Sunday, November 30, 2014

The US and the origins of the European Union

The European Union has a founding myth in which the nations of Europe came together after the two world wars and recognized that only a common democratic unity project could prevent should horrors and suffering in the future. They decided that the needed to move toward a more formal union for those purposes and also to give Europe a more substantial presence in the world in the face of American dominance in Western Europe.

Jean-Claude Juncker is the current President of the European Commission. He's a conservative Luxembourgian politician of the Christian Social People's Party and the European People's Party who served as Luxembourg's Prime Minister 1995-2003. Juncker was the winner of the prestigious International Charlemagne Prize for 2006, awarded for "services to European unification." The fact that it was awarded to Angela Merkel in 2008 is already a bitter irony.

In the 1992 on which his name appears as the author, he recounted the postwar history of the European unity process, Der weite Weg in die Zukunft Der Spiegel 10/2002 (04.03.2002); the piece also appears in Spiegel Special 1/2002.
Juncker presents the story according to the founding myth, in which a process with prewar roots led to major milestones like the European Coal and Steel Community/ECSC (1951), the European Economic Community (EEC; 1957), the Ecu (the European Currency System), the Schengen Agreement to open European borders (1985), the Maastrict Treaty (1992) that created the European Union; the beginning of the euro for financial institutions in 1999, then for the general public of eurozone countries in 2002.

The names of numerous figures that played an important role in the process along the way are mentioned, some of them much better known than others:

What Juncker did not include in his 2002 article is the history of the Bretton Woods system recounted by Yanis Varoufakis, Joseph Halevi and Nicholas Theocrarkis in Moderm Political Economics: Making sese of the post-2008 world (2011). They refer to the international financial and economic structure built on the Bretton Woods agreement as the "Global Plan" which endured until the 1971-3 period. For the stability of the international capitalist system as also as a pillar of the Cold War against the Soviet Union, the United States successfully insisted on building up Germany and Japan as two strong industrial centers and their currencies as pillars of the Bretton Woods system.

The drive for European unity became an important element of that process:

The Marshall Plan involved not only a great deal of money but also vital institutions. On 3 April 1948, Truman established the Economic Co-operation Administration and 13 days later the United States and its European allies created the Organisation for European Economic Co-operation (OEEC), with a remit to work out where to channel the funding, under what conditions and to which purpose. The first Chair of the OEEC (which later, in 1961, evolved into what we know today as the Organisation for Economic Co-operation and Development, the OECD) was Robert Marjolin, one of the three participants in the Harvard reading group dedicated to understanding Keynes' General Theory ...

As important as the dollarisation of the European economy was for restoring markets and reinvigorating industry, the Marshall Plan's relatively unsung, but equally significant, legacy was the creation of the institutions of European integration, from which the greatest beneficiary was to be the continent's defeated nation: Germany!

The Americans' condition for parting with about two per cent of their GDP annually was the erasure of intra-European trade barriers and the commencement of a process of economic integration that would increasingly be centred around Germany's reviving industry. In this sense, the Marshall Plan can be fruitfully thought of as the progenitor of today' s European Union. Indeed, from 1947 onwards the US military (and in particular the Joint Chiefs of Staff at the Pentagon) called for the 'complete revival of German industry, particularly coal mining' and pronounced that the latter was acquiring 'primary importance' for the security of the United States. (p. 310) [my emphasis]
The United States, they write, played a key role in persuading France to accept German reindustrialization as part of the larger Bretton Woods/Global Plan arrangements:

So, what was it that convinced the French to accept the reindustrialisation of Germany? The United States of America, is the simple answer. When the New Dealers formed the view, around 1947, that a new currency must rise in Europe to support the dollar, and that this currency would be the Deutschmark, it was only a matter of time before the destruction of German capital would be reversed. The price France had to pay for the great benefits of the Marrshall Plan, and for its central administrative role in the management of the whole affair (through the OEEC), was the gradual acceptance that Germany would be restored to grace, courtesy of the United States' new Global Plan.

In this context, it is useful to think of the Marshall Plan as a foundation of the Global Plan for as the former was running out of steam, in 1951, it was already passing the baton to phase two of the American design for Europe: integration of its markets and of its heavy industry. That second phase came to be known as the European Coal and Steel Community (ECSC), the precursor to today's European Union. The new institution was soon to provide, as was intended by the New Dealers, the vital space that the resurgent German industry required in its immediate economic environment.[my emphasis in bold] (p. 311)
I don't read their description as disparaging the process of European integration. On the contrary, they express great admiration for the creativity and realism of the Bretton Woods/Global Plan system.

And they aren't discounting the intra-European motives at work. On the contrary, they note specifically of Robert Schuman that the creation of "a shared heavy industry across, primarily, France and Germany would, Schuman believed (quite rightly), both remove the causes of conflict and deprive the two countries of the means by which to persecute [sic] it ["prosecute it" was clearly meant here]."

But they do make the point that this history doesn't quite match up to the founding myth favored in official celebrations of the European Union and its development:

Thus, Germany was brought in from the cold and France gradually accepted its re-industrialisation; a development essential to the New Dealers' Global Plan. Indeed, it is indisputable that without the United States guiding Europe's politicians, cajoling and threatening them, often in one breath, the ECSC would not have materialised. Contrary to the Europeans' self-adulating narrative (according to which European unification was a European dream made real by means of European diplomacy and because of an iron will to put behind Europe its violent past), the reality is that European integration was a grand American idea implemented by American diplomacy of the highest order. That the Americans who effected it enlisted to their cause enlightened politicians, such as Schuman, does not change this reality.

There was one politician who saw this clearly: General Charles de Gaulle, the future President of France who was to come to blows with the United States in the 1960s, so much so that he removed France from the military wing of NATO. When the ECSC was formed, de Gaulle denounced it on the basis that it was creating a united Europe in the form of a restrictive cartel and, more importantly, that it was an American creation, under Washington's influence and better suited to serve what we call the Global Plan than to provide a sound foundation for a New Europe. For these reasons, de Gaulle and his followers voted against the formation of the ECSC in the French parliament. (p. 312) [my emphasis in bold]