by Norman Lowe
A German–Italian proposal was accepted that a conference should be held to clarify and formalize the constitution of the EU, by 2004.
A plan for a European Union Rapid Reaction Force (RRF) of 60 000 troops was approved, to provide military back-up in case of emergency, though it was stressed that NATO would still be the basis of Europe’s defence system. This did not please the French president, Jacques Chirac, who wanted the RRF to be independent of NATO. Nor did it please the USA, which was afraid that the EU defence initiative would eventually exclude the USA. In October 2003, as discussions were taking place in Brussels on how best to proceed with EU defence plans, the US government complained that it was being kept in the dark about Europe’s intentions, claiming that the EU plans ‘represented one of the greatest dangers to the transatlantic relationship’. It seemed that although the Americans wanted Europe to take on more of the world’s defence and anti-terrorist burden, it intended this to be done under US direction, working through NATO, not independently.
Before the Treaty of Nice could be put into operation in January 2005, it had to be approved by all 15 member states. It was therefore a serious blow when, in June 2001, Ireland voted in a referendum to reject it. Ireland had been one of the most co-operative and pro-European members of the Union; but the Irish resented the fact that the changes would increase the power of the larger states, especially Germany, and reduce the influence of the smaller states. Nor were they happy at the prospect of Irish participation in peacekeeping forces. There was still time for the Irish to change their minds, but the situation would need careful handling if voters were to be persuaded to back the agreement. When the European Commission president, Romano Prodi of Italy, announced that enlargement of the Union could go ahead in spite of the Irish vote, the Irish government was outraged. His statement prompted accusations from across the Union that its leaders were out of touch with ordinary citizens.
(c) Problems and tensions
Instead of a smooth transition to an enlarged and united Europe in May 2004, the period after the signing of the Treaty of Nice turned out to be full of problems and tensions. Some had been foreseen, but most of them were quite unexpected.
Predictably, the divisions widened between those who wanted a much closer political union – a sort of United States of Europe – and those who wanted a looser association in which power remained in the hands of the member states. Chancellor Gerhard Schröder of Germany wanted a strong European government with more power given to the European Commission and the Council of Ministers, and a European Union constitution embodying his vision of a federal system. He was supported by Belgium, Finland and Luxembourg. On the other hand, Britain felt that political integration had gone far enough, and did not want the governments of the individual states to lose any more of their powers. The way forward was through closer co-operation between the national governments, not through handing control over to a federal government in Brussels or Strasbourg.
The terrorist attacks of 11 September 2001 in the USA threw the EU into confusion. The EU leaders were quick to declare solidarity with the USA and to promise all possible co-operation in the war against terrorism. However, foreign and defence issues were areas where the EU was not well equipped to take rapid collective action. It was left to the leaders of individual states – Schröder, Chirac and UK prime minister Blair – to take initiatives and promise military help against terrorism. This in itself was resented by the smaller member states, which felt they were being by-passed and ignored.
The attack on Iraq by the USA and the UK in March 2003 (see Section 12.4) caused new tensions. Germany and France were strongly opposed to any military action not authorized by the UN; they believed that it was possible to disarm Iraq by peaceful means, and that war would cause the deaths of thousands of innocent civilians, destroy the stability of the whole region and hamper the global struggle against terrorism. On the other hand, Spain, Italy, Portugal and Denmark, together with the prospective new members – Poland, Hungary and the Czech Republic – were in favour of Britain’s joint action with the USA. American Defence Secretary Donald Rumsfeld dismissed the German and French opposition, claiming that they represented ‘old Europe’. An emergency European Council meeting was held in Brussels in February, but it failed to resolve the basic differences: the UK, Italy and Spain wanted immediate military action while France and Germany pressed for more diplomacy and more weapons inspectors. This failure to agree on a unified response to the Iraq situation did not bode well for the prospects of formulating a common foreign and defence policy, as required by the new EU constitution due to be debated in December 2003.
A rift of a different sort opened up over budgetary matters. In the autumn of 2003 it was revealed that both France and Germany had breached the EU rule, laid down at Maastricht, that budget deficits must not exceed 3 per cent of GDP. However, no action was taken: the EU finance ministers decided that both states could have an extra year to comply. In the case of France, it was the third consecutive year that the 3 per cent ceiling had been breached. This bending of the rules in favour of the two largest member states infuriated the smaller members. Spain, Austria, Finland and the Netherlands opposed the decision to let them off. It raised a number of questions: what would happen if smaller countries broke the rules – would they be let off too? If so, wouldn’t that make a mockery of the whole budgetary system? Was the 3 per cent limit realistic anyway in a time of economic stagnation?
The most serious blow – in December 2003 – came when a summit meeting in Brussels collapsed without reaching agreement on the new EU constitution, which was designed to streamline and simplify the way the Union worked. Disagreement over the issue of voting powers was the main stumbling block.
Failure to agree on the new constitution was not a total disaster; the enlargement of the EU was still able to go ahead as planned on 1 May 2004; the ten new members were the Czech Republic, Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia. But it was clear that the future of the Union was going to be fraught with problems. With some 25 or more members to deal with, the main issue was how to balance the interests of the smaller and larger states. Happily, most of the problems seemed to have been overcome when, in June 2004, a Constitutional Treaty was drawn up, to be presented to member states for ratification. The new constitution was something of a triumph: it brought together the confusing hotchpotch of previous treaties, and made for much smoother decision-making. It appeared to allow the national parliaments rather more powers than previously – for example, there was a procedure for members to leave the Union if they chose to; and states kept their veto on taxation, foreign policy and defence. The areas over which the EU had overriding control were competition policy, customs, trade policy and protection of marine life. The dispute over the voting system was also resolved: for a measure to pass, it must be supported by at least 15 countries representing 65 per cent of the EU’s total population of 455 million; at least four countries with 35 per cent of the population would be required to block a measure. This was a safeguard to prevent the biggest countries from riding roughshod over the interests of the smaller ones. Spain, which had protested strongly that the previous proposals disadvantaged the smaller members, was happy with the compromise. The next problem was to get the new constitution ratified by all the members, and this would involve at least six national referendums. Unfortunately in 2005 it was rejected by Dutch and French voters, and it was decided that there should be a ‘period of reflection’.
Eventually a new agreement was drawn up, preserving many of the reforms of the previous constitution but amending the ones that had raised objections. Signed by all 27 member states at Lisbon in December 2007, the stated aim of the treaty was ‘to complete the process started by the Treaty of Amsterdam [1997] and by the Treaty of Nice [2001] with a view to enhancing the efficiency and democratic legitimacy of the Union and to improving the coherence of its actions’.
10.9 THE EUROPEAN UNION IN CRISIS
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p; In a referendum held in June 2008 well over half the Irish voters rejected the Lisbon Treaty. The Germans and French, who were mainly responsible for the form of the treaty, were furious. The Germans threatened Ireland with expulsion from the EU, and President Sarkozy announced that the Irish must hold a second referendum. Before this took place, the economic situation in Europe had changed dramatically: in September 2008 in the USA there occurred the worst financial collapse since the Wall Street Crash of 1929 (see Section 27.7–8). The effects soon spread to Europe; by the end of 2008 the demand for European exports had contracted alarmingly, and one by one the member states of the EU plunged into recession. Worst affected were Spain and Ireland, the two countries which had enjoyed the highest growth rates in the EU since the introduction of the euro in 2002. As Perry Anderson explains:
The crisis struck hardest of all in Ireland, where output contracted by 8.5 per cent between the first quarters of 2008 and 2009, and the fiscal deficit soared to over 15 per cent of GDP. Though a probable death warrant for the regime in place at the next polls, in the short run the debacle of the Celtic Tiger was a diplomatic godsend to it. Amid popular panic the government could now count on frightening voters into accepting Lisbon, however irrelevant it might be to the fate of the Irish economy.
In October 2009 Irish voters obligingly approved the Lisbon Treaty, which came into effect on 1 December 2009.
(For further developments in the eurozone financial crisis, see Section 27.7.).
(a) The future of the European Union
All these problems should not be allowed to lead to the conclusion that the EU is a failure. Whatever happens in the future, nothing can take away the fact that since 1945, the countries of western Europe have been at peace with each other. It seems unlikely that they will ever go to war with each other again, if not absolutely certain. Given Europe’s war-torn past, this is a considerable achievement, which must be attributed in large measure to the European movement.
However, the Union’s development is not complete: over the next half-century Europe could become a united federal state, or, more likely, it could remain a much looser organization politically, albeit with its own reformed and streamlined constitution. Many people hope that the EU will become strong and influential enough to provide a counterbalance to the USA, which in 2004 seemed in a position to dominate the world and convert it into a series of carbon copies of itself. Already the EU had demonstrated its potential. With the 2004 enlargement, the EU economy could rival that of the USA both in size and cohesion. The EU was providing well over half the world’s development aid – far more than the USA – and the gap between EU and US contributions was growing all the time. Even some American observers acknowledged the EU’s potential; Jeremy Rifkin wrote:‘Europe has become the new “city upon a hill”. … We Americans used to say that the American Dream is worth dying for. The new European Dream is worth living for.’
The EU has shown that it is prepared to stand up to the USA. In March 2002 plans were announced to launch a European Galileo space-satellite system to enable civilian ships and aircraft to navigate and find their positions more accurately. The USA already had a similar system (GPS), but it was mainly used for military purposes. The US government protested strongly against the EU proposal on the grounds that the European system might interfere with US signals. The French president, Chirac, warned that if the USA was allowed to dominate space, ‘it would inevitably lead to our countries becoming first scientific and technological vassals, then industrial and economic vassals of the US’. The EU stood its ground and the plan went ahead. According to Will Hutton, ‘the US wanted a complete monopoly of such satellite ground positioning systems. … the EU’s decision is an important declaration of common interest and an assertion of technological superiority alike: Galileo is a better system than GPS.’
Clearly the enlarged EU has vast potential, though it will need to deal with some serious weaknesses. The Common Agricultural Policy continues to encourage high production levels at the expense of quality, and causes a great deal of damage to the economies of the developing world; this needs attention, as does the whole system of food standards regulation. The confusing set of institutions needs to be simplified and their functions formalized in a new constitution. And perhaps most important – EU politicians must try to keep in touch with the wishes and feelings of the general public. They need to take more trouble to explain what they are doing, so that they can regain the respect and trust of Europe’s ordinary citizens. In a move which boded well for the future, the European parliament voted by a large majority in favour of José Manuel Barroso, the former prime minister of Portugal, as the next president of the European Commission. The new president had pledged himself to reform the EU, to bring it closer to its largely apathetic citizens, to make it fully competitive and to give it a new social vision. His five-year term of office began in November 2004 and in September 2009 he was granted a second five-year term.
However, by that time the EU was facing two further problems: immigration and the deepening economic crisis. Increasing immigration into the EU, about half of which consisted of Muslims, led to racial and religious tensions; some observers were writing about the ‘battle at the borders’ to control and reduce the number of immigrants. By 2009 there were estimated to be between 15 and 18 million Muslim migrants in the richer western states of the EU. This might seem a small number out of a total population of perhaps 370 million, but what many people found worrying was that the birth rate among the native populations was declining, while that of the Muslims was increasing, especially in the big cities. In Brussels over half the children born every year were from Muslim immigrants. In Amsterdam there were more practising Muslims than either Protestants or Catholics. According to Perry Anderson, in 2009 the overall inflow of migrants into Europe was some 1.7 million a year.
Poverty and unemployment in these communities is nearly always above the national average and discrimination pervasive. In a number of countries – France, Denmark, the Netherlands and Italy have been the most prominent to date – political parties have arisen whose appeal has been based on xenophobic opposition to it. The new diversity has not fostered harmony. It has stoked conflict.
Given the wave of terrorism perpetrated by Muslim extremists during the first decade of the twenty-first century (see Section 12.2–3), it was hardly surprising that some observers talked about the impending war between Islam and the West. The problems of immigration and unemployment were linked: the optimistic view was that if and when the economy of Europe recovered and there was full employment, tensions would fade and Muslims and Christians would be able to live together in harmony – multiculturalism could triumph after all!
However, in 2009, this seemed a forlorn hope – the crisis deepened and some economists were predicting that the euro was beyond salvation; some even thought the EU itself might disintegrate. In February 2012 Angela Merkel, the German Chancellor, said that Europe was facing its gravest test for decades, and she predicted that 2012 would be worse than 2011. All governments were trying to cut costs by introducing unpopular austerity measures. Greece had ‘manipulated’ its borrowing figures to make them look less than they actually were, in order to be allowed to join the euro (2001). The consequence was that Greek debts were enormous, and for much of 2011 and 2012 the government seemed to be on the verge of defaulting. This could have disastrous effects on banks and on the economies of other countries that had traded with Greece. Hungary’s currency, the forint, was in free fall, while Italy, Ireland, Spain and Portugal had huge debts and could only borrow more at high rates of interest. And everywhere unemployment was rising, averaging over 10 per cent throughout the EU.
FURTHER READING
Anderson, P., The New Old World (Verso, 2011 edition).
Ash, T. G., In Europe’s Name: Germany and the Divided Continent (Jonathan Cape, 1993).
Brown, A., The Rise and Fall of Communism (Bodley Head, 2009).
Hix, S., The Political S
ystem of the European Union (Palgrave Macmillan, 2nd edition, 2005).
Hutton, W., The World We’re In (Little, Brown, 2003).
Judah, T., Kosovo: War and Peace (Yale University Press, 2002).
Judt, T., Postwar: A History of Europe Since 1945 (Vintage, 2010).
Laqueur, W., The Last Days of Europe (Thomas Dunne, 2007).
Mahoney, D. J., De Gaulle: Statesmanship, Grandeur and Modern Democracy (Greenwood, 1996).
Milward, A. S., The European Rescue of the Nation-State (Routledge, 2nd edition, 2000).
Naimark, N. M. and Case, H. (eds), Yugoslavia and Its Historians: Understanding Balkan Wars of the 1990s (Stanford University Press, 2002).
Pittaway, M., Eastern Europe: States and Societies (1945–2000) (Hodder/Edward Arnold, 2002).
Rifkin, J., The European Dream (Polity Press, 2004).
Service, R., Comrades: Communism, A World History (Palgrave Macmillan, 2007).
Shawcross, W., Dubček and Czechoslovakia, 1968–1990 (Hogarth, 1990).
Wheaton, B. and Kavan, Z., The Velvet Revolution: Czechoslovakia, 1988–91 (Westview Press, 1992).
Young, J. W., Cold War Europe, 1945–1989: A Political History (Longman, 1991).
QUESTIONS
Assess the evidence for and against the view that the European Economic Community became stronger after its enlargement in 1973.
Why and in what ways did the states of western Europe see closer relations with each other after the Second World War?
In what ways and for what reasons did Britain’s attitude to Europe change during the period 1945 to 1991?
Assess the reasons why two German states emerged between 1945 and 1949.
How similar were the causes and consequences of the Hungarian uprising of 1956 and the Prague Spring of 1968?