The Path to Power m-2

by Margaret Thatcher

  Now — with the Commission exploiting the Single European Act to accumulate powers of greater direction and regulation — Europe is reaching the point at which it must choose between these two approaches. Is it to be a tightly regulated, centralized bureaucratic federal state, imposing uniform standards throughout the Continent? Or is it to be a loose-knit, decentralized free-market Europe of sovereign states, based upon competition between different national systems of tax and regulation within a free-trade area?

  The federalists at least seem to be clear. The Maastricht Treaty met the Commission’s requirement for a ‘single institutional framework’ for the Community. Yet, before the ink was even dry on the Treaty, it was reported that the President of the European Commission was seeking more money and more powers for the Commission which would become the Executive of the Community — in other words a European Government. There would seem to be no doubt about the direction in which the European federalists are now anxious to proceed — towards a federal Europe.

  Nor is there any mystery about the urgency with which they press the federalist cause. Even though they may wish to defer the ‘enlargement’ of the Community with the accession of Eastern Europe, they realize it is impossible. A half-Europe imposed by Soviet tyranny was one thing; a half-Europe imposed by Brussels would be a moral catastrophe, depriving the Community of its European legitimacy.

  The Commission knows it will have to admit many new members in the next few decades. But it hopes to construct a centralized superstate in advance — and irrevocably — so that the new members will have to apply for entry on federalist terms.

  And it’s just not on.

  Imagine a European Community of thirty nations, ranging in their economic productivity from Germany to Ukraine, and in their political stability from Britain to Poland

  - all governed from Brussels;

  - all enforcing the same conditions at work;

  - all having the same worker rights as the German unions;

  - all subject to the same interest rates, monetary, fiscal and economic policies;

  - all agreeing on a common foreign and defence policy;

  - and all accepting the authority of an Executive and a remote foreign parliament over ‘80 per cent of economic and social legislation’.

  Mr Chairman, such a body is an even more Utopian enterprise than the Tower of Babel. For at least the builders of Babel all spoke the same language when they began. They were, you might say, communautaire.

  Mr Chairman, the thinking behind the Commission’s proposals is essentially the thinking of ‘yesterday’s tomorrow’. It was how the best minds of Europe saw the future in the ruins after the Second World War.

  But they made a central intellectual mistake. They assumed that the model for future government was that of a centralized bureaucracy that would collect information upwards, make decisions at the top, and then issue orders downwards. And what seemed the wisdom of the ages in 1945 was in fact a primitive fallacy. Hierarchical bureaucracy may be a suitable method of organizing a small business that is exposed to fierce external competition — but it is a recipe for stagnation and inefficiency in almost every other context.

  Yet it is precisely this model of remote, centralized, bureaucratic organization that the European Commission and its federalist supporters seek to impose on a Community which they acknowledge may soon contain many more countries of widely differing levels of political and economic development, and speaking more than fifteen languages. ‘C’est magnifique, mais ce n’est pas la politique.’

  The larger Europe grows, the more diverse must be the forms of cooperation it requires. Instead of a centralized bureaucracy, the model should be a market — not only a market of individuals and companies, but also a market in which the players are governments.

  Thus governments would compete with each other for foreign investments, top management and high earners through lower taxes and less regulation. Such a market would impose a fiscal discipline on governments because they would not want to drive away expertise and business. It would also help to establish which fiscal and regulatory policies produced the best overall economic results. No wonder socialists don’t like it.

  To make such a market work, of course, national governments must retain most of their existing powers in social and economic affairs. Since these governments are closer and accountable to their voters, it is doubly desirable that we should keep power at the national level.

  THE ROLE OF THE COMMISSION

  Mr Chairman, in 1996, when the arrangements agreed at Maastricht are due to be reviewed, and probably a good deal earlier, the Community should move in exactly the opposite direction to that proposed by the European federalists.

  A Community of sovereign states committed to voluntary cooperation, a lightly regulated free market and international free trade does not need a Commission in its present form. The government of the Community — to the extent that this term is appropriate — is the Council of Ministers, consisting of representatives of democratically elected national governments. The work of the Commission should cease to be legislative in any sense. It should be an administrative body, like any professional civil service, and it should not initiate policy, but rather carry it out. In doing this it should be subject to the scrutiny of the European Parliament acting on the model of Commons Select Committees. In that way, whatever collective policies or regulations are required would emerge from deliberation between democratic governments, accountable to their national parliaments, rather than being imposed by a bureaucracy with its own agenda.

  COOPERATION IN EUROPE

  But need this always be done in the same ‘single institutional framework’? New problems arise all the time. Will these always require the same level and type of cooperation in the same institutions? I doubt it. We need a greater flexibility than the structures of the European Community have allowed until very recently.

  A single institutional framework of its nature tends to place too much power with the central authorities. It is a good thing that a Common Foreign Policy will continue to be carried on under a separate treaty and will neither be subject to the European Court nor permit the Commission to fire off initiatives at will. If ‘Europe’ moves into new areas, it must do so under separate treaties which clearly define the powers which have been surrendered.

  And why need every new European initiative require the participation of all members of the Community? It will sometimes be the case — especially after enlargement — that only some Community members will want to move forward to another stage of integration.

  Here I pay tribute to John Major’s achievement in persuading the other eleven Community heads of government that they could move ahead to a Social Chapter, but not within the Treaty and without Britain’s participation. It sets a vital precedent. For an enlarged Community can only function if we build in flexibility of that kind.

  We should aim at a multi-track Europe in which ad hoc groups of different states — such as the Schengen Group — forge varying levels of cooperation and integration on a case-by-case basis. Such a structure would lack graph-paper neatness. But it would accommodate the diversity of post-communist Europe.

  THE EUROPEAN PARLIAMENT

  Supporters of federalism argue, no doubt sincerely, that we can accommodate this diversity by giving more powers to the European Parliament. But democracy requires more than that.

  To have a genuine European democracy you would need a Europe-wide public opinion based on a single language; Europe-wide political parties with a common programme understood similarly in all member states; a Europe-wide political debate in which political and economic concepts and words had the same agreed meaning everywhere.

  We would be in the same position as the unwieldy Habsburg Empire’s parliament.

  THE HABSBURG PARLIAMENT

  That parliament was a notorious failure. There were dozens of political parties, and nearly a dozen peoples were represented — Germans, Italians, Czechs, Poles and s
o on. For the government to get anything through — for instance, in 1889 a modest increase in the number of conscripts — took ages, as all the various interests had to be propitiated. When one or other was not satisfied, its spokesmen resorted to obstruction — lengthy speeches in Russian, banging of desk-lids, throwing of ink-wells and on one occasion the blowing of a cavalry trumpet by the Professor of Jurisprudence at the German University of Prague. Measures could not be passed, and budgets could only be produced by decree. The longest-lasting Prime Minister, Count Taaffe, remarked that his highest ambition in politics was the achievement of supportable dissatisfaction on all sides — not a bad description of what the European Community risks becoming.

  And because of the irresponsibility of parliaments, the Habsburg Monarchy could really only be ruled by bureaucrats. It took twenty-five signatures for a tax payment to be validated; one in four people in employment worked for the state in some form or another, even in 1914; and so many resources went to all of this that not much was left for defence: even the military bands had to be cut back, Radetzky March and all. Of course it was a tremendous period in cultural terms both in Vienna and in Budapest. We in England have done mightily well by the emigration, often forced, to our shores of so many talented people from Central Europe. But the fact is that they had to leave their native lands because political life became impossible.

  This example could be multiplied again and again. Belgium and Holland, which have so much in common, split apart in 1831. Sweden and Norway, which have even more in common, split apart in 1905. It does seem simply to be a straightforward rule in modern times that countries which contain two languages, even if they are very similar, must in the end divide, unless the one language absorbs the other. It would be agreeable to think that we could all go back to the world of the Middle Ages, when the educated classes spoke Latin and the rulers communicated in grunts. But we cannot. Unless we are dealing with international cooperation and alliances freely entered into, we create artificial structures which become the problem that they were meant to address. The League of Nations, when the Second World War broke out, resolved to ignore the fact and to discuss, instead, the standardization of level-crossings.

  A FEDERAL EUROPE

  Mr Chairman, I am sometimes tempted to think that the new Europe which the Commission and Euro-federalists are creating is equally ill-equipped to satisfy the needs of its members and the wishes of their peoples. It is, indeed, a Europe which combines all the most striking failures of our age.

  The day of the artificially constructed megastate has gone. So the Euro-federalists are now desperately scurrying to build one.

  The Swedish-style welfare state has failed — even in Sweden. So the Euro-statists press ahead with their Social Chapter.

  Large-scale immigration has in France and Germany already encouraged the growth of extremist parties. So the European Commission is pressing us to remove frontier controls.

  If the European Community proceeds in the direction which the majority of member-state governments and the Commission seem to want, they will create a structure which brings insecurity, unemployment, national resentment and ethnic conflict.

  Insecurity — because Europe’s protectionism will strain and possibly sever that link with the United States on which the security of the Continent ultimately depends.

  Unemployment — because the pursuit of policies of regulation will increase costs, and price European workers out of jobs.

  National resentment — because a single currency and a single centralized economic policy, which will come with it, will leave the electorate of a country angry and powerless to change its conditions.

  Ethnic conflict — because not only will the wealthy European countries be faced with waves of immigration from the south and from the east. Also within Europe itself, the effect of a single currency and regulation of wages and social costs will have one of two consequences. Either there will have to be a massive transfer of money from one country to another, which will not in practice be affordable. Or there will be massive migration from the less successful to the more successful countries.

  Yet if the future we are being offered contains so very many risks and so few real benefits, why, it may be asked, is it proving all but irresistible?

  The answer is simple. It is that in almost every European country there has been a refusal to debate the issues which really matter. And little can matter more than whether the ancient, historic nations of Europe are to have their political institutions and their very identities transformed by stealth into something neither wished nor understood by their electorates. Yet so much is it the touchstone of respectability to accept this ever-closer union, now interpreted as a federal destiny, that to question is to invite affected disbelief or even ridicule. This silent understanding — this Euro-snobbism — between politicians, bureaucracies, academics, journalists and businessmen is destructive of honest debate.

  So John Major deserves high praise for ensuring at Maastricht that we would not have either a single currency or the absurd provisions of the Social Chapter forced upon us: our industry, workforce, and national prosperity will benefit as a result. Indeed, as long as we in Britain now firmly control our spending and reduce our deficit, we will be poised to surge ahead in Europe. For our taxes are low; our inflation is down; our debt is manageable; our reduced regulations are favourable to business.

  We take comfort from the fact that both our Prime Minister and our Foreign Secretary have spoken out sharply against the forces of bureaucracy and federalism.

  THE CHOICE

  Our choice is clear. Either we exercise democratic control of Europe through cooperation between national governments and parliaments which have legitimacy, experience and closeness to the people. Or we transfer decisions to a remote multilingual parliament, accountable to no real European public opinion and thus increasingly subordinate to a powerful bureaucracy. No amount of misleading language about pooling sovereignty can change that.

  EUROPE AND THE WIDER WORLD

  Mr Chairman, in world affairs for most of this century Europe has offered problems, not solutions. The founders of the European Community were consciously trying to change that. Democracy and prosperity in Europe were to be an example to other peoples in other continents. Sometimes this view took an over-ambitious turn with talk of Europe as a third force brokering between two superpowers of East and West. This approach was always based upon a disastrous illusion — that Western Europe could at some future date dispense with the military defence offered by the United States.

  Now that the forces of communism have retreated and the threat which Soviet tanks and missiles levelled at the heart of Europe has gone, there is a risk that the old tendency towards decoupling Europe from the United States may again emerge. This is something against which Europeans themselves must guard — and of which the United States must be aware.

  This risk could become reality in several ways.

  TRADE

  First, there is the question of trade. It is a terrible indictment of the complacency which characterizes the modern post-Cold War world that we have allowed the present GATT round to be stalled for so long. Free trade is the greatest force for prosperity and peaceful cooperation.

  It does no good to the Western alliance when Europe and the United States come to regard each other as hostile interests. In practice, whatever the theory may be, economic disputes do sour political relations. Agricultural subsidies and tariffs lie at the heart of the dispute, which will not go away unless we in Europe decide that the Common Agricultural Policy has to be fundamentally changed. That will go far to determine what kind of Europe we are building.

  For, as I have said before, I would like to see the European Community — embracing the former communist countries to its east — agree to develop an Atlantic Free Trade Area with the United States. That would be a means of pressing for more open multilateral trade throughout the world. Europe must seek to move the world away from competing regio
nal trade blocs — not promote them. In such a trading arrangement, Britain would have a vital role bridging that Atlantic divide — just as Germany should provide Europe with a bridge to the east and to the countries of the former Soviet Union.

  EASTERN EUROPE

  Secondly, we must modify and modernize our defence. The dangers on Europe’s eastern border have receded. But let us not forget that on the credibility of NATO’s military strength all our wider objectives depend — reassurance for the post-communist countries, stability in Europe, transatlantic political cooperation.

  Communism may have been vanquished. But all too often the communists themselves have not. The chameleon qualities of the comrades have never been more clearly demonstrated than in their emergence as democratic socialists and varieties of nationalist in the countries of Central and Eastern Europe. From the powerful positions they retain in the bureaucracy, security apparatus and the armed forces, from their places in not-really-privatized enterprises, they are able to obstruct, undermine and plunder.

  The systems of proportional representation which so many of these countries have adopted have allowed these tactics to succeed all the more, leading to weak governments and a bewildering multiplicity of parties. All this risks bringing democracy into discredit. If Eastern European countries which retain some links with a pre-communist past, and have some sort of middle class on which to draw, falter on the path to reform, how will the leaders of the countries of the former Soviet Union dare to proceed further upon it?

  We can help by allowing them free access to our markets. I am delighted that Association agreements have been signed between the European Community and several of these countries. I would like speedy action to include the others in similar arrangements. But ten years is too long to wait before the restrictions on trade are removed. And I would like to see these countries offered full membership of the European Community rapidly.