Chapter 1The Origins of Supranational Europe

One of the things that Britain has traditionally most disliked about the European Union is its supranational nature. As Theresa May put it in September 2017,

The profound pooling of sovereignty that is a crucial feature of the European Union permits unprecedentedly deep cooperation, which brings benefits. But it also means that when countries are in the minority they must sometimes accept decisions they do not want, even affecting domestic matters with no market implications beyond their borders. And when such decisions are taken, they can be very hard to change. So the British electorate made a choice. They chose the power of domestic democratic control over pooling that control.¹

Ever since the foundation of the European Coal and Steel Community in 1951, European integration has not just involved independent governments cooperating voluntarily. Rather, it has been defined by the creation of supranational political, bureaucratic and judicial institutions such as the European Commission in Brussels, the European Parliament in Brussels and Strasbourg, and the European Court of Justice in Luxembourg. This makes it unusual: other organizations designed to promote regional cooperation have much less in the way of institutional infrastructure. For example, the North American Free Trade Area (NAFTA) has a Secretariat which is responsible for resolving disputes, with national offices in each of the three countries involved (Canada, Mexico and the United States); a Free Trade Commission which brings together government representatives from the three countries; and a variety of committees and working groups.² That’s it. There is no suggestion that the three countries involved are doing anything more than cooperating in a mutually beneficial manner.³ The European Union is very different.

The EU is not a supranational state, but its 28 member states have agreed to pool some (but not all) of their sovereignty in a uniquely structured and institutionalized manner. This has always led to criticism from Eurosceptics, and not only in Britain. Why did European regional integration involve the creation of so many supranational institutions? Why did it not just involve looser intergovernmental structures, as the British traditionally wanted? During the 1950s only a minority of European countries – just six – were willing to go down the supranational route. Most countries, like Britain, favoured intergovernmental cooperation. And yet it was the minority vision that eventually won out: the overwhelming majority of European countries are today members of the EU.

The question of why nearly all European countries eventually decided to join the EU is intimately connected with the creation of the Single Market in the 1980s and early 1990s, and will be considered later in this book. This chapter will discuss some of the reasons why the original six founding member states – the three Benelux countries, France, Germany and Italy – decided to go down a supranational route in the first place. There are several deep structural factors, relating to European geography, history and economics, which increased the demand for European integration in the aftermath of the Second World War, and which help to explain why the original six founding members thought that this should be expressed in supranational institutions.

The Legacy of War

The first and most obvious reason for European integration is that by the 1950s it was clear that political fragmentation in the continent had become increasingly and unacceptably costly. There are many natural barriers within Europe, such as the Alps, the Pyrenees and the English Channel, which is one of the reasons why would-be conquerors of Europe, since the fall of the Roman Empire, have found it impossible to unify the continent by military means. Many economic historians have argued that this fragmentation was traditionally a source of competitive advantage for the continent.⁴ It made it more difficult for absolutist rulers to suppress dangerous ideas, for a Voltaire could always escape to Geneva. Once there, his ideas were free to circulate elsewhere thanks to a common elite European culture. Even more importantly, perhaps, the political and military competition that fragmentation implied gave Europe an undisputed ‘comparative advantage in violence’. This helps to explain such bizarre episodes in world history as tiny Portugal seizing Brazil and dominating much of Asia’s maritime trade during the sixteenth century – a time when Portugal’s population was not much more than 1.25 million.⁵

By the twentieth century, however, the costs of political fragmentation were becoming unbearable because of the arrival of modern industrial warfare. During the First World War deaths of military personnel amounted to 1.6 per cent of the total population in Britain, 3.4 per cent in France and 3 per cent in Germany. The Second World War was even more destructive since it was no longer concentrated along a more or less static front, and involved very heavy aerial bombardment across the continent. In addition the Nazis directly targeted civilian populations. Total deaths, both military and civilian, were equivalent to 0.7 per cent of the pre-war population in the UK, 1.5 per cent in France and 9 per cent in Germany.⁶

The timing of moves towards greater European unity, and American support for that aim, are thus hardly surprising.⁷ This history also explains the importance of the Franco-German relationship as a driver of European integration. The importance of that relationship can be seen indirectly by comparing Europe with Asia: to a European, the extent to which memories of the Second World War still poison relationships between China, Japan and Korea is disturbing. One could speculate that a rapprochement between China and Japan might one day play a catalysing role in the context of East Asian integration, but the contrasts between the post-war Franco-German and Sino-Japanese relationships remain striking.

The contrast between the ways in which the two world wars are remembered in Britain and the continent is also striking. Armistice Day celebrations are an occasion for patriotism everywhere, in France as in Britain, but the day feels very different on the two sides of the English Channel. Sometimes the French complain when Monsieur or Madame le Maire has to read the speech written for the occasion by some Secretary of State or Minister up in Paris. The eleventh of November is a day for villages to come together and remember their dead: who needs politicians? But on the rare occasions when I’ve been able to get to Saint Pierre d’Entremont and attend the Armistice ceremonies, the speeches have struck me as being generally pretty good, especially since 2014: pedagogical is the word that immediately comes to mind. Last year, for example, we learned that

The French army was not the only one to sacrifice itself. At the cost of heavy losses the Canadians led the attack at Vimy and the British at Passchendaele, while the Italians were defeated at Caporetto. The United States abandoned isolationism and took the side of the Entente. The arrival of American soldiers changed the balance of power and would contribute to forging the eventual victory … Profoundly shaken by two revolutions, Russia signed an armistice with Germany on 15 December.⁸

There is no pretence that France fought alone, even though her losses were particularly heavy.

Yes, the French are rightly proud of their country and its armed forces. But all those names – those familiar names – and all those crosses, in such a small village, leave no one in any doubt about how dreadful war is. And if there is a political message it tends to be pro-European. French Prime Minister Édouard Philippe’s words at Compiègne in 2017 are typical:

When you live in Compiègne, or further away, in Belgium, the Netherlands or Germany, to love peace is to love Europe. Her peoples and cultures, and her diversity of course. It’s to love wandering there, studying there, discovering her beauty and history. But it’s also to love the political Europe: her freedoms and shared citizenship. It’s to love her with her imperfections and failings. Despite her complexity and delays. Yes, if you’re European, to love peace is to love Europe: a Europe that reminds us of the eternal values that unite us, and the disasters that we mourn.⁹

The eleventh of November in France is deeply patriotic, but doesn’t strike this foreigner as being excessively nationalistic. I am not entirely sure that the same can be said of Britain, and Armistice Day is certainly not seen as an occasion for reminding the British of the need for European integration. As a schoolboy in 1953, William Wallace sang at Queen’s Elizabeth’s coronation. Now a Baron and member of the House of Lords, he served for the Europhile Liberal Democrats in the 2010–15 coalition government in London. He recalls a memo written for David Cameron, the Prime Minister of the time, warning that ‘we must ensure that our commemoration [of the First World War] does not give any support to the myth that European integration was the result of the two World Wars.’¹⁰ If words fail you then I’m afraid I can’t help, for they fail me too.

You will hear no mention, and see no sign, of the sacrifices of the French, the Italians, the Russians or the Americans at the Remembrance Sunday ceremony held at the London Cenotaph on the second Sunday of November. This is a strictly British affair, although the High Commissioners of the countries of the British Commonwealth (the former British Empire) lay wreaths.^fn1 Poppies commemorating British soldiers who died in the First World War and subsequent conflicts are ubiquitous in Britain in the week or two leading up to the ceremony. British soldiers, it should be noted, not soldiers or civilians more generally.

Since 2014 the ambassador of Ireland, once a part of the United Kingdom but independent since 1922 and not a member of the Commonwealth, has also laid a wreath. Since the peace process of the 1990s Ireland has increasingly recognized the role played in the Great War by Irishmen like my grandfather. In November 2017 the Irish Taoiseach (Prime Minister), Leo Varadkar, even wore a poppy – embedded within an Irish shamrock – in the Dáil, Ireland’s parliament. In an Irish context his gesture was a rejection of nationalism – Irish nationalism. In Britain, while the dominant tone may be one of traditional patriotism, it would be difficult to describe the symbols and ceremonies associated with 11 November as anti-nationalistic. The legacy of war in most of Europe has been support for European integration. This has not been the case in the United Kingdom.

The Aftermath of the Industrial Revolution: Relative Decline

Europe was the first continent to experience the Industrial Revolution. As such it enjoyed an enormous increase in its relative economic, military and political power, symbolized by the European empires of the nineteenth century. Figure 1.1 tells the story in graphical form. At the start of the second millennium people around the world were (roughly speaking) all equally poor, and so the sizes of different economies depended more than anything else on their populations. China and India had the world’s largest populations, then as now, and so they had the largest economies. China accounted for 23 per cent of the world’s GDP (or output) in 1000, while India accounted for 28 per cent. Western Europe, in contrast, accounted for just 9 per cent. There followed eight centuries during which Western Europe’s share of world output slowly rose: it was slightly more than 20 per cent 800 years later, at the start of the nineteenth century. But then European incomes exploded. Western Europe’s share of world output peaked at 34 per cent in 1900, with four ‘British offshoots’ (Australia, Canada, New Zealand and the United States) accounting for a further 18 per cent. With plenty came power: industrial military technology overwhelmed local resistance across the globe. The share of the Earth’s surface controlled by Europeans rose from 37 per cent in 1800 to 84 per cent in 1914.¹¹ And Europe’s rise corresponded to the relative decline of the rest of the world: by 1950 India and China both accounted for less than 5 per cent of world output.

Figure 1.1
Shares of world GDP, 1000–2008
Source: Maddison (2010)

In the long run, however, modern industry spread across the globe, and the relative decline of Europe was the inevitable consequence.¹² Europe’s primacy was already ending at the beginning of the twentieth century, as the US emerged as the world’s largest industrial power. The two world wars hastened the transition from a Western European-dominated world, and by 1945 the two leading military powers were clearly the US and USSR. Not everyone wanted to admit this: the European colonial powers, in particular, were reluctant to accept their diminished status. In 1942 Winston Churchill famously proclaimed that he had ‘not become the King’s First Minister in order to preside over the liquidation of the British Empire’;¹³ in 1945 a politician from French Guiana, Gaston Monnerville, declared to the Provisional Consultative Assembly in Paris that ‘Without her empire France would only be a liberated country. Thanks to her empire, France is a victorious country.’¹⁴

The years that followed quickly revealed such statements to be delusional. First the Dutch were expelled from Indonesia, while the British left India and Palestine. Then it was the turn of the French in Indochina. Ghana gained its independence from Britain in 1957; by the 1960s the European empires had all but vanished. A key question for European statesmen was then how to avoid being overwhelmed by the Soviet Union and condescended to by the US. Greater unity seemed an obvious solution. Europe’s diminished status was perhaps more obvious, earlier, on the continent than in Britain. France, Germany, Italy and the Benelux countries had all been defeated in one way or another during the war. By contrast the UK had remained undefeated throughout the conflict, and it retained much of its empire during the crucial decade from 1945 to 1955. Perhaps it is not surprising that the need for small and medium-sized European powers to band together in an increasingly dangerous world was not obvious to everyone in London.¹⁵ But in Paris, on 5 July 1957, Maurice Faure, the Minister of State for Foreign Affairs, was clear on the issue when defending the Treaties of Rome^fn2 in the Assemblée Nationale: ‘You see, my dear friends, we still maintain the fiction that there are four Great Powers in the world. Well, there are not four Great Powers, there are only two: America and Russia. There will be a third at the end of the century: China. And it is up to you as to whether or not there will be a fourth: Europe.’¹⁶

The Aftermath of the Industrial Revolution: The Role of the State

Industrialization created a large class of workers that eventually started to demand higher wages, safer working conditions and state-provided social insurance programmes. Meanwhile industrial warfare required the mobilization of large conscript armies, and this gave governments an incentive to supply such demands for reform. If citizens were expected to fight for their countries then the state had to provide them with educational and other public services that would increase their identification with the state and ensure their loyalty.

Late nineteenth-century globalization also led to a demand for state regulation and social insurance policies that could protect workers against the insecurities, real or perceived, associated with open international markets. The late nineteenth and early twentieth centuries thus saw the introduction of a wide range of labour market regulations across Western Europe, as well as old-age pensions, and sickness and unemployment insurance. Interestingly, these reforms were most widespread in those countries most exposed to the globalization of the period.¹⁷

The two world wars gave a further impetus to the growing involvement of the state in domestic economies and to the development of social welfare systems. The aftermath of the First World War saw a significant extension of the electoral franchise, as well as an increase in the influence of trade unions and socialist parties. In 1942 the British Beveridge Report proposed the creation of a National Health Service, as well as better public housing and social welfare policies.¹⁸ French women were granted the right to vote in 1944. The defeat of Churchill in 1945 and the election of a British Labour government reflected the desire of ordinary workers who had suffered so much during the war to see their lives improve in its wake. Given the experience of the Great Depression, they were hardly going to be willing to ‘leave it to the market’: a push for greater government intervention in the economy was a logical consequence.

These heightened expectations on the part of ordinary people coincided in most of Europe with the widespread feeling that traditional nation states had failed their people – they had failed in providing economic security during the interwar period, and in providing physical security after 1939.¹⁹ The three crucial constituencies that had to be placated were agricultural voters, whose disillusionment had led them to support extremist parties during the interwar period in many countries; workers; and those dependent on the welfare state. The solution was to ensure rising living standards for the agricultural sector; to provide workers with rising wages and full employment; and to establish modern welfare states.

Accomplishing all three goals required an extension of government intervention in the economy. So did the economic growth strategies pursued by governments after 1945. These relied on high investment facilitated by complex corporatist bargains between capital and labour: the extension of the welfare state was a key part of these bargains.²⁰ As the economic historian Alan Milward says,

in the long run of history there has surely never been a period when national government in Europe has exercised more effective power and more extensive control over its citizens than that since the Second World War, nor one in which its ambitions expanded so rapidly. Its laws, officials, policemen, spies, statisticians, revenue collectors, and social workers have penetrated into a far wider range of human activities than they were earlier able or encouraged to do.²¹

What does all this have to do with the need for supranational European integration?²² On the one hand, the lesson of the interwar period was that European countries needed mixed economies, with governments that were more proactive in ensuring economic security for their citizens. But on the other hand, the interwar period also showed the dangers of protectionism, and the need for Europe-wide free trade if prosperity was to be achieved. The challenge was how to reap the benefits of trade, without undermining the ability of governments to provide that security. During the negotiations that eventually led to the Treaties of Rome, for example, French officials worried that laxer regulations in Germany and other countries would place French car manufacturers at an unfair disadvantage. The working week had already been lowered to 40 hours in France, while it was still 48 hours in Belgium and Germany. Since workers in France in fact worked as many hours as their colleagues elsewhere, this meant that French employers had to pay more overtime. Similarly, French women enjoyed (in theory) equal pay with men, while women could legally be paid less than men in other countries. The French therefore sought a level playing field, demanding that the new common market should have a standardized working week, standardized rules regarding overtime payments, equal pay for men and women, and similar rules regarding paid holidays.

The Germans resisted standardizing the working week and overtime rules, and in the end there was a compromise: the treaty establishing the European Economic Community (EEC) included a protocol stating that unless overtime hours and rates in other member states had converged to levels similar to those in France, France would be allowed to impose safeguard measures to protect its industries. The treaty also established the principle of equal pay for equal work for men and women, and committed member states to maintaining ‘the existing equivalence between paid holiday schemes’.²³ In the event, the Trente Glorieuses and the German Wirtschaftswunder intervened:^fn3 living standards and social protections increased so rapidly everywhere, and especially in Germany, that the issue was defused. But this did not mean that the issue was unimportant: on the contrary, it was essential that the domestic social welfare systems which underpinned governments’ political legitimacy as well as their economic growth strategies not be undermined by the development of Europe-wide free trade. ‘The problem genuinely was how to construct a commercial framework which would not endanger the levels of social welfare which had been reached … The Treaties of Rome had to be also an external buttress to the welfare state.’²⁴

In short, economic prosperity required trade, but political stability required welfare states. In order to achieve both prosperity and stability a free trade area was not enough: you needed European integration to set a common regulatory framework so as to prevent destructive races to the bottom. In this way Europe would come to the rescue of the European nation state.²⁵ But it did so by establishing the sorts of supranational institutions that many on the other side of the English Channel were allergic to.

Agriculture

A further consequence of Western Europe’s precocious industrialization was that it became a large net importer of agricultural goods, something to which European farmers naturally objected. From the mid-nineteenth century onwards steamships and railways lowered the cost of shipping food from the prairies of the New World to the markets of the Old, reducing European prices and agricultural incomes. This ‘grain invasion’ sparked agricultural protection across much of the continent that would become a permanent feature of the European landscape.²⁶ What the grain invasion failed to achieve, the Great Depression of the 1930s finally accomplished in such traditionally free-trading countries as the UK and the Netherlands.

After the Second World War all European governments wished to achieve food self-sufficiency for strategic reasons, and widespread agricultural intervention became the norm across the continent.²⁷ Governments promoted agricultural production by a variety of means: guaranteeing farm incomes, and encouraging agricultural investment and better farming practices. They also guaranteed prices for farmers. This meant raising domestic prices above world levels, and insulating domestic agricultural markets from world markets by means of strict import controls. By the early to mid-1950s food shortages were becoming less of a problem, and food surpluses started to emerge as a result of the guaranteed prices. At the same time low farm incomes remained a problem, with rising productivity and migration from the countryside to cities being insufficient to bridge the gap between agricultural and non-agricultural living standards. Faced with the inherent contradictions of the situation, agricultural policy in Europe became ‘increasingly complicated’ and more intrusive.²⁸

No European government of the 1950s could have contemplated a liberalization of agricultural production. There were therefore two logical choices facing politicians wishing to liberalize European trade. The first was to liberalize trade in industrial products alone, maintaining existing national agricultural policies. German industries would have gained from this, but such a bargain could never have been acceptable to France, Italy or the Netherlands, with their large agricultural sectors: in the early 1950s agriculture accounted for 13 per cent of GDP in France and the Netherlands, and no less than 22 per cent in Italy. Even more importantly from a political point of view, it accounted for 26 per cent of male employment in France in 1954, 20 per cent in the Netherlands in 1947, and 42 per cent in Italy in 1951.²⁹

This left the second alternative, which was to liberalize intra-European trade in agricultural products as well, but to replicate national agricultural policies at the European level – in other words, to develop some sort of Common Agricultural Policy. Such a policy would require a lot more intergovernmental cooperation than a mere free trade area: for example, decision-making rules on setting minimum agricultural prices, and rules for financing the consequences of surplus production. Liberalizing trade between the six founding member states thus required supranational institutions, and as we have seen many other considerations pointed in the same direction. The next chapter will discuss how Britain’s historical experience and political requirements were very different.