Orchestrating Europe (Text Only). Keith Middlemas
of the Berlin Wall on 9 November 1989), nor the reunification of the two Germanies. But all three events conditioned everything that happened in Europe thereafter. They affected EFTA, as Sweden and Finland reacted both to the removal of a forty-year-long threat and to the new-found independence of the Baltic States and Austria, with the return of growing normality, to what had once been Habsburg dominions. Above all they affected former West Germany and France, the EC’s central nexus, because the implications of a united Germany encompassed all the other eleven. The break-up of Yugoslavia, the collapse of Christian Democracy in Italy, and the undermining of the political right in Britain can be traced to the same origin, as can the growth of largely refugee immigration through east and south east Europe’s porous borders, with its direct consequences of racism and xenophobic nationalism.
In the years 1989–93, many of the vestiges of post-War settlements, in welfare programmes, industrial relations and state benefits, also died. Each country described its own parabola of declension: the new – or perhaps nineteenth-century Liberal – thought, first enunciated by the new right in Britain and the United States, passed through a sort of contagion, causing questioning, then fiscal and moral panics, and finally a scaling down of promises and expectations. The true fiscal crisis of European states, heralded in academic literature in the early 1980s, burst a decade later. Coinciding with disillusion after Maastricht, it had a corrosive effect on what remained of late-1980s’ aspirations.
Four Summit meetings stand out as markers on the road from Hannover to Maastricht. The first, in Madrid in June 1989, brought together the Delors Committee’s report on Monetary Union and the first draft of the Social Charter. The meeting was noted for Nigel Lawson’s attempt (speaking for a divided leadership) to be explicit about the terms for Britain to enter the ERM, though his government opposed both EMU at any point beyond stage I and the Social Charter. Defeated on the question of whether to have an IGC, and reduced to near-isolation by the accommodations between the Spanish Presidency, Germany and France (which had been made explicit in the Kohl-Mitterrand letter in favour of political union) Britain had to accept not only the IGC but EMU stage I in July 1990.
At the next Summit in Strasbourg in September 1989, with overwhelming support from the Parliament and smaller states such as Belgium, the French version of monetary union was accepted, with a date for that IGC (but not for the one on political union) after the West German elections and under the Italian Presidency at the end of 1990. Mitterrand had won his second seven-year term in 1988, and although his narrow Socialist majority forced him to govern with centrist approval, he had the firm support of his finance minister, Pierre Bérégovoy, in a period of stability, growth and falling unemployment – which he used to get the European Bank for Recovery and Development (EBRD) off the ground, with his protégé Jacques Attali as head. By then, the Commissioner for Social Affairs, Vasso Papandreou, had seventeen draft directives ready on all the aspects of industrial relations and conditions of work which had been stultified since the early 1970s.
The third meeting, in Dublin in June 1990, took place very much in the shadow of the Franco-German commitments to common foreign and security policy and to a second IGC on political union set out jointly by Kohl and Mitterand in April. The Irish prime minister Charles Haughey capitalized shrewdly on Ireland’s affinity with France, which was seeking to strengthen the European Council, extend QMV and inhibit the pretensions of the Commission and the Parliament. This also suited Helmut Kohl, whose government was prepared to pay the price so long as political union could be kept in tandem with its monetary counterpart.
Once again, the British Cabinet hesitated on the margins, its prime minister profoundly uneasy at the implications of the Kohl-Mitterrand agreement which had been made without consultation with either NATO or their EC partners. That lack of consultation had offended other governments as well: however the weight of the Franco-German entente lay heavy on them all, and was on the basis of this declaration that EC foreign ministers prepared for Dublin and its sequel, the summit in Rome, which to a large extent set the IGC’s agendas. All Thatcher could do, given Britain’s eleven to one minority, was – sensibly enough – to veto a Franco-German proposal for a large dollar loan intended to prop up the collapsing Soviet Union.
Italy took over the Presidency in July, before the Conference on Security and Cooperation in Europe (CSCE) meetings with the Soviet Union. Soon after, Giulio Andreotti became prime minister (Craxi having destroyed de Mita’s liberalizing government of 1989, together with the DC’s reformist programme which, in retrospect, was Christian Democracy’s last chance to save itself from shameful eclipse). Under his direction, the principle of two concurrent IGC’s for monetary and political union was established. After careful consultation with the German and French governments, Andreotti proposed a special ‘informal’ Council, to meet in Rome in October: his intention being to agree a target date for EMU stage II in 1994, with a further wide-ranging IGC the following year.
So hot was this pace that the Italian leader’s motives need analysis. It has been argued that, with the help of his own MEPs and other Christian Democratic parties, Andreotti set a truly Florentine trap for Margaret Thatcher, while her attention was diverted by the July G7 meeting in Houston and by GATT negotiations, so that she went largely unprepared into the October special Council.11 Certainly her political nemesis was welcomed widely across the EC – in what one French diplomat described as a mood of soulagement. Yet there is no evidence among member states, whose policies were much more finely balanced than their leaders’ statements usually allowed to appear, of a desire to marginalize Britain. Concessions on stage II, and even some consideration of the chancellor of the exchequer John Major’s ‘hard ecu scheme’ had not been ruled out. But the Italian coalition was committed to transferring power to the Parliament. Andreotti may also genuinely have been concerned that the agenda for December was too vast for one meeting, since he attempted to agree much of it in advance at bilateral meetings and in the encounters of Christian Democratic parties in the late autumn. The German government had agreed not to bring forward the subject of the next set of GATT negotiations, hoping thereby to avoid antagonizing France (whose farming lobby passionately opposed the Blair House Agreement), while helping Andreotti’s fragile pentapartito administration. The German government’s concession of a firm date for EMU stage II, made during the October special Council, certainly strengthened France’s tentative acceptance that the two IGCs on monetary and political union should coincide.
Some of this can be ascribed to German and French governments’ calling in of past favours to Italy. But Italy also provided a skilful chairmanship which falsefooted British and Danish opposition. There was no discussion of GATT. Instead, proposals on political union and EMU stage II for January 1994 were confirmed, in advance of the IGCs. Thatcher had failed to seek alliances for her point of view and found no support except from Ruud Lubbers of the Netherlands.
France and Italy emerged with their governments’ main aims agreed. The real winner was Helmut Kohl who had been hoping for an uncontroversial reunification after the successful East German elections in March, and before public opinion during the West German elections began to question the terms. At the year’s end, Germany in effect paid for USSR approval of reunification and the new Germany’s continuing NATO membership with a massive hard currency sum to cover the withdrawal of Soviet troops from the former East Germany. In the same month, the five new Länder were absorbed in the enlarged Federal Republic, under Article 23 of the 1949 Basic Law; and once Kohl belatedly acknowledged the existing Polish border (cutting off the original pre-1914 East Germany for ever), the Soviet Union was excluded from central Europe for the first time since 1944.12
The fact that the two IGCs which began after the Rome meeting were to be concurrent, starting under the Luxembourg Presidency and ending under the Dutch one at Maastricht a year later, did not imply that they would resemble each other. The one on political union and Interior Ministry questions remained very largely a matter for inter-governmental negotiations. The question of monetary union involved the Commission to a far greater extent, and its influence permeated many of the texts. But the two were intimately linked, as Andreotti had argued; at the same time, the agenda was complicated by the issue of the reform of EC institutions, and by cohesion and the budget cycle after 1992 (which was essential for future cohesion funds), together with the Social Chapter, to which both were closely related.