WHERE IS EUROPE HEADING
admin1 – May 25, 2007 – 11:10am

By Michel Rocard - for CROSSROADS

Michel Rocard est un homme politique français Ancien ministre et Premier ministre. Depuis 1994, il est député au Parlement européen, membre du groupe parlementaire du Parti socialiste européen.

Michel Rocard is a French politician, member of the Socialist Party (PS). He served as Prime Minister from 1988 to 1991. He is currently a member of the European Parliament.

It is a source of pleasure to know that the Republic of Macedonia is a candidate for membership in the European Union and that its citizens are starting to show interest in this.

When in January this year our Romanian and Bulgarian Euro-MPs joined us at the formal session, I, an experienced politician, once a decisive and cold blooded Prime Minister, almost had tears in my eyes. So many wars are being wiped from our memory and their repetition is becoming impossible… Welcome Macedonia, the sooner the better. However, caution dear friends: it isn’t a question of speed, nor ease, nor fatalism. The union is not just an agreement, like others, it means to live with common values and forms of organization of society which deeply transform its own members. Be sure in yourselves.

Today’s Europe is quite different from what its founders wanted to achieve and the adventure of the Union is in many aspects astounding.

The Roman Empire realized an all encompassing Union of Europe. Carlo the Great brought it back to life at the beginning of the 9th century. The division of his empire between his three grandsons took us into a millennium of constant wars. The dream of the Union appeared from time to time: Carlo V, Anri IV of France, Bonaparte. But nations survived, as did the wars.

The idea for a peaceful unification once again appeared during the middle of the 19th century. In 1851 the greatest bard of that idea is Victor Hugo. Such ideas are fruitless and as a result the French – German war in 1870, then the World War 1914 – 1918 turns into a great slaughter. The Frenchman Briand and the German Stresemann take over the baton. However, the economic crisis of 1929 - 1932 leads to the election of Hitler to office in Germany and with that the Second World War and 30 million dead.

In 1945 it becomes clear to everyone: that the unity of Europe must be secured in order to prevent future wars.

Two French visionaries, Jean Monet and Robert Schuman, ponder on the reasons which brought about a century of failures. According to them, it is impossible to expect national parliaments to vote in favor of giving up essential characteristics of sovereignty. That would be contrary to their vocation. Monet and Schuman see that the only solution is in creating technical inter-dependency in Europe which would be sufficiently strong to link the nations in an unbreakable way and to create a regulatory power that will not bring into question national sovereignty. They attracted to their vision Konrad Adenauer from Germany, Alcide De Gasperi from Italy and Paul-Henri Spaak from Belgium.

That is how the first project was born: fusion of the industries for coal and steel of France and Germany, in order to prevent the rebirth of the military industries in these countries. Belgium, Holland, Luxembourg and Italy join this community first of all because of economic reasons.

And it works. The goal is peace, the tool is a community for technical management, while the explicit hope is that this project will be the zarodis????? of strong federation of European states, capable at a given period in time to have an integrated economy, with its own money, diplomacy, army, with which it will have influence in the world equally strong and in the way in which the USA does it. The European Steel and Coal Community was created in 1951. The attempt to create a joint army was undermined by France in 1954. Significant step forward in favor of the European idea came from two agreements signed at the same time in 1957. The first had the goal of creating the European Atomic Energy Community (Euratom) regulating nuclear energy for civilian use. It was quickly ratified and implemented only to loose its meaning later having in mind that France wanted to keep its civilian nuclear program under its control. It is obvious that France, when Europe is in question, is the greatest creator of ideas but at the same time it is also its greatest destroyer.

The second agreement, signed at the same time as the “Euratom”, in 1957, is in fact an ingenious idea from the 20th century. That agreement will change the history of the world. It is known as the Treaty of Rome, it formed a “joint market” creating with it the European Economic Community. This was a simple idea: lift all customs and non-customs obstacles to trade between the nine member states, a common customs policy is introduced towards non-members, and to regulate this they created over-dimensioned institutions. They still exist: The European Commission implements decisions and manages the market. Besides this it also has an exclusive right to propose new rules. The Council of Ministers decides. Then comes the Parliament which at first had a consultative role, but today it has all the characteristics of a classic Parliament: it votes in laws and the budget, it can have a vote of no confidence for the Commission, it controls its activities, but there is one exception: it does not propose laws. And finally a Court of Justice was formed to resolve conflicts.

Quickly ratified by 6 of the founding states, the Agreement started to be implemented as of January 1958.

It is immediately a triumph. The increase in internal trade gives “small Europe” a significant economic dynamic which has an effect on its exports towards the rest of the world: From 1961 – 1980 Europe will double it’s GDP. It dominates the world with its exceptional progress. All of our neighbors are surprised and full of praise and sometimes fear. How is it possible that the Germans and French, who hated each other for centuries, managed to not only reconcile but to also create and manage together such a phenomenal machine?

The country which at first asked itself most of these questions is Great Britain. At the beginning, it formally did not approve this project and did everything, truly everything, to prevent its success. That is understandable. As far as the English were concerned, for more than a millennium anything that came out of the continent was mostly considered a catastrophe; of course first of all the wars but not just them. They generally accept the feeling that we are all slightly barbarians. They created democracy and habeas corpus, while we created wars of extermination. For centuries and with incredible continuity, English policy is based on this: to do everything so that the continent remains divided and weak, sometimes to make an alliance with the second military power on the continent in order to weaken the first.

This is the reason for the initial English hostility towards the European adventure at its beginnings. Then came astonishment, then hesitation when it became clear that the project is working, quite well at that. Great Britain immediately changed its position: a common market benefits trade, so it suits us. But it shouldn’t grow into something more. And we the English can prevent this only if we are on the inside. Great Britain requested to become a member for the first time in 1961. The President of the Republic of France Charles de Gaulle vetoes this in 1963. The second English request, accompanied by Denmark, Norway and Ireland comes in 1967. The six member states after two years of blockades by general de Gaulle, finally accepts the new members when President Pompidou refrains from a veto. This essential enlargement was quickly negotiated: the people of Norway voted against, while Great Britain, Denmark and Ireland become members. It will take thirty years for us to understand that the initial idea for a Europe – federal, political and powerful – died that year. What we did and what is happening to us since then is quite different, which undoubtedly is no less important.

But you couldn’t see that immediately. On the contrary, economic performance has significantly increased. Reconciliation after a world war is an exceptional achievement which incorporates the English. All our countries support each other and everyone want’s to be part of the project.

At that time Europe is just an economic community. To be truthful, to a great degree all the next requests for membership were not because of economic reasons. Europe is seen as an absolute guarantee for peace and security, as a brand which confirms democratic maturity – Spain requested membership from the very onset, but was refused because of its fascism – and of course an exceptional opportunity for economic growth and prosperity.

Greece, which had been destabilized by the awful adventure by the fascist colonels, requested membership in order to consolidate its young democracy - in spite of its different economic interests. It became a member in 1981, which is the second round of enlargement. Spain and Portugal need the same thing after their dictatorships disappeared. They would join together in 1986 which is the third enlargement. At the time we are twelve. Then comes the fall of the Berlin Wall, the dissolution of the Soviet Union and the democratic transformation of new Russia. There are no more obstacles for the requests for membership from Sweden, Norway, Finland, and not even for Austria. They would join together in 1995, with the exception of Norway whose people voted against joining at a referendum. The three new members are neutral. This was the fourth enlargement.

After this, one after the other, the countries from central Europe and the Baltic states finished with Communism and requested to become members. Slovenia, Cyprus and Malta join them. This is carried out in two stages. First ten countries: Estonia, Latvia, Lithuania, Poland, Hungary, Czech Republic, Slovakia, Slovenia, Cyprus and Malta in 2004, Romania and Bulgaria in 2007. Today we are 27 members. To this number we have to add the candidates for membership, the Republic of Macedonia, Croatia and Turkey. The group of potentially declared candidates encompasses Albania, Bosnia & Herzegovina, Serbia, Montenegro, and we include here also Kosovo.

1972 – 2007: 35 years to enlarge a small initial community to encompass today almost the entire Europe which is finally united on the basis of an institutionally guaranteed peace. This is almost an incredible adventure. Historically it is a miracle, but it is also changed of the map of the world. Europe devastated and terribly weakened after the Second World War has finally awakened.

However, on the inside things are not functioning so well. In the system, as we said, the power is in the Council of Ministers. But all Governments are facing the fact that their sovereignty is being reduced and are opposing this with all means.

Already, the transformation of the common market into a common market of goods, services and movement of capital, in which companies from all member states  participate at all public tenders, is already being carried out very slowly and with great difficulty. A new agreement was needed and The Single European Act is signed in 1986. At least it was done.

As far as everything else is concerned, internal life in Europe brings about fatigue and depression. The institutional system, which envisages unanimous decisions in the Council of Ministers for important decisions, worked somehow when there were 6 member states. With 27, it is impossible. Three consecutive treaties, the Treaty from Maastricht (1992), Amsterdam (1997) and Nice (2000) gradually expanded the powers of the Union and the fields in which decisions are made with a qualified majority. After 30 years, 80% of all decisions are made in this way. However, foreign policy, security, fiscal policy, the essential part of worker rights and social security are still based on the principle of unanimous decisions, which means that there is almost no progress.

Some dreamed of deepening the Union before enlargement occurred, or at least at the same time. That idea failed. Almost all the rules for governing Europe that were in force when it had only six members are in force for a Europe with 27 members. That causes a dangerous paralysis.

In these circumstances, the existing routine of the Union, more precisely the realization of the common market and its regulation is being carried out slowly but more or less in an acceptable manner. On the other hand it is very difficult to adopt a new decision which will have appropriate gravity from an economic and financial standpoint. This refers to the fiscal policy, deep reforms of current policy, and first of all for the Common Agricultural Policy (CAP) or the necessary concessions in reference to the World Trade Organization (WTO).

Almost nothing is happening outside of the economic and financial sector. We can not agree on a common foreign policy, but can only undertake joint activities in foreign policy. There are many, but they are individual and without greater political importance. The Middle East is the only issue on which we managed to reach a relative agreement of opinions which enabled us to work together and to have a certain amount of influence. On the other hand Europe was powerless before the dissolution of the former Yugoslavia and the numerous atrocities that were committed there, because it could not reach an agreement on what could be done. In the field of defense, especially after the pro-European shift by Tony Blair on this issue, during the France-German summit in St. Malo on December 4th 1998, gave a strong impulse for the integration of European defense forces and for their engagement in humanitarian and peace keeping missions. This launched the idea for an integrated military unit of 60.000 men which would be capable of carrying out world wide operations and capable of sustaining themselves in the field for one year, of course only in peace keeping operations, possibly under a mandate from the UN. If I remember well they have already been engaged in Bosnia and in Kosovo. However, after several years the impulse has weakened, there is no more faith and enthusiasm and the whole matter has been diluted.

Progress has also been slow in the judiciary. Our legal systems are very different and as a result it is difficult for them to communicate between each other. We need a strong political will here, but that is exactly what we are lacking. The only significant success is the defining and implementation of the European Arrest Warrant which, if I may conclude, is functioning exceptionally well. But that is still insufficient.

Finally the failure of the constitutional project, because of the negative referendums in France and Holland, not only prevented the adoption of certain simplifications in procedures, it also wiped away the enthusiasm. This failure convinced first of all the Governments that years are needed before an agreement is reached on something that would be acceptable for everyone, it has also encouraged those Governments who started to think that the European Union has gone too far, that it is too expensive, that the too great integration is irritating the general public at a national level and that it is time to start unraveling the already too tight??????. Far from it that the British are the only ones who share this opinion, however they are still the only ones, not for long, who dare state this publicly. I don’t at all believe, and I write this without a crumb of satisfaction, that the German Chancellor Angela Merkel’s efforts to renew the constitutional process will succeed.

Let’s take stock of this pile of debris. Four conclusions emerge:

The First is that a political Europe which will become a diplomatic and military power is dead. No one wants it any more. The dream, first of all by several Frenchmen, to launch at any opportunity they could get the idea for such a Europe, has no rational hope of realization.

As a result of this the question is asked: what is the definition of Europe? The European Economic Community had the status of a legal entity, which is not the case of the Union, and without a Constitution that will continue to be so. On the other hand, agreements explicitly envisage that security and protection of vital interests are within the exclusive power of every member state and they have not been delegated to Europe. Some (Ireland, Sweden, Finland, Austria) chose to deal with this problem becoming neutral, while most of the other members states by becoming members in NATO. This implies that the institutions of the European Union can not discuss their borders, even less to define them. When a collective of international public law speak about their borders, this is of course to guarantee them. While Europe is not authorized to guarantee anything. So it is a territorially undefined community. This is an essential question. Throughout history, its borders significantly changed and that might continue into the future.

So Europe is an undefined community of nations that are not linked not even with a common political will, neither by believing in a certain theory, but rather with the choice to create common rules for functioning. These rules are grouped into two groups: those that refer to human rights and representative democracy, which in this field are the best in the world; and those that refer to the art of production and trade, respect for competition, which once again are the best in the world.

I think that we can conclude that Europe will never have a common foreign policy nor will it ever be able to take care of its security on its own: most of our member states don’t want that. I am less and less convinced that we should feel sad about that. The force of Israel is not enough to solve the Palestinian problem. American force is bogged down in Iraq and Afghanistan and has no more reserves to manage Iran or North Korea. Even more, this North American force can no longer threaten Latin America which is pulling out from the influence of the USA, not even Turkey which we have to remember refused the request allow the transfer US troops through its territory during the invasion of Iraq in 2004.

In today’s world of giants which mutually neutralize each other, it seems that force is playing only a marginal role. There will be no political or military Europe? There it is – let’s not cry over that.

Even more so because of the second element: what we have already managed to create together, is historically astounding and economically colossal. The creation of a market of 540 million consumers, which has undoubtedly become the leading economic force and even more convincing the leading trading power in the world, after millenniums full of war and hatred in Europe, and especially the maddening violence that devastated it in the period 1870 – 1945 – that is an exceptional success, a type of historical challenge. At the same time this economic entity has an obviously strong reconciliatory virtue. To belong to the European Union, that means to own a certificate for security, peace, prosperity and democracy. And the Union knew how to implement the practice of investing in the development of its less advanced members, which to a certain extent is supporting progress. Integration into the Union is the most secure factor for the swift development of the Balkan, as it is probably for Turkey and the region of the Caucuses. Unfortunately it is unimaginable that such a united force could more and more influence developments throughout the world, even if limited to the economic and financial field.

The third element: even though the European cohesive force has gradually weakened in the past twenty years, even though there is no dynamic at the moment, it is a fact that an absolutely grand decision was made, a decision which constantly shows its consequences: the creation of the Euro. Slovenia recently joined the group (the first former Communist country to do so) of thirteen countries which gave up their national currencies in order to transfer to the Euro as a common monetary instrument. The GDP which supports this currency is approaching the GDP of the USA. The Euro is already the first world currency in the field of issuing secured loans and its participation in global liquidity is in a gradual but constant increase. I will come back to this issue when I finish the part about the economic situation in the rest of the world.

But first the fourth element: I should mention that it is possible that another grand decision is in the making which might contribute to the partial compensation about the perception of dissolution and dead hope which Europe is depicting at the moment. I want to talk about energy. Regardless of the tide of nationalism, which is spreading everywhere and is taking up with it some of our Governments, regardless of the immanent fear that the Council of Ministers causes when it even mentions another step forward towards a greater integration of Europe, however obvious is the pleasure of some to see that the machine has been stopped, it is obvious that the energy challenges of the 21st century can in no way be dealt with at the national level. Whether we are talking about supporting research in the field of renewable sources of energy, securing safe supplies from the Middle East and the Caucuses, the rounding up, the more dense and the rationalization of the Euro-Asian map of oil pipelines or gas pipelines, all of that can not be carried out efficiently except at the European level. The Commission knows this and is getting ready to come out with an ambitious project before the Council of Ministers and before the Parliament. That will be support for massive savings of energy and a change in the composition of what is available in favor of renewable energy, in an amount which will be sufficient to enable the continuation of economic growth, significant reduction of the emission of greenhouse gasses. This is enormous but also rationally possible, and it is obvious that if Europe succeeds in doing this, in the eyes of the rest of the world and before itself, if will attain a meaning, an image and first rate influence.

So that is where the European construction, initiated in 1950, is today. Until now I have only spoken about Europe as it is seen on the inside. But in the past 50 years the world has dramatically changed. World population has more than doubled, growing from about 2 billion to about 6 billion people; the difference in income between the poor and the rich countries has increased from 1-20 to 1-30 (in 1950) to 1 – 100 (today). The communist adventure was suddenly finished, taking all the hope from Africa, Asia and Latin America that a better future is possible through a non-capitalist economic system. Under such circumstances an essential shift occurred which deeply influences Europe and its future.

That is an internal transformation, in fact a revolution that happened within 30 years in all the capitalist systems of the developed countries and which pulled with it and had an essential impact on Europe.

Capitalism was created at the beginning of the 19th century. This is an ingenious system because it calls on the entire population to participate in development???????????????????????????????????????????????

This is also a frighteningly cruel system. However, because it is efficient the history of developed nations shows that at the end the system was accepted primarily because its enormous efficiency enabled a gradual reduction in cruelty. That is in fact what happened.

The system also had a third characteristic: its instability. In the 19th century it manifested itself in the crisis’s it created every 10 years. The strongest was also the last, from 1929 – 1932. In only six months it caused a reduction in GDP by 30% in the three most developed countries at the time, Great Britain, Germany and the USA, increasing unemployment in those countries from 2 or 3% to more than 25%. Because of a lack of social insurance or assistance for the unemployed, people died of hunger. It was exactly that crisis which brought about the election of Hitler in Germany, and as a result war. At the end of the drama it was clear to everyone that such a dangerous capitalism must be stabilized and controlled.

Beveridge (an Englishman) explains that the more you expand social security, the more the system is stabilized. Cain (another Englishman) explains how to utilize budget and monetary policies to prevent oscillations in the system. The American industrialist Henri Ford understood this; he stated and implemented the fact that in order for the massive production (which the system enables) to be consumed, you have to pay out the highest possible salaries. America will exit the 1929-1932 crises thanks to this policy, which the Europeans will adopt as soon as they can do that, more precisely immediately after the war. These three correctors of capitalism, primarily the last one, will enable the phenomenal blooming of capitalism after the Second World War. Henri Ford is the person who really defeated Karl Marks.

This opened up an unprecedented period in the history of mankind. From 1945 up to 1972-73 all developed countries (North America, Western Europe, Japan, Australia) will notice a continued, regular and strong growth of approximately 5% (on a global level) without noticing even one general or even regional financial crisis – except several national bankruptcies which were quickly isolated and treated – followed by full employment for more than 25 years. Today that has been forgotten, but it was an extremely powerful show. It contributed a great deal to the dissolution of the communist block during the cold war. It is exactly because of that memory that all the countries of the European east, without exception including of course Macedonia, requested to join the European Union.

But the beautiful machine broke down because of practice and a theory. The balance of regulated capitalism in the year from 1945 – 1975 created a noticeable growth of large multi-national companies which separated from the family type capitalism and became managed by paid managers. A thousand of these companies produce one fifth of global production, but that is enough to track the direction of the evolution of the system. The skill of the managers was in their ability to maintain their companies through a balance between workers, suppliers, clients, banks and shareholders. During this long phase, which the French economist Jean Fourastie called “the thirty great years”, maintaining the entrepreneurial policies of very intensive investing in research, supported by the policy of high salaries which I already talked about, brought about the conclusion that the profit which the shareholders were realizing over a longer period of time was insufficient.

That is when the revolution of the eighties occurred, during which shareholders grouped themselves into investment, retirement, arbitration or hedge funds. They captured shareholder meetings and administrative bodies in all the large companies. Their pressure is enormous. They replace the management of companies that do not give them a sufficient piece of the profit, they pressure for the laying of from work of all those who are not essential in the work process, they “externalize” smaller obligations (maintenance, repairs, cleaning, production of certain elements) to small and medium companies which they can pay poorly. They increase this pressure by increasing the number of public offerings.

The results are astounding. In all developed countries, the total mass of unemployed, workers on the border of social existence, and of the poor who have been eliminated from the labor market – reach 20% even though the proportion of unemployed compared to the number of temporary workers varies from country to country. The average real salary in the US has not increased in the past 20 years, while GDP has increased by a third only to the advantage of the richest. The average real salary in France has been stagnating in the past 6 years. In the past 25 years, participation of salaries in national product among 15 of the oldest member states of the Union has decreased by 11%. Suddenly the consumers buying power is gone. Growth is weak, insecurity in the labor market is growing, the middle class in our countries has been destabilized, no one believes in it any more. Europe is being accused more and more for this situation even though it contributed with nothing to this. That is why we had the negative vote (there would have been a negative vote in Germany and in England if a referendum was held in these countries) which immobilized Europe.

The only thing you can blame Europe for is the inability to correct this evolution coming from the side. But the conservative ruling elites in Europe played this card, which at the beginning brought them enormous profits. Besides this, a new doctrine (monetarism), explains that the balance of the markets is optimal and that countries must in no case undertake any corrective measures.

Normally, the new ruling conservative elites in the countries to the east of Europe were enthralled with enthusiasm towards that new regulation without the least bit of understanding about how it functioned. The share that salaries take up in the GDP is reducing for everyone and the engines of growth in them will also weaken, as it happened with us.

All of these developments are being carried out under the management of a new ruling economy, the one of the USA, which lives off the profits of real estate and the market for half of its GDP, it imports the greatest part of what it consumes, it accumulates deep trade deficits – today it is 6% of GDP – and continues to maintain itself because it can increase its debt by 2 billion dollars a day.

That is crazy. Not only has the global system returned to its social cruelty (20% are poor, temporary employed or unemployed) and to its instability, but it is also now clear that it is rushing at great speed towards a great crisis.

Before that global disorder, Europe is a type of protector and the Euro is a type of anti-seismic safe house. Unfortunately, by discarding the constitution, if I may say so, we forgot to select the keeper of the safe house.

It is a fact that facing the tornadoes which are being predicted, only the European Union, first of all through its Euro monetary zone, has the necessary strength not only to protect itself but first of all to re-direct currents and balances, and to secure certain elements of counter-balances.

So Europe is potentially our chance for salvation; facing the serious risks towards which we are being pushed by current development. Not one of our countries can oppose this on its own or take refuge from what is obviously in the works.

But in order to really take refuge, it necessary to once again find a flexible but efficient regulation of the market economy. International social-democracy is quite qualified because of its past to take over what is starting to be considered an obligation, before it grows into a different type of management. But it isn’t the only one and it does not have a monopoly.

This is first of all the job of all the citizens of Europe who must try to understand what is happening to us and to understand where we are going in order to take destiny into their own hands and to fight for a better future.