VI A Coordination of the Movements for a United Europe

VI A Coordination of the Movements for a United Europe The International Committee of the Movements for European Unity. In December 1947 the several movements working actively for European unity decided to coordinate their efforts in order to avoid the danger of duplication and confusion and to conduct a joint campaign for unity throughout the European Continent. With the exception of the Socialist Movement the several movements decided to form the "International Committee of the Movements for European Unity." The Committee was "to inform and lead public opinion; to study the political, economic and technical problems of European Union and to suggest how they could be solved; to promote a sense of European consciousness and common loyalty to Europe; by every available means, to mobilize public opinion behind the policy of European unity and to provide a medium through which supporters of this cause could make their influence felt." x The "Congress of Europe." One of the first actions of the Committee was to convene a Congress of Europe at The Hague from May 8 to 10, 1948. The aims of this Congress were: "(1) to demonstrate the widespread support for the cause of unity existing throughout the free countries of Europe; (2) to deliberate upon the issues involved, and make practical recommendations to governments; and (3) to provide a fresh impetus and inspiration to the European campaign." 2 The Congress was attended by more than 800 delegates from almost all parts of Europe. Several former prime ministers and for1 The European Movement, European Movement and the Council of Europe, Hutchinson & Co., London, 1949, pp. 35, 36.

2 Ibid., p. 36. 124 MOVEMENTS FOR A UNITED EUROPE 125 eign ministers, politicians of various parties, bishops and prominent churchmen of all denominations, business and labor union delegates, and other representatives of every important sector of European life were invited. The President of Honor of the Congress was Sir Winston Churchill who addressed the opening session with a speech on the urgency and desirability of European unification. The Hague Congress resulted in the inauguration of a new organization under the name of the European Movement whose Presidents of Honor became Blum, Churchill, Gasperi, and Spaak. In each country a National Council composed of delegates of the various unification movements was formed. Where the countries had a totalitarian regime, National Committees of democratic leaders in exile were formed. The discussions of unification problems by the Congress were conducted in three committees—political, economic and social, and cultural.

Resolutions on Political Union. The political discussions mainly dealt with the creation of a "Council of Europe" and a number of resolutions the most important of which read as follows: "1. No attempt to reconstruct Europe upon the basis of rigidly divided national sovereignty can prove successful. 2. The nations of Europe must create an economic and political union in order to assure security, economic independence and social progress; and for this purpose they must agree to merge certain of their sovereign rights. 3. A European Consultative Assembly, whose members should be nominated by the Parliaments of the participating nations, must be convened forthwith. 4. The European Union or Federation should be open to all democratic European nations which undertake to respect fundamental human rights. 5. A European Court of Human Rights backed with adequate sanctions should be established to adjudicate in cases of alleged violation of these rights.

6. The special ties which at present link the countries of Europe with other States and dependent territories overseas must be preserved. 7. The creation of a United Europe must be regarded as an essential step towards the creation of a United World."3 These political principles were reaffirmed and given full expression at subsequent meetings of the International Committee, s Ibid., pp. 47, 48.

126 DOCTRINES AND PLANS OF UNIFICATION An Economic and Social Resolution. The Hague Congress also discussed and adopted a resolution on the economic and social problems of unification. It dealt with the broad principles of a European economic policy and was meant to be a common basis for future action. These principles of economic policy indeed were so broad that they were accepted through unanimous vote by all political parties and groups represented. It proved impossible, however, to formulate detailed proposals of European unification. For this reason the European Movement decided to convene an economic conference at Westminster which should discuss the important economic problems of unification. Westminster Economic Conference. In April 1949, two hundred delegates including businessmen, trade unionists, economists, and politicians from all over Europe met at Westminster and discussed the economic aspects of the European problem. After several days of debates the Conference resolved that "Europe needs economic union in order to build a stronger, more efficient and more productive economy on the ruins and rubble left by the last war. This strength, efficiency and productive capacity can only be attained if Europe makes a rational use of all its resources, if it creates a market large enough to give full scope to the economies of mass-production, and if it allows all to share equally in the advantages of scientific invention and technical progress. Thus, and thus only, can the standard of living of Europe's peoples be raised as rapidly as respect for the inalienable human rights require that it should be." 4 "Europe needs economic union," the resolution reads, "in order to promote a fuller and better understanding among its peoples by removing all those international obstacles which today restrict their freedom to seek work, to undertake business, to travel and live where they will. Thus, and thus only, can Europe create a civilization composed of distinct but integrated elements. . . . The purpose of the union must be to constitute within Europe an area in which men, goods and capital may move with no more difficulty than is experienced today within the frontiers of a single country." 5 A Customs Union Advocated. The delegates proposed the creation of an economic union that was to be protected from outerEuropean competition by tariffs and other restrictions. Whereas the customs barriers, quotas, and all currency obstructions were to be eliminated within the Union, restrictions were to be continued towards other continents. "The first measure to be adopted as a re4 ibid., p. 98.

5 Ibid., pp. 98, 99.

MOVEMENTS FOR A UNITED EUROPE 127 suit of this agreement," the resolution on the Customs Union reads, "should be a declaration of a truce both as regards tariffs and as regards quantitative trade restrictions. No modification of this truce should be permitted. . . . The second task which should be initiated forthwith, and accomplished while the truce is in force, must be the elaboration of a common tariff, vis-a-vis the rest of the world, which, in accordance with the accepted principles of commercial policy, must not be higher than the average of the tariffs of the participating states." 6 According to this resolution, the participating European states are to effect the removal of interEuropean tariffs and quotas within a period of ten years. To this end, a minimum annual rate of reduction of restrictions should be determined. Government Protection of Workers to Be Continued. Although all forms of indirect or direct commercial protection and especially all forms of unfair competition, such as discriminatory transport tariffs, should be prevented, "the measures taken by the governments with a view to improving the living standards of the workers or their professional status should not be considered as having a protectionist character, so long as they are not disguised subsidies aimed at artificially lowering the cost price." Also in the determination of the annual rates of reduction of restrictions "due account should be taken of the need to ensure full and productive employment 7 in each country, and to maintain a satisfactory standard of living: and for these purposes, transitional measures should be adopted to facilitate the adaptation of national economies to the new conditions of the Union. . . . During this same period, every effort should be made to bring fiscal and social policies into line in a manner as favourable as possible to the workers, taking into account relative productivity."

In addition, collective bargaining on a Continental basis should be initiated and "collective European agreements should be discussed between the representatives of employers and workers in order to afford the latter minimum guarantees based on principles. It should be remembered that the standard of living of the workers is an element of vital importance in any plans for the realization of European unity. . . . The full employment of labour must be regarded as a moral, social and economic necessity. As far as possible, and taking into account family needs, each country should aim at providing adequate employment for its nationals through the in6 Ibid., p. 100. 7 Italics added.

128 DOCTRINES AND PLANS OF UNIFICATION tensive exploitation of its natural resources and the development of its industry: a development which will be encouraged by the free movement of capital within the European Union."8 Convertibility of Currencies and Financial Policies. In a section dealing with the convertibility of European currencies the resolution reads as follows: "No scheme for a European Economic Union can be fully realized unless Europe is organised as a zone within which there is free convertibility of currency. This free convertibility may, during a transition period, be limited to exchange requirements originating from current transactions. During such a period capital movements may continue to be controlled. "The participating countries should coordinate their financial policies with regard to: (a) The extent to which provision is made for budgetary surpluses or deficits affecting monetary equilibrium; "(b) capital movements from one country to another, in order to prevent such movements from upsetting the balance of payments of the countries concerned; "(c) credit policy." 9 The financial policies as well as the rates of exchange are to remain subject to the regulations of the Bretton Woods Agreement.

Socialization of Basic Industries. As to the European basic industries, the economists gathered at Westminster resolved the following: "Study of the industries concerned reveals a variety of common problems regarding such questions as to coordination of investment, production plans and research; the study of markets; standardization; vocational training and cooperation in the prevention of unfair trade practices by governments or by commercial undertakings." To this end "three organisations should be created in each of the four basic industries—Coal, Iron and Steel, Electricity and Transport —namely: "1. A European governmental body which would have as its function the definition of general policies in the industry concerned, in particular the policies concerned with investment, volume of production, and prices, in order that it shall always be in line with the general policy and with the economic and social aims of a European Union.

"2. A consultative body consisting of employers, employees and s ibid., p. 102. o Ibid., p. 103.

MOVEMENTS FOR A UNITED EUROPE 129 representatives of the public interest whose task would be to advise the European governmental body on matters of general concern to the industry. . . . "3. One or more organisations of employers drawn from both publicly-owned and privately-owned undertaking, on whom would fall, amongst other duties, the task of carrying out the general directives and recommendations of the European governmental body. . . . "In the event of an employers' organisation failing to act in accordance with these principles, the European governmental body would have power to institute proceedings with the competent judicial authorities, leading to the possible applications of sanctions such as: the cancellation of certain decisions, the award of damages to injured third parties, the suppression of the employers' organisation concerned." 10 Agricultural Production and Distribution to Be Regulated. The group of economists also recommended that Commodity Councils should be instituted in order to: "1. consider the steps to be taken to promote a European agricultural policy in respect of production and distribution of agricultural products; 2. frame the necessary measures for stabilising European markets for these products at a level which will ensure to European farmers and agricultural workers a secure livelihood and an adequate standard of living in well-managed enterprise, whose existence is justified from an economic and social point of view; 3. in due course propose the establishment, in conjunction with the professional agricultural organisations, of the agencies required for the establishment of markets which might, if necessary, be entrusted with the task of handling stocks, effecting any carry over and generally administering international distribution schemes on behalf of a European Authority." n Existing Preferential Systems and Other Economic Ties Should Be Continued. "To avoid unnecessary dislocations," the economists recommended that "it should be permissible for those nations which consider such steps desirable, to maintain the existing preferential systems and economic ties between themselves and associated overseas countries. In order to further the interest of European economic union, it is desirable to extend to all other members of the 10 Ibid., pp. 104-5.

11 Ibid., p. 106.

130 DOCTRINES AND PLANS OF UNIFICATION Union, on a mutual basis and as far as practicable, the benefits which members of existing preference systems now enjoy." 12 APPRAISAL As must be expected, a coordination of the several movements for a United Europe cannot present ideas and arguments in favor of unification other than those the various movements themselves advance. A coordination of various movements embracing diverging ideologies necessarily must be based on compromises and other middle-of-the-road solutions. If resolutions on unification are to be acceptable to the several member movements, they must be compromises between the various ideologies or be formed sufficiently broad to include the several ideologies. If one or several ideologies held by the member movements are found to be incompatible with interstate unification, a compromise solution containing an "incompatible ideology," too, necessarily must be incongruous with unification. If the ideologies of all member movements are found to render true unifications impractical for one or several reasons, the compromise solution containing ideas from each of the several movements necessarily must contain a multiplicity of unification obstacles.

The European Movement constitutes an agglomeration of movements whose political and economic ideologies do not render unification feasible. This assertion on the ideologies held by the member movements has been presented and evaluated in detail in previous chapters. It is obvious that an evaluation of a compromise solution which is acceptable to all member movements cannot lead to conclusions that differ from those on the proposals by the member movements. We may therefore dispense with a detailed analysis of the resolutions of the European Movement and content ourselves with a brief evaluation of its most important provisions. In one important aspect, however, an analysis of the compromise solutions adds considerably to our knowledge. Such an analysis reveals to us the relative importance of each movement in contemporary Europe and the significance of some fundamental notions which are found to be acceptable to all member movements. As shall be proven in the following, these fundamental notions are socialist notions accepted by the various movement representatives in the Westminster resolution.

The Obstacles to a Customs Union. "The first measure to be adopted . . .," the resolution on the Custom Union reads, "should be 12 ibid., p. 109.

MOVEMENTS FOR A UNITED EUROPE 131 a declaration of a truce both as regards tariffs and as regards quantitative trade restrictions." That is to say, whereas the member states are urged to bring about a "truce" in their trade relations, the policies of economic nationalism and warfare towards nonmembers may be continued and coordinated through the "elaboration of a common tariff vis-a-vis the rest of the world." This resolution apparently contains two serious fallacies. First, under prevailing ideological conditions, a "truce" among the member states cannot be achieved because the industries and groups of producers who enjoy government protection from the competition of industries and producers in other member states do not acquiesce in an abolition of their protection. Government protection, according to prevailing ideologies, is identical with "progress" and "social welfare." Furthermore, elaboration of a common tariff vis-a-vis the rest of the world is impractical because a union tariff would protect and subsidize particular groups of producers while it imposes a sacrifice on all the other producers and consumers. In a national state the representatives of a particular industry often succeed in persuading the rest of the nation to consent to a sacrifice in favor of a particular industry. In a federation comprising different nationalities, however, enormous difficulties arise. The sacrifice which the Union Tariff would impose upon the vast majority of population for the protection of certain minorities of producers would benefit other nationals in the Union. That is to say, a protective tariff in favor of German farmers would be rejected unhesitatingly by the Dutch, Belgian, French and Italian majority in the Union. Furthermore, any protection and restriction in favor of a particular industry would inflict serious harm on European export industries. Foreigners who cannot sell their goods to Europeans cannot buy from Europeans as they lack the European media of exchange. But would a Belgian export industry, for example, endure unemployment of labor and capital in order to benefit a Dutch industry clamoring for protection?

These are the problems of unification. Unfortunately, they are consistently overlooked by the schemers of European unification. Policies of Full Employment and Protection of Workers Render Unification Unfeasible. "Due account should be taken of the need to ensure full and productive employment." This means that the member governments are called upon to continue their policies of spending, credit expansion, inflation, and protection of those branches of industry suffering from readjustment and unemployment. Naturally, all these measures bring about divergencies in the structures of economies. Divergencies are unification obstacles and the starting 132 DOCTRINES AND PLANS OF UNIFICATION point for economic nationalism. Credit expansion, for example, depreciates the domestic currency and makes the price for foreign currencies rise. As this is considered undesirable, foreign exchange controls are imposed which then bring about a shortage of foreign exchange. This shortage then is met with import restrictions and allocations. Both these measures, however, are measures of economic nationalism and disintegration of the international division of labor.

The numerous provisions calling for special protection and benefits for the workers call for similar disparities of economies. Government measures in favor of the workers universally raise the costs of production. If one member government imposes higher costs on its industries than another member government, the industries of the former country are necessarily put at a competitive disadvantage to those of the latter. They will be undersold and will suffer from unemployment. As this is undesirable, imports will be restricted and the economic relations partially or wholly severed. But can these policies be considered to be "declarations of a truce"? Furthermore, the most important government measures of protection of workers is the immigration legislation which protects the wage rates of the workers in wealthier countries from being lowered by workers immigrating from poorer countries. Now, what does the European Movement advocate? Protection of the workers in wealthier countries or European unification? It cannot have both.

Monetary and Financial Provisions Call for Economic Nationalism. The European Movement pretends to advocate free convertibility of European currencies. The exceptions which it concedes to its rule of convertibility, however, clearly indicate the hypocrisy of its provisions. "This free convertibility," the resolution reads, "may, during a transition period, be limited to exchange requirements originating from current transactions. During such a period capital movements may continue to be controlled." In the first place, what is a transition period? The International Fund Agreements of 1944 have a similar provision on a transition period in which capital movements may continue to be controlled. Up to this very day all members of the Fund but five have invoked this provision and continue to control capital movements. Furthermore, what are capital movements and what are current transactions? The impossibility of distinguishing them leaves all transactions open to arbitrary controls by member governments. There is no need for control on capital movements as capital invested in land, factories, buildings, MOVEMENTS FOR A UNITED EUROPE 133 machines, etc., cannot move anyhow. But why does the resolution make these provisions?

The participating countries are urged to coordinate their financial policies with regard to monetary equilibrium, balance of payments, and credit policy. That is to say, the member governments are urged to coordinate their planning and regulating of the economic activities of their citizens. The operation of the market economy in these important fields of human economy is to be eliminated and central planners are to establish their economic systems of production and distribution. But what yardstick are they to use for their economic order? The French yardstick as to "national interest," "social justice," "essentiality," etc., undoubtedly will differ from that of the Dutch, Belgian, German and Italian planners. As no true agreement can be reached, conflicts will arise and policies of economic nationalism will be continued. Socialization of Basic Industries Leads to Socialism. Although it is common knowledge that the socialist parties in Europe strongly advocate a nationalization or socialization of basic industries to facilitate "more efficient economic planning," it is surprising to see the economists of the European Movement who represent nonsocialist parties openly advocate fundamental objectives of socialism. This fact permits us to draw an important conclusion: The prevailing ideology of Europe is socialist. According to the Westminster resolutions, European governmental bodies are to define general policies in basic industries—in particular the policies concerned with investment, volume of production, and prices. Employers' organizations, under threat of penalties, are merely to carry out the general directives and recommendations of governments.

But when government interferes with investment, volume of production, prices, etc., the results must be unsatisfactory, even from the government point of view, and other measures of central planning and regulation become necessary. And so the governmental body continues to plan and interfere until allround socialism is established. European Regulation of Agricultural Production and Distribution Not Feasible. The special steps recommended for the promotion of European agriculture and stabilization of its markets reveal an arbitrary preferential treatment of farmers to the detriment of the vast majority of European population. Is there any reason that can be advanced in favor of benefits to farmers that cannot be advanced for special benefits to barbers, writers, textile manufacturers, artists, etc.? Why should governments not stabilize the markets of books 134 DOCTRINES AND PLANS OF UNIFICATION that do not sell, or buy and store up men's undershirts in order to insure fair prices and parity income to shirt producers and their workers? But let us disregard this inconsistency and inquire into the possibility of regulating agricultural production and distribution.

Various European governments have protected their farmers for many decades. But the national policies of protection have differed more or less as to the multiplicity of products, extent and nature of benefits, and groups of producers benefited. A European regulatory authority would have to cope with a vast variety of protective privileges which the farmers would defend vigorously. But there can be no common market if these privileges are continued. Let us assume that the German farmers now receive a price of 10 for a bushel of grain, Belgian farmers a price of 8, Dutch farmers 6, and French farmers 4. Now, would the German fanners acquiesce in a price of 8 for the sake of European unification? Or the French and Dutch population acquiesce in paying a price higher than they pay now? There cannot be any doubt that all parties concerned will reject a scheme of unification containing those provisions.

Preferential System or Economic Union: an Alternative. The Westminster resolutions urging European nations to unite find it permissible for nations "to maintain the existing preferential systems" and "desirable to extend to all other members of the Union . . . the benefits which members of existing preferential systems now enjoy." In other words, the European nations are to unite and to extend the British system of trade preference. One wonders what the European nations are really urged to do, to unite or to organize a system of trade preference. Certainly dne precludes the other, and the European nations must choose—they cannot have both. Unification means non-discrimination among member states and absence of national policies of protection and economic nationalism. The Preference System of trade, however, means protection and economic nationalism in degrees. How can both systems be simultaneously realized?

If European governments should choose to join the British system of trade preference, they are faced with insoluble problems. The purpose of the British Preference System was to protect certain industries in the British Empire from competition afforded by all other nations. Admittance of outsiders to the preferential system is identical with abolition of preference. Now, is it likely that the protected Commonwealth industries will approve admitting European products in competition with their own? On the other hand, a great number of European industries enjoy government protection from MOVEMENTS FOR A UNITED EUROPE 135 the competition of efficient export industries of the British Commonwealth. As a matter of fact there would undoubtedly be some opposition on the part of protected European industries to exposure to the competition of efficient Commonwealth industries. As we see contemporary political and economic conditions, there can be neither a European Union nor an extension of the Commonwealth preferential system to the countries of Europe. The modern predilection for government welfare and government regulation of the activities of individuals according to welfare principles has led, and still is leading, towards a disintegration of the international cooperation and division of labor. Predilection for government welfare is predilection for international conflict.

As has been shown, a coordination of various movements which themselves embrace a multiplicity of irreconcilable contradictions and fallacies cannot miraculously render unification feasible. A true unification of the nations of Europe is conceivable only if and when they decide to abolish the unification obstacles and abandon the ideologies of government welfare and world market disintegration.