Book Essay: The Great Deception (Part 1)
by Henrik Ræder Clausen
In these days, a fundamental question of European politics, and the EU in particular, is this:
Can the public still be permitted to have a say over the way things are run?
It has been argued that the Lisbon Treaty is way too complex for ordinary citizens to understand, not to mention to have a qualified opinion on, and thus referendums should be avoided, and important issues should be left for the elite to decide upon, untainted by the unqualified opinions of the undereducated masses.
While this is a democratically dubious approach, it has a point: The public is dramatically underinformed about the European Union, the history, scope and purpose of it. The Great Deception, by Christopher Booker and Richard North, sets out to correct this. It is based on ample amounts of references and documentation, including archives recently opened to the public and, vitally, the memoirs of countless politicians who participated in the process.
When I was first introduced to this book by a friend, my immediate reaction to the title was something like: “Oh, that’s a nice, catchy exaggeration to catch my attention.” Nevertheless, as comprehensive (we’re talking 600+ pages) books about the European Union are few and far between, and it seemed well researched, I decided to plunge in. This essay contains my impressions from the first half, covering the time from beginning through the late 1980s.
Fair notice: This book is Britain-centric. Most of the conflicts described are those between Britain and the EU, rather than those of other countries, such as Denmark. This makes sense, as Britain was involved in the project, one way or another, from the beginning, and had the lion’s share of conflicts throughout.
This essay is part review, part a résumé, for the simple reason that this material is essential reading for anyone dealing seriously with European matters. To deal with the ‘review’ part right away, here’s the bottom line:
Difficulty: Above medium
- Provides a comprehensive history of the European Union
- Identifies key players and developments of ideas
- Calls a spade a spade, and deception deception
- Amazing level of detail in all its Byzantine twists
- Relentless in identifying deceit and malpractice
- At places needlessly derogatory
Bottom line: If you want to understand the European Union, not much need to bother with my essay. Better get the book…
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Beginning at the beginning
The sovereign nations of the past can no longer solve the problems of the present: they cannot ensure their own progress or control their own future. And the Community itself is only a stage on the way to the organized world of tomorrow. — Jean Monnet, Memoirs
There is no one person who played a larger role in the formation of the European Union than Jean Monnet. Seemingly always at the right place, with the right contacts, Monnet worked tirelessly to fulfill his vision of a united Europe, eliminating the nation-states and building a new world order. Though others, like Schumann, are more outwardly visible, Monnet prepared most of the initial work, and frequently let others be in the limelight as long as the project was moving forward.
The initial ideas for the European Union stem from the period after WWI (not WWII), where the catastrophe just experienced had made a deep impression, and had seeded the ground for trying out new ideas. The League of Nations was one such idea, creating an intergovernmental body to deal with international conflicts, and hopefully to preserve the peace. The various players, Monnet, Salter, and later Spinelli, drafted their first ideas immediately after WWI, in an effort to preclude a repeat of this, possibly the most meaningless war in history. Even the basic structure of the Union, modeled after the League of Nations, was drafted out at this early stage. A basic feature was to fuse the coal and steel industries of the previous enemies, Germany and France, so they could never again turn their industrial capacities against each other in an orgy of destruction.
However, the initial drafts where quickly sidelined by developments on the ground. The Great Depression, and Hitler’s climb to power, created a situation where ideals of voluntarily forming a New Europe gave way to Hitler’s radically different approach for Neuropa.
Though stalled, the basic drafts for a grand European Union didn’t disappear. Monnet, who had been doing business and making contacts during the war, resumed this efforts after WWII. The plans for the Union were remarkably similar to those drafted after WWI. Some may argue that the European Union is designed to deal with problems long made obsolete by the rise of the Soviet Union and the Balance of Terror. Further, Winston Churchill in his famous Zurich speech and on other occasions, raised the idea of creating a united Europe to avoid future wars and stand up to the Soviet challenge.
A badly damaged Europe lay at the feet of a victorious Soviet Union, and the lure of Communism was very real, threatening to compromise the freedom Europe had just regained. Several initiatives, including the Marshall Plan, NATO, UN and GATT were created to stabilize the situation and get Europe back on its feet. Monnet would be involved in this, lobbying to create these as supranational organizations, but failed twice, and eventually realized that there was little open opportunity to make the citizens of Europe give up their nation-states voluntarily.
Thus, in 1954, his tactics shifted. Instead of aiming directly for a supranational Union, Monnet and his allies opted for an Economic Community instead. This time his efforts came to fruition, and in 1957 the signing of the Treat of Rome marked the birth of the community. Initially with six members: Italy, France, the Benelux and Germany, this core of countries committed themselves to ‘ever closer integration’. An “Almost Mystical Conception” had been created.
It wasn’t that Britain was not interested in joining the Community. But the basic rules of the community, including common tariffs on imports, would be severely damaging to the British Commonwealth, as well as to the British economy, and the idea of giving away sovereignty, soon after she had fought so hard to preserve it, had limited appeal.
Enter the CAP
During the 1960s, the European economies were booming, and things were looking good. Britain still showed some level of interest in joining the EEC, but France, ruled masterfully by Charles de Gaulle, kept Britain out. For a reason, of course: the Community was implementing a Common Agricultural Policy, based on the French model of subsidizing inefficient farmers, a policy strongly contrary to British traditions. Letting Britain join before the details of the common policy had been fixed would severely damage this project.
One myth is worth busting here: It has been mentioned that the CAP was created to stimulate agricultural production after the war, where agriculture production had suffered severely. Nothing could be further from the truth. Agriculture in Europe was reestablished through the Marshall Plan and general growth, including the advent of fertilizer and modern machinery, and already during the 60’s a significant surplus of agricultural production existed. The CAP was created for different purposes. But which, exactly? It remains a partial mystery, but certainly France was the part pushing hardest for its creation. Once created, it soon absorbed a massive 90% of the Community budget, and even today (2008) consumes roughly 40% of the overall budget. It is modeled after French agricultural policies, and one might propose the following theory:
The CAP was transferred from France to a European level because it had become unsustainable for France herself to fund the massive economic transfers. Having the Community fund it as a common project, with French farmers then being the greatest beneficiaries, seemed a workable solution.
In 1971, with the CAP firmly in place, there was a sudden breakthrough in the British negotiations. British fears of handing over sovereignty had diminished over the years, and, probably not less significantly, Edward Heath, who had long been a sworn proponent of joining the Community, had become prime minister. After a decade of little progress, the negotiations with Britain, Ireland, Denmark and Norway continued apace.
Inventing the CFP
While one may consider the opening moves cunning, not least as executed by France, it hardly lives up to the title “The Great Deception” yet. Yes, there was a long-running plan of transforming the Community into a political union, but it had not been implemented at this point. But one radical piece of deception took place at this time, inventing the Common Fishery Policy. The lure was obvious: The four countries negotiating for membership commanded the very best fishing waters of Europe, yielding some 80% of the European total of fisheries. Gaining access to these waters would be a huge win for the French, Dutch and German fleets.
There was but one catch: The Community treaty provided no legal foundation for letting the Union control the fishing itself, only for permitting the free trade of fishery products. But the lure proved greater than the honesty: A Common Fishery Policy was quickly drafted on basis of this free trade clause, and the aspiring members were expected to accept this policy as a fact, granting other countries access to the waters the countries used to have exclusive right to through centuries.
One may wonder how this would be accepted by the applicant countries. For Britain, the equation was simple: While the fishermen would lose exclusivity to her own waters, they would gain access to the rich Norwegian ones, and Britain accepted the conditions. There was only one catch: Norway rejected them, and Britain joined the Community without gaining anything to compensate for the loss of exclusivity.
The CFP went into effect as planned, and the result was predictable: severe overfishing when the new fleets entered the traditional waters of others. The Community response was equally predictable: rather than abandoning a misguided idea, it instead assumed more power over the previously free trade of fishing, namely the quota system. By assigning quotas for each country, the fish populations would supposedly not suffer too badly, and disaster would be avoided. Unfortunately, fish do not swim or breed according to the plans of civil servants in Brussels, and the requirement to discard any caught fish that a given ship had no quotas for created not only immense waste, but also an ecological disaster. The Soviet Union could not have mishandled things more radically.
This is where I put down the book in disgust over the very real deception, and the very real consequences, of leaving things to a central bureaucratic system like this. Not only are poor plans devised, ancient privileges revoked, and disasters created. But instead of admitting mistakes and abandoning bad ideas, the problems served only as justifications to transfer further power to Brussels.
Creating a crisis
Britain was not benefiting at all from her new membership of the Community. Large economic transfers to Brussels, combined with new tariffs on imports from the Commonwealth and the 1973 price hike on imported oil created an unprecedented crisis, in which a moderate trade surplus from year to year turned into a billion-point deficit. One might think that the British would look at the balance sheets and say:
“Look, our industries desperately need modernization, and the Commonwealth really likes its traditional access to the British markets. It does not make sense that we introduce tariffs on Commonwealth imports and send the proceeds to inefficient French farmers, all while we suffer extreme inflation at home. We’re out.”
The continued membership was indeed an object of contention, and eventually it was laid to rest through a referendum, quite an unusual move for Britain. The ‘Yes’ side, having significantly better organization (and, not least, funding from the European Commission), won the vote easily. There was no doubt that Britain was to stay ‘in’, as ‘out’ had the unpleasant feeling of cold isolation.
The British rebate
After the referendum, one would think that things would calm down a bit. After all, Britain no longer had a viable threat of leaving the Community. But the fundamental problem, the fact that the economics were all stacked against Britain, remained. The CFP, now gaining full effect, had a dramatic negative effect on the British fishermen. Something needed to be done to compensate, and after tough negotiations, the famous British rebate was introduced to level out the problems.
At this point, my admiration for the negotiation skills of the French and of the Community proponents in general hit a new high. How efficiently they were able to make Britain accept unfavorable terms, suffer the consequences, and then make the British rebate look like a special favor bestowed on a misbehaving child in order to keep him in line. Whenever anyone protested the policies of the Community, it would seem that the Community was basically right, and the protester merely suffered from intransigence. The skill of what today would be called ‘spin’ is amazing. Only my basic appreciation for fair play protests this game, and — everything included — leaves me with a rather bad taste.
Apart from the inherent economic bias of the Community and the bureaucratic dealings of Brussels, the Community was basically working, and the inner market functional. Things were at a plateau in the late 70’s, and enlargement to include the now-democratic states of Greece, Spain, and Portugal was a natural development. But for those who desired the Community to develop into a Union, this was a very unsatisfactory situation. The Italian Communist Spinelli, in particular, desired to reignite the drive for the Union, and chose to head for a common currency as the main tool to achieve this.
The intricacies of the Exchange Rate Mechanism, of the speculative assaults on it, and the eventual emergence of the European Monetary Unit are too much to relate in detail. Again, the pure skill of negotiation to get these projects going is a source of continuous amazement, as is the way France always seems to make Germany follow along when things get tough. Germany had the strongest and most respected currency of any Community member, and no one would have thought that she would voluntarily give up the D-Mark, a milestone of German post-war reconstruction. Yet this is what was to happen.
The intergovernmental Conference
Along with the common currency came new treaty proposals. One remarkable tool for this is the ‘Intergovernmental Conference’, IGC. While a ‘conference’ would sound innocent enough, and certainly not a main driver of radical policy change, the IGC is a different beast. The conference is no mere get-together of ministers and civil servants. Rather, the conference itself is a culmination of months, sometimes even years, of very detailed work by civil servants, ministers and other participants. The real purpose of the conference is to grant approval of meticulously prepared decisions.
There is one problem, however, and that is the fact that the decisions would be prepared outside the public eye, away from public debate, and in particular far away from critical scrutiny. Therefore these conferences are prone to murky compromises, hidden agendas and even ‘negotiation ambushes’, where one party — frequently the British — would suddenly find itself isolated and forced to give concessions it had never imagined.
Thatcher, the staunch fighter
An amazing figure of this tale of compromise and deception is the Iron Lady, the British prime minister through eleven years, Margaret Thatcher. While not being British myself, I have always had an admiration for this lady who managed to steer Britain out of stagnation and into a new period of growth and economic progress for the masses.
Watching her earnest battles against the machinations of the Community, one feels like knighting her all over again. Her sincere awareness of what would be in the interests of Britain, her sense of fairness, and her stamina in the face of intrigue and deceit is nothing short of astonishing. In the end, however, infighting in her cabinet wore down her position, and the strongest defendant of British interests in the Community had to give way to much more Eurocentric persons.
One thing stands out in the British battle to protect sovereignty: whatever Britain did to resist supranationality would embolden the remaining Community countries in a quest to convince the British to proceed. And whatever Britain did to accommodate the supranationalists would seem a concession to proceed in the right direction. Whatever Britain did, the path towards supranationalism, increasingly eliminating the relevance of the nation-state, seemed only to turn stronger. Strange.
Moving towards the Union
Along with the progress towards a common currency, an effort was being made to reform the working of the Community, and — not least — to direct development towards the Union originally envisioned by Monnet back in 1954. The work had begun in earnest in 1984, and soon developed into not one, but two, treaty revisions, to be adopted a few years apart. The first one, called the Inner Market, was adopted in 1986 without much fanfare.
One may wonder why a new treaty would be needed to implement what had for a long time been a core functionality of the Community. Dissecting the process, Booker & North come up with the obvious reply: the treaty to change the Community into a political union stood at a very real risk of being rejected if proposed all at once. Thus, the less controversial items would be approved first, in the Inner Market Treaty, with the Union Treaty to follow later with further modifications of the Community.
The Inner Market Treaty contained only traces of the Union project and hooks for its future implementation. However, alert critics in Denmark spotted these traces, and asked the Danish prime minister Poul Schlüter about them. To which he famously replied: “The Union is stone dead”. It is not known whether the response was due to ignorance or was based on intentional deception. I tend to assume the former, as it would take deep scrutiny and good connections to discover the nature of what would come next.
At this point (the Maastrict Treaty), we are faced with one of the most significant deceptions of the European Union project: It was sold to the European citizens as an economic community, not as a political union. By implementing the political union in small steps, and not making the final goal clear to the public except at a very late stage, the Community founders had pulled off one of the greatest deceptions in history, effectively decoupling the progress from democratic scrutiny and criticism.
1992 marks the end of the European Economic Community and the (troubled) birth of the European Union.
More of this in part 2 of this essay.