Part 2 – Economic and Monetary Union: laying the foundations

The escalating events of the “Cold War” in Europe from 1947 to 1948, caused the USA government to grow increasingly wary of the possibility that the countries of Western Europe might deal with their security concerns by negotiating with the Soviets. To counter this possible turn of events, the Truman Administration considered the possibility of forming a European-American alliance that would commit the United States to bolstering the security of Western Europe and commit the Europeans to conform to USA foreign policy in Europe.

In March 1948, with American encouragement & passive support, Britain, France, the Netherlands, Belgium & Luxembourg signed the Brussel’s Treaty. Included in this treaty was a military alliance pact known as the “Western Union“. However, the “Western Union” was of very limited scope and only provided for collective defence; if any one of the treaty nations was attacked, the others were bound to help defend it. However, as the European-USSR situation worsened, the USA promoted a widening of the treaty that would include the USA, Canada and most of the other Western European countries, but still excluded the Federal Republic of Germany (FRG). Eventually, in April 1949, the North Atlantic Treaty Organization (NATO) was formed.

The whole question of the re-militarisation of the FRG was another area where the countries involved had differing agendas. The general feeling in the FRG was strongly anti-military, for understandable reasons, and there was much divided opinion and resistance among German politicians for re-arming. On the other hand, the USA was most concerned about the developing military threat from the USSR and therefore wanted to strengthen the collective European morale against the Soviets. In addition, the Americans felt that they had to push the leading European nations to be capable of adequate military strength at a reasonable date. Europe had to be capable of defending itself, if under attack, until the help of the free world could reach the Continent. In order to achieve this goal, re-armament of the FRG was a necessity. The countries that participated in the “Western Union” military pact and France in particular, previously had feared a re-armed and strong German military force more than any threat from the USSR. However, they now also recognised the necessity of a FRG military contribution in Europe. The French were particularly determined to keep the FRG out of NATO. If the FRG had to be re-armed, then France wanted to limit and control the process.

The start of the Korean War in June 1950 immediately added a new, worrying dimension into the issue of how to integrate the FRG into the “new” Europe. A few weeks after the outbreak of the Korean War, the United States indicated that the re-armament of the FRG was now an immediate necessity and they would seek consensus from their Western European partners to find a way how to proceed with this. There was a growing fear that the Soviet Union, which had achieved nuclear capability in late 1949, could launch an offensive military campaign in Western Europe. At the same time, the French army was embroiled in Indo-China, and British units were involved in Malaysia. The 14 Western divisions based in Europe did not seem up to the task of taking on over 180 Soviet divisions. Konrad_Adenauer, as part of his aim to regain full sovereignty for the FRG, also called for the right to be able to raise an armed force capable of protecting his country from the military threat posed by the East German/USSR alliance. The member states of the North Atlantic Treaty Organisation (NATO) also added their weight in favour of a re-armament of the FRG.

In May 1950, Robert_Schuman in his “Schuman Declaration“, had announced the intention of forming the European Coal and Steel Community (ECSC).

Jean_Monnet and a special committee were then given the task of drafting how the ECSC would function and be organised.  It was intended that the new Community body would replace the existing IRA and therefore the scope of the ECSC was extended to include Italy, Belgium, Luxembourg and the Netherlands, in addition to France and the FRG.

The worrying military developments in Europe soon placed the successful conclusion of the Schuman ECSC plan in jeopardy. Monnet realised that there were only two divergent solutions possible.

The first possibility, and the least desirable for France, was that the FRG would regain its full sovereignty directly in the international community together with re-emergent armed forces. This was the route that the USA & Britain were supporting. If this occurred, Adenauer would most likely not participate in the Schuman plan, since he would then regain complete control of the FRG’s entire coal and steel industry.

The other possibility was to provide every incentive for the FRG to prefer to want to integrate fully into Western Europe first. As the incentive, Monnet recommended that the original Schuman plan should be widened to include defence, and proposed that, in parallel with the ECSC, a European Defence Community (EDC) be set up as well. This would provide for a European Army, run by a European minister of defence and a council of ministers, with a common budget and arms procurement. While all other members would be able to maintain separate forces, for colonial and other purposes, the FRG would only be allowed to participate in the European Army. Monnet hoped that this proposal would find a receptive audience in the FRG, especially since the FRG had been excluded from NATO.

On 10 August 1950, Schuman explained the background and motivation for the establishment of the ECSC to the “Council of Europe” (COE).

Then, in September 1950, Monnet presented a revised proposal to Schuman regarding the direction and form that relations with the Federal Republic of Germany should take. At about the same time, in a Memorandum sent to Rene Pleven, France’s Prime Minister, Monnet outlined why and how the original Schuman plan should be revised .

On 24 October 1950, Pleven presented the outline of the revised ECSC plan, that included the formation of the EDC, to the French Assembly. Pleven made it clear that negotiations to set up the EDC would not start until the ECSC Treaty had been concluded.

Initially, and for a variety of reasons, the majority of French politicians were not enthusiastic about what Schuman and Pleven were proposing. Although the proposals were in line with the French doctrine at the time of maintaining control of the FRG by inclusion rather than exclusion, there was a reluctance to accept the supranational aspect of the plan. Many felt that the new emergence of France as a leading European power would be diluted by such supranational involvement and that there were other ways to achieve similar objectives.

Concurrently during the period that the EDC was under discussion and negotiation, separate meetings and discussions were held with representatives from France, the FRG, Italy, Belgium, Luxembourg and the Netherlands to achieve consensus and agreement on the proposed ECSC. Monnet kept Schuman informed of the progress being made with the establishment of the ECSC.

In April 1951, “The Treaty of Paris” was signed and France, the Federal Republic of Germany, Italy, Belgium, Luxembourg and the Netherlands (the Big Six) agreed to establish the “European Coal and Steel Community” (ECSC). In addition, the Foreign Ministers of the Big Six countries issued a joint statement called the “Joint Declaration of Ministers“. The Declaration said that the ECSC marked the birth of Europe as a political, economic and social entity, reflecting the principles that Schuman had announced earlier in the Schuman Declaration.

In June 1951, Monnet met with General Eisenhower in order to gain USA support for the EDC. Eisenhower had just been appointed as the supreme commander of NATO forces in Europe. and the USA had an important stake in the EDC negotiations because it was one of the occupying powers in the FRG. Monnet explained to Eisenhower why the road to Franco-German reconciliation could only be achieved through the formation of the ECSC and the EDC. Eisenhower knew that the French were opposed to the FRG joining NATO and therefore he was convinced that the best and quickest solution was for the USA to support the plan that the FRG military contribution should come through the formation of a European Army within the EDC. Eisenhower agreed to pass on his recommendations to the US government.

The US policy regarding the EDC that emerged in 1951 was that the EDC would be the instrument that would serve to re-integrate the FRG militarily into Western Europe with the necessary controls and with the support and agreement of the Western European countries. France was an important partner in the European re-construction effort and the USA felt obliged to take the French concerns and point of view into account. In return for the American support of the EDC, the USA demanded that France would need to fully support the Contractual Agreement.

The Contractual Agreement comprised of a number of conventions dealing with FRG re-armament and defence issues, measures to control the production of war materials, the role of the FRG military in Europe and measures required to ensure the security of Allied troops stationed on German territory and to protect legitimate Allied interests until a full peace treaty was signed. In addition, the agreement also dealt with the progress towards granting the FRG full sovereignty and extended the jurisdiction of the German authorities in the legislative, executive and judicial fields.

By late 1951, Schuman had used all of his political clout to persuade doubters in the French parliament to support the ECSC. Part of the persuasion was to highlight that close co-operation among Western European nations was going to unpin the rapid redevelopment of industry and support social development in the respective countries involved. Eventually, Schuman was able to rally sufficient majority support and French ratification for the establishment of the ECSC was obtained.

On 10 December 1951, in a speech given to the COE, Schuman encouraged the “Council of Europe” not to give up on their original goal of a united Europe. Despite all of his best efforts, Paul-Henri Spaak, the COE president, had finally been forced to admit that the COE would never be anything more than just a talking shop and had, in addition, concluded that “we must do without Britain’s support if we were to make any headway”. Spaak resigned from the COE on 11 December 1951.

On 27 May 1952, the signing of the “Treaty establishing the European Defence Community” (EDC) and the “Convention on Relations Between the Three Powers and the Federal Republic of Germany” (the Contractual Agreements) took place in Paris. However, the EDC Treaty would not come into force until it had been ratified by the parliaments of all of the signatory states.

In the preamble of the EDC Treaty, the six signatory countries stated that, in addition to the creation of a European Defence Community, they were “Conscious that they are thus taking a new and essential step on the road to the formation of a united Europe”. In addition, Article 38 of the Treaty called for “the creation of an Assembly of the European Defense Community elected on a democratic basis” and that, among other provisions, the Assembly would need to bear in mind the principle that “The definitive organization which will take the place of the present transitional organization should be conceived so as to be capable of constituting one of the elements of an ultimate Federal or confederal structure, based upon the principle of the separation of powers and including, particularly, a bicameral representative system.”

In addition, on 30 May 1952, the Consultative Assembly of the COE called upon the governments of the six countries party to the EDC Treaty to choose, by the adoption of whichever procedure was the more rapid, the Assembly on which responsibility should be conferred for drafting the Statute of a supranational Political Community open to all Member States of the Council of Europe and to offer opportunities of association to such of these States that were not yet full members of the Political Community.

On 10 August 1952, the ECSC High Authority was established in Luxembourg and Monnet was appointed as its first president. The ECSC Common Assembly, made up of members of parliament from the six member countries, with Spaak as the first president, was established in Strasbourg.

On 10 September 1952, as a result of the decisions taken in May, the Consultative Assembly of the COE was advised that, on that same date, the ECSC Common Assembly was to be requested to draft a Treaty instituting a European Political Authority that was to be completed by 10 March 1953.

Consequently, on 13 September 1952, the ECSC Common Assembly was given its first task. They were asked to co-opt nine additional members from the members of the COE Assembly (three German, three French and three Italian) to form an ECSC “Ad Hoc Assembly”. The “Ad-Hoc Assembly”, with Spaak as president, were then to formulate a draft constitution for a political authority that would oversee the ECSC and EDC. The work was conducted by various sub-committees and eventually, on 10 March 1953, the ECSC “Ad Hoc Assembly” adopted the “Draft Treaty embodying the Statute of the European Community” (EPC) at a meeting held in Strasbourg.

The EPC draft treaty was then immediately presented to the Foreign Ministers of the six ECSC member states. After all of the initial optimism and encouragement give by senior government ministers, the reaction to the draft treaty was disappointing. Some thought that it was necessary first to set up the EDC before being able to tackle the establishment of a political community. Others deplored the dominance of parliamentary power and proposed the drafting of a new plan that would divide legislative power between the Executive Council and the Council of National Ministers. The plan then became the subject of lengthy diplomatic negotiations, which gradually tailed off since no consensus could be reached.

From May 1952 onward and into 1954, the long, drawn out process of getting the EDC treaty ratified in each signatory country took place. However, the political mood in France was slowly changing. From being in the vanguard of the path to supranational European integration, French politicians began to increasingly reject any proposal that might weaken or dilute French national sovereignty. Even the presence and influence of well-respected government ministers such as Schuman and Pleven were, in the end, unable to reverse this change of heart. Ultimately, the French government did not ratify the EDC treaty and therefore the EDC did not come into being. Since the EDC Treaty was not ratified, this automatically led to the abandonment of the creation of the EPC, of which it was the institutional corollary.

Despite the failure of both the EDC and the EPC Treaties to be adopted, the extensive and intensive effort that was put into the drafting of those treaties by all participants and contributors should be recognised and deserves some credit. Their unwavering belief, at that time, that their efforts were going to contribute to a better and prosperous Europe cannot be questioned. Here is the speech given on 9 March 1953 by Spaak, as President of the ECSC Ad Hoc Assembly, that embodies all of these sentiments.

It is relevant to highlight, at this stage, that the substance and direction of French government policy towards European integration and supranationalism largely guided and determined the course of events that took place in Europe in the period 1946 to 1958. Here is a much more detailed description and analysis of French European Policy 1950 to 1958.

On 23 October 1954, a revised set of agreements, treaties and protocols called the Paris Agreements were all signed at a conference in Paris, where all the countries involved were represented. Although there was general acceptance that the FRG would now join NATO, it was also felt that there was still a need for a strictly Western European military alliance, along similar lines to the EDC. It was therefore decided to expand the existing “Western Union” into the “Western European Union” that would have close links to NATO. In addition, the Contractual Agreement was reworked to remove all references to the EDC.

The provisions of the Paris Agreements came into force on 5 May 1955. On this date, the last meeting of the three Allied High Commissioners took place at the house of the US Commissioner in Bonn. Thus it was on 5 May 1955 that the Allied occupation of West Germany officially ended and the FRG was declared a fully sovereign country.

Simultaneously, also on 5 May 1955, the “Western European Union” military alliance came officially into being. On the following day, the FRG became a full member of NATO.

In the meantime, while the work to create the EDC and EPC was being conducted, Monnet put all of his efforts into making the ECSC a success. Here is a detailed account of the development of the ECSC from 1953 to 1955.

One interesting observation about the make-up of the ECSC was that, despite the protracted discussions about how the ECSC should be constructed, the model which finally emerged was almost identical to that outlined by Arthur Salter twenty years earlier. Adapting the structure of the League of Nations, Salter had proposed that the government of a “United States of Europe” should be made up of a Secretariat, with supranational powers; a Council of Ministers representing national governments; an Assembly representing national parliaments; and a Court of Justice. This was precisely the structure that made up the ECSC, except that the terminology was altered slightly. The ECSC called its institutions a High Authority (the Secretariat), a Special Council (the Council of Ministers), a Common Assembly (the Assembly) and a Court of Justice. Much later, the same model would be used to formulate the structure of the “European Economic Community” and the “European Union”.

After Eisenhower became President of the United States, he continued to be very supportive of Monnet’s efforts and the goals of the ECSC. These same sentiments were expressed by the Chairman of the Senate Committee on Foreign Affairs:

It is my deep hope that the European Coal and Steel Community will be able to weld together the European economy so that the combined strength of free Europe will enable that continent to maintain its freedom and develop its resources to the fullest in order that the people of Europe may prosper.”

Spaak was re-elected as President of the ECSC Common Assembly in May 1953, although he had become disillusioned that progress would be made to European supranationalism through that body. Finally Spaak resigned from the Common Assembly in 1954 when he regained his former position as Belgium’s Foreign Minister and Vice Prime Minister after the Socialists were returned to power on 22 April 1954.

In Nov 1954, Monnet indicated that he would not seek another term in office as president and would be resigning from the High Authority. This is an extract from his speech to the ECSC Common Assembly explaining the reason for his resignation:

“As I have told the High Authority, it is the desire to be entirely free in what I say and do in my efforts to forge real and concrete European unity which prompts me to stand down on 10 February.

In the words of the French Government’s declaration of 9 May 1950 the European Coal and Steel Community is to be the first step in the federation of Europe.

The essential contribution which the Coal and Steel Community has made and will continue to make to European federation lies in moving forward and being successful in the specific area entrusted to it.

However, the institutions of our Community only have those powers that have been delegated to them. It is not their place to broaden them. Any decision to transfer new powers to the European institutions must come from the member parliaments and governments.

So the impetus has to come from outside. I am keen to join forces with those working to continue and broaden the undertaking we have begun. The United States of Europe are not only the great hope but also the great imperative of our time, because they will determine the future prosperity of each of our peoples and strengthen peace.”

The following extract from the speech given by Monnet on 10 May 1955, just before he left the ECSC, gives some insight into the view that Monnet had about the future of Western Europe.

“…..The full effects of this first European Common Market, in other words, have yet to be felt.

…..We are not doing all this work for the sake of having European rules and institutions but to improve living conditions for all people in Europe within a framework focused on the Community.

The action that has been taken has obvious limitations. Coal and steel are two basic commodities. They influence the development of all economic activities. However, they only have an indirect effect on individuals’ standards of living. If these standards are to be raised more quickly and more directly, it will be necessary to go further. It is very clear that we shall not reap the full benefits of the common market until those limitations have been gradually overcome by means of a broader integration process which expands the pooling of resources and promotes the introduction of a common economic policy covering a wider range of activities.

….The European Coal and Steel Community was intended to pave the way for European integration in two senses, that is to say by creating common foundations for economic development while using an initially limited area of industrial activity to pilot the resolution of practical problems posed by the creation of a common market.

We once again find ourselves faced with the realisation that people’s living standards in Europe cannot be maintained and raised if the European nations do not take another step towards the achievement of unity. It is up to the governments and parliaments of our countries to decide on the ways in which new advances are to be made and the areas to which the gradual establishment of European economic unity is to be extended. Whichever methods are chosen, the effort that we, the common institutions and governments, have made together and the experience we have acquired have laid the first firm foundations of a European federation and have set us on the way to a United States of Europe.”

In Oct 1955, after Monnet had left the ECSC, he founded the “Action Committee for the United States of Europe” through which, until his death, he tirelessly called on the European political class not to abandon the path towards European unity and integration.

Here is a very interesting study regarding the theory and reality of the European Coal and Steel Community. It poses the question of how did the ECSC, as an institution, affect the process of European integration?

Schuman, the politician and diplomat, became known as the “Father of Europe”, although detailed knowledge of his actual contribution towards the eventual formation of the European Union has been rather sparse and subdued. The period 1946 to 1958 was a critical and difficult period for France and Europe. Schuman managed to balance the needs of his country with the challenges of re-integrating Germany back into a Europe that was also being reconstructed. He served his country and Europe with distinction at a critical period and his valuable contribution towards the goals achieved was crucial.

Monnet, in contrast, was always closely involved in political affairs but was not really a politician. He was a technocrat and a highly capable administrator who was able to take the ideas of politicians and turn them into practical plans. In this respect, he always preferred to remain in the background whilst he wielded his influence and guided events, but in most of the recorded history, he seems to have stolen the limelight. For all of his brilliance, Monnet was not without criticism. Spinelli was quoted as saying: “Monnet has the great merit of having built Europe, and the great responsibility to have built it badly.”

Some researchers seem to hint that the motivation and objectives of Monnet and his colleagues were in pursuit of some sinister and devious master plan for Europe. However, I do not agree with that assertion. The 12 year period after the war was fraught with many obstacles and difficulties to re-establish a normalised status quo in Europe. The resurgence of commerce and industry in Europe would have, undoubtedly, caused vested interests to seek to gain advantages in order to maximise the benefits to their respective businesses. There is no doubt that, at many levels, there must have been a lot of jockeying for influence and attempts to steer matters in particular directions. At least up until about 1957, we will never really know to what extent these external influences played a part in shaping the course of events in Western Europe.

During his entire career, Monnet also had dealings with a wide and varied range of powerful and influential politicians and bureaucrats. These had ranged from presidents, prime ministers, government ministers, government officials, senior military officials to members of the OSS and CIA. Robert Murphy was a Foreign Service officer in the US Dept. of State and, in 1940, he was selected to be President Roosevelt’s own personal representative in French Africa. During Murphy’s time in French Africa, he came into contact with Monnet. Here is an account of what transpired in that period and his impressions of Monnet.

The posts that Monnet had held in the French government, although not as an elected Deputy or as a minister with a portfolio, gave him powerful influence in many important French affairs at the time. His opinions were highly respected and he must have had an influence on the substance and direction of official French policy. I cannot agree that he subjugated what was best for France for his own personal objectives. My conclusion is that he was an idealist and a dedicated French patriot. If he did indeed have some devious master plan, it was to have lasting peace in Europe and to restore France’s prestige and power in European affairs.

In Alan S. Milward’s book “The European Rescue of the Nation-State”, published in 1992, Milward challenged the conventional view of European integration as a process destined to produce the replacement of nation-states by a European federal political structure. Milward argues that in the wake of the Second World War the founding fathers of European integration were first and foremost interested in rebuilding their countries as nation-states. Integration, it follows, was the outcome of a conscious decision by European governments to pool sovereignty in certain areas to provide nation-states with the foundations that they, given the horrible experience of the war, apparently lacked.

“There is….a strong common identity of thought between Spaak, Schuman, Adenauer, de Gasperi and Monnet. It is to be found in their understanding of the search for security by the Western European population after 1945 and in the very wide interpretation which they, like the population, gave to it. Going far beyond the problems of military defence and physical protection, they interpreted it to mean an economic security in daily life of a more comprehensive and assured kind than before the war.

….We are not dealing with social reformers, nor, except in the case of Monnet, economic innovators, but merely with statesmen well attuned to the themes of fear, of the need of reassurance, and of the fundamentally conservative yearning for a more certain personal and political order which shaped democratic politics in those years.”


About Peter Smith

A "foot-soldier" in the wider Post Capitalism Movement. First task - keep spreading the words of change, hope & inspiration.
This entry was posted in The History of the European EMU and tagged , , , , , , , , , , , , , , . Bookmark the permalink.

One Response to Part 2 – Economic and Monetary Union: laying the foundations

  1. Pingback: Part 1b – Economic and Monetary Union: the birth of a grand idea | Thoughts on European Politics & Economics

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