Part 4 – Economic and Monetary Union: slowly bringing everything together

As the 1950’s drew to a close, the proponents of European integration could feel very satisfied with the results of their efforts. The successful conclusion of three very important and significant treaties had set the groundwork for the new “European Community”. In addition, the six countries involved were reaping the rewards of economic co-operation.

On 1 January 1958, the treaties that established the European Economic Community (EEC) and the European Atomic Energy Community (Euratom) entered into force (Treaties of Rome). These treaties applied to the “Big Six” countries, being France, the Federal Republic of Germany (FRG), Belgium, the Netherlands, Luxembourg and Italy that together made up the European Coal and Steel Community (ECSC).

Here are the full texts of the treaties: the European Economic Community treaty and the European Atomic Energy Community treaty.

The EEC treaty, which bound together the six countries for an unlimited period of time, consisted of 248 Articles, 15 Annexes, and numerous Protocols, Declarations and Declarations of Intent. The institutional arrangements followed broadly the same pattern that was established in the ECSC. There would be four institutions. The Council and the Commission would have the executive power, the Assembly would have the legislative power, albeit in a limited way, and a Court of Justice would have the judicial power. The major difference was that the nine-man EEC Commission, which would be the real operating executive body, would require the approval of the EEC Council for a far wider range of decisions than was the case for the ECSC High Authority.

The preamble to the EEC treaty declared the intention of the signatory countries to establish “the foundations of an enduring and closer union between European people” by gradually removing the economic effect of their political frontiers. A common market and a common external tariff – a customs union – was to be established for all goods; common policies for agriculture, transport, labour mobility and other important sectors of the economy were to be devised; common institutions for economic development were to be set up; and, for an experimental period of five years, the overseas areas connected with the member states were to be associated with the new Community. All these measures were intended to have one “essential aim”- a steady improvement in the conditions of life and work of the citizens of the six countries.

The first president of the EEC Commission was Walter Hallstein (also see bio here) and he held this position from 1958 until 1967. (Note: due to Hallstein’s membership in the 1930’s of the Association of National Socialist German Lawyers [BNSDJ, which became more “nazified” after 1936], there have been attempts to label him as a Nazi supporter and make a case that there is a post-1945 Nazi plot to take over Europe – on the balance of probabilities, my research indicates that all of these propositions are false).

The EEC Commission comprised of nine directorates, each under the control of a Commission member. The directorates were Administration (under the Commission President), Economic and Financial Affairs, Internal Market, Competition, Social Affairs, Agriculture, Transport, Overseas Countries and Territories, and External Affairs. In what was known as the “First Stage”, which would span four years, the initial focus of the EEC was to establish the common agricultural policy (Articles 38 to 47), the common trade policy (Articles 110 to 116) and the transport policy (Articles 74 to 84).

Articles 103 to 109 dealt with co-operation on economic policy. The key points were covered in Article 104 of the EEC treaty which stated that each Member State should pursue an economic policy “to ensure the equilibrium of its overall balance of payments and to maintain confidence in its currency, while taking care to ensure a high level of employment and a stable level of prices”. Article 105 stated that, in order to attain the objectives of Article 104, “Member States shall coordinate their economic policies”. It also stated that the Member States “shall for this purpose institute a collaboration between the competent services of their departments and between their central banks”.

To ensure the co-ordination of policies in these fields, a consultative body called the Monetary Committee was established. The task of the Monetary Committee was to help Member States to co-ordinate their policies in monetary and financial matters. The Committee was expected to carry out periodical examinations of the situation in the member countries and report its findings to the Council and the Commission.

The Economic and Financial Affairs directorate (known as DG II) came under the control of Commission member, Robert Marjolin. At its inception, DG II focused its efforts on macroeconomic policy and was divided into three sub-directorates. The first sub-directorate, “National economies and business cycle”, was responsible for monitoring the economic situation and the business cycle in the Community. The second sub-directorate was “Monetary matters”. Important tasks of this sub-directorate were the monitoring of the monetary situation (inside the Community and in the international monetary system) and the preparation of directives for the liberalisation of capital movements. The third sub-directorate was “Structure and development”.

Country specific monetary policy was still considered to fall outside of the EEC mandate and each EEC member country was expected to draw up and manage its own policy.

During February 1958, the European Investment Bank (EIB) was established. Drawing on substantial funds guaranteed by the governments of the six EEC member states, the EIB was set up to provide low-interest loans to fund a vast range of projects which might serve the purposes of “integration”.

On 3 February 1958, Belgium, the Netherlands and Luxembourg (Benelux) signed the Treaty establishing the Benelux Economic Union. These three countries had already been co-operating closely since January 1948,  when the the Benelux Customs Union was formed. Then in October 1949, a preliminary Benelux Union Treaty was adopted. In 1953, two protocols were agreed on by the three countries, the first one to coordinate economic and social policy and the second one to define a common trade policy. Finally, the agreement and signature of the 1958 treaty declared the determination of the Benelux countries to achieve the free movement of people, goods, capital and services as well as to pursue a coordinated policy in economic, financial and social matters. The Benelux Economic Union Treaty entered into force in 1960.

Then on 19 March 1958, as a result of provisions in the Treaties of Rome, a single Parliamentary Assembly for the three Communities was established, and into which the ECSC Common Assembly was absorbed. Robert_Schuman was elected as the first president of the new European Parliamentary Assembly.

The first president of the Euratom Commission was Louis Armand, a post he would hold until 1959. He immediately set to work pursuing the recommendations that had been contained in the “A Target for Euratom” report. In February 1958, it was announced that a combined working party of Euratom and the AEC (Atomic Energy Corporation in the USA) was to explore possibilities through which the USA could co-operate with Euratom for “initiating at an early date a joint program of the order of 1,000,000 kw for the development of full-scale prototype nuclear reactors.”

On 30 June 1958, the Euratom Commission published a fairly detailed report that gave a general survey of the situation in the six Euratom countries regarding nuclear power.

By mid-1958, after struggling to deal with numerous political crises, the French government eventually collapsed and on 1 June 1958, General Charles de Gaulle was asked to take on the position of Prime Minister of France. Most of the problems concerned the constitution of the Fourth Republic, the economy and civil wars in many of France’s overseas territories. On 4 October 1958, a new constitution was signed into law and, because each new constitution establishes a new republic, France moved from the Fourth to the Fifth Republic.

One of de Gaulle’s first acts on becoming France’s new leader was to arrange a meeting with Konrad Adenauer, which took place in September 1958 at de Gaulle’s home in Colombey-les-Deux-Eglises. They announced that close co-operation between France and the FRG was the foundation of “all constructive endeavour in Europe”, and that this should be put on an organised basis. This marked the start of the close relationship that developed between these two statesmen and that lasted until Adenauer’s death in 1967.

Towards the later part of 1958, the French macroeconomic and monetary situation had become a matter of serious concern for the EEC Commission. Inflation in France exceeded 10% and the balance of payments showed a deficit. This was also a serious problem for pro-Europeans in France: how could France participate in the common market project with these kind of macroeconomic imbalances? In addition, French officials were thinking of using the safeguard clauses in the EEC treaty to offset the effect of these problems, which in turn concerned the Commission, since all of this was happening so soon after the inception of the EEC. So the monetary problem in France was one of the first issues to be be investigated by the Monetary Committee.

One solution proposed by Robert Triffin, who was an adviser to the EEC Commission, was to create a European Reserve Fund. Triffin had reformulated his earlier ideas for such a European Reserve Fund to fit into the EEC framework. Consequently, in November 1958, Marjolin presented a memorandum to the Commission outlining the Reserve Fund plan.

However, in December 1958, de Gaulle devalued the French franc by 14.8% and introduced orthodox economic policies, which re-established economic stability in France. In addition, the countries participating in the European Payments Union restored the external convertibility of their currencies within the framework of the Bretton Woods system. These measures resulted in the need for a European Reserve Fund to fall away and therefore the Fund never came into being.

The European Payments Union had been established by the OEEC countries in 1950 to promote free trade by a multi-layered clearing of payments between the member countries. This arrangement, which could have been the core of a new European monetary union, was then dissolved without discussion at the end of 1958 when it had fulfilled its immediate task of regulating intra-European payment’s balances. Although this was regretted by many participants, there was no wider initiative to deepen and institutionalise European monetary co-operation at that time.

When the British delegation withdrew in November 1955 from the work of the Intergovernmental Committee, which was established after the Messina Conference, the British government was faced with two options. Either to allow integration to continue in Europe without the involvement of Britain and thus risk being sidelined and economically isolated, or to come up with an alternative plan. The British wanted to rather have a large free trade area in Europe that included Britain and they rejected the idea of the common customs union being proposed as the basis of the EEC.

The British plan was submitted to the OEEC Council of Ministers on 17 July 1956. Two days later, the OEEC Council of Ministers decided to set up a working group, known as the Group of Seventeen, to study the establishment of a multilateral system combining the intended customs union of the six ECSC countries (“little” Europe) and the other OEEC member states. In January 1957, the special OEEC group presented its report defining the technical scope for creating a free trade area in Europe. On 13 February 1957, the OEEC Council of Ministers decided officially to open negotiations with the six ECSC countries to establish a free trade area (FTA) within “greater” Europe.

What with all the other work going on to conclude the EEC and Euratom treaties, these FTA negotiations did not progress very well.  Eventually, on 15 November 1958, de Gaulle unilaterally rejected the British plan for a free trade area and, on 15 December 1958, all discussions on the establishment of a European FTA were definitively suspended. Attempts by the three Benelux countries at conciliation between the parties came to nothing.

General Charles de Gaulle was elected the President of the French Republic on 21 December 1958. De Gaulle then set about implementing his plan to forge a more active and confident role for France in international affairs.

“France cannot be France without greatness”

(written by de Gaulle in 1954 on the first page of his memoirs)

Greatness implied a France “sovereign, independent and free”. While de Gaulle supported a united Europe in which France and the FRG were to be the main pillars, he rejected any significant transfer of sovereignty to a supranational authority. Over the next 5 years, de Gaulle’s policies were to have an important influence in European events in the following key areas:

In early 1959, seven OEEC member countries, Austria, Denmark, Norway, Portugal, Switzerland, Sweden and the United Kingdom, reacted to the failure to reach any agreement with the EEC on a free trade area by opening new negotiations among themselves with a view to setting up a smaller free trade area that would give them some of the benefits of eliminating customs barriers.

Finally, on 20 November 1959, the representatives of Austria, Denmark, Norway, Portugal, Switzerland, Sweden and the United Kingdom successfully concluded their negotiations and signed the European Free Trade Association (EFTA) Treaty in Stockholm. On 4 January 1960, the Stockholm Convention creating EFTA came into force.

Encouraged by its success and the prospect of carrying its work forward on a global stage, and on the initiative of France and the UK, the OEEC invited Canada and the USA to join the OEEC. This invitation was accepted and this prompted a reform of the OEEC that resulted in the signing of the OECD Convention on 14 December 1960. The Organisation for Economic Co-operation and Development (OECD) was officially born on 30 September 1961, when the Convention entered into force.

The slow dissolution of the transatlantic post-war monetary order (the so-called Bretton Woods system) in the 1960’s was accompanied by an acute sense of crisis in the Western World. During this period, the political and ideological bases of international and national economic policies were being challenged and they ended up being profoundly transformed. In addition, de Gaulle desired to reshape France’s relations with the USA in the field of military security, especially concerning nuclear weapons and France’s position in NATO.

In Europe, de Gaulle now proposed a new kind of union among Western European states, one that would focus on the political, economic, cultural and defence fields and that would be intergovernmental in concept and not supranational.

De Gaulle had never been an enthusiast for what he regarded as Monnet’s supranational obsessions and once remarked: “we are no longer in the era when M. Monnet gave the orders”. Not only did de Gaulle himself seem unsympathetic to Monnet’s ideas, but the French prime minister Michel Debré so detested them that he would allegedly pass Monnet with averted gaze. A commentator later noted that “the European reformation had scarcely begun and then the counter-reformation was installed in Paris”.

On 5 September 1960, at press conference, de Gaulle spoke of his vision of the “Europe des Etats” (Europe of States), which he said should be established rather than a supranational Europe. De Gaulle believed that an ambitious, ostensibly economic Europe, administered by technocrats, and enjoying supranational powers, was an unacceptable challenge to the sovereign authority of nation states endowed with direct democratic legitimacy. With amazing foresight, considering what was to take place many years later in the European Union, de Gaulle made the following statement at the same press conference:

“…..Europe’s nation states were ‘the only realities upon which one can build’, unlike ‘vaguely extra-national bodies’ – such as the European Commission, the European Parliament, or indeed a Council of Ministers acting by qualified majority vote – ‘which do not and cannot have…..any political authority’.

He went on: ‘It is an illusion to believe that one could build something capable of effective action, which would be approved by the people, above and beyond the nation state’. Any other approach would be ‘to indulge in fantasy’.”

In respect of Europe, “federalism” is taken to mean a multi-layered system of government in which the highest level enjoys exclusive competence in at least one policy field, and in which some decisions at that level can be taken without the unanimous agreement of all participating states. “Confederalism”, by contrast, is a multi-layered arrangement in which the highest level enjoys exclusive competence in no area, and all decisions at that level have to be taken unanimously. “Supranationalism” is a system of decision-taking above the level of the nation state. In the European context, it is synonymous with federalism, in that it implies an independent centre of authority outside the unanimous control of the governments of the member states. “Intergovernmentalism”, by contrast, is a system of decision-making between governments. In the European context, it implies the absence of an independent centre of authority, with all decisions requiring unanimous approval and being implemented by the states themselves. If the EU had been founded on intergovernmental, rather than supranational, lines, it would have been a confederation.

Thus, the impression being presented at the start of 1961 was that “little” Europe might now be moving away from supranationalism towards a more intergovernmental approach. This subtle change of emphasis did not go unnoticed by the British government. The increasing economic prosperity of the EEC countries was clearly noticeable and this factor was an enticement for Britain to join the EEC, believing that this time it would be under different terms than had existed before.

On 10 to 11 February 1961, de Gaulle’s proposals for “closer political co-operation” were discussed at the first summit meeting of the heads of state and governments of the six EEC member states in Paris.

Prior to the official talks, de Gaulle and Adenauer had a private meeting, where they discussed de Gaulle’s proposals for Western Europe and also France’s plans regarding NATO. Adenauer was sufficiently re-assured on most points and agreed to support de Gaulle’s starting point for more “political co-operation” within the EEC.

At the summit meeting, all six EEC countries finally agreed to set up an “Intergovernmental Committee on Political Union” to review a range of initiatives to strengthen foreign-policy co-ordination and to suggest institutional means to that end – whether by improved working methods within the existing Treaty of Rome, or by formal amendments to that treaty, or by drafting a new, separate treaty text, as was being proposed by France. The committee was established under the chairmanship of Christian Fouchet and it met numerous times between March 1961 and April 1962.

The first report of the Fouchet committee was given to the foreign ministers of the EEC member states at a meeting in Bonn on 5 May 1961. The report was not encouraging as it concluded that no agreement could be reached among the parties.

On 18 July 1961, at a summit meeting in Bonn, the leaders of the six EEC countries agreed on what became known as The Bonn Declaration and announced their decision “to give shape to the will for political union already implicit in the Treaties establishing the European Communities”. Furthermore, the Fouchet committee was now given the task of preparing proposals on the means to achieve intergovernmental political co-operation within a “Union of States”.

On 26 September 1961, Britain presented their formal application to join the EEC to the Council of Ministers.

On 19 October 1961, the French delegation on the Fouchet committee presented a draft treaty (Fouchet Plan I) that would establish an intergovernmental political union between the six EEC member states. The defence aspect of the treaty proposed severing Europe’s dependence for military security on the Atlantic Alliance and the USA. This reflected de Gaulle’s wish for Europe to be more self-reliant and centred rather on a strong Franco-German defence alliance. De Gaulle further proposed a radical reconstruction of the EEC, turning it into a voluntary union of independent states. Its secretariat would be based in Paris and there would be extensive national veto powers over all common policies. Effectively, the proposals envisaged a drastic dilution of the powers of the Commission and Council of Ministers, and the subjection of Community law to national law. This was the supreme expression of de Gaulle’s vision of a ‘Europe des Etats’. There was a mixed reaction to the Plan. The FRG and Italy were mildly in favour, but with reservations on parts of the plan. Luxembourg was neither for or against the plan. The Netherlands and Belgium totally rejected the draft treaty.

Therefore, to make it more acceptable to the other countries, the Fouchet committee, again with a strong French input, made revisions to the draft treaty. On 18 January 1962, a new version of the plan (Fouchet Plan II) was submitted. The reaction of the “Five” countries was not encouraging as they all indicated that none of the revisions that were being proposed were acceptable. The “Five” countries then decided to draft a counter-treaty in response to the second Fouchet Plan and this was presented in February.

On 9 February 1962, in response to this development, de Gaulle asked for an urgent meeting with Adenauer to discuss the “Fouchet proposals” and the NATO issue. They met in a hotel in Baden-Baden, where Adenauer and de Gaulle both conceded and compromised on the issues of their disagreement. Based on the changes agreed to by the two leaders, Adenauer then withdrew the FRG’s support of the counter-treaty.

At further meetings of the Fouchet committee, on 20 February and 15 March 1962, the changes agreed to by de Gaulle and Adenauer were not discussed and the committee limited themselves to comparing the second Fouchet Plan with the counter-treaty of the “Five”, and drafting a synoptic report “which explained the points of divergence [both] between France and the Five and among the Five themselves”.

Then, on 20 March 1962, the foreign ministers of the EEC countries met in Luxembourg to review the situation. De Gaulle had just appointed Fouchet as the French High Commissioner in Algeria and therefore he was replaced by Attilio Cattani as chairman of the committee. During the meeting, the Franco-German changes were incorporated and amendments were made to the Plan. Despite these changes, Italy, Belgium and the Netherlands would still not support the plan and the meeting ended without any progress being made towards agreement.

On 4 April 1962, de Gaulle visited Turin, Italy to discuss the situation with the Italian prime minister. Further alterations to the plan were agreed to by the two leaders and these amendments were to be formally tabled by the Italian foreign minister at the next meeting in April.

On 17 April 1962, at a meeting in Luxembourg, the Dutch and Belgian foreign ministers rejected the new amendments and declared that it would be best if the negotiations were suspended until it was unmistakably clear that the United Kingdom would be joining the EEC. Since further progress was effectively no longer possible, the only agreement reached was to suspend further negotiations, for an indefinite period. Here is a detailed account of the development of “Fouchet Plan” and its eventual abandonment.

On 15 May 1962, de Gaulle confirmed that the attempts to achieve a political union had been abandoned. At a sensational press conference, he condemned European federalist policies and openly criticised the “game” he said was being played by Britain and America.

The long-range effects of the failure of the Fouchet Plan negotiations were thus significant. Unable to secure agreement to his intergovernmental design, de Gaulle resolved to stall the Community and prevent any who opposed his institutional vision (Belgium and the Netherlands) or who might challenge France’s geopolitical interests (those states plus Britain) from getting their way. In this he succeeded. It took six years (1969) before the process of European political integration was resumed in any meaningful way. It took ten years (1973) before Britain entered the Community. It took twelve years (1975) before heads of government began meeting on a regular basis in the new European Council. It took twenty-four years (1987) before foreign-policy was codified in the Treaty – in the form of European Political Cooperation – and majority voting was extended in EC decision-making. It took thirty years (1993) before an intergovernmental Common Foreign and Security Policy pillar was established along lines at all comparable to those of the Fouchet Plan.

In September 1958, a working party of independent economic experts, under the chairmanship of Pierre Uri, a French economist, presented a report to the EEC Commission concerning the economic situation of the EEC countries at the commencement of the “First Stage”. In compiling the report, the members of the working party who had high qualifications in the field of national accounting and economic forecasting, worked in close co-operation with the Commission’s own staff.

The Commission then instructed the working party to conduct another study. Their second task was to make a survey of the long-term development prospects of the EEC countries. It would take over three and a half years before the results of this survey were presented!

During the period from 1958 to 1959, the Commission had been dealing with the introduction of the “Common Policies” and concerned with the economic and monetary problems of France.

In January 1960, the establishment of an Economic Policy Committee was proposed to the EEC Council to give further substance to the consultations required on economic policy as laid down in the EEC treaty. According to its terms of reference, the Committee wished to analyse the way in which  the instruments of economic policy were being used and the economic effects that they produced, and to make any necessary proposals as required.

External, international events concerning an over-valued US dollar led to problems of European countries maintaining a fixed exchange rate to the US dollar. In addition, difficulties were also being experienced maintaining parity with the French franc. Ultimately, these issues caused both the FRG and the Netherlands to revalue their currencies by 5% in March 1961.

The first regulations on the free movement of workers within the EEC was approved by the Council on 12 June 1961.

Then on 14 January 1962, on the basis of the progress made with the “First Stage”, the Council approved the transition to the “Second Stage”. At the same time, the Council approved the regulations to implement the common agricultural policy (CAP). This was the start of the establishment of a single market for agricultural products.

In March 1962, the Parliamentary Assembly decided to change its name to the European Parliament.

In June 1962, a report titled “Economic Development Prospects in the EEC from 1960 to 1970” was published by the EEC Commission. This report embodied the findings of the working party that was given this task in September 1958. Predictably, the report was highly technical in content and it provided a broad but consistent general forecast of economic development in the Member States from 1960 until 1970. The Commission therefore felt that the document should not merely be reserved for internal use, but authorized its publication.”

On 22 October 1962, in a speech given by Hallstein in Bonn to the “Europa Union” organisation, Hallstein took the opportunity to informally lay out his vision for the EEC. This was only two days before an official EEC memorandum, on a similar theme, was published. The speech largely dealt with the details of the following issues:

“…..[In Europe today] we have five major problems: (1) The problem of the economic union which we ourselves have shaped and are still in the process of shaping. (2) The geographical enlargement of the European Economic Community, and the accession of the United Kingdom in particular. (3) The Atlantic partnership, i. o. the recasting of Europe’s relations with the United States and Canada. (4) Our relations with the Soviet Union, and (5) The problems of what is known as the ‘Political Union’…..”

On 24 October 1962, the Commission issued a memorandum titled the “Memorandum of the Commission on the Action Programme of the Community for the Second Stage” that is, sometimes, erroneously referred to as the Marjolin Memorandum. The Memorandum outlined the intended programme or focus areas of the nine directorates over the next four year period. The heads of each directorate complied the chapter related to their directorate’s area of responsibility. In the Introduction of the memorandum, Hallstein clearly laid out the future objectives of the EEC as seen by the Commission:

“…..The Treaty of Rome, interpreting as it does the intention of its Contracting Parties to embark on full integration, and taking into account the economic conditions which govern the establishment of a unified economic area, provides for the economies of the Six to be welded into a real economic union…..

…..The customs union has proved to be the right take-off point for a vigorous advance towards a unified economy. At the same time as it has provided a foundation for the Community’s economic power, it has acted as a unifying factor among the Member States. But this swift demolition of trade barriers has also confirmed that the Treaty was rightly heedful of economic requirements in prescribing that the establishment of economic union proper should proceed in parallel with the customs union, and not lag behind.”

It was clear that the Commission were pushing for the broadest interpretation of the Rome Treaty to imply the progressive realisation of full economic, monetary and political union.

Marjolin authored two chapters – Economic Policy and Monetary Policy. In the Monetary Policy chapter, Marjolin broached some new and, at that time, radical ideas. He proposed a form of monetary union to be implemented through irrevocably fixed exchange rates between the currencies of the EEC countries. This could be considered to be the first official mention of possible monetary integration in Europe.

“…..[The present international monetary system] makes for a certain fragility calling for constant action if undue strains are to be avoided. The Community will be all the more able to act effectively in this direction as it will function as a single unit; the emergence of a European reserve currency would considerably facilitate international monetary co-operation and a reform of the present system.

…..The Treaty makes provision for a common commercial policy but not for a common monetary policy; this is an obvious gap which needs to be bridged.

…..The Commission is fully aware of the delicate nature of this proposal in view of the need to observe the strictest secrecy[???]…..

…..The establishment of the monetary union could become the objective of the third stage towards the Common Market…..The Council of the Governors of the Banks of Issue would become the central organ of a federal type banking system.”

These proposals found no support among the EEC governments. The president of the FRG Bundesbank, Karl-Heinz Blessing, attacked the ideas as “pipe dreams” and insisted that monetary policies had to be dealt with on a wider basis, on the transatlantic level. In any event, the economic policies of the member countries would have to converge much more before any discussion of monetary integration made any sense. Blessing’s criticisms were supported by the FRG government. In France, de Gaulle refused to even consider such ideas.

While the Monetary Policy chapter of the Memorandum was later ignored (or not acted upon), a Committee of Governors of the national central banks of the EEC was established later in 1964.

On 14 January 1963, under the crystal chandeliers of the largest, most ornate room in the Elysée Palace in Paris, and without warning his partners in the EEC, de Gaulle announced in front of the world’s press that he intended to veto Britain’s EEC application. The reason given was that de Gaulle was highly suspicious of Britain’s real motives for wanting to join the EEC after previously rejecting membership. In addition, the details of the Common Agricultural Policy (CAP) were still being finalised and de Gaulle did not want the British EEC application negotiations to undermine the favourable conditions that the French were seeking.

“…..It must be agreed that first the entry of Great Britain, and then these States, will completely change the whole of the actions, the agreements, the compensation, the rules which have already been established between the Six, because all these States, like Britain, have very important peculiarities. Then it will be another Common Market whose construction ought to be envisaged; but one which would be taken to 11 and then 13 and then perhaps 18 would no longer resemble, without any doubt, the one which the Six built.
Further, this community, increasing in such fashion, would see itself faced with problems of economic relations with all kinds of other States, and first with the United States. It is to be foreseen that the cohesion of its members, who would be very numerous and diverse, would not endure for long, and that ultimately it would appear as a colossal Atlantic community under American dependence and direction, and which would quickly have absorbed the community of Europe.
It is a hypothesis which in the eyes of some can be perfectly justified, but it is not at all what France is doing or wanted to do — and which is a properly European construction…..”

There was another item at the top of de Gaulle’s agenda. Only a week after he had shocked the world with his veto, Adenauer arrived in Paris for the final negotiations on their planned Franco-German treaty. On 20 January 1963, while Adenauer was dining at the German Embassy, Monnet, Hallstein and the Dutch Commissioner, Blankenhorn, came to plead with him to link the Franco-German treaty with an assurance that negotiations with Britain should continue. Here de Gaulle’s assiduous courtship paid off. Adenauer refused. On 22 January 1963, the two leaders signed their treaty, in the same Elysée Palace where de Gaulle, nine days earlier, had announced his veto.

On 28 January 1963, the six EEC member states formally confirmed the rejection of Britain’s application for membership .

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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 4 – Economic and Monetary Union: slowly bringing everything together

  1. Pingback: Part 3 – Economic and Monetary Union: the Community takes shape | Thoughts on European Politics & Economics

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