THE EUROPEAN UNION —To Whose Benefit? by Stuart Christie. eBook £1.50 (see eBookshelf)

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Mise-en-scène (1919-1939)

The European Economic Community (EEC) did not spring fully armed upon an unsuspecting world with the Treaty of Rome in March 1957. It was the culmination of a long process that had its roots in the First World War, a war from which the US emerged as the ascendant political and world power. Since the early 1920s, important elements among the US ruling elites had been pushing for a United States of Europe, believing such an entity would stabilise the European situation and be conducive to establishing a properly managed world economy. This never materialised.

Technical progress and the growth of mass production in the 1920s and 30s meant a steady drift toward larger economic units among the industrial and developing nations. In spite of the collapse of the US economy in 1929, with its large-scale unemployment which was to last the best part of a decade, the United States was the pacesetter for efficiency in modern industry. Its economic basis of mass production had enabled it to pay high wages to those fortunate to have a job and at the same time compete successfully with European industries that paid their workers less, but wasted more on unproductive charges and inefficient organisation — mainly due to the small size of the economic unit. No tariffs prevented the movement of goods from one end of the United States to the other. Each industry knew it had a domestic market of some 120 million people whose average consumption of industrial products was around 80 per cent above that of Europeans.

Excluding the Soviet Union, Europe between the wars, covering no more than 4 per cent of the world’s land area, was the home of about 19 per cent of the world’s population. Its foreign trade (i.e. imports plus exports of all European countries) was in most years as great as the total foreign trade of the rest of the world. It is also important to remember that around 40 per cent of the population of industrial Europe was engaged in agriculture.

The need to ‘de-Balkanise’ Europe was apparent to European industrialists at least as early as 1925. The Viennese newspaper Neue Freie Press (4.4.1925) pointed out that the peace settlement of 1919 had done more to ruin the European economy than the war itself:

While America has got organised, Europe has got Balkanised … The fact that we in Europe ‘had to’ create some 17 new States and territories with new frontiers, new trade barriers on all sides, new currencies and new legal systems, may well have done more harm to Europe’s economic system than even the terrible destruction of property during the war itself. And still there are troops right and left of all these frontiers, indeed, whole armies whose existence jeopardises the achievement of the most favourable geographical distribution of European industry; and that is a serious handicap for economic progress.

The economic integration of the industrial countries of Europe progressed gradually throughout the twenties and thirties. Hilda Monte, in The Unity of Europe, pointed out that in spite of the steadily tightening restrictions on the movement of people and goods across Europe’s many frontiers in the pre WWII period:

There has been a manifest tendency of European industries to complement each other, to achieve that economic integration which alone makes technical progress possible. Europe’s foreign trade gives a clear reflection of these efforts. Forty-four per cent of the exports of the ten industrial countries of Europe consist of an exchange of goods between these ten industrial countries. They exchange among them mainly raw materials and semi-manufactured goods, while exports to the industrially less developed parts of Europe and to overseas countries consisted more largely of manufactured goods. (p. 29)

The Council on Foreign Relations (CFR)

The spectacular failure of the US economy in 1929 had driven home to the Western ruling elites, particularly the North Americans, that there was a pressing need for the proper management of the world economy. The outbreak of the Second World War provided the US planners with the opportunity to draw up proposals for a new global order for the post-war world. Less than two weeks after war broke out in Europe, on 12 September 1939, Hamilton Fish Armstrong, editor of Foreign Affairs magazine, and Walter H. Mallory, an executive director of the Council on Foreign Relations (CFR), probably the key policy-moulding think tank in the private sector, travelled to Washington to meet George Messersmith, US Assistant Secretary of State. Messersmith was also a member of the Council on Foreign Relations. They outlined a long-term planning project involving close State Department and CFR collaboration in the critical period that had just begun. The project involved setting up a number of study groups — called the War and Peace Study Groups — to focus on the long term problems of the war and to plan for the peace.

The rapid and unexpected success of the German army in 1940 took the government and the CFR planners by surprise, forcing them to consider the possibility that Germany might defeat Britain. One of the important questions, which had concerned US planners, for the previous 10 years, at least, centred on the problem of US self-sufficiency and economic warfare. How much of the world’s resources and territory did the US require to maintain her power and prosperity? The CFR’s Economic and Financial Study Group concluded that, as a minimum, the US national interest required free access to markets and raw materials in the British Empire, the Far East, and the entire Western Hemisphere. Aid to Britain and the exclusion of Japan — an expanding power like the USA and seen as a clear threat by the CFR — from European dependencies in the Far East were essential for the long-term welfare of the US economy.

William Diebold, a CFR research assistant, explained the strategy in his study New Directions in Trade Policy (New York, 1941). The pro-British stance adopted by the United States had nothing to do with sentimental ties or anti-Nazism: ‘Aid to Britain, short of war’ was to be adopted as US policy because of the post-war value to the United States of successful British resistance: ‘The idea is that our post war problems will be easier to solve if Britain stands than if the Nazis dominate Europe. We are concerned with this war because it affects the future shape of the world.‘ The bottom line of CFR policy was that the US should end its isolationism and enter the war in support of Britain. The spectacular attack on obsolete warships in Pearl Harbour on 7 December 1941 opportunely silenced the isolationist elements in the US Congress and America entered the war.

The Grand Area

It was in the early years of the war that State Department and CFR planners developed the concept of the ‘Grand Area’, that is, an area which would be subordinated to the needs of the American economy as part of ‘an integrated policy to achieve military and economic supremacy for the United States within the non-German world; This strategically essential area for world control was to include the Western hemisphere, the Far East, and the former British Empire — which was to be dismantled in what the Americans called an exercise in ‘anti-colonialism‘ and the British called ‘an effort to elbow us out‘. The Grand Area concept was described in a memorandum to the president and the State Department on 24 July 1941, one month after Hitler’s invasion of the USSR. Memorandum E-B34, as it was called, summarised the idea: ‘its meaning for American policy, its function in the present war, and its possible role in the post war period.‘ In this document the CFR Economic and Financial Study Group stressed the significance of the economic integration of the Grand Area.

All member countries had to be able to prosper economically within the region, or instability would be inevitable:

In the event of an American and British victory, much would have to be done towards reshaping the world, particularly Europe. In this the Grand Area organisation should prove useful. During an interim period of re-adjustment and reconstruction, the Grand Area might be an important stabilising factor in the world’s economy. Very likely the institutions developed for the integration of the Grand Area would yield useful experience in meeting European problems, and perhaps it would be possible simply to interweave the economies of European countries into that of the Grand Area.

The IMF, the World Bank and the United Nations

The CFR Economic and Financial Study Group ended its recommendation by outlining the key topics for future study, and how best to integrate the Grand Area. Leading this list were financial measures — the creation of international financial institutions to stabilise currencies, and of international banking institutions to promote investment and the development of backward areas. Thus did the CFR identify, at an early date in the war, and before direct US involvement, the need for an International Monetary Fund and a World Bank, institutions that they were specifically to suggest in February 1942, shortly after US entry into the war.

The implementation of such proposals, however, presented a problem. In order to avoid what one CFR member, Isaiah Bowman, described as the US committing itself to ‘conventional forms of imperialism’ in an age of rising nationalism, he argued that it was first of all necessary to make the exercise of that power international in character, through — a United Nations body. The planning for this collective security system, the United Nations, began in the summer of 1943 when the ‘Agenda Group‘, set up by US Secretary of State Cordell Hull and all of whose members also belonged to the Council on Foreign relations, drafted the US proposals for a United Nations organisation to maintain international peace and security.

Post-war Solutions

Hitler, with his immense war machine, failed to create a unified Europe. Fascism, by the efficient administration of terror, could offer full employment to the masses and ritualised spectacle, but it could offer little else. The peoples of Europe wanted more than the security of bondage. Where he did succeed was in uniting Europe in the struggle against fascism. The liberation of Europe provided the planners, ‘reconstructionists’, and utopian dreamers of every ideological hue with the opportunity of achieving by administrative means what the great men of destiny from Charlemagne to Hitler had failed to do by force.

While the general populations of the overrun European nations emerged from the Second World War close to starvation their economies were far from being in ruins. German output in particular, supposedly the worst affected, recovered rapidly to pre-war levels. German economic output in 1945 has been put as little as 10 per cent below that of 1939. Much of the supposed industrial damage was in fact only the devastation of financial and residential areas (see J.K. Galbraith on the illusory nature of the “German economic miracle” of the 40s and early 50s).

The liberation had acted as a catalyst for important social change, accelerating the pre-war drift toward the integration of industrial Europe as a means of reducing the crises and contradictions of capitalism. Economic unity and centralised planning, as developed in a war economy, would, argued the economists, promote industrial growth and full employment, thereby ensuring a further period of grace for capitalism. Planning and rationalisation would produce the goods the people wanted and the increased purchasing power necessary to acquire them. Mutually assured wealth would lead to social harmony, security and the likelihood of future peace — until the next crisis, at least.

Another important consequence of the Liberation was the emergence of the European communist parties as powerful organised forces. These communist parties had, however, in line with Russian foreign policy, long since abandoned revolutionary politics and had, since 1944, been cultivating the role of normal patriotic parties committed to the ‘normalisation of everyday life’. The French Communist Party, the most unashamedly Stalinist of all the European CPs, for example, considered the terms revolution and revolutionary pejorative and directed these at uncontrollable party or non-party militants such as those whom Thorez, its leader, described as ‘Hitlero—Trotskyites’.

The Cold War

An important factor that the planners and ‘reconstructionists’ had to take into account was their ability to generate support for the concept of a united Europe in peacetime. A nation at war is a tightly knit cohesive instrument created for the specific purpose of self-defence; it is an organic unit subject to the political will of the state that, in the final analysis, is an organisation for war. In war citizens are submissive but at the same time active and willing participators in the body politic; it is perhaps the only situation in which modern society functions with a unity of purpose and uncritical patriotic devotion. For this reason war or the threat of war has always been the ideal lever of state power stabilising and controlling national economies and manipulating their own domestic populations. The planners and politicians were only too well aware that with the coming of peace, the ‘nation at war’ had achieved its purpose and would quickly revert to its normal state as an aggregate network of individual groups It had ceased to operate as an organic unit in which individuals were prepared to sacrifice their lives to ensure the survival of the organism.

The device by which the new corporate and technocratic elites of the Western industrial nations retained the herd instinct essential for their post-war plans, both foreign and domestic, was the Cold War. The opportunity to make the transition from world war to Cold War came with a major foreign policy speech by Stalin in February 1946. This speech should be viewed in the light of growing disagreements with the Western powers over the terms of the various peace treaties and the unexpected cutting off of the US lend-lease scheme to the USSR in 1945. It had been a disastrous decision for Russia, leaving her in particularly precarious straits. Before a large and carefully selected audience in Moscow the Soviet leader outlined his country’s post-war foreign policy in which he concluded that ‘no peaceful international order was possible.‘ The Soviet Union, therefore, had to be capable of guarding against any eventuality. Output of the basic materials of Soviet national defence — iron and steel — had to be trebled, while those of coal and oil, the sources of energy, doubled.

Stalin’s ominous sounding speech spread considerable apprehension. George F. Kennan, the US Chargé d’Affaires in Moscow, was asked for clarification as to Soviet intentions in Europe. Kennan’s assessment, in what has come to be known as ‘The Long Telegram’, played a crucial part in forming Cold War strategy. The intelligence report, published the following year in Foreign Affairs magazine — at the height of the Cold War (July 1947) — argued the case for what he described as ‘containment’. Kennan predicted that Soviet policy would be to use every means to infiltrate, divide and weaken the West. Means would include the foreign communist parties, diplomacy, international organisations — blocking what they did not like, starting false trails to divert. He argued that to seek a modus vivendi with Moscow would prove chimerical, a process leading not to an end but only to political warfare.

It should be stressed, however, that Kennan viewed the Soviet challenge as essentially political, not military. To use the atomic bomb, the source of US military superiority, in other than a response to an attack on US territory would, he stressed, be a major diplomatic disaster in the ideological competition between Washington and Moscow. Among the tactics advocated by Kennan as a means of responding to the political threat was the ending of the US denazification programme in Germany. The Nazi power elite and bureaucratic machinery would prove invaluable allies in the eventual confrontation with Russia.

Kennan’s prognosis of political containment did not, however, accord with the foreign policy requirements of the US State Department. Dean Acheson later observed:

His recommendations — to be of good heart, to look to our own social and economic health, to present a good face to the world, all of which the Government was trying to do — were of no help; his historical analysis might or might not have been sound, but his predictions and warnings could not have been better. We responded to them slowly.

The first Western response came from Winston Churchill in a speech delivered the following month, on March 5, in Fulton, Missouri. It was this speech that formally inaugurated the Cold War. It gave the first hint of the military alliance between the Western powers that was to become NATO. Picking up an odd phrase first used by Goebbels‘s propaganda ministry in the closing phase of the war, in a last-ditch appeal to win over the Allies to a joint crusade with the Nazis against the menace of Soviet communism, Churchill announced to the world: ‘From Stettin in the Baltic to Trieste in the Adriatic, an iron curtain has descended over the Continent.’ This speech contributed greatly to halt the retreat into isolationism in 1945 by elements in the Truman administration and Congress. Churchill went on to suggest that in order to lift that curtain, ‘fraternal association of the English speaking peoples’, operating outside the UN, should undertake this task. Their tool would be the atomic bomb, which, according to Churchill, ‘God had willed’ to the United States.

As was to be expected, Stalin reacted angrily. He compared Churchill and his US allies to Hitler, charging that like Hitler they held a racial theory that proposed world domination for the English speaking peoples. Stalin denounced Churchill’s speech as ‘a call to war with the Soviet Union‘ and reminded the British premier that twice in the recent past Germany had attacked Russia through east European countries that had governments ‘inimical’ to the Soviet Union. Within three weeks of Churchill’s speech the Soviets had rejected membership in the World Bank and participation in the International Monetary Fund, and announced the start of a new five-year plan designed to make Russia self-sufficient in the event of war. By the end of 1946 the lines between East and West were clearly drawn in Europe (although Czechoslovakia was still neutral), but elsewhere what belonged to whom was still uncertain.

The Truman Doctrine and the Marshall Plan

In March 1946 a meeting between the anti-communist French President Léon Blum and the US Treasury Secretary Fred Vinson had set the stage for what one contemporary French observer, Jean Davidson, the APF correspondent in Washington described as ‘the turning point in French post war policy’. Vinson proposed to Blum that the French socialists join an anti-communist coalition to oust the communists in the cabinet. Although no conditions were laid down, the US message was clear — while the communists remained in government the assistance the European governments would receive from the United States would be minimal.

Two months later, in May 1946, General Lucius D. Clay, the US military commander in occupied Germany, informed the Russians, unilaterally, that they could expect no further reparations from the Western zones of occupied Germany. In September US Secretary Byrnes gave a highly publicised speech in Stuttgart in which he gave notice that US policy toward Germany had shifted from keeping Germany as ‘an economic poorhouse’ to one favouring economic unification and encouraging Germany to develop exports in order to become self-sustaining. He went on to propose that the Germans should be given primary responsibility for running their domestic affairs and be allowed to increase their industrial productivity. This was, however, simply recognising what was already a fait accompli and giving legitimacy to the policies that General Clay had been putting into practice for some time. Byrnes also emphasised that the US presence in Europe would remain indefinitely.

One of the main stumbling blocks in the ability of the planners and their social democratic allies to manipulate the internal and foreign policies of the main European nations was the existence of strong Communist parties that had emerged in the wake of the Liberation. The French, Italian and Belgian communist parties were particularly powerful and had to be removed from power and neutralised. This was done fairly crudely, but effectively, by covert means by the CIA and overtly by the Truman Doctrine of 12 March 1947 that promised US assistance for combatting internal or external communist threats wherever they might occur. On the face of it, the Truman Doctrine was designed to deal with the specific threat to Greece and Turkey; in effect it was a threat to the Soviet Union and non-aligned socialist movements that the US would provide assistance for combatting anything its saw as a threat within its ‘sphere of interest.‘

Two month later, in June 1947, US Secretary of State General George Marshall announced the revival of a ‘working economy in the world‘ through US aid. This, the so-called ‘Marshall Plan’, was intended, according to Acheson, to win over the critics of the Truman Doctrine at home and abroad and to accelerate the removal of economic controls within Europe and stimulate political, economic and military integration. US aid was ‘conditional’ upon a mutually agreed joint plan being drawn up by all the European nations. Needless to say, the Soviet Union refused to participate in the creation of such a scheme because of the political ‘sting’ in the tail of ‘relief and reconstruction‘. Poland and Czechoslovakia requested participation but it was pointed out to their respective leaders that such a move would be construed by the Soviet Union as a hostile action and they withdrew their applications. The organisation that emerged to administer the Marshall Plan was, then, uniquely Western European.

With one eye looking to block the alleged threat of soviet expansionism in Western Europe while the other looked to prevent the risk of post-war depression in the US, the thrust of the Marshall Plan was to break down economic barriers and promote the political, economic and military integration of Europe. The sixteen-country Committee for European Economic Co-operation drew up a jointly produced plan that called for $28 billion over a 4-year period, their requirements in goods and foreign exchange for the years 1948-52. The Plan was accepted by Truman, but because of a largely critical and isolationist Congress who were growing increasingly disenchanted with his foreign policy, he reduced the $28 billion to $17 billion. The trump card in Truman’s hand was the argument that by providing Europe with the wherewithal to buy goods and services from the US, the foundations for a strong United Europe would be laid down and the risk of post-war depression in the US would be forestalled or minimised. The provisional sixteen-country Committee became the more formally structured Organisation for European Economic Co-operation (OEEC).

One immediate effect of the Marshall Plan was the final polarisation of Europe into East and West. In September 1947 Soviet Foreign Minister Molotov announced the formation of a new Communist International, the Cominform, ‘to ‘fight the Marshall Plan as an instrument of American imperialism‘.

The communist-led coup against the neutral Czech government of Edvard Beneš and Jan Masaryk in February 1948 was the catalyst the Truman administration required to bulldoze the Marshall Plan through the Senate. The fear of communism was now paramount and, on occasion, manifested itself in hysterical behaviour, such as the epidemic of flying saucer reports that began around this time. In August 1947 the American Civil Liberties Union published a report on ‘US Liberties’ that summarised developments of the preceding twelve months:

A general retreat to nationalism, militarism and defence of the status quo increasingly marked the country. Excitement bordering on hysteria characterised the public approach to any issue related to communism, accentuated by the declaration of a foreign policy aimed at blocking the advance of Soviet influence.

From The Brussels Treaty to NATO

The plans of the Western policy-makers began to bear fruit as early as March 1948 with the signing of the Brussels Pact, a treaty of mutual assistance between France, Britain, the Netherlands and Luxembourg. Shortly after, during the first session of the newly constituted Council of Europe, Mouvement Républicain Populaire (MRP) deputy Georges Bidault spoke for the first time of a possible German accession to the Council. The following year, 1949, Europe became more closely integrated as an organic entity with the signing of the NATO treaty that required the member nations to jointly assess their military requirements with Canada and the USA.

‘The atmosphere in Washington today’, wrote Joseph and Stewart Alsop in their New York Herald Tribune column of 17 March 1948, ‘is no longer a post-war atmosphere. It is, to put it bluntly, a pre-war atmosphere … It is now universally admitted that war within the next few months is certainly possible.’ A Gallup poll at the time reported that 73 per cent of the voting population of the US already believed that a Third World War was inevitable.

The years 1946 to 1948 were, then, years in which the US played a crucial role in the internal and international affairs of Europe. Grand Area planning came into its own. Long-term US strategic objectives were contingent upon an economically revitalised Europe. This demanded a political partnership between France and a revived and rearmed Germany, a step that would call for great feats of ingenuity in convincing the people of Europe as being both legitimate and necessary.

Shortly after the signing of the Brussels Treaty, France agreed to merge its occupation zone of Germany with the combined American and British zones, and embarked on a reform of the German currency. These moves were read by the Russians as hostile acts indicating that the Allies had now abandoned the idea of a united Germany and that there was no longer any point in maintaining the illusion that Berlin would be the future capital of a united Germany. They responded by blocking road access to Berlin for more than a year. The Allies responded by forming a military alliance within the Brussels Treaty, the Western Defence Organisation (WDO), which was supported, informally, by the US and Canada. Within a year the WDO became the North Atlantic Treaty Organisation (NATO) with the signing of the twelve-nation NATO treaty on 4 April 1949

The ‘European Movement’

Militarily and politically the original purpose of NATO, from the US point of view, was to implement Grand Area strategy. Its legitimacy was rooted in the alleged aggressive and expansionist nature of the Soviet Union. The NATO Treaty imposed demands and limitations on each of its member countries, committing them to eliminating conflict in their international economic policies and encouraging economic collaboration between any or all of them.

Of all the interests involved in the creation of NATO perhaps the most influential of all was an organisation of the conservative, liberal and social-democrat elite of Europe known as ‘the ‘European Movement‘. Members of this group intimately involved in the setting up of NATO included figures such as Edgardo Sogno, Jean Monnet and Robert Schuman. These mandarins and others like them were to be the architects of the European Economic Community. George McGhee, Under Secretary of State for Political Affairs in the Kennedy administration, commenting on the influence of this elite group noted: ‘I believe you could say the [1957] Treaty of Rome which brought the Common Market into being was nurtured at these meetings.’

The senior administrators of this supra-nationalist lobby were intellectuals and technocrats who, for the most part, had risen to power outside the framework of the normal democratic process. Their rise to power signified an important development in the new post war world. They were not answerable to any representative body and they had far-reaching powers of executive action that extended far beyond national boundaries.

The European Movement (or the ‘Bilderberg Group‘ as it later became known) was to play a crucial role in the history of post-war European integration — NATO, the Council of Europe the ‘League for Economic Co-operation‘ and the various other supra-national and quasi technical institutions which were to emerge in the 1950s such as the ECSC, Euratom, The European Atomic Energy Commission and the ill-fated European Defence Community, as well as the Treaty of Rome itself, so it is worthwhile saying a few words about its background.

The driving force behind the European Movement was a Polish exile by the name of Joseph Hieronim Retinger. Between the wars Retinger had campaigned vigorously for a unified Europe and, in WWII, worked in London as political adviser to General Sikorski and later to Sir Colin Gubbins, head of Special Operations Executive (SOE), later resuming his campaign for a unified Europe. On 8 May 1946, he addressed the Royal Institute for International Affairs (Chatham House) and warned them of the impending threat to Europe from the Soviet Union. It was from this talk that the idea of the ‘European Movement‘ developed.

The Council of Europe and The American Committee on a United Europe (ACUE)

Working closely with Paul van Zeeland, the Belgian Foreign Minister, later the first European Chairman of the North Atlantic Council, and Paul Rijkens of Unilever, Retinger organised the first Congress of Europe at The Hague in 1948. From this Congress sprang the Council of Europe, the first step along the road to European integration

In July 1948, Retinger travelled to the US with the former Belgian Prime Minister Paul Henry Spaak (later to be Secretary General of NATO between 1957 and 1961), Winston Churchill and Duncan Sandys, President of the European Movement, to seek funds for non-governmental, political activities of the organisation. From this initiative an organisation called the American Committee on a United Europe (ACUE) was formed. The ACUE was formally launched during a lunch in honour of Churchill on 29 March 1949 — just a week after the publication of the text of the North Atlantic Treaty.

The most significant thing about the ACUE was its leadership. Its chairman was William ‘Bill‘ Donovan, former Director of the Office of Strategic Services (OSS), the forerunner of the CIA; its vice-chairman was Allen Dulles, Director of the newly formed CIA. The Secretary was George S. Franklin, then Director of the Council on Foreign relations (later ‘Coordinator‘ of the Trilateral Commission), the moving spirit behind the Grand Area concept. The Executive Director was Thomas Braden, head of the CIA’s division on international organisations.

ACUE soon began to send money to the Brussels headquarters of the European Movement, of which Retinger was now Secretary General. Most of this money came from US State Department ‘slush funds’ that totalled, between 1949 and 1953, £440,000. Among the principal objectives of the European Movement at this time were to counter the rising tide of anti-Americanism in Europe, to rearm Western Germany and to create an informal forum for important people from NATO countries to promote the case for European unity.

The French political economist, diplomat Jean Monnet, a member of the European Movement, was one of the key figures in the creation of a ‘united’ Europe. Monnet, often described as ‘the Father of Europe‘ (although never elected to public office), had headed the joint French-British supply committee until the French collapse in the summer of 1940. He then went to Washington as Churchill’s appointee to the British Supply Council and drafted the ‘Victory Programme‘ of war production for Roosevelt. In 1943 he went to Algeria for the joint Munitions Assignments Board where he became commissioner on armaments, supply and reconstruction in the French Committee on National Liberation. After the war he was responsible for introducing centralised economic planning for French industrial and agricultural modernisation. From there he moved on to NATO where, with Averell Harriman and the British civil servant Edwin Plowden, he was responsible for working out the procedures used by the treaty signatories to jointly negotiate their defence budgets.

The European Coal and Steel Community (ECSC)

After the Council of Europe the next step towards European integration took place in May 1950 with the French proposal, proposed by Robert Schumann, another Retinger mandarin, for the pooling of Western European coal, iron and steel resources, thereby eliminating one of the main bones of contention between France and Germany. France, Germany, Italy and the Benelux countries signed the treaty that gave birth to this new supra-national organisation, the European Coal and Steel Community (ECSC) in April 1951. The first head of the ECSC was the mandarin Jean Monnet; it was he who began to guide industrial Europe along the path of economic integration.

In 1950, following the Soviet Union’s acquisition of the atomic bomb and the Chinese communist defeat of the Kuomintang, US foreign policy shifted to out-and-out ‘containment militarism‘. Containment militarism was not primarily intended to contain Soviet expansion from without, but rather, to contain US allies from within. As National Security Council document NSC-68 explained it: ‘Even if there were no Soviet Union we would face the great problem that the absence of order among nations is becoming less and less tolerable.‘ The absence of order was noticeable within the US itself. With the Korean War (1950-53) the ephemeral post-war boom had run its course, and as prices continued to soar and consumer purchasing power ebbed, unsold goods piled up in warehouses.

Another danger foreseen by NSC-68 was that the slow pace of European integration and neutralism was detrimental to the fundamental interests of the US. Containment militarism — defined as a ‘defensive holding action‘ that sought by all means short of war to block further expansion of Soviet power, roll back the Kremlin’s influence and, in general, foster the seeds of destruction within the Soviet system — was the one strategy which promised to elicit the desired response from each of the three major powers — the Russians, the Europeans, and the American public. To the Europeans, the increased aid that would come their way as a result of such a rearmament programme would close the dollar gap and, at the same time, discourage any moves toward non-alignment.

The Truman Administration got this signal over to the Europeans by making it clear to them that if the continued infusion of dollars through economic aid was unrealistic, there was no reason why the trade imbalance could not be remedied by means of military assistance. To this end, NSC-68 called for an overall merger of foreign aid, both economic and military:

Progress in this direction — that of European political stability — will require integrated political, economic and military policies and programmes, which are supported by the United States and Western European countries, and which will probably require a deeper participation by the US than has been contemplated.

Containment Militarism and the European Defence Community (EDC)

In May 1950, the same month the ECSC was founded and less than a month after the publication of American foreign policy document NSC-68, Dean Acheson unveiled the combined military-economic strategy of ‘containment militarism‘ in a meeting with European leaders in London. The Secretary of State urged the Europeans to make a greater effort towards economic and military unity, pledging that the US would support such an effort financially. It was during these meetings that Acheson alluded to a new American foreign policy, which was military in emphasis but aimed at the Marshall Plan’s economic goals. Just as the big stick of containment militarism had been waved at the Russians with the formation of NATO, so the carrot of economic aid was being offered to the Europeans to dissuade them from any moves toward non-alignment.

Under American pressure the North Atlantic Council, the controlling body of NATO, decided to implement ‘containment militarism‘ by fighting ‘Soviet aggression’ as Far East in Germany as possible. That same year, 1950, René Pleven, the French Defence Minister, proposed an integrated multinational army controlled by a supra-national political body as a means of permitting Germany to make her defence contribution yet at the same time avoiding the dangers of a separate army, general staff or defence ministry. Based on the ECSC, Pleven envisaged this European Defence Community (EDC) being controlled by a council of ministers, an assembly and a European Minister of Defence.

The six-country treaty establishing the EDC was signed in May 1952 and the three occupying powers agreed to withdraw from Germany upon ratification of the treaty. In spite of it being a French initiative, however, the French remained uneasy about the prospect of any plan involving the rearming of Germany. Finally, in August 1954, in spite of strong American pressure threatening to cut off aid, French Gaullists and communists combined to throw out the Pleven Plan for a European Defence Community and the whole EDC initiative collapsed.

In spite of the refusal of the French National Assembly to ratify the EDC, an alternative political solution was soon found. The following month, September 1954, the British Foreign Secretary Sir Anthony Eden instigated a Western European Union as a consultative group to oversee German rearmament and to balance the new German army. As part of this agreement the British agreed, if necessary, to keep four divisions in Europe until the year 2000. Despite the fact that Germany had invaded France three times in 75 years, the French Assembly ratified the Paris treaties that legalised the changes in German status that they had earlier found so objectionable. By October the allies had agreed to end the occupation of West Germany and to accept a plan for its rearmament — but without nuclear weapons.

In May 1955 bourgeois West Germany formally recovered her sovereign status —without her former boundaries —as a full and equal member of NATO. According to the East German Brown Book, a book which identifies leading ‘ex-Nazis’ in the West German administration, the newly recognised sovereign German state had over 100 ‘ex-Nazi’ generals and admirals controlling the Bundeswehr, 21 ministers and state secretaries of the Federal Republic, 245 senior officials of the German Foreign Office, 297 senior police, security and intelligence service officers, and 828 leading members of the German judiciary. Nine days later — and over 6 years after NATO had been formed — the Soviet Union responded by setting up the Warsaw Pact.

The collapse of the EDC signalled a critical shift in attitudes among European parliamentarians. The prospect of abandoning their sovereignty to the supranational bureaucracy implied by European economic and military integration had become markedly less attractive in the increasingly buoyant economic atmosphere of the mid 1950s.

The Bilderbergers, Messina and the Treaty of Rome

The European Movement, now renamed the ‘Bilderberg Group‘ following a meeting at the Bilderberg Hotel in Holland in May 1954, stepped up its pro-European campaign. In 1955 Jean Monnet resigned from the ECSC to form an Action Committee for a United States of Europe (ACUSE) to revitalise the unification movement. Members of ACUSE met only once a year, but the committee issued numerous statements and Monnet himself was heavily involved in numerous schemes to create supranational institutions and thereby promote European unity. ACUSE members Monnet, Paul Henri Spaak, Schuman, Alcide de Gasperi and Konrad Adenauer were responsible for convening the meeting at Messina in June 1955 that laid the foundations for the European Atomic Community (Euratom) for joint exploration of nuclear energy, and the European Economic Community (EEC).

At the Messina meeting the representatives of the six industrial nations of continental Western Europe — France, West Germany, Belgium, the Netherlands, Italy and Luxembourg — decided that the next step toward West European integration had to be economic rather than military or political. From this meeting grew the Treaty of Rome that formally established the six-nation EEC in March 1957. Both the Euratom and EEC agreements went into effect at the beginning of 1958.

The EEC Treaty — Means and Ends

Briefly, the Rome Treaty established the methods and time schedule by which the signatory countries, as well as other nations that wished to join, could integrate their economies into a single, more expansive system. The EEC Treaty, with 572 articles and almost 400 pages, like the treaties establishing the ECSC and Euratom, looked forward to the eventual political unification of Europe. The means toward this long-term objective was economic integration by removing, gradually, over a 12-year period, the internal customs barriers of its member states, while adopting a common external tariff against outsiders. At the same time, investment was to be directed in order to integrate the joint economy as a whole, with special attention to the industrialisation of economically backward and underdeveloped regions such as southern Italy. Special consideration was to be given to agriculture, detaching it as far as possible from the market economy to cushion the integrative process while improving the standards of living and social protection of the agrarian community. The objective was to provide a mass market, which, like the United States, would allow mass production techniques to be introduced and costs to be lowered. To help facilitate this there was to be free movement of persons, services and capital within the Community.

The institutional organisation for implementing this process was much the same as that developed for the ECSC and the ill-fated EDC: a European Parliamentary Assembly of supra-national party blocs of Christian Democrats, socialists and liberals sitting and voting together irrespective of national origins (shuffling 760 MEPs and 3,000 staff between Brussels and Strasbourg every month aboard two exclusively chartered ‘gravy’ trains); a Council of Ministers representing the member governments directly: an executive High Commission of nine that was enjoined by law to ‘exercise their functions in complete independence‘ of their national governments; a Court of Justice with powers to interpret the treaty and settle disputes; two advisory groups (the Monetary Committee and the Social and Economic Committee); a European Investment Bank to channel funds for integrative and development purposes within the Community; the Overseas Development Fund to do the same for former colonial territories now directly associated with the EEC; a European Social Fund for industrial retraining and unemployment compensation; and finally the two associated Communities (ECSC and Euratom). These last two were integrated with the EEC by the fact that all three communities were to share the Parliamentary Assembly, the Court of Justice and the Council of Ministers.

These organisations all have some of the aspects of sovereignty from the fact that their decisions do not have to be unanimous, are binding on states and on citizens who have not agreed to them, and can be financed by funds that may be levied without the consent of the people being taxed.

The impact of these initial steps toward an integrated Europe was spectacular, at least in the economic sphere. In general, the rate of economic expansion of Western Europe, particularly its industrial expansion, was far higher than that of Eastern Europe. By 1960 the 300 million people of Western Europe had per capital incomes over a third higher than the 260 million people in the same area in 1938-39. Industrial production more than doubled over the same period, while agricultural production was a third greater with a smaller workforce. For the six EEC countries, their economic growth rate was over 6 per cent a year during the 1950s, more than double the rate of growth in the US and the UK.

The reasons for the relative boom in the EEC were due to steady demand, high rates of investment, and liberal fiscal and financial policies. In 1961, for example, the rate of net investment in Britain was about 9 per cent compared to the West German rate of about 17 per cent. The high demand that stimulated this process appears to have come not only from fiscal policies but also from the enormous market of 100,000 people.

The sharp contrast between the prosperity of the EEC and the languishing economy of Britain eventually brought the latter to recognition of the advantages of participating in the European Community. Britain had refused to join the EEC because of the insistence on a common external tariff that would create friction with what remained of the Commonwealth. Finally, in August 1961 Harold Macmillan decided to seek membership of the Community. The decision came too late, however, and the British were blackballed in January 1963, after 17 months of onerous negotiations, by General de Gaulle who was strongly, and rightly, suspicious of British motives and loyalties, having made numerous attempts to sink earlier moves toward effective European integration. Macmillan’s decision to turn to America instead of France for a nuclear weapons system triggered the split between Britain and France.

Disregarding established EEC procedures de Gaulle announced the news at a personal press conference:

Britain, in effect, is insular, maritime, and linked by her trade, her markets, and her suppliers to a great variety of countries, many of them distant… [so that] the nature, structure, and circumstances of Britain differ profoundly from those of continental states.

Were Britain admitted to the EEC, affirmed De Gaulle, she would at once seek to bring in all the other members of the Organisation for European Economic Cooperation (OEEC), and ‘in the end there would appear a colossal Atlantic community under American dominance and leadership which would completely swallow up the European Community.’

The other five EEC members, supported by Britain and the US, opposed De Gaulle’s decision to reject the British application for membership, but the French vetoed further discussion of the subject and the British membership was rejected, thus suspending, temporarily, at least, the steady drive toward European political unity.

The Six Become Twenty-Eight

The political stalemate in Europe was to continue for a further 4 years until 1967 when a British Labour government made a renewed application to join the Community. By December 1969 all six governments, including France, were committed to British membership. Negotiations over the Treaty began in 1972 and by January 1972 it had been agreed that on 1 January the following year Britain, Denmark and Ireland would become members of the European Economic Community. The EEC formally became the European Union (EU) in 1993 with the signing of the Maastricht Treaty. The number of member countries that have subsequently acceded to the EU has now reached 28, of which 18 participate in a monetary union sharing the euro as their legal tender. Through the Common Foreign and Security Policy, the EU plays a role in external relations and defence; it also maintains permanent diplomatic missions throughout the world and represents itself at the United Nations, the WTO, the G8, and the G-20. With the signing of the Lisbon Treaty in 2009 this enlarged interstate organisation has substantially restructured its administrative/executive apparatus with the creation of a new single legal entity, a permanent President of the European Council.

Arguably, however, the most important change that has taken place within the EEC/EU was the accession of the UK. As de Gaulle had foreseen, it effectively transformed the Community from an expanding instrument of mutually beneficial political and economic integration — which some hoped would permit a future United States of Europe to become a Third Force in international affairs — into a crisis-ridden adversarial institution. For the British government, the political aspirations of the EEC were a potential threat to the ‘balance of power’ in Europe, one that had to be neutralised. The solution was a simple one: join the six and convert the EEC into a bureaucratic market place where the contending sovereign national interests of European agriculture, fisheries and industry could be defended. British awkwardness within the Councils of the EEC is not, therefore, simply a matter of driving the best possible bargain for British interests; it is, rather, the continuation of British foreign policy by other means, a ‘wonderfully unconscious tradition’ which was cogently described by Winston Churchill at a meeting of Conservative members of Parliament in March 1936:

For 400 years the foreign policy of England has been to oppose the strongest, most aggressive, most dominating power on the Continent, and particularly to prevent the Low Countries from falling into the hands of such a power. Viewed in the light of history these four centuries of consistent purpose amid so many changes of names and facts, of circumstances and conditions, must rank as one of the most remarkable episodes that the records of any race, nation, state or people can show. Moreover, on all occasions England took the more difficult course. Faced with Philip II of Spain, by Louis XIV under William III or Marlborough, against Napoleon, against Wilhelm II of Germany, it would have been easy — and must have been very tempting — to join with the stronger and share the fruits of his conquest. However, we always took the harder course, joined with the less strong powers, made a combination among them, and thus defeated and frustrated the continental military tyrant whoever he was, whatever nation he led. Thus we preserved the liberties of Europe, protected the growth of its vivacious and varied society, and emerged after four terrible struggles with an ever-growing fame and widening Empire and with the Low Countries safely protected in their independence. Here is the wonderful unconscious tradition of British foreign policy.

‘Nuff said!



Dean Acheson, Present at the Creation. My Years in the State Department, W. W. Norton & Company New York, 1969.

Peter Calvocoressi, World Politics Since 1945, Longman, London, 1982.

Winston Churchill, The Gathering Storm, Houghton Mifflin Company, Boston, 1948.

George Kennan, ‘The Sources of Soviet Conduct’, Foreign Affairs, July 1947.

Hilda Monte, The Unity of Europe, Gollancz, London, 1943.

John Pomian, Joseph Retinger: Memoirs of an Eminence Gríse, University of Sussex Press, 1972.

Carroll Quigley, Tragedy and Hope, Collier, Macmillan, London, 1966

North Atlantic Treaty Organisation — Facts and Figures, Brussels, 1981.

U.S. National Security Council. NSC-68: A Report To The National Security Council, April 14, 1950, Naval War College Review, May-June, 1975.

SEE ALSO David Teacher’s Rogue Agents — Habsburg, Pinay and the Private Cold War 1951-1991