As part of this effort, conversations have been started in Brussels, on the initiative of the Spanish Government, in order to study the problems faced by the Spanish economy as a result of the operation of the Common Market. On February 9 last, the E.E.C. authorities presented a questionnaire to the Spanish Government asking specifically about important aspects of the relations between the Six and Spain which had been studied in a Spanish report of December 9, 1964. The Spanish Government's answer to the questionnaire was handed to the E.E.C. in June.
As part of this effort, conversations have been started in Brussels, on the initiative of the Spanish Government, in order to study the problems faced by the Spanish economy as a result of the operation of the Common Market. On February 9 last, the E.E.C. authorities presented a questionnaire to the Spanish Government asking specifically about important aspects of the relations between the Six and Spain which had been studied in a Spanish report of December 9, 1964. The Spanish Government's answer to the questionnaire was handed to the E.E.C. in June.
This development has encouraged me to comment on the positions which will determine the outcome of the dialogue between Spain and the E.E.C. Spain, of course, would receive a boost for the accelerated economic development in which she is now engaged; and the E.E.C. would also receive some advantages. In any case, it would seem to me unrealistic for the E.E.C. to reject Spain's petitions and proceed with a commercial and agricultural policy which completely ignored the problems it poses for the Spanish economy.[i]
It is no secret that life in Spain is undergoing a real transformation, especially since 1959. I believe that year will be a milestone in Spanish history. Nor have the changes occurring in the world, and especially in Europe, been less important or slower. The most visible manifestation of them has perhaps been the desire to unite, to integrate, as a means of solving increasingly numerous and complex problems of general policy.
Spain is enthusiastically readying herself to face this reality. She sees that the idea of European integration represents a formidable challenge for her as well as a gamut of rich possibilities.
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Jean Monnet's dream that European integration would eliminate conflict may have been a delusion. France and other countries do not share Germany's fixation on sound money -- or its hegemonic vision. A European central bank would be unresponsive to local unemployment, while political union would remove competitive pressures within Europe for structural reform, prompting protectionism and conflict with the United States. A Europe of 300 million people and an independent military might be a force for world peace, but war is also a distinct possibility.
The battle for the common currency may be remembered as one of the more useless in Europe's history. The euro is hailed as a solution to high unemployment, low growth, and the high costs of welfare states. But the deep budget cuts required before integration are already causing pain and may trigger severe recessions. If the European Monetary Union goes forward, a common currency will eliminate the adjustments now made by nominal exchange rates, and the central bank will control money with an iron fist. Labor markets will do the adjusting, a mechanism bound to fail, given those markets' inflexibility in Europe.
Advocates of "Europe" -- a united, federal European state -- tout their project as at once a noble political ideal and a pragmatic economic strategy. Both arguments are wrong. The European Union's bureaucrats will stifle the continent's economy, and its politicos will breed corruption and nationalist resentment. Letting the EU handle security matters would be equally disastrous, as the fiasco in Bosnia demonstrates. Despite all this, the partisans of "Europe" warn the skeptical that the train is pulling out of the station. Those who care about Europe will let it go.
