The Grand Bargain: A New Book Demystifies European Integration

"The voluntary transfer of monetary sovereignty from the national to the European level is unique in history. However, it should not be seen as a single, isolated event. The introduction of the euro is part of the process of European integration. . . . The aims of European integration are not only, or even primarily, economic. Indeed, this process has been driven and continues to be driven by the political conviction that an integrated Europe will be safer, more stable and more prosperous than a fragmented Europe."

-- Wim Duisenberg, president of the European Central Bank, May 1999

One should take Duisenberg's statement with many grains of salt: why do bankers love saying that money is not what really matters? Certainly European unity is driven by history, culture, politics, and economics -- if only because one cannot really separate these things.

Despite its present weakness, the euro represents the highest peak yet reached in the long climb toward integration. But as the 1997 Amsterdam Treaty shows (and the low turnout in the last European Parliament elections recently underscored), Europe's institutions are weak. Polls proclaim that the sense of European identity is feeble. As Kosovo demonstrated, a common security policy lags far behind the common currency. Charles de Gaulle argued that a state is fully legitimate only if it can defend its citizens. But the fateful decision in 1954 to reject the European Defense Community (EDC) -- which would have created a small, integrated army with officers and soldiers of various nationalities serving in the same units -- meant that Europe was doomed (or perhaps lucky enough) to become an economic power that relied on the United States to defend it. Whenever the Russian bear let out a roar, the Europeans appealed to Washington to save them. And with security issues out of the way, they focused on economics instead.

In simplified language, this is what Andrew Moravcsik's book is about. It argues that the European Union (EU) is neither the reincarnation of Charlemagne's empire nor a virtuous peoples' Europe that will sweep away warring nation-states. Instead, the EU is a set of agricultural subsidies and an arrangement for free trade with a complicated system of rules worked out by the member states to protect their interests. Moravcsik's Europe is neither romantic nor unique; its leading trait is its ability to react rather slowly to economic innovation.

What makes states surrender their sovereignty? Why did 11 European countries decide to give up their currencies for the euro? As Europe marches with an uncertain but determined gait toward economic cooperation, scholars have offered competing explanations for this phenomenon. Some argue that European statesmen were intent on constraining German power or countering the Soviet Union or the United States. Others see an idealistic vision of a united, federal Europe. Another camp points to the role of institutions and supranational officials -- from Jean Monnet to Jacques Delors -- in explaining the rise of the European Community (EC), which emerged as these international entrepreneurs fostered new institutions and interstate negotiations to promote their own bureaucratic agenda.

Moravcsik offers a competing vision that, despite its limitations, sweeps like a cold wind through the existing literature, carrying off dead leaves and rotting branches. For him, the basic, rational desire of each state to reap commercial advantages was the motor driving European integration. The EC was not a mystical achievement of European solidarity but simply a way of adapting to the changing realities of the global economy -- namely, the rise of intra-industry trade and investment and capital mobility. He explains the five European "grand bargains," from the 1957 Treaty of Rome to the 1992 Maastricht Treaty, as reflections of the relative power of states and the degree of convergence of economic interests. Ideology and institutions did play a role but did not override the basic realities of national economic interest. As Moravcsik puts it, "Far from demonstrating the triumph of technocracy, the power of idealism, and the impotence or irrelevance of the modern nation-state, European integration exemplifies a distinctly modern form of power politics."

At the core of Moravcsik's vision of European integration lies a rejection of widely praised institutions, favorite actors, and frequently heard interpretations. He dismisses the actors first, refusing to give credit to the famous men of Brussels -- Monnet, Paul-Henri Spaak, and Delors (whose report was supposedly so influential on monetary union). Instead, he places the EC's Council of Ministers and its supposedly uninteresting team of national civil servants in the driver's seat; this intergovernmental decision-making body let the EC pool sovereignty through qualified majority voting. The EC's creation was therefore not an exceptional piece of handicraft undertaken in response to new problems but a flexible operation of national interest that states regularly performed to keep up with their competition. The states that won out were economically the strongest and socially the most resolute. At the same time, they remembered that their competitors were also economic partners and therefore offered to make themselves desirable as trading allies. For example, Konrad Adenauer's Germany presented a large import market for France's agricultural goods after World War II; this factor, not the high Cold War politics of the Berlin crisis, made the EC possible. Later in the book, Moravcsik offers a similar interpretation of monetary union: unromantic and statish. The European nation-state, he leads us to conclude, will survive as long as it concentrates on its economic well-being as successfully as it did in the four decades leading up to Maastricht.