Ce pays, l'Europe

--Jean Monnet

IT must be hard indeed for non-Europeans to understand why such a vital development as the integration of Europe does not advance more rapidly, and why the conception of "national sovereignty" exercises such power over European minds when few people in Western Europe still believe that any state can solve its problems on a national basis. Deep-seated national habits, scars of old wars, differences of religion, race, social and cultural traditions cannot be swiftly surmounted. The present writer (whose views, of course, do not necessarily represent in every detail those of his Government) certainly does not believe that the psychological and social differences between the northwestern nations of Europe and the Latin group, for example, make unity impossible; yet it is a mistake not to be aware that barriers of many kinds still exist between European states.

However, Europe is growing more and more aware that there is no alternative to voluntary unification, unless it be subjection to Soviet rule. The Second World War revealed structural changes in politics and economics--clear to some farsighted men in 1919--which made the national state logically a thing of the past in Europe. Without the aid of the United States, the Western European countries could never have escaped economic ruin after the Second World War. But the O. E. E. C., through which dollar aid was extended, provided only a method of consultation among European nations; the divergencies among these national economic systems remained wide. It is, therefore, not surprising that the two supra-national plans for integration which have reached an advanced stage--the Schuman Plan and the European Defense Community--have been realized outside O. E. E. C. After the failure of the so-called Stikker Plan, which called for integration in all economic fields inside O. E. E. C., it seemed advisable to go forward on a more moderate scale, seeking economic and political integration more or less simultaneously, but restricting the effort to certain sectors.

It is the great merit of French statesmen like M. Schuman and M. Pleven that they understand how closely economic viability and political stability are related. The formation of the European Community for Coal and Steel, and of the European Defense Community, have laid the foundation for a unification of Europe through institutions to which the participating states transfer a part of their national sovereignty. The development of these two "communities" is especially heartening since they offer hope-- the only hope, I believe--of reconciling the old antagonism between France and Germany; and when national armies have been integrated, and a European Army has come into existence, German militarism will no longer be a threat to Europe.

The Governments of Belgium, France, Germany, Italy, Luxembourg and the Netherlands have agreed that in certain matters which directly affect their economies national sovereignty can be overruled by an international authority. But the process of European unification will not come to a halt with coal and steel, or with defense; indeed, it may well be that the treaty establishing the Defense Community will not be ratified by the national parliaments unless Europeans are convinced that it is part of a forward movement which will really consolidate Europe.

Much thought has already been given to plans for harmonizing interests in the field of agriculture; but before discussing this logical next step, it would be well, I think, to note briefly here certain new aspects of the problem of political organization. The French Government has just made the interesting proposal that the Assembly of the Community for Coal and Steel be instructed to study the possibility of creating a European political assembly. There may be objections to this on the grounds that the six Schuman-Plan countries would seem thus to substitute themselves for the Council of Europe, but they will be in a better position to canvass the possibilities of political integration than is the Strasbourg Assembly, whose members include many countries not participating in the Schuman Plan and the Defense Community. I believe that it is of primary importance that a nucleus be formed of European states which see no objection to surrendering part of their national sovereignty to organs of a supranational character. That does not in the least mean that the supra-national European community should become exclusive; any state should be free to enter the community and to adhere to it. But at present it is difficult to imagine that Sweden, Greece or Turkey, for example, would wish to adhere to the Schuman Plan, or to a politically federalized group of states. No political federation has ever existed in which the participants remained completely free to run their national economies.

The interesting picture with which we seem to be presented, in other words, is a development of integration in Europe along two lines: a direct line of unification by a group of six countries, and a line of coöperation--that is to say, coöperation between the integrated group and those states which retain full sovereignty. Some of the countries belonging to the second group--the United Kingdom in particular--desire to establish a relation of association between themselves and the integrated community. The position of Britain with regard to continental Europe has often been the cause of great anxiety on the Continent, but has often been misunderstood. During the war Britain was a symbol of the European ideal of freedom and democracy in the eyes of the people of occupied Europe--almost the only democracy in Europe not under enemy control, the nearest neighbor, whose voice was heard in every home and hiding place. London, the seat of the governments-in-exile, was the cornerstone of Europe. It seemed inconceivable then that Britain would detach herself in any way from European affairs after the war; but it should be added in fairness that very few continental Europeans fully understand the importance of the Commonwealth relationship to the British. On the Continent, people incline to think in terms of written constitutions, and those who do not know what the Commonwealth means in terms of economic and cultural coöperation, and as a working community among several English-speaking countries, do not easily find the key to this British secret.

Recent developments, however, have somewhat alleviated the anxiety about Britain's loss of interest in the Continent. In September 1951, the Ministers of Foreign Affairs of France, the United Kingdom and the United States stated at their meeting in Washington not only that they considered that Europe belongs to the Atlantic community, but also that the closest possible association should be established between a continental European community and Britain. This declaration was followed by statements in the same vein by Mr. Churchill and Mr. Eden in Paris and Washington, and the British Government has subsequently made it clear that Britain will relate herself to the European Authority for Coal and Steel. Of perhaps even greater importance is the guarantee which the British Government has offered to the European Defense Community; and it is noteworthy that Britain supported the Preparatory Conference on the organization of European agricultural markets held in Paris last March. The change in attitude of the British Government is of great importance to Europe, and is especially welcome to the northwestern countries which feel themselves akin to Britain. The Continent is prepared to accept the fact that Britain, by virtue of her Commonwealth relations, cannot participate in any transfer of sovereignty to European supra-national bodies. And if the United Kingdom Government now really desires to aid the process of European unification, and shows its acceptance of European responsibilities by associating itself with the European community, much has been gained. Governments, press and public in Europe are watching closely the development of Britain's policy.

II

As I have said above, a next step along the road to European unity is the beginning of integration of agriculture. Support for this, as for other moves, has come from the United States. Shortly before the Paris Conference on agricultural integration began its discussions in March of this year, Paul R. Porter, the Director of the European office of M. S. A., issued a statement warmly commending its objectives. This was followed by General Eisenhower's first Annual Report to NATO, in which he called the Schuman Plan and the European Defense Community historic advances in European coöperation and added that plans of the same nature for agriculture, electric power and a system for standardizing money "would serve as practical laboratories for the development of that full political and economic unity which alone can make Europe self-sustaining and secure." The United States Congress urged more efficient use of European resources, through "a centralized European procurement program," in the Mutual Security Program for 1953. Many Europeans, however, wondered whether the United States intended to take back with one hand what it held out with the other, through legislation restricting imports of farm products from Europe. If European political and economic integration is to be carried further, protectionist tendencies on both sides of the Atlantic will have to be overcome--a result that can be achieved only if the protected interests see that they will ultimately gain from European unity.

The need of integration in this field is incontestable. During 1949 and early 1950, a situation like that of the thirties began to develop in Europe, with agricultural surpluses in some countries and scarcity in others. Rising tariffs kept imports at a low level, thus protecting producers, but also keeping prices high for consumers. The rise in population in Europe, and the necessity of raising--or at the very least maintaining--the standard of living, makes an increase in food production imperative, particularly since the problem of the dollar balance remains unsolved. Because of uncertainty about markets and prices, however, European farmers refused to produce more food. They will raise larger crops only if they can be sure of outlets for them, and they cannot count on that unless the vicious circle of national tariffs is broken. Integration of European agriculture is the plain answer. The creation of a large area without trade barriers would provide for greater stability in markets and prices, would tend to redirect production to the areas most suited for various products and to bring higher production at lower cost. In this respect, integration in agriculture is based on the same principles as industrial integration.

Agriculture, however, has many special aspects. Nature causes inescapable variations in the size of crops from one year to another, yet the demand for agricultural products is comparatively constant. Unless special measures are taken, fluctuations in price can therefore be considerable, even in an enlarged market. Furthermore, every government wants to be certain of at least a minimum quantity of food production within the national frontiers, regardless of cost. And since most farming in Western Europe is mixed farming, governments give support to many thousands of small farmers for social and political reasons; this group has special demographic importance.

Thus the application of the principles of economic liberalism, suitable for the industrial sectors of the economy, cannot be applied to farming. Under a system of free competition, a uniform price might establish itself in all countries, but only part of the farms now in operation would return a profit. In countries with a low cost of production, on the other hand, large extra profits would be made. We must not expect that a uniform European price can be set for farm products during the first stages of agricultural integration. It would be feasible, however, to determine at what price, or between what price-limits, the products of the various countries could be exchanged. Such a system of "European exchange-prices" for agricultural products should be based on considerations relating to farming conditions and also to the economic situation as a whole.

In fixing the European exchange price, imports from countries outside Europe should be coordinated, but integration must not make the European agricultural community a protectionist area in which national tariffs are merely replaced by international tariffs, with the consumer shouldering the cost of all the economic dislocations. The European exchange price itself must be fixed at a level to make this impossible. An integrated European agricultural community will continue to import most of the basic agrarian products exported by the North American countries. The rise in the standard of living which can be expected will create a demand for more food and foodstuffs and so both reward higher production and better utilize basic European agrarian products. Generally speaking, it will be necessary to maintain a price level which will yield farmers a profit, and this means that subsidies and levies will be unavoidable in intra-European trade, at least for the transition period. The expenditure and income involved should, in the opinion of the present writer, be charged to, and used by, a European Agricultural Fund; help for technical development for areas with high costs could come from this Fund.

III

Opposition to integration by some of the farmers' organizations in protectionist countries stems mainly from the relatively high cost of agricultural production in those countries, and the fact that they are importers of food. The need for imports makes it possible to maintain the prices received by the farmers through a system of custom duties, and they are naturally unwilling to relinquish these privileges. Protectionist countries fear the "surpluses" of the exporting countries, whereas the latter countries call these "surpluses" their exports. Within an integrated agricultural economy, surpluses would exist only to the extent that protection would create them. In Europe as a whole the annual consumption of agricultural products is, with very few exceptions, considerably higher than annual production. If the integrated community included only the Schuman-Plan countries--as it might because of the movement toward political integration in this group--it would be an importing area for most agricultural products; and this characteristic would be further accentuated if the United Kingdom associated itself with the continental agricultural community. Seasonal or regional surpluses are at present dealt with on a state basis, and as experience in the United States and Canada has shown, problems of this nature can be better managed by an integrated community. (The problems of the United States and Canada are even more difficult, for these countries are also exporters and their surpluses are not merely seasonal or regional.) Fear of competition from the low-cost producing countries is not a valid objection to the scheme. Problems of differences between costs of production and the general price level, and the question of subsidies, would be dealt with in the transition period, during which national agricultural policies were gradually being harmonized.

Generally speaking, all food and foodstuffs--whether in the stage of production or in final form--would be considered "agricultural" and included in the program of integration, since the ultimate aim of the whole effort is to provide more, better and cheaper consumer goods. To remind ourselves of this is to perceive more clearly the relation between integration in agriculture and in industry and finance. Since some countries are mainly agricultural and others mainly industrial, their interests in agricultural integration are not equal. It may very well be that some industrial countries will have to ask for compensations, and these cannot be given unless integration is undertaken simultaneously in other fields. Agricultural integration would exert an important influence on the cost of living, and therefore on the wage level of industrial workers, for approximately 40 percent of living costs in Europe goes for food. It is essential, therefore, that developments in all these fields keep pace with one another.

Two specific proposals for integration of European agriculture have been made--by the Government of the Netherlands in November 1950 and by the French Government in May 1951. The general objectives of the two plans are the same--to raise the standard of living and lower prices to consumers, to eliminate the impediments to trade, and to expand and specialize production. Both seek these ends through the establishment of organs of a supranational character. However, the French proposals (the so-called Pflimlin Plan) limit integration to four commodities: wheat, wine, sugar and dairy products; the Netherlands proposals aim at the integration of all agricultural production. Further, the French proposals make the reduction of trade barriers subject to the equalization of the conditions of production in the various countries, whereas the Netherlands' plan suggests that the gradual reduction of trade barriers go hand in hand with measures to equalize costs of production, since reduction of tariffs will promote specialization and raise productivity.

In March 1952 the French Government called a Preparatory Conference on the Organization of European Agricultural Markets, in which 15 European states participated. Most of these countries were represented by their Ministers of Agriculture, who could not, of course, take far-reaching decisions. Moreover, only a minority of the 15 countries represented at the Paris Conference could be expected to subscribe to the supra-national principle; and even among the Schuman-Plan countries, the governments which protect their farmers must reckon with opposition from the farmers' organizations. Decisions on agricultural integration which directly concern national economic interests and special consumers interests will have to be taken on Cabinet level. It was significant that only the United Kingdom, France, Turkey and the Netherlands appointed either their Minister of Foreign Affairs or of Economic Affairs as delegates, or sent a Cabinet colleague with their Minister of Agriculture.

The Conference accepted the desirability of integration of agriculture in principle, and established an Interim Working Party to prepare for another Conference of Ministers this autumn; the Working Party will submit useful data and reports; but the political decisions are the hard ones, and only governments can take them.

In spite of many setbacks, much progress has been made in the integration of Europe since the end of the war. National pride and old prejudices are bound to flare up from time to time--as, for example, when hitherto sovereign nations must decide where the seat of a supra-national community is to be located. Perhaps we in Europe may console ourselves by remembering the degree of dissension which such a question caused among the American States, when the United States of America was established. Indeed, the American States were never able to agree on a selection of one of the older cities as a national capital; but a Federal capital was founded, nonetheless, and has endured. The road ahead for Europe is long and difficult. But it is the only way out.

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