POLITICS
Euro-business: it is
a political issue
NOEL MALCOLM
Few sights can be more unnerving than that bf Mrs Thatcher joking and chatting amiably with her fellow-European heads of government at Hanover. Sweetness and light are breaking out all over Europe. Something must be wrong. Mrs Thatcher has seemed to follow in the past a refine- ment of Groucho Marx's principle: she would not want to belong to any club which enjoyed having her as a member. Yet there she was, happily accepting compromise proposals from Dr Kohl about planning the future of European monetary policy, and welcoming the re-appointment as president of the Commission of that nice M. Delors, who only two years ago ostentatiously sent her to Coventry at a post-summit press conference. (M. Delors' refusal to reply to her on that occasion brought forth from Mrs Thatcher a deft and untypically femi- nine put-down: `Ah, I see you are one of those strong, silent types.') Perhaps the Prime Minister has been watching too many adverts from the De- partment of Trade and Industry. Europe, we are told, is about to be 'open for business', as if it were a hypermarket nearing completion on the outskirts of town. Lord Young tells us that he wants to buy a light-bulb in London and take it with him to Paris — an ambition which puts to shame the more modest preparedness of other English holidaymakers, who will not visit foreign hotels without taking at least their own supply of lavatory paper and a bathplug. The Government's public atti- tude to Europe has subtly changed during the last year, and for this Lord Young must take some of the credit — and the blame.
Credit is due for a change of style and emphasis: a rediscovery of the fact that the Common Market is meant, after all, to be a market, instead of the tangle of restrictions and interventions which it has represented in most British eyes for the last 15 years. Sir Geoffrey Howe can now make speeches about 'a non-subsidised, deregulated com- petitive Europe' all over the Continent, holding his head high as someone who was busy deregulating and non-subsidising years ago at home, while his European colleagues were still arguing about levies and quotas.
For many observers, it will be a relief to find that the British Government now has a clearer and more positive view of the benefits which may be derived from Euro- club membership. But the more preoccu- pied the Government becomes with con- crete economic benefits, the less attention it seems to give to the political implica- tions. When defenders of government poli- cy talk about the long-term effects of economic integration, they admit that there will be some loss of national powers, but they always refer to this as a loss of 'economic sovereignty', which makes it sound as if it is a rather technical question purely within the realm of economics. Yet economic sovereignty is sovereignty. To adapt the title of a well-known Times leader: it is a political issue.
For years, this Government has preach- ed the doctrine that the harsh laws of economic life operate automatically and independently, like laws of nature. This may be a useful thing to say to inefficient industries when they come begging for government help; but it can be a mislead- ing doctrine if it makes people think that decisions about economic problems can be purely technical and 'non-political'. The view of the world propagated by Lord Young suggests that getting trade and industry to work more efficiently in Europe is simply like developing a more efficient engine, something which is self- evidently desirable to anyone who under- stands what an engine is for. But human beings are not just for working and trading. Their economic lives are bound up with all the other aspects of their lives, and the task of sorting out the priorities between their various conflicting economic and social goals is entrusted ultimately to politics. If the Government believes that it can pursue the goal of supra-national economic effi- ciency without yielding up real political powers, it is guilty of wishful unthinking. One form this unthinking takes is the idea that you can simply go along with all the liberalising measures and dig your heels in at all the regulating ones. Mrs Thatcher's officials seems to be taking this line at Hanover when they explained that she had a 'minimalist' policy on regulation. But in order to develop a 'liberalised', unified market in Europe, it is not suffi- cient just to tear down the customs posts: you must also ensure that manufacturers are competing on equal terms. For many producers, the 'opening up' of Europe will be accompanied by an avalanche of new regulations.
Another piece of plausible unthinking is the idea that you can go along with the economic policies and just draw the line at the social ones. Many policies, unfortu- nately, are both at the same time — decisions about the distribution of taxes and excise duties, for example. Mrs Thatcher is right to be distrustful of M. Delors' vision of a 'social plan' for Europe (which is backed not only by M. Mitter- rand but also by Mr Papandreou, who takes over the EC presidency next month). But she would be foolish to imagine that the goal of economic integration can be pursued in a vacuum of social consequ- ences.
Euro-theorists used to enthuse about the inevitable process of 'functional spillover'. By this they meant the process of ramifying consequences which ensured the integra- tion in any one area of economic life (coal and steel planning, for example) would gradually spill over into other areas too. This complacent assumption of inevitabil- ity took some heavy blows from de Gaulle, and has had a hard time, up till now, at the hands of Mrs Thatcher. But it is creeping back into favour. Real unification of the market, the argument goes, cannot take place without stable exchange rates; this requires full membership of the EMS, backed by a European central bank; and this can work in the long run only if there is proper European supervision of national economic and fiscal policies. Mrs Thatch- er's off-the-cuff remarks, describing this process as out of the question, are a good thing; but a considered statement of long- term policy, setting out the limits beyond which the Government will refuse to pass, and perhaps putting forward at the same time a constructive policy of co-operation in a quasi-Gaullist Europe des patries, would be an even better thing. As it is, the Government's policy is one of ruling out any possibility of shooting Niagara, while paddling resolutely downstream.
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