Dr. Hallstein's Europe
By RICHARD BAILEY WHAT sort of Europe do the Europeans want? In the long run this is likely to prove a much more important question than President de Gaulle's much-publicised desire for l' union des patries. The most complete exposi- tion of the views of the Brussels Establishment was given recently by the top European, Dr. Walter Hallstein, President of the Commission of the European Economic Community, in three lectures* in the United States. Between them the lectures give a very clear picture of the Hallstein thesis that economic integration will lead to political unity in the EEC. The argu- ment is that by the time the member countries have implemented the Rome Treaty and com- mon policies for agriculture, competition, capital movements and so on are in operation the EEC will not only have achieved de jute economic integration, but de facto political integration as well. This being so, separate treaties to set up a political union will be superfluous. Governments will have surrendered so much sovereignty in relation to their internal affairs that joint action with regard to external commitments will be inevitable.
Dr. Hallstein does not state his thesis in quite such simple terms, but the argument is there spread through the three lectures for all to read. He is careful to explain the legal status of the institutions of the three Communities and never strays away from what is sanctioned by the Treaties of Rome or Paris. He points out that the term 'supra-national' does not appear in the Rome Treaty at all, and its only official men- tion is in Article 9 of the Paris Treaty which set up the European Coal and Steel Community.
The significance of some of the matters to which Dr. Hallstein refers has not been generally realised here. One of these is the difference in the power of the different institutions in each of the three stages of the transitional period during which the Rome Treaty is implemented. In Stage One, which ended on December 31, 1961, the Council of Ministers was the top or- ganisation, as the main task, the working out of common policies, involved the agree- ment of member governments. With Stage One completed by the scrape through on agricul- tural policy, the Commission becomes increas- ingly important as the body responsible for applying common policies throughout the Com- munity. This process will gather momentum
*The Clayton Lectures, delivered at the Flet- cher School of Law and Diplomacy, April 16-18.
throughout the transition period. The new form of government represented by the institutions of the three Communities clearly presages a form of union 'going further than anything yet accepted in Europe.' But how far it will go remains to be seen.
In the past, successful customs unions have developed into political entities. Is this likely to happen with the European Economic Com- munity? Dr. Hallstein suggests a new term, 'economo-politics,' is needed to describe the area of overlapping interests between economic and political policies. A study published by the United Nations in 1947 is quoted as stating that: 'When there is free movement of goods, persons and capital in any area, diverse eco- nomic policies concerned with maintaining economic activity cannot be pursued. To assure uniformity of policy, some political mechanism is required. The greater the interference of the State in economic life, the greater must be the political integration within a customs union.' This quotation fits in exactly with what is hap- pening in the EEC and the philosophy on which it is based. The Treaty of Rome, as 'a Treaty of procedures and principles rather than a set of precise and detailed instructions,' is sufficiently flexible to work out the detailed measures required for full economic integration.
These policies for _freeing the movement of the factors of production and the dismantling of economic barriers have already progressed far enough to make their presence felt. So far, indeed, as to make action necessary by the European Social Fund and the European Invest- ment Bank which Dr. Hallstein regards as a latter-day equivalent of Adam Smith's 'hidden hand' tempering the effects of increased com- petition to the exposed firm.
Although the 'logic of economic integration is compelling and inexorable,' it cannot, thinks Dr. Hallstein, be put into practice without governments making a definite political choice. The Schuman Declaration of May 9, 1950, which started the Six on the road to Rome, was a proposal for 'political reconciliation' between France and Germany, and while the means used 'appeared to be economic,' the goal was political. The ECSC was followed by the Euro- pean Defence Community, which the French Chamber refused to ratify. But in spite of this failure, the process went on and Euratom and the EEC are direct descendants of the Schuman Plan. 'In these matters it is sensible and necessary to advance pragmatically,' says Dr. Hallstein —a remark which those who regard Britain as having a monopoly of pragmatism would do well to ponder. The logic of economic integra- tion not only leads on towards political unity to, way of the fusion of interests: it also involves political action in itself.' Common rules, com- mon institutions, harmonisation of policies are all demonstrated to be political in essence. But Dr. Hallstein skates round the question of what exact form of union he envisages. 'We are not integrating economics,' he explains, 'we are inte- grating policies.' He comes nearest to a precise statement of what he has in mind in a passage in his third lecture. After explaining what the T!eaty has to say about liberalisation of trade and relations with third countries, he comes down to foreign policy: All these, I think, may be regarded as liberal provisions and declarations of intent. That this is so, and that there is no separate part or Title of the Treaty exclusively devoted to foreign economic policy as such is a reflection of the Treaty-makers' confidence that the very fact of creating the Community would in itself be a major contribution, not only to the world's political and economic stability, but also to the increase of its prosperity and the expansion of its trade.
The objections to the Free Trade Area pro- posal were not only on economic grounds, but rather because it was seen as a threat to the eventual political unity of the EEC. The way ahead as seen by Dr. Hallstein is to press on with economic integration with the EEC in the knowledge that this will lead to political unity. In order to be acceptable the Community must have liberal intentions and adopt a world- wide approach in its external trading relations.
This picture of an integrated Community trading over a low common external tariff with the outside world would have satisfied many Europeans within the Six and outside. How does Britain's application for membership fit into the pattern? Dr. Hallstein regards the British application as 'the most striking testimonial to the success of EEC—and to its political charac- tcr.' It is also 'a vindication of the pragmatic approach' adopted by the Community after the failure of the Free Trade Area negotiations. Far- ther afield, Dr. Hallstein regards Mr. Ken- nedy's attempt to obtain powers to reduce the American tariff through the Trade Expansion Bill as a means of securing a 'partnership' be- tween the Community and the United States. In moving towards a satisfactory relationship with the US, in evolving policies of aid for, and developing trading policies with, the undeveloped countries, the Community will be passing beyond commercial policy into the realms of foreign economic policy. This would mean application of common commercial policies and the co- ordination of policies with the 'Community's partners.' And as part of this co-ordination the Community would have to consider the question of trade with the Communist bloc. A common commercial policy would involve a common foreign economic policy. The fusion of interests would be complete and it would all have been accomplished within the framework of the Rome Treaty. This is the basis of the Hallstein thesis. There are many Europeans on both sides of the Atlantic who hope its assumptions may be proved correct.
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