The Netherlands and European Integration, 1950 to Present 9789048552030

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The Netherlands and European Integration, 1950 to Present

The Netherlands and European Integration, 1950 to Present

Mathieu Segers

Translated by Andy Brown

Amsterdam University Press

Originally published in 2013 as Reis naar het continent by Uitgeverij Prometheus, Amsterdam Translation: Andy Brown

Cover illustration: Arnold Böcklin, Odysseus und Kalypso (1883) Source: WikiArt Cover design: Coördesign, Leiden Typesetting: Crius Group, Hulshout isbn 978 94 6372 813 3 e-isbn 978 90 4855 203 0 (pdf) doi 10.5117/9789463728133 nur 697 © Mathieu Segers / Amsterdam University Press B.V., Amsterdam 2020 All rights reserved. Without limiting the rights under copyright reserved above, no part of this book may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise) without the written permission of both the copyright owner and the author of the book.

Contents Preface

7

Prologue: Dinner in Laeken (1989) Kohl’s great leap forward The surgeons of French realpolitik Exploiting Franco-German reconciliation The Netherlands between the Anglo-Saxons and the Teutons Journey to the continent

13 17 22 27 35 38

1 American concepts: Building Europe (1947-1949) Eternal division

41 51

2 Magical realism (1949-1951) Putting the country’s mental stability to the test The Germany memorandum Atlantis and bloc formation within the Western bloc The Netherlands taken by surprise Manufacturing a tranquillizer

57 59 63 67 76 84

3 The Beyen Plan (1951-1954) The letter from ‘the Ten’ Red versus Catholic From Europe A game for insiders

89 90 97 99 104

4 Around Cologne cathedral (1954-1957) Adenauer’s Abendland Coordination through Europe’s back channels With the Benelux to Sicily Rebirth as a market The latest trend The Treaties of Rome

107 109 113 119 123 127 133

5 A Europe of conspiracies (1957-1968) Faust in Paris Rhetoric and intrigue Market expansion by a gentleman farmer Silence is golden

139 141 146 158 165

6 At home in the Basel biotope (1968-1974) American dreams An alternative loan circuit Holtrop’s logic Masters of the interim stage

169 170 176 182 187

7 Sturm und Drang (1974-1982) Late conversion The monetary trilemma Failure for Duisenberg The stick of free movement of capital

197 201 206 209 218

8 The hand of French-German friendship (1982-1989) A community united by blood Celebrating success and earning money Work in progress The Delors Report

225 226 236 243 250

9 After Strasbourg: A different party than expected (1989-1992) Piet’s work of art The consequences

257 259 266

10 European realities: Defining Europe after the Cold War The direction of integration The 1990s and after The tragedy of Maastricht and Amsterdam A rediscovery

271 275 280 285 292

Epilogue: The call of Calypso

297

Abbreviations

313

Acknowledgements

315

Sources and references

317

Index Index of names Index of subjects

329 329 331

Preface Why did the Netherlands take part in the process of European integration from the beginning? How did that happen and what consequences did it have? These are the core questions addressed in this book. The answers to these questions are encapsulated in a history that is often dominated by misconceptions. The history of European integration is regularly and grossly oversimplified. The incomprehension, the controversy and the amazement that the integration process so often invokes call for the development of concepts and theories to explain how it is possible that things go the way they go in ‘Europe’. The process has always led to heated debate and sharp differences of opinion, not to mention an overfull international library of documentation, which continues to expand. But exactly what European integration is we do not (yet) know. If – after substantial study in that international library – one thing becomes clear, it is that in the history of European integration, very little is what it seems to be. If possible, that applies even more to the Netherlands’ role in that process. This is perhaps because the shelves in the library annexe dealing specifically with Dutch policy are relatively empty. But perhaps it is also because, in the years following the Second World War, the Netherlands focused more on international cooperation that reached beyond Western Europe. At that time, it was more enthusiastic about transatlantic organisation and free trade than European integration. That preference did not make the Netherlands’ starting position in Europe any easier and has been a complicating factor in the history of its involvement in European integration. It is a history that has continually been played out in an extensive twilight world between dream and reality – a world that mostly remains hidden, overshadowed by the apparent logic of rationalisations made with hindsight. That is partly why that world has received little attention in existing explanations of the how and why of Dutch engagement in Europe. It is relatively simple to explain with hindsight why the Netherlands had little choice in taking part in the process of European integration: the material benefits were (and still are) enormous and disproportionate. That is easy to say looking back from where we are now but, at the moment the decisions were made, Europe was often much more complex. The history of European integration is made even more impenetrable by the thick mist surrounding its final goal. That vagueness makes ideal types and blueprints seem much more realistic than they actually are. And that not only leads to much teleological debate about the future of

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the EU and the deterministic models in which it is framed (a federation, superstate or nation-state); it also makes it difficult to analyse the history of integration, which can only be achieved if historical facts can be clearly distinguished from the rhetoric surrounding the final goal – and that is no simple task. Attempts to do so have a chance of succeeding only if they include a study of the primary sources: sources that can tell us something about the circumstances and ideas prevailing at moments when decisions were made to take important steps towards integration – or not. Most relevant primary sources are accessible to researchers only after thirty years. Consequently, international research into the history of European integration did not really start until the beginning of the 1980s (it now extends up to the end of the 1970s/early 1980s). Since then, time and time again, one conclusion proves inescapable: none of the parties involved – the governments of the member states, European institutions and their predecessors, the business community, lobbies, political parties, individuals, etc. – have ever been able to control the integration process, let alone dominate it, not even for a short time. The process has been uncontrollable from the very beginning, even for the United States. The ‘normal’ situation in the history of European integration comes close to one of chaos. In the midst of the unpredictable circumstances that such a situation generates, emotions, coincidence and intrigues have often been (and still are) more decisive than policy choices made on the basis of rational consideration. That makes the history of European integration, in the first place, political: it is the art of achieving what is possible in unforeseen circumstances. Some of those involved have had better command of that art than others. It is often difficult to predict how political processes will develop, especially if there is great uncertainty and when a large number of widely varying actors are involved. For the different actors in Europe, therefore, it is more often a matter of responding and anticipating than creating. For the Netherlands, as for the other member states, the integration process was primarily something that happened to the country. It was, at crucial moments, even overwhelmed. That had much to do with the gaping hole between the European reality and how it was presented in The Hague. In the Netherlands, it was long believed – and asserted – that the final destination of the whole European integration project could not be understood within the borders of continental Western Europe. Although this is exactly how integration proceeded from the start of the 1950s onwards (and would continue to do so until the early 1970s), the Netherlands still had its sights set elsewhere. Its future was to be Atlantic. At the same time, however,

Preface

9

its reality became increasingly continental European, and especially more German. In the post-war period, the Netherlands kept up this pretence, with one foot in reality and the other in its interpretation of that reality, for an alarmingly long time. It is this delicate balancing act that is central to the history of Dutch involvement in European integration. And that is where the Netherlands differs from its European partners. Like the other five founders of the European project, from 1950 the Netherlands embarked on a journey to the continent – away from a past of world wars and global ambitions to a much smaller world of Western bloc-forming and, especially, Western European cooperation. But mentally, the Netherlands travelled somewhere else. It wanted to go to a different destination than the one it was heading towards ‘physically’, i.e. economically and politically. This book is about the history of those two journeys – the mental one and the physical one. The account of those journeys is at the heart of the book. It is a story full of drama. But that drama is mostly hidden away in technical policy dossiers – behind their dry and rational exterior, the most unpredictable political battles have been fought out. To make the journey, therefore, the reader also has to plunge into the dossiers and become familiar with the economic and monetary methods found within them. That can often be more exciting than you might imagine. Reading between the lines in the policy dossiers reveals unexpected facts. And, at least as important, a close reading of the dossiers often provides a deeper understanding of the political processes behind them. To analyse how the Netherlands responded to European developments, it is crucial to reconstruct European reality. And that is only possible by adopting a multinational perspective. This book is thus based on archive material not only from the Netherlands but also from elsewhere. The analysis rests, to a significant degree, on new or as yet unknown source material from within and outside the Netherlands. In addition, it ties in with recent insights from international research into the history of European integration. Any sources quoted in languages other than English have been translated where necessary, in the interests of readability. This attention for the international and European context means that the account in this book is not only about the Netherlands and its role in European integration but also addresses issues like European power relations, the international economy and the ‘high politics’ of the Cold War. Consequently, to make it clear to the reader what situation the Netherlands found itself in, the discussion is often less directly about the Netherlands than the reader might expect. Much attention is also given to other states involved in the process of European integration, such as France, Germany, the

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United States and the United Kingdom. That context is mostly indispensable in understanding why the situation developed as it did in the Netherlands, and in analysing the Netherlands’ positions, choices and dilemmas. Clearly, in a book like this, certain themes will be explored in greater detail than others. The choices I have made are derived from two main areas of attention. Firstly, I focus on the start of the integration process and the position originally taken by the Netherlands in relation to that process; much of what happened later can be traced back to that starting point. Secondly, I look at the actual steps and developments taken in the process of European integration: facts, treaties, failures, etc. – in short, things that were actually achieved or took place and were relevant to European integration between 1950 and the present day. Other approaches are, of course, possible and indeed desirable. It would be a welcome development if this book were to encourage more substantive debate and follow-up research on the Netherlands and Europe. The history of European integration is still being written. The current episode in that history is dominated by crisis. That is raising pressing existential questions about how the integration process should move forward. The Netherlands is clearly grappling with these questions, and a book such as this can hardly ignore these developments as they unfold in front of our eyes. The prelude to the current state of affairs is the main theme of the final chapter, which focuses on the ‘new’ post-1989 Europe, the old and new issues that this brings with it, and their significance for the Netherlands. Because primary sources for the most recent period are not yet or hardly accessible, this last chapter is somewhat more reflective. It is simply not possible to reconstruct the history of the past 25 years in the same way as that preceding it. The repercussions of many developments from the recent period, such as the substantial expansion of the EU with new member states from Central and Eastern Europe and as yet barely successful attempts by the EU to present a more united profile in the international political arena after the Cold War, cannot yet be clearly estimated. What the last 25 years of European integration do force us to confront is the far-reaching significance of a Europe of the euro, the money and the banks. That Europe has actually been achieved. The deep grooves that the eurocrisis has gouged across the EU and its member states have pushed the history of that same EU towards other, new perspectives. It is difficult as yet to see what they are, but we can already conclude that the origins of the monetary dimension of European integration will perhaps prove even more important for the history of integration than was long asserted, believed or estimated. That is one reason why the history of the European

Preface

11

Economic and Monetary Union (EMU) and the euro is a central theme in this book. In many respects, that history remains under-researched and even less understood. This book, and chapter 6 in particular, therefore devotes considerable attention to the origins and development of the EMU. The Netherlands’ role in the history of European integration clearly shows how the pressure to deepen monetary cooperation drove the integration process long before the Treaty of Maastricht and the introduction of the euro. The pre-history of the EMU explains much of how and why the Netherlands resolutely persisted in keeping a foot in both the European and Atlantic camps, first until 1989 and even, under duress, for several years after that. In addition, the history of the EMU provides new insights into the tangled state of crisis in which the Europe of today (and tomorrow) finds itself. The current state of Europe calls for an urgent re-interpretation of existing explanations of the integration process. What exactly are we facing? The history of European integration – including the Netherlands’ part in that history – has become different since 1989 from what it seemed to be before. For the time being at least, European integration seems viable without the Cold War and the Pax Americana, and in the context of the unprecedented transatlantic rift. But is that really true, or just an illusion? And if it is true, how is it possible? These questions are the most important parts of the puzzle currently facing researchers of European integration. That is why this book not only ends with an epilogue on Europe and the Netherlands after the Cold War but starts with a prologue set in 1989, the most important historical turning point in the history of European integration to date. Mathieu Segers Amersfoort, January 2013 and Maastricht, August 2018



Prologue: Dinner in Laeken (1989) Abstract The period immediately following the fall of the Berlin Wall is key to studying the Netherlands’ role in European integration. After a brief moment of paralysing doubt, this unbelievable turnaround was celebrated as a victory after Europe’s horrific recent history. But when the dust began to settle, the Netherlands found itself in an uneasy position. The Treaty of Maastricht (1992) made German unification and European integration ‘two sides of the same coin’, catapulting the Netherlands into a political situation comparable to that of the 1950s. On the euro’s debut, the country once again became part of a continental circle in which France and Germany set the pace while the UK, Denmark and Sweden wished the Netherlands luck from the sidelines. Keywords: Treaty of Maastricht, European Economic and Monetary Union (EMU), German unification, Franco-German relations, end of the Cold War, Helmut Kohl

The fall of the Berlin Wall on 9 November 1989 marked the beginning of a series of radical historic changes in Germany, Europe and the world. Clearly, much would be very different than it had been in the preceding decades, especially in Europe. But how exactly things would be different was less clear. A majority of the Netherlands’ partners quickly clung tightly to the process of further European integration which, in those uncertain times, seemed to offer a beacon of stability. It also offered tried and tested ways of achieving reconciliation with Europe’s dark past – which now, after the fall of the Wall, was once again very topical. The year 1989 offers a unique starting point for examining the history of European integration, as the member states involved in the process were abruptly compelled to fall back on the values that they had relied upon in their post-war foreign and European policies. What were those values? The widely varying ways in which the member states answered this question revealed much about the past history of

Segers, Mathieu, The Netherlands and European Integration, 1950 to Present. Amsterdam, Amsterdam University Press 2020 doi: 10.5117/9789463728133_prol

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The Netherl ands and European Integr ation, 1950 to Present

European integration and their own national histories as part of that process. That is why this book starts in the midst of the exciting developments of 1989. At that moment, the Netherlands was not at the centre of events – and this would not be the first time. Much in Europe happened (and happens) without the Netherlands being directly involved. Sometimes, that was a deliberate choice, but more often it was not. Most of the time, the Netherlands would have liked things to have been different. To understand the Netherlands’ attitude to European integration, knowledge of European reality can be more useful than knowing how the Netherlands interprets it. It was European reality, much more than that of The Hague, that dictated the Netherlands’ options for action. That is no different now. And within that European reality, the Netherlands usually – and often more or less consciously – stands in the wings. That is why this book starts with an event that took place outside the Netherlands. The opening scene is a confidential conversation between the Netherlands’ two most important post-war partners. The location is the capital of Belgium; the date, early December 1989. On the eve of the NATO summit in Brussels on 4 December 1989, US President George Bush went to Stuyvenberg Castle, a residence of the Belgian Royal family in the Brussels suburb of Laeken, for a dinner with the West German chancellor, Helmut Kohl. Earlier that day, Bush had arrived from Malta where he had had a two-day summit meeting with Soviet leader Michael Gorbachev. The summit on the Mediterranean island had been an exceptional event. Initially, the leaders were to meet alternately on naval vessels of the two superpowers, which were moored just off the coast: the cruiser USS Belknap, the flagship of the US Sixth Fleet, and the Soviet cruisers Slava and Maxim Gorki. But things turned out differently than planned. On the night of 2 December, the Maltese coast was hit by a fierce storm. As evening fell, the Americans had watched as the officers’ sloop had been smashed to pieces on the starboard deck of the Belknap. It was clear that the American delegation would have to enjoy the festive meal in the absence of their main guest and his entourage. The meeting on the Slava, which lay at anchor further off the coast, had already been cancelled earlier, because Gorbachev did not want to take any chances with the storm. Consequently, what should have been four meetings on different ships ended up as two afternoon sessions on the comfortable Maxim Gorki, which lay safely in port. The extreme circumstances in and around the port of Valetta, the Maltese capital, formed the backdrop to a historic breakthrough. It would mark the start of the end of the Cold War and act as a catalyst for peaceful German

Prologue: Dinner in L aeken (1989)

15

unification exactly ten months later – though that was unimaginable at the time. The summit ended on 3 December with the first joint press conference in the history of relations between the US and the Soviet Union – a hopeful omen. The American delegation in any case were confident that an important step had been taken towards mutual trust. They were moreover convinced that Gorbachev might perhaps from then on be less concerned that the Americans would take advantage of the situation in Eastern Europe, where a number of Soviet states were grappling with democratic revolutions. After his press conference with Gorbachev on 3 December, Bush continued on to Belgium for the NATO summit a day later. He had declined an invitation from French president François Mitterrand to travel to Brussels via the south of France.1 He preferred to dine with Helmut Kohl. Some weeks earlier, on 9 November, the Berlin Wall had fallen. Since then, a wave of radical changes had swept not only Eastern Europe but the whole world. There were glimmers of a Western victory in the Cold War and of Germany being reunited. And history had taught that, at such times, violence was a real threat. The quarantine in which the German question had been placed after the Second World War had been continually extended by the Cold War and had been consolidated, since 1961, in the form of a real wall. But now, after more than four decades of stability, that comforting situation had been thrown up in the air from one moment to the next by developments in Germany. This was certain to have far-reaching consequences. After gathering dust for 44 years, the non-decisions of Yalta and Potsdam on which the world order was built were once again laid large as life on the table of international politics. And international relations, which had been frozen into the bipolar mould of the Cold War, were ready to explode. International law offered little solace. After all, the essence of the ‘Yalta order’ was that, after the Second World War, there had been no peace agreement signed with (and regarding) Germany. The post-war borders were provisional. The whole system of German, European and global division was based on the confrontation between East and West. For Europe, it had proved to be an unprecedentedly stable and peaceful arrangement. And now, that was all starting to shift. What did it mean? At what point in history did Germany, Europe and the world find itself in now? The most logical answer was: back in 1945. Or was it 1939? What if Germany had the audacity to claim its rights to the pre-war borders and call into question the provisional Oder-Neisse border with Poland, which was at the heart of the Yalta order? British prime 1

George Bush and Brent Scowcroft, A World Transformed (New York: Vintage, 1998), pp. 160-173.

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The Netherl ands and European Integr ation, 1950 to Present

minister Margaret Thatcher had in any case put a map into her handbag showing Germany’s different past geographical boundaries (1871, 1939, etc.) to warn her fellow allies of what could happen. Her historical map was ‘not altogether reassuring’.2 During a hastily arranged summit of the heads of government of the European Community on 18 November in Paris, two weeks before his dinner with George Bush in Laeken, it became clear to German Chancellor Helmut Kohl just how far his European partners had indeed moved back in the direction of 1945 and how quickly mistrust of Germany and the Germans was increasing. France, which held the presidency of the European Community in the second half of 1989, had called the extra summit. According to Paris, what was at stake was nothing less than ‘saving the Community’. The summit discussed more extensive aid programmes for reform-minded states in Central and Eastern Europe. During the talks, Kohl was dismayed to discover that the subject of German unification was taboo: not a single word was said about it. It was bizarre, as though the Berlin Wall had not fallen on 9 November at all. The elephant was in the middle of the room, but everyone pretended it was not there. Kohl had initially decided to go along with this mass exercise in denial, but during dessert, Margaret Thatcher broke the spell and launched a frontal attack. According to the British prime minister, any thoughts of German unification were preposterous. Dutch Prime Minister Ruud Lubbers agreed entirely.3 When Kohl replied that NATO had formally been positive about German unification since 1970, Thatcher was beside herself with rage. Stamping her feet, she snapped at Kohl that the declaration he referred to dated from a time when everyone was convinced that German reunification would never become a reality. Any review of the post-war borders was out of the question – and that applied equally to the border between East and West Germany! It was a shocking experience for Kohl, especially as this hysterical response was openly supported by his Christian Democrat colleague Lubbers and silently approved by the other leaders present at the summit. 4 Kohl saw the writing on the wall. Western Europe – which was also his Western Europe – was being overwhelmed by old fear reflexes triggered by the developments in Germany. This was a painful and tragic conclusion for a West German, but it was perhaps understandable and inevitable. Either way, Western European mistrust of the Germans and of the chancellor 2 3 4

Margaret Thatcher, The Downing Street Years (New York: Harper Collins, 1993), p. 796. Hans-Peter Schwarz, Helmut Kohl: Eine politische Biographie (Munich: DVA, 2012), p. 558. Helmut Kohl, Erinnerungen 1982-1990 (Munich: Droemer, 2005), pp. 983-984.

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had now become manifest, and this is what formed the backdrop to Kohl’s dinner with Bush. How different was the openness he experienced during that dinner in Laeken. The contrast could hardly have been greater. Five days earlier, Kohl had made use of the budget debate in the Bundestag to present his ten-point plan for the unification of Germany. Even though Kohl’s announcement had surprised practically everyone – friend and foe at home and abroad – and had placed Gorbachev, already forced into a corner by the developments, under greater pressure – something that the Americans were very concerned about – it did nothing to upset the atmosphere of trust between the two leaders. There was a good reason for the deep mutual trust between Bush and Kohl that evening. Bush was the only one of Kohl’s international partners who had been informed beforehand of the bold unilateral political course that the chancellor announced at the end of November.

Kohl’s great leap forward At a meeting of Kohl’s communications staff on the evening of 23 November, Horst Teltschik – Director General at the German Chancellery and for many years a close confidant of the chancellor – had argued forcefully in favour of taking a bold step. Teltschik impressed on Kohl that if he wanted to influence the course of history, he had to act now. Through his contacts in the Soviet Union, it had recently become painfully clear to Teltschik that Moscow already had advanced plans for the future of Germany. These plans were essentially old wine in new bottles. They were based on the Yalta order and assumed that the Occupation Statute still applied and that the former occupying powers had the right to decide Germany’s future – as though nothing had changed since 1945! The most alarming aspect of all was that at that point Bonn did not have even the bare bones of a plan for a unified Germany. Teltschik continued to insist that it was time to take the initiative quickly. But he encountered fierce resistance from his colleagues, who found his pleas impetuous. They felt that such audacious behaviour by the chancellor could especially have a counterproductive effect on the people of the German Democratic Republic (GDR). Nevertheless, the communications staff produced a memorandum that the chancellor could take along in his weekend bag, laying out a ten-stage plan for German unification. It was up to the chancellor to decide what to do with it. The general mood among the experts was clear: restraint was better than causing a stir.

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The memorandum from the communications staff sketched out the main outlines of the development of a treaty-based community between the Federal Republic of Germany (West Germany) and the GDR via a confederation between the two Germanies, with the ultimate aim of a single German federation. This would, of course, all take place within the framework of the overall European and multilateral relations and partnerships that West Germany had entered into in the post-war period. If such a route to unification could be completed before the end of the millennium, it would be a ‘Glücksfall der Geschichte’, a stroke of historical luck.5 In the weekend of 25 and 26 November, Kohl himself set to work on the ten points. At home, in his bungalow in Ludwigshafen, he focused especially on the passages about ‘confederation’ and ‘federation’. The chancellor rewrote the memorandum without his official staff, but he was not alone. He was assisted by his wife Hannelore and Erich and Fritz Ramstetter, local Catholic priests (who were brothers) whom Kohl often consulted. Kohl also called CDU member of parliament Rupert Scholz, a professor of constitutional law in Munich, to discuss specific points. The final ten-point plan contained concrete measures to facilitate travel between the GDR and West Germany and confirmed the West-German government’s commitment to economic and political cooperation. It stated emphatically that this depended on far-reaching democratic reforms and the creation of conditions for a market economy in East Germany. These changes, laid out in the first three points, also had to be ‘irreversible’. Only in this way could they form the basis of an increasingly close community between the two states (point 4). The treaty-based community would be the first step towards the second phase (a short period of confederation) and third phase of unification (federation). The period of confederation would have to be short to prevent the institutionalisation of two states existing alongside each other (point 5). The process of German unification had to be embedded in a pan-European security concept, the ongoing process of European integration and the pan-European cooperation process within the Organisation for Security and Cooperation in Europe (OSCE), all within the framework of new measures to precipitate further disarmament (points 6-9). The completion of the ten-point plan would entail the creation of a federation leading to a unified Germany (point 10).6 5 Horst Teltschik, 329 Tage: Innenansichten der Einigung (Berlin: Siedler, 1991), p. 52. 6 Bundesministerium des Innern unter Mitwirkung des Bundesarchivs, Dokumente zur Deutschlandpolitik. Deutsche Einheit. Sonderedition aus den Akten des Bundeskanzleramtes 1989/90 [DzDPDE] (Munich: Oldenbourg Verlag, 1998), p. 65; Kohl, Erinnerungen, p. 991f.

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The combination of points 5 (a short period of confederation) and 10 (German unification) placed a bomb under international political relations and diplomacy. For Germany’s former enemies in Europe – with the Soviet Union, the United Kingdom and France at the forefront – this was tantamount to standing the world on its head. Kohl brazenly staked a claim for German unification and, in doing so, denied the realities of post-war history. The fact that he had dared to do this, without prior consultation, was seen as an ominous sign. The American government responded differently. Washington acknowledged that, by presenting the ten-point plan, Kohl had unequivocally taken the initiative. In doing so, the chancellor had not only taken the wind out of the sails of the plan for a permanent treaty-based community, as presented earlier by East German leader Hans Modrow, he had also unleashed among the people of Germany the exciting prospect of a rapid process of unification. This was to give his popularity a great boost, as was clear from the broad support with which his plan was received in the Federal Republic.7 In the midst of all this tumult, the US government was decisive and placatory. Washington was anxious not to turn against Kohl or to publicly question his initiative. The US covered the chancellor’s back and allowed him to take the lead in the process of unification. In so doing, the Bush administration forged an American-German axis around which everything would eventually turn. The official reaction from Washington was announced the day after the presentation of the ten-point plan. Secretary of State James Baker’s press conference was initially aimed at ensuring that Kohl’s somewhat impetuous act did not provoke Gorbachev.8 The US took a simple and hard-line position. In that way, it could both take the sting out of the situation and give it direction. Baker explained that German unification had to be a gradual process based on self-determination and taking account of the inviolability of the post-war borders which, under the terms of the Final Act of the Conference on Security and Cooperation in Helsinki in 1975, could only be changed through peaceful means. And, without batting an eyelid, Washington laid one other sine qua non on the table: the US would only agree to German unification if the reunified Germany became a member of NATO, the embodiment of the Western alliance and Western solidarity in the Cold War. In this way, Kohl’s great leap forward was coupled to an equally breathtaking leap forward by the Americans. The hopes for a rapid unification were 7 DzDPDE, Conversation between Kohl and Bush, Laeken, 3 December 1989, pp. 604-5. 8 Philip Zelikow and Condoleeza Rice, Germany Unified and Europe Transformed (Cambridge MA: Harvard University Press, 1998), pp. 118-121.

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still alive and kicking, but the US position had linked it irrevocable to the rapid triumph of the West in the Cold War. After the presentation of the ten-point plan and Baker’s press conference, there was little doubt about who was pulling the strings or where the initiative now lay. The AmericanGerman axis was turning at full power and had already been doing so for some time. Kohl had, for example, been closely involved in the preparations for Bush’s meeting with Gorbachev off the Maltese coast.9 During the dinner in Laeken, Bush and Kohl agreed that they had to make sure that Gorbachev stayed in the Kremlin. It was their responsibility to make the Soviet leader the ‘advocate of peaceful change’ that they both believed he could be.10 That was a little too much like wishful thinking, as it would have called not only for Gorbachev to elect voluntarily for the unification of Germany – the Soviet Union’s archenemy in the war – but also for a humiliating defeat in the Cold War, the global conflict that typified the prestige and credibility of the modern Soviet Union. In addition, there was the humiliation of seeing a reunited Germany joining the Soviet Union’s greatest enemy, NATO. That would be a bitter pill to swallow even for ‘Gorby’, who had become a cult figure in the West. Furthermore, would the Western countries be able to close ranks and keep them closed? With the exception of Hannelore Kohl, the Ramstetter brothers, Professor Scholz, a select group of the chancellor’s staff and President Bush, everyone was completely taken by surprise when Kohl presented his ten-point plan on 28 November. How to respond to this sudden turn of events, which threatened to leave them hopelessly playing catch-up in the historic restructuring of post-war Europe was a painful question not only in Moscow and East Berlin but also in Western Europe, especially in London and Paris. If we are to believe Margaret Thatcher’s memoirs, the events that took place in the autumn of 1989 were ‘the most welcome political change’ of her lifetime. But in reality, the Iron Lady was above all concerned. She saw the threat of war. It was no coincidence that, at the same time, the German question was once more at the top of the international political agenda. After all, the two things – war and Germany – went hand in hand. Thatcher knew her history. During the first period of German unity, from 1870 to 1945, Germany had ‘veered unpredictably between aggression and self-doubt’. That was perhaps because a united Germany was simply too big to fit into a stable European order. In that respect, certainly, Germany’s neighbours were traumatised. But that applied even more to the Germans themselves. 9 DzDPDE, Kohl to Bush, 28 November 1989, pp. 567-73; Kohl, Erinnerungen, pp. 999-1000. 10 DzDPDE, Conversation between Kohl and Bush, Laeken, 3 December 1989, pp. 605-606.

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‘The true origin of German angst is the agony of self-knowledge,’ wrote Thatcher. In her eyes, this painful truth, as she described her own vision of the German soul, had convinced the Germans of a dangerous misconception. They themselves wanted to be ‘locked in to a federal Europe’. But precisely within that geographically limited European framework, they would have more rather than less opportunity to emerge again as the dominant power on the continent.11 In short, German unification in itself was certain to create the risk of destabilisation in Europe, but the inauspicious idea now being proposed – to temper the destabilising effects through a process of advanced European integration – was downright dangerous, a potentially fatal idea based on a misinterpretation of history. Kohl’s ten-point plan was therefore, for Thatcher too, a very unwelcome surprise. In her eyes, there was only one response possible: a full, frontal counterattack with the aim of delaying, containing and blocking the momentum towards unification unleashed by Kohl. When her closest advisers warned her some weeks later during consultations at Chequers, the prime minister’s country estate, that this was all getting to sound ‘a little like 1938’, the time of appeasement with Hitler’s Germany, she flashed her eyes back at them and answered ‘Yes, and I’m not an appeaser.’12 She would not back down. In any case, in the autumn of 1989, the chances of German unification being postponed and ultimately abandoned did not yet seem to be completely lost. Thatcher knew only too well that you don’t introduce a free market and democracy overnight, and certainly not in Germany. Concerned as she was about the increasing excitement in Germany, Thatcher had already contacted Bush before Kohl presented his ten-point plan. The American president had told her that he was looking forward to ‘a really good talk’ with her at Camp David on 24 November. But there was to be no meeting of minds there. Bush may not have disagreed with her openly but was ‘distracted and uneasy’ and had harped on about Thatcher’s relationship with Kohl. Wouldn’t her attitude give rise to difficulties in her relationship with the German chancellor? After her visit to Camp David, Thatcher was by no means confident that her American friends understood what was at stake. When Thatcher heard James Baker’s press conference a day after the presentation of the ten-point plan, she heaved a sigh of relief at most of what the Secretary of State was saying, except on one crucial point: that, in the future, Germany would have to be part of ‘an increasingly integrated 11 Thatcher, Downing Street, pp. 790-791. 12 Zelikow and Rice, Germany Unified, p. 207.

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European Community’. At the NATO summit on 4 November – the day after the dinner in Laeken – she would hear Bush elaborate on this point in detail. Thatcher was shocked. Bush was turning out not only to be Kohl’s best friend, he ‘was aligning America with the federalists’! The situation was now painfully clear to Thatcher. She couldn’t rely on the Americans, either on the issue of German unification or on tempering European integration. The only card she had left to play was to work together with Paris, but that was by no means a trump card.13 And that was putting it mildly.

The surgeons of French realpolitik The way in which Paris responded to the vagaries of these circumstances was such that an entente with Thatcher’s United Kingdom was an illusion from the outset. The European realities that François Mitterrand and his advisers saw unfolding in front of their eyes may have been disconcerting, but they heralded the beginning of the unavoidable future that France had succeeded in postponing for so long. That future represented the decline of French power in the world. A central and painful aspect of that process was the relative loss of power in relation to the ‘German colossus’ that had arisen under Bismarck, the official foundation of which had been celebrated on 18 January 1871 in the Palace of Versailles after the Germans had crushed the French empire in the war of 1870-1871. Paris had long known that France ultimately lacked the brute force to compete with Germany. The only option left was to keep the ‘Teutons’ at arm’s length.14 This was a precarious strategy, but they had no choice. The colossus may have been reassuringly divided into two since the end of the Second World War, but in Paris, officials were constantly aware of the temporary nature of that arrangement. The hard reality was the prospect of their own decline, and they were confronted with that once again in 1989 when – as so often before – future power relations in Europe revealed their true face. In the 1950s, the French political elite had discovered European cooperation as the perfect instrument to keep in check the decay of their country’s power. But that had been a problematic undertaking. European integration after all also implied increasing rapprochement with Germany, France’s traditional rival on the continent. In 1989, after more than four decades of 13 Thatcher, Downing Street, pp. 793-796. 14 Lois Pattison de Ménil, Who Speaks for Europe? The Vision of Charles de Gaulle (London: Weidenfeld and Nicolson, 1977), p. 21.

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division in Germany and Europe, there was no avoiding the conclusion that this problematic aspect had ultimately not stopped France from pushing the process of integration ever forwards and ever deeper. Indeed, one could perhaps say that European integration – as it had taken shape since 1950 – was more the outcome of French realpolitik than anything else. That constant factor had primarily manifested itself in the uncompromising way in which countless leaders from the variegated French elite had proved, time and time again, willing to slice ruthlessly into the flesh of their own national sentiments and pride. If France’s position in the world was at stake, the surgeons of French realpolitik pulled very few punches. For France, Europe’s integration was dictated by that realism, and that meant slicing into its own flesh: France had to surrender power to Europe in order to retain power and influence in the global arena, and all sentiments were subordinate to that goal. In other words, they had to make a convincing show of loving the archenemy across the Rhine. There was no other choice. The deal had proved very lucrative, not least because the same applied to the newly born Federal Republic of Germany. Through its liaison dangereuse with France, the still insecure and provisionally constructed West German state was able to take giant steps towards international rehabilitation following the disaster of Nazism. This Gleichberechtigung, as the first West German chancellor Konrad Adenauer called the equal status between West Germany and its partners, was thus able to take shape credibly within the Western bloc and to be completed within less than ten years, when West Germany joined the Western European Union (WEU) and NATO in 1955. Hardly five years after the end of the Second World War, talks had already started with the French about the rearmament of West Germany within European institutional structures. Outside the political elite, however, this Franco-German reconciliation coming so soon after the war came across as downright bizarre. The stiff injections of ice-cold realpolitik administered by the surgeons of political realism ravaged the open nerves of French popular sentiment. FrancoGerman reconciliation proved difficult to sell to a chauvinistic population still traumatised by the war. So soon after the third humiliating war with the Germans in a century, reconciliation could easily be seen as a fatal Faustian pact. And this is exactly how it was seen by many Frenchmen, as became clear when the French plan for a European Defence Community (EDC) – after years of negotiations between 1950 and 1954 – was dramatically rejected by the French parliament in August 1954 (see chapter 3). Slashing one’s own political autonomy to retain power was one thing but, in the 1950s, the radical Europeanisation of the French soul that the EDC implied was,

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at that moment in history, going too far. The result was an existential crisis for the embryonic process of European integration.15 A common European foreign and defence policy was to remain both a dream and a nightmare in the decades that followed. Nevertheless, in the 1950s, the French policy of European integration achieved the desired effect. Cutting back on policy autonomy had made modern France leaner and meaner in European – and global – power politics. The lever of European integration worked perfectly. Slowly but surely, European integration based on Franco-German reconciliation became the backbone of French foreign policy, and with good reason. The disproportional benefits of this policy in terms of power politics steadily eroded the fears of the French people and tempered economic protectionism and other conservative reflexes. Moreover, time and growing prosperity in Western Europe had done their relentless work during Les Trente Glorieuses, the three decades following the end of the Second World War. This pre-history of European integration was an integral part of the dilemma facing Mitterrand and his advisers in the autumn of 1989. Exploiting Franco-German reconciliation to benefit France’s standing in Europe and the world had been a central mainstay of the country’s European and foreign policy for many decades. But would that course now have to be abandoned? Had this European leverage mechanism, which had proved its worth over and over again, finally had its time? The fall of the Berlin Wall seemed to catapult France and Europe into two directions at the same time: forwards into the future, into the post-Cold War era, but also back to 1945, when all capacity to think was frozen in fear of the shadow cast by the German colossus. What should France do now? What rationale should it adopt to protect its power position in this new situation? Answering these questions was no simple task. Was there actually any difference between the two opposing directions in which history now seemed to be moving? Or did it only appear that way? How much of a solid footing for the future did Franco-German reconciliation offer in an era without the Cold War? In the third volume of his war memoirs, published in the 1950s, Charles de Gaulle describes a message that he received in 1945 from Heinrich Himmler, head of the SS and the Gestapo. Himmler wrote the following: You have won, but what will you do now? Submit yourself to the AngloSaxons? They will treat you like a satellite and you will lose all honour. 15 Mathieu Segers, De Europese dagboeken van Max Kohnstamm: Augustus 1953-September 1957 (Amsterdam: Boom, 2008), pp. 37-41 and elsewhere.

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Associate with the Soviets? They will force France to submit to their law and liquidate you personally… In reality, the only way to lead your people to greatness and independence is an entente with defeated Germany. Proclaim it immediately! Make contact without delay with those men in the Reich who still have de facto power and want to lead their country in a new direction… They are ready and waiting for your offer… If you can master the spirit of vengeance, if you seize this occasion that history offers you, you will be the greatest man of all time.

De Gaulle’s commentary on this incident is revealing: ‘Apart from the flattery that this missive from the edge of the grave directed toward me, there is undoubtedly some truth in the picture it paints.’16 After his return as head of the French government in 1958, when he was elected first president of the Fifth Republic, de Gaulle continued – and deepened – the policy of the Fourth Republic to exploit Franco-German reconciliation within the framework of the ‘Europe of the Six’ (France, West Germany, Italy and the Benelux countries). De Gaulle had frequently explained the rationale behind this, but rarely as clearly as he did on 22 August 1962 to his state secretary Alain Peyrefitte (who would be promoted some weeks later to the post of minister of information): What is the point of Europe? It should serve to prevent us from being dominated by America or Russia. The six of us together should be able to do as well as each of the two superpowers. France could be the strongest of the six members. We could control this lever of Archimedes. We could carry away the others. Europe represents the first opportunity France has to regain what she lost at Waterloo: world dominance.17

During the Cold War, that French ‘instrumental Europe’ was identical to the Europe that rotated around the Franco-German axis. After all, West Germany was due to its war history, under the temporary provisions of international law, by definition the junior partner in the relationship. This paradoxical maxim of French grandeur via Franco-German reconciliation and European integration was the essence of France’s post-war European 16 Charles de Gaulle, Mémoires de guerre, 3 (Paris: Plon, 1959), pp. 175-79; Jeffrey Glenn Giauque, Grand Designs and Visions of Unity (Chapel Hill: University of North Carolina Press, 2002), pp. 77-78. 17 Alain Peyrefitte, C’était de Gaulle, 1 (Paris: Fayard, 1994/95), pp. 158-59; Luuk van Middelaar, De passage naar Europa: Geschiedenis van een begin (Groningen: Historische Uitgeverij, 2009), p. 192.

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policy. That did not change under Mitterrand. It should therefore come as no surprise that, during the tumultuous developments in Europe in the final months of 1989, alongside the dominant German-American axis, a second smaller one was also turning, but now at full speed: the Franco-German axis within the framework of European integration. Bush got a few glimpses of it during the dinner in Laeken – and of the disturbed relations between Bonn and London. After discussing the revolutionary developments in the Eastern Bloc, their consequences for the Soviet Union and Gorbachev’s leadership and the impressions he had brought with him from Malta, Bush wanted to talk to Kohl about Western Europe. Bush:

How did your Western European partners respond to the ten-point plan?

Kohl explained that there were great differences. Belgium and Luxembourg had few problems with Germany’s wish for and moves towards self-determination. Felipe González’ Spain had even been enthusiastic, while Austria and Switzerland had also responded positively. As far as Mitterrand was concerned, Kohl was in no doubt at all that he was wise enough to realise that it was in no way in France’s interests to oppose German self-determination. According to Kohl, the French president’s main concern was that the developments did not lead to chaotic scenes. Kohl:

Mitterrand wants German unification to remain part of the process of European integration.18

With this explanation of France’s position, Kohl left it at that for the time being. He did not bring Bush up to date on the finer points of the intensive coordination between the Elysée and the Bundeskanzleramt. Later that same evening, this would prove to have been a good decision, as Thatcher’s visit to Camp David had made Bush suspicious of the European dimension of Kohl’s plans for German unification. By now, it was obvious to Kohl what the French had in mind. That had all become crystal clear at the extra European summit on 18 November in Paris. The talks may have focused on consolidating the historical importance of European integration and setting up comprehensive aid programmes for reform-minded Eastern Bloc countries, but it had not escaped Kohl’s notice that French priorities lay elsewhere. As president of the European 18 DzDPDE, Conversation between Kohl and Bush, Laeken, 3 December 1989, p. 606.

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Community, France was very concerned that developments in Eastern Europe and Germany would push the negotiations on the Economic and Monetary Union (EMU) into the background at the forthcoming European summit in Strasbourg in mid-December.19 The Strasbourg Summit was to be the provisional climax of the momentum surrounding the EMU, carefully orchestrated by Paris, which had reached a high point earlier that year in April with the presentation of the unanimous Delors Report (see chapter 8). That high point had perhaps come as something of a surprise to many, but not to Mitterrand and his entourage. Jacques Delors, the French president of the European Commission, had performed the excellent work that the Elysée had demanded, and at an opportune time. The report, drawn up under Delors’ presidency, increased the pressure on the EMU dossier to the maximum at exactly the right moment, so that it was logical to take the first irreversible steps towards realisation of the EMU in the second half of the year, under the French presidency.

Exploiting Franco-German reconciliation The EMU had been a long-cherished wish of the surgeons of French realpolitik. France could only escape the ‘tyranny of the Deutschmark’ by sacrificing the franc. The French had learned by experience that fusing the sorrow of France (its declining power) with that of Germany (its war guilt) – through the mutual post-war reconciliation exercise under the cover of European integration – acquired an increasingly strong financial-economic dimension. And this was not necessarily to France’s benefit. In that respect, Paris was forced to learn a rather ironic European lesson, a lesson that found its best expression in monetary matters. It was saliently summed up by Paul Volcker, former chairman of the US Federal Reserve (Fed): ‘In order to stand up to the Germans, you had to be subservient to them – by following their lead in key questions of monetary affairs’. In other words, for France, the EMU was the best possible way to escape the yoke of the Bundesbank. Indeed, there was no other way, at least no longer. Or, as French president Valéry Giscard d’Estaing had put it as early as 1978, ‘we need an organised Europe to escape German domination’.20 France’s calculations after the fall of the Wall proved diametrically opposed to those of Margaret Thatcher: France 19 Kohl, Erinnerungen, p. 983. 20 David Marsh, The Euro: The Politics of the New Global Currency (New Haven, London: Yale University Press, 2009), pp. 68-69.

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understood that European integration was necessary to break German domination. During the 1980s, after being forced to abandon his fanciful socialist experiments because of their dramatic consequences for the position of the franc within the European Monetary System (EMS), Mitterrand had come to the same conclusion as Giscard when it came to economic and monetary affairs (see chapter 8). The EMU had even become the alpha and the omega of his European policy. Mitterrand described it himself as follows: ‘The Germans are a great people deprived of certain attributes of sovereignty, with reduced diplomatic status. Germany compensates for this weakness with its economic power. The Deutschmark is to some extent its nuclear force’.21 This also made the challenge facing the French president immediately clear which was to dismantle Germany’s ‘nuclear force’. Mitterrand understood that this had to be achieved through Franco-German reconciliation and certainly not through Franco-German estrangement, as this would jeopardise France’s achievements in the process of European integration. Under the blankets of European integration, it had to stay warm and enticing. After the presentation of the Delors Report, Paris was closer to a historic step towards the EMU than ever. But then developments in Germany threatened to put a spoke in the wheel of the French strategy in sight of the finish line in Strasbourg. After the fall of the Berlin Wall, Mitterrand had to find a way to regain some degree of control over the process, so that he could use the completely new situation that had emerged to France’s benefit. That seemed a gargantuan task but soon proved easier than he had thought. The new state of affairs actually presented an opportunity for the EMU. To take advantage of it, Mitterrand had to take a leap forward for France, in the same way that Kohl had done to open the path to German unification and Bush had done to ensure American victory in the Cold War. Mitterrand did not tire of emphasising that the developments in Eastern Europe demanded not only continuation of the process of European integration. That in itself was not enough. He urged that Europe had to go further and had to strengthen and speed up the process. Mitterrand had repeated this mantra at the extra summit ‘to save the European Community’ on 18 November. He had received the unequivocal support of Helmut Kohl. Yet the French president had also sat by and allowed Thatcher to engage in her hysterics. He clearly shared her concerns: the historic developments 21 Jacques Attali, Verbatim III: Première partie 1988-1989 (Paris: Fayard, le livre de poche, 1995), p. 92.

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in Europe also deeply affected the sly fox of the Elysée. But Mitterrand was not ready to shoot himself in the foot at that time so as to ensure a glorious survival. The old fears flared up and prevented him from performing this brutal but necessary surgical intervention on himself. He let it go, for the moment. Only years later did his friend Helmut Kohl discover that, in those days, Mitterrand had not hidden his fears of war and violent conflict from those close to him. In contrast to his public statements, he found the Germans’ excitement over possible unification above all alarming, saying ‘these people are playing with a world war, without seeing it’.22 What Thatcher would never understand, however, was that Mitterrand chose to continue to suppress these ‘secret fears’ rather than sharing them with like-minded colleagues in Europe.23 How could he see the threat of war and yet close his eyes to it? And, even worse, how could he publicly support a development that he was terrified of?! Thatcher sought the explanation in the hesitant fatalism that Mitterrand displayed in his encounters with her. But she was wrong. The Iron Lady was being taken for a ride. In the autumn months of 1989, the French president was hastily working up to the tour de force of power politics that, at least according to the French interpretation, the situation now forced upon him. The acceleration of history that the whole world was now witnessing called for an equally revolutionary response in terms of Franco-German reconciliation (and thereby a slice into France’s own flesh). Mitterrand’s conclusion took concrete shape and the catapult of history launched France and Europe into a new future beyond the Cold War, just as a radically different future had dawned in 1945. Partly on the advice of his adviser Jacques Attali, Mitterrand had already made the necessary Franco-German preparations in the days leading up to the fall of the Berlin Wall.24 Initially, in light of the momentous changes in the air, he had done that purely to keep his options as open as possible. Kohl had, however, made the choice much easier. Well before taking his great leap forward on the matter of German unification, the chancellor had given the process of European integration new and unmistakable impulses. As early as the summer of 1989, the revolutionary developments in Eastern Europe had set Joachim Bitterlich, Kohl’s main adviser on European matters, thinking. Germany’s European policy faced the threat of being rather uninvitingly forced on the defensive: if developments in Eastern Europe 22 Kohl, Erinnerungen, p. 984. 23 Thatcher, Downing Street, p. 796. 24 Attali, Verbatim III, p. 403f.

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were to suddenly make the issue of German unification urgent – and that was no longer as unlikely as it may have seemed – the chancellor would be forced to or would probably wish to provide evidence of German loyalty to Western Europe, to the West and to European integration. But if that call for new West-German commitment were to coincide with France’s presidency of the EU in the second half of the year, the Federal Republic could be placed under extra pressure regarding the EMU. To prevent Germany from finding itself in a tight corner in which it would be forced to make unacceptable concessions, it was imperative that Bonn took the initiative in developments in the EMU dossier. That was particularly important because the EMU was certainly not a popular issue in domestic politics. The Deutschmark was stable, it was free of political influence, and it was sacrosanct. All things considered, in the summer of 1989, this left Kohl with only one option open if he was to be well prepared for what was possibly going to happen. Bonn had to leapfrog the shadow of its own technical and financial-economic reservations about the EMU by seeking constructive rapprochement with the French presidency – and precisely on that EMU dossier. The French had to be convinced of the sincerity of Kohl’s intentions. One way of achieving that was to confirm unequivocally the continuity of the pro-European policy of a committed partnership with France, which was embodied in the crucial 1950s more than anyone by Konrad Adenauer, the most illustrious German friend of post-war France. As Adenauer was a fellow Rhinelander and Kohl’s godfather in the CDU, the current chancellor could make this point with pathos and conviction.25 Seeking greater rapprochement with France on the EMU dossier was, however, no easy task. First of all, it had to take place in secret, as it would not have survived in the full daylight of German public opinion. Secondly, it meant that Kohl would have to keep the two ministers with primary responsibility – Finance Minister Theo Waigel and Foreign Minister HansDietrich Genscher – as far as possible from the EMU dossier. That was not only necessary for the sake of secrecy; it was also crucial for the credibility of Kohl’s strategy of rapprochement. It was, after all, a public secret that, besides the majority of West-German citizens, the influential financial-economic elite were also extremely sceptical about the plans for the EMU (and the associated costs and disadvantages for the Federal Republic, not to mention the ultimate surrender of the Deutschmark). 25 Joachim Bitterlich, 1998, ‘In Memoriam Werner Rouget: Frankreichs (und Europas) Weg nach Maastricht im Jahr der Deutsche Einheit’, in Joachim Bitterlich and Ernst Weisenfeld (eds.), Schwierige Nachbarschaft am Rhein (Bonn: Bouvier), p. 113.

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Partly with an eye on these domestic feelings, Bitterlich had built a super-offensive element into his plan for stepped-up rapprochement to Paris. Bitterlich’s ‘surprise’ was the European Political Union: the EPU was a vision of the future that could count on broad and enthusiastic support in the Federal Republic, especially if it were linked to more rights and competences for the European Parliament – in other words, more European democracy. Not only could this be used in the future to influence German public opinion,26 it could also be deployed to exert pressure on the French in future EMU negotiations. For France, an EPU that gave the European Parliament more competences represented overly far-reaching interference in national sovereignty. That made the EPU a potentially powerful weapon in forcing concessions from France in the EMU talks. In short, Kohl’s European policy focused on the EMU to enhance FrancoGerman rapprochement – with a view to the impending discussion on German unification – and was rounded off by linking the EMU to the EPU. Furthermore, it gave en passant the position of the chancellor the gloss of European idealism, which could only benefit the credibility of German European policy. The strategy that Bitterlich had come up with was not at all badly formulated. It was Italian Prime Minister Giulio Andreotti, a fervent EMU supporter, who had the honour of unwrapping the Germans’ EPU surprise. During a meeting with his Italian counterpart on 18 October in Bonn, Kohl had explained that, in his opinion, European integration would by no means be finished with the completion of the internal market, planned for 1992. He added that, at the forthcoming European summit in Strasbourg – the finale of the French presidency of the Community – Europe’s leaders should discuss how the integration process should move forward after 1992. For the Federal Republic, this was the essential issue. Kohl emphasised that, in the future, European integration should go much further towards greater democracy – in other words, towards a political union. He assured Andreotti that he also wanted to see progress on the EMU but stressed that this was only possible if the ultimate aim was the EPU.27 During the regular talks within the framework of the Franco-German friendship treaty in Bonn on 2 November, Kohl had revealed his proactive European agenda in a conversation with Mitterrand. After they had established that European integration was of eminent importance for the future of Germany and Eastern Europe, Kohl said that it was his wish to work 26 Interview by the author with Bitterlich, Paris, 2003. 27 DzDPDE, Conversation between Kohl and Andreotti, Bonn, 18 October 1989, p. 453.

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as closely as possible with the Elysée to prepare the European Council in Strasbourg. The Elysée and the Bundeskanzleramt would discuss and solve any differences of opinion in advance and in confidence. The chancellor emphasised that he wanted Strasbourg to be a success and that was why he felt that it was important to avoid discussing the content of the EMU as much as possible. He had already instructed Genscher and Waigel to put the EMU dossier on hold and not discuss the details in the preparatory meetings of the Council of Ministers. Kohl had also made it clear to Mitterrand that he would support the EMU on one condition: that there be a debate on the ultimate political dimension of European integration. This issue therefore had to be on the agenda for Strasbourg too. In particular, the summit had to address expanding the competences of the European Parliament. Mitterrand responded to these demands in generalities.28 During the joint press conference after the meeting, Mitterrand had responded to a question about German unification by saying ‘I am not afraid of unification. I do not ask myself that kind of question. History is there. I take it as it is. I see the German desire for reunification as legitimate.’29 But at that moment, the Berlin Wall had not yet fallen. Nine days later – after the Wall had fallen – Kohl called Mitterrand and thanked him for his ‘sehr wichtiges Wort’ (very important words) of a few days previously. Before hanging up he also thanked him ‘für seine Freundschaft’, at which the president once again assured the chancellor of his friendship.30 When Bush and Kohl dined in Laeken, therefore, there was besides an American-German line of advance also a Franco-German one. Six days before the fall of the Berlin Wall, it had already become clear that the question of German unification would be tied to further European integration in the shape of the EMU and that the EMU, in turn, was linked to Germany’s ambitions for the EPU. The crux of this embryonic deal, however, was that discussing the details of the EMU – the core element that bound France and Germany together – had been declared taboo. The differences of opinion between the two countries were simply too fundamental. They took diametrically opposed positions on key questions like fiscal harmonisation and budget discipline, which the Germans insisted had to be necessary conditions for the EMU. That had become clear immediately after the conversation between Kohl and Mitterrand on 2 November, in follow-up 28 DzDPDE, Franco-German consultations, Bonn, 2 and 3 November 1989, pp. 471-473. 29 DzDPDE, Press conference, 3 November 1989, p. 472, note 8. 30 DzDPDE, Telephone conversation between Kohl and Mitterrand, 11 November 1989, p. 512

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discussions between the German chancellor and the French prime minister Michel Rocard. And then there was the EPU, such an unpleasant surprise for the French. Rocard had diplomatically manoeuvred his way around the issue to avoid broaching it head on.31 Yet, no matter how high the technical obstacles were, they proved completely subordinate in importance to the political objectives of Kohl and Mitterrand – German unification and the EMU – which came together so very opportunely due to the circumstances. On 27 November, one day before he presented his ten-point plan, Kohl had sent a letter to Mitterrand. It outlined a timetable for the EMU that could be set in motion immediately after the summit in Strasbourg and a proposal to submit a Franco-German plan for the EMU at the summit, coordinated and agreed by the two countries in advance. This was Kohl’s way of preparing his friend in the Elysée for the shock that was to come. It had been a complicated message. Kohl’s timetable seemed to propose substantial progress and irreversible steps towards the EMU, but there were three other noteworthy points. Firstly, Kohl wrote that he did not wish the intergovernmental negotiations on the EMU to start earlier than December 1990. He wanted to ensure that they did not begin until after the German elections, so that the EMU would not become an issue in the election campaign. Secondly, he did not want the negotiations to start until there had been sufficient progress on the more controversial points, notably fiscal and budgetary issues. Thirdly, he expressed in no uncertain terms his serious concerns about the problems surrounding fiscal harmonisation inherent to the EMU project and about the high budget deficits of some members of the Community. He also insisted again on expansion of the competences of the European Parliament, long a popular theme in West German politics.32 The letter reflected the difficult position in which Kohl found himself. The chancellor felt obliged to do something to temper the increasing concerns in his cabinet about the EMU. In the end, he had decided to make a virtue of necessity by writting down all the German demands and reservations clearly and concisely for his friend Mitterrand. Although this ended up being a source of irritation for the French president, the letter was a sign of far-reaching transparency on Kohl’s part. His intention was that the Elysée should study it carefully. 31 DzDPDE, Conversation between Kohl and Rocard, 2 November 1989, pp. 474-476. 32 DzDPDE, Kohl to Mitterrand, 27 November 1989 and conversation between Kohl and Rocard, 2 November 1989, pp. 565-567 and 475.

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Kohl received a reply from Mitterrand just before his dinner with Bush. The French president now laid his wishes on the table. In Strasbourg, the ‘definitive’ decision had to be taken to start the intergovernmental negotiations on the EMU, by the end of 1990 at the latest. That was Mitterrand’s first – and only – concession to Kohl. He did not deign to devote a single word to the European Parliament. In his view, the EPU should not be discussed until the EMU had been established. Nor did he refer to Kohl’s detailed agenda. He dismissed the substantive problem areas identified by Kohl as truisms. Bitterlich, who added explanatory comments to Mitterrand’s reply for Kohl’s benefit, summarised it succinctly as follows: For M., the EMU has priority over everything else. It is the main objective for the coming period. All other issues relating to European integration are completely subordinate to it […]. M. sees your demands and conditions regarding the EMU as ‘diversionary measures’ […]. On more than one point, M. leads one to suspect that he is only concerned with achieving the EMU as quickly as possible; from his perspective, France has already more than contributed its share, by allowing liberalisation of the movement of capital and accepting the leading role of the Deutschmark and the German orientation in the design of the EMU [in the Delors Report].33

Bitterlich added that this reaction from Paris was to be expected and did not feel that this open exchange of views would put ‘Strasbourg’ in jeopardy. According to Bitterlich, Kohl had to understand now that, for Mitterrand, the EMU was the necessary counterweight to the neoliberal character that the common market had acquired in the preceding years – and which Paris had never supported. This new point from the French side made it considerably more difficult for Kohl to get something in return for a constructive German approach to the EMU dossier. Lastly, Bitterlich outlined just how limited support for France’s EMU plans was: only Italy and Greece supported them wholeheartedly. That meant that, in Strasbourg, Kohl would still have opportunities to get a number of Germany’s points – so superciliously ignored by Mitterrand at this stage – into the conclusions of the European Council. Those opportunities could be made even greater by coordinating with Belgium, Spain and Luxembourg in advance.34 Kohl knew what he had to do. He made sure that Waigel and Genscher were not informed of 33 DzDPDE, Memorandum from Bitterlich to Kohl, 2/3 December 1989, p. 597. 34 DzDPDE, Memorandum from Bitterlich to Kohl, 2/3 December 1989, p. 598.

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all this in detail. And they were not the only ones. With the exception of Bitterlich, almost no one knew of Kohl’s agenda.

The Netherlands between the Anglo-Saxons and the Teutons Kohl’s statement on French support for German unification, about which he informed Bush during their dinner in Laeken, was thus based on the truth. The same applied to his explanation about it being tied to European integration. But behind this lay an unruly world in which the French and the Germans wrestled over the EMU and EPU dossiers. Kohl did not tell Bush about these wranglings. Instead, he answered Bush’s question about how his Western European partners had responded to his ten-point plan. As mentioned above, the chancellor had already indicated that there were serious differences between the partners. And that included the Netherlands. Kohl: Bush: Kohl:

Bush:

The Netherlands has always been strongly focused on London. And London is very reticent regarding the ten-point plan. That is the understatement of the year! This abnormal Dutch response, has it anything to do with the Second World War? Yes. And I respect that. The Nazis treated the Dutch exceptionally badly. And that was an even harder blow for the Netherlands because, before 1933, they had always been very supportive of Germany; for example, offering asylum to Keizer Wilhelm II. The day before the German army invaded, Von Ribbentrop had assured the people of the Netherlands that Germany had no plans to invade their country. The Dutch have never forgotten that. On top of that, the Nazis established a civil government in the Netherlands, unlike Belgium, for example, where the country was governed by a military commander. That civil government was made up of Viennese Nazis of the worst kind. And then, of course, came the persecution of Dutch Jews. The Queen of the Netherlands told me that she has released a number of Nazis and that she was heavily criticised for that. But how does Mrs Thatcher stand on German unif ication?35

35 DzDPDE, Conversation between Kohl and Bush, Laeken, 3 December 1989, p. 606.

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This led Kohl to explain at length how Margaret Thatcher was stuck in the past and, above all, that she did not understand the historic significance of European integration. Kohl:

Bush: Kohl:

In her view, the European Parliament cannot have any rights, because Westminster is not able to surrender them. Only two weeks ago, she said ‘What kind of parliament is that European Parliament? It doesn’t even speak one language.’ Mrs Thatcher’s ideas simply no longer belong to these times. As for Germany, she believes that the post-war period has still not come to an end. Does she mistrust Germany? No. But she finds historic developments unjust. And, to be fair, that is also understandable. The United Kingdom put its own survival in danger in the Second World War and sacrificed its empire. It won the war, but lost a lot, too. That plays a large part in her response.

Kohl then explained to Bush that he could not understand why Thatcher chose the wrong strategy. In her place, he would take the lead in the European process to incorporate Germany even further into Western alliances. The conditions for achieving that were extremely favourable. After all, it was this chancellor who had made it clear over and over again that, for Germany, a future in peace and freedom was only possible under a common European roof. Kohl: Bush:

Kohl:

Mitterrand does understand this. I know you have excellent contact with Mitterrand. I was recently at Camp David with Margaret Thatcher. I am very concerned about the emergence of a fortress Europe and that ‘Brussels’ will take over sovereignty in Europe. As far as I’m concerned, there will be no fortress Europe. I support free global trade and absolutely oppose a central bureaucracy. And there is no majority in favour of that in Europe. Europe can only survive if it continues to have close ties with the United States. The truth is that Mrs Thatcher believes that London takes the lead in Europe. There is nothing I can do to change that, but she is well wide of the truth.36

36 DzDPDE, Conversation between Kohl and Bush, Laeken, 3 December 1989, p. 607.

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On 20 September 1988, Thatcher had explained her vision of the future of European integration in a speech at the College of Europe in Bruges, which caused quite a stir. After she had begun ‘by doing what the Foreign Office wished’, i.e. pointing out how much Britain had contributed to Europe over the centuries and how much it still contributed, the Iron Lady had broached a heftier topic: ‘What is Europe?’. She started to answer the question by comparing the Soviet Union and European integration. She concluded by saying ‘We have not successfully rolled back the frontiers of the state in Britain only to see them re-imposed at a European level with a European super-state exercising a new dominance from Brussels.’ Instead of this, she called for something completely different, a ‘Europe of enterprise’, part of the global free-trade project established in the General Agreement on Tariffs and Trade (GATT). That Europe was not an inward-looking protectionist fortress but an open structure serving the ‘Atlantic Community – that Europe on both sides of the Atlantic – which is our noblest inheritance and our greatest strength’. She did not mince her words – and that is putting it mildly. Thatcher’s speech in Bruges boosted her popularity at home but, not completely to her surprise, she had to conclude that the response in ‘European circles’ was one of ‘stunned outrage’. ‘The federalists’ were seething with rage. Only Dutch prime minister Ruud Lubbers proved willing to support her position. But the isolation simply strengthened her conviction that, by following Delors’ plans for the EMU, Europe was on the wrong track. She did not doubt for a moment that ‘in the long term a proud, ancient nation like Spain would balk at continued loss of national self-determination in exchange for German-financed subsidies’.37 Kohl considered this a hopeless position. He was convinced that things were different to how Thatcher saw them. And he was the best of friends with Spanish leader Felipe González. Together with his Belgian counterpart Wilfried Martens, González was the only fellow European leader who could depend on receiving a regular invitation to the chancellor’s birthday parties. Lubbers and Thatcher would never be on that list.38 Not that Thatcher lost any sleep on that count. She had an ‘aversion’ to ‘all things German’ and to Kohl, ‘the wurst-eating, corpulent, plodding Teuton’, in particular.39 37 Bruges Speech, 20 September 1988, http://www.margaretthatcher.org; Thatcher, Downing Street, pp. 744-46 and 766. 38 Hans-Peter Schwarz, Helmut Kohl: Eine politische Biographie (Munich: DVA, 2012), p. 358f; interview with Hans-Gert Pöttering, KAS, Berlin, 2012. 39 George Urban, Diplomacy and Disillusion at the Court of Margaret Thatcher: An Insider’s View (London: I.B. Tauris, 1996), p. 131.

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Journey to the continent In the conversation between George Bush and Helmut Kohl in Laeken on 3 December 1989, the whole complex of problems and mechanisms that had driven the process of European integration forward in the past 39 years were put on the table, including the aversion to integration in London and the powerful encouragement from Washington. In the autumn of 1989, under the force of circumstances, it was time to take stock. Western European realities that could be covered up during the quarantine imposed by the Cold War now had to be confronted. And those realities determined the state of affairs. Their essence could be encapsulated in four general developments in post-war Western Europe and the integration process or, better yet, in four journeys that the Western European powers had undertaken, sometimes together, sometimes individually, sometimes intentionally, but often by coincidence or through circumstances, as they were forced to seek ways towards a shared future after 1945. In the first instance, there was the unprecedented journey that France and West Germany had undertaken jointly that had led them from being archenemies to reconciliation and eventually to a sustainable partnership, even friendship, embedded within the multilateral structures of European integration. Secondly, there was the decisive defeat of the British alternative to European integration that, despite Britain’s victory in the Second World War, had been the consequence of Franco-German rapprochement. The humiliating nature of that defeat became painfully and belatedly clear in 1973, when the British set off on their own journey to the continent – as inevitable as it was uncomfortable – by joining the EEC, with the Irish and the Danes in their wake. But that only came to pass after the UK had twice been refused membership. For more than ten years, France had used the leverage it had found and claimed in the process of European integration to keep the door to British entry closed. This had widened the gap between France and Britain within Europe. Thirdly, there was Western Europe’s withdrawal from the non-Western world. Post-war Western Europe was suffering from the loss of its colonies. After 1956, this withdrawal was symbolised by the French-British debacle in the Suez Crisis. Suez represented the fall of what had once been European empires. Lastly, there were the journeys that the people of Italy, Belgium and Luxembourg had undertaken on the road to greater European integration within the framework of their cultural affinities with the Franco-German tandem. In the 1970s and 1980s, the Spanish, Greeks and Portuguese had embarked on similar journeys. Like their predecessors, these medium-sized and smaller Western European

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powers regularly acquired positions of trust in Bonn and/or Paris, often completely independent of the political colour of their governments. In the margins of the conversation between Bush and Kohl, something else also became clear. One of the founders of European integration had adopted an exceptional and mistrustful position: the Netherlands. How was that to be explained? Why did Kohl coordinate his position on the EMU with Belgium, Luxembourg, Italy (especially via Paris) and Spain and not with the Netherlands? How did the Netherlands end up so far out in the periphery of European developments? Why did the Netherlands actually embark in 1950 on its journey towards increasingly far-reaching European integration? Its cultural similarities with the other partners were not so self-evident. Was it purely a matter of calculation? Why had The Hague abandoned its British friends of free trade in the 1950s in favour of largely Catholic partners from Mediterranean and semi-Mediterranean Europe? How could this decision be explained? How was it taken and maintained? Was the Netherlands fully aware of what it was getting itself into in 1950? All things considered, the Scandinavian countries – with which in many respects the Netherlands had much more in common than with Belgium, Luxembourg and Italy – stayed outside Franco-German Europe and remained with both feet in the British camp, a pattern that was repeated in the EMU and the euro. Switzerland, the country of Calvin and haute finance, had also taken the well-considered decision to stay outside Europe. So why not the Netherlands? Why had the Dutch – with their much more Anglo-Saxon, Atlantic orientation – allowed themselves to be encapsulated in continental Europe? How disruptive or misleading had the Cold War been? Why did the Netherlands set off on its own journey to the continent in 1950? Before the Second World War, the famous Dutch historian Johan Huizinga described the Netherlands as having ‘its sights set on the sea, and even beyond the sea’ and as a nation in which ‘the centre of gravity of its national existence is hardly located in the country itself, but much more in a virtual point in the sea’. 40 What interest does such a country have in continental Europe? How does the Netherlands of the post-war period fit into the process of European integration? What were the Dutch looking for in Europe? Only export markets and free trade? Was that not too little? In May 1962, the French Minister of Foreign Affairs, Maurice Couve de Murville, was asking himself the same questions. Shortly after the failure 40 Johan Huizinga, ‘Die Mittlerstellung der Niederlande zwischen West- und Mitteleuropa’, Grundfragen der Internationalen Politik, Heft 5 (Leipzig, Berlin: B.G. Teubner, 1933), p. 5.

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of France’s plans for more intensive political consultations between the six EEC member states – which the Netherlands fiercely opposed – Couve de Murville told George Ball, his American counterpart on European affairs: The Netherlands was an island, in the same sense that the United Kingdom was an island. The Dutch had never been really interested in Europe; they have always been looking out over the waters at other areas of the world. As a consequence they had resisted the development of Europe at almost every point. The Dutch were, of course, in many ways, the best of partners in the Community since they were the most honest and the most steady. But they were not Europeans – at least they were not continental Europeans – as were the French and the Germans. 41

Why the Netherlands made this journey to the continent is the subject of this book. The account of that journey forms the core of the book and is presented in chapters 2 to 8. The preceding chapter (chapter one) outlines the pre-history and the international context within which the first initiatives towards European integration were taken. Chapter 9 resumes where this prologue stops, focusing on Dutch European policy in response to the issues of German unity and the end of the Cold War. After the events of 1989, following several decades of status quo, these issues were abruptly pushed back up to the top of the agenda. They also proved to give the latest project of European integration, the EMU, a massive boost. In the years following that historic period of the fall of the Wall, the end of the Cold War and the establishment of the EMU, the Netherlands was slowly but surely forced to face up to European reality – a reality that did not stand outside of itself but of which it was itself an integral part. The epilogue offers a first step towards reconstructing the long and difficult process of navigation and re-orientation in which the country still finds itself.

41 Couve de Murville quoted in Sebastian Reyn, Atlantis Lost: The American Experience with De Gaulle, 1958-1969 (Amsterdam: Amsterdam University Press, 2009), p. 414.

1

American concepts: Building Europe (1947-1949) Abstract Dutch ambitions for post-war Europe thrived within the wider goal of constructing a transatlantic free-trade zone in the wake of the establishment of the Bretton Woods system (1944). In the late 1940s, The Hague’s European and foreign policy focused on economic cooperation within the framework of the Organisation for European Economic Co-operation (OEEC), the multilateral organisation linked to the Marshall Plan. This transatlantic arena had been created after the launch of the Plan in 1947 by energetic American diplomacy strongly promoting European integration to tackle the German question in light of the unfolding Cold War. Keywords: Bretton Woods, Marshall Plan, Organisation for European Economic Co-operation (OEEC), European Payments Union, Cold War, American foreign policy

Harvard, 5 June 1947: in a speech, US Secretary of State George Marshall announces an extensive American plan for reconstruction in Europe. The plan implied a radical revision of the mission of the World Bank, established at the 1944 Bretton Woods Conference, to support European reconstruction financially. The new American engagement with Europe propagated by Marshall made the World Bank loans meaningless. In 1947, the total sum of these loans to Europe was less than half a million dollars, while the Marshall Plan pumped around four billion dollars into European reconstruction. As a result, the World Bank switched to its second mission – promoting the development of backward member countries – much earlier than expected.1 1 Michele Alacevich, ‘The World Bank’s early reflections on development: A development institution or a bank’, Centro Studi Luca D’Agliano Development Studies Working Papers, 122 (2007), pp. 1-2.

Segers, Mathieu, The Netherlands and European Integration, 1950 to Present. Amsterdam, Amsterdam University Press 2020 doi: 10.5117/9789463728133_ch01

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The Netherl ands and European Integr ation, 1950 to Present

But these seemed to be multilateral side issues; the main issue was a change of course in American foreign policy. Marshall’s message was clear: the United States was offering a massive aid programme but the Europeans had to take responsibility for implementing it. Reconstruction was ‘the business of the Europeans’. It soon became clear that the Soviet Union would reject Marshall Aid. Washington had anticipated this response; the aid programme was an American instrument in the rapidly escalating Cold War. What was disappointing, however, albeit not unexpected, was that all Central and Eastern European countries followed the Soviet example. From that moment on, ‘Europe’ for the Americans meant Western Europe. And what they asked for in return for Marshall Aid and the recovery programme was ‘European integration’.2 But why did they want Europe to be more integrated? And what did they believe that should entail? During the Potsdam Conference in the summer of 1945, it had become clear that a peace treaty with and regarding Germany could not be achieved for some time. The differences of opinion between the Western Allies on the one side and the Soviet Union on the other were too fundamental. As a result, the decision taken by the Allies at the Yalta Conference in February 1945 to divide Germany into four occupation zones remained in place. The same applied to the agreement that each occupying power represented the highest authority in its own zone, which boiled down to a right of veto in all matters of policy concerning the whole of Germany. That essentially prevented the development of a policy for Germany as a whole. Thus, the provisional ‘Yalta order’ continued, also after the unconditional capitulation of the German Reich on 8 May 1945. This divided Germany and Europe into two.3 On 1 January 1947, the American and the British occupation zones merged to form the Bizone, which the French zone would later also join. For the United States, this situation meant that cooperation with the Soviet Union, initially anticipated by Washington, rapidly became increasingly unlikely and impossible. The American position towards Europe needed to be reviewed, and thinking soon moved in a new direction. The prevailing view in Washington was that, in any case, a customs union needed to be created in Western Europe to promote free trade. This was the overriding objective that the 2 Geir Lundestad, ‘Empire’ by integration: The United States and European integration, 1945-1997 (Oxford: Oxford University Press, 1998), p. 6. 3 Dokumente zur Deutschlandpolitik, II. Series, Vol. 1, Die Konferenz von Potsdam (Neuwied, Frankfurt: Albert Metzner, 1992), pp. 2289-96 and 2312-13; William Smyser, From Yalta to Berlin: The Cold War Struggle over Germany (New York: St. Martin’s Griffin, 1999), pp. 10-17.

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United States strove to achieve with Marshall Aid, as that was the only way to stimulate production and growth, eradicate the acute dollar shortages, and promote cooperation and unity against the Communist danger and the threat from the Soviet Union. But it did not solve the most glaring problem in Europe: how to deal with the question of Germany and its provisional status in the Yalta agreement? At an interdepartmental meeting in August 1947, Charles ‘Chip’ Bohlen – one of Marshall’s chief advisors – formulated a new perspective that would become prominent in America’s European policy. He turned things around: the question of Germany was not an occupation issue but a European matter. In Bohlen’s words, ‘the three Western zones should be regarded not as part of Germany but as part of Western Europe’. This offered greater opportunities for America’s European policy for two reasons. First, the German threat could be neutralised by enclosing it in a larger, Western European context. Second, this would make it easier to drive the Western European economy forward. As ‘part of Western Europe’, the potential of the Western German economy could be better mobilised for reconstruction, which was of vital importance for Western Europe. The situation, it was claimed, should therefore not be viewed from the perspective of a divided Germany but from that of a unified Western Europe! It was now a priority to establish a West-German state to make that unity in Western Europe possible and to support it politically and, above all, economically. That meant a radical shift in America’s European policy. From the end of 1947, Washington embraced a new post-war mission: ‘building Europe’. 4 The original American idea was that European unity had to be enforced by free trade. To achieve this, the Organisation for European Economic Cooperation (OEEC) was established. Setting up the OEEC was the condition that the American Congress attached to Marshall Aid, and it opened its doors in the spring of 1948.5 It did not, however, function as had been intended. Rather than having an ‘integrating effect’, OEEC consultations increased economic tensions within the Western bloc, painfully emphasising national differences within Western Europe. The conflicting interests between Western Europe and the United States also became unmistakably clear, as did the divisive monetary forces at work between the dollar trading area, the sterling zone 4 Marc Trachtenberg, A Constructed Peace: The Making of the European Settlement 1945-1963 (Princeton: Princeton University Press, 1999), pp. 63-65. 5 Robert Lieshout, De organisatie van de West-Europese samenwerking: Een voortdurende strijd om de macht (Bussum: Coutinho, 2004), p. 60.

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and continental Western Europe, where ideas for a customs union based on a ‘small’ continental Europe became increasingly concrete. In no time, all American intentions ran into a brick wall of resistance from Britain, because of its preference for more globally oriented arrangements, and from France, which wanted similar arrangements in continental Europe. In 1949, the OEEC was relieved of its formal responsibility to allocate funds for the recovery programme. This signified the de facto end of the organisation only a year after its establishment.6 In the years that followed, post-war history unfolded differently than the United States had anticipated. It was not the establishment of the OEEC but that of the Federal Republic of Germany (FRG; West Germany) that would prove crucial for the institutionalisation of post-war Western European cooperation. As a result, Western European cooperation would take shape in different ways than had been expected. After the conference of the Western occupying powers and the Benelux countries in London in the spring of 1948, the Soviet Union no longer attended the meetings of the Allied Control Council (ACC), the body in which the Allies held futile meetings on a common policy for the whole of Germany. The reason for this was clear: in London, the six Western countries had confirmed that the Western occupation zones would fall completely under the Marshall Plan. Moreover, they had stated that they would set up a provisional federal government for the joint Western occupation zones. These agreements formed the foundation for the Frankfurter Dokumente – the first blueprints for West Germany – which were presented on 1 July 1948. Two months later, the Parliamentary Council started drafting the Grundgesetz. This was to become the constitutional basis for the provisional state that West Germany was to become, as the peace treaty with and regarding Germany was not in place, nor would it be in the near future. The Grundgesetz was adopted in May 1949 by the Länder and the Western occupying powers. In September, the first free elections were held in West Germany.7 More than anything else, the Weststaatsgründung of West Germany formed the foundation underlying the process of European integration that would take an unprecedented leap forward a few months later (see chapter 2). The fact that the foundation and development of the Federal 6 Alan S. Milward, The Reconstruction of Western Europe 1945-51 (London: Methuen & Co., 1984), pp. 466-70. 7 Mathieu Segers, Tussen verzoening and verval: De nationale standpuntbepaling van de Bondsrepubliek Duitsland gedurende de beraadslagingen and onderhandelingen over de Verdragen van Rome, dissertation Radboud University Nijmegen (2006), pp. 35-36.

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Republic of Germany in many respects formed the core of the European integration process often receives insufficient attention today, let alone that it was recognised (or could be recognised) in Washington in 1949/50. There, the Americans they were mainly concerned with shaping the practicalities of American engagement with Western Europe. Their active role in Western Europe confronted the Americans with a complex and fundamental question of foreign policy. At the end of the 1940s, it became increasingly clear that the responsibility for reconstruction in Western Europe that the US had taken on would not be over in a short time. On the contrary, it probably meant the start of a long-term relationship with Western Europe. That forced Washington to take part in an unknown world of international organisations, multilateral dynamics and regional partnerships – a world in which the American attitude of ‘get up and go’ often had completely different effects than expected. Time and time again, it became clear that the US had little or no grip on the cooperation between Western European countries, not to mention power to direct it. It sometimes drove policymakers in Washington crazy or to despair, or both. It presented them with policy issues that called for a clear perspective on the future of Europe. The more the implementation of the Marshall Plan and the European recovery programme progressed, the more that new policy issues came to the fore. What should the next step be? Should the Marshall Plan be seen as the first step in a long road towards European unification, sponsored by the US? Or was the Plan ultimately little more than cement for the Cold War alliance currently being established via the North Atlantic Treaty Organization (NATO)? Could those two scenarios perhaps be combined in some way in other initiatives, more radical than the OEEC? A transatlantic community, perhaps? Or were such future scenarios simply wishful thinking? Was it, after all, not a first requirement that any American engagement must remain temporary? But, if that were true, how could the task the Americans had set themselves of ‘building Europe’ be any more than a quick fix in response to international circumstances? Contrary to what is often claimed today, in Washington they had no idea how to answer these questions. But one thing was clear. In the end, the answers to all these questions depended on how one interpreted a question of a different, higher order than the problem of Western Europe: the Cold War. How long would this phenomenon, which seemed to be holding international politics in an increasingly tight grip, persist? What would come after it? Here, too, understandably, the Americans had no clear idea of how to answer these questions. But, from

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the summer of 1949, policy debates on the follow-up to the Marshall Plan became increasingly urgent and analyses more detailed. The conceptual discussion was focused mainly in and around the State Department’s Bureau of European Affairs. The BEA was the focal point of European expertise in Washington. In 1949, these advisers were searching hard for an ‘idea for Europe’ that would work, something that their superiors could hold on to in the daily practice of America’s European policy. That proved no easy task. The BEA may have embraced the recovery programme shortly after it was launched and assessed it as an adequate instrument to promote peace, stability and prosperity in Europe, but that was about as far as clarity of thinking went. And especially now that the OEEC was on such thin ice, there was much disagreement among Europe experts in Washington on the follow-up and on America’s European policy in the medium to long term. All of the leading figures had different ideas. Sometimes these differences were only on details, but more often than not they were based on fundamental differences of understanding and insight. That can clearly be seen from a written exchange of views between BEA staff members George Kennan and Chip Bohlen in October 1949:8 Bohlen:

The French [..] feel that while we are still giving lip-service to […] the general unification of Europe, in reality, we are as a matter of basic policy envisaging future developments more along the line of Anglo-American partnership, with the continent […] as a sort of junior partner.

Bohlen had reached this conclusion in response to the coordinated American-Canadian-British action to address the UK’s acute f inancial problems caused by the dollar drain. British imports from the US were disproportionately higher than British exports to America, leading to a dangerous decrease in British dollar reserves. The Americans, Canadians and British had negotiated a rescue deal within the framework of the Anglo-American ‘special economic relationship’. When the British abruptly decided early in September to devalue the pound, there were follow-up measures, which were also carefully coordinated between the three countries. This state of affairs led to raised eyebrows in Paris. The 8 The written conversation that follows is based on quotes from the George Kennan Papers (Princeton University Library) as reproduced in Kenneth Weisbrode, The Atlantic Century: Four Generations of Extraordinary Diplomats Who Forged America’s Vital Alliance with Europe (Cambridge MA: Da Capo, 2009), pp. 94-97.

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Anglo-Saxon tête-à-tête caused irritation in France, and this was what Bohlen was concerned about. Bohlen:

I can only tell you my strong conviction that if it becomes evident that we are creating an Anglo-American-Canadian bloc as a political reality in our European policy we will not be able to hold on to the nations of Western Europe very long.

Kennan did not agree with Bohlen. He rejected the latter’s concerns as nonsense and insinuated that Bohlen, who had partly been educated in France, was a Francophile. He tried to make the situation more concrete by countering with a question of his own. Kennan:

Would the French prefer to have the British dollar drain progress more rapidly than it is progressing? Do they think that the continent has something to gain from the blows which are going to fall on the entire non-communist world within the coming months from the disintegration of the British financial system? […] This sort of suggestion leaves me with a feeling of hopelessness.

Kennan’s return question was oversimplified. The American recession of 1949 had plunged the UK into a balance-of-payments crisis. The dollar drain put sterling under heavy pressure, and the reserves in the sterling zone were at risk. This was an unacceptable state of affairs for London. The British had already threatened to withdraw completely into the sterling zone, which was a nightmare scenario for the Americans and had made a profound impression in Washington. If the British followed up on their threat, it would split the West into two: a hard currency zone led by the US and a soft currency zone led by the UK. And that would severely undermine the Americans’ position in the Cold War. The message the British were sending out was unmistakable: the UK’s foreign policy was focused on the world and not on Europe. In more concrete terms, London was not afraid to go against America’s European initiatives. From an American perspective, this had two far-reaching implications. First, Washington had to give up all hope of the UK emerging as the driver of European integration. Second, the abrupt and drastic devaluation of the pound (by 30 per cent), which London had decided upon shortly after making its withdrawal threat, forced the US to initiate the above-mentioned coordinated action to save the British pound in the form of special dollar guarantees given shape within the framework of the European Payments

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Union (EPU). This system of payment and credit provision had been set up by the Europeans themselves alongside the failing OEEC to restore currency convertibility in Western Europe but was financed with American money. All in all, Britain’s actions exacerbated more problems than the US cared for. It made it clear to the whole world that the West could be divided, and that may not have been such an unrealistic future scenario, given the widely diverging economic interests within the Western bloc. That continental Western Europe – unlike the United Kingdom – experienced no serious fallout from the American recession of 1949 was the next omen of impending disaster. Intra-European trade made the continent less vulnerable to external turbulence than the global exposure that the United Kingdom and its waning empire were having to cope with. The wagons of the continental economies were hooked up to the German motor – now being kick-started – in the Rhineland, the heart of European industry. The impressive economic recovery of West Germany led to a rise in German imports, giving an enormous boost to neighbouring economies, often at the expense of the United Kingdom.9 This was what Bohlen was concerned about: the centrifugal forces on both sides of the Channel. He focused not on the policy solutions suggested by Kennan in response to the acute problems experienced by the pound but on the political repercussions. He feared a possible split in Western Europe between the United Kingdom on the one hand and the continent on the other, which could well be the unintended consequence of America’s resolute policy, despite the best of intentions for itself and for Europe, such as the coordinated action to save the pound. Bohlen was therefore simply warning his colleagues about the counterproductive political effects of a policy which, in American eyes, may have seemed completely rational but could prove short-sighted in the reality of complex European relations. The difference of opinion between Bohlen and Kennan had little to do with the overarching policy objective being pursued. They were both in agreement about that: peace, stability and prosperity in Western Europe were crucial to the security of the United States. They also agreed that European integration should be an integral part of America’s European policy after the Marshall Plan. After all, America had explicitly demanded European integration in exchange for the recovery programme, and with good reason. What they disagreed on was how that could best be achieved and what form European integration should take. According to Bohlen, the situation called not only for radically new insights but also for radically new policy. In other words, America needed 9 Milward, The Reconstruction, pp. 473-74 and 488.

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something completely different from its traditional European policy, which was largely marked by keeping its distance, and which in reality lay at the basis of the OEEC, an organisation in which the US exercised enormous influence but of which it was not a member. What Bohlen feared was that rashly encouraging European integration would weaken the position of the United Kingdom in Western Europe. He was concerned not only about the French but also about keeping the UK on board. If that did not succeed, it could in time lead to what Bohlen called ‘desolidarization of the UK from the continent’, something that was very undesirable for obvious reasons. Bohlen:

There is not enough potential economic and military strength on the continent alone to counter-balance in the future the power of a revived Western Germany and certainly not of a revived and unified Germany.

Bohlen’s conclusion was clear: the assumption that ‘feasible European integration’ would be possible without maximum British participation was an illusion – and a dangerous one at that. To move beyond that illusion, European relations needed to be fundamentally recast, but that was impossible without the active and long-term intervention of the United States. In short, not only intra-European relations but also American-European relations would need to be reviewed with a view to greater mutual solidarity. Only then could the US secure its vital interests in Europe. That could not be achieved through NATO alone. On this point, Bohlen had identified the core of the problem. What the discussion on the follow-up to the recovery programme boiled down to was that one brain-addling question: what would come after the Cold War? What reality would emerge after the temporary ‘order of Yalta’? How should the United States and Western Europe prepare for the day that would inevitably come? This turn in their discussion touched a sensitive nerve with Kennan who, like Bohlen, seemed preoccupied by this major question. Now that Bohlen had ventured to pose it – in the context of the desired scale and nature of American intervention in European integration – Kennan also seemed full of concerns, but for different reasons. Kennan:

The US is someday going to end up in a cruel dilemma with respect to the complex of Russia, Germany and Western Europe […] I am afraid that what you are recommending […] will tie our hands for the future in ways that we may bitterly regret.

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Kennan fell back on principles. His standpoint touched on the traditional doctrine of American foreign policy, according to which the US had already crossed a line by taking part in NATO. NATO was exactly the kind of ‘foreign entanglement’ against which the founding fathers had so insistently warned the nation.10 According to Kennan, the US should not expand the traditional boundaries of its foreign policy any further in pursuit of Western European unity. The active commitment to Western Europe that Bohlen was calling for was, in Kennan’s eyes, a threat to American interests in the medium to long term. Kennan implied that it could be a fatal error to discard America’s traditional aims to solve the German problem, which was in principle a European and not an American concern. Moreover, the provisional nature of the order of Yalta should force the US to look ahead, beyond the temporary reality of the Cold War. Kennan spoke intentionally of ‘Russia’ rather than the Soviet Union. With an eye to the future, the US should keep its options as open as possible. After all, if the history of European relations was characterised by one recurring phenomenon, it was incredible changes in alliances. What if old Russia were to abandon its obsession with Communism? What if Germany were to be reunited? How far would the US have compromised itself by following an active reunification policy in Western Europe based on a divided Germany – the policy that Bohlen and others were promoting with increasing passion? Kennan thought there was a good chance of the answer to that question proving very detrimental to Washington. In his view, Bohlen’s course was a completely inadequate way of preparing for that unavoidable moment when a united Germany and Russia would once again be the great powers they had once been, and therefore potentially each other’s allies and enemies of the United States, the United Kingdom and France in a new and unpredictable multipolar world. There could be no doubt about the consequences underlying Kennan’s comment: American engagement in Western Europe should go no further than NATO.11 In the confusion of tensions between the BEA and the other American government bodies concerned with the future of Europe, one central faultline developed: on the one side were classic realists like Kennan who were opposed to active intervention in European integration and therefore saw the Atlantic alliance as the end point of American involvement in Western Europe, and on the other side were supporters of integration, like 10 Stanley Hoffmann, ‘US-European relations: Past and future’, International Affairs, 79, 5 (2003): 1029-30. 11 Compare Trachtenberg, A Constructed Peace, pp. 104-105.

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Bohlen, who considered it essential for America’s position in the world that it actively took on the economic and political responsibility to realise European integration. This faultline would become central to all future debates and negotiations on European integration – not only in Washington but also in Western Europe, and later within the EEC, the EC and the EU. And it would also inspire many differences of opinion in the member states and candidate member states of these organisations.

Eternal division From the end of the 1940s, two things became immutably fixed in stone within the Western bloc. The first was the reason for pursuing the Cold War: the need for Western unity against the Communist threat from the Soviet Union. Secondly, and closely linked to the first, was the need for the resolute reconstruction (and, not much later, rearmament) of West Germany. The country’s potential was simply indispensable in the West’s fight against its Cold War adversaries. In 1949, there was relative agreement in Washington about the need for rehabilitation and reconstruction in West Germany, and also increasingly among the elite in Western European capitals. That did not apply at all, however, to the way in which this was to be achieved in practice, i.e. economically, and in terms of treaty law and security policy. Those practical challenges drove viewpoints apart, forging deep differences of opinion about the form and geographical scale of future European integration. That disagreement often congealed into irreconcilable rifts between Atlanticists and Europeans. The discussion between Kennan and Bohlen also ran aground on these divisions. That was not necessarily an unfruitful or coincidental outcome. The division also brought a kind of clarity. It may have been the only way to create some sort of order in the tangle of four intertwined issues: (1) the German question, (2) the temporary (or indeed, more lasting) nature of Russia’s Soviet obsessions, (3) the finite nature of the Cold War and the order of Yalta and, flowing from that, (4) the slumbering rivalry between European integration and the transatlantic alliance. Everything was related to everything else, making this complex of issues unfathomable. The burning need for simplification, if only for the sake of political translation and democratic legitimation of foreign policy, led to a fixation with the fourth issue, for the reasons outlined below. Although the four issues formed a single clump of intertwined problems that could actually only be adequately analysed and addressed together, something else very quickly occurred. As the discussion between Bohlen and

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Kennan showed, it was necessary to take a position on the first three issues to be able to do so on the fourth, which was about the institutional design of Western and Western European unity. But, because of their controversial nature, the first three issues – the German question, the Soviet question and the durability of the Cold War – were avoided. This was even more tempting because, the longer the Cold War lasted, the more entrenched the division of Germany became. No matter how provisional it was, the order of Yalta – and the classical solution to the German question inherent within it (the division of the German-speaking peoples) – became an increasingly formal and mental feature of post-war international relations and therefore acquired a progressively permanent character. The bipolar template of the Cold War quickly became the unchallenged analytical framework for international relations and for legitimising foreign policy. The consequence of this situation was that the answers to the first three issues were predetermined by the reality of the Cold War. The German question was solved by dividing the country and tying West Germany to the United States and Western Europe. Russia’s Soviet obsession was no longer considered to be something that might be temporary but as permanent, and that meant that the order of Yalta defined not only the reality of the present but also of the future. In summary, the world would be split into two into the distant future, and Europe and Germany would remain divided. The template of bipolarity proved an effective instrument to order and clarify the new post-war world and its future. The Cold War defined the Western bloc and its anti-Communist nature and provided a solution to the Germany problem. In this way, the first three questions were unravelled from the original clump of four and were answered on the basis of the assumption that the Cold War would last forever. In all three cases, solutions that extended beyond pragmatic adaptation to the temporary circumstances of Cold War were no longer considered. Thinking about alternatives – and thus about the past and the future – therefore quickly evaporated. The Western world lived very much in the present. And that present could be completely defined in terms of the new phenomenon of the Cold War. This was comfortable and manageable because it reduced uncertainty and unpredictability. The fourth question, however, caused a lot of inconvenience. The latent tension between Western European cooperation and the Atlantic alliance may have derived from the first three issues, but it could not be solved with the rhetoric of the external threat: it was an internal Western problem. That meant that discussing the shape of European and/or transatlantic cooperation could lead to bringing the whole clump of four issues back to

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the table, in all its unmanageability. After all, any discussion of European integration and/or transatlantic partnership meant irrevocably limiting the options that the West would have at its disposal the moment the Cold War came to an end. And that was exactly what Kennan had warned about in his discussion with Bohlen. As the Cold War persisted, however, such discussions increasingly had more disadvantages than advantages for Washington and for the West. Their whole foreign policy strategy was more and more explicitly focused on the status quo of the Cold War (and thus not on its – or the Yalta order’s – temporary nature). That made it, in many ways, attractive to no longer problematise the prevailing situation. The core question therefore changed to how to ensure that the whole clump of problems did not find their way back to the negotiating table in the aftermath of Marshall Aid. The answer to that question was as simple as it was effective. The approach had to be reversed: the West had to put the assumption of an eternal Cold War first, then the rest would follow. In European policy within the Western bloc, the central question became how to design European and transatlantic integration given the international reality of the Cold War. In this way, detached from the clump of issues described above, this internal debate on institutional design helped consolidate the absolute nature of the order of Yalta, also in the eyes of the public. The central aim was to achieve West German reconstruction by tying the country to the multilateral organisations of Western and Western European cooperation. Through rehabilitation of West Germany, the country’s potential could be used in the fight against Communism and the Soviet Union, while containing the threat of a strong Germany, also in the future. Tying the Federal Republic to the West thus brought two advantages: material benefits and sustainable control of the German threat. The debate on how to shape European integration quickly shifted from Washington to Western Europe, partly because the Americans wanted it that way, bringing the ‘Atlantic-European’ faultline with it. Europeans proved to be just like Americans: it would not take long for the differences between Atlanticists and pro-Europeans in Western Europe to expand, with conflicting methods of achieving integration. In post-war Western Europe, ‘Atlantic versus European’ would regularly be seen as synonymous with ‘intergovernmental versus supranational’. And that dichotomy, in turn, was irrevocably intertwined with the equally simple division between the (transatlantic) ‘widening’ and (continental) ‘deepening’ of European integration. These stylised categories would fuel many bitter confrontations between Western Europeans on the shape and scope of European integration

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– confrontations that endure to this day. And it would all too often prove to be the case that Bohlen, with his warning about the ‘desolidarization of the UK from the continent’, had hit the nail on the head. But, as mentioned above, fundamental debates about this, such as the discussion between Bohlen and Kennan, soon disappeared into the background. After the outbreak of the Korean War in June 1950, the world in Washington became considerably simpler. The war was seen as a new and unambiguous confirmation of the urgent need to form a bloc in the West, including the rearmament of Germany. In the eyes of the Truman administration in the US, German rearmament had to take place within the context of NATO.12 There was no time to split hairs on what form that should take. Forming a united front against the Soviet Union and its ‘military build-up’ now justified a wide range of means. America’s perspective changed rapidly in the direction of pragmatism: European integration had to happen because West German rehabilitation had to happen in order to enable West Germany to be rearmed.13 The form that European integration took was less important, as long as it served to strengthen Western European cooperation and thereby the Western bloc. The essence of America’s European policy became above all progressive: to achieve more European integration as soon as possible. The major discussions about how to achieve that did not diminish but did become less important.14 Circumstances demanded that short-term interests related to realpolitik in what had become a heated Cold War – and in which the US had now lost it nuclear lead – be given priority. This all meant that the big question ‘What will happen after the Cold War?’ was firmly put on hold. The implicit answer was crystal clear. After the Cold War came nothing at all. That made the world more manageable and policymaking a lot easier. But it was, to a significant degree, also far from the truth. The ruminatinons about what would happen after the Cold War and the division of Germany in Europe did not stop at all. On the contrary, in Bonn, Paris and London, it remained at the top of the agenda, but usually behind the scenes of daily political reality. In other words, it was a matter of diplomacy. So the big question had not gone away. It would mainly find its way into the public eye at times when the problem of Germany was once more in the news, such as during the Berlin Crisis of 1961 or in the autumn of 1989 (see chapter 5, the prologue and chapter 9). However, as long as the 12 Department of State, Foreign Relations of the United States (FRUS), 1951, III (Washington: Government Printing Office, 1981), pp. 760-62; Lundestad, ‘Empire’, pp. 43-44. 13 Trachtenberg, A Constructed Peace, pp. 99-103. 14 Compare Weisbrode, The Atlantic Century, pp. 114-16.

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answer at these moments of crisis could again be found in the division into two of Germany, Europe and the world, the big question could still be pushed into the background. That situation would only become untenable if one or the other side in the Cold War won or if the two superpowers brought their rivalry to an end. At the end of the 1940s, that moment seemed further away than ever.

2

Magical realism (1949-1951) Abstract On 9 May 1950, French Foreign Minister Robert Schuman proposed establishing a European Coal and Steel Community (ECSC). This bombshell of post-war European diplomacy came as a complete – and unpleasant – surprise for the Dutch government, but the Netherlands nevertheless felt it had to adapt. The harsh realities of economics and geography made it impossible to consider excluding the country from the continental market in the making. When it was formed, the ECSC largely confirmed Dutch fears. This first ‘European Community’ consisted of only six countries and was built around a predominantly Christian-Democratic (Roman Catholic) Franco-German axis. Moreover, it had strong inherent tendencies towards protectionism and hidden ambitions to form a ‘third power’ – characteristics that did not suit Dutch preferences at all. Keywords: Shuman Plan, European Coal and Steel Community (ECSC), Dutch reconstruction policy, Dutch foreign policy, Konrad Adenauer, Jean Monnet

In the Netherlands, meanwhile, people had other things on their minds than they had in Washington. The country had emerged severely damaged from the Second World War. Survival was the main priority – there was no space for anything else. Jan van den Brink, Minister of Economic Affairs in the Drees-Van Schaik government (1948-1951), summed up this ‘almost impossible challenge’ by saying: Our people are faced with a Herculean task, which they will have to perform almost with their bare hands: the reconstruction of a devastated and plundered land, a fundamental change in the political and economic relations with the Dutch East Indies, and absorbing a population growth that appears to be much greater than that experienced by any other Western European country.’

Segers, Mathieu, The Netherlands and European Integration, 1950 to Present. Amsterdam, Amsterdam University Press 2020 doi: 10.5117/9789463728133_ch02

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Regarding this last point, between 1946 and 1950, the birth rate in the Netherlands rose to almost 26 per 1,000 inhabitants. In Europe, the rate was higher only in Yugoslavia (28.3) and Poland (27.9); in Belgium, it was 17.3 and – allowing for the death rates in both countries – net population growth in the Netherlands during those years was 16.4 compared to 3.8 in Belgium. Thirty-three-year-old Jan van den Brink was a member of the Catholic People’s Party (KVP) and had also been Minister of Economic Affairs in the previous Beel government, a coalition of the KVP and the Dutch Labour Party (PvdA). The young minister was to become one of the architects of the post-war Netherlands. To tackle the problems facing the country, Van den Brink launched a strongly liberal industrialisation policy, the basic principles of which were laid down in his first memorandum on industrialisation in 1949. He presented his plans with little pomp and circumstance, hoping to avoid exhausting ideological bickering with proponents of the planned economy. He described the proposals as an ‘industrialisation plan’, nothing more than a framework for policy. That was an understatement. The task that Van den Brink had taken upon himself amounted to nothing less than a whole new perspective for the Netherlands – which was now without the Dutch East Indies (after Indonesia was granted independence). That meant making hard and fundamental choices, which required much more than just a ‘framework’. His approach to the job at hand was, in his own words, ‘above all, pragmatic’.1 That it was. But it also challenged national taboos by elevating the priority of a sound balance of payments and measures to combat structural unemployment (partly in light of the rapid population growth) above that of the Netherlands’ interests in the Indies, which had been so dominant in Dutch foreign policy since the end of the Second World War. And that was exactly what Van den Brink did. It was remarkable just how absent the ‘Indonesian question’ was in the memorandum. It was ignored completely, even its economic aspects. The substantial group of Dutch citizens repatriated from the colony were, for example, not mentioned at all in relation to the unemployment problem. Van den Brink’s memorandum marked a ‘sea change in thinking on Indonesia’, which The Hague now seemed forced to adopt under the pressure of f inancial need and international circumstances.2 But in reality, the 1 J.R.M. van den Brink, Zoeken naar een ‘heilstaat’: Opbouw, neergang and perspectief van de Nederlandse welvaartsstaat (Amsterdam: Elsevier, 1983), pp. 356, 441 and 451; Pieter Lieftinck, Pieter Lieftinck 1902-1989. Memoirs recorded by A. Bakker and M.M.P. van Lent (Utrecht, Antwerp: Veen, 1989), p. 115. 2 H. Baudet and M. Fennema, Het Nederlands belang bij Indië (Utrecht: Spectrum, 1983), pp. 12-13 and 217-18.

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Netherlands’ colonial empire, from which it had lived by producing and trading in rice, sugar, coffee and other commodities, had been a thing of the past since the German invasion of the Netherlands in 1940. The memorandum may not have been the first acknowledgment of this new reality, but it was probably the first explicit exercise in which the country reconciled itself to it. For the Netherlands, the world had changed fundamentally. It could no longer live off of and with the East Indies. That international reality drove the Netherlands inexorably back into Europe, where it had to learn to live off of and with its immediate geographical neighbours. Forging more alliances in the West and Western Europe, so emphatically delineated by the Cold War, seemed the best way to achieve that. The change in policy that required was not easy; it was difficult, especially psychologically, to let go of the colonial mentality.3

Putting the country’s mental stability to the test Van den Brink’s industrialisation memorandum fit in well with the trend towards greater international engagement that had already typified Dutch foreign policy before the war. This trend was especially evident in the signing of the Oslo agreements in 1930, which regulated tariffs between the Scandinavian countries, the Netherlands, Belgium and Luxembourg, and the 1932 Ouchy Convention on the lowering of tariffs between the Netherlands, Belgium and Luxembourg. After the German invasion, the Netherlands’ policy of neutrality was declared ‘stone-dead’ by Minister of Foreign Affairs Eelco van Kleffens. 4 After the war, the country’s political re-orientation towards Europe and the West was further consolidated by the signing of two agreements in 1948. That put the final seal on the end of the policy of neutrality. In March 1948, together with the UK, France, Belgium and Luxembourg, the Netherlands signed the Treaty of Brussels. The treaty’s formal aims were described as ‘collaboration in economic, social and cultural matters and for collective self-defence’ to enable the signatories to resist a revival 3 William Mallinson, From Neutrality to Commitment: Dutch Foreign Policy, NATO and European Integration (London, New York: Tauris, 2010), pp. 26-31; James Kennedy, Nieuw Babylon in aanbouw: Nederland in de jaren zestig (Amsterdam: Boom, 1995), p. 50 and further; compare Lieftinck, Pieter Lieftinck, pp. 152-53 and 171-72; ‘Beetje elan best belangrijk’, interview by Leonoor Kuijk with Edmund Wellenstein, Trouw, 10 January 2012. 4 Duco Hellema, Buitenlandse politiek van Nederland: De Nederlandse rol in de wereldpolitiek (Utrecht: Spectrum, 2006), p. 113.

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of aggression from Germany.5 But, against the background of the Communist takeover in Czechoslovakia, the treaty also – or perhaps, primarily – encapsulated Western Europe’s hopes for a transatlantic alliance. This ambition, shared fervently by the Netherlands, was fulfilled in April 1949 with the foundation of NATO. The second Western organisation that the Netherlands joined in 1948 was the Organisation for European Economic Cooperation (OEEC). In April of that year, the Netherlands signed the convention establishing the OEEC, the quid pro quo that Washington had demanded in return for Marshall Aid (see chapter 1). In the explanatory memorandum to the convention, the Dutch government stated – completely in line with the American viewpoint – that it was convinced that ‘besides the generous aid provided by the United States, resolute European cooperation is required for the success of the European Reconstruction Programme’.6 Van den Brink’s industrialisation policy seemed to tie in seamlessly with these developments. In 1950, it was so successful that all resistance evaporated.7 The link between the policy and the progress of reconstruction in the Netherlands was, however, less direct than it might seem at first sight. International factors were demonstrably of greater significance in Van den Brink’s success. In the first place, as in the case with France, Marshall Aid was essential to the Netherlands’ economic recovery. Secondly, when the British took the extreme step of devaluing the pound in September 1949, closely followed by the Scandinavian countries, the Netherlands had little choice but to follow suit. On 18 September, the guilder was devalued by 30 per cent against the dollar, which substantially improved the Netherlands’ competitive position, boosted exports and made the country more attractive for foreign investors, especially from the United States. And thirdly, there was the decision, initiated by the US and implemented in early September 1949, to completely liberalise imports into West Germany. That was by far the most important factor for the Dutch economy. It was a gift from heaven, all the more so because the American initiative also included an offer to the Netherlands to completely liberalise exports to Germany (with the exemption of fish, vegetables and Philips products).8 It was largely these 5 Lieshout, De organisatie, p. 65. 6 Annemarie van Heerikhuizen, Pioniers van een verenigd Europa: Bovennationaal denken in het Nederlandse parlement (1946-1951), dissertation, University of Amsterdam (1998), pp. 16-39. 7 Van den Brink, Zoeken, p. 445. 8 Richard Griff iths (ed.), The Netherlands and the Integration of Europe (Amsterdam: NEHA, 1990), pp. 9-17; Friso Wielenga, West-Duitsland: partner uit noodzaak. Nederland and

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three international developments that allowed Van den Brink’s policy to be successful but, all things considered, the Netherlands had negligible influence on any of them. On 7 September, the Dutch and West German governments signed a new trade agreement lifting the embargo between the Netherlands and the German hinterland. The trade embargo had partly been imposed because the occupying powers in the Bizone (see chapter 1) demanded that imports from Germany had to be paid in hard currency, i.e. dollars. The Netherlands had fought for many years against this measure, referred to as ‘the Chinese Wall’ by Director of Foreign Economic Affairs S.Th.J. Teppema. Now it had been knocked down in one fell swoop. The Netherlands was obliged only to purchase non-essentials from West Germany up to a value of 32 million dollars, but beyond that imports from Germany remained fully subject to quotas, while export from the Netherlands was liberalised. It was a golden deal and it gave the Dutch economy a spectacular boost. Within just a few months, West Germany was the largest importer of Dutch exports, the long-standing deficit on the balance of payments became a surplus of hundreds of millions of guilders, and transit trade (through the Netherlands to Germany) grew explosively. On 22 September 1948, Van den Brink had already discussed the future of Dutch-German trade in detail with economics professor Ludwig Erhard, who the Americans had parachuted into West German politics. Erhard was a declared supporter of the Freiburger Schule, a school of economic thought with which the Austrian Friedrich von Hayek was associated and which had been advocating an economic system somewhere between centralised planning and unbridled capitalism since the 1930s. When Van den Brink had met Erhard, the latter was the leading candidate to become Minister of Economic Affairs in a future West German government. During their meeting, Erhard had made an ‘outstanding impression’ on the Dutch minister. Like Van den Brink, he was a fervent supporter of the free market economy and as much free trade as possible. As pleasant as this meeting of minds was, no one on the Dutch side believed at the time that Dutch-German trade would be so rigorously liberalised only a year later, especially only two days after Erhard had been instated as Minister of Economic Affairs. According to Teppema, the ‘surprise’ of September 1949 was something that the Netherlands had ‘never dared to dream of’. It was so overwhelming that it ‘put the country’s mental stability severely to the de Bondsrepubliek 1949-1955 (Utrecht: Spectrum, 1989), pp. 235-36; Lieftinck, Pieter Lieftinck, pp. 172-73; Milward, The Reconstruction, pp. 469-70, 474 and 489.

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test’.9 That was understandable because, no matter how necessary and desirable it was to couple the Netherlands to West Germany economically, it had serious implications: the integration of the Dutch economy into that of the Federal Republic. That meant that the post-war Netherlands was focused predominantly on Germany. No matter how much energy was still devoted to what was now Indonesia, this was the new reality for the Netherlands in the post-war world. In 1946, The Economist had succinctly analysed how important the reconstruction of Germany was for the future of Europe, and of the Netherlands in particular, as follows: ‘The truth is that nothing can finally compensate continental Europe for the loss of its largest market, and the impact of this fact is likely to be felt by the Dutch sooner than by any other people.’ The growth of the port of Rotterdam, for example, was dependent on industrial development in the Ruhr.10 From September 1949 onwards, the ‘lost market’ in Germany was reactivated. After the first post-war years of scarcity and difficult recovery, it was easy to justify Dutch integration into the West German economy. But that was not the end of the story. This lucrative step had far-reaching consequences for foreign policy. The future of the Netherlands became much less Atlantic-oriented than had ever seemed possible. In other words, the irreversible change of course towards continental Europe had been made. In December 1949, the Drees-Van Schaik government resolutely rejected a British proposal for the Netherlands to join the sterling zone. The ‘centre of gravity’ of Dutch trade relations may have traditionally been ‘focused on the English’, as Minister of Finance Pieter Lieftinck described it, but the German-Dutch trade agreement had shifted it towards Germany: the Federal Republic had ‘taken over England’s role’. In The Hague, the realisation that this fixation with the market to the east of its borders meant that the Netherlands would in the future not be able to avoid following the Federal Republic relatively ‘slavishly’ sank in much more slowly than it was actually taking place in front of their eyes.11 That applied in particular in the field of foreign policy. Analyses of the fundamental change of course in that policy as a consequence of the Dutch-German trade agreement were largely absent or, in any case, not recorded in written form. The exception was one hefty volume, the Germany memorandum, which had been written in the spring 9 Wielenga, West-Duitsland, pp. 235-37; Walter Salzmann, Herstel, wederopbouw and Europese samenwerking (The Hague: Sdu, 1999), pp. 186-88; Segers, Tussen verzoening en verval, pp. 44-45. 10 Mallinson, From Neutrality to Commitment, pp. 12 and 16. 11 Lieftinck, Pieter Lieftinck, pp. 172-73.

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of 1949 – well before the September surprise – and which had since proved to be an increasingly reliable portrayal of the situation.

The Germany memorandum In the summer of 1949, Max Kohnstamm – ‘deputy for German affairs’ – was staying at his regular holiday address on the island of Schouwen in the Dutch province of Zeeland. Summers in the island’s natural surroundings were ‘long and delightful’, not to mention therapeutic. They gave Kohnstamm time to reflect, and he made good use of the opportunity. That summer, his thoughts were dominated by one thing: West Germany.12 That was not surprising, as Kohnstamm worked under government commissioner Max Hirschfeld, whose office was responsible for distributing Marshall Aid in the Netherlands. Administratively, it was accountable to the Ministry of Foreign Affairs, but in reality it operated very independently and had more of an ‘Economic Affairs culture’ than was to be found at the foreign ministry, which looked down with disdain on anything to do with the economy. Kohnstamm was appointed in 1948 to take care of policy on West Germany and was given a free hand by Hirschfeld, who had hired him on the advice of his right-hand man Ernst van der Beugel, a bosom friend of Kohnstamm. In the spring of 1949, Kohnstamm presented the first fruits of his work: the extensive ‘Memorandum on the allied and Dutch policies on West Germany’, which – excluding the appendices – amounted to more than 50 pages. In the paper, Kohnstamm elaborated on ideas that Hirschfeld had formulated earlier (in 1946) in a memorandum on Germany and which had since been lying on a shelf in The Hague. The main argument was that the German economy was indispensable to the recovery of not only Europe but also the Netherlands.13 After Hirschfeld had signed Kohnstamm’s document at the end of April and sent it to the government, it caused a stir in civil service circles in The Hague, and especially at the Ministry of Foreign Affairs. The ‘Germany memorandum’ contained far-reaching and controversial recommendations for the Netherlands’ foreign and European policy. According to the paper, 12 Anjo Harryvan and Jan van der Harst, Drs. Max Kohnstamm: Vraaggesprekken met Harryvan en Van der Harst 2001-2005 (not published), transcription 21 and 22 January 2002, pp. 15 and 19; Mathieu Segers, Diep Spel: De Europese dagboeken van Max Kohnstamm. September 1957-February 1963 (Amsterdam: Boom, 2011), p. 147. 13 Meindert Fennema and John Rhijnsburger, Dr. Hans Max Hirschfeld: Man van het grote geld (Amsterdam: Bert Bakker, 2007), p. 160.

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the Dutch government should focus strongly on West Germany. In more concrete terms, the Netherlands should actively help promote the German economy’s production potential and the opening of the German market. This could only be achieved by working closely with West Germany within the framework of Western European multilateralism. This advice met with fierce opposition within the apparatus of the civil service. Eelco van Kleffens, at that time the Dutch ambassador in Washington, warned against a strong focus on Germany. The head of the Dutch military mission to the Allied Control Council in Germany, Admiral J.M. de Booy, went a few steps further. In heated letters to Hirschfeld, he called the Germany memorandum ‘dangerous’ because it followed ‘the line of least resistance’ in a short-sighted (economic!) manner. It was short-sighted because this ‘line’ was founded on ‘the Netherlands’ geographical location and the economic development and especially the investments that we had, and still have, in Germany’. To De Booy, this was utterly banal. Such rashness, he said, represented ‘the greatest possible danger in determining our policy regarding Germany’. He made a plea for something completely different, calling for ‘the least possible economic dependence on Germany’ and working through the Benelux ‘to strengthen the position of England and its attractive and natural objectives for our policy’. The priority must be to ‘achieve the strongest possible position in relation to Germany’ because the Netherlands and the West ‘were faced with a […] dangerous German people whose mentality, history had shown, lay closer to the East than to the West’.14 No matter how fundamental and f ierce the criticism expressed by prominent figures in the corps diplomatique was, it lost its urgency after the Dutch-German trade agreement was signed in September. And, conversely, the trade agreement gave the ‘economic’ Germany memorandum the allure of superior realism. With hindsight, what was more logical than to focus on West Germany and advanced Western European (economic) cooperation, even though it was at the expense of traditions and values that had dominated Dutch foreign policy for at least the past century? Although these developments worked in favour of the memorandum, the battle was by no means over. The short but heated controversy following its presentation was only an overture that offered a glimpse into the wrangling that would become inherent in Dutch European policy in the decades that followed. It was an advance warning of the Dutch version of the struggle between 14 National Archives, The Hague (NA), 2.05.117, 22481-2, Van Kleffens to the ministry, 21 June 1956; De Booy to the ministry, 9 May and 6 June 1949.

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the Atlanticists and the Europeans (see chapter 1). In the Netherlands, that struggle was reinforced by what Teppema had described as ‘putting the country’s mental stability to the test’, and that test was far from over: in the Netherlands, it was only just beginning. The essence of the matter was that international realities and America’s actions had made the Netherlands ‘more German’ than ever, while the Dutch mentality remained both very Anglo-Saxon and Atlantic-oriented. The Germany memorandum was a first attempt to find a new balance. It started with an outline of the ‘historical development’ since the American intervention in the Second World War. According to the memorandum, two factors were prominent in that development. In the first place, the American viewpoint on the issue of how to deal with the German economy – which had, in many respects, been the engine behind two world wars – had ‘changed completely’. While the Americans had initially insisted on repressing any kind of economic development in Germany that went beyond the relieving of immediate hunger, they were now calling for the German economy to be stimulated. The background to that policy change was self-evident. After the bipolar ‘Yalta order’ started to have an impact on German reality, ‘the exchange of food from the East and industrial products from the West that had always occurred within Germany came almost to a standstill’. That forced the US and the UK to make ‘significant financial sacrifices’ to prevent serious starvation in the country, which in turn ‘forcefully contributed to a growing awareness of the importance of productivity in Germany’. Secondly, the devastation and impoverishment in Europe led to ‘a dire need for goods of all kinds’. In short, ‘the termination of production in Germany proved to have serious consequences for Europe as a whole’. In the course of 1947, the Americans and British therefore decided to increase maximum production levels substantially. That change in thinking opened the way to the Bizone and the provisional West German state. The memorandum’s main conclusion was that the circumstances that formed the backdrop to the German question were now completely different to those following the end of the First World War. The United States was now actively and constructively involved in the future of Western Europe and West Germany. An Atlantic Treaty had even recently been signed (establishing NATO), something ‘which Clemenceau and the French statesmen could never have imagined in their wildest dreams after the First World War’. Back in 1918, the American position was typified by isolationism and ‘France was never sure of the support of the Western allies in the face of an ever-stronger Germany’. Now there was the ‘fact’ of the Cold War. That made ‘a powerful and united Western Europe […] [indispensable]’ and meant

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that ‘a politically and economically weak Germany on this side of the Iron Curtain […] was a dangerous weak point for Western Europe’. There could be ‘no other conclusion’ than that ‘West-German territory would have to be integrated in the defence of Western Europe’. And there was an additional factor: due to the changing circumstances, ‘an independent threat to the West from Germany’ had become ‘very unlikely’. That had been replaced by the threat from the Soviet Union, and that called for ‘a positive policy focused on incorporating Germany into Western Europe’ – not least to avoid ‘the great danger […] of a newly strong Germany, with its political, military and economic power, allying with Russia’. From an economic perspective, too, developments pointed in the direction of reconciliation between Western Europe and West Germany. The Dutch situation exemplified this, as was clear from the figures presented in the memorandum: between 1930 and 1938, around 25% of Dutch imports came from Germany (not including trade with Dutch overseas territories), while some 19% of Dutch exports went in the other direction, around half of which constituted agricultural products. The disappearance of Germany as a producer and market after the Second World War caused serious problems for the Dutch economy. In the first place, Dutch needs had to be fulfilled elsewhere, which led to an increase in imports from the dollar zone from 189 million guilders in 1938 to 1,410 million guilders in 1947 and a rise in imports from England from 180 million to 452 million guilders in the same period. Beside the fact that this had exacerbated a dangerous increase in the deficit of dollars in Western Europe and the Netherlands, the traditional trade surplus with England was transformed into a deficit of 233 million guilders. There was an additional problem to these woes. Agricultural production, an important component of the Netherlands’ export package, could only be partially absorbed by the English market, while exporting these products to the dollar zone was considered ‘completely out of the question’. In economic terms, too, there therefore appeared to be only one possible conclusion: it was of vital importance for the Dutch economy for Germany to once again become a dynamic economy as quickly as possible in Western Europe, as both a producer and a market. And that applied not only to the Netherlands but to the entirety of Western European economies. These analyses pushed Kohnstamm and Hirschfeld’s Germany memorandum irrevocably towards the ‘only solution’ to the German problem: A future for Western Europe without West Germany [is] unthinkable. The danger of a Germany that turns against Western Europe – if not on its own, then as an ally of Russia – remains. If this were to materialise,

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Western Europe would no longer have a future. The only policy that offers any future prospects for Western Europe is one aimed at making Germany stronger and, at the same time, absorbing it into Western Europe. Thus is our objective clear.

The memorandum therefore became a passionate plea for the integration of West Germany into Western Europe and for an open Dutch attitude to its neighbour, with the aim of achieving equal treatment for the country within Western Europe as soon as possible. That was seen as essential for a stable system. It was therefore ‘extremely necessary’ to avoid ‘a “too little and too late” approach in tackling the German question’, even though people were ‘rightly afraid of making the international game once again a stage for German arrogance’. Normalising relations was the best choice, as ‘incorporating Germany in Western Europe by force’ was ‘impossible’. Security could therefore only be achieved by establishing ‘European organisations’ – and without delay. After all, the memorandum concluded, ‘the stronger Germany is, the more difficult the integration of Western Europe will be’.15 After reading the Germany memorandum, there could be no misunderstanding of what it advised: Western European integration was the only possible solution to the problem posed by Germany and was extremely urgent for the Netherlands and Western Europe. That was an ambitious message, especially as all the signs in the only existing organisation of Western European cooperation, the OEEC, were pointing in a different direction.

Atlantis and bloc formation within the Western bloc At the heart of the Netherlands’ policy of industrialisation was a liberal export doctrine which evolved to become the core of virtually the whole of the country’s post-war policies, especially its foreign and European policy. The government considered the liberalisation of trade and money transfers as ‘a precondition for the Netherlands’ survival’ and the ‘main condition for the success of its policy of industrialisation’.16 Internationally, however, there was still much work to be done. Trade in Europe was impeded by an accumulation of quantitative restrictions and high import tariffs. The former 15 NA, 2.05.117, 22481-2, Memorandum on the policy of the allies and the Netherlands on West Germany, 28 April 1949. 16 P.F. Maas (ed.), Het kabinet-Drees-Van Schaik: Liberalisatie and sociale ordening, 1948-1951. Parlementaire Geschiedenis van Nederland na 1945, deel 3A (Nijmegen: GNI, 1991), p. 364.

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were a consequence of the post-war currency shortages in many European countries, which hampered economic growth and exacerbated the dollar deficits. That was one reason why the American government had made dismantling these restrictions – horizontal liberalisation – a sine qua non for the provision of Marshall Aid. The Netherlands was a great supporter of the liberal American approach. But there was one problem. The Netherlands – like its other Benelux partners but in contrast to most other European countries – imposed low import tariffs, but because of this, international cooperation presented a threat. That is to say, if such cooperation were to be restricted to horizontal (general) liberalisation, it would place the Netherlands in a disadvantageous position compared to countries with higher import tariffs. The Hague therefore also lobbied for far-reaching vertical liberalisation (per sector) within the framework of the OEEC. This campaign would eventually result in 1950 in the Stikker Plan, named after the Dutch Minister of Foreign Affairs, the liberal Dirk Stikker (see later in this chapter). There was another reason the Netherlands wished to achieve sector-based liberalisation through the OEEC. As a result of the Cold War, the global ambitions of the Bretton Woods system had been adjusted radically. The attempt to expand the system beyond monetary regulation to embrace trade policy had failed; only the International Monetary Fund (IMF) remained as the system’s flagship. The establishment of a counterpart to the IMF to deal with trade policy had foundered after resistance from the US Congress, which was opposed to the protectionist exceptions included, at the insistence of developing countries, in the Havana Charter, the document establishing an International Trade Organisation (ITO) to oversee freer multilateral money transfers. Under pressure of public opinion, President Harry Truman had even decided not to submit the Havana Charter to Congress for ratification. The result was only a general agreement on the organisation of periodical tariff negotiations, the General Agreement on Tariffs and Trade (GATT), which came into force on 1 January 1948. The trade policy counterpart of Bretton Woods, which was to be the ITO, therefore never materialised; as a result, the Bretton Woods system became a halfway house. All this had significant consequences for the shape of future Western European and transatlantic cooperation. Although as yet, little was said about European integration, with the failure of the Havana Charter, the proponents of an Atlantic community had already suffered a decisive defeat in the struggle to determine the nature of that integration. The fact that it was the United States that had pulled the plug on the ITO was the writing on the wall. The dream of an Atlantic community in which the United

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States would work together with Western European countries on the basis of equality proved to be an illusion. The failure of the Havana Charter was quickly forgotten. Throughout the 1950s and 1960s, prominent ‘Atlanticists’ in Western Europe such as West German Minister of Economic Affairs Ludwig Erhard stubbornly refused to understand the full significance of the unsightly American writing on the wall of transatlantic cooperation and were certainly unwilling to face up to the consequences it implied. They simply held their ground. But was that realistic, given that the promised Atlantic community did not appear to have materialised in crucial areas? Not at all. In effect, it meant that they elected to formulate their policies within a hypothetical Atlantic community. Was that strange or naive? Perhaps neither, as little could stimulate the political imagination in Europe more than a post-war Atlantis together with the Americans. The hope and expectation that it invoked in so many ways, politically and culturally, were an inexhaustible source of inspiration for foreign policy and initiatives for international cooperation and coordination. And if there was one country that was (and would remain) hypersensitive to this tantalising Atlantic ideal, it was the post-war Netherlands – despite the fact that the unequal development of Western multilateralism and the limits of American engagement were abundantly clear: the IMF, but no ITO; NATO, but a tumultuously faltering OEEC from which Washington kept its distance. The OEEC did not fulfil American expectations in any way at all. In inter-European trade and money transfers, the system of bilateral drawing rights remained dominant (countries with a surplus on their balance of payments, like Belgium, provided financial support to countries with a deficit, for example by passing on Marshall Aid funds in the form of credits, on condition that the money would be used to buy imports from the donor country). Trade remained trapped in ‘the shackles of bilateralism’, and that was disadvantageous to the Netherlands. Escaping these shackles would probably require the ‘currency revaluation’ foreseen in the European Payments Union (see chapter 1), but that was not a realistic option for the time being. Above all, trade would first have to be liberalised. But how was the Netherlands to achieve that? According to Stikker, the most logical step was to work towards a ‘global solution’ that linked up with ‘constructive ideas to this effect’ in the UK. Yet, as Stikker was aware, the trend was in the opposite direction: ‘bloc formation’ within the West. Stikker argued that the Netherlands should not go along with this, if only because it was unclear ‘what form this bloc formation would

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take’ and especially ‘which bloc the Netherlands should join’.17 The latter was in fact not at all unclear: the bloc that the Netherlands should join was any bloc of which West Germany was a part. Stikker was either unable or unwilling to voice this reality, so he more or less swept it under the carpet: the Netherlands’ interest in liberalising trade was not a common Western European interest but one that the Dutch and German export economies shared. Ironically enough, for the United Kingdom – on which Stikker was setting his sights – liberalisation was a serious threat because it would place pressure on the pound as an international currency. Within the OEEC, the British were putting the brakes on with good reason.18 Nothing at all had come of the flying start to Western European multilateralism through the OEEC that many had envisaged. On the contrary, the organisation only highlighted the differences in national economic interests. Atlantis was not working. Did it in fact exist at all? Self-proclaimed Atlanticists like Erhard and Stikker found themselves compelled to inject a stiff dose of wishful thinking to retain their credibility. And that proved quite successful: public opinion was not interested in a cynical debunking of transatlantic integration. In the oppressive context of an intensifying Cold War and a persistent feeling of powerlessness in Europe, there were few lights on the horizon that twinkled brighter than the promise of Atlantic integration, and especially in Dutch eyes. Stikker helped this light burn even more brightly: at every opportunity, he liked to emphasise that the Netherlands’ natural place in the world was shoulder to shoulder with the Anglo-Saxon countries.19 The failure of the ITO and the bankruptcy of the OEEC could do nothing to change that. The Atlantic-oriented European policy that this engendered in the Netherlands bore a striking resemblance to a movement in Dutch literature that emerged in the same period, which built on existing movements in art in Europe: magical realism. Just like the Atlantic approach after the failed ratification of the Havana Charter, the magical realism of Simon Vestdijk, Johan Daisne and Hubert Lampo found its inspiration beyond everyday reality, in a higher dimension of that reality. At the root of magical realism was the fact that it showed something that was often within the realms of possibility but was not very probable. As a result of the failure of the ITO, the Netherlands’ foreign and European policy – which in essence aimed to replicate Van den Brink’s industrialisation policy in the international 17 NA, 2.0205.02, 371, REA, 17 August 1949, p. 5. 18 Salzmann, Herstel, pp. 162-63. 19 Mallinson, From Neutrality to Commitment, p. 52.

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arena – was also a perfect example of magical realism: it was not impossible, but it was very improbable. The Netherlands set its sights on a different (higher) dimension of Western multilateralism than that which existed in the daily practice of international politics. But this discrepancy remained unnoticed, which was also completely in line with literary magical realism. The disastrous ITO project represented a turning point in the Netherlands’ post-war foreign policy but was not recognised as such at the time. Although in reality, the Netherlands became definitively integrated into the West German economy, its foreign policy continued to be inspired by the hypothetical community of ‘Atlantic islands’ comprising the US, Canada, the UK and the Northwest European rump of the old continent: the Netherlands’ own Atlantis. It should be noted here that the successes attributed to Van den Brink’s industrialisation policy also made it difficult to identify this dichotomy and to address it in any detail. Nor did there seem any clear reason to be concerned about it. At first glance, the Netherlands’ policy seemed to tie in closely with developments relating to Western bloc formation; and that image remained strong, even though it was less in tune with reality than when the ITO was a realistic goal. It was in effect very clear by the end of the 1940s that the Dutch notion of Atlantis would only genuinely materialise in one organisation: NATO. Yet it was also clear from the start that NATO would be unable to fill the holes that had appeared in transatlantic multilateralism. NATO remained largely what had been described in the Washington Treaty, an old-fashioned agreement on mutual assistance and collective defence. It could and would never be a pivotal Atlantic organisation in the international arena. That was a bridge too far. The Americans did not need such an organisation, and the French did not want one. In Dutch eyes, however, NATO became the sole bearer of joint Western policy. Only there was there a shared Western policy which Western European alliances had to remain subordinate to. The implication was that Western European cooperation had to remain apolitical, and that became the undisputed bottom line of the Netherlands’ post-war foreign and European policies. This was seldom more clearly articulated than by Joseph Luns, Dutch Minister of Foreign Affairs from 1952 to1971, when he locked horns with French President Charles de Gaulle on the European Political Union (EPU) in the late 1950s and early 1960s (see chapter 5). This episode would also expose the magical realistic roots of the Netherlands’ doctrine, at least to its European partners. The Dutch themselves did not yet recognise these roots; in their eyes, there was no magic involved at all. A last and perhaps most salient aspect of the Netherlands’ magical realism is the discrepancy between American and Dutch support for Atlantic

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cooperation. Both were strongly normative and culturally determined, and thereby sometimes fanatical. There was, however, an important difference: the Dutch variant pursued an ideal, while the American perspective reflected its Cold War strategy so that it was in the first instance not idealistic but calculating and flexible. In practice this meant, for example, that the Americans often gave in to the capricious demands of the French, who were in many respects ‘anti-Atlantic’. At such moments, they would, in the interests of bloc formation in Western Europe, turn a deaf ear to the serious warnings of their Atlantic friends in the UK and the Netherlands leaving them in uncertainty and misunderstanding. As much as the Netherlands’ approach to Western European cooperation seemed at first glance to tie in with America’s engagement in Western Europe – free trade, the integration of Germany, embedding Western Europe in the Atlantic partnership – the congruence between the two often proved less than complete in practice. That would be a constant source of frustration, but not debate, in Dutch European policy. The political debate had in effect already been closed with the general approval of Van den Brink’s memorandum in Dutch parliament.20 From that moment, promoting the policy of liberalisation through Western multilateral ties became the guiding principle of the Netherlands’ foreign policy. The political discussions on the international aspects of that policy focused on the form in which cross-border money transfers and trade should be coordinated. Some, especially members of the Dutch Labour Party (PvdA), made a strong plea for setting up international bodies with far-reaching competences, but they were in a minority. The majority in parliament was in favour of international coordination but did not want it to be ‘imposed’ by a formal body. It was to be ‘the fruit of converging economic development in the countries concerned’.21 As far as the Netherlands was concerned, the economy came before politics. That viewpoint was brutally thwarted on 9 May 1950 by a press conference in Paris, which would render the Dutch Atlantis a sunken land once and for all. On that day, 9 May 1950, French Minister of Foreign Affairs Robert Schuman launched a plan to bring coal and steel production in France and Germany under the umbrella of a supranational ‘European’ institution, in which other Western European countries could also participate. What made the Schuman Plan radical was that the proposed European Coal and Steel Community (ECSC) would be supranational rather than intergovernmental 20 Baudet and Fennema, Het Nederlands belang, p. 13. 21 Maas, Het kabinet Drees-Van Schaik, p. 365.

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like the OEEC and as was customary in multilateral organisations. The Netherlands had taken no part at all in the preparations for what the Belgian newspaper La Relève described as ‘la bombe Schuman’ and was confronted with a fait accompli.22 The Schuman Plan had been conceived and drawn up by Jean Monnet. In 1950, Monnet had already enjoyed a long career in international cooperation. From 1919 to 1923, he had been Deputy Secretary General of the League of Nations, and in 1940 he had led the committee to coordinate joint mobilisation of French-British forces. During the war, he had worked for the British government on the elaboration of the American Victory Program and became a member of the Comité Français de Libération Nationale (1943-1944). In the latter body, he had acted as liaison for no one less than American President Roosevelt, from whom he received (but did not always follow up on) secret instructions directly. His intimate knowledge of the Anglo-Saxon world sometimes caused a few raised eyebrows, especially those of General de Gaulle, the leader of the ‘Free French’ and the first prime minister of post-war France. Nevertheless, it was de Gaulle who had appointed him to a key position after the war.23 From 1946, Monnet headed the Commissariat au plan, the influential and powerful unit within the French government apparatus charged with modernising the French economy, a crucial step if France was to once again play its role as a great power. However, Monnet had another, even greater mission than restoring French grandeur through economic means. He himself described it as ‘changing the existing order’ in Europe.24 And in his eyes, that could be achieved only by aiming at European integration, one step at a time, through economic cooperation between Western European states per sector. But that had to be anchored in supranational institutions. This was the core of the matter; this is where it was revolutionary. The ECSC was to be seen as the first crucial step towards a supranational community, through which Europe could wrest itself free from its tragic history. New supranational institutions would be the embodiment of that promise. The collective memory of peaceful and prof itable cooperation that could be built up in these alternative constitutional institutions would then work as an antidote to the fanatical nationalism that predominated in those other 22 ‘La bombe Schuman’, La Relève, 20 May 1950, p. 8. 23 François Duchêne, Jean Monnet: The First Statesman of Interdependence (New York, London: Norton, 1994), p. 103f. 24 Jean Monnet to René Pleven, 3 September 1950, Private archives of Max Kohnstamm (Fenffe), IISG (Amsterdam).

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institutions – the nation-states – and that repeatedly manifested itself in mutual mistrust, protectionism and cynical power politics. In that respect, the state of affairs in the OEEC spoke volumes. According to Monnet, therefore, the ECSC had to be the start of a process of far-reaching integration that would change Europe permanently and lead to reconciliation between its people and nations. This process was to be founded on mutual benefit in the sense of prosperity and stability – and to such an extent that could be attained only by community policies. The ECSC was to be the start of an institutional countermovement to state sovereignty because, as Monnet himself said, ‘nothing is possible without men, and nothing is lasting without institutions’.25 It was exactly for this reason that the institutions of the new Europe had to be supranational. Only then could the mutual mistrust deeply embedded in European relations through the absolutism of state sovereignty be sufficiently held in check. Monnet’s goal may have been ambitious and compelling, but the practical, step-by-step technocracy into which he succeeded in translating that vision and which formed the core of the Schuman Plan was not at all lacking in political realism. Unlike others in The Hague, Kohnstamm was enthusiastic. This was a magnificent and practical expression of the ideas that had dominated his thoughts since his holiday on Schouwen. After 9 May 1950, Kohnstamm – scarred by the horrors of the Second World War – became deeply convinced that Monnet’s initiatives were the only way ‘to make that “never again” into reality’ and to settle with the past once and for all. He became an ‘ardent European’.26 Yet few in The Hague responded in the same way as Kohnstamm. It was therefore no coincidence that his career at the Ministry of Foreign Affairs soon foundered and his relationship with the civil service would remain difficult for many years.27 In the mid-1950s, C.L.W. Fock, Secretary General for General Affairs and Prime Minister Willem Drees’ right-hand man, even warned the premier about Kohnstamm. This ‘European’, who had allied himself with Monnet, had to be considered capable of ‘ruining’ the Netherlands’ interests.28 25 Jean Monnet, Mémoires (Paris: Fayard, 1976), p. 447. 26 Correspondence between Max Kohnstamm and the author, Fenffe 18 January 2006; Harryvan and Van der Harst, Drs. Max Kohnstamm, transcription 21 and 22 January 2002, p. 19; Mathieu Segers, De Europese dagboeken van Max Kohnstamm: Augustus 1953 – September 1957 (1) (Amsterdam: Boom, 2008), pp. 7-10; Anjo Harryvan and Jan van der Harst, Max Kohnstamm: A European’s Life and Work (Baden-Baden: Nomos, 2011), p. 89. 27 Segers, De Europese dagboeken, p. 10. 28 NA, 2.03.01, 2848, Fock to the prime minister, 9 February 1957.

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Schuman’s press conference received a lukewarm welcome in The Hague. The Dutch government was not amused. The careful timing of its launch, however, ensured a positive reception by Western public opinion.29 But the preparations were kept strictly secret: only West German Chancellor Konrad Adenauer had been consulted about the plan in advance. The Netherlands of course supported greater economic integration in Europe, but the Schuman Plan clearly aimed to go much further. The supranational elements were completely new, and their consequences were difficult to predict. Stikker was ‘upset’ by the situation.30 How could such a radical initiative simply appear out of thin air? To answer that question, it was necessary to go back to mid-September 1949. Against the background of the efforts to save the pound, US Secretary of State Dean Acheson had already urged Schuman to show French leadership in the question of embedding West Germany in Western Europe. Acheson had made it clear to his French counterpart that he could count on support from Washington for any serious initiative to achieve that objective. In Schuman’s eyes, this meant that the US government had given him a ‘mandate’ to take action in Europe. The problem was that he had no idea of how to make the rehabilitation of Germany acceptable to his fellow politicians in France and to the French people. For that reason, he had initially decided to do nothing and wait.31 Acheson’s actions were inspired by the conviction that integration was first and foremost a Western European – and therefore not an American – affair. He also felt that, in light of the Cold War, there was no longer any time to waste in taking account of the doubts and problems of the United Kingdom. He described this all very succinctly and practically in an internal memorandum: ‘Recent trends suggest that the most likely tight grouping of the character we have in mind would be a continental union including France, Italy, Belgium, Western Germany and possibly the Netherlands’. This list of countries shows just how aware Washington was of the ‘island mentality’ of the Netherlands, which may have been located geographically on the continent but which had its sights set on the Atlantic. Acheson continued his argument with the same clarity: ‘We must insist that the UK not interfere with developments on the continent nor impede any other 29 NA, 2.05.117, 18603, Spierenburg to the minister, 29 May 1950. 30 Albert Kersten, ‘A Welcome Surprise? The Netherlands and the Schuman Plan Negotiations’, in Klaus Schwabe (ed.), Die Anfänge des Schuman-Plans 1950/51 (Baden-Baden: Nomos, 1988), p. 285. 31 Schwabe, Die Anfänge, p. 219.

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country’s joining a continental union or unions.’32 This was the moment that Atlantis was scuttled and the seed for bloc formation within Western Europe was sown.

The Netherlands taken by surprise In the autumn of 1949, Acheson stepped up the pressure on Schuman: France had to come up with a plan – now. On 30 October 1949, in a personal letter to Schuman, Acheson had used words that left little to the imagination: ‘Now is the time for French initiative and leadership of the type required to integrate the German Federal Republic promptly and decisively into Western Europe. Delay will seriously weaken the possibilities of success.’ In an instruction to the American embassy in France, he added: ‘this does represent our analysis of what is needed if Russian or German, or perhaps Russian-German domination, is to be avoided’ (clearly, Acheson’s actions were a continuation of the ‘Kennan line’, see chapter 1).33 Under increasing pressure from Washington, Schuman had gone looking beyond the walls of his own ministry on the Quai d’Orsay and had knocked on Monnet’s door. Monnet had an idea of how to break through the vicious circle described above and of the future German threat that was inherent to the recovery of West Germany. This led to his proposal to bring the French and German coal and steel industries under a joint organisation with its own supranational competences and in which France and Germany would be represented equally. Geopolitical considerations were hidden behind the technocracy. Supranational cooperation in the coal and steel industries would enable the former German war industry to be brought under control. In this way, the Federal Republic – and its enormous economic potential – could be tied to Western Europe (and France) for the long term. After reading the elaboration of this idea by Monnet and his staff, Schuman concluded that it was the plan that would enable him to put into practice the mandate that Americans had imposed on him. He then did what was necessary. Through Bernard Clappier, his cabinet chief and a close acquaintance of Monnet, he by-passed his own ministry. After that, he gave a somewhat vague presentation of the proposal during the cabinet meeting of 9 May 1950. That was enough to obtain the approval of the government, 32 Quoted in Schwabe, Die Anfänge, pp. 218, n. 23. 33 FRUS 1949, IV (1975), Acheson to the ambassador in France, 19 October 1949, pp. 469-472; Schwabe, Die Anfänge, p. 219.

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after which he immediately announced the plan to the outside world at the press conference. The exact details of the plan, which Schuman had not revealed at the cabinet meeting, were there for all to read in the media.34 The French minister had pulled off a magnificent piece of tactical manoeuvring to sidestep the widespread scepticism in his country and ensure the most forceful possible entrée for the plan of Monnet. But that was not all. Parallel to his machinations at home, Schuman had done something else to prepare for the launch of his plan. On 7 May, two days before the presentation – and therefore before the discussion of the plan in the French cabinet meeting (!) – he sent the detailed plan to his fellow Christian Democrat and West German Chancellor Adenauer. It was accompanied by a personal letter in which Schuman emphasised the political aspects relating to the practical character of the plan. ‘Europe’ could only be achieved if concrete steps were first taken to create ‘de facto solidarity’. That meant ‘eliminating’ the age-old tensions between France and Germany. Schuman was not exactly careful in his explanation of the plan. The system that he proposed would change economic relations between France and Germany ‘completely’ and ‘focus them definitively on peaceful cooperation’. At the same time, that same system would lay ‘the practical foundations’ for ‘an economic European organism, accessible to all countries in favour of a regime of liberty and aware of their solidarity’.35 Adenauer replied a day later. Without wasting words, he welcomed Schuman’s plan as ‘a decisive step towards a partnership between Germany and France and therefore to a new order in Europe, based on peaceful cooperation’. In a personal note, he thanked Schuman sincerely for his ‘gute Nachricht’, good news. Adenauer also assured him that he was convinced that West German public opinion would give the plan a positive reception.36 He was to be proved right. The Netherlands knew nothing of the entire American-French-German foreplay preceding the launch of the Schuman Plan. The first inkling that Dutch diplomatic circles had of the situation did not come until 24 May – two weeks after the plan had been launched – when Monnet spoke to Dutch delegate Dirk Spierenburg in confidence about the background to the plan. During the same conversation, he pointed out that the Atlantic alternative of intergovernmental sector-based liberalisation, as advocated by Dutch 34 Lieshout, De organisatie, pp. 82-83. 35 Politisches Archiv Auswärtiges Amt, Berlin (PAAA), B20, Vol. 20, Schuman to Adenauer, 7 May 1950. 36 Konrad Adenauer, Briefe 1949-1951 (Berlin: Siedler, 1985), pp. 208-9.

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minister Dirk Stikker within the OEEC, had no chance of success (see later in this section).37 Besides being an international political tour de force of the first order, the Schuman Plan – and the treaty negotiations on the ECSC that it gave rise to – also represented an impressive encounter between two veteran statesmen, Schuman and Adenauer, who originated from the same region. Schuman spoke good German. He had been born in Luxembourg, grew up in Lorraine when it was a state in the German Empire, studied law in Bonn and served in the German army in the First World War. After that war, Alsace-Lorraine became part of France and Schuman became a French citizen. Adenauer, who came from the Rhineland, was a former mayor of Cologne. After the Second World War, as leader of the Christian Democratic Union (CDU) in the British zone of occupation, his political star rose rapidly and in 1949, at 73 years of age, he became the first chancellor of the Federal Republic of Germany. Schuman and Adenauer found common ground in the core principles of what the latter referred to as the ‘Wesen des Abendländische Christentums’ (values of Western Christianity): individual freedom, democracy and social cohesion. They both believed that the individual should stand at the centre of the post-war future of Europe and that this could only be achieved through democracy. To ensure that this lasted, it had to be Christian democracy so that the state and the market would serve the individual and not vice versa, as had happened all too often in the inter-war years. Human rights were, after all, a Christian concept, according to Schuman.38 Adenauer agreed completely. He also agreed with Schuman that Christian values must form the basis of a new Europe, a Europe that could also offer the stability required for the future of West Germany. That was in the first instance a regional concern, as the essential first step was, in Adenauer’s words, ‘German-French cooperation and solidarity’. Shortly after the war, he had already tried to revive an old plan for a French-Belgian-German Rhine-Ruhr state, which he had proposed earlier in the crisis year of 1923, when he was mayor of Cologne. Then, it had been too early. At that time, many had seen it as obscure Rhineland separatism. For the British occupying authorities, it was reason to relieve this ‘born intriguer’, who they saw as ‘dangerous’, of his position as mayor of Cologne.39 But his views had not changed when 37 NA, 2.05.104, 18603, Spierenburg to the minister, 29 May 1950. 38 Alan Milward, The European Rescue of the Nation-State (London: Routledge, 1994), p. 328. 39 Charles Williams, Adenauer: The Father of the New Germany (London: Little Brown, 2000), p. 294; Henning Köhler, Adenauer: Eine politische Biografie (Frankfurt, Berlin: Propyläen, 1994), p. 15; H. Blankenhorn, Verständnis und Verständigung (Frankfurt: Propyläen, 1980), p. 43.

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he received Schuman’s ‘good news’ a few years later. Adenauer was still convinced that a regional grouping in continental Western Europe, which he called the ‘United States of Europe’, was the best guarantee of security and stability in the continent and ‘the great hope’ for Germany – and for Europe. 40 For the wider public in Western Europe, the Schuman Plan offered a new and hopeful solution to the persistent German question. For France, it marked a radical turnaround in its European policy which had until then been focused on dismantling Germany’s potential, especially in the Ruhr and Rhineland. In the early post-war years, however, that traditional French policy had proved largely futile and little suited to the needs of an exhausted Western Europe. Nor did it align with the American vision of the future of Europe. For the US, the launch of the Schuman Plan was a relief: after the debacle of the OEEC, the Europeans finally seemed to be making progress with cooperation and bloc formation, including the rehabilitation of West Germany which was necessary for the country’s rearmament, in its turn crucial in light of the Cold War. For the Netherlands, its economic dependency on West Germany left it little choice: The Hague had to join in. Consequently, in line with the wider international response, Minister van den Brink expressed his ‘sympathy’ for the plan in parliament. 41 Nevertheless, the Schuman Plan did pose important economic questions for the Netherlands. How did the proposed supranational integration affect Dutch economic interests, including those of the private sector? How much national policy autonomy would be left, for example in determining wages and prices? Was it acceptable to give up that autonomy? What did supranational integration mean for the position of smaller participants like the Netherlands? And what were the political consequences of European integration based on a French initiative for the Netherlands’ position? What if integration were limited to the continent, around a Franco-German axis, and the United Kingdom were to remain outside as a classic counterbalance to overly ambitious French and German plans (which history shows have always jeopardised security in the Low Countries)? How should the Netherlands react? Under the pressure of the circumstances, the Netherlands followed two tracks. In the first place, efforts were made to discover what the Schuman Plan exactly entailed, as it had still not been fully elaborated on many points. Second, The Hague stepped up its lobbying of already existing Dutch 40 Konrad Adenauer, Erinnerungen 1945-1953 (Stuttgart: DVA, 1963). 41 NA, 2.02.05.02, 394, Cabinet meeting, 15 May 1950, p. 7.

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initiatives for far-reaching Western European cooperation on trade in a broader framework than the restrictive Rhineland Europe. Clearly, the Netherlands was refusing to write off the OEEC. In mid-May, the civil service in The Hague was still struggling to determine exactly what the plan would mean. A memo initialled by Kohnstamm underscored the striking resemblance between the Schuman Plan and the core conclusion of the Germany memorandum he had penned the previous spring: Drawing the only correct conclusion, the Schuman Plan aims to bring about integration, which is the only way to avert the German threat, as quickly as possible. From a political point of view, this cannot be applauded enough […]. The success of this policy is also of eminent importance for the Netherlands.

Yet Kohnstamm, too, had to admit that it was still a matter of guesswork ‘what motives had moved the French to make this proposal’. 42 An analysis that circulated later that year in the British Foreign Office made no bones about France’s motives. The British had rapidly decided not to take part in the Schuman Plan and had drawn clear conclusions about France’s reasons and the feasibility of the whole venture on which ‘the Six’ (France, West Germany, Italy, Belgium, the Netherlands and Luxembourg) had embarked when the negotiations on the ECSC started in Paris in June. According to the British, the background to the whole undertaking was childishly simple. It was a French attempt to form a bloc so that Germany’s recovery could be exploited to save ailing French industry from destruction (and, at the same time, cut off the UK from that life-saving injection). Given that reality, in pro-British eyes, there could be little doubt about the plan’s feasibility: The six participating countries have completely different systems and views, partly free, partly fixed prices, partly socialised and partly free undertakings, completely different currencies, etc., so that conditions for a union to this extent are not present. The Monnet Plan has proceeded hitherto, in practice, on the basis that Germany should pay. 43

Although similar ideas slumbered in the bosom of the Dutch government, in the spring of 1950 The Hague was not yet ready to draw such conclusions. They first had to be brought up to speed by Schuman and Monnet. This 42 NA, 2.05.117, 18603, Het Plan Schuman (Memorandum), 19 May 1950. 43 UK National Archives, Kew, Foreign Office, 371, Memorandum 1950.

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occurred in a series of conversations, one of which took place on 24 May when the French duo received the ministers from the Benelux. For the Dutch delegates, this meeting was certainly not a pleasure. They concluded that the institutional consequences ‘had not been sufficiently thought through’ and that the participating countries had been asked ‘to completely surrender their sovereignty in the coal and steel industries’ to a High Authority that was answerable to no one and could have a direct influence on wage and price policies. And then there was the British question, in relation to which Schuman and Monnet had clearly stated that they ‘very much hoped that England would take part in these discussions, but […] that, if England declared that it was not prepared to do so, the plan should go ahead without them’. Because Monnet had explained that the institutional structure ‘had intentionally not been worked out in detail, so that it could be freely discussed’, Stikker stated, on returning from the ministerial council, that ‘the Netherlands would in principle take part in this plan’ but would remain alert as to the institutional side of the matter. On this basis, the government was able to approve his proposals.44 On the second track, the Netherlands took a decidedly more pro-active stance. Within the OEEC, it presented the Stikker Plan as an alternative to the Schuman Plan. Stikker’s plan contained proposals for sector-based liberalisation in the OEEC zone (thus including the UK), accompanied by a flanking policy to compensate for the temporary problems this would cause, such as frictional unemployment and short-term capital loss. These proposals had actually been under preparation in The Hague for some time and predated the launch of the Schuman Plan. However, when Stikker presented his detailed proposals for sector-based liberalisation within the OEEC at the beginning of June, it was clear that such purely intergovernmental integration had already been superseded.45 Stikker’s initiative paled in the face of the bold supranational structure of the Schuman Plan. The Netherlands had to accept that fact; Monnet had made as much unmistakably clear to Spierenburg in their conversation on 24 May, explaining just how actively and unequivocally the Americans were supporting the Schuman Plan. The Netherlands now had to reconcile itself to a new reality in Europe in which the Schuman Plan, at least for the time being, was all-decisive. This was certainly no easy task. The Dutch government was strongly divided about the plan. Sceptics like Prime Minister Willem Drees and Minister of Finance Piet Lieftinck (both of the PvdA), who had initially rejected it, stood 44 NA, 2.05.104, 18603, Spierenburg to the minister, 29 May 1950; compare NA, 2.02.05.02, 394, Cabinet meeting, 22 May 1950. 45 NA, 2.02.05.02, 572, Cabinet meeting, 7 June 1950.

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in direct opposition to the Ministers of Economic Affairs and Agriculture, Jan van den Brink and Sicco Mansholt (also PvdA), who welcomed the French initiative.46 The liberal Stikker found himself between these two camps. He had gradually come to realise that the plan should be seen as a ‘necessary evil’ if Germany were to be embedded in Europe. The instruction given to the delegation that was in the meantime negotiating on the ECSC treaty was dominated by fear; fear that, by participating in the ECSC, the Netherlands stood on the threshold of a ‘little Europe’ dominated by France and Germany, protectionist and not very ‘Atlantic’. Moreover, there were serious practical concerns about the supranational aspects of integration, which could have a disadvantageous impact on the Netherlands’ reconstruction policy. The Dutch government was afraid that the harmonisation of wages and prices ‘upwards’ (i.e. to Belgian and French levels) would make it impossible to continue its own policy of low wages, thereby weakening the Netherlands’ competitive position as a modern, export-oriented industrial state. 47 During the treaty negotiations, in its efforts to restrict the competences of the supranational High Authority of the ECSC, the Netherlands found a partner in Belgium. The two neighbours fought together for the establishment of an intergovernmental Council of Ministers and the possibility of appealing against decisions by the High Authority. The Belgian-Dutch campaign was eventually successful, and a Council of Ministers was incorporated within the institutional structure of the ECSC as a decision-making counterweight to the supranational High Authority. That was, however, as far as BelgianDutch cooperation went in the negotiations. The economic interests of the two countries were too diverse for them to devise a genuine joint standpoint that might enable them to exert greater influence on the course of the talks. Belgium was traditionally a steel exporter with high wages and prices, while the Netherlands, though building up its own competitive steel industry, was an importer of steel and had a consistent policy of wage restraint. Belgium, which had emerged from the Second World War much stronger, had concerns that were diametrically opposed to those of the Netherlands; it was afraid of a race to the bottom in terms of wages and prices. 48 46 Anjo Harryvan, Jan van der Harst and Sandra van Voorst, Voor Nederland and Europa: Politici and ambtenaren over het Nederlandse Europabeleid and de Europese integratie, 1945-1975 (Amsterdam: Boom, 2001), p. 268. 47 Kersten, ‘A Welcome Surprise?’, pp. 287-291; Hellema, Buitenlandse politiek, p. 153. 48 Skander Nasra and Mathieu Segers, ‘Tussen argwaan and pragmatisme: Belgisch-Nederlandse relaties and de Europese integratie, 1949-1969’ in Duco Hellema, Rik Coolsaet and Bart Stol (eds.), Nederland-België: De Belgisch-Nederlandse betrekkingen vanaf 1940 (Amsterdam: Boom, 2011), pp. 109-14.

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Under Monnet’s impassioned leadership, the complex negotiations on the ECSC treaty regularly proceeded in a rather unorthodox fashion. But they continued to make progress, and the atmosphere was often one of solidarity and a feeling of joint responsibility for the success of this revolutionary project. On 18 April 1951, the participating countries – including the Netherlands – signed the treaty establishing the European Coal and Steel Community. A little over a year later, this first ‘European Community’ started operating. Its objectives focused particularly on two areas. It aimed to establish a common market for coal and steel and to harmonise and improve the working conditions and living standards of coal and steel workers. The ECSC granted credit to coal and steel producers to invest and guaranteed supply by regulating prices (by establishing maximum and minimum prices on the common market). The community also introduced a flanking social policy for miners and steel workers, including retraining programmes and allowances relating to benefits and pre-pensions. High Authority decisions on these matters had to be applied directly in the coal and steel sectors in the member states. The ECSC was concerned with more than just the economy – at least that was the intention. In theory, the common market (in which there was a ban on discrimination enforced by the High Authority) was an instrument to achieve an optimal division of production and maximum productivity. At the same time, employment had to be safeguarded and disruptions in the national economies of the member states had to be avoided. This soon proved far from simple, and much of the ECSC’s concrete policy had yet to be formulated. In addition, sensitive issues – such as price-setting within the common market and the decartelisation of the West German GEORG (Gemeinschaftsorganisation Ruhrkohle, an institution for the buying and selling of coal from the Ruhr-area) – led to fierce clashes of interest between the member states. This made it more difficult for the Community to function, and it regularly became bogged down in laborious decision-making and bureaucracy. Less than a year after moving to Luxembourg, where the High Authority was located, Kohnstamm – who had made his way up to the position of First Secretary of the High Authority (under Monnet’s presidency) – was forced to conclude to his regret that ‘he never got around to the political work’ and that his secretariat had increasingly degenerated into becoming ‘a large clockwork machine producing a continual stream of data and documents’. 49 49 Segers, De Europese dagboeken (1), pp. 29-34 and 57.

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Manufacturing a tranquillizer After signing the ECSC treaty, the Dutch government was primarily relieved that the supranational nature of the organisation had been successfully diluted. The Council of Ministers seemed an effective guarantee against too much intervention by the High Authority in national socioeconomic policy and ensured that the member states could keep a firm hold on the ECSC. For Prime Minister Drees, the inclusion of the Council of Ministers in the treaty was an ‘absolute necessity’ for approval of and participation in the Community (Lieftinck, however, could not be convinced and ended up voting against participation in the ECSC in the cabinet; see chapter 3).50 Yet this intergovernmental guarantee was perhaps not the most essential consideration for the Netherlands. Dutch participation in the ECSC also represented a further step in the revisionist course followed by the Netherlands in the post-war period. This course had been initiated by the signing of the Treaty of Brussels and the country joining the OEEC and NATO. And it was no small step. The UK had not followed suit. The Netherlands’ latest international partnership was a regional continental European organisation. That caused constant friction between the revisionist consequences of geographical-economic realism and policies based on the consistent pursuit of the traditional objectives of Dutch foreign policy. This paradox fuelled even more bickering between the ‘Atlanticists’ and the ‘Europeans’ and continued to be a ticking time bomb under the Netherlands’ European policy. No efforts were made to solve it, if only because it also reflected the fundamental nature of the pillarised and decentralised unitary state firmly wedged between the North Sea and Rhineland. Amsterdam and The Hague – the cities of financial capital and international law – were globally oriented, while the thriving industry in Rotterdam pulsated to the rhythm of the Ruhr, and the provinces along the country’s eastern border had always looked (and continued to look) towards Germany. In any case, for a long time yet, there was neither the need nor the opportunity for a searching analysis of the Netherlands’ role and position in Europe. Reconstruction had priority. Moreover, the reorientation towards Western Europe and West Germany was not controversial in a practical economic sense, enjoyed broad political support, and tied in perfectly with the Cold War bloc formation in the West. These circumstances bolstered

50 Harryvan, Van der Harst and Van Voorst, Voor Nederland and Europa, p. 269.

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Van den Brink’s elaborate pragmatism so that it quickly acquired the allure of well-thought-out and rational policy. From 1949, the success of reconstruction had the Dutch polders shining in the sunlight again, as brightly as after a heavy summer shower. But the bright light of recovery also had a blinding effect and obscured important aspects of the international context in which it unfolded. That context shone considerably less brightly. The post-war Netherlands – which, after having experienced the independence of Belgium in 1830-1839, now had to take its leave of the East Indies – was perhaps more than ever at the mercy of international politics. The forces of the Cold War were much too powerful for the small country on the North Sea. Furthermore, it was forced to cast its lot in with the old continent, where it had to deal with troubled and headstrong Western European powers over which it had no control or influence but with which it had to cooperate in a way that it had never had to do before. It was not strange that this decline in the Netherlands’ position in the world tended to be ignored or forgotten and the international context portrayed with a certain degree of impressionism.51 That resulted in a distorted view, as it was precisely in the international context that more of the causes of the economic cloudbursts were to be found than within the Netherlands’ own borders. In reality, it was a confluence of international circumstances that was the driving force behind the country’s reconstruction, including Marshall Aid, the devaluation of the guilder and the US-driven Dutch-German trade agreement. National policy was of less importance or simply followed these external drivers. The same circumstances drove the country along the profitable path of economic integration with West Germany. The Netherlands had little choice but, because it is irresistible for politicians and civil servants to maintain the pretence of pursuing rational, self-controlled policy – and especially when it is handed to them on a plate – these international circumstances were often not mentioned. That had two consequences in The Hague specifically and more generally in the Netherlands. Firstly, there was no debate on the radical reformulation of foreign policy that international reality had imposed on the country: the end of the colonial empire, the end of its policy of neutrality and/or independence in international affairs, and the shift in Dutch European policy towards the continent. Secondly, the government primarily tried to explain the multilateral developments within the Western bloc in terms of consistency with the Netherlands’ traditional position in the world and the global or Atlantic-oriented policy 51 Compare Kennedy, Nieuw Babylon, p. 50 and further.

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that this implied, while that very policy was becoming obsolete in many areas. Anything that did not fit with that picture was ignored; and that was a great deal, especially when it came to the structure of multilateralism in Western Europe. In the early years after the Second World War, the Netherlands set off along a path that would lead to the heart of continental Europe, a place where the country had never been. Perhaps this occurred without anyone really being aware of it. In any case, it certainly took place without the Netherlands itself taking the initiative. Either way, the fact that the Netherlands had irrevocably embarked on this journey through membership of the ECSC became a delicate issue that was either ignored or covered up with the logic of pragmatism. This veneer created a parallel domestic political reality, dominated by the belief that the Netherlands was in charge of choosing its own position in Europe and the world. That The Hague had been completely taken unawares by the Schuman Plan remained a well-kept secret. The historic decision to set up the ECSC with ‘the Six’ was, as far as possible, reduced to a non-event. In line with that image, the Netherlands preferred to adopt a sceptical and detached attitude. That resulted in an apparently ultra-rational standpoint on European integration. Integration had to be preceded by economic convergence: in that order and not the other way around. This rationalism was, however, to a large extent an illusion. In reality, the Netherlands had decided to go along with Schuman, Monnet and Adenauer, who clearly had a preference for integration before economic convergence: they had set their sights on a ‘political Europe’. At the same time, like-minded nations in Western Europe – such as the Scandinavian countries and the UK – had chosen different paths to the Netherlands, and using arguments that were all too familiar in the Netherlands (fear of a loss of policy autonomy and being subject to Franco-German domination, unwillingness to harmonise their social and economic policies). How could the Netherlands come to terms with this? While its mental stability was put severely to the test by the European political choices it had to make in 1949-50, the country was also preoccupied with two other issues: the drama in the East Indies and the resounding success of reconstruction. Europe was lost somewhere between the two. The way in which the decision to take part in the ECSC was taken looked very much like the way in which The Hague had taken the steps that preceded it. This decision, too, was justified on pragmatic grounds and taken without a great deal of fuss. The political aspects were as much as possible covered up by technocratic nit-picking.

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In this way, the Netherlands gave itself a tranquilizer. It was an effective medicine in helping the country to live with its shattered Atlantic ideals, its aversion to its increasingly continental future, and its inability to understand the clinical Cold War realism that ultimately proved time and time again to dominate the American attitude to Western Europe, and at the expense of international law.52 The tranquillizer proved to be addictive.

52 Compare Wielenga, West-Duitsland, p. 274.

3

The Beyen Plan (1951-1954) Abstract The rapid expansion of European integration after 1950 triggered lasting existential unease in The Hague, fuelling fierce Dutch revisionism. Alliance-building with supporters of Atlantic free trade remained a priority, and swift British (and Scandinavian) accession to the ‘Small Europe’ of the Six was seen as essential. The Dutch government had therefore been very sceptical about the proposed European Defence Community (EDC); after this failed in 1954, Dutch policymakers feared new negotiations for a relance européenne would strengthen Small Europe and its built-in traditions of politicisation and dirigisme. Ironically, the Common Market – proposed by Dutch Foreign Minister Johan Willem Beyen, and eventually enormously profitable for the Dutch export economy – was considered a ruse when it was presented in the Hague. Keywords: European Defence Community (EDC), Korean War, Deutsch­ landvertrag, Beyen Plan, Dutch European politics under Willem Drees, Common Market

Minister of Finance Pieter Lieftinck had voted against the Netherlands participating in the European Coal and Steel Community (ECSC) in the cabinet in 1950. He was afraid: ‘Afraid that real economic cooperation would require much greater coordination of policy’ than he ‘considered attainable’ and ‘afraid that France and Germany in particular would impose their mark on Europe and we would simply have to go along with them’. He would have preferred cooperation only on trade policy; in his view, that had ‘fewer disadvantages than an economic union’. Prime Minister Willem Drees shared Lieftinck’s fears and analysis, but his hands were tied – in the first place by the results achieved under the chairmanship of Jean Monnet in the talks on the ECSC treaty in Paris but also by the less negative standpoint of Foreign Minister Dirk Stikker and the support for the ECSC among other key members of his cabinet, including Agriculture Minister Sicco Mansholt

Segers, Mathieu, The Netherlands and European Integration, 1950 to Present. Amsterdam, Amsterdam University Press 2020 doi: 10.5117/9789463728133_ch03

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and Economics Minister Jan van den Brink, both of whom had the support of the Lower House of Parliament. As a minister, Lieftinck had done in the cabinet what Drees could not – vote against participation in the ECSC. Like Lieftinck, however, Drees had largely left European matters to others in the cabinet. This meant that these PvdA heavyweights were certainly not ‘at the forefront’ when it came to Europe.1

The letter from ‘the Ten’ The position taken by Drees and Lieftinck led to turmoil in the PvdA. On 11 October 1951, ten mainly young members of the party gave their frustrations free rein in a letter to the party leadership. They did not mince their words, stating that: lack of insight and imagination have increasingly left us – and will continue to do so – at the mercy of an unpractical reticence, driven by intuitive conservatism, in the daily practice of politics, to the shame of our party and to the shame of our country in the community of free peoples.

The members of the group were not politicians. They were all representatives of the intellectual vanguard of the party. Six of them were young civil servants closely involved in politics: four from the Ministry of Foreign Affairs (Director of International Affairs Conny Patijn, his Head of Political Affairs Jan Meijer and the two friends mentioned earlier, Director for the Western Hemisphere Ernst van der Beugel and Head of the Germany Office Max Kohnstamm) and two from Mansholt’s ministry (Director of International Affairs Jaap van der Lee and Head of Legislation and Legal Affairs Ivo Samkalden). The other four were Piet Sanders, a lawyer from Schiedam and formerly a member of the personal staff of Wim Schermerhorn (the first post-war prime minister), chief editor of daily newspaper Het Parool Peter Koets, and two leading figures from the Central Statistics Office (CBS) – Director of Statistics Flip Idenburg and General Director Jan Tinbergen. According to the authors of the letter, the main issue that urgently called for a victory over ‘intuitive conservatism’ and was therefore ‘ripe’ for a ‘clear statement from the party’ was European integration.2 The Netherlands 1 Lieftinck, Pieter Lieftinck, pp. 172-73. 2 NA, 2.21.302 (Archive C.L. Patijn), I(7), Letter to PvdA party leadership, 11 October 1951.

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may have signed the ECSC treaty on 18 April but, in The Hague of the Drees government, it seemed more like a necessary evil than a historic opportunity. That was regrettable, and the political apathy it led to was damaging for the Netherlands’ international credibility. This had been clearly illustrated by the curious response of the Dutch government to a second plan for European integration, the European Defence Community (EDC), launched a few months after the Schuman Plan by French Prime Minister René Pleven. While participating in the negotiations on the ECSC, the Netherlands had rejected an invitation to explore – with the same partners – the possibilities for setting up the EDC. What was the EDC all about, and why had the Dutch government decided not to take part in it? The invasion of South Korea by Communist North Korea on 25 June 1950 was the direct cause of this second integration initiative from Paris. The invasion was seen in the West as a direct provocation by the Russians and the Chinese. Parallels were also drawn with East and West Germany. Western governments increased their defence spending and the United States intervened in the conflict with a mandate from the United Nations. For a short time, a third world war seemed a distinct possibility. In Western Europe, the Korean War had led to panic and hoarding. Initially, that had given the West German economy a strong boost as its industry, surprisingly enough, proved able to satisfy the rising consumer demand (industrial production in the Federal Republic rose by a quarter in the second half of 1950). But this was soon cancelled out by new scarcity on the raw materials market, leading to sharp price rises and inflationary tendencies. For the Netherlands, that meant an enormous increase in import prices. It was crisis time again. There was a risk of severe balance-ofpayments problems, and calls for protectionist intervention, price controls and new import quotas became louder and louder, even in the liberal heart of Western Europe, in the Federal Republic and the Netherlands. Despite the growing criticisms of their policies, confirmed market economists Ludwig Erhard and Jan van den Brink resolutely refused to subordinate their neoliberal course to crisis management. This itself was far from self-evident, because colleagues in both the West German and Dutch governments called for the import liberalisations to be rectified. And they were by no means minor f igures. In Bonn, this standpoint was propagated by none other than Chancellor Konrad Adenauer, who had snarled at Erhard during the climax of the crisis in 1950 ‘sind Sie mir janz ruhig mit ihrer Marktwirtschaft’ (‘Spare me that market economy of yours’).3 In the Netherlands, a deeply 3

U. Wengst, Staatsaufbau und Regierungspraxis 1948-1953 (Düsseldorf: Droste, 1984), p. 254 n50.

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concerned Lieftinck had urgently called for ‘very radical measures’ by the government. From the spring of 1951, however, Erhard and Van den Brink had been proved right by a concurrence of circumstances: the OEEC had granted West Germany a special loan to avert the threat of a deficit on the balance of payments, and the Korean War had entered a phase of de-escalation (the peace talks – which would end inconclusively – started at the beginning of July). 4 The crisis sparked by the Korean War had once again made clear how fragile Western European cooperation was, how much the interests of the various economies diverged, and how vulnerable the technocratic projects were when the unpredictable twists and turns of the international political situation increased uncertainty. In short, it highlighted how much work was still needed to make the experiment of European integration a success. For Western Europe, however, one consequence of the crisis outweighed all the others: West German rearmament. The Korean War had forced the West to place this issue right at the top of the agenda. American impatience with the slow pace of rearming the Federal Republic within the context of NATO could no longer be ignored (see chapter 2). That had brought the French government to launch its proposal for setting up the EDC, unveiled by Prime Minister Pleven on 24 October. This plan for supranational European integration had also been cooked up by Jean Monnet, together with his team at the ECSC negotiations. Under the Pleven Plan, national army units (battalions of around 900 men) would be placed under the command of a supranational body headed by a European defence minister accountable to a European parliament. With such a European construction, the vivid traumas associated in Western Europe with German rearmament could perhaps be sufficiently controlled to meet the acute demands now being imposed by the Cold War and the Communist threat. European integration could be the way to keep future German armed forces under control. Just as the reconstruction of the former German war industry had been embedded in the ECSC through the Schuman Plan, the Pleven Plan would make the rearmament of Germany possible under the auspices of Europe. Once again, there were two sides to the process of European integration: on the one hand, increasing German power could be brought under the control of European institutions while, on the other hand, Germany’s growing capacity could be used to promote European (French) economic and security interests.Because the EDC and German rearmament were irrevocably linked, the EDC was a precondition for the coming into 4 Lieftinck, Pieter Lieftinck, pp. 119-120; Segers, Tussen verzoening en verval, pp. 51-52.

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force of the General Treaty, which provided for the rehabilitation of West Germany under international law. The way in which the Dutch government responded to the EDC reflected the suspicion regarding the ECSC that had held sway in the Drees government but which had been anxiously kept behind closed doors. The response was again sceptical and reserved. But The Hague had also learned from its experience with the Schuman Plan. In addition, the fall of the Drees-Van Schaik government in January 1951 offered an excellent opportunity to practice being neutral. The Netherlands had followed the British example and rejected the invitation of the French government to take part in the EDC negotiations. It wished only to attend the talks as an observer. To be on the safe side, Stikker had sent a telegram to the embassies to once again explain why: in his view, ‘nothing should be left untested’ to get the Netherlands ‘out of the straitjacket of the continent’. By taking part, even though the talks were intended only as exploratory, the Netherlands would find itself ‘caught in the French net’.5 In the meantime, there were growing concerns in The Hague about a division in Western Europe. The nightmare scenario was one in which a more Atlantic-focused British-Scandinavian project would compete with the French-German Europe of the ECSC; that would also threaten unity within NATO.But the worst of it was that, in such a situation, there was a serious risk that, as a member of the ECSC, the Netherlands would find itself confined in a continental bloc against its will. That was a nightmare that seemed less and less hypothetical. To return to the letter from ‘the Ten’: when it was sent, the EDC negotiations had moved up a gear. The American government, which had initially pushed hard for Germany’s rapid rearmament in the context of NATO and had therefore rejected the EDC, had changed tack completely. NATO’s commander in Europe General Dwight Eisenhower had become convinced after a lunch with Monnet that the US should give the EDC its full support, and President Truman followed his advice. Eisenhower had realised that the EDC was not only one of the very limited ways in which France could be persuaded to agree to West German rearmament but that it also offered an excellent chance to ‘build Europe’.6 For the Netherlands, 5 Wielenga, West-Duitsland, pp. 100-101; Jan van der Harst, ‘The Netherlands and the EDC’, EUI Working Paper, 86/252 (1986), pp. 3-9 and 17; Jan Van der Harst, ‘Nabuurstaten of uniepartners? Aspecten van het defensiebeleid van de Benelux-landen, 1954-1954’, in E.S.A. Bloemen (ed.), Het Benelux-effect (Amsterdam: NEHA, 1992), pp. 134-135. 6 Fred van Staden and Rik Coolsaet, ‘Nederland and België tijdens de (eerste) Koude Oorlog’ in Duco Hellema, Rik Coolsaet and Bart Stol (eds.), Nederland-België (Amsterdam: Boom, 2011), p. 152; Lieshout, De organisatie, pp. 107-8.

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this meant that the position originally taken by the government was now untenable. The American government no longer accepted such neutrality, and there was no question of the Netherlands risking its close partnership with Washington on this issue. The new Drees-Van Schaijk government had completely changed course. Under American pressure, the Netherlands did take its seat at the table in the autumn of 1951 as a full negotiating partner, but as a restraining factor. It was not only the ten social-democratic letter-writers who were becoming irritated by this indecisive European policy. The Lower House of Parliament had also expressed its disapproval of the government’s initial decision not to take part in the EDC negotiations. And Benelux partner Belgium, which – like the Netherlands – was not enthusiastic about the Pleven Plan (and with whom the trade deficit had risen as a result of the Korean War), felt duped by the Netherlands’ moves to withdraw from the Europe of Six.7 It was the combination of these defensive and backward moves by the Dutch government that had inspired the Ten to write their letter. In the letter, the Ten had addressed the main dilemmas in the Netherlands’ European policy, packaged in a feverish plea for a substantive debate on how the Netherlands could play a more constructive role in Europe. It was a highly singular and futile act. The tone of the letter was perhaps also too excitable to have any impact in the small margins for manoeuvre in professional Dutch politics, within which ‘Europe’ was already well on its way to becoming anathema. Nevertheless, on four points, the Ten hit the nail on the head. First, they rightly observed that ‘the Atlantic Treaty will not evolve into an Atlantic Federation in the short term’. If ‘Europe’ wanted to ‘have its say as an equal’ in the future – and that was, in their eyes, important for European influence in the alliance – then ‘a common European military and foreign policy’ was indispensable. In addition, that would make the position of the smaller countries somewhat more secure. In the dilemma of European integration, therefore, the Netherlands should argue resolutely and without reservation for the process to move forward, especially politically. Secondly, there was little argument that ‘a genuine solution’ to the German problem could ‘only be found’ in European integration, which would require a far-reaching and irrevocable transfer of powers, as that solution was possible ‘only at a viable, supra-German level’. Thirdly, the letter-writers observed that the UK was not prepared ‘to take part in a European federation’ in the short term. What did that mean for the Netherlands? According to them, waiting for the English 7

Nasra and Segers, ‘Tussen argwaan and pragmatisme’, pp. 114-19.

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to take the lead was not the only option. On the contrary, achieving tangible results with the ‘Europe of the Six’ could actually strengthen the Netherlands’ ties with the English as ‘anyone wishing to have England as friend […] should not come empty-handed’. Fourthly, the letter-writers had to conclude to their chagrin that European development ‘had moved forward at a pace that neither Dutch public opinion not the Dutch government had been able to keep abreast of’ and that, consequently, ‘the country risked being overwhelmed’. The latter had, in fact, already happened (see chapter 2), but the Ten did not wish to accept that as a fait accompli. They called for ‘robust support’ for ‘our country taking part in European federal cooperation, even if this were only to be continental in form’, so as to maximise the Netherlands’ influence.8 In the autumn of 1951, there were heated meetings within the PvdA on the contents of the letter. But very little of what was discussed was made public. The Ten spoke not only to the party leaders but also to Drees and other prominent figures like party chairman Koos Vorrink, director of the party’s think tank Joop den Uyl, international secretary Alfred Mozer, parliamentary party leader Jaap Burger, foreign affairs spokesman and Communist-hater Jacques de Kadt, and Drees challenger and ‘European’ Marinus van der Goes van Naters. The closed meetings were tense but, eventually, the party leaders rejected all the criticisms. Drees wanted none of it. Only Van der Goes dared to openly express his support, but he had little to lose: after a failed public attack on Drees’ leadership, Van der Goes had been skilfully sidelined within the party. Mozer only expressed his appreciation of the Ten’s letter later. In the end, the letter had achieved nothing, on balance. Some members of the group already came to this conclusion only a few weeks after having sent the letter; Van der Beugel, a practised networker in The Hague, even distanced himself from the whole initiative.9 In the meantime, the government was taking part in the EDC treaty negotiations in Paris as if they had never done anything else. In a ‘marriage of convenience’ with Belgium – relations between the neighbours were diligently restored after the Korean Crisis and the faux pas in the EDC dossier – the Netherlands focused on widening and consolidating the gap between the Benelux and the ‘Big Three’ (France, West Germany and Italy). Belgium and the Netherlands rejected proposals for a joint defence 8 NA, 2.21.302 (Archive C.L. Patijn), I(7), Letter to PvdA party leadership, 11 October 1951. 9 NA, 2.21.302, I(7), W. Wansink, De Groep van Tien: PvdA-ambtenaren and buitenlands beleid, doctoral thesis Utrecht University (1988), and Mozer to ‘the Ten’, 8 November 1951, and Koets to the party leadership, 17 December 1951; H. Daalder and N. Cramer, Willem Drees (Houten: De Haan, 1988), p. 141; Friso Wielenga, ‘Alfred Mozer: Europeaan and democraat’ in M. Krop et al. (eds.), Het twaalfde jaarboek voor democratisch socialisme, Amsterdam (1991), p. 155.

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budget and for joint armament programmes, calling once again for an intergovernmental Council of Ministers to be included in the institutional design of the new community (using similar arguments to those they had adopted in the ECSC negotiations). In addition, they argued that ties between the EDC and NATO should be as strong as possible. This Belgian-Dutch opposition bore fruit: there was to be no European defence minister, the powers of the EDC were much less far-reaching than those of the ECSC, the Council of Ministers became the central decision-making body and would make decisions based on unanimous voting (and was thus purely intergovernmental) and, finally, EDC units were to be operationally under NATO command. On 27 May 1952, the six ECSC member states signed the EDC treaty after the General Treaty had first been signed in Bonn by the Western allies and the Federal Republic of Germany. Article 38 of the EDC treaty provided for the possibility of establishing a European Political Community (EPC). That amounted to little more than having the Assembly of the EDC charged with preparing a political body to which the ECSC High Authority and the EDC Commission would be accountable.10 Yet this vague article – which had been made a talking point at the negotiations after an exchange between Schuman and Italian Prime Minister Alcide de Gasperi via the international media – explained the fear and concern that gripped Drees, Lieftinck and Stikker. The EPC clause opened up the prospects of a European political union based on a supranational model. That was not what they wanted, and certainly not in the confined context of the Six. According to Dutch thinking, the EPC could only be considered after very far-reaching economic integration. That order of events could under no circumstances be reversed. That was exactly where, in Drees’ eyes, the letter from the Ten went wrong. Their overblown, federally tinted EPC rhetoric belied the Netherlands’ Atlantic-oriented economic and political interests in the world. Drees didn’t give a hoot about the EPC.11 The initiative of the Ten lost all chances of success when the elections of 25 June 1952 caused a landslide in post-war Dutch society. Under the leadership of Willem Drees, the PvdA gained four additional seats, making it – completely unexpectedly – the largest party at the expense of the Catholic People’s Party (KVP), which lost seats. Drees was able to form a government but, given the 10 Dirk Spierenburg and Robert Poidevin, The History of the High Authority of the ECSC (London: Weidenfeld & Nicolson, 1994), pp. 44-45. 11 Compare W. Drees Sr., ‘De Europese integratie’, Internationale Spectator, 28, 17 (1974): 575-76 in Jan Willem Brouwer and Peter van der Heiden (eds.), Drees, minister-president 1948-1958 (The Hague: Sdu, 2005), p. 79.

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election result, there was little scope for far-reaching policy changes. The PvdA now had to manage without the liberal VVD, which had profiled itself explicitly as a party of opposition. Drees was not happy about that, especially as he would now also have to do without Dirk Stikker at the foreign ministry.12 That Drees saw nothing at all in the proposal of the Ten did not mean that he was opposed to European cooperation in principle. He, too, was convinced that Europe should unite in one way or another. His concerns were about the form that would take, its scope and, above all, with which partners.

Red versus Catholic Willem Drees was not keen on the French. He didn’t trust them completely and had a ‘deep mistrust of French politics’. What he particularly disliked was ‘the country’s desire to dominate and its complete lack of any willingness to take account of non-French interests’. The prime minister was therefore extremely sceptic about the ECSC. He was also very concerned about ‘the political instability in countries like France and Italy’. When Drees looked at ‘the nature and composition of the integrating community’ a little more closely, there was only reason for suspicion. This state of affairs fuelled his ‘strong aversion to the Christian democratic dominance of the Six’. Here, too, he was not against the Christian Democrats in principle; he was not anti-Catholic as such. On the contrary, Catholics were pillars of support in all his governments. But he did worry about ‘a dominating political-Catholic hegemony’ in the Europe of the Six. He shuddered at the thought of l’Europe Vaticane but had to accept the fact that Schuman and Adenauer, like their counterparts Joseph Bech and Paul van Zeeland in Luxembourg and Belgium, were dyed-in-the-wool Catholic Christian democrats – not to mention the Italians. When, during a dinner in honour of the Italian Minister of Foreign Affairs, the minister’s daughter – who assumed she was sitting next to a fellow Catholic – asked him whether he ‘also found it so wonderful to live in a Catholic Europe’, Drees had to bite his tongue. Afterwards, he hissed to Van der Beugel, who was also present, ‘You see! I always suspected that.’13 12 Willem Weenink, Johan Willem Beyen, 1897-1976: Bankier van de wereld, bouwer van Europa (Amsterdam: Prometheus, 2005), p. 290. 13 Minutes of Ambassadors’ Conference 1951, morning session, 9 August 1951, private records of Dr A. Van Ginneken (Utrecht); Daalder and Cramer, Willem Drees, pp. 152-54; Jelle Zijlstra, Per slot van rekening: Memoires (Amsterdam, Antwerp: Contact, 1992), p. 57; Mallinson, From Neutrality to Commitment, p. 40.

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That was also why Drees was perfectly happy for a non-KVP member to be in charge of European affairs in his next government, formed in 1952. He did not object to a KVP minister taking over from Stikker at Foreign Affairs, the ministry that Carl Romme, the influential leader of the KVP, claimed for his party. But Drees did demand that the minister be backed up by a ‘strong staff’ at this heavyweight ministry. It proved difficult for Romme to meet Drees’ demands, for two reasons. Firstly, the archbishopric in Utrecht had expressed the wish that Franciscan friar and professor of international law Leo Beaufort not be given a minister’s position. According to coadjutor bishop Alfrink of the archbishopric, a member of the clergy as a minister would only foster the growing anti-papism in the country. But Beaufort was the only remaining high-level KVP candidate for the position after heavyweights like former prime minister Louis Beel and economic affairs minister Jan van den Brink had declined the offer and Drees had rejected the young member of parliament Marga Klompé because of her interest in a European federation. Beaufort’s candidacy was thus torpedoed by his superiors in Utrecht. Secondly, the Royal Household was actively lobbying for Johan Willem Beyen, departing Dutch board member of the International Monetary Fund and the World Bank, to be appointed Minister of Foreign Affairs in the third Drees government, which once again included a broad range of parties (this time the PvdA, the KVP, the Christian Historical Union and the Anti-Revolutionary Party). Beyen had no party but was a member of Prince Bernhard’s ‘Tie Club’, an exclusive group of friends bound together by the motto that they must ‘support each other at all times and in every way’. The director of the Queen’s Cabinet, Marie Anne Tellegen, who knew Beyen well from their student days in Utrecht, was particular passionate in fighting for his appointment. Her position ensured that she was directly involved in the process of forming governments and she did so with verve. She got on Drees’ nerves on several occasions and was not afraid, if she felt it necessary, to respond to one of the prime minister’s proposals with a short and sharp ‘That is not appreciated here, Willem’. In Beyen’s case, that was not necessary, and Tellegen needed to do little more than make a warm recommendation. Drees’ decision to appoint Beyen minister of foreign affairs was largely based on the advice of Stikker, whose opinion he valued and who had also recommended Beyen. Like Stikker, Beyen had a background in the banking world but, above all, the outgoing minister thought that Beyen shared his concerns about ‘the Dutch parliament drifting towards a European federation’. An important motive for Stikker’s advice may also have been that, through his friends at the Royal

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Palace, Beyen had been mentioned as a perfect candidate for the post of ambassador in London, a position that Stikker himself had his eye on after his ministership. Whatever the case, Drees was greatly in favour of Beyen taking the minister’s position. Romme eventually got his way to a certain extent in that Joseph Luns, whom Queen Juliana referred to as ‘the man who took care of the seating arrangements’, was appointed co-minister (without portfolio) alongside Beyen.14 It was no accident that Beyen was put in charge of European affairs. Drees felt that this technocrat with no party affiliations and internationally very experienced banker would tackle this troublesome dossier with much objectivity. How wrong he would prove to be… Three years after being appointed minister, the man that Drees had placed in the cabinet as protection against a ‘Roman Catholic-dominated Europe’ entered into a Catholic marriage with his second wife, the much younger Margaretha Antonia ‘Gretel’ Lubinka from Vienna. He had met Lubinka before the war, when he had been president of the Bank for International Settlements in Basle and had made her his mistress. The wedding took place during a ‘very private ceremony’; even Beyen’s children knew nothing about it, not to mention the cabinet. Just how seriously he took his marriage was to emerge some years later, while Beyen was ambassador in Paris. To the amazement of many people around him, he converted to Catholicism, casting his ministership in the third Drees government in a new light.15

From Europe It became clear very soon in the third Drees government that ‘there was no greater difference possible than that between Drees and Beyen’. The latter proved himself to be a ‘non-partisan internationalist’ with ‘vision’, a ‘free thinker’ who ‘focused on the big picture’ and rarely ‘took the usual six bags of papers home for the weekend’. Drees actually found Beyen ‘a creature from another planet’.16 Beyen would prove, however, to primarily come ‘from Europe’. Coincidence would have it that, during his ministership, he wanted to take the lead at a crucial moment in the process of European integration; 14 Albert Kersten, Luns: Een politieke biografie (Amsterdam: Boom, 2010), pp. 94-96; Weenink, Johan Willem Beyen, pp. 275 and 288-89; Gerard Mostert, Marga Klompé, 1912-1986: Een biografie (Amsterdam: Boom, 2011), p. 183. 15 Weenink, Johan Willem Beyen, pp. 439-443. 16 Daalder and Cramer, Willem Drees, pp. 141 and 155.

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and he succeeded in doing so. Few have been more important for Dutch policy in Europe than Beyen, and few have been forgotten more quickly. Beyen and his colleague from Economic Affairs Jelle Zijlstra, a professor in theoretical economics at the Free University in Amsterdam and at 34 the youngest minister in the cabinet, had hardly been in their jobs a week when they had to go to Luxembourg to attend the first official ECSC ministers’ conference on 8 and 9 September 1952. It would be an inspiring start to both of their ministerships. The ceremony, the dinners, the international allure – Zijlstra was deeply impressed and found it all ‘almost breathtaking’. One incident that took place there in Luxembourg he would never forget. At a dinner in the luxurious Grand Hôtel Brasseur, West German Chancellor Konrad Adenauer had come up to him. The old gentleman wanted to speak to him for a moment. They sat down on a nineteenth-century sofa and Adenauer started to talk. Zijlstra recalled the chancellor’s words as follows: You are young and I am old. It is spring tide today in Europe, but that will not always be the case. Later, when I am no longer here, will come the setbacks. Then the tide will be going out for Europe and it will be a matter of holding on. You must promise then to be steadfast and remain true to Europe.

Zijlstra promised he would. What else could he say? The young professor was deeply impressed by the chancellor and his way of speaking, which was ‘as simple as it was imposing’. Zijlstra would ‘keep his word’ and always support the proponents of European integration,17 not something that was always to be taken for granted. Beyen must have felt like a fish in water in Luxembourg. For a minister who had only been in his job for a week, he showed himself to be an impressive participant in the discussions and achieved immediate results. In no time, he had familiarised himself with the complicated European dossier, which now revolved around the EDC-EPC. It was so complex that US Secretary of State Dean Acheson said that only two of his countrymen dared claim that they understood it. One was David Bruce, the US Ambassador in Paris, and the other his assistant William Tomlinson. Neither of 17 Zijlstra, Per slot, pp. 55-56; R.J. de Bruin, ‘Cees Hazenbosch and de “eeuwige beginselen van Gods Woord”: Antirevolutionaire beginselpolitiek and de integratie van Europa in de jaren vijftig’ in G.J. Schutte (ed.), Grenzeloos christelijk-sociaal, Cahier 8 (Amsterdam: Amsterdam University Press, 2009), p. 53.

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them could, however, explain to their colleagues in Washington what it was about. ‘Indeed’, Acheson said, ‘Bruce would not try’.18 For Beyen, it was less complicated. Within a few days, he had formed a clear idea of the opportunities that the issues dominating the ECSC Council agenda presented for the Netherlands. The main theme was the establishment of an ‘ad hoc Assembly’ to study the implications of Article 38 of the EDC treaty, in other words, European Political Community. Beyen knew what he wanted: he wanted the Netherlands to abandon the policy of integration per sector which was not only en vogue in the Europe of the Six but had also formed the basis of the 1950 Dutch Stikker Plan (see chapter 2). Beyen did not believe in this approach. He had already asked himself in Washington, as an ‘interested outsider’, how they expected to tackle the ‘inevitable objections to economic unification’ if integration were restricted to only a small number of sectors. In his view, it was not possible ‘to divide the economy of a country into parts’. He had ‘serious objections’ to ‘this approach’. In his view, it was necessary to radically change the direction of the Dutch position. In addition, he felt that it was time to ‘increase the pressure in favour of supranational integration’ in that position. Beyen was a firm supporter of supranational organisation, a standpoint that mirrored the pro-European sentiments in parliament, which had become even stronger after the elections. The EPC presented a real chance for the Netherlands to adopt a high profile on this point. During his first week as a minister, Beyen was satisfied to observe that the cabinet did not oppose the change of emphasis in the Netherlands’ standpoint that he was proposing, nor was there any ‘principled objection’ to the EPC. Beyen had his hands free to interpret the main axiom of the Netherlands’ European policy, which Stikker had already pursued and which he himself had summarised as ‘no political integration without economic integration’, in a completely different way. So he turned it around and transformed the Dutch standpoint from defensive to offensive. The EPC was nothing to be afraid of; on the contrary, it was the perfect opportunity to genuinely achieve the necessary economic integration that the Netherlands was so insistent about putting in place. Beyen also knew exactly how to take that opportunity. Via an amendment to a draft resolution submitted by the Italian delegation to the effect that the ECSC Council would mandate the Assembly on an ad hoc basis, Beyen – in close cooperation with Professor Walter 18 Dean Acheson, Present at the Creation: My Years in the State Department (New York: Norton, 1969), p. 557.

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Hallstein, state secretaryat the West German Foreign Office – succeeded in linking the EPC explicitly to ‘the creation of a common base for the economic development of the member states and with a merger of their most essential interests’. According to the Dutch government, now represented by Beyen, this embraced something very concrete: the ‘establishment of a European Common Market’. That standpoint was consistently maintained: the Netherlands would participate in the EPC talks ‘as long as they would eventually lead to the setting up of a general common market’. At the end of 1952, Beyen presented a concrete proposal on behalf of the Netherlands, which he modified further in the early months of 1953 after several consultation rounds in Europe. He did that under pressure from Zijlstra and with the support of Sicco Mansholt, through the interministerial Beyen Committee. In the process, the Netherlands’ European policy was radically revised. The ultimate Beyen Plan called for a common market to be established, via the intermediate step of a customs community. During that intermediate stage, import tariffs between member states would have to be scrapped and a common tariff introduced for the external world. In addition, the plan contained proposals for a supranational community body under the EPC umbrella. That institution could offer the member states temporary exemption in the case of problems with adjusting their national economies, with the possibility of material support being provided through a common fund.19 Beyen’s radical ideas received a lukewarm welcome in Europe, first by the ad hoc Assembly and later by the permanent EPC study committee that succeeded the Assembly. Beyen’s plans only complicated the already extremely difficult negotiations even further, and no one wanted that to happen. What could also not count on a lot of support in Europe was that the Beyen Plan seemed to tie in with the anti-ECSC campaign that had in the meantime been initiated by Ludwig Erhard. The West German Minister of Economic Affairs had heard enough of sector integration. He wanted something else: currency reform as a first step towards a large internal market. Preaching to the converted during a lecture at the International Trade Chamber in Amsterdam in November 1953, Erhard expressed his opinion as follows: ‘When we see where Europe is being led with so-called liberalisation […] where Luxembourg is being led [by which he meant the ECSC] then it is time to recognise that this is not the way to build Europe, but to destroy it’. Monnet-style sector integration had had its day: it was now 19 Johan Beyen, Het spel and de knikkers: Een kroniek van 50 jaren (Rotterdam: Ad. Donker, 1968), pp. 204-208 and 227-229.

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clear that it had been a statist and bureaucratic experiment from the very beginning, making it ‘false on principle’ in Erhard’s eyes.20 In his view, the market had to regulate the economy. Erhard may have come to the same conclusion as Beyen – no more sector integration – but there was a crucial difference between their perspectives. The West German minister preferred to see the largest possible free-trade zone, including the British, as the basis of a common market. This was a popular viewpoint in the Netherlands, but Beyen saw it differently. Beyen was a great supporter of limited regional cooperation because he believed it gave supranational integration a much greater chance of success. That is why he held on to the ECSC Group of Six as the basis of a common market. In his view, that was practical realism – and that was what was needed. He told parliament that ‘idealism about Europe was one of the best things’ that ‘we have seen emerge in recent years’ and stated that it was ‘right’ that nothing new could be created or born without idealism. However, at the same time, he warned against ‘constructions that are not viable or well-thought-out’ and could only harm the ‘real, bigger goal’. 21 What was both necessary and feasible was a common market of the Six via the intermediate step of a customs union, as ‘a Europe threatened from outside by hostile armies and from within by Communism can only survive by increasing its production and productivity’. This was, after all, the only way that unemployment could be addressed and stability preserved in the long term. And that was impossible ‘as long as Europe remained fragmented’ in ‘small markets characterised by trade barriers and monetary uncertainty’.22 To overcome that fragmentation, supra-state cooperation and mutual solidarity between West European states were indispensable. That was therefore the sufficient condition for ‘winning the peace’ – as Beyen had written as early as 1944 in a paper for Unilever when he was director of the company and, together with chairman Paul Rijkens, had applied himself to social questions that would be facing the post-war world.23 In the early 1950s, Beyen considered the step to a supranationally regulated common market feasible, but the member states would have to form some kind of regional unit. The EPC project of the six ECSC member states was the perfect stepping stone in that direction. 20 PAAA, B20/92a, 85.34/1, Niederländische Pressestimmen Vortrag Bundeswirtschaftsminister, 24 November 1953. 21 Weenink, Johan Willem Beyen, pp. 319 and 326. 22 Alan Milward and Richard Griffiths, ‘The Beyen Plan and the EPC’ in W. Maihofer (ed.), Noi si mura (Florence: EUI, 1986), p. 601. 23 Weenink, Johan Willem Beyen, pp. 221-231.

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The Beyen Plan was, however, to end up in Europe’s bottom drawers, along with the final report of the EPC study committee. After the departure of Robert Schuman as Minister of Foreign Affairs in 1953, the mood in France – and consequently in Europe – changed for good. Support for the EDC in Western Europe soon crumbled, and the international pressure to rearm Germany – pumped up to a maximum by the Korean War – dissipated. In Washington, where according to the Belgian ambassador the EDC had been elevated to the ‘Eleventh Commandment of American diplomacy’, policymakers looked on in dismay.24

A game for insiders The watered-down compromise that the text of the agreement f inally became (the supranational minister, for example, had been changed to a ‘collegial Commissariat’) reflected the design faults that had consistently frustrated the project. The Adenauer government, for instance, should have dug in its heels from the very beginning to ensure that the Gleichberechtigung (partnership of equals) and the mutual commitment – two matters that were crystal clear in the Schuman Plan – were also in some way included on the agenda of the EDC talks. The Pleven Plan proved to be much more intergovernmental (the original European Minister of Defence would receive instructions from the Council of Ministers, which decided by unanimous vote) and also implied less commitment on the part of the member states, primarily because France refused to place its entire armed forces at the disposal of the EDC due to the war in Indochina. It quickly became clear that the similarities between the Schuman Plan and the Pleven Plan were predominantly superf icial. In terms of a common project, the Pleven Plan – despite its more politically loaded appearance – was a step back. Its aim – to keep West Germany down – was outdated and not focused on an equal partnership.25 The sideshow of the European Political Community could not change that. The EPC’s fate depended on the success of the EDC. And that success started to look highly unlikely after the signing of the EDC treaty, as successive French governments fearfully delayed ratification by asking for all kinds of points to be renegotiated. West German rearmament remained a very sensitive issue in French politics and les hommes politiques thought 24 Van Staden and Coolsaet, ‘Nederland and België’, p. 155. 25 Lieshout, De organisatie, pp. 103 and 111.

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twice before running the risk of getting their fingers burned in a public debate on ratification in the Assemblée Nationale, the French parliament. It was highly doubtful whether it would be possible to obtain a majority in favour of the treaty. On top of that, the French ministries – which, in the case of the Schuman Plan (i.e. the ECSC), could be significantly sidelined through crafty manoeuvring by Schuman and Monnet – were now (in the case of the EDC) fully involved and were extremely sceptical of any form of supranational integration and certainly in relation to defence and foreign policy. On 30 August 1954, the months of procrastination exploded into a political drama as rarely seen before. On that day, the French parliament placed the final nail in the EDC’s coffin. After a heated debate lasting nearly three days and a sequence of procedural tricks, the approval of the EDC treaty was swept from the table by the Assemblée Nationale. The end of the EDC also meant the demise of the EPC and the Beyen Plan. Beyen acknowledged that ‘the dictum of the French parliament at that moment signified the non of France’ to ‘everything that resembled supranational cooperation’, but that did not mean that his mission to create a common market had become futile. At least, that was how Beyen himself felt. In his view, circumstances would force the Six ‘to solve the issue of the economic integration of Europe in a much wider sense than the ECSC in a relatively short time’.26 He was to be proved right: the EDC and EPC were dead and buried, but in 1955 the Beyen Plan would once again be taken out of the bottom drawer. For the Netherlands, the EDC drama meant that the ‘continental straitjacket’ about which Stikker had warned behind closed doors was weaker than had been feared. The future was no longer fixed. For many in The Hague, that was a pleasant realisation, and one that seemed to play into the hand of Drees’ indifferent and aloof standpoint regarding the Europe of the Six. More Atlanticist scenarios once again became feasible alternatives. Erhard’s approach gained ground: market and intergovernmental cooperation embedded in an Atlantic framework seemed to have the winning hand. That tendency was underscored by the solution found shortly after the failure of the EDC for the problem of West German rearmament (see chapter 4). Lastly, France’s painful grappling with its own Pleven Plan had demonstrated something else of importance to the Netherlands’ European policy. French journalist and philosopher Raymond Aron, who wrote for Le Figaro, compared the heated discussions in French politics on the EDC with the notorious Dreyfus affair. As with Dreyfus, it was a rare débat idéologique, 26 Beyen, Het spel, pp. 233-34.

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where the discussion could not be encapsulated in the familiar differences between political parties. What typified such an ideological debate was the division within each camp.27 In the Netherlands, too, though there were no heated public debates on Europe, disagreements on European policy often ran directly through the various political parties, giving the debate a more ideological tint. The genie could no longer be put back in the bottle. The letter from the Ten had no immediate impact, but it did mark a tendency in politics – and especially in policy circles in The Hague. In the Netherlands, too, the European boat was afloat. ‘Europeans’ from different quarters joined forces, for example in the Dutch European Movement, by making public federalist statements. Marga Klompé, then a rising star in the KVP, was one of those who embraced this trend. In addition, there was an influential lobby through informal networks. Mansholt held gatherings at his home in Wassenaar, where he and like-minded colleagues discussed how they could push the cabinet in a more pro-European direction.28 The ‘warm and ardent supporters of European integration’ at the Royal palace – who were better informed of Beyen’s European ideas than the prime minister’s government – also let their views be known.29 In the midst of these pro-European forces, politicians and officials like Drees, Luns and Van der Beugel felt themselves ‘branded as heretics to the European doctrine’, in the words of the latter.30 There was, however, an important difference from the ideological debate in France. In the Netherlands, it was more technocratic than political, and that was why it remained below the radar of public discussion. In The Hague, Europe remained a game for insiders. In that game, Dutch Europeans faced two counterforces that were difficult to deal with. The reasoning of Dutch policy technocrats was solidly set in two golden rules that made it more difficult to maintain enthusiasm for European integration. Rule number one was that deeper integration could only be achieved after far-reaching economic convergence; rule number two was that social policy was a national responsibility – there could be no question of social-economic harmonisation imposed by Europe. In the eyes of Dutch policymakers, the welfare state was a national affair and should above all stay that way. In that sense, too, Beyen was not a standard Dutch politician. 27 Raymond Aron and Daniel Lerner (eds.), La Querelle de la C.E.D. (Paris: Armand Colin, 1956), p. xi. 28 Johan van Merriënboer, Mansholt: Een biografie (Amsterdam: Boom, 2006), p. 225. 29 Weenink, Johan Willem Beyen, p. 290. 30 Daalder and Cramer, Willem Drees, p. 152.

4

Around Cologne cathedral (1954-1957) Abstract Dutch unease with European integration refused to go away. The Common Market – the single most important project in the history of European integration – excluded the UK and therefore the Anglo-Saxon connection so desired by the Dutch. Moreover, kindred spirits like West Germany’s Ludwig Erhard had been outmanoeuvred: during the crucial phase of negotiations for the Rome Treaties, Chancellor Adenauer decided that Franco-German friendship must be prioritised over economic calculations, given the tense international situation (marked by escalating violence in Suez and Hungary and resurgent nationalism ahead of the Saar referendum). Events caught The Hague by surprise once again: behind the scenes, the signing of the Treaties of Rome on the European Economic Community in March 1957 received a lukewarm welcome. Keywords: Paris Agreements, relance européenne, Treaties of Rome, European Economic Community (EEC, common market), EURATOM, Suez Crisis, Hungarian uprising

The failure of the French parliament to ratify the EDC Treaty in August 1954 cast a shadow of impotence over Western Europe. The fiasco sowed doubts about German rearmament, the integration of the Six, and the transatlantic relationship. The ‘political Europe’, which had so hopefully flared up momentarily for ‘Europeans’ within and outside Western Europe, had been blown out of the water. Those at the headquarters of the ECSC in Luxembourg felt they were ‘le dernier bastion communautaire’.1 But the drama was not restricted to European integration. It also jeopardised the General Treaty, which regulated the rehabilitation of West Germany under international law. And that put the credibility of West 1 Enrico Serra (ed.), Il rilancio dell’Europa e i trattati di Roma (Brussels, etc.: Bruylant, 1989), p. 174.

Segers, Mathieu, The Netherlands and European Integration, 1950 to Present. Amsterdam, Amsterdam University Press 2020 doi: 10.5117/9789463728133_ch04

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Germany’s policy of Westbindung – integration with the West – at risk. This was perhaps the most acute threat for Western Europe. From 1949, Chancellor Konrad Adenauer had consistently elaborated the policy of Westbindung and established it as the guiding principle for the Federal Republic. This West German strategy had had a stabilising effect in Western Europe, both politically and economically, and had become crucial to European integration. The EDC was a precondition for the activation of the General Treaty, in many respects the crowning glory of Adenauer’s Westbindung policy. What was to be done now that the EDC had failed? The answer to that question was unclear. Two things were certain: France had lost the initiative, and overarching supranational constructions were out of fashion. Together, this meant an imperative return to the traditional logic of European relations: the ball was now in the United Kingdom’s court. After standing on the sidelines for four years, the UK now had the opportunity to take the lead in the process of European integration and shape it in its own interests. And there was a solution based in treaty law that particularly suited Britain’s European policy: broadening the scope of the Treaty of Brussels. Signed in 1948 by France, the UK and the Benelux countries as protection against future German aggression, the treaty had now become obsolete in substantive terms (see chapter 2). It was now widely accepted that the greatest threat to security in post-war Western Europe was not Germany but the Soviet Union. In fact, to be able to defend itself effectively, Western Europe urgently needed West Germany as a partner. British Foreign Secretary Anthony Eden took the initiative shortly after the failure of the EDC. Eden came up with a traditional intergovernmental solution for the problems surrounding the General Treaty, using the framework provided by the Treaty of Brussels. Besides having West Germany’s accede to a revised version of the Brussels Treaty (which now focused on assuring protection against Soviet aggression), his proposal included the Federal Republic joining NATO, something France continued to vehemently oppose. The conclusions of the Nine Power Conference in London from 28 September to 3 October 1954, where the ECSC member states, the UK, the US and Canada discussed the problems that had arisen, offered the prospects of a compromise. Here, too, Adenauer proved to hold the key. The conference proposed that West Germany (and Italy) accede to the Treaty of Brussels, which was renamed the Western European Union (WEU). In addition, the US, the UK and France (the occupying powers) stated their willingness to terminate the occupation regime, which was still in place in the Federal

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Republic, as quickly as possible and to consider the elected government of the country as the only government authorised to speak on behalf of Germany. The following personal intervention by Adenauer was indispensable in acquiring French approval of these proposals: ‘I am willing to declare, in the name of the Federal Republic of Germany, that we voluntarily refrain from the production of A, B and C weapons, completely voluntarily’).2 (A, B and C stand for atomic, biological and chemical.) Adenauer was therefore giving his word that the FRG would remain the junior partner in Western Europe where weapons of mass destruction were concerned. That assured the leading role for France on the continent in the longer term. During a follow-up conference in Paris, the issues of West German rearmament and the rehabilitation of West Germany under international law were settled in the Paris Agreements, signed on 23 October 1954. The details of these agreements had been negotiated in the weeks running up to Paris in four separate conferences. At a conference of the three Western occupying powers and the Federal Republic, the General Treaty was reformulated, together with a protocol outlining the termination of the occupation regime in the Western zones. The Nine Power Conference had provided for West Germany’s accession to the WEU. After a fifteen-power conference of the fourteen NATO member states and the FRG, the latter was invited to join NATO. Lastly, a two-power conference, at which France and West Germany negotiated on the future of Saarland, led to the signing of the Saar Statute. That represented a first attempt to heal an open sore in post-war Franco-German relations. It would, however, take many months of laborious negotiations and a referendum seething with nationalism to come to a definitive agreement in the autumn of 1956. The outcome was that the Saar (quite unexpectedly) became German and the French government expressed its satisfaction with the honouring of its far-reaching claims on exploitation of the coal-rich Warndt basin.3

Adenauer’s Abendland With the Paris Agreements, Adenauer’s West Germany reached the pinnacle of the policy of Westbindung that it had been pursuing since 1949. Behind the closed doors of the CDU party leadership, the chancellor made no secret of his delight about the intergovernmental WEU solution, which was linked 2 DzDP, II. Series, Vol. 4, p. 347. 3 Segers, Tussen verzoening and verval, pp. 78, 107-111, 150-52, 169-72 and 189-90.

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to West German membership of NATO. This outcome, he said was ‘much better than the EDC had been’.4 After the failure of the EDC, Adenauer may have made a convincing show of presenting himself publicly as a ‘broken European’, but he had been fundamentally opposed to both the Pleven Plan and the EDC from the very beginning as, within that framework, the Federal Republic had to fight every inch for equal treatment (see chapter 3). Adenauer was determined to cash in on the achievements of the Paris Agreements as quickly as possible. In light of the political instability of the French Fourth Republic, one thing was certainly advisable: there should be no new risky undertakings or political prospects relating to European integration. The chancellor had a simple and effective way of achieving that: he decided to leave European policy, for the time being, in the hands of Minister of Economic Affairs Ludwig Erhard who, shortly after the Paris Conference, had been entrusted with Germany’s European policy, at the expense of the Ministry of Foreign Affairs. Since then, Erhard had been rampaging through the china shop of European integration like the proverbial bull. The professor was elated with his new responsibilities and, at the beginning of 1955, sent a hefty ‘Private Study’ to the chancellor, outlining what he felt West Germany’s European policy should look like. Two points were central. Firstly, Erhard claimed that sector integration was a threat to the working of the market (through Atomisierung of the economy) and that it should be rectified. Real integration was market integration, and the opportunities for achieving that were better within the much more expansive frameworks of the OEEC and GATT than with the six ECSC member states. Secondly, Erhard saw another serious design fault in existing European integration: prices in France were too high in relation to the exchange rate of the franc. That problem was not being addressed at the European level and was making far-reaching market integration de facto impossible. The French had to modernise their economy rather than wait for support from the ECSC. Erhard saw it as his job to make these points clear in the international media, which he did with aplomb.5 By the end of March 1955, Adenauer’s great project reached its conclusion when the French parliament ratified the Paris Agreements (on the 4 Die Protokolle des CDU-Bundesvorstands, Vol. 16, ‘Adenauer: Wir haben wirklich etwas geschaffen’ (Düsseldorf: Droste, 1990), p. 258. 5 Köhler, Adenauer, p. 19; Felix von Eckardt, Ein unordentliches Leben: Lebenserinnerungen (Düsseldorf, Wien: Econ, 1967), pp. 301 and 317; Bundesarchiv, Koblenz (BA), B136/68800/1310 (Aktenbestand BKA), Erhard to Adenauer, 25 March 1955 (Private Studie – vertraulich) and N1254/85 (Nachlass Franz Etzel), FAZ 28 May 1955, Speech by Erhard 30 May 1955, Le Monde 1 June 1955.

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WEU and the General Treaty on Germany). Ten years after the end of the war, the Federal Republic was among equals in Western Europe and the West as a whole. It was an impressive achievement of foreign policy. West Germany could now look to the future, a future in which French initiative and supranational integration were less self-evident, leaving more scope for a standpoint inspired nationally from Bonn. That is not to say by any means that there was less focus on the Franco-German reconciliation. On the contrary, that remained the foundation underlying Adenauer’s European policy because, in the chancellor’s eyes, it was the only possible basis on which a realistic West German and West European position in international relations could be founded. What was new was that the Paris Agreements had modified the rules of the game so that they were now more equal. During and after the long-drawn-out failure of the EDC, in the years from 1952 to 1995, a lot changed in Adenauer’s Franco-German Europe. Supranational cooperation was put on ice. Schuman departed as French Minister of Foreign Affairs, weakening Adenauer’s partnership with this devout Catholic. Then Monnet announced his departure as president of the High Authority of the ECSC. The man who had acted as the main link in the cooperation between Adenauer, Schuman and De Gasperi wanted to continue his campaign for European integration outside the European bureaucracy. That was not without reason: Monnet had been the butt of severe criticism. The supranational competences of the ECSC had been the subject of fierce attacks from Paris, where Euroscepticism was proliferating. In 1955, the Gaullists entered the new government under the leadership of Edgar Faure (who would be prime minister for eight months). Like their premier, the Gaullists had a strong dislike for Monnet, the technocratic fixer with his federalist propaganda and his international friends. They accused him of wanting to be ‘empereur de l’Europe’, at France’s expense.6 Despite all the drama, much in Europe stayed the same. The ECSC sometimes visibly faltered but still functioned. And in Bonn, tactics may have changed but little else. That was all in line with the slogan that Adenauer’s CDU would use successfully in the 1957 elections: ‘keine Experimente! [no experiments]’ The slogan applied equally to the Federal Republic’s foreign policy. The successes of the Westbindung policy ensured that Adenauer’s chancellorship was completely uncontested at home or abroad in the 1950s. The chancellor was seen more and more as the continental anchor for the West and for European integration. Early in 1955, the French High 6 Christian Pineau and Christianne Rimbaud, Le grand pari: L’aventure du traité de Rome (Paris: Fayard, 1991), p. 155.

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Commissariat in Germany stated that Adenauer ‘had shown on every occasion his desire for a policy of rapprochement with France’.7 That the French diplomatic service so unequivocally recognised this ‘desire’ on Adenauer’s part emphasised just how much trust the first chancellor of the Federal Republic had succeeded in building up in only a few years with his country’s traditional enemy. That trust was genuine and would not evaporate very quickly. Adenauer would stay on as chancellor for many years and continue to devote himself to Franco-German reconciliation. For the time being, Western Europe would remain Adenauer’s Europe, and that meant ‘part of the Rhine-Western cultural world’. Or more concretely, Europe remained Western Europe, with Cologne Cathedral as the centre of the world. German writer Heinrich Böll described that ‘cultural world’ of Adenauer as provincial and empty – ‘kölsch-katholisch-linksrheinic Chuzpe’ (Cologne, Catholic, left-Rhine Chutzpah) – because it was servile to big industry.8 But that was a little too simple a depiction. Adenauer did indeed have a sharp eye for the industrial and economic interests of West German business and stubbornly represented them at home and abroad, but that did not change the fact that he considered market economists and number-crunchers like Erhard to be completely unfit to leave the business of politics to. He felt the same way about industrialists, calling them ‘imbeciles’ who thought only of the ‘balance for the coming year’.9 For the chancellor, politics (and therefore not the economy) always came first. In Adenauer’s European policy, Western European solidarity had priority and was necessary to protect the cultural values of das christliche Abendland, by which Adenauer meant Western Europe. In concrete terms, this meant absolute priority for Franco-German reconciliation, even if it cost a few Deutschmarks in the short term (when, for example, he had settled the delicate issue of the Saar by granting France a very lucrative deal in the Warndt basin, completely against the advice of his advisers, he declared that ‘Europe is worth a few tons of coal’).10 Adenauer was not a supporter of either the state or the market. The old Rhinelander was an exponent of Christian social ideology and the solidarity ideal of the 7 Historical Archives of the EU, Florence (HAEU), MAEF/OW/280, 7 February 1955, Vue général sur la politique allemande. 8 Blankenhorn, Verständnis, p. 43; Köhler, Adenauer, p. 13. 9 Segers, De Europese dagboeken (1), p. 168. 10 Die BRD und Frankreich: Dokumente 1949-1963, 1997, Vol. 2, p. 299; PAAA, B1/155, 13 July 1956, Fortgang der Saarverhandlungen; Christian Pineau, 1956/Suez (Paris: Laffront, 1976), p. 58; R. Lahr, Zeuge von Fall und Aufstieg: Private Briefe 1934-1974 (Hamburg: Albrecht Knaus, 1981), pp. 244-45.

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Catholic church. The latter was the main conservative weapon to take the wind out of the sails not only of liberalism but also and more especially of socialism and social democracy.11 For the Netherlands, the West European focus of Adenauer’s Westbindung was vitally important. West German industry was an important driver of Dutch exports and was crucial for the Netherlands as a transit country. It made the country richer, more stable and more prosperous. It was already clear in the 1950s that the Netherlands would become increasingly tied to the Rhineland. The question was not whether it would happen but how: would it develop on continental lines as Adenauer perceived it, within the limited institutional framework of the six ECSC member states, or would it follow Erhard’s logic of the market, which aimed at the largest possible Western free trade zone. Either way, it was certain that the Rhineland was not only the centre of Adenauer’s Europe but would also become the centre of the Netherlands’ Europe. Prophetic as that notion was, it was not necessarily an easy truth for the Dutch to accept and was perhaps even an uncomfortable one.12

Coordination through Europe’s back channels In mid-May 1955, the French and Belgian ministers of foreign affairs, Antoine Pinay and Paul-Henri Spaak, met for lunch in the small but chic Hotel Directoire on the Left Bank in Paris. The hotel was owned by Margaret Biddle, a fabulously wealthy American from a banking dynasty. Biddle was a divorcee and a leading figure in political-intellectual and diplomatic circles in the city, partly due to the soirées she organised. David Bruce, the American ambassador in Paris (and a close acquaintance of Monnet), regularly introduced European politicians to her. Pinay was an intimate friend within that network. The 64-year-old French minister, who lived alone because his incurably sick wife and the mother of his children was permanently in hospital, maintained ‘affectionate ties’ with the charming Biddle. Before becoming foreign minister, Pinay had made himself well-loved in France while prime minister in 1952. The ‘miracle Pinay’ – the impressive boost in the failing French economy that he had 11 Compare Ronald Havenaar, Eb en vloed: Europa en Amerika van Reagan tot Obama (Amsterdam: Van Oorschot, 2009), p. 33. 12 Compare Minutes of Ambassadors’ Conference 1951, morning session, 9 August 1951, p. 60 (private archives of Dr. A. Van Ginneken); Kennedy, Nieuw Babylon, pp. 66-68.

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achieved through an austere combination of economic liberalisation, strictly controlled public spending and stabilisation of the franc – had made him the most popular politician since General de Gaulle. Pinay had gone to the lunch in the Directoire together with his chef de cabinet Henri Yrissou. His counterpart, Robert Rothschild, was seated across the table with Spaak, who Bruce had only recently introduced to Biddle but who had quickly become a regular visitor to the hotel. The topic of conversation was the new far-reaching plans for European integration. The Belgian minister was the driving force behind the plans for expanded sector integration into other branches of industry, including energy and transport, an atomic agency for the peaceful uses of nuclear power and, yes indeed, a common market. His pro-integration campaign caused predictable concern among the Europe of the Six. The lunch was intended to allow the French and the Belgians to make sure they were on the same page on the eve of the conference of ECSC foreign ministers, to be held at the beginning of June. The conference had been arranged to talk about the Benelux memorandum, which contained concrete proposals for far-reaching European integration. The message from the French side of the table was not unfavourable but the general feeling was that ‘it must not go too fast’.13 Pinay was a ‘committed European’, supported behind the scenes by Schuman, who had joined the Faure cabinet as minister of justice. But he was very aware that a public pro-European stance, so soon after the EDC debacle, was playing with fire politically. That was also the main reason why the French government had openly turned against Monnet. Faure had even let it be known through diplomatic channels that France would leave the ECSC if he discovered that other member states were conspiring to get Monnet elected for a second term as president of the High Authority. To add weight to that threat, he had added that such a dramatic step would make him the most popular head of government in France. The secretary general of Pinay’s ministry worded it as follows: ‘the opponents of the EDC had not been disarmed’. That was something of an understatement in the Paris of 1955. Militant Gaullist EDC haters like General Marie-Pierre Koenig were even ministers in Edgar Faure’s cabinet. Pinay’s European policy therefore had to be pursued with the greatest of care, and that called for clandestine methods – something the minister was familiar with. Through the grapevine, he made sure that Monnet understood that he, the minister, was not personally opposed to the new proposals 13 Robert Rothschild, Un phénix nommé Europe: Mémoires 1945-1995 (Brussels: Racine, 1997), pp. 160-61.

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but that prime minister Faure was. Via the Belgian ambassador in Paris, Pinay impressed on Spaak that ‘Edgar Faure n’aime pas Jean Monnet, prenez garde!’(Take care. Edgar Faure does not like Jean Monnet!).14 The lunch with Spaak in the Directoire was also part of Pinay’s cautious Europe diplomacy. Closer coordination on the Benelux memorandum was urgently required. So how had that memorandum come about and what was in it? Since the end of 1954, Spaak – who had in the meantime emphasised his Atlantic profile with impassioned arguments for supranational integration15 – had been working closely with Monnet and the vice president of the ECSC High Authority, German Christian democrat Franz Etzel. Their aim was to bring about a relance européenne, a revival of the European project, that would make people forget the failure of the EDC. From within the entourage of Monnet and Etzel, Spaak was fed with elaborate plans for new steps towards sector integration and towards extending the competences of the High Authority. And, more particularly, there was also a design for a European atomic energy community.16 According to Monnet, that was the best way to seduce France into taking a new step towards European integration and to get over the failure of the EDC. In Paris, there was indeed some support for an atomic energy community. On Boxing Day in 1954, a select group of ministers from the French cabinet had decided, partly on the initiative of the powerful Commissariat à l’Énergie Atomique (CEA), to initiate a secret nuclear programme, partly with the aim of building a French atom bomb in the future. That programme was under way and enjoyed the support of politicians and leading civil servants, including not only Gaullist ministers but also key figures at the Ministry of Foreign Affairs on the Quai d’Orsay. European atomic cooperation would prevent future German nuclear proliferation while providing access to West Germany’s extensive f inancial and industrial resources and knowledge, which France was in sore need of to build a nuclear fission plant (which would enable the country to produce enriched uranium).17 14 Faure and Snoy et d’Oppuers, quoted in Serra, Il rilancio, pp. 71 and 73; Pineau and Rimbaud, Le grand pari, pp. 155 and 168; Christianne Rimbaud, Pinay (Paris: Perrin, 1990), pp. 286-91; René Massigli, Une comédie des erreurs 1953-1956 (Paris: Plon, 1978), p. 507. 15 Rik Coolsaet, België and zijn buitenlandse politiek, 1830-1990 (Leuven: Van Halewyck, 1998), pp. 391-92. 16 Segers, Tussen verzoening en verval, p. 91. 17 Mathieu Segers, ‘Zwischen Pax Americana und Pax Atomica’, Vierteljahrshefte für Zeitgeschichte (Munich: Oldenburg, 2006), pp. 433-458.

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In early April of 1955, Monnet received Carl Friedrich von Ophüls for a confidential conversation in Luxembourg. Ophüls was a senior official at the West German foreign ministry, and a committed European from the very beginning. Monnet had arranged the meeting to reach agreement on exactly how the West German government could support the relance initiatives. As with the launch of the Schuman Plan, Monnet was counting on the support of the Adenauer government. But he was to be disappointed: Ophüls had come with a sobering message. The West German government could not support the atomic energy community because opponents to further sector integration, led by Erhard, had recently gained the upper hand in Bonn regarding the European dossiers. And they were more in favour of nuclear cooperation with the UK. But Ophüls did have a suggestion: Monnet’s plan for an atomic energy community could possibly count on West German support if it were to be combined with a plan for general economic integration, i.e. a common market to be set up in stages. Such a project would be very interesting to the Federal Republic given that it was a major exporting country. That might appease the dominant Erhard faction. Monnet had concluded from this that ‘there is nothing else to be done’18 and had asked his economic adviser Pierre Uri to write out a draft declaration in anticipation of the coming conference of ECSC Ministers of Foreign Affairs. He did this in the hope that the draft could become a ‘Benelux paper’.19 After all, the failure of the EDC in the French parliament and Erhard’s control of the European dossiers in West Germany made it impossible to launch a new plan for European integration via Paris or Bonn. The only remaining option was to present the plan via the Benelux. It was fortunate that, at the same moment, Spaak had committed himself so strongly to Monnet’s mission. He had personally ensured that the contents of Uri’s document tied in as closely as possible with the state of affairs in the consultations within the Benelux, of which he was the driving force. During a meeting in The Hague on 2 April, Minister of Foreign Affairs Beyen had made it clear to a heavy-duty official delegation from Brussels that, one way or another, he wanted to see the plan for a European common market that he had introduced at the EPC talks in 1953 (see chapter 3) back in the joint Benelux initiative that Spaak was pushing for. The Belgian delegation, led by Baron Jean Charles Snoy et d’Oppuers, was concerned about Beyen’s demands. Snoy, the senior official on European dossiers at the 18 Uri quoted in Serra, Il rilancio, pp. 78-79. 19 Segers, De Europese dagboeken (1), p. 69.

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Belgian Ministry of Economic Affairs, was thinking more in terms of a freetrade zone in the context of the OEEC, which would include Scandinavia and the UK. His people had been working on the proposal since September 1954. Shortly after the failure of the EDC, high-ranking officials in Brussels had already concluded, on the basis of consultations within Benelux, that further economic integration required a broader and more liberal framework than was possible within the confines of the Six. Belgian Minister for Foreign Trade Victor Larock had already presented plans in November 1954 for liberalisation per sector within the context of the OEEC. He had repeated that summarily in March 1955.20 The realistic Belgians rode on the wave of the Erhard revival in European integration. From a Dutch perspective, however, the Belgian plans meant more than that. They were in fact an update of the Stikker Plan that had failed in 1950 (see chapter 2). All the signs suggested that the chances for a more Atlanticoriented free-trade zone as a model for European integration had rarely been so favourable since the early months of 1950, when ‘la bombe Schuman’ had yet to fall. There was no doubt at all that the Belgian initiatives would fall on fertile ground in The Hague. At least, that was the understandable expectation in Brussels. As the responsible minister in the Netherlands, however, Beyen saw the situation very differently. Convinced as he was of the necessity of supranational integration and regional cooperation, he rejected the Belgian plans out of hand and put forward his own plan from 1953. Even when Snoy warned him that it was not necessary ‘to go that far’, the minister did not change his mind.21 On the contrary, Beyen felt that the circumstances could be favourable for relaunching his far-reaching plans for a common market, via the intermediate step of a customs union. The fact that he knew it would probably invoke ‘stiff opposition from our French friends’ did nothing to change that.22 In Spaak, Beyen found a ‘partner in crime’. Spaak not only shared his supranational convictions but also saw the advantage of such a maximal strategy. This was a moment Europe had to show some courage, a moment to create something great, because they – the Benelux – were now in the driving seat. Beyen saw it exactly the same way. Together with Spaak, he wanted to try and bring about a historic leap forward in European integration. It was of no interest to him that, in doing so, he was radically modifying the 20 Duchêne, Jean Monnet, p. 270. 21 Rothschild, Un phénix, p. 158. 22 Serra, Il rilancio, pp. 146-47; Weenink, Johan Willem Beyen, p. 346.

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consistent line in Dutch European policy favouring Atlantic free trade by deliberately ignoring a unique opportunity to revitalise the ideas behind the Stikker Plan. From a historical perspective, it was indeed ‘ironic’ (as Van der Beugel called it) that Beyen, a non-aligned passer-by in the political scene in The Hague, could – and did – determine the Netherlands’ European policy precisely at this moment.23 Op 22 April, Monnet and Spaak together examined the ‘Uri paper’ in which proposals for an atomic energy community and other plans for further sector integration were combined with the idea of a common market. The document was clandestinely passed on to the West German foreign ministry, where it was circulated under the title ‘Vorschlag Monnet’.24 For the summary elaboration of the second component, the 1953 Beyen Plan was indeed taken back out of the cupboard. Uri had, however, only devoted one page out of a total of five to the common market. Spaak persuaded Monnet that this was not a good idea; the section on the common market had to be the same length as the one on sector integration.25 A day after his meeting with Monnet and after he had assured himself of the complete support of Joseph Bech, his colleague from Luxembourg, Spaak travelled to The Hague to make definitive agreements on the form and content of the joint memorandum. As expected, his Dutch colleagues also wanted to see as much attention given to the common market as to sector integration and wanted to retain the final editing of ‘their part’ – the common market – for themselves. And so it happened.26 ‘Behold your child,’ Rothschild said when he handed the final Benelux memorandum to Monnet on 6 May.27 Three days later, during the celebration of the fifth anniversary of the launch of the Schuman Plan, Monnet addressed the ECSC General Assembly in Strasbourg. Although he personally had serious doubts about linking the Beyen Plan to his initiatives for sector integration – and the atomic energy community in particular – he publicly expressed his support for the common market by saying that he did not consider sector integration and ‘general integration’ in the field of economics to be mutually exclusive. Etzel also spoke at this extraordinary session of the Assembly. The German spoke in 23 Daalder and Cramer, Willem Drees, pp. 155-56. 24 PAAA, 2, 900, A9010, (Vorschlag Monnet), 14 April 1955. 25 Michel Dumoulin, Spaak (Brussels: Racine, 1999), p. 505. 26 Jean-Charles Snoy et d’Oppuers, ‘Le role du Benelux dans la relance européenne en 1955’: Belgisch buitenlands beleid and internationale betrekkingen (Leuven: Leuven University Press, 1978), p. 231; Rothschild, Un phénix, p. 159. 27 Monnet quoted in Serra, Il rilancio, p. 81; HAEU, MK 2, Projet d’un emorandum des pays Benelux aux six pays de la CECA, 8 May 1955.

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more concrete terms: the current plans for a common market would change the economy of Western Europe fundamentally and went much further than the agreements made in the context of the GATT and the OEEC. The steps outlined in the Benelux memorandum implied a change of course towards a ‘European state’; and in his eyes, that was a very good move.28 On 20 May, the Benelux memorandum was sent to the governments of the six ECSC member states. The Benelux called for the coming ministers’ meeting of the Six to discuss the ‘organisation of a conference’ at which a new treaty could be discussed. The memorandum comprised three components. Firstly, it included an explicit appeal for further sector integration by expanding the competencies of the ECSC High Authority to include such areas as transport and energy. Secondly, it called for the establishment of a new, supranational European community on the peaceful use of nuclear power. Thirdly, the Benelux argued in favour of setting up a common market in stages, as described in the Beyen Plan. It noted that agreement would have to be reached on the pace of the liberalisation process, the required social and economic harmonisation, a system of exemption clauses for national and other special circumstances and the harmonisation of legislation, especially regarding the length of the working week and pay for overtime and holidays.29

With the Benelux to Sicily The Benelux memorandum was discussed at the conference of the ECSC foreign ministers on 1 and 2 June on the island of Sicily. As it was election time in Italy, the liberal foreign minister and Sicilian-born Gaetano Martino was able to benefit from the extra political exposure on the island. But in practical terms, there was little effective discussion at the conference. Sicily was, in many respects, an adventure for the northern Europeans. The conference was held in Messina, but the delegations stayed in the picturesque town of Taormina, which was situated high on the rocks on the east coast of the island. Consequently, every day of the conference meant a wild journey along winding coastal roads to cover the 60 kilometres from the hotel to the conference centre and back. But the adventure had 28 Archiv für Christlich-Demokratische Politik, Sankt Augustin (ACDP), i-659070/2 (Nachlass Hans von der Groeben), Ausführungen von Vizepräsident Etzel, 9 May 1955, Strasbourg; Rothschild, Un phénix, p. 159. 29 PAAA, 2, 900, A9010, Memorandum des Pays Benelux de la CECA, 20 May 1955.

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a number of other dimensions. Only ten years previously, Carlo Levi had published his world-famous book Cristo si è fermato a Eboli (Christ Stopped at Eboli), a poetic but unsettling eyewitness account of the deep, hopeless and abject poverty in southern Italy. The book was compulsory reading in the cosmopolitan policy circles in the Bretton Woods institutions in Washington. It was read as a source of inspiration because it was seen as penetrating confirmation of the urgency of poverty alleviation and social engagement through multilateralism. Many of the conference attendees were, in one way or another, part of that transatlantic policy elite. That was certainly true of former IMF boss Beyen. He was pleased to see Sicily as the stage for European high politics ten years after the war. Moreover, the exotic location gave the ECSC conference something exciting, its own trademark, and Beyen could see the benefits of that.30 That was, however, not the case with everyone. In preparation for the conference, the Italians and Germans had distributed memoranda setting out their position on the Benelux proposals. Although the tone of the documents was moderately positive, one thing was very clear: in Bonn and Rome, they were not overly enthusiastic about the initiative so soon after the failure of the EDC. Even more problematic was that the French had not revealed their standpoint at all. Spaak’s chef de cabinet Rothschild was concerned. On the evening before the conference, as the delegates started arriving at the Hotel San Domenico, the former monastery that was to be the diplomatic centre for the conference, he was trying to coordinate positions more closely with the French. But his attempts were in vain: Pinay had gone directly to his room and, although the high-ranking officials in the French delegation hung around in the bar, they were very tight-lipped. The failure of the conference was already in the air, and the atmosphere showed it. Cynicism ruled, not least because the press had shown little interest in the European adventure on Sicily. Kohnstamm, who had been sent to Taormina on behalf of the ECSC High Authority as an observer, now discovered at first hand just how much appreciation there was for the first supranational institution in the history of European cooperation: that is, none at all. It was all rather unpleasant; everyone gave him a wide berth. It was ‘the worst conference in the worst atmosphere he ever experienced’. After the first day, he ‘lay in bed in tears’. It literally made him ‘severely ill’. That was partly because of the officials in the Dutch delegation, whom he called ‘rotten Dutch trash’. Of those, Jaap Kymmell – who worked at the Ministry of Foreign Affairs under Kohnstamm’s 30 Beyen, Het spel, p. 238.

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college friend Van der Beugel – communicated clear disapproval of the whole undertaking. Kymmell’s aversion to the arrogance of the French was a clear and audible voice in the Dutch position. Beyen was also only too well aware of what ‘many’ in Europe and the Netherlands ‘thought’ about the Messina conference – that it was ‘yet another failed attempt’. That was certainly true of the Dutch cabinet. With the exception of Mansholt and Zijlstra, the Dutch government was ‘either not interested or opposed to’ the whole project. Drees’ chef de cabinet Fock thought the Benelux memorandum ‘an exceptionally bad document’.31 But Minister of Foreign Affairs Beyen was an optimistic man, and he retained that optimism during the conference in Messina. That was probably against his better judgment, as there was precious little to be optimistic about. What the other delegations suspected was correct. Premier Faure had given Pinay a simple instruction: support the atomic energy community but oppose the common market as much as possible. That meant that significant results were an illusion before the conference even started and that total failure was a very realistic prospect. After all, both projects were linked together in the Benelux memorandum; indeed, that was even its essential message. On the first morning of the conference, the Benelux delegations discussed the strategy and concluded that, given the standpoint of the others, agreement on the content was probably not feasible. It was therefore preferable to focus on reaching agreement on the procedure for what was to happen after the conference. Bech and Spaak had already worked out the tactics in the previous days. The minimum outcome of the conference had to be a decision to set up an ‘intergovernmental committee led by a prominent political figure’ to study the feasibility of the plans in the Benelux memorandum. This would comply with France’s wishes, as communicated to Spaak by Pinay at the lunch at Margaret Biddle’s, to temper ambitions while keeping the flame of the relance alive. Much would depend on the ‘prominent political figure’ who would lead the committee. On the second day of the conference, it became the clear that the French and the Germans would not mind at all if the whole undertaking were to come to nothing. Just when the discussions seemed to be running aground, the Benelux played its trump card: a proposal for an ‘étude préalable’, a pre-study That offered Pinay a little more room for manoeuvre. The French minister declared that he could agree to this in principle, including the part 31 NA, 2.02.05.02 (Cabinet meeting), 2 May 1955 and 9 and 16 May 1955; Harryvan, Van der Harst and Van Voorst, Voor Nederland en Europa, p. 46.

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about the common market, but it all depended on the conditions defining the study committee’s task. During the same meeting, however, this minor success seemed to be reduced to very moderate proportions. Squabbling over the committee’s mandate quickly made the discussion on the conditions for social and economic harmonisation very complex – so complex, in fact, that a sense that it would all come to nothing seemed to be embedded in the committee’s tasks from the beginning. That was the state of affairs when president Bech brought the final session in Messina to a close. Snoy was given the task of setting the conclusions of the conference down in black and white. Back in Taormina, however, he was quickly forced to ascertain that no decisions at all had been made. What now? The baron hurried to the Greek amphitheatre in the town, which Goethe had called a ‘most astonishing work of both nature and art’.32 At this magnificent location, the ministers were enjoying a spectacle of a completely different kind, a performance by the Ballet of Rome. Snoy found Bech and strongly urged him to re-open the meeting so that it could reach some conclusions. Bech agreed to do that but said that it would have to wait for a while. After the ballet, there was a supper in San Domenico, at which the ballerinas would join them at the table. In the end, Bech was unable to resume the meeting until around two in the morning. The meeting was everything but orderly; chaos reigned. At first, there seemed to be no hope at all of reaching agreement. It eventually took a confidential conversation between Spaak and Pinay to produce a concluding statement. The conclusions of their tête-à-tête were incorporated in the Messina Resolution.33 Only months later would it emerge that the ECSC states had taken a historic step in the history of European integration. In the resolution, the ECSC member states expressed the aim of achieving closer cooperation in the fields of transport and energy and stated their support for setting up an atomic energy community. In addition, they specified the common market as a goal to be worked towards on a step-by-step basis. The resolution stated that further study was required to determine the feasibility of all these plans, after which a follow-up ministerial conference could decide on further steps. An impressive list of issues to be studied was then drawn up for the common market: from the procedure and the ‘rhythm’ of the integration process to the coordination of monetary policy, 32 Johann von Goethe, Italiaanse reis (Amsterdam: Boom, 2005), p. 298. 33 HAEU, CM3/1, MAE/SEC, 13/4, II; Pineau and Rimbaud, Le grand pari, p. 173; Segers, De Europese dagboeken (1), p. 72; Dumoulin, Spaak, pp. 506-509; Duchêne, Jean Monnet, pp. 280-81; Rothschild, Un phénix, p. 163; Snoy et d’Oppuers, ‘Le role’, p. 95.

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and from the harmonisation of financial, economic and social legislation to a system of exemption clauses and the establishment of institutions to preserve the workings of the market. The study committee entrusted with this daunting task was referred to in the resolution as an ‘Intergovernmental Committee’. This term was devised to denote a committee that may consist of representatives of governments but who were not authorised to commit their governments in any way. Lastly, Bech and Spaak’s plan for the committee to be led by a ‘prominent political figure’ was also included in the final declaration, even though there was insufficient time that night to determine just who that figure might be.34 After the resolution had been made public, Winrich ‘Teddy’ Behr, the chef de cabinet of ECSC vice president Etzel, called his friend Kohnstamm, who was in bed in Taormina. In contrast to the unremittingly cynical and sceptical mood of public opinion, Behr’s tone was enthusiastic: what an unexpectedly good end to the conference, the resolution wasn’t that bad at all! Kohnstamm, who had seen from much closer how things had gone, was not yet ready to draw such conclusions: ‘General after-taste of conference not one of relance, but of funeral’, he wrote in his diary.35 The news coverage on the conference became considerably more positive in the weeks that followed, however, when it became clear that Spaak was to be the ‘prominent political figure’ who was to lead the study committee. The Messina Resolution stated that the committee should present its results no later than 1 October 1955. That deadline was not reached by a long chalk; the final report of the Spaak Committee was not ready for discussion until the Venice Conference of 29 and 30 May 1956.

Rebirth as a market According to Beyen, the Venice Conference was like ‘an event from a dream – Venice was at its most beautiful and pleasant’ and ‘there were more pigeons on the Piazza San Marco than Americans’. The conference was held ‘in the beautiful monastery of San Giorgio’, where the delegates were brought by gondola. And perhaps the best of all, ‘we had little work to do’. The Spaak Report was completed and was waiting to be approved. The report elaborated on the Benelux memorandum, with a little finetuning by the French and the Germans. After the Faure government had 34 HAEU, CM3/1, MAE/SEC, 13/4, II and III. 35 Duchêne, Jean Monnet, p. 281; Segers, De Europese dagboeken (1), p. 72.

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decided in November 1955 to disband parliament and call new elections, Monnet-confidant Uri and the German European Hans von der Groeben – whose career in the Ministry of Economic Affairs was being pushed by the Bundeskanzleramt – had taken on the final editing of the report, at Spaak’s request. Conspicuous in the final report was that the section on the common market had been worked out in detail and the institutional structure of the market considerably upgraded. There was to be a supranational ‘European Commission’ to enforce compliance with the rules of the market. The market itself should reach out in all kinds of directions, embracing for example agriculture and monetary policy. The Council of Ministers would make decisions in all cases, on the basis of proposals by the Commission, and the competencies of the ECSC Court and Assembly (Parliament) would be expanded. EURATOM, the atomic energy community, would be designed along the same institutional lines. The option of a free-trade zone was definitively abandoned. There was unanimous agreement on an ‘irrevocable’ customs union as an intermediate step on the way to a common market. That final goal was to be achieved within twelve years, a period that was divided into three phases of four years in which the member states were to remove trade barriers step by step. That would not take place automatically and linearly, as Beyen had originally proposed, but by political decisions by the Council of Ministers. What would occur automatically was the allocation of grants from the ‘adjustment fund’ for retraining and labour mediation in cases of company closures resulting directly from the working of the market. French concerns on this point were taken very seriously, also because the report anticipated a system of exemption clauses and exceptional situations to curtail and rectify future market distortions. Decisions on these kinds of issues would have to be taken in the first phase by the Council of Ministers on the basis of unanimity. In short, the Spaak Report presented a ready-to-go recommendation to introduce a common market (and thus no free-trade zone). This was the course that had been taken since the autumn of 1955, and it was reason enough for British observers to withdraw from the Spaak Committee. The Spaak Report laid out the timetable for introducing the common market, including the dates on which the Six would move from one phase to the next. Nevertheless, it did avoid making hard choices. The report contained, for example, no clear standpoint on agriculture. France wanted agriculture included in the market and a more expansive flanking policy (to protect farmers’ incomes), which West Germany certainly did not want.

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Furthermore, nothing at all was said about the sensitive dossier of overseas territories, mainly the colonies of France, Belgium and the Netherlands. The most essential issue that was not addressed, however, was the balance of payments of the member states. It was clear that a certain balance was crucial for the market to function and for the member states to fight inflation. The report did not deal with these core issues. How should the joint interest in market stability be promoted? Between the lines, it was possible to read an ambiguous answer to this question: first, the report stated that the balance of payments should remain a strictly national responsibility, only to express the expectation later that, the further the common market developed, the more need there would be for greater economic and monetary integration. But that was all still in the future – it was as yet too early to speak of monetary integration. That conclusion was also borne out by the facts: if these common goals were to be taken seriously, the exchange rate of the franc was a painful joke.36 On the eve of the Venice Conference, Spaak had again tried to discuss everything with the French in advance. A year after his lunch with Pinay in the Hotel Directoire, he now met up with the latter’s successor as Minister of Foreign Affairs, his ‘friend’ and fellow socialist Christian Pineau. The recent political developments in Paris were not unfavourable for Spaak. After the elections in January 1956, the government of Edgar Faure had to make way for a centre-left cabinet under the leadership of socialist Guy Mollet, who openly allied himself with the Action Committee for the United States of Europe, Monnet’s new lobby vehicle. And that was very good news for European integration. Through ‘resolutions’ of the Action Committee, prominent politicians and employers’ and employees’ leaders committed themselves to the objective of further European integration. The support for the integration process that Monnet succeeded in creating within the Europe of the Six in this way was impressive. Almost all political parties allied themselves to the Committee – only the Communists, the Gaullists and the Nenni socialists (led by the Italian socialist and anti-fascist Pietro Nenni) refused. Monnet had set up the Action Committee to generate political pressure in favour of new European projects based on the ECSC model. He did that by making political legitimation of integration at home in France a less precarious undertaking. Ratification of international agreements had to become less 36 Comité Intergouvernemental crée par la conférence de Messine, Rapport des Chefs de Délégation aux Ministres des Affaires Étrangères, Brussels, 21 April 1956 (MAE 120f/56 corrected); HannsJürgen Küsters, Die Gründung der EWG (Baden-Baden: Nomos, 1982), pp. 165-196.

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dependent on the political whims of the moment. Only in that way could a repeat of the EDC debacle be prevented. The resolutions were the visible side of the Action Committee, but at least equally as important to its success was Monnet’s network, which operated largely out of public view. This network assured the Action Committee of wealthy American sponsors like the Ford Foundation and good publicity through its excellent contact with the Western media. But, above all, Monnet’s network provided access to the highest political circles in Paris, Bonn, Washington and even London. The knowledge that Monnet and his supporters gathered there was, in effect, a source of power. Subtle interventions in interstate European negotiations were the Monnet team’s speciality. The new French prime minister Mollet may have been a friend of Monnet, but Pineau had a serious problem with the relance. He wanted to speak to Spaak about it directly and in person before the Venice consultations, and he spoke frankly. He told Spaak that the socialist super-minister in the Mollet government, Paul Ramadier, was opposed to a common market because he was convinced that, in a free market, the French economy would not be able to compete with the other five ECSC member states. Spaak responded sharply, saying that this was ‘not possible’ and that it was ‘too late’ for France to backpedal. The other five member states were prepared to discuss both the common market and EURATOM, which had been included in the Spaak Report largely to keep the French on board. EURATOM was a bargaining chip for Paris; it was all part of the same package as the common market. Spaak: Pineau: Spaak:

The others have no interest in EURATOM… We have reached the point at which France must say ‘yes’ or ‘no’. And what if we say ‘no’?’ Then you will witness the birth of a new free-trade zone led by the United Kingdom […] Not only your industrialists will suffer, but also your farmers […] Believe me, it is in the interests of France to accept what seems to me inevitable, and without pulling a sour face. You will have plenty of opportunities to defend your interests during the negotiations.37

Spaak was right. After this conversation, Pineau proposed that Mollet plough through the yes/no question thoroughly once more in the cabinet. The prime minister thought that a bad idea; in his eyes, it was ‘not prudent’ to present the cabinet with a ‘choice that precise’. Instead, Mollet performed 37 Pineau and Rimbaud, Le grand pari, pp. 206-207.

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a handy piece of delegation. He expressed his full confidence in Pineau and mandated him to decide on his own initiative whether to answer ‘yes’ or ‘no’. Pineau could decide, and Mollet assured him ‘either way, I will support you’. A few days later in Venice, Pineau took the ‘big gamble’: in the name of France, he said ‘yes’ to the common market-EURATOM package. To the great surprise of the other parties, France agreed to the opening of treaty negotiations on both projects. In addition, Pineau proposed putting Spaak in charge of the negotiations, a suggestion that was unanimously approved.38 ‘Venice’ was to be Beyen’s last European conference.39 His departure marked the end of a decisive and exceptional phase in the Netherlands’ European policy, but Beyen was to witness the acceptance of the Spaak Report as the basis of the negotiations on the atomic energy community and the common market. In this way, the Netherlands left its mark on the future path of European integration. Via the Benelux memorandum and the Spaak Report, the 1953 Beyen Plan had become an integral part of the integration process. With hindsight, it can be concluded that, during the period that Beyen was minister, the process experienced a transformation that was to be embedded in the construction of the common market. And Beyen had been one of the architects of that development. Sector integration became a thing of the past. That was certainly the case from 1958, when President de Gaulle severely hindered the implementation of the EURATOM treaty in the interests of an independent French force de frappe. In the decades that followed, it would become clear that the integration process – through the form it took – would acquire one dominant identity. That identity was derived not from the ECSC nor from a European army or a political union but from the market. For a long time, the possibility that the integration of Europe would follow this course was not even contemplated. And perhaps even more surprising: it was to turn into a resounding success.

The latest trend How did The Hague deal with Beyen’s European legacy? How did the Netherlands conduct the negotiations on the agreement that was to be the mother treaty of the EU? 38 PAAA, 2, 906, A9025-26, Project de proces-verbal de la conference tennue à Venise les 29 et 30 mai 1956; HAEU, MAEF/OW/306, Note. Résultat de la conference de Venise, 13 June 1956; Pineau and Rimbaud, Le grand pari, pp. 207-208. 39 Beyen, Het spel, p. 243; Weenink, Johan Willem Beyen, p. 364.

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When the treaty negotiations started in earnest in the summer of 1956, Joseph Luns was the minister with primary responsibility for European affairs. He had refined his view of foreign policy in the early 1950s during conversations with fellow KVP party members like Carl Romme, Marga Klompé and his close friend Father Beaufort, and in discussions with committed civil servants like Conny Patijn, Pieter Blaisse (who became a member of parliament for the KVP in 1952) and Ernst van der Beugel (see chapter 3). Van der Beugel became State Secretary for European Affairs under Luns after Beyen’s departure. Back in 1952, Luns had described his perspective on foreign policy in a note entitled ‘The main goal of the Netherlands’ foreign policy’. The starting point was the permanent tension between the Netherlands’ tradition of neutrality, which had been intact for more than a century, and the international reality of the post-war world. That reality forced the Netherlands to adopt what Luns called ‘subjectivity’ in its foreign policy. In other words, the new situation required an active foreign policy, including taking sides. In 1952, however, Luns had to conclude that the Netherlands was still not ready to pursue such a policy and, instead, took refuge in a policy fuelled by ‘abstract norms of international law and fairness’. The bureaucratic exercises and technocratic tours de force that accompanied such a policy may look impressive but were not, in his view, politically very astute. International politics was, after all, ‘not science’ but ‘l’art du possible’. In other words, instrumentalism and idealism made Dutch foreign policy blind to the indecency of others. The tendency to take the lead in international thought and action often meant that the Netherlands lagged behind in the hard banality of interstate negotiations. At the negotiating table, the ability to bluff and a streetfighter’s mentality were often more useful than naïve wishful thinking about an international community or model-based policy planning. Xenophilia and trendy notions of international law were not the way to defend the Netherlands’ interests. Luns considered the state of Dutch foreign policy in 1952 nothing short of ‘dangerous’. There was one stroke of luck: when the third Drees government came to office in that year, Luns himself was at the helm as co-minister of foreign affairs. From October 1956, after Beyen’s departure and the arrival of the new Drees government, he had the foreign policy dossier completely to himself. In matters of European integration, Luns usually agreed with Drees. That differences of opinion on this issue were neither party-based nor religious became clear in this fourth Drees government (1956-1958): they cut directly through centrist parties like the PvdA, the KVP and the ARP. The new government reflected this phenomenon: supporters of international

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European integration like Mansholt, Klompé, Samkalden and Zijlstra sat across the table from colleagues who were sceptical of the Europe of the Six – men like Drees, Luns and Van der Beugel. But, by now, they were all ‘Europeans’; politically they had no other choice. The premier knew that better than anyone else. Drees was pleased that the slippery Beyen had been shown the door. But the prime minister was forced by circumstances to adhere more and more strongly to an active role for the Netherlands in Europe, even in the Europe of the Six. What helped was that, since the failure of the EDC, the Six seemed to have abandoned the idea of a ‘political Europe’ and tended more and more towards pure market cooperation. That brought the integration process closer to Drees’ perspective of how it should be. Furthermore, this technocratic form of integration would leave the door more widely open for the United Kingdom and the Scandinavian countries. That passionate Europeans were amply represented in his fourth government was a reflection of the subtle shift in a pro-European direction that Drees now considered opportune. Confirmed realist Luns seemed the ideal man to give Dutch policy more pro-active form in foreign affairs, too. But one aspect remained a little awkward: the autumn of 1956 was certainly on the late side to start taking an active part in the treaty negotiations on the common market and EURATOM. Up to that point, the Netherlands had hardly been a visible presence in the process and, when The Hague had come to the fore, it had been with defensive standpoints. In the first instance, in the follow-up to the Messina Conference, the government had – at Beyen’s suggestion – chosen economics professor Gerard Verrijn Stuart as its representative on the Spaak Committee. That was a strange choice because the other delegations were led by professional negotiators who had won their spurs in earlier diplomatic assignments. West Germany sent Ophüls and Von der Groeben; France dispatched exminister Felix Gaillard, while Belgium and Italy sent sitting ministers. Drees regretted that, by sending Verrijn Stuart, he lost control of Beyen’s European eccentricities, but there was little he could do to change it. It was, after all, up to the Ministry of Foreign Affairs to decide who was to be in the delegation. Fock, Drees’ tried and tested secretary-general, had done his best to act as watchdog for the prime minister and had made it something of a game to intercept as much information on the Dutch standpoint in the Spaak Committee as possible. He was often successful, but it was never more than a sticking plaster from the perspective of the prime minister’s office. Whenever the Dutch delegation did make itself heard in the Spaak Committee, its message was loud and clea, and focused on three aspects. First,

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the Netherlands insisted strongly on the lowest possible external tariff. After all, its export interests were at stake. This standpoint was directly opposed to that of the French lobby. When the Netherlands found itself in danger of becoming isolated as a result of this inflexible demand and Spaak started nagging at them to compromise, Fock wrote to Drees: ‘I would certainly not like to give in to Spaak’s pressure and be intimidated by his rather rough tactics’. Fock’s exhortation was timely. The prospect of isolation had already led to shifts in thinking in The Hague. Drees had personally ensured that the delegation dug in its heels on this point – and without discussing it first with his cabinet. 40 Secondly, the Netherlands felt that social harmonisation should never be set as a condition for introducing the common market. This standpoint, too, was diametrically opposed to that of France. The Netherlands agreed with Erhard. The German Minister of Economic Affairs called the French perspective ‘unfair and unacceptable’ if for no other reason than that the social harmonisation that the French were calling for would mean West Germany exposing its economy to ‘an inflationary development’ and surrendering itself to ‘a policy of instability’. France’s bleating about social harmonisation was an attempt to disguise the decadent ‘mentality’ of the Fourth Republic. It was an absurd reversal of the facts. Economically, it was a complete illusion as ‘from Sicily to the Ruhr’, there could simply be ‘no equal productivity and therefore no equal labour costs’. The French position was ‘baren volkswirtschaftlichen Unsinn’ (pure political-economical nonsense) and would lead to ‘economic mass extinction’). The Hague could not have put it better. 41 But the Dutch government differed in opinion from Erhard on one crucial point, and that is why the two countries never stood shoulder to shoulder against the ‘economic nonsense’ from Paris. Thirdly, the Netherlands had, surprisingly enough, started arguing strongly in favour of supranational cooperation within the context of the common market. Beyen’s preference for such an approach was long known but, since the Benelux memorandum, Drees, Luns and Van der Beugel had also changed course in this direction. To guarantee that the market worked as it should, the European Commission would have to be given as many 40 NA, 2.02.5.02 (Cabinet meeting), 401, 13 June 1955 and 2.03.01 (AZ/KMP), 2852, Memorandum, 5 August 1955 and 2846, Fock to Drees, 3 and 8 December 1955 and Linthorst Homan to the minister, 7 December 1955 and 2847, Van der Beugel to the minister, 16 February 1956 and 2.05.118 (BZ 1955-64), 18797, Bot to the minister via the secretary-general, 17 February 1956. 41 PAAA, B1/48, Erhard to Adenauer, 25 September 1956; BA, N1254/85 (Nachlass Franz Etzel), Erhard to Etzel, 16 November 1956; .G. Harryvan, In Pursuit of Influence: The Netherlands During the Formative Years of the EU, 1952-1973 (Brussels, etc.: Peter Lang, 2009), pp. 125-26.

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competences as possible. That was the only way to keep French policy outside the door and allow the market to work without being distorted by state intervention. The cabinet even agreed unanimously that the Netherlands should leave the Europe of the Six if insufficient powers were to be transferred to the Commission. In that case, the common market would be nothing more than an ‘OEEC of the Six’ and the OEEC itself could thus provide a multilateral framework for free trade. 42 (It is important to note here that it was this supranational institutional structure – elaborated in the Spaak Report – that caused the United Kingdom to decide against participation.) Such a strong plea for a supranational body was nothing short of a revolution in the European policy of Drees and of the Netherlands. Why did the most Eurosceptic ECSC member state, which had opposed the transfer of national powers to the supranational level in the negotiations on both the ECSC and the EDC, now argue so forcefully for supranational integration? There were three main reasons for this change of heart. The first was that, in the eyes of the Netherlands, what was at stake was more than what had been called ‘political Europe’. With the exception of a few idealistic proponents of integration, Drees’ governments hated that political dimension with a vengeance. 43 They didn’t trust it: whatever happened, the Netherlands had to avoid being confined in a continental bloc under the political leadership of the French and Germans. The Netherlands’ foreign policy was Atlantic, and that was that! The Spaak Report hardly mentioned the political dimension of European integration. It proposed a technocratic trade project comprising a customs union and a common market. These were matters very close to the Netherlands’ heart and, for that reason, the Dutch felt they must not be spoiled by political games and bargaining. The best protection against that, the best way to keep that wonderful market project really apolitical and to allow it to work automatically – according to the laws of the market itself – was to establish and enforce the rules at the supranational level. That was the only way to ensure that the member states would stick to the bargain. The second reason lay in the considerable strategic advantages of the shift towards a pro-supranational perspective. Spaak had shown in Belgium how that worked. Like the Netherlands, Belgium was deeply concerned that taking part in the integration process would lead to dominance by 42 NA, 2.02.05.02 (Cabinet meeting), 402, 14 November 1955 and 2.06.010 (BEB/EZ), 18796, Memorandum Van der Beugel, 5 October 1955. 43 Albert Kersten, Luns: Een politieke biografie (Amsterdam: Boom, 2010), p. 202.

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France and Germany, but Spaak had already made a European virtue of that necessity a few years earlier. In his view, the best way to defend the interests of the small countries was to go on the offensive. For some time, he had been explaining that transferring policy autonomy to supranational institutions increased rather than decreased small countries’ room for manoeuvre. Not only would the large countries be bound by the same supranational rules, but also the small ones could negotiate those rules as equals. Spaak had achieved considerable success with this perspective – nationally, in Europe and in the wider international arena. From the mid-1950s, it was rapidly adopted by the Dutch government. In short, the fight to stop a Europe dominated by the great continental powers was pursued by other means: supranational rather than intergovernmental guarantees. Spaak was thus seen as a valuable ally. Having said that, there could be no harm in the Netherlands making itself more visible at the European table since, in the words of State Secretary Van der Beugel, ‘when it came to it, the Belgians always came down on the French side’. Van der Beugel admitted later that, although ‘he was very fond of Spaak […] he was, at heart, a French-oriented Belgian’. 44 The third reason was that, in both the Netherlands and within the Western bloc, it was trendy to be pro-European. Spaak’s international popularity was a clear illustration of that. The Belgian minister was not only a leading European but also enjoyed a special status in Washington, where he was a popular guest and advisor at the very highest level. That was something to be intensely jealous of, and that may have been the main cause of the Netherlands’ change of attitude to European integration. This was especially so because being trendy was something that the Dutch were very good at in international politics, as commentators from outside the Netherlands had earlier observed. 45 The traditions of neutrality and free trade offered more than enough mental flexibility to respond to the latest trends. Furthermore, the guiding principles of post-war foreign policy – pragmatism and economic technocracy – provided the instruments to do that rigorously and radically, if circumstances called for it. And they called for it continually: first, in the years shortly after the war when the Netherlands embraced the Western multilateralism of Bretton Woods, the Brussels Pact and the OEEC as the international expression of its own industrialisation policy. The much 44 Harryvan, Van der Harst and Van Voorst, Voor Nederland, p. 59; Nasra and Segers, ‘Tussen argwaan en pragmatisme’, pp. 120-24. 45 Kennedy, Nieuw Babylon, pp. 53-54.

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more old-fashioned-looking integration in the West German economy was expressly seen as part of that international movement. Later, the Spaak Report called for a new make-over of foreign policy. Now European integration had to be made part of that Dutch trendiness. Luns could not get around that – nor did he want to. The popular minister wanted to present himself in the international arena as a front-runner, and the common market offered an excellent opportunity to do just that. Here, however, an essential difference between Luns and people like Spaak and Beyen revealed itself. The latter were personally convinced that regional supranational integration was the road to the future. Luns and Drees, however, took it a little less seriously and saw it primarily as a glittering instrument for Dutch foreign policy and important for domestic popularity. The pro-European profile of the fourth Drees government was relatively non-committal. That was clear from its standpoint on the relance européenne: the Dutch government would not have minded at all if the entire project were to fail – in fact, they might have preferred it. For that would mean that the much more Atlantic OEEC would once again be at the centre of European developments and – just as after the failure of the EDC – the initiative in Europe would shift towards the UK. It is therefore not surprising that the Netherlands hardly translated its pro-European values into deeds in the treaty negotiations.

The Treaties of Rome The prospect of failure seemed to come very close in October 1956. 46 The first conference of ECSC foreign ministers on the treaty negotiations, on the basis of the Spaak Report, ended in a Franco-German row about social harmonisation. What had happened? After much haggling over competences in Bonn, Erhard had succeeded in getting himself included in the West German delegation as an ‘expert’. Having made it to the conference, he deftly thwarted an agreement on the common market and cast Europe into a new crisis. He was delighted. The obsession with the Spaak Report seemed a thing of the past. Finally, there now seemed room for real economic cooperation. The first signs were already there: the British government had presented plans for a free-trade zone. But Erhard had got it wrong. The situation now was very different from the failure of the EDC, which had smoothed the path for a successful British 46 The following paragraphs are based on Segers, Tussen verzoening en verval, pp. 216-271.

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alternative (the WEU, see chapter 3). Then, France had been the deal-breaker; now it was West Germany. That responsibility was too much to bear for the new-born state which had the policy of Westbindung to thank for its existence, especially in the form of European integration. If anyone realised that, it was Adenauer; especially given the electoral risks it brought with it since the SPD had aligned itself with Monnet’s Action Committee at the beginning of the year. Until then, the chancellor had kept his cards close to his chest during the treaty negotiations. He, too, had taken account of a possible EDC scenario and a rival British alternative. After Erhard’s kamikaze diplomacy in Paris, Adenauer could no longer stay in the background – he had to intervene to limit the damage. The chancellor became pro-active. He relieved Erhard and State Secretary for Economic Affairs (and committed federalist) Walter Hallstein – who had been squabbling in public for months – of their responsibilities for the European dossiers. And he asked Etzel to come to Bonn as crisis manager and, in cooperation with the West German foreign ministry, cobble together a Franco-German compromise as quickly as possible. Adenauer knew, of course, that Etzel would do this in very close collaboration with Monnet (Etzel even took Monnet’s confidant Kohnstamm to Bonn as a special advisor). Etzel’s mission was clear and produced results within only a few days. Through Monnet’s contacts and channels in Luxembourg (ECSC), the Elysée was informed of the changes in the West German standpoint. Washington was also tipped off that Bonn would do whatever it felt was necessary to save Europe. This all took place in direct contact with the chancellor and behind the backs of the West German cabinet. In other words, Paris and Washington knew what the West German standpoint was before the ministers in Bonn did! Two weeks after the failed conference in Paris, a Franco-German compromise on the common market and EURATOM was on the table. That got the negotiations moving again, and they soon shifted into a higher gear. The core of the deal was that the Federal Republic would not hold up the process of saving Europe for the sake of a few cents here and there, and social harmonisation would be an integral part of the package. On 6 November, Adenauer and Mollet took advantage of an already scheduled visit to Paris by the chancellor to conclude an agreement. This Adenauer-Mollet agreement laid the basis for a successful completion of the treaty negotiations. The end result was that Erhard was sidelined, British alternatives were scuppered and the Netherlands had become part of a continental common market with protectionist fringes. Once again, the

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Netherlands had been overrun by events. How could all this have happened so quickly? The context of international crisis had made it decisively easier for the Adenauer-Mollet agreement to be concluded and gave political legitimacy to this historic step. What exactly had happened? When Adenauer visited his colleague Mollet on 6 November 1956, the Suez Crisis was approaching its conclusion. The crisis had escalated a week earlier as a result of British-French military intervention in Egypt. In the special train in which he travelled to Paris during the night of 5 November, the chancellor had received copies of two letters sent to London and Paris from the Kremlin. In the letters, the Soviet Union threatened to initiate a nuclear attack if the war in Egypt did not stop. At the same time, the tanks of the Red Army rolled into the streets of Budapest and bloodily crushed the Hungarian uprising. The world seemed to be on fire. The Bundestag had tried to stop Adenauer from going to Paris, to at least prevent the visit from being interpreted as support for the colonial actions of the French and British. En route, however, the chancellor had felt only confirmation for his decision to go ahead with the visit. That feeling was mainly aroused by a copy of a third document: a letter from Moscow to Washington, in which – while threatening London and Paris with nuclear war – the Soviet Union proposed cooperation with the US ‘to prevent a third world war’. It was very serious that, given the circumstances, the Soviet threat seemed not at all unfeasible. Adenauer blamed the United States, which was steadfastly refusing to give the French and the British political or military support, even now that Moscow was threatening to use nuclear arms. What value did NATO still have in such a world? Europe had become a plaything of the superpowers. Faced with this combination of the Soviet threat and American unreliability, the chancellor felt that it was crucial that Europe be able to stand up for itself politically in the world of the future. In that light, his meeting with Mollet could end in no other way than with a giant leap forward in the process of European integration. The Adenauer-Mollet agreement paved the way for the signing of the Treaties of Rome on 27 March 1957. What was ultimately agreed in the Treaties of Rome? First of all, they founded EURATOM and the EEC. The latter was based on the main outlines of the Spaak Report, which envisaged a step-by-step phasing out of tariffs and the liberalisation of trade over a period of twelve years, divided into three four-year stages. After that twelve-year period, the common market would have to be complete. The Council of Ministers would continue to be the decision-making body. In principle, the Council could only make decisions based on a majority vote on proposals by the Commission or on

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the initiative of a majority of twelve out of seventeen votes and four of six states (votes in the Council were allocated as follows: France, the FRG and Italy had four, Belgium and the Netherlands two, and Luxembourg one). A decision on the common tariff would, for the time being, be made by unanimous vote. A fund was established for vocational education and for managing freely mobile employees, to which the member states contributed in proportion to their size. In addition, an agricultural fund was set up, and it was agreed that agriculture would be part of the common market. On this point, the Dutch delegation had shown itself to be the champion of the community ideal. It even got an exception incorporated in the treaty: the Netherlands wanted majority decision-making on agricultural policy and national minimum prices as soon as possible. The agricultural market had to be thrown open so that growing Dutch agricultural surpluses could find a market (see chapter 5). Finally, there were the funds for the overseas territories, whose set-up revealed the familiar patterns of Franco-German reconciliation that formed the heart of ‘Adenauer’s Europe’. It took an intimate walk in the gardens of Matignon on 18 February 1957 – the final day of the treaty negotiations – for the chancellor and Mollet to reach a compromise on the overseas territories dossier, which would be negotiated under the poignant title ‘Eurafrique’. The final compromise was as follows: of the total of 581 million dollars that would be deposited into the fund, 511 million would be allocated to the French overseas territories. The Netherlands, Belgium and Italy would receive 35, 30 and 5 million dollars, respectively. Luxembourg and the Federal Republic would get nothing. The FRG would, however, be a net contributor to the fund, paying 200 million dollars. The West German and Dutch negotiators had watched on with dismay during Adenauer and Mollet’s walk in the garden. One of the Dutch diplomats had whispered to Drees that ‘every minute of this conversation is costing Adenauer at least a million’. That was to prove a rather conservative estimate. But ultimately, for Adenauer, it was all about something completely different. Even before the last round of West German concessions, he had explained to his ministers why the Federal Republic had to pay more money: All in all, the treaty is a risky undertaking. It has significant economic and political aspects. But, above all, it is necessary to take account of the mentality of the others. The rest of the world fears our economy. That is why France is so keen to conclude a pact with us. 47 47 Die Kabinettsprotokolle der Bundesregierung 1957 (Munich: Oldenbourg), p. 94.

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That was history and politics. According to Adenauer, the economy was subordinate to both. That is why, in an in-depth interview after the signing of the Treaty of Rome, he said ‘perhaps this alliance is the most important event of the post-war era’. 48 But, paradoxically enough, from the end of the 1950s, Adenauer’s Europe would primarily be a Europe of the market in which the political dimension remained hidden behind the economic. That does nothing to change the fact that the Federal Republic, as shaped by its first chancellor, in many respects formed the core of this new edifice of West European unification. The common market was built around Cologne cathedral.

48 Konrad Adenauer, Teegespräche 1955-1958 (Berlin: Siedler, 1986), p. 182.

5

A Europe of conspiracies (1957-1968) Abstract The Europe of the Six never became The Hague’s Europe, just as it never became London’s or Ludwig Erhard’s. The revisionism this induced in Dutch government circles remained a priority regardless of what government was in office during the 1950s, ‘60s and early ‘70s. Successive Dutch governments of all political colours actively engaged in attempts to sabotage French initiatives and Franco-German plans for a European Political Community (EPC) in the mid-1950s. And when French President de Gaulle made new attempts to create a European Political Union in the early 1960s, Dutch diplomacy helped unveil what were seen as Gaullist conspiracies aimed at steering European integration in an anti-AngloSaxon direction, which the Dutch saw as also undermining NATO. Keywords: Free Trade Association (FTA) and European Free Trade Association (EFTA), European Political Union (EPU), British application for EEC membership, French veto against British accession, Common Agricultural Policy (CAP), Franco-German friendship treaty (Elysée Treaty)

How were the Treaties of Rome received in the Netherlands? On 3 October 1957, the House of Representatives held a debate on the ratification of the treaties. With the exception of the Dutch Communist Party (CPN) and a few Protestant quibblers, there was overwhelming support in the House for the common market and even more for EURATOM. Luns started his term of office by saying that ‘approval of these treaties is of unprecedented importance for the Netherlands, and therefore for Europe’ and that it was ‘a step towards European unity to be applauded and which the government and parliament see as a main goal of Dutch foreign policy’. In addition, it sent a ‘mental stimulus from Europe to the rest of the world, which would benefit from this new, almost revolutionary form of living alongside each other in solidarity’.1 1 These and ensuing quotes come from the parliamentary debate of the Proceedings of the States-General, Lower House, 1957-58, 3 October 1957 (www.statengeneraaldigitaal.nl).

Segers, Mathieu, The Netherlands and European Integration, 1950 to Present. Amsterdam, Amsterdam University Press 2020 doi: 10.5117/9789463728133_ch05

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According to Luns, the House need not concern itself about inadequate guarantees for the working of the free market, as the current structure of the cooperation offered sufficient safeguards to ‘look forward with peace of mind to how the new institutions would operate’. In addition, the treaty would nudge ‘more protectionist-minded countries’ like France ‘in the right direction’. The Netherlands would lead by example. The minister then put it into historical perspective: The Netherlands already made a choice when it joined the ECSC. It chose not against something, but for something […] And that choice was one which would inevitably have further consequences. […] It is the government’s firm conviction that it was the right choice and that it was made in the interests of the Netherlands and Europe. […] By approving these treaties, we are embarking on a course from which there is no turning back.

That was true. By joining the ECSC, the Netherlands had taken a course that led the country into the common market, a road from which there was very unlikely to be any way back. That was the reality of the situation. When he was minister of economic affairs, Zijlstra also used to present the economic argument that ‘the EEC was a further step in a process that was already under way’. It was all about exports within Europe. During the debate, Zijlstra set it all out clearly once again. Before the war, 15 per cent of the Netherlands’ foreign exchange earnings came from capital revenues (interest). That was now only two per cent. Pre-war exports to Indonesia accounted for 20 per cent of total Dutch exports. A large part of that market had now disappeared. At the same time, the population of the Netherlands had grown by no less than forty per cent. The government had been able to compensate for these developments in an ‘unexpected’ way, by increasing exports, especially within Europe. This was the Netherlands’ own Wirtschaftswunder. Zijlstra reminded the House that, before the war, ‘no one would have dared believe in the degree of economic development we are now experiencing’. The minister was honest: of course, the Netherlands would also face ‘difficulties with adjustment’ to the common market but, from a historical perspective, that was peanuts and the Netherlands could now rely on the country’s capacity to increase its exports. Furthermore, it should be ‘abundantly clear that our small country is the best gateway to the Six.’ But whether that reality was entirely congruent with the ‘deep conviction’ of having made ‘the right choice’ remained questionable. That became clear

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later in Luns’ argument, when he called the House’s attention to the newly initiated negotiations on a European free-trade zone, an extension of the British initiative which had foundered in the autumn of 1956: That these talks are being conducted at all is in itself proof that the creation of the EEC is already strengthening the forces in favour of freer world trade. If I perceive it correctly, these repercussions will not be the last.

But Luns did not perceive it correctly. A year later, the British-inspired negotiations on a Free Trade Association (FTA) would fail in the face of resistance from the continent (see the next section). Convinced that he was in the right, Luns laid his cards clearly on the table during the ratification debate: In the arguments put forward from some sides of the House, I have observed an underestimation of the enormous political and economic importance associated with a free-trade zone for the Netherlands. It is the first test of the face the Community will present to the outside world. We have not been able to negotiate on the common market without keeping our eyes open to the political situation in our partner countries. […] There is growing awareness in all parts of the United Kingdom of the increasing urgency of the relationship with Europe. It would be a grave error, both politically and economically, for the Six to turn its back on that tendency and snub the UK by adopting an overly self-confident and isolated attitude.

Yet that was exactly what was to happen. And it would go much further than simply snubbing the UK. The role of bridge-builder between the EEC and FTA that Luns and the Dutch government foresaw the Netherlands fulfilling was a recipe for disappointment and frustration. This was especially so after the Algerian Crisis had brought General de Gaulle back into power as the head of the French government in May 1958.

Faust in Paris The ink was not yet dry on the ratification when a discussion arose on the relationship between the Six and an FTA. The Netherlands took an active part in the debate and emerged as the FTA’s most impassioned supporter.

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They went so far that Belgian diplomats felt that their northern neighbours considered the signing of the EEC treaty as ‘a mishap’.2 By now, the Netherlands’ European policy comprised a curious mix of partly contradictory elements of revisionism, conservatism and trendy pragmatism. The Netherlands was completely revisionist when it came to expanding European integration. That British membership still did not seem to be any closer was a thorn in the eye for The Hague. In addition, the Netherlands responded conservatively – if not with great aversion – to any form of integration that leaned towards a more independent role for ‘Europe’ on the world stage. If there was a community that should develop into a political union, it was the Atlantic one. As far as the Netherlands was concerned, that was not a role that Europe should fulfil. Europe was for other things, primarily for technocracy in the service of free trade. Lastly, there was the Netherlands’ ambition to present itself as the champion of supranational integration, a position that fluctuated according to changing trends. Merging all these elements into a coherent standpoint demanded ultra-pragmatism. But The Hague was accustomed to that. Furthermore, the Dutch government was convinced that it possessed the bridge-builder’s mentality now required in Europe to reconcile the common market with the aim of extending the EEC towards the Atlantic. Van der Beugel was already hard at work. In the autumn of 1958, he visited the State Department in Washington to talk about the stalemate in the negotiations on the FTA caused by French resistance. He was open and insistent, saying ‘your friends of free trade within the EEC are in relatively desperate need of assistance’. It was by now clear to Van der Beugel that France most certainly did not endorse the goal of an ‘open’ and ‘outward-looking Common Market’. He therefore warned his American partners of a ‘split between the EEC and the rest of the OEEC countries’ that could ‘jeopardise many of the achievements of the post-war period, including NATO’.3 What Van der Beugel was sketching here was the nightmare scenario that Stikker had sensed with foreboding in 1951, when the Netherlands was confronted with the Pleven Plan: a schism between continental and Anglo-Saxon Western Europe and consequently the Netherlands being caught up in ‘the French net’ (see chapter 3). Van der Beugel’s concerns were well-founded. The formation of a bloc in Western Europe was indeed what the new government in Paris was preparing, and the Americans had no intention of standing in the way. On the contrary, they were prepared to support it. 2 3

Nasra and Segers, ‘Tussen argwaan and pragmatisme’, p. 127. FRUS, 1958-60, Vol. 7(2), pp. 78-80.

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Instead of a more British EEC, the Netherlands was faced with a Europe in which Paris played a more rather than less determinant role. This was particularly the case after de Gaulle, following his return to the head of the French government, set about intensively redefining European integration and calling for the EEC to be limited to continental Europe. A serious political crisis in France, which had almost driven the country to the brink of civil war, had brought the old general back into active politics, and with a vengeance. In the spring of 1958, France found itself in a state of emergency, due to an escalation of the long-running war in Algeria and a military coup in Algiers on 13 May. With government buildings in Paris barricaded by the riot police, President René Coty saw only one way out. At the end of the month, he made an urgent request to the ‘most illustrious of all Frenchmen’, Charles de Gaulle. Thereafter, the new France soon started to take shape. On 1 June, a government of national unity was installed. De Gaulle was given special powers and a free hand to revise the constitution; the latter would lead some months later to the start of the Fifth Republic – which remains the polity of modern-day France – in which the executive (the president) was designated extensive powers in respect of parliament. It was conspicuous that the ‘princes of the Fourth Republic’ who, according to Gaullist propaganda, had abused France ‘like a nymphomaniac in the barracks’, 4 were amply represented in de Gaulle’s government. They included socialist Guy Mollet, Antoine Pinay and Pierre Pfimlin, leader of the Christian Democratic Mouvement Républicain Populaire (MRP), all of whom were members of the cabinet. They were all known to be pro-Europeans and maintained close contact with Monnet. The break with the France of the Fourth Republic, which de Gaulle regularly made a point of publicly, proved not to be that far-reaching after all. And that was certainly true of France’s European policy.5 It continued to operate behind the scenes, through back channels and diplomatic contacts, in the same old tried and trusted fashion. Under de Gaulle, the 72-year-old ‘European Saint’ Schuman remained fully active, and the short lines of communication between the Elysée and Monnet’s office at Avenue Foch 83 continued to be nurtured, albeit in the deepest of secrecy.6 De Gaulle had first sketched out his ideas for the future of European integration on 13 August 1958. The main message was that the EEC should become a 4 David Schoenbrun, The Three Lives of Charles de Gaulle (London: Hamish Hamilton, 1966), pp. 189, 197, 210, 214. 5 Compare Gérard Bossuat, L’Europe des Français (Paris: Publications de la Sorbonne, 1996), pp. 398 and 399. 6 Fondation Jean Monnet, Lausanne (FJM): AMKC 14/9/54, Monnet to Schuman, 20 October 1958; Roussel, Jean Monnet, p. 720.

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‘reality’ in the political arena. This would allow Europe to participate in efforts to solve ‘major global problems’. According to de Gaulle, that would entail setting up a ‘mechanism of regular consultation’ between the ‘governments involved’.7 Such regular intergovernmental consultation was ultimately to take the form of a genuine European Political Union (EPU), which would allow the EEC member states to capitalise politically on their economic power in the world. Partly because Washington had rejected his proposals for a French-British-American security policy directorate within the Western bloc,8 de Gaulle concluded that European and American interests in the Cold War were very divergent. In the general’s view, that gap was too wide to bridge, especially in the essential issues of nuclear proliferation and decolonisation.9 And that forced the Europeans to work towards greater independence. De Gaulle realised that, as far as Europe was concerned, he had little choice. The fact that France had signed the Treaties of Rome meant that his European policy had to focus on ‘exploiting this inevitable reality’.10 Nevertheless, he surprised friend and foe with his constructive approach to the EEC. France not only accepted the obligations in the EEC treaty – something about which there was still much uncertainty, and with good reason – but also went a step further. When Pinay’s hard reforms to strengthen the French economy (which included a devaluation of the franc) started to bear fruit in the form of increased competitiveness, de Gaulle’s Fifth Republic called for the step-by-step liberalisation provided for in the EEC treaty to be speeded up. In France’s view, the end of the first phase of tariff reductions, originally planned for 1 January 1962, should be brought forward to July 1960. The EEC partners could hardly protest. After all, France had always been the one to put off achievement of the goal of liberalisation, mainly for fear of the repercussions for the French economy (which was particularly vulnerable to due the relatively high price level in France, which the leaders of the Fourth Republic had never dared to address). But that was now all in the past: together with the liberal economist Jacques Rueff, Minister of Finance Pinay had freed the French economy from this millstone. 7 Charles de Gaulle, Lettres, Notes et Carnets (LNC), VIII (Paris: Plon, 1985), p. 73. 8 Frédéric Bozo, ‘France, “Gaullism”, and the Cold War’, in Melveyn P. Leffler and Odd Arne Westad (eds.), The Cambridge History of the Cold War, 2 (Cambridge: Cambridge University Press, 2010), p. 166. 9 Kennedy Presidential Library, Boston (JFKL), Presidential Off ice Files (POF), Memcon Deloncle-Rostow, 28 March 1961 and memo, 27 June 1961; Sorensen Papers, box 50, Memcon Schumann – Sorensen/Stabler, 29 May 1961. 10 Edmond Jouve, Le général De Gaulle et la construction de L’Europe, 1 (Paris: Librairie général, 1967), p. 209.

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But this exemplary European behaviour on the part of Paris also had a downside, certainly from a Dutch perspective. In November 1958, the French government had issued a unilateral statement in which it said that it was ‘impossible to create an FTA in the form desired by the British’.11 That was a slap in the face for London. But France was not alone. The European Commission, under the leadership of the German federalist Walter Hallstein, was also not at all in favour of the FTA, which was seen in Brussels as a potential threat to the Commission and its authority. For the same reason, the French government could count on the support of the Americans and Monnet.12 This was exactly the ‘grave error’ that Luns had presented to the House of Representatives as ‘unrealistic’ during the debate on the ratification of the EEC treaty. De Gaulle’s France seemed to be deliberately setting out to ‘snub the UK by adopting an overly self-confident and isolated attitude’. And yet the Netherlands was to go along with this, for pragmatic and economic reasons. The French proposals to expedite the process of liberalisation were part of a whole package within which the call to determine a common external tariff was a central issue. The key dossier for the Netherlands was once again on the table, but now in the context of greater liberalisation. Of course, the tariff that France proposed was far higher than the existing tariffs in West Germany and the Benelux, but the French plan to link the dossiers offered the Netherlands the opportunity to strike a very profitable compromise. The core points of the compromise were completion of the common market and the introduction of the Common Agricultural Policy (CAP), which would be beneficial to the extensive agrarian sector in the Netherlands. The Hague was placated. It could perhaps even be concluded that, with this deal, Luns – now Minister of Foreign Affairs in a government free of ‘reds’ and led by Prime Minister Jan de Quay (of the Catholic People’s Party, or KVP) – had sold the soul of the Netherlands’ European policy. From the outside, the differences between The Hague and Rome seemed increasingly small. And in The Hague, too, everything seemed to be up for sale. Would that have happened under Drees? Either way, the deal had far-reaching consequences for the relationship between the EEC and the United Kingdom. When, in the course of 1959, the Six reached an accord on the French package, the agreed common external 11 FRUS (1993), 1958-60, 7, p. 77. 12 Compare UKNA, PREM, FO to Tokyo, 23 October and Tokyo to DFO 27 October 1959; Pascaline Winand, ‘American “Europeanists”, Monnets Action Committee and British Membership’, in George Wilkes (ed.), Britain’s Failure to Enter the European Community (London: Frank Cass, 1997), p. 166.

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tariff threatened to drive a wedge between the EEC member states and the other members of the OEED. The sword of Damocles that had been hanging over the Atlantic market fell and cleaved Western Europe in two. The EEC became a bloc within the Western bloc. This was the moment at which ‘Fort Europe’ was born. The FTA plans could be thrown definitively onto the scrap heap. This was all something of a defeat for the UK. It would eventually lead to the European Free Trade Area (EFTA) being set up in 1960. In the EFTA, the UK worked together with Sweden, Denmark, Norway, Switzerland, Austria and Portugal. The Netherlands played an uneasy role in these developments, especially when it became clear that the sabotage of the FTA was only the first step in de Gaulle’s ambitious plans for the EEC.13 In the summer of 1959, premature enthusiasm on the part of the Italians led to a Franco-Italian plan for political cooperation between the Six leaking out.14 The leaked plan caused much suspicion, especially in Germany and the Netherlands. Was the Franco-Italian EPU to be a future rival for NATO? Was it intended to keep the British out in the cold forever? Luns in any case immediately rejected the whole idea, on behalf of the Netherlands. In the cabinet, he explained that forming any kind of bloc against the Netherlands’ Anglo-Saxon partners would be insanity, would jeopardise cooperation in NATO, and thereby damage the Netherlands’ most vital interests.15 Be that as it may, a continental bloc was already being formed in economic terms, also as a result of the failure of the FTA, which the Netherlands had gone along with. The responses from northern Europe were sufficiently suspicious to leave de Gaulle with no other choice than to put his political plans for Europe on ice, at least for the time being. The relief in The Hague was to be short-lived.

Rhetoric and intrigue Monnet was one of the very few who knew that de Gaulle was not the die-hard opponent of European integration that he was seen to be. His reputation as an integration basher was nothing more than a political image 13 Mathieu Segers, ‘De Gaulle’s Race to the Bottom: The Netherlands, France and the Interwoven Problems of British EEC Membership and European Political Union, 1958-1963’, Contemporary European History (Cambridge: Cambridge University Press, 2010), 19, 2, pp. 111-32. 14 Maurice Vaïsse, ‘De Gaulle, l’Italie et le Project d’Union Politique Européenne, 1958-63’, Revue d’histoire moderne et contemporaine, 43 (1995): 660. 15 Jeffrey Vanke, ‘An Impossible Union: Dutch Objections to the Fouchet Plan’, Cold War History, 2 (2001): 97.

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that the general liked to nourish.1616 And de Gaulle knew that Monnet knew that. But that did not mean that there were not deep differences of opinion between the two when it came to Europe. De Gaulle had an aversion to any progressive steps towards what might one day be a European superstate. He considered that to be a process beyond the control of the member states. It was driven by technocratic legal mechanisms, reconfirmed each time in European treaties, as in the explicit ambition to achieve an ‘ever closer union’. This made European integration a machine that thundered forwards, manned by Eurocrats. What far too few people asked themselves, in de Gaulle’s eyes, was who was driving ‘this thing’.17 He himself knew only too well who was driving the machine in the background. The technocratic, legal nature of the process was irrevocably tied up with the cultural Americanisation that was eating its way deeper and deeper into Western Europe. That betrayed who was really at the helm of the federalisation machine: Washington! And why? Because of US interests in the Cold War – or, more concretely, the Pax Americana in the Western world. The United States was Europe’s clandestine federateur! That had to stop, because it was a threat to Europe’s future survival. Monnet thought this was nonsense. In his view, the next step in the integration process had to be an Atlantic partnership. The Cold War was, after all, a given, and the US was Europe’s most important partner. This difference of opinion was a potential bombshell under their (clandestine) cooperation, but Monnet did not believe that the general’s anti-American sentiments would prove an obstacle in finally getting the political dimension of European integration up and running – on the contrary.18 For Monnet, it was an extra encouraging sign that, parallel to his pro-EEC course, de Gaulle expressly sought rapprochement with Adenauer. In September 1958, the chancellor even had the exceptional honour of being invited to de Gaulle’s family home in Colombey-les-deux-Églises. On that occasion, the general had said two things. He had argued that Europe had no other choice in the long term than to seek closer ties with Russia, as de Gaulle consistently insisted on calling the Soviet Union. That would after all be necessary when the artificial bipolar situation of the Cold War came to an end. Secondly, he had assured Adenauer that he was 16 Wilfried Loth, ‘De Gaulle und Europa: Eine Revision’, Historische Zeitschrift, 253 (1991): 642 and 643; Mathieu Segers, Diep Spel, pp. 29-33, 103, 113. 17 Perry Anderson, The New Old World (London, New York: Verso, 2009), p. 79. 18 Segers, Diep Spel, pp. 36-46 and 92-95; Alain Peyrefitte, C’était de Gaulle, 1, pp. 61 and 62 and elsewhere.

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determined to implement and adhere to the EEC treaty. He was to repeat this pledge at their next meeting, in Bad Kreuznach in November.19 The strategy that Monnet developed in response to de Gaulle’s European ideas was intended to solve the two major problems hampering the integration process – the political dimension and the ‘British question’ – in one fell swoop. Monnet realised that the disturbed British attitude to the EEC was a potential source of division, also within Europe, where member states like the Netherlands and influential politicians like Erhard had been unpleasantly surprised by the failure of the FTA and the contempt with which France had treated the UK. The consequences of this British humiliation should not be underestimated. There would be voices in London urging for the integration process to be sabotaged, that much was certain. At the core, the relationship between the EEC and the UK was all about the bitter struggle for trade domination in Western Europe. Furthermore, that struggle was about to escalate as a result of the Common Agricultural Policy (CAP), which was on the point of being launched and which juxtaposed the trade interests of the UK and the Commonwealth even more sharply against those of the EEC. That was exacerbated by the fact that this essentially trade-related problem was increasingly acquiring geopolitical aspects. The split between the Six (the EEC) and the Seven (the EFTA) threatened to spill over into the Third World, and Africa in particular. That was a cause of concern not only because it further complicated the already difficult process of decolonisation but even more so because it threatened to undermine the Western European partnership with the United States in the Cold War.20 In close cooperation with French EEC commissioner Robert Marjolin, Monnet had worked out a plan to address these problems. The plan was as ingenious as it was radical. The rivalry between the Six and the Seven would have to be neutralised by means of a new overarching Atlantic organisation.21 Within this new multilateral structure, the increasingly clashing economic and commercial interests of the EEC and 19 Documents Diplomatiques Français (DDF), 1958, 2 (Paris: Imprimerie Nationale, 1993), pp. 341345 and 754-656; FJM, AMM, 5/8/34 and 36, Memos Monnet, 31 August and 1 September 1962 (‘notes roses’, with thanks to Françoise Nicod of the Fondation Jean Monnet for access to these archive files, which are still closed for research); Giauque, Grand Designs, pp. 85 and 86; Ulrich Lappenküper, Die deutsch-französische Beziehungen 1949-1963, 2 (Munich: Oldenbourg, 2001), p. 1456. 20 Compare Archiv für Christlich-Demokratische Politik, Sankt Augustin, (ACDP), 1-433-064/2, Birrenbach to Herter and Kissinger, 18 and 15 February 1963; UKNA, PREM 11/3131, 21 November 1960 and Foreign Off ice Records (FO), 1 and 4 July 1960; JFKL, Ball Papers, box 2, Telcon Ball-Bundy, 3 May 1961. 21 FJM: AMKC 33/3/290, Marjolin to Monnet, 4 August 1959.

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its Western partners (Britain and the Commonwealth, the Seven and the United States) could be reconciled. What made the plan so ingenious was that it not only offered a solution to the British question but also seamlessly tied in with de Gaulle’s political ambitions for Europe. The future Western forum for economic coordination that Monnet and Marjolin had cooked up tied in closely with de Gaulle’s plans for an EPU because it was founded on the idea that the EEC would act within it as one party – i.e. as a politically integrated actor. In other words, the EPU was a necessary condition for the creation of the new multilateral institution, which would appease the British. On top of that, the whole project would have a reassuring effect on the Americans. That, too, was urgent, as Washington was rapidly becoming more and more concerned about the formation of an economic bloc in Western Europe. Booming intra-European trade had few positive consequences for the American trade balance. Creating international support for his new plan was no great problem for Monnet. He could count on backing from Washington (which was one reason why the Americans could not understand the Netherlands’ resistance to the EPU),22 and he consulted as closely and meticulously as possible with Adenauer and de Gaulle at every stage. The route towards the next stage in European integration was already set out. The first step was to achieve the EPU by intensifying Franco-German cooperation. That was to be followed by the economic ‘association’ of the three Western sub-blocs (the US, the UK and the Commonwealth, and the EEC as a union) by bringing them together in a new multilateral construction. The final stage was to deepen the Atlantic partnership between the US and Western Europe on the basis of equality. The sequence of these steps was crucial. After all, if the UK ‘did not want to participate in Europe, then Europe should not treat the UK any differently than the US’. In other words, more clearly, this route offered an effective means of quashing any cynical British ambitions to have the best of both worlds – free access to the EEC and a special economic relationship with the US. That was exactly why Monnet’s new plans were appealing to Adenauer.23 In the spring of 1960, the circumstances were favourable enough for de Gaulle to relaunch his EPU plans. The idea was to put the subject on the agenda at the upcoming meeting between de Gaulle and Adenauer in Rambouillet at the end of July. The starting point was a long letter that 22 Kersten, Luns, p. 272 and elsewhere. 23 FJM, AMKC 9/1/35, Monnet to Adenauer, 13 and 22 August 1959 and AMKC 14/5/12, Monnet to De Gaulle; Lappenküper, Die deutsch-französische Beziehungen, pp. 1488-1489.

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Monnet had sent to de Gaulle in the summer of 1959, outlining his plan once again. De Gaulle had, however, used the letter primarily to further develop and polish his own ideas on the EPU. He had written down the results of that exercise in a private memorandum. The text was crystal clear: the overarching goal of de Gaulle’s European policy was to reorganise NATO. The general was not against the North Atlantic Treaty as such but did not agree with how it had been put into practice later during the Korean Crisis.24 In his view, the organisation of NATO should better reflect the new ‘reality’ of interdependence between ‘Europe’ and the United States rather than be a continuation of the dependent relationship of the past. This is where European integration entered the equation. The ambition to achieve equality could be realised on the basis of a ‘Franco-German agreement’ and the broader EPU of the Six that this would lead to. This cooperation would have to consist of regular high-level consultations between the governments on matters of politics, the economy, culture and defense.25 During the confidential talks in Rambouillet, the general read from his private memorandum. That was a surprise to all those involved, who thought it had been agreed that de Gaulle would take this opportunity to launch the Monnet-Marjolin plan, on which Monnet had already coordinated with the Germans. When the general did not do this, a confused Adenauer responded with great reticence but did not reject the ideas out of hand. After the meeting, there was considerable lack of clarity about what de Gaulle had said and meant, about what Adenauer had answered and meant, and about what the two statesmen had agreed. That their conversation had taken place without interpreters did not help: Adenauer’s French was certainly not something to write home about. Diplomats in Bonn and Paris were never able to get a clear picture of what exactly had taken place. Much of what was discussed at Rambouillet would remain forever shrouded in mist. What did become painfully clear, however, was that – consciously or unconsciously – de Gaulle had incorrectly interpreted Adenauer’s reserved answers.26 That was to become clear on 5 September 1960, the day on which de Gaulle held one of his notorious press conferences to launch the EPU publicly, using typically ‘audacious’ Gaullist language. He took every opportunity to 24 Georges-Henri Soutou, L’Alliance incertaine (Paris: Fayard, 1996), p. 188. 25 De Gaulle, LNC, VIII, p. 382 and 383; NA, 2.05.118, 1391, Beyen to the ministry, 16 September and 20 October 1960. 26 HAEU, MK 18, memo, 20 September 1960; Michael Sutton, France and the Construction of Europe, 1944-2007 (New York: Berghahn, 2007), pp. 91-94; De Gaulle, LNC, VIII, pp. 396-399 and 401.

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ridicule the ‘delusion’ of supranational integration. By doing so, he intentionally provoked many ‘Europeans’ and federalists, but his words also raised other suspicions among the Six. What was de Gaulle up to? Did he want to dismantle the existing communities? Did he want to cast doubt on the value of NATO? These questions only became even more pertinent when Adenauer responded with rage. By declaring on the radio that he remained ‘the sincere supporter of existing European and NATO policy’ that he had always been, the chancellor distanced himself from the suggestions that de Gaulle’s words invoked about the nature of their conversation in Rambouillet.27 His specifying NATO in this context was good for the Netherlands but a sensitive slap for de Gaulle, the man who had withdrawn the French Mediterranean fleet from NATO control, had refused to integrate French air defences into NATO structures and had forbidden the US to station nuclear weapons on French soil. The public polarisation following the press conference served the goals of neither de Gaulle nor Monnet: the break had to be repaired. During a secret meeting between de Gaulle and Monnet in mid-September, preparations were made for a ‘non-aggression’ pact – an agreement not to attack or criticise each other in public. In the autumn of 1960, the agreement was set down in black and white by a select group of loyal members of both entourages and coordinated with Adenauer in Bonn. Not much later, the whole conspiracy would be exposed by Hans van Houten, the Dutch State Secretary for Foreign Affairs, in a confidential conversation in London.28 Luns had brought Van Houten from the Dutch embassy in Mexico City to become a state secretary in the centre-right De Quay government. He had scouted Van Houten, son of a wealthy aristocratic family, as a suitable diplomatic war horse in the thorny issue of New Guinea. But he proved to be capable of fulfilling that same role in the opposition to de Gaulle’s foreign policy. This had the beneficial side effect that Luns could play the ‘good cop’, which was not unimportant to his stature in the international political arena, his further career, and maintaining good bilateral relations with France, a key partner in colonial dossiers.29 27 Charles de Gaulle, Discours et messages, III avec le renouveau, mai 1968 – juillet 1962 (Paris: Plon, 1970), pp. 256-267; NA, 2.05.118, 196030156, Linthorst Homan to Van Houten, 19 September 1960 and 2.05.118, 1391, Beyen to the ministry, 16 and 18 November 1960; Lappenküper, Die deutschfranzösische Beziehungen, 2, p. 1523. 28 HAEU, INT 555, p. 357; Oliver Bange, The EEC Crisis of 1963 (Houndmills: Macmillan, 1999), pp. 28 and 29. 29 Bart Stol, ‘De enige zekere bondgenoot: Nederland, Frankrijk and de zwanenzang van het Europese kolonialisme (1950-1962)’, Tijdschrift voor Geschiedenis, 122, 1 (2009): 19f.

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On 21 November, Van Houten was in London to talk to Edward Heath, then the Lord Privy Seal in Harold Macmillan’s Conservative government with responsibilities in the field of foreign policy. The reason for the meeting was the summit of the Six on de Gaulle’s EPU plans, which Paris was pushing forward. At the meeting, Van Houten gave Heath a copy of the non-aggression pact between de Gaulle and Monnet, clearly hinting at a continental conspiracy to shut the UK out of Europe (through the creation of a politically inspired secretariat threatening the cooperation within NATO).30 Essentially, this meant that the Dutch leader of the anti-de Gaulle lobby in the Europe of the Six was presenting Heath with a smoking gun. This was proof that the French, de Gaulle and Monnet supporters alike were not to be trusted when it came to Europe! The same applied to Adenauer. With Monnet, Paris and Bonn were cooking up a French-German directorate that would lead to the exclusion of the UK. The British did not really know what to do with this information, particularly as sentiments within the government were now ripe for rapprochement towards de Gaulle and the EEC. In addition, Heath was wary of running the risk of being accused of undermining the Six, and he wondered whether the copy he had received from Van Houten should be taken seriously. So the British responded evasively and decided to wait and see what the Six would do. In February 1961, the heads of government of the Six came together to discuss de Gaulle’s plans, which could now count on the open support of Adenauer. Dutch prime minister De Quay was tense and allowed Luns to do the talking as much as possible. His evasive attitude and insistence on British participation (which would later crystallise into what became known as the préalable anglais) placed the Netherlands in direct opposition to de Gaulle and Adenauer. The resistance of the Dutch led to a committee of national representatives being set up under the chairmanship of French diplomat and Gaullist Christian Fouchet to explore the possibilities of a European Political Union. The postponement in decision-making was a victory for Luns, but it also had a downside: it made it more difficult for the Dutch government to play its role as bridge-builder. Its standpoint on the EPU had placed it in a negative and isolated position within the Six. That was not good for the Netherlands, especially as it was also untenable as long as the British took no concrete steps towards the EEC. Furthermore, as de Gaulle pointed out, the Dutch standpoint was ‘illogical’, as it argued in favour of British participation and supranationality at the same time.31 30 UKNA, PREM, 11/3131, Record of conversation and attached memo, 21 November 1960. 31 NA, 2.05.118, 1391, Beyen 379, 16 September 1960; DDF (1997), 1961, 1, pp. 192-193.

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As everyone knew, these two positions were incompatible. Despite this, after the meeting, the general had complimented Luns on his ‘tenacity’. A realist and a Francophile, Luns proved easily pleased and he returned home delighted.32 De Quay was less happy. After Luns’ tough stance at the Paris summit, the Dutch position was as good as hopeless. The other EEC partners supported de Gaulle’s initiative, the British had not requested EEC membership, and the EPU could even count on the support of Monnet and Washington.33 Not long afterwards, The Hague was faced with the impossible choice of leaving the Fouchet Committee (which, since the Netherlands was a member of the Six, was not a realistic option) or going along with the proposals (which would mean a loss of face). On 10 April, Fock sent a note to Van Houten, ‘for his eyes only’, describing a conversation that morning with De Quay. The note revealed how much the prime minister was grappling with de Gaulle’s plan. He had confided to Fock as follows: I assume that it will be extremely difficult to determine the Dutch government’s standpoint regarding de Gaulle’s plans. Whatever standpoint it eventually takes, the government is facing a decision that will bring a very serious far-reaching responsibility with it. That applies to both a positive and a negative attitude to the plans. I believe that this is the most important decision facing a Dutch government since it decided in 1940 to continue the fight against the Germans, which almost automatically signified the end of our policy of neutrality. It will probably determine our future for decades.34

These were the words of an inexperienced actor in European politics, who had great difficulty in separating hard fact from rhetorical reality. After all, the future of the Netherlands, the responsibility for which De Quay felt weighing heavily on his shoulders, had to a large extent already been decided. Below the surface of the free trade slogans and the overblown rhetoric of European progress, the Netherlands had already been becoming increasingly ‘continental’ for some time and, especially, increasingly ‘German’ (the integration of the Dutch economy into that of Germany was completed in 32 Albert Kersten, ‘De langste: Joseph Antoine Marie Hubert Luns (19521971)’ in Duco Hellema, Bert Zeeman and Bert van der Zwan (eds.), De Nederlandse ministers van Buitenlandse Zaken (The Hague: Sdu, 1999), p. 211. 33 NA, 652, fiche 1534, MR, 20 January and 3 February 1961; compare NA, 2.05.118, 30154, Van Houten to the secretary-general, 7, 21 and 25 September and 12 November 1959. 34 NA, 2.05.118, 30156, Fock to Van Houten, 10 April 1961.

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1961 when the guilder was pegged to the revaluation of the Deutschmark; see chapter 6). That all took place within the ‘Europe of Adenauer’ and thus also meant that the Netherlands had become ‘more French’ and less ‘British’. The EEC only strengthened this development even further. But the common market was invariably presented in the Netherlands as an essentially apolitical project. And that offered new scope for escapism in Dutch European policy. Consequently, the Anglo-Saxon-inspired desire for a great Western free-trade bloc became the founding principle of Dutch thinking on Europe. This happened even when it did not serve to promote Dutch economic and commercial interests. That was curious but, in a certain way, it did tie in with the success of the reconstruction. In the 1960s, the Netherlands could afford such frivolities somewhat more easily: post-war scarcity was now definitely a thing of the past and, in 1959, a gigantic natural gas field had been discovered near Slochteren, in the province of Groningen. The revenues from the gas would help fill the state coffers for many years. This was the context in which Luns decide to openly oppose de Gaulle’s plans for the EPU. In the Fouchet Committee, the Dutch government initially had little choice than to try and hold up the proceedings as much as possible in the hope that circumstances would change for the better. That proved no simple task since – as always in European matters – the Dutch cabinet was deeply divided. Within Luns’ own party, the KVP, there was a strong faction led by Marga Klompé which wanted a constructive approach to the EPU; in this they were supported not only by the Lower House of Parliament but also by KVP Minister of Agriculture Victor Marijnen. Marijnen was in no mind to sacrifice the CAP, which was so advantageous for the Netherlands, in the battle of foreign policy principles that Luns expected to have to wage against de Gaulle. Luns could count on the support of Minister of Economic Affairs Jan Willem de Pous (CHU), who acted as his deputy on this dossier. This division in the cabinet made it impossible to draw up resolute instructions for the negotiating delegation in Paris. It soon led to the untenable position that had been inherent in the Dutch standpoint from the beginning.35 To the amazement of the leading members of the cabinet,36 as early as the spring of 1961, the Dutch negotiators in the Fouchet Committee found themselves forced to succumb to pressure from their EEC partners and from Washington, resulting in the préalable anglais being jettisoned. That 35 Segers, ‘De Gaulle’s race’, p. 125. 36 NA, 652, fiche 156, MR, 17, 21 and 28 April 1961.

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did little for the reputation of Dutch European policy. But the Netherlands was about to receive a gift from heaven. The tide turned in the summer of 1961, when the UK decided to submit an application for full membership of the EEC. What had made London change its mind? At the start of that year, a new administration had taken off ice in Washington led by President John F. Kennedy. It was, in the words, of a well entrenched journalist, an ‘administration of Monnet men’. According to Monnet’s right-hand man Kohnstamm, this fact was ‘no conspiracy and no coincidence’. Monnet’s friends had been appointed to key positions in Washington because they ‘wanted change’ and because they know how to be ‘concrete’. They were inspired by Monnet’s agenda. And that is how it was. The changing of the guard in Washington was an enormous stroke of good fortune for Monnet and his team, but it was more than their fragile partnership with de Gaulle could bear. The new European activism in Washington would signify the end of the crucial sequence of stages in Monnet’s plan (i.e. first the EPU and then the rest). During secret talks in April, American diplomats reported to Monnet, in a ‘strange atmosphere of conspiracy and solemnity’, on their intensive consultations with the British and the talks between Kennedy and Macmillan earlier that month in Washington. During those discussions, the American president had clearly indicated that, for political reasons, he was very much in favour of Britain applying for full membership of the EEC. In America’s eyes, the unity of Western Europe was being threatened by the friction between the Six and the Seven. At dinner, Macmillan had rushed over to George Ball – an old friend of Monnet who had quickly risen to become Kennedy’s most important adviser on European affairs – and told him ‘we will do it’.37 And in the summer of 1961, the British indeed applied for EEC membership. One consequence of this move by the British was that it gave the opponents of the EPU, like the Netherlands, new and very effective weapons to frustrate the negotiations in the Fouchet Committee. According to the Dutch government, it was now indisputable that the EPU could only be realised with the UK on board. In other words, the UK’s application to join the EEC had made the EPU of secondary importance. At the beginning of 1962, de Gaulle gave his displeasure about these developments free rein. Although a compromise was within reach, the absence of any substantial results in the Fouchet Committee (in the sense of greater 37 Segers, Diep Spel, pp. 164, 171-72, 180-83.

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independence from the US) led de Gaulle to unilaterally harden France’s negotiating position. He personally went through Fouchet’s compromise text, scrapping all references to NATO and insisting that the EPU should also concern itself with the economy (which The Hague – together with other parties at the table, including of course the European Commission – vehemently opposed). With this heavy-handed unilateral behaviour, de Gaulle forfeited the last ounce of credit among his opponents and sceptics. It also proved to be the first step towards the dismantling of his EPU plans. On 17 April 1962, at a conference of EU foreign ministers, Belgian minister Paul-Henri Spaak administered the Fouchet plan the final coup de grâce by insisting – with the support of Luns – that the préalable anglais was an unnegotiable condition for any progress on the EPU. This was unacceptable to the French minister, Maurice Couve de Murville.38 ‘Political Europe’ was once again a miserable failure. With the EPU in shatters, de Gaulle set out on a collision course. He personally prepared Adenauer for what was to come. In a secret conversation during the chancellor’s state visit to Paris, the general explained once again that ‘Europe was one world’ and ‘les Anglo-Saxons another’.39 Their Europe, that of de Gaulle and Adenauer, was under threat: via the British application for EEC membership, the US and the UK were trying to hijack the process of European integration because, as a result of de Gaulle’s plans, Europe was threatening to acquire too much international power. In the general’s eyes, the EEC was the first step towards a new chapter in European history in which close relations would continue to exist between the continent and its overseas territories.40 And de Gaulle was also intent on developing Europe’s relations with Russia, formerly a major European power but currently in a state of confusion, in which it was misused as ‘the citadel of Communism’, but that would not last. 41 It was a misconception to write their Russian friends off as potential partners in the future. After the failed defence of the Fouchet Plan, de Gaulle opened the attack with an aggressive Eurosceptic press conference in May 1962. He went so far that the MRP ministers in his cabinet felt compelled to submit their resignations. The general compared all the talk in Brussels about supranationality to the constructed language of Volapük (i.e. an unrealistic dream) and spoke of the ‘federator who would prove not to be European’ (hinting to an 38 DDF (1998), 1962, 1, pp. 433-434. 39 FJM, AMM 5/8/36 (‘Notes roses’), memo Monnet, 1 September 1962. 40 Jouve, Le général, pp. 202-203 and 210. 41 Compare FJM: AMM 5/8/36 (‘Notes roses’), memo Monnet, 1 September 1962.

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American-led conspiracy driving supranational European integration). At the same time, he put a spoke in the wheels of the negotiations on British accession to the EEC. The British question and the Cold War were also now arenas for a polarising confrontation with Monnet. De Gaulle’s press conference in May signified the end of the non-aggression pact between the two. The general’s attack came to a dramatic climax in January 1963. 42 The f inale had been carefully timed. Some months earlier, French negotiators had guided the talks on Algerian independence to a successful conclusion in the Evian Accords. This was also a personal victory for de Gaulle, who had brought what was a Herculean task to a surprisingly good end. Secondly, in the autumn of 1962, a constitutional referendum was held in France, which also ended in a convincing victory for de Gaulle, strengthening his position of power even further. With these successes in domestic politics under his belt, the general chose 14 January 1963 – the day on which the US president made his State of the Union address – to make a public statement on Europe. It was to become a historic moment. De Gaulle’s main message focused on the British application for EEC membership. De Gaulle had the following to say about the expansion of the EEC to include the UK and other EFTA countries: It is to be foreseen that the cohesion of its members, who would be very numerous and diverse, would not endure for long, and that ultimately it would appear as a colossal Atlantic community under American dependence and direction, and which would quickly have absorbed the community of Europe.

This bombastic warning culminated in a ‘veto’ against British accession to the EEC. According to de Gaulle, the ‘island’ had not ‘transformed herself sufficiently’ to ‘become part of the European community, without restriction, without reserve’. 43 The general presented ample evident to support his warning: the nuclear agreement concluded by the UK and the US on the Bahamas a few weeks previously (and the fact that this had led British diplomats to seriously explore to what extent de Gaulle could be ‘bribed’ with the promise of support for a Franco-European atomic bomb), the 42 Mathieu Segers, ‘Preparing Europe for the unforeseen, 1958-63. De Gaulle, Monnet and European integration beyond the Cold War: From cooperation to discord in the matter of the future of the EEC’, The International History Review, 34, 2 (2012): 347-370. 43 Anjo Harryvan and Jan van der Harst (eds.), Documents on European Union (Houndmills: Macmillan, 1997), p. 135.

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erratic response of the UK and the US to the Berlin Crisis (which suggested that they saw the status of West Berlin as negotiable; see the next section in this chapter), Kennedy’s unilateral action in the Cuban Missile Crisis, not to mention the surprise takeover of French car manufacturer Simca by Chrysler. De Gaulle had had enough of such Anglo-Saxon games, which kept the Cold War going. He was not prepared to allow the Americans to hijack the EEC through the ‘Trojan horse’ of British accession. 44 De Gaulle’s shocking press conference was the prelude to the Élysée Treaty, a treaty of friendship between France and Germany, signed by the general and Adenauer eight days later. The West and ‘Europe’ were shaken to their foundations. This was it: the dreaded formation of a continental bloc! The ‘desolidarization of the UK from the continent’ which American Europe expert Chip Bohlen had been so afraid of at the end of the 1940s (see chapter 1), was complete. Washington was in a state of uproar. Powerful lobbying by the US and by Monnet successfully led to some of the sharper edges being removed from the friendship treaty. West German politicians were happy to help out with this. It was not only Washington that was up in arms – Adenauer’s party was also in shock. The chancellor did not receive sufficient support in the Bundestag for this step; even his own CDU distanced itself from it. During the ratification process, the West German side added a preamble to the treaty in which the Federal Republic clearly expressed its loyalty to NATO and the organisation’s primacy in West German foreign policy. This led de Gaulle to sigh to Adenauer that ‘treaties, like young maidens and roses, have their day’ (parodying Victor Hugo, he quipped, ‘Hélas, que j’’en ai vu mourir de jeunes filles!’, Alas, how many young girls have I seen die of that!). 45 The most important political component that remained intact was the periodic Franco-German consultations on European integration. That would prove in the future to be no negligible result.

Market expansion by a gentleman farmer The Dutch government responded with dismay to France breaking off accession talks with the UK. At the official end of the negotiations, Luns 44 Frédéric Bozo, Two Strategies for Europe: De Gaulle, the United States, and the Atlantic Alliance (Lanham MD: Rowman & Littlefield, 2001), pp. 67-73 and 87-94; Sutton, France, pp. 91, 102 and 103; Richard F. Kuisel, ‘The American Economic Challenge: De Gaulle and the French’ in Robert O. Paxton and Nicholas Wahl (eds.), De Gaulle and the United States (Oxford: Berg, 1994), p. 199; Andrew Moravcsik, The Choice for Europe (Ithaca: Cornell University Press, 1998), p. 192. 45 Pattison de Ménil, Who speaks for Europe?, p. 125.

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spoke of a ‘black day for Europe’. The ‘spirit of the Community of the Six’ had been severely ‘compromised’. The Netherlands was ‘deeply concerned about the future of the Community’. 46 Outside the government, there was another Dutch politician of European stature who was very upset about these developments: Sicco Mansholt, Commissioner for Agriculture in the European Commission on behalf of the Netherlands. Mansholt was livid. He sought publicity and dramatised the crisis. With heated support from London and The Hague, he exacerbated the differences between the ‘Gaullists’ in Paris and Bonn and genuine ‘Europeans’. It was the start of a crusade against the Europe of de Gaulle that he would keep up for many years. Mansholt’s pugnacious attitude was, however, a little strange. Berend Heringa, Mansholt’s director of market organisation, did not consider de Gaulle’s veto a disaster at all. Policy reality actually showed that the general was completely in the right. It was no coincidence that de Gaulle’s decision to torpedo accession talks was secretly supported by Commission president Walter Hallstein. 47 The ‘veto’ had saved the Common Agricultural Policy (CAP). De Gaulle had closed the doors to the Europe of the Six, and the cynical explanation he had given for doing so had put relations among the Six – and more generally within the Western bloc – on edge. And that created an ugly scratch in the public varnish of the European ideal. That was all true. But, on the other side of the coin, de Gaulle had saved the CAP from an Anglo-Saxon attack. He had said that himself in as many words at the press conference when he questioned whether the UK really was ready and willing to bear the consequences of EEC membership: i.e. to say farewell to the preferential arrangements with the Commonwealth and ‘to abandon its demands for an exceptional position for British agriculture’. 48 Insiders knew that it was no coincidence that the general uttered these words on the first anniversary of the historic agreement between the Six on the CAP, the showpiece of the EEC, which was seen in Washington and London as a protectionist provocation directed at the liberal spirit of the Pax Americana. Before de Gaulle initiated his attack on opponents of the more intergovernmental and more political ‘Europe of States’ that he wished to see become a reality, he had ensured the security of the CAP. That had won him the sympathy of Europeans in Brussels, but his main motivation was French national interests. 46 Harryvan and Van der Harst, Documents, pp. 140-41. 47 Van Merriënboer, Mansholt, pp. 289-92. 48 Harryvan and Van der Harst, Documents, p. 135.

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The general made it unmistakably clear that the Europe of the Six owed it to France to honour the CAP in exchange for the risks the country had taken by agreeing to the Treaties of Rome. De Gaulle’s message was unambivalent and rhetorically very effective: West Germany should open up its market to French agricultural products to compensate for the opening up of the French market to West German industrial products within the context of the EEC.49 Here, French interests coincided with those of the Netherlands. Bonn was strongly opposed to this, as the FRG would suffer financial and economic disadvantages and the West Germans rightly feared that eventually they would also have to take on the role of paymaster in the CAP. The CAP mainly served French and Dutch interests and was also very Dutch in nature. In the course of the 1950s, the post-war scarcity in the Netherlands had been transformed into a surplus. Under the direction of agricultural minister Mansholt, the state had introduced export subsidies, buying up overproduction from Dutch farmers at guaranteed prices and dumping it at a loss on the other side of the tariff wall. At the end of the decade, therefore, The Hague was only too pleased to jump on the wagon as France insisted on a Common Agricultural Policy within the EEC. On 14 January 1962, Mansholt – the architect of the CAP – had his finest hour. It was one of those moments when French diplomacy had once again succeeded in getting the West German camel through the eye of a European needle. As with the Adenauer-Mollet agreement on the common market, geopolitical factors also played a central role. De Gaulle’s France had taken a hard line against the Soviet Union during the Berlin Crisis. In the eyes of Chancellor Adenauer, this showed the country to be a more reliable partner than the Anglo-Saxon allies, who had flirted with détente and were more ambiguous in their confrontations with Moscow. Adenauer knew how to keep a friend. In confidential talks in the spring of 1961, he had given de Gaulle the green light for a package comprising a CAP deal before the end of the year, steps forwards in de Gaulle’s EPU project in January 1962 and postponement of British EEC membership. The latter, according to the chancellor, was a logical consequence of the first two. Adenauer had added that, if the Fouchet project failed, France and the Federal Republic would have to move forward with the EPU on their own (this ultimately led to the Franco-German Treaty of Friendship in January 1963).50 49 Edgar Pisani, Le général indivis (Paris: Albin Michel, 1974), p. 64; compare Kiran Klaus Patel, Europäisierung wider Willen: Die BRD in der Agrarintegration der EWG (Munich: Oldenburg, 2009), p. 507. 50 Segers, ‘Preparing’, pp. 347-370.

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These agreements between de Gaulle and Adenauer did not mean that the CAP negotiations proceeded without any problems. Failure was always just around the corner. In December 1961, Couve de Murville, the French chairman of the negotiations, had even postponed the deadline. That was the only way to create sufficient time to reach agreement on the CAP and to allow the formal transition from the first to the second phase of the EEC to take place before the end of 1961, as had been agreed. With the clock still stopped, the marathon debate on agriculture of December 1961 eventually continued until 14 January. In that energy-sapping series of meetings, France and the Netherlands fought side by side for the CAP, with the inexhaustible plan-maker Mansholt as the indispensable outboard motor. The final agreement set the machinery of the CAP definitively on track. The structure that Mansholt had built in Europe was a copy of what he had done previously in the Netherlands, only now it was to be implemented ‘from Schleswig-Holstein to Sicily’. During his periods as minister in the Netherlands, his policy had displayed the élan characterised in those years by modern concepts like rationalisation, upscaling and liberalisation. Mansholt himself had initially typified his policy as ‘opportunistic’, and that description was reasonably accurate. The modern packaging concealed the fact that it was, in fact, a system of relatively high ‘floor prices’ intended to safeguard farmers’ material prosperity. This market and price policy ‘with a feeling for the farmer’ was against the principles of liberalisation, but it worked. It had made Mansholt immensely popular and given him a certain international allure. The quality press in West Germany observed that the ‘red farmer’ from the Netherlands had achieved a Landwirtschaftswunder, an agricultural miracle. This was in itself remarkable; he had succeeded ‘where other socialists had failed’, as ‘wherever in the world Marxists concerned themselves with agriculture, production immediately collapsed’. But this was not the case in the Netherlands, where the contrary had been achieved. Mansholt’s guaranteed prices as agricultural minister had given overproduction in the Netherlands an enormous boost. He had therefore tried as early as 1950 to get a European agricultural policy up and running. In his quest for markets for Dutch agricultural products, he had ‘borrowed’ Monnet’s idea of supranational integration – not because he believed in it so ardently but rather to ‘achieve a breakthrough in agricultural exports’ from the Netherlands. Back then, he had not succeeded; Drees had felt that he was moving too fast. But in 1958, as European commissioner, he was able to give it another try. The Common Agricultural Policy that he put together at that time was a variation on the system that he had set up in the Netherlands. The main components were outlet guarantees and

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target prices for each product. In addition, a European fund was set up to be used for three purposes: to compensate for import duties (the Federal Republic was permitted to phase out these import duties gradually), to apply price guarantees, and to support structural reform. It was only after this had been achieved (on 14 January 1962) that de Gaulle set out on his collision course with the Europe of the Six and frustrated the negotiations in the Fouchet Committee with barely acceptable French demands (see the previous section). Much could be destroyed, but the CAP was there to stay – and that fitted in nicely with Mansholt’s priorities. So what explains his enraged response after de Gaulle’s press conference exactly a year later? There was still one issue that Mansholt was not happy about following the glorious victory of 14 January 1962. The European Commission may have been granted the authority to manage Europe’s agricultural markets and enforce the regulations, but this was to be done under the direction of the Council of Ministers – in other words, the member states. The ‘King of Europe’, however, wanted much more control in his own hands, just as Commission President Hallstein did, and that meant more supranational powers. Mansholt had become a full-blooded European – that was, after all, part of his job. The gentleman farmer and socialist was the ideal type of the modern Dutch ‘European’. And he behaved accordingly, full of passion. This passion irrevocably led to tension between commitment to the EEC and the reserved traditions of Dutch European policy, but this was smoothed out with hopeful (social) formulations of Europe’s newest market trends. These formulations were naturally based on the concept of gidsland Nederland – the notion that the Netherlands and its policies were an example to other countries. Mansholt’s CAP would eventually go off the rails. On 15 February 1971, Belgian farmers dragged three cows up the marble staircase of an office building in Brussels to the sixth floor, where the decisive meeting of EEC agriculture ministers on Mansholt’s latest plans was about to start. Assuming that the protest was aimed at the ministers, he applauded enthusiastically. He was, however, completely aghast when he saw what had been painted on one of the cows: AAN DE GALG MET MANSHOLT (to the gallows with Mansholt). In the weeks that followed, the farmers’ protests against the Commission got completely out of hand. There were violent confrontations that even cost one Belgian farmer his life. ‘Super-farmer’ Mansholt seemed on the surface to be unaffected by the hate campaigns against him, but some weeks later, he suffered heavy nosebleeds and collapsed with high blood pressure. Why had ‘his’ farmers turned against ‘his’ Brussels? On 1 July 1968, the common market for agricultural products entered into force; it was preceded by an impressive series of ‘Mansholt marathons’ (very

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lengthy negotiation sessions of the European ministers of agriculture). The essence of the system that had been constructed lay in the ‘political prices’, but soon the agricultural market of the Six became saturated. Special EEC intervention bureaus bought up the surpluses to bolster up prices, but the guarantee prices resulted in such a large surplus that it became increasingly difficult to find a market for them. There were wine and milk lakes, and grain and butter mountains. Butter was stored in EEC cold stores and sugar in EEC silos. It all started to become a little bizarre. Mansholt saw no other way out than to cut prices, together with rigorous upscaling within the framework of the agricultural structure policy he was then in the process of developing. The main thrust of the policy was for farmers to become employees of collectives of agrarian businesses. In his view, that was the only way that small farms – which were so dear to him – could still be saved. But his fellow farmers saw it differently: in their eyes, Eurocrats were delivering family businesses the final death blow. They spoke of ‘the greatest betrayal of the century’ and compared Mansholt to Hitler. This political and personal drama led Mansholt to adopt a tried and trusted strategy: he went on the offensive, digging deeply into radical leftwing abstractions of zero growth. In Brussels, where he had in the meantime climbed up to become provisional president of the Commission, he preached in public against ‘the supremacy of technology’ and in favour of ‘utopia’. And he started a love affair with Petra Kelly, a young member of his staff in her twenties who was later to set up the green political party Die Grünen. Heringa thought it all a little indecent, while his former chef de cabinet Alfred Mozer even spoke of ‘self-destruction’. Mansholt’s time was over. The contradictions in the CAP that he had succeeded in reconciling for so long with his dynamism and belief in progress were characteristic of the complexity of market integration within the EEC. Mansholt had a flawless feel for the political game played out in that wild technocratic forcefield, but, in the end, the recalcitrance of the EEC proved too much, even for this tough farmer. What was Europe? At the end of his impressive European career, Mansholt seemed to have no idea how to answer that question. There were few people who were more practical or resolute than Mansholt, few who could deal more effectively with paradoxes and policy dilemmas, few who were more convinced that they were in the right and few who relied more on their gut feeling. There were few people who were more trendy, especially when it came to Europe, and few who were more pragmatic, more Dutch… In the 1950s, Mansholt had become a European in order to promote Dutch exports, but also because being a progressive European offered him

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an excellent opportunity to showcase himself against the conservative and much less trendy Drees. He was perhaps never a European out of conviction, any more than he was a Marxist. Indeed, the dogma of the gentleman farmer family from which he came – ‘that the price of bread is a measure of the level of civilisation’ – sounded ‘bourgeois’ against Marx’s maxim of ‘reward the farmer, and the worker foots the bill’.51 In many respects, the CAP was a model for the technocratic future of the Europe of the Six, to which the latter’s rebirth as market irrevocably led. But that future was ambiguous – and difficult to explain. On the one hand, the policy mechanisms in Brussels worked as one large machine for reconciling national economic interests while, on the other hand, that reconciliation was ultimately shaped in thick reports and technical rules that were increasingly difficult for politicians and for normal people in the street to understand. The combination of supranational elements (for example, the role of the Commission and the Court in policy) and intergovernmental decision-making (for instance, European summits or crucial meetings of the Council of Ministers covered by the media) made the EEC incomprehensible for many. How much control did politicians still have over this enormous machine? That remained, above all, unclear. What was clear was that in order to complete market integration, more and more new plans were required. In the 1970s, the rationale of sector integration proved, quite unexpectedly, as popular as ever in Brussels. But by far the greatest significance of the CAP for the future of the EEC was the problems facing policy as a result of fluctuations in exchange rates between the member states. This was a constant source of unrest and tension. To be able to set adequate target prices, the Commission had to quickly develop a unit of account to represent the common currency of the EEC. But it became painfully clear equally quickly that this was little more than an inadequate ad hoc fix that required a lot of additional monetary solutions. That would make the EEC vulnerable. The CAP was at the heart of the common market but was totally unprotected against an international currency crisis or rising tensions in the international monetary system. From the 1960s, this alarming situation provided a constant incentive to make plans for an Economic and Monetary Union (EMU).52 51 Johan van Merriënboer, Mansholt, pp. 348, 356-58 and 396; Frank Westerman, De graanrepubliek (Amsterdam: Olympus, 1999), pp. 162-64 and 171-781. 52 Emmanuel Mourlon-Druol, ‘The euro crisis: A historical perspective’, Strategic Update (2011): 2.

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Silence is golden From the moment the EEC was up and running, that new European project slowly but surely came to the fore. When, in the course of the 1960s, the Six took up the challenge of the EMU, Europe had changed substantially. Since the failure of the EDC in 1954, an institutional structure with a strong supranational character had been built up in the regional Europe around the Rhine and the Alps. Because it had remained relatively small-scale, allowing its builders to focus on details and on deepening and refining. As a project of its kind, it was a great success, perhaps even a wonder of the world. The beauty of the Franco-German reconciliation that made it possible was moving, often in a very deep way. The Netherlands may have been one of the founders but, for a long time, that position was one that it had taken up much against its will. The country had an aversion to the continental form that European integration had increasingly taken during the 1950s and 1960s. And yet it had gone along with every step of this process, following a course that increasingly made a way back improbable. The decisions that had driven the Netherlands along that course of success and benefit could initially be traced back to the enormous attraction of the centre, the Federal Republic of Germany. But that was not the whole story. The crucial decisions that also embedded the Netherlands institutionally in the small continental Europe of the Six were in a certain sense made outside the Netherlands. The Benelux memorandum came from Monnet and Spaak, and it was Adenauer who had gotten the EEC negotiations under way again after they had run aground. The only times that the Netherlands had made any substantial contribution to the process were due to the efforts of one man, Minister of Foreign Affairs Johan Willem Beyen, the man who Drees thought came from another planet. It was no wonder, then, that the form taken by the integration process fit so badly with the vision of the Netherlands, with the exception of one very important point: from the end of the 1950s, European integration increasingly took on the form of a market. While political Europe failed time and time again, market integration – in the shape of the EEC – overshadowed all other European cooperation projects. As an exporting country, the Netherlands could hardly oppose that, and this was one reason why, from the fourth Drees government onwards, the country embraced the integration process – from which it was already impossible to remain at a distance – a little more enthusiastically. It was generally speaking not a passionate affair, but it did bring prosperity and progress. And furthermore, building up capacity was part of the Dutch mentality, especially if it was expressed through tangible projects based on

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rational plans and free of political scheming. And that is what the European process increasingly seemed to be. But appearances were deceptive. Although the integration process seemed to be more and more in line with the Netherlands’ economic and commercial interests, it drifted at the same time further and further away from the soul of Dutch European policy, especially when the Europe of Adenauer became the Europe of Adenauer and de Gaulle. Working closely together, these two statesmen completed the founding phase of European integration. Apart from the flying start of the EEC, their great achievement was the Common Agricultural Policy. The CAP was the ultimate definition of what Europe had become under Adenauer and de Gaulle: a continental bloc within the West, with the British on the other side of the door. The long-term vision was that, at some time in the future, this continental Europe would have to take political advantage of its economic potential. In this Europe, much of what happened constantly took place without the Netherlands being directly involved. All this came perilously close to the Netherlands’ post-war Atlantic nightmare scenarios. The inexperienced Prime Minister De Quay was tormented by it. The CAP became a symbol of the devil’s dilemma facing Dutch European policy: substantial material gain at the expense of Atlantis – could they get away with that? Luns thought so, as long as it was presented by referring to the desiderata of the past. In that sense, de Gaulle’s opposition to the British presented the Netherlands with excellent opportunities: the préalable anglais could become the essence of every Dutch position. That had many advantages. It implied a heroic struggle by David (the Netherlands) against Goliath (France, or France and Germany). That made you popular, while it had few consequences in terms of demanding a clear vision on the future of Europe – other than the hopeless one of an Atlantic future, that is to say. That silenced the voices of unrest and created the impression of consistency and stability in European policy. It also meant that there was less need for difficult substantial debates on Europe. That gave the Netherlands the space, unlike de Gaulle’s France, to present itself as a modern country that stood for progress and took the lead when it came to European integration. The positive image of being aware of modern trends was also an asset of the préalable anglais. These were the small free benefits of a minimum of politics. Dutch European policy remained in the shadow of Luns’ adopted pose. When it came to European integration, the political response in the Netherlands was familiar: speech is silver, but silence is golden. Moreover, Europe was not a priority. The start-up phase of European integration was completed in 1966 with an intergovernmental annex to the Europe of the communities

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(ECSC, EEC and EURATOM) known as the Luxembourg Compromise.53 This picket in the history of European integration had also been staked out by de Gaulle and was a blot on the Commission’s reputation. The Luxembourg Compromise was the consequence of France’s ‘empty chair’ policy, which de Gaulle initiated in the summer of 1965 and persisted with until January 1966. France did not attend the Council of Ministers for a number of months out of protest against the Commission’s plans to make the CAP more supranational – by, for example, expanding the system of decision-making by majority voting. De Gaulle’s goal with this policy of confrontation was, of course, to achieve the most advantageous form of funding for the CAP for France. But that was not all. The empty chair policy was also a direct attack on the expanding Europe of the technocrats. It was a principled conflict about the direction of Europe’s institutional future. What kind of Europe was it to become? In de Gaulle’s eyes, it was unimaginable that France could be forced to commit to anything against its will in vital areas of policy like the CAP (by majority voting in the EEC). As far as he was concerned, it even cast doubt on the durability of the French signature under the EEC treaty. After several months of crisis, the Six agreed on the Luxembourg Compromise: member states were permitted to veto decisions made in the Council of Ministers if they fell under the treaty provision for qualified majority voting, but only if they felt that their ‘vital interests’ were under threat.54 The treaty thus survived in the end, and France remained a signatory. That was a great relief for the Netherlands, which had argued strongly that France should accommodate itself to the EEC. Despite this, however, with the Luxembourg Compromise, the ‘Europe of the states’ had pushed a crowbar between the gates of Europe as a community. After the Compromise had been reached, Luns rightly said that it had become clear that there was no agreement between the Six on ‘the intentions of the treaty and the direction to be taken by European integration’.55 In addition, the Compromise meant that de Gaulle had won a decisive battle in his fight to achieve a political Europe. It would, however, be many years before the more political Europe of the future actually took shape. Nevertheless, after the Luxembourg Compromise, it was only a matter of time before politics penetrated more deeply into the technocratic 53 Lieshout, De organisatie, pp. 172-74. 54 Philip Bajon, Europapolitik ‘am Abgrund’: Die Krise des ‘leeren Stuhls’ 1965-66 (Stuttgart: Steiner, 2012), p. 29f. 55 Kersten, Luns, p. 373.

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bastion of the EEC.56 De Gaulle had defined more precisely not only the geographical reach of Europe (continental) but also its institutional scope (more intergovernmental). The latter was also incompatible with the Dutch perspective – at least the Dutch perspective at that moment. On the other hand, the United Kingdom continued to flirt with the EEC (after all, de Gaulle would not be president of France forever), and technocratic Europe proved to be no longer as easy to tame. Through international monetary developments, Europe would quickly expand far beyond the borders of the Six. This meant that new horizons of hope and expectation would come into sight for the Netherlands.

56 Van Middelaar, De passage, pp. 108-109.

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At home in the Basel biotope (1968-1974) Abstract In 1973, the United Kingdom finally became a member of the European Community, together with Denmark and Ireland. This meant the beginning of the end of any serious ambition to develop the political dimension of European integration beyond the status quo. At the same time, the integration process faced new challenges posed by the collapse of the Bretton Woods system. The Netherlands was on the brink of embarking on its happiest period in post-war Western Europe. The ‘new’ European integration that had emerged from the ashes of Bretton Woods, and would include the United Kingdom, became increasingly instrumental, focusing on the market and the management of international financial-economic and monetary affairs: things the Dutch felt they were good at. Keywords: End of Bretton Woods, EMU, Bank of International Settlements (BIS), Barre Plan, Werner Plan, Ostpolitik, First enlargement of European integration

When Richard Nixon finally became president in 1969, he immediately found himself facing a tough challenge. Inflation in the US was around six per cent, and hard measures were called for. The Keynesian stimulation policy of the 1960s had to be reined in. In discussions on how to solve this problem, the analysis of economist Milton Friedman became increasingly popular: the money supply in the economy had to be linked to its potential for growth in the long term. The essence of Friedman’s recommendations was that, if exchange rates were floated, the market could reward and punish much more purely. Monetary policy should be determined not by the government but by the market. The first requirement to allow this alternative system to work effectively was that the money supply in the economy had to be controlled more strictly. Nixon and the Federal Reserve (the Fed), the American central bank, adopted the following course of action: monetary control was tightened up, making it more difficult to obtain

Segers, Mathieu, The Netherlands and European Integration, 1950 to Present. Amsterdam, Amsterdam University Press 2020 doi: 10.5117/9789463728133_ch06

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money and credit. The expected recession followed almost immediately, with the economy contracted for the first time in more than eight years. It quickly became clear, however, that the crisis of the 1970s would turn out to be different from anything that had come before. Unemployment rose, but that had been foreseen. Inflation, however, did not fall to any significant degree – and that had not been predicted. The combination of high unemployment and rising prices was new. Economists were confused and devised a name for this new and unprecedented phenomenon: stagflation. But Nixon was a politician, not an economist. What he needed was ‘hopeful change’ to address this new problem. The acute circumstances caused by stagflation left him with no choice – the US president had to embrace the Keynesian orthodoxy that he had jettisoned only a few months earlier. It was no longer Keynes or Friedman, but Keynes and Friedman. In concrete terms, this meant that, under Nixon, the US started to focus its energies on increasing the influence of the market in the international movement of capital while pumping money into the domestic economy to stimulate growth. The desire to rediscover American economic vitality eclipsed any doubts about this course of action – and with good reason. Shortly after Nixon took office, the US was faced not only with a balance-of-payments deficit – which had been putting the budget under increasing pressure since the 1950s – but also, for the first time since the end of the war, a structural trade deficit. That was an additional cause for concern, as the only way to combat this trade deficit proved to be a policy mix aimed at increasing exports and reducing consumption, which meant letting go of the old monetary policy. Another solution, of course, was to abandon the link between the dollar and the country’s gold reserves. The idea was for this action to be temporary, just long enough for some room to be created for monetary policy. But the link to gold would all too soon be abandoned for good.

American dreams On 15 August 1971, Nixon dropped a bomb on the incomplete edifice of the Bretton Woods system. On that day, the president announced the latest step to be taken under the 1970 Economic Stabilization Act. What he did was to ‘close the gold window’ by ending the convertibility between the dollar and gold. This unilateral move sent two shocking messages to the Western world. Firstly, the value of the dollar had become unreliable, and the US now openly admitted as much. Secondly, the US acknowledged that it did not have the capability to call itself to order. Washington had no desire to

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subject the country to stricter economic discipline and cure itself of its excessive free-spending ways.1 In this way, the US abandoned the golden rule of monetary prudence. The notion that the external value of a currency reflected a state’s internal economic discipline was apparently no longer a prerequisite for Washington. The ‘Nixon Shock’ signified the advent of a new world in which everything would still be about the ‘hope and glory’ of the capitalist system but then in a different form. Floating exchange rates and liberalised financial markets were to be the new monetary setting for the old American dream. This was to be how the American economy would re-invent itself. But it would come at a high price. It proved impossible to force markets to discipline the economy. On the contrary, they unleashed an unpredictable circus of exchange rate fluctuations, permanent currency crises, a persistent fall of the dollar, peaking inflation and destabilisation of world trade. But perhaps the most important development of all was that, in this new monetary world, regaining control of the domestic money supply – the core of Friedman’s learning – proved a complete illusion. Six months after the dollar had been floated permanently in the spring of 1973, something of the new monetary dynamics became clear. In the autumn, the Organization of the Petroleum Exporting Countries (OPEC) responded to the devaluation of the dollar, the currency used for transactions on the world’s oil markets, by quadrupling the price of crude oil. This led to more inflation as well as an increase in reserves of petrodollars at the major banks. These petrodollars in turn offered a fresh source of credit for countries that were no longer able to pay their oil bills and other credit-based investments.2 These were patterns that were part of the reality of floating exchange rates and the liberalisation of capital markets: increasing fragmentation and bloc formation, and monetary practices that were explicitly linked less and less to domestic money supply and national economic discipline. In the language of international politics, this all meant that, in a period of two years (1971-1973), the leader of the Western world had thrown in the towel in terms of maintaining the multilateral rules governing post-war monetary policy.3 The consequences were almost impossible to predict, and certainly in Western Europe. 1 Harold James, International Monetary Cooperation since Bretton Woods (Oxford: Oxford University Press, 1996), p. 208. 2 William Greider, Secrets of the Temple: How the Fed Runs the Country (New York: Simon & Schuster, 1987), pp. 334-40. 3 James, International, p. 210.

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Until 1971, the Bretton Woods system had been in operation for 26 years. It was an anchor of stability for global trade and for the Western bloc in particular. And the whole system was based on the dollar and its reliability. The dollar was linked to gold at a fixed price of 35 dollars per ounce, and the other currencies in the system – including those in Western Europe – were pegged to the dollar with fixed exchange rates. The member countries were bound to ensure that their currencies were linked to each other within a fixed margin (a maximum fluctuation of one per cent from parity). In practice, that meant that they all interpreted this as an obligation to observe this margin solely in relation to the dollar. The dollar was the heart of Bretton Woods. The central banks of the other Bretton Woods members bought and sold dollars to ensure that their currencies remained within the margins. This also ensured that members would not ‘print money’ or pursue other inflationary economic policies to give themselves a competitive advantage in mutual trade. If a state’s currency exceeded the margin in respect of the dollar, it had to take domestic measures to rectify the situation. The punishment for not doing was so was buying back gold at the fixed price in respect of the dollar. That made inflation an unattractive monetary instrument. Instead, member states had to introduce austere measure themselves. That may have seemed a little harsh, but if they experienced difficulties, they could always seek recourse to the International Monetary Fund (IMF). The IMF was there to ensure that the required reforms of domestic economies actually became feasible goals. It provided short-term loans to help temper balance-of-payments problems between the members and to buy time for domestic structural adjustments. The idea was that, in a system of fixed exchange rates, it was possible to achieve both internal (full employment and price stability) and external (the balance of payments) equilibrium at the same time. What remained were temporary friction problems, which were eased by the IMF and by the billions in gold reserves that the US had earmarked as a lubricant to ensure that international convertibility ran smoothly. The system was credible because, if necessary, the US would pay other countries in gold at the fixed price of 35 dollars an ounce. In the Bretton Woods system, a paper dollar was literally as good as gold. In other words, the system was built on ultimate conf idence in the stability and value of the dollar or, more precisely, on ultimate confidence in America’s sense of responsibility and leadership. And it was exactly this essential component of the system that Nixon scrapped on 15 August 1971. Dollars could no longer be exchanged for gold. Fort Knox, where America’s gold was stored, was closed for business.

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Nixon had reason enough to take this step. America’s gold reserves had reached an alarmingly low level. In 1971, foreign financial institutions had a total of 36 billion dollars in outstanding claims, much more than the remaining gold bars in Fort Knox could cover. The US authorities had urged their Western partners for many years to keep the dollars they had been forced to buy under the Bretton Woods system as far as possible in reserve. In the 1960s, the Bretton Woods ‘gold-dollar standard’ had in effect already become a ‘dollar standard’, as it came to be covered less and less by actual gold reserves. That gradual change had made international monetary relations increasingly dependent on American domestic policy considerations. At the same time, the international repercussions of US policy became less and less a priority in Washington. The situation became explosive. The US could relax its monetary rules unilaterally, without the fixed gold price of the dollar changing accordingly. In short, Washington could create more money without it losing its value. In addition, unlike the other member states, the US was not obliged in extreme cases to settle its debts in gold. By the end of the 1960s, this state of affairs had become untenable. 4 How did it ever get to that point? The United States had set the pace in bloc formation in the West after the Second World War. It had literally taken the costs of defending the West upon its own shoulders, and Washington was also the powerful engine behind the dizzying reconstruction in Western Europe and Japan in the 1950s and 1960s. This was all accompanied by expansive aid programmes and the large-scale export of capital through investments in foreign companies and trade. It led to the entire world being flooded by a long-lasting tidal wave of dollars. The US, which had emerged from the war unscathed and was the richest country in the world, dominated the global economy. That is how it was in the first two decades after the war, but it did not stay that way. In the 1960s, the economies of Western Europe and Japan were making rapid advances. For the Americans, this meant that, besides being allies in the Cold War, these partners were also increasingly becoming strong rivals on the world markets. Perhaps the most obvious manifestation of these changing relationships were the stacks of dollars that were accumulating in Bonn, Paris and The Hague as a consequence of Europe’s success in trade. These reserves, known as eurodollars, were a lucrative source of funding 4 Mathieu Segers and Femke van Esch, ‘Prudence before politics: The Netherlands and European monetary cooperation during Bretton Woods’ in Régine Perron and Guido Thiemeyer (eds.), Multilateralism and the Trente Glorieuses in Europe: New Perspectives in European Integration History (Neuchâtel: Éditions Alphil, 2011), pp. 92-97.

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for Western European states (they were, after all, worth their weight in gold), but for Washington they posed an increasingly serious problem, for example because they made it more difficult to control the domestic money supply. Their most important impact, however, was that they eroded the credibility of the Bretton Woods system,5 a development that some in Europe did not mind at all. As early as 1965, France had seen the chance to impose lasting damage on Bretton Woods. After having repaid France’s debt to the US and having built up a stockpile of eurodollars in the Banque de France, President de Gaulle called a press conference on the international monetary system. The evening before, French Minister of Information Alain Peyrefitte had asked de Gaulle whether he was going to say ‘anything of importance’. De Gaulle’s answer was so unequivocal that Peyrefitte had found it difficult to believe.6 De Gaulle: I am going to say that the gold-dollar standard is on its last legs. Peyrefitte: Is that wishful thinking? De Gaulle: It’s not wishful thinking! This is what we are going to do. I will say that the gold-dollar standard no longer rests on the same foundations as before and that, as a consequence, it should change. Peyrefitte: But surely we cannot change the standard on our own? De Gaulle: We will say that we reject the standard, and that we want no more dollars, but gold. Others will then do the same. If we repeat it long enough, it will eventually be enough to cause the gold-dollar standard to collapse. But it would be better if the standard were to be conclusively abandoned through negotiation. Peyrefitte: The Americans, with the support of the English, will see this as an act of aggression. De Gaulle: We no longer consider the dollar as gold, and from now on we will systematically exchange our dollars for gold […]. A large number of global economic operations have been hijacked by the Americans, with the capital that they purchase with their inflation. […] They will react, but it will not be of any great significance. 5 Greider, Secrets, p. 337. 6 The conversations between De Gaulle and Peyrefitte that follow are based on Alain Peyrefitte, C’était de Gaulle, 2 (Paris: Fayard, 1997), pp. 80-82.

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The press conference took place on 4 February 1965. In the Salle des Fêtes at the Elysée, the general openly expressed his concerns about the credibility of the value of the dollar. At the same time, he talked poetically about the ‘immutable character’ of gold, called for the restoration of the traditional gold standard and announced that France was going to exchange its dollars for gold. Fort Knox would have to open its doors and gold bars be transported to Paris. And that is what happened. The Americans had no choice – France’s request was legitimate. De Gaulle was condemned for his anti-American action, but it was indeed not long before other Western European states followed France’s example, concerned as they were about the value of their eurodollars. It was a painful setback for the American administration, even more so because the US was at that moment pumping billions of dollars into the Vietnam War and its deficits were rising explosively. Two weeks after the press conference, de Gaulle once again explained it to Peyrefitte, who was surprised at the support for the general’s action among the French population, even as the international and national political elite – with the MRP and influential publicist Raymond Aron at the forefront – widely condemned de Gaulle’s sly trick as a rash attack on the United States. De Gaulle: The people understand what the intellectuals do not want to understand. Peyrefitte: Where is this going to lead? De Gaulle: To the derailment of the Americans’ book-keeping and, at some point, to the collapse of the dollar, which will no longer be convertible to gold. Peyrefitte: But we can’t possibly want that to happen! De Gaulle: Bah! Why would you believe that? Peyrefitte: Surely we have to show solidarity? De Gaulle: The Americans and the English have been able to maintain their supremacy artificially. As long as they were able to exchange their money for gold and their balance of payments were in the black, no one cared about that. But today, the situation has been reversed: their balance of payments are in the red and they are losing their gold. If the Americans want to preserve their gold-dollar standard, as they ought to, they will have to balance their books, but they are not capable of doing that. There will come a day when the dollar will be delinked from gold […]. Restoring the equilibrium

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of the balance of payments is a daunting task. It calls for political fortitude that they do not possess. Papa Johnson [Lyndon B. Johnson, the president of the United States at that time; MS] does not possess that fortitude. He will not able to balance the balance of payments any more than he can achieve peace in Asia.

De Gaulle would prove to be right on all counts. Six years later, Nixon would do what had in the meantime become unavoidable: cancel the convertibility of the dollar to gold.

An alternative loan circuit Negotiations on the dismantling of the Bretton Woods system, which de Gaulle had considered desirable to control the collapse of the system, never materialised. A half-hearted attempt was made, but not until July 1968, when de Gaulle’s proud France was itself under fire from the financial markets. In anticipation of a devaluation of the franc, the French currency was dumped and Deutschmarks bought en masse, causing considerable upward pressure on the mark. In November 1968, at the insistence of the Americans, an ad hoc G-10 conference was organised in Bonn. The aim of the meeting was to find solutions to what had been known for years as ‘the European money muddle’, the perpetual monetary unrest caused by currency fluctuations within Western Europe. Entirely in the spirit of the rapidly unravelling Bretton Woods arrangements and the diverging interests of the Western European economies, this summit was to end in chaos. Nevertheless, for the first time, the G-10-meeting in Bonn made four things very clear. First of all, the US categorically refused to adjust the value of the dollar. In the words of American Secretary of the Treasury Henry Fowler in Bonn: ‘the dollar is like the sun in the solar system. The position of the sun is immutable. If adjustments have to be made, it is up to the planets to make them.’ Secondly, the Federal Republic refused to revalue the Deutschmark, despite the Americans putting Bonn under heavy pressure to do so. The ministers of economic and financial affairs, Karl Schiller (SPD) and Franz Josef Strauß (CSU), were determined to protect West Germany’s export interests and pointed out that the causes of the problem did not lie in Germany. On the contrary, the West German economy was in perfect health! It was turning the situation on its head to demand that the Federal Republic make adjustments. That was a lesson out of Erhard’s book (see chapter 4).

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Thirdly, France was also not happy about adjusting (i.e. devaluating) the franc. (After much imploring among the other attendees, French finance minister François-Xavier Ortoli had given them the impression that the franc would be devalued by 11.1 per cent; a day after the meeting, however, de Gaulle had announced that devaluation was out of the question.)7 These three facts reflected relations within the Western bloc: the US was confronted by two European challengers who were not afraid to deploy monetary instruments, even if they were not compatible with American interests. France’s response came as no surprise, as the country had been trying for many years to achieve greater geopolitical equality between the US and Western Europe within the framework of Western cooperation. The second European rival was new and more powerful: the Federal Republic of Germany, the mighty engine of the European economy. If Bonn stood shoulder to shoulder with Paris on economic issues, it was worth taking notice, if only because the challenge they posed and their cooperation were partly based on the enormous economic and political potential latent in the EEC: this was ‘Fortress Europe’ in the making. The fourth thing that emerged at the Bonn conference was that, to shore up the franc, France had succeeded in tapping into an alternative European money circuit. Although that success was partly due to Paris creating the false impression that it would devalue the franc in exchange for the muchneeded support, that detail soon disappeared into the background. What was crucial was that, through this alternative circuit, France had found a way of bypassing the IMF and the US. What was the nature of that European circuit? After it had become clear that an IMF support package of 745 million dollars, flanked by the sale of gold to the Fed and to the Western European central banks, was not enough to stop the run on the franc, the governors of the central banks of the EEC member states decided at one of their meetings in Basel that it was time to act. In their view, this situation fulfilled the criteria for mutual assistance, as laid down in Article 108 of the EEC Treaty.8 Consequently, the central banks provided France with an additional loan of 600 million dollars (half came from the Bundesbank, 200 million from 7 Brian Lapping Association, VPRO, ARTE, Danmark radio/tv, RTBF, SVT, YLE, The Money Changers (documentary) (1998); Harold James, ‘The Potential of a Caterpillar or the Origins of European Monetary Integration’, unpublished paper Yale Economic History Seminar (2011), pp. 34-35; Marsh, The Euro, pp. 47-48; André Szász, The Road to European Monetary Union (Houndmills, Basingstoke: Macmillan, 1999), pp. 23-25. 8 Horst Ungerer, A Concise History of European Monetary Integration (Westport: Quorum, 1997), pp. 52-53.

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the Banca d’Italia, and the rest from the central banks of Belgium and the Netherlands). In exchange, the Banque de France sold 300 million dollars’ worth of gold to the EEC central banks. It is very revealing that, at the same time that this deal was being forged within the EEC, negotiations were underway in the G-10 on an IMF rescue package worth 2,000 million dollars for the pound, which was also in serious difficulty. The IMF could have done the same for France, but Paris did not want that. For its salvation, de Gaulle’s France looked to Europe – more precisely, to the EEC, and even more precisely, to the Federal Republic. There proved to be sufficient support among France’s European partners for such a bold move. With their joint coordinated loan, the EEC central bank governors had crossed the Rubicon. The path they took after making the crossing led to a Europe that had moved on from the Bretton Woods system. That new Europe was continental, and the focus lay less on global monetary stability and even more on the functioning and stability of the common market of the Six. In monetary and economic terms, Europe had become more regional. After this first step towards a new European world, a system of mutual loans and assistance was gradually developed within the EEC based on permanent provisions for European loans and other kinds of mutual financial support. The main flow of money would almost always be from the Bundesbank to the Banque de France. But this was not the only effect of this alternative circuit. France’s monetary manoeuvring in 1968 was also aimed at making Europe’s economic potential a greater force in global politics. It breathed new life into old blueprints for European monetary and political union. In the feverish quest for European ways to get a better grip on the perpetual currency crises in Western Europe, these plans once again became topical. The most recent of them had their origins in the vacuum between the signing of the EEC Treaty in March 1957 and the start of the first phase of the common market on 1 January 1959. In the autumn of 1957, French participation in the first phase was by no means assured. The cause was the financial crisis in which France found itself, partly as a consequence of the escalating war in Algeria. Gaillard, at that time premier of the Fourth Republic, had appealed to his old boss Monnet for help in drawing up a crisis strategy and – believe it or not – in persuading the US to provide a loan. Monnet had put together a team comprising his trusted supporters Uri, Marjolin and Paul Delouvrier, director of the finance division of the ECSC, together with the Belgian-American Yale economics professor Robert Triffin, a friend of Marjolin and an influential pro-EMU activist. These economic experts had developed a plan for a

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European stabilisation fund, separate from the IMF. They saw this a first step towards a European and/or transatlantic monetary union and an EPU.9 The proposals that Monnet had presented to de Gaulle in the summer of 1959 for an economic ‘association’ of the three Western sub-blocs (the US, the UK and the Commonwealth, and the EEC) elaborated on this plan (see chapter 5). At that time, however, these proposals proved premature. In the autumn of 1968, around the conference in Bonn, these ideas were once again picked up by the European Commission, and in particular by French Commissioner for Economic and Financial Affairs Raymond Barre. On 12 February 1969, the Commission presented the Barre Plan. The core of the plan was that mutual monetary assistance among the Six would from then on have to be linked to two other components: the convergence of economic goals in the medium term and the coordination of policy in the short term. Interpreted in its most extreme sense, the memorandum implied something approaching an economic government for the EEC or even a European Political Union (in the somewhat longer term). In practice, Barre’s plan meant the formalisation of the alternative European – i.e. non-IMF – circuit that had offered France a helping hand to save the franc in summer of 1968.10 The nerve centre of this new European loan circuit was located in a building in the Swiss city of Basel. That was curious, as it could be argued that figuratively this was further from the EEC than the City in London. But Basel also housed the headquarters of the Bank for International Settlements, set up in 1930. Unnoticed, the BIS had played a pivotal role in the process of European integration for many years. That, too, was curious. The BIS had acquired that ‘European role’ completely unexpectedly when the Marshall Plan was introduced. The Bretton Woods agreements had actually included provisions to disband the BIS, but nothing had ever come of them. The BIS had the Cold War to thank for its revival: the American government had mistrusted the IMF from its inception. It had been a tarnished organisation ever since the American architect of the brand-new Bretton Woods institutions, Harry Dexter White, had been the subject of persistent accusations of spying for the Soviet Union – accusations that would later prove to have been unfounded. The impact on post-war Western multilateralism was clear: Washington had ensured that the IMF would not be responsible for administering the European recovery programme and the European Payments Union (see chapters 1 and 2), and this was what had breathed new 9 Duchêne, Jean Monnet, p. 312; Segers, Diep Spel, p. 59. 10 James, ‘The potential’, pp. 34-35; Szász, The Road, p. 12.

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life into the BIS, which had in effect already been written off. As a result, responsibility for administering the recovery programme and the European Payments Union came to lie in Basel. Since the setting up of the common market of the Six, Basel had become increasingly ‘European’. A European sub-group formed around the BIS meetings, comprising the governors of the central banks of the Six, to address the economic and monetary problems relating to the EEC. From December 1962, the group had even upgraded their consultations to periodic meetings in preparation for the EEC Council of Ministers. In April 1964, these meetings were institutionalised even further when the Council passed a decision promoting the consultations between the central bank governors to an official committee (it did not, however, become a full-fledged EEC institution).11 The immediate reasons for setting up the Committee of Governors of the Central Banks of the European Economic Community were the revaluations of the Deutschmark and the Dutch guilder in 1961. The revaluations may have put a stop to a period of tension and intensive discussions within the IMF (especially on the ever-growing West German surpluses), but the German-Dutch action had not been coordinated within the EEC. On the contrary, everything had been planned in Washington. Partly for that reason, the ultimate decision to revalue to currencies came at an extremely inopportune moment for the EEC. The revaluations reopened the discussion on the relative prices for agricultural products, which had finally been agreed upon after long and laborious negotiations, causing these first fragile steps towards a Common Agricultural Policy (CAP) to falter. This led to initiatives to improve monetary coordination in Western Europe, to complement joint policy within the framework of the common market. But that was not all. It also stimulated visionary plans, for example for a ‘Eurofed’.12 The whole episode had given ‘Basel’ a more prominent role in the daily management of the EEC. Similar episodes would follow in the 1960s and 1970s, as a result of which the Committee of Governors played an increasingly active role in EEC affairs. This took place against the background of a fixed pattern of continually recurring events: imbalances in the balance of payments of the EEC states causing monetary turbulence. In concrete terms, that meant pressure to devaluate currencies like the franc and the pound and to revalue the Deutschmark and the guilder. That happened, 11 Emmanuel Mourlon-Druol, A Europe Made of Money: The Emergence of the EMS (Ithaca: Cornell University Press, 2012), p. 19. 12 James, ‘The potential’, p. 14f.

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for example, shortly after the ‘EEC fix’ of 1968. In 1969, first the franc was devalued, followed a few months later by a revaluation of the Deutschmark and the guilder. That caused serious problems for the CAP, within which prices were calculated on the basis of a common European unit. The permanent crisis management needed to keep the CAP functioning as a consequence of monetary turbulence effectively amounted to little more than a sticking-plaster solution. It also proved increasingly difficult to reconcile mutual currency convertibility, introduced in 1958, with preserving fixed parity.13 The Six were at the mercy of currency crises, and that was an untenable situation. At some point, the common market itself would also be at risk – and, consequently, the whole process of European integration. The official channel for consulting with the BIS was set up within the EEC beyond the public eye and operated more or less independently of the governments of the member states. That was in line with the principles of the Netherlands and West Germany, for whom independent responsibility for price stability was the essence of a central bank. At the same time, it was embedded in a multilateral structure that was broader in scope than the EEC alone. Other BIS members were also included in the ‘EEC’ consultations. That is why the meetings and the secretariat remained in Basel. The futuristic headquarters of the BIS remained largely an ivory tower, a hidden world of technocracy, complex interest margins, parities, experiments in achieving balance-of-payments equilibrium and other monetary techniques – all incomprehensible to mere mortals. Looking back, however, we have to conclude that this hidden consultation between banks was the engine room of today’s Europe. The first steps towards an EMU were taken not within the EEC but by the network of monetary technocrats in Basel. And that was much more a matter of circumstance than conspiracy. Although the European Commission had devised the Barre Plan, it was dealt with by two European committees that were more focused on Basel than on Brussels: the Committee of Governors of the Central Banks and the Monetary Committee, which had been conceived in Article 105 of the EEC Treaty and had been active since June 1958. The Monetary Committee was a consultative body in which two representatives of the Commission and two from each member state – one from the central bank and one from the Ministry of Finance – discussed monetary issues so as to advise the Council of Ministers. Minutes were never taken at these meetings. Via 13 Mourlon-Druol, A Europe, pp. 21-23.

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the discussions of the Committee of Governors in Basel, the Monetary Committee (an EEC body) had open channels of communication with the BIS world of the central bankers. When the Dutch financial-economic elite cast its eyes over the turbulent seas of Europe’s exchange rates, ‘Basel’ stood steady as a rock in the proverbial tempest. It could perhaps even be seen as a rock that proved the existence of the Atlantis that still lingered as a distant hope in Dutch European policy. Either way, it was no coincidence that Dutch representatives felt more at home in Basel than in Brussels, Paris or Bonn, just as it was no coincidence that the governor of the Dutch central bank (DNB), Marinus Holtrop, was one of the driving forces of the Committee of Governors.

Holtrop’s logic The Basel biotope of instrumental and apolitical management was a Valhalla for the Dutch financial and economic policy elite. It was an unexpected oasis of technocracy in the midst of the political turbulence on the old continent, a place where the country’s most gifted practitioners of rational policymaking, which had been elevated to an art in the polders of the Netherlands, could excel. This nurtured a paradoxical tendency in the Netherlands’ European policy: the increasingly central role that Basel came to play in the EEC expelled the aversion of Dutch policymakers to continental European constructions, even those tending towards political union. DNB Governor Holtrop’s European catharsis was a perfect example. As a rationalist, Holtrop reasoned in long, straight, logical lines. He preferred to hold monologues.14 His perspective on international monetary policy seemed crystal clear. International monetary cooperation was necessary but had to be apolitical – in other words, not aimed at influencing the distribution of prosperity among the cooperating states. The goal was unequivocal: to ensure a sufficient supply of money to foster the sustainable growth of global production and trade. In Holtrop’s eyes, this required nothing other than to apply internationally those principles that inspired the ‘best traditions of national monetary policy’, i.e. ensuring price stability (combatting inflation and deflation) to preserve a stable currency. That was in the interests of all. The essence of his doctrine was that the external value of a currency reflected the internal health of the economy. 14 Bruno de Haas and Cees van Lotringen, Wim Duisenberg: Van Friese volksjongen tot Mr. Euro (Amsterdam: Business Contact, 2003), p. 168.

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From the early 1960s, Holtrop became increasingly concerned about international monetary developments. The currency crisis of 1961, one consequence of which was a speculative attack on the pound unleashed by the revaluations of the Deutschmark and the guilder, was countered by large-scale IMF support for the pound. Holtrop himself helped set up the support packages through the Basel channels. As monetary stability was of essential importance, he of course supported this international cooperation. But he emphasised time and time again that ‘in such cooperation lies the hidden danger of contributing to continued postponement of the therapy’. He firmly believed that balance-of-payments deficits should not be financed with borrowed money. That brought the threat of reckless money creation, and with it the spectre of inflation. Cool-headed as he was, Holtrop even had a certain liking for the pain caused by balance-of-payments deficits. The only thing that helped in such circumstances was to go cold turkey. That meant ‘quantitative restriction’, i.e. less consumption and greater self-discipline – in other words, no mercy in the form of support from funds or other monetary measures to soften the blow of letting the disease run its course.15 That was indeed all very pure and clear, but it was also the complete opposite of what was happening in the common market of the Six. There, qualitative restrictions were seen as distorting the market and were therefore not tolerated. Moreover, one of the EEC’s main aims was to make the movement of goods, services, people and capital free. Holtrop was especially concerned about the latter. The question whether free movement of capital should be accepted was for Holtrop the same as whether the ant in La Fontaine’s fable should open its store to the grasshopper (member states with a savings surplus and that paid low interest on loans represented the ant, while countries with a deficit and high interest rates were the grasshopper). In both cases, Holtrop’s answer was a firm ‘no!’. But just as Holtrop’s monetary analysis of the crucial value of a balance-of-payments deficit proved false because commercial interests prevailed, so would his aversion to the free movement of capital lose out to the commerce spurred on by the common market. Although in the 1960s such a scenario seemed far in the future, the first floodgates would be opened to free flows of capital in the early 1970s. The champions of free capital were, however, to be found mainly in the weaker and poorer economies in the Latin regions of the EEC, like Italy, which had been at the forefront of capital liberalisation since the middle of 15 Willem Vanthoor, Een oog op Holtrop: Grondlegger van de Nederlandse monetaire analyse (Amsterdam: De Nederlandsche Bank NV, 1993), pp. 170-177.

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the 1960s. The Netherlands and in particular the Federal Republic were still very sceptical about this, afraid of uncontrollable international capital flows that could undermine their national monetary policy of price stability.16 What had become very clear in the 1960s was that Holtrop’s view of international monetary policy actually offered no answer to the issues relating to the market integration of the Six within the context of the EEC. Holtrop’s main concern was always the stability of the international – rather than the European – monetary system. He saw European coordination as part of a wider international task. That was the logical hierarchy: Europe was subordinate to the world. European cooperation was important but was nothing more than an extension of the global task facing him and his fellow technocratic managers of the international economy. That was the only reason he supported European cooperation. Holtrop’s perspective was only superficially compatible with that of the EEC partners. They often saw European cooperation in the first instance as regional integration, exactly as former BIS president and inspirator of the EEC Beyen had seen it (see chapter 3). That viewpoint implied, however, a certain degree of bloc-forming in Europe. That made monetary policy, to a certain degree, an instrument of geopolitics. It was no longer apolitical, as had by now become clear. Was de Gaulle concerned about the stability of the monetary system? Or was he practising European power politics in response to American influence in Western Europe which was, for him, a thorn in his side? Holtrop did not pose such questions about the political repercussions of monetary arrangements. Just how politically confused a brilliant rationalist can be and wishes to remain is clear from a speech he gave as governor of the DNB in 1962 at the Business School in Antwerp on the subject of European Monetary Union: As idealistically inclined Europeans, we do not have such a great problem with the idea of European Monetary Union. We are personally very willing to accept the notion of a federal Europe, which will one day – like the US – have a federal bank system, as an ideal worth striving for.

This shows how the idea of ‘Europe’ could even addle the brains of trendsensitive Dutch technocrats. Where Europe was concerned, they abandoned their rationalism for idealism. It made Holtrop’s efforts to promote European cooperation and coordination very vulnerable to unintended consequences 16 James, ‘The potential’, p. 33.

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in the context of European integration and bloc formation. That became abundantly clear when he outlined how the European ideal could be achieved and what role that central bankers like himself could play in it. Common monetary policy is not […] a precondition for achieving economic and political unity in Europe. It can only be the fruit of it.

His West German colleagues agreed entirely. They called this the Krönungstheorie: the EMU as the final stage of the European integration process, the crowning moment not only of optimally converged national economies but also of political unification. For them, this was good reason for extreme restraint regarding the still-distant prospect of monetary union. What guarantee was there that a future unified Europe would be prudent in its approach to price stability, the Holy Grail of the Wirtschaftswunder, which in the Federal Republic was safe in the secure hands of the independent Bundesbank? None at all, most probably, and that made the EMU a dangerous project, something that – in the eyes of the West German financial and economic elite – could best not be encouraged. Holtrop took little notice of this response, however. He preferred to focus on sketching out the theoretical and legally logical policy options: As long as national states do not relinquish their sovereign right to control their own finances […] and as long as national traditions ensure that the structure of their financial markets are completely different to those of their fellow members of the Community, they will not be able to give up their own central banks […]. If [a supranational organisation of central banks] were to be made accountable in the final instance to a supranational government body, monitored by a supranational parliament, it would bring […] a federal Europe a substantial step closer. It is the task of those in government […] to give the Europe of the future form and content. The central banks, who have been charged with the responsible task of managing the money supply, have to perform that task as servants of the sovereign power above them. Only the future will tell whether or not that power will be federal.17

The final point was false modesty, as would be shown clearly in the 1970s and 1980s. In Basel, they continued to tinker relentlessly with the EMU, not infrequently at the initiative of Dutch technocrats. Chancellor Helmut 17 Vanthoor, Een oog, pp. 177-80.

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Schmidt would later speak of the ‘hidden treasure’ of ‘papers produced by and for monetary experts’.18 Holtrop had adopted a pro-active approach before. He was the main man behind the Committee of Central Bank Governors and, shortly after the signing of the Treaties of Rome, had made it clear at the Alpbach Economic Forum in Austria that, as far as he was concerned, it was inevitable that a European Central Bank (ECB) would have to be set up at some stage. In his view, there was no question about it: stabilising the balance of payments of the Six was necessary for the common market to function as it should, and in the long term, that implied stable exchange rates and a ‘shift away from the policy of internal price stabilisation’. That was the only way that the looming conflict between internal and external price stability could be solved in the long term.19 Another necessary consequence of this would be a European stabilisation fund. The other bank governors had not responded with great enthusiasm to Holtrop’s truisms. That much became clear in the margins of the first BIS meeting after his 1962 speech in Antwerp, in January 1963. In fact, they all felt that he had gone much too far. The governor of the Bundesbank Karl Blessing in particular felt shivers running down his spine at the thought of a common EEC fund, which would be an inevitable part of a future EMU. It was crystal clear that the Federal Republic, with its rock-solid Deutschmark, would have to finance the fund left, right and centre. That would be even more inescapable with the combination of exports and a hard currency – which was an unbreakable commandment in the Federal Republic – making the Deutschmark the immutable sun at the centre of the European monetary solar system. The Netherlands had no problem at all with the increasingly dominant role of the Deutschmark, as the guilder was linked to the Deutschmark and the monetary policy of the DNB reflected that of the Bundesbank. Both banks gave absolute priority to price stability, and Amsterdam faithfully followed Frankfurt’s lead. But for France and Italy, the situation was different. Their less strict, politicised monetary policy meant that they regularly suffered from the strong and stable Deutschmark. In times of crisis, the kill-or-cure remedy of deflation reared its head as the only effective solution. In a European monetary system, they would want to be compensated for that in some way or another. And that meant irrevocable transfers from German to Latin Europe. The institutionalisation of such compensation (or concessions, 18 Mourlon-Druol, A Europe, p. 1. 19 Vanthoor, Een oog, pp. 177-80.

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depending on how you looked at it) was for Paris and Rome a sine qua non for European monetary union, no matter what form it took. France and Italy believed that a common European monetary policy should not be restricted solely to price stability and that economic growth and employment had to be equally important goals to be pursued through a common European policy (in the form of a fund). This Latin perspective on the EMU was exactly why Holtrop’s colleagues in West Germany were not enthusiastic about his public displays of logical reasoning on monetary union. Before you knew it, the EMU would be seized upon by the politicians and they would be banging on the door in Frankfurt! To ensure that horrific moment never arrived and to secure monetary prudence for the future, Frankfurt, Amsterdam, Bonn and The Hague had to maintain a united front. But that had proved an impossible task. The front was breached from the inside, and that would happen repeatedly from the 1960s onwards. The culprits were always the same: West German chancellors and Dutch technocrats – though the latter were most probably not always aware of the fact. Chancellors Willy Brandt (1969-1974, SPD), Helmut Schmidt (1974-1982, SPD) and Helmut Kohl (1982-1998, CDU) would all emerge as ardent supporters of the EMU. All three were willing to completely by-pass the Bundesbank and the finance ministry (and the immediate material interests of the Federal Republic) to help move that great European project forward. Their main reasons for doing so were political, or rather geopolitical. They were committed to preserving the valuable legacy of Adenauer: attaining national unity through Westbindung and the preservation of Franco-German reconciliation. The latter predominantly took the form of investing in European integration projects that channelled West Germany’s economic power to benefit the whole of Western Europe as an emerging cultural and social unity, and also to promote the Rhineland as a beacon and a bloc in international politics. It was Chancellor Willy Brandt who took the first decisive step towards the EMU during the European summit in The Hague on 1 and 2 December 1969, at the peak of the Dutch presidency of the EEC.

Masters of the interim stage The results of the summit in The Hague were a topic of discussion at the Dutch Ministry of Finance. Former treasurer-general Emile van Lennep, who become secretary-general of the OECD, tried to set the tone in a conversation with Onno Ruding, head of monetary affairs at the ministry. In his view,

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the summit had produced ‘far-reaching agreements on greater monetary integration’ and had led to results that, according to Van Lennep: would never have been reached if the delegations at the summit had contained sufficient experts (central bankers, finance ministers and officials from their ministries). […] Because they were lacking, not only in the Dutch delegation but also in others, foreign ministers and the cabinets of prime ministers and presidents had a free hand to act politically and with little expertise […]. Brandt’s proposals did not come from the relevant line ministries or the central bank, but purely from his own political entourage.

The ‘danger’ of this regrettable state of affairs was that ‘the EEC would now act too much as a bloc […], independent of the IMF, the US, etc. That is not right in economic terms and is moreover politically unacceptable.’20 No matter how familiar these warnings sounded in the context of the Netherlands’ European policy, they fell on deaf ears. It would soon become clear that Van Lennep no longer wielded the sceptre at the Ministry of Finance. Brandt had given a good shaking up in Europe in order to achieve the historical task the chancellor had taken upon himself: his Ostpolitik. This was his foreign policy goal, which aimed at normalising relations with Eastern Europe. Under the tenet ‘Wandel durch Annäherung’ – change through rapprochement – Brandt’s confidant Egon Bahr, the architect of the Ostpolitik who had become state secretary in the Bundeskanzleramt, had been fuelling hopes of German reunification since 1963. In the post-war world of German division and the Cold War, symbolised by the wall built in Berlin in 1963 and again thrown into relief by the brutal ending of the Prague Spring in 1968, the Ostpolitik was nothing less than a megaproject. It could only succeed if all other policy considerations could be made subordinate to it. Brandt may have had an enigmatic image, but he knew only too well that there was only one way to get rapprochement with Eastern Europe, and East Germany in particular, on the agenda without resorting to fisticuffs with NATO and West Germany’s EEC partners: the Federal Republic had to commit itself fully to being part of the West. In concrete terms, this was only possible by taking initiatives in the context of European integration. As far as that was concerned, the prospects were not unfavourable; the integration process was crying out to have new life breathed into it. Brandt was eager to help extract the integration process from the all-consuming swamp of the Kafkaesque CAP and the currency crises. 20 NA, 2.08.51, Ruding to the minister via the treasurer-general, 22 January 1970.

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The chancellor’s actions implied practically anything that could give new impetus to the integration process: concessions to French and Dutch demands regarding financing in the CAP, support for prompt negotiations with the UK on accession, and a constructive approach to the EMU proposals elaborating on the Barre Plan.21 In the runup to the summit in The Hague, as a prominent member of the Action Committee for the United States of Europe, Brandt embraced the far-reaching EMU plans of Monnet’s unrelenting lobby for further European integration. With de Gaulle now out of the way – he had departed as leader of France in April 1969 – it was important to foster the image of the summit as embracing the ‘spirit of The Hague’, a slogan intended to express the new European élan. But it was little more than an image. Although for the first time in many years, the discussions addressed issues on which the general had firmly stood on the brakes – ‘completion, widening and deepening’, to use the language of the Dutch presidency – in reality, the summit was dominated by the lingering currency crisis, which had flared up again after the unilateral devaluation of the franc in the summer of 1969, and the related problems with financing the CAP. Nevertheless, the summit ended on a positive note on all of the main issues. There was an agreement on the CAP. It was announced that preparations for accession negotiations with the UK would be completed by 30 June 1970 at the latest and that talks would start immediately after that. It was also decided that a committee would be set up to explore how an EMU should be established. ‘War es nicht genug? War es zuviel?’ (Was it not enough? Was it too much?), Brandt asked himself. According to his memoirs, he was never able to answer that question. But what he did know was that his Ostpolitik had to be supported by Western Europe or it would fail. ‘We knew where we belonged’, he said.22 Brandt had got the European machine up and running. That was good, but the machine would have a much greater impact than he would ever have thought possible, especially when it came to the EMU. That was partly because the driving force of that machine, in the hidden engine room of future monetary Europe in Basel, had already been cranked up to a much higher level. However, none of this had been clear at all at the European summit in The Hague, despite Brandt suffering from cold feet on the subject 21 Guido Thiemeyer, ‘Die Bedeutung der Gemeinsamen Agrarpolitik für die Europapolitik Willy Brandts 1967-1969’ in Andreas Wilkens (ed.), Wir sind auf dem richtigen Weg: Willy Brandt und die europäischen Einigung (Bonn: Dietz, 2010), pp. 237-38; Szász, The Road, p. 28; Patel, Europäisierung, p. 510. 22 Willy Brandt, Erinnerungen (Berlin: Siedler, 1989), pp. 285 and 170.

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of the EMU. With the support of the Netherlands and Luxembourg, he had insisted on sticking to the Krönungstheorie (first convergence, then the EPU, and only then the EMU) and had made every effort to dilute the plans for a European reserve fund. De Gaulle’s successor, Georges Pompidou, had been surprised at Brandt’s retreat but had not made a point of it.23 Either way, the EMU boat had set sail. Brandt’s oscillation on the EMU dossier was a forewarning of the West German aversion to the political myopia that, according to the financial-economic elite in the Federal Republic, had dominated the summit. The EMU could be the great new project to revive European integration – that much was clear after ‘The Hague’. A committee chaired by the prime minister of Luxembourg, Pierre Werner, was charged with devising concrete plans. The committee took the Barre Plan as its starting point. On 8 October 1970, Werner presented his final report. It proposed a plan in three stages, resulting after ten years in an EMU. This would be the third stage, though the duration of the crucial second stage was not specified. The final goal was, however, defined: from 1980, the EMU should consist of ‘total and irreversible convertibility of currencies, the elimination of fluctuation in exchange rates, the irrevocable fixing of parity rates and the complete liberation of movements of capital’. There were two options in terms of the form that the EMU could take: it could exist alongside national currencies or it could be in the form of a single currency. For psychological reasons, the latter was preferable, to promote European identity and to guarantee the irreversibility of the EMU. Besides skipping over the planning for the completion stage, the final report also failed to elaborate on the institutional aspects of the EMU. Much remained unclear. How were economic and monetary responsibilities to be defined and allocated? A European Fund was to be set up as the forerunner of a European system of central banks. But should there also be a European Central Bank, and what form should it take? How should tasks be divided between the system of central banks and the Council for Macroeconomic Coordination foreseen in the plan and which should result in a ‘a centre of decision for economic policy’ (accountable to the European Parliament)? How supranational should the ‘effective powers of decision’ with which these organs would be furnished be? Werner gave no clear answers to these questions.24 23 Harryvan, In pursuit, pp. 207-208. 24 Ungerer, A Concise History, pp. 109-113; Marc Dierikx (ed.), Common Fate, Common Future: A Documentary History of Monetary and Financial Cooperation in Europe (The Hague: Huygens ING, CSCE, 2012), pp. 110 and 175-180.

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It was precisely these questions that the Dutch Ministry of Finance had been concerned about during the discussions in the Werner Committee. The ministry’s senior officials had, from an early stage, taken their lead from a ‘strictly confidential internal memorandum from the German Ministry of Economic Affairs’, which had systematically set out the advantages and disadvantages of European monetary union. The advantages included the economic benefits of free capital movement and the disappearance of currency fluctuations, and the political benefits of ‘strengthening the position of the Community and its acting as a unity in its external relations’. The disadvantages were identified as a lack of clarity on economic convergence and supranational political integration, which should be seen as the hard preconditions for achieving an EMU in the first place. They were particularly concerned about the latter at the finance ministry in The Hague because the elaborations of the Barre Plan that were being circulated did not go any further in terms of institutional design than intergovernmental coordination. Consequently, ‘paradoxically enough, […] the natural supporters of the European Commission were forced into the position of being opponents of integration’.25 The ministry was particularly irritated at the representative from the Ministry of Foreign Affairs in the interministerial consultations, who stated that, in light of the French position, emphasising a supranational final goal was not realistic. Ruding, head of monetary affairs at the Ministry of Finance, saw that completely differently: A clear emphasis on the direction that will be taken with such measures is desirable in the very first stage of the consultations. The purely ‘pragmatic’ course of the Commission and the French (the latter’s main concern will be to determine the possibilities of acquiring support for the weak franc) will force the Netherlands into a more negative response; a more idealistic (yet, in the long term, more realistic) course, on the other hand, will offer the possibility of a more constructive Dutch approach.

The Ministry of Finance argued exasperatedly ‘for thinking about the stages in terms of the final goal’.26 It began a propaganda campaign to strengthen the force of its own standpoint. In a speech at the International Chamber 25 NA, 2.08.51, Standpuntbepaling t.a.v. de wenselijkheid and realiseerbaarheid van een EMU, 3 February 1970 and Memorandum from Ruding to the minister via the treasurer-general, plus annex, 17 February 1970. 26 NA, 2.08.51, Memorandum from Ruding to the minister via the treasurer-general, 26 March 1970.

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of Commerce in Amsterdam on 26 May 1970, Minister of Finance Johan Witteveen expressed the hope that ‘the order would soon be given for [the creation of] a new treaty’ in which the EMU would be elaborated in detail. That meant that the economic and political conditions should be defined as explicit goals. Witteveen was clear-cut about what that meant: ‘a single European ministry of finance’ and ‘a single European central bank’.27 This all tied in closely with the perspective that Holtrop had been advocating since the end of the 1950s. For the Netherlands’ European policy, which fell increasingly under the auspices of the Ministry of Finance as a result of the greater focus in Europe on the EMU, this marked the start of a velvet revolution. The sea change would gradually pick up momentum from 1971 to 1975 and would eventually lead to the policy being completely restructured. After the departure of Luns in 1971, his policy of strategic ‘supranationalism’ was quietly but rigorously abandoned. It had been born of necessity to oppose de Gaulle’s plans for Europe and in reality remained incompatible with the Netherlands’ support for Britain’s accession to the EEC. It had therefore always suffered from a credibility problem. The end of Luns’ nineteen year long career as minister of foreign affairs offered an opportunity to review the Netherlands’ entire European policy – and the government took it. Certainly after the final collapse of Bretton Woods and following Britain’s accession in 1973, Luns’ rhetoric was traded in for something completely different – unadulterated European idealism. This change of course was marked by his successor and fellow KVP member Norbert Schmelzer (1971-1973) in the cabinet led by Prime Minister Barend Biesheuvel of the ARP, which was a coalition between the ARP, KVP, VVD, CHU and DS’70. Schmelzer was a committed ‘European’ and put that conviction into practice as much as possible. He was a pronounced advocate of further deepening and political integration,28 but his role in the process was transient. The real innovators who initiated the revolution in the Netherlands’ European policy were primarily the internationally oriented technocrats at the Ministry of Finance and the Dutch central bank. They became preoccupied with the ‘interim’ stage between the common market and the EMU, a stage that many of them believed the integration process found itself at the end of the 1960s. During the 1970s, they would emerge as the ‘Europeans’ par excellence of this interim stage, in which everything seemed to be 27 NA, 2.08.51, Memorandum for the treasurer-general, 2 April 1970 and ‘Munt slaan uit de Europese eenheid’, 26 May 1970. 28 Harryvan, Van der Harst and Van Voorst, Voor Nederland, pp. 246-48.

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centred around the monetary technique of the future monetary union.29 The European dream that they consciously – but mostly unconsciously – spurred on was Drees’ nightmare: political union. The radical change in Dutch European policy was, in a certain sense, a logical development. From the early beginnings of the Europe of the Six, the Netherlands’ standpoint was dominated by a suspicious and defensive Atlantic approach. Luns had made the presentation of that approach more ‘European’, and while that seemed more proactive and constructive, but the Netherlands’ European policy had not really changed radically. That became clear every time the Dutch standpoint ran aground yet again in the diplomatic trench of the préalable anglais (i.e. The Hague would only talk about integration if the UK sat at the table as a full member). That defeatist strategy had been dusted off for one last time in the runup to the summit in The Hague. A few months after taking office, Prime Minister Piet de Jong – leader of a centre-right government consisting of the KVP, VVD, ARP and the CHU (1967-1971) – had, behind the closed doors of the cabinet, flexed his muscles in the tradition of his predecessors. In his view, history had proven that democracy was not safe in the hands of the French and the Germans: ‘the accession of Great Britain and the Scandinavian countries’ was therefore of the ‘utmost importance for democracy in Europe’. He considered it irresponsible to make the Netherlands a ‘European satellite under French and – after de Gaulle’s death – German hegemony’. His own cabinet made it clear that this was old European politics. His KVP colleagues Pierre Lardinois (minister of agriculture) and Luns made every effort to get the prime minister to temper his views by referring to the CAP, which was at the top of the European agenda and in which – as the largest agricultural exporter in the EEC – the Netherlands had considerable interests. Lardinois even pointed out that, in this respect, an early British accession was not necessarily to the Netherlands’ advantage.30 After the summit in The Hague, however, such discussions were hardly necessary. The British would eventually accede to the EEC, bringing Ireland and Denmark along in their wake. All of a sudden, the EEC looked fairly close to what the Netherlands had first had in mind: a transatlantic market without an overarching political structure, and with the UK as a counterweight to France and Germany. Europe had become valuable, a market where Dutch exports could earn a lot of money. And the process of European integration seemed as good as complete. The Netherlands had helped to achieve that and could now even 29 ‘Muntunie als kern van Europese Unie’, Het Financieele Dagblad, 12 May 1975. 30 Harryvan, In pursuit, pp. 197-201.

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be happy about it. From a Dutch perspective, the interim stage looked very much like an end point. The Netherlands was in favour of Europe, but for practical (trade-related) reasons, not for political ones. In Dutch politics, European integration was less of an issue than ever. The initial mistrust, which Beyen described as the typical Dutch ‘fear of being cheated’,31 was mixed with increasing prosperity and political indifference. That was also reflected in the sentiments of the people. From as far back as the early 1960s, the Dutch had been the most pro-European of all peoples within the EEC (some 80 per cent of the population supported European unity), while at the same time they felt that they benefitted the least from European integration and were the worst informed about the EEC (this would remain the case for many years).32 All in all, this was not a bad situation. It was, however, only an intermediate state of affairs, not a final result. European integration would never again leave the Netherlands or its people in peace, even though it was regularly possible to live under the misconception that it had or for politicians to present the situation as completely the reverse: that it was ‘gidsland Nederland’ – the Netherlands as a beacon to the world – that did not leave Europe in peace and showed the integration process the way. The latter gave new meaning to the Netherlands’ European policy, urgently required after the Six became the Nine in 1973 and that policy threatened to lose its way. Fortunately, ‘Europe’ also increasingly became the Europe of money and of the banks. Europe’s newest projects focused on technocratic monetary management, and that was something the Netherlands was good at – or so it believed. The Werner Committee was the first real step towards monetary union within the EEC. What came out of it? In essence, the Committee’s final report was the outcome of a reasonably successful exercise in reconciling on the one hand the proponents of the German or North European Krönungstheorie and on the other hand the ‘monetarists’ from the Latin regions of the EEC, who saw it exactly the other way around, viewing the EMU as a way of kick-starting economic convergence and deepening integration. The balanced outcome, as outlined in the Werner Report, closely corresponded to the conclusions of the summit in The Hague, which stated that monetary cooperation should be independent of economic convergence and referred to the setting up of a European fund. When, in 1974, transition to the second stage of the Werner Plan proved infeasible (partly as a consequence of the 31 Weenink, Johan Willem Beyen, p. 436. 32 Kennedy, Nieuw Babylon, pp. 62 and 234.

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1973 oil crisis), it signified an end to the reconciliation exercise on which it was founded.33 What remained was the ‘snake arrangement’ of 1972 – the agreement that exchange rates within the EEC could only deviate by a maximum of 2.5 per cent from parity. The arrangement would not, however, bring monetary peace. Throughout the 1970s, the game with exchange rates continued unabated (see chapter 7). Now, however, the question during the currency crises was: do we stay in the arrangement or leave? European integration came to a standstill, and the monetary project did not get off the ground. And concerns about it increased, also among Dutch ‘Europeans’. In the early 1970s, prominent PvdA figure Sieb Posthumus organised ‘European socialist boat trips’. Mansholt and Van der Goes van Naters always took part, and former French European commissioner Marjolin also attended whenever he could. Few were as influential in the integration process as Monnet’s confidant Marjolin, who was also a driving force behind the attempts to set up the EMU. But in the early 1970s, as they sailed around the lakes of Friesland, he appeared to have lost faith in the project. According to Van der Goes, although Marjolin went into spasms of delight at the ‘surreal pattern of black and white produced by a herd of Frisian cows as you sailed past them’, the Frenchman also sighed: now that the decision to allow the accession of Great Britain, with its support troops from Denmark and Ireland, has been made, the European Community will remain what it is in name only. It will become beyond the grasp of a genuinely homogenous political administration. It will no longer be able to inspire me. I am going to leave Brussels.34

Marjolin’s Europe had disappeared. The integration process had transformed in a monetary direction and had widened in Anglo-Saxon and Scandinavian directions, seeking new and pragmatic inspiration. That did not fit well with Marjolin – or with France. European innovation was better suited to a completely different kind of technocrat: a young, trend-sensitive, internationally oriented Dutchman, for whom the lakes of Friesland may have remained home but the biotope of Basel would become a warm bath: Wim Duisenberg.

33 Mourlon-Druol, A Europe, p. 18. 34 Marinus van der Goes van Naters, Met en tegen de tijd (Amsterdam: De Arbeiderspers, 1980), pp. 238-39.

7

Sturm und Drang (1974-1982) Abstract British accession heralded a period of what is often referred to as ‘euroscleroris’. In the 1970s and 1980s, serious deepening of European integration became virtually impossible. Many dedicated Europeans across and beyond the continent became increasingly anxious about the vitality of the whole project, but not Dutch policymakers. They became confirmed Europhiles in many ways, even emerging as forerunners in particularly sensitive domains like the Monetary Union, where Franco-German antagonism was explosive and British aversion deep-seated. They even went so far as to launch far-reaching proposals for deep monetary integration, like the Duisenberg Plan of the 1970s. Keywords: European Monetary System (EMS), Robert Mundell’s Optimum Currency Areas theory (OCA), Duisenberg Plan, free movement of capital, EMU, EPU

If there is one factor that made the Netherlands a continental country in the post-war period, it is monetary Europe, the ‘Europe of the money’. The structural pegging of the guilder to the Deutschmark, which took definitive form after the revaluation of 1961, marked the start of a process of rapid Europeanisation of the Netherlands. From then on, external circumstances had much less impact in driving the Netherlands forward on the path of European integration. Little by little, the Europe of the Deutschmark nudged the Netherlands into taking a more active part in the integration process. In addition, the Netherlands’ monetary policy constantly showed just how the Dutch economy had developed since the German-Dutch trade agreement of September 1949: in economic terms, the Netherlands had become a part of West Germany (see chapter 2). That also meant that the Netherlands became increasingly less enthusiastic over the years about British accession to the EEC. The market integration with the Six that Drees had considered oppressive and protectionist was

Segers, Mathieu, The Netherlands and European Integration, 1950 to Present. Amsterdam, Amsterdam University Press 2020 doi: 10.5117/9789463728133_ch07

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widely recognised in the early 1970s as the foundation for prosperity and employment in the country. And the situation in the UK looked rather pale in comparison, which fed doubts about its accession in the Netherlands and elsewhere. Was the British economy strong enough? The only constant factor in the Netherlands’ European policy came under increasing pressure. What would serve the Netherlands’ interests better: the accession of the economically weakened UK or the strongest and most coherent possible common market? It became less and less self-evident that the answer to that question was the former. Furthermore, British accession would require radical reform of the Common Agricultural Policy and how it was financed. On that point, too, the Netherlands’ interests diverged substantially from those of the UK. In short, the fact that the UK’s accession would increase the size of the common market, giving Dutch trade and exports a considerable boost, could no longer conceal its economic and financial disadvantages. The préalable anglais, which had been central to Dutch European policy since Luns had placed it there during the Fouchet negotiations (see chapter 5), was more and more at odds with clear Dutch interests. That had already become obvious during the second British attempt to join the EEC in 1967. Negotiations between the UK and the Six had been underway for most of that year but, on 27 November, the talks ran aground again when de Gaulle refused to allow the UK to accede. At a spectacular press conference at the Elysée, attended by more than 1,000 journalists, politicians, civil servants and other interested parties, the general declared that, in its current state, the British economy was in his view incompatible with the common market of the Six. Although the Netherlands publicly remained a strong proponent of the UK’s membership of the EEC and even presented itself with new élan as the champion of British accession at the European summit in The Hague in 1969 (see chapter 6), in reality the Dutch standpoint was not so far removed from that of de Gaulle. In February 1967, in preparation for a visit by British Prime Minister Harold Wilson to the Netherlands, the European Integration Department at the Ministry of Foreign Affairs (DIE) had drawn up an overview of the advantages and disadvantages of British accession. It was an extensive memorandum that spoke volumes but required close reading. It started by confirming the consistency of the Netherlands’ European policy. DIE wrote that ‘for the Netherlands, the accession of the UK was in the first place a political matter’ and that ‘The various economic, financial and institutional problems relating to the accession’ needed to be assessed ‘against the background of a political appraisal of the accession’. That was followed by a list of the familiar issues: the great importance of British accession in preserving and expanding the

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Atlantic ‘partnership’ with the United States and the ‘close relationship’ between the Netherlands and the UK (and the Scandinavian countries; besides Denmark, Norway was also considering applying for membership of the EEC in the wake of the British).1 The overly familiar points were given a prominent place in the memo but, later in the document, DIE suggested the need for a radical review of the Netherlands’ standpoint. Entirely as was to be expected, the memo devoted a number of passages to the traditional Dutch aversion to the Franco-German nature of the EEC. However, it drew a different conclusion than was customary (that FrancoGerman dominance was the ultimate argument for British accession). The préalable anglais proved less important than what – with a little imagination  – could be called the préalable allemand. DIE argued that the Netherlands should stand firmly behind the West German interpretation of the EEC – and therefore oppose the French version. That was notable, as the usual standpoint was that the Franco-German axis required a counterbalance because the era of French dominance within the Six would undoubtedly be followed by a period of German dominance. That was generally portrayed as the spectre inherent in a Franco-German Europe. The idea of German dominance sent shivers down Dutch spines. And British accession was essential if it were to be prevented. This was exactly as De Vos van Steenwijk, leader of the Dutch delegation in the Fouchet Committee, had written down for Luns in 1961: ‘The Six without the British is only the European veneer of a French egocentric policy’ and ‘Germany […] will follow the French with the thought in the back of their minds that “after de Gaulle we Germans will determine European policy”.’2 In 1967, DIE demonstrated that it thought differently on that score: British accession would ‘give Germany the feeling that it did not stand alone’. That was followed by the ominous warning that ‘a sense of isolation had always been a bad adviser for that country’. Later in the memo, however, it became clear that this reference to the war was little more than lip service. When it came to practical (i.e. economic) EEC policy, there was clearly a German and a French camp within the EEC. In other words, the German doctrine of export, free trade and a hard currency clashed with the French ‘standpoint’ which was based on ‘a different approach […], including greater influence of the state’. 1 Archives of the Ministry of Foreign Affairs, The Hague (BZ), 16245 (General 1965-75), Dossier Wilson-Brown, 24 January 1967. 2 NA, 2.05.118 (BZ 1955-64), Memorandum from De Vos van Steenwijk to the minister via the secretary-general, 2 December 1961.

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The DIE memorandum contained no discussion of whether the Netherlands should always side with Germany. According to the memo, that was implied in continuing to support British accession. It was after all to be expected that the accession of the UK and the Scandinavian countries would more likely strengthen the German than the French camp. The memorandum was very clear about that: the economic orientation of our country and these countries has always been more similar than that between our country and the Federal Republic on the one hand and of France and Italy on the other.

This was new. As long as the UK would strengthen Germany’s position in respect of that of France, it would serve the interests of the Netherlands. If that were not the case, then British accession was actually not a particularly attractive prospect, also in political terms: England’s current economic vulnerability has a direct impact on the Netherlands’ perceived political interests in a prompt British accession […] The political advantages for our country will be smaller as long as England has not been able to set its economy on a solid footing.

Here, the memo shifted somewhat towards de Gaulle’s standpoint, especially since it was the case that, by EEC standards, the UK ‘had not yet proved itself capable of combining a balanced balance of payments with economic growth and full employment’. Another concern was the extremely alarming state of the pound reserves, which were ‘much too low to deal with normal fluctuations in the balance of payments without causing unrest surrounding the exchange rate’ – and, on top of that, the reserves simultaneously had to ‘serve as cover for the substantial net debt arising from sterling balances predominantly held abroad’. The unavoidable conclusion was that the UK was not ready economically for accession, especially because the fluctuations in its balance of payments were more likely to increase rather than decrease in scale ‘as a consequence of the English economy becoming more closely intertwined with those of the other EEC countries’.3 What was indisputable economically was scarcely mentioned politically. In that respect, the memorandum was hardly an exception, as the first impression was full support for British accession because of overarching political interests. The memo thus led to no real change in the Netherlands’ 3

BZ, 16245 (General 1965-75), Dossier Wilson-Brown, 24 January 1967.

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position. Up to the moment that the UK acceded to the EEC, the Netherlands would staunchly support its British friends. In the meantime, however, the UK and the Netherlands moved unavoidably further apart. That was clear, for example, from the bluntness of British diplomacy against the candidacy of KVP Minister of Agriculture Pierre Lardinois as commissioner for agriculture in the European Commission. The Commission, which took office in 1973, included for the first time two British commissioners, George Thomson for Regional Policy and Sir Christopher Soames for External Relations. In a nervous and strictly confidential letter to the Secretary General of the Ministry of Foreign Affairs Emile Schiff, the Dutch ambassador in London noted the deep aversion of the British not only to Lardinois personally but also to the Netherlands’ policy. A ‘tirade’ against the candidacy of the miller’s son from South Limburg had made it clear to him that there was ‘little understanding for the policy of minister Lardinois’. 4 It was not until the UK had finally joined the EEC in 1973 (along with Denmark and Ireland) that the rather threadbare préalable anglais could be placed in the overfull display case of past instruments of Dutch European policy. From that moment, the policy was due for a radical review along the lines already recognisable in the DIE memorandum of 1967. But DIE would not be allowed to conduct the review itself. European ­integration in the 1970s was all about monetary cooperation. The Ministry of Finance was increasingly given the lead in reformulating the Netherlands’ position in Europe. After the end of the Bretton Woods system, monetary Europe – which had been hanging over the common market for so long –progressively took shape. That seemed to suit the Netherlands better – in any case better than Europe’s earlier obsessions with the EPU. The Netherlands would increasingly manifest itself as a driving force in European integration.

Late conversion The minister of finance in the most left-wing government in Dutch parliamentary history made the Netherlands’ European policy fit for the future. Against a background of stagflation, Wim Duisenberg introduced two radical changes in the Dutch position on the most important EEC dossier of that moment – the EMU. Firstly, he frankly admitted that there was 4

BZ, 16242, Huydecoper van Nigtevecht to Schiff, 18 December 1972.

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nothing more important for the prosperity of the Netherland than the Federal Republic, its markets and the stable Deutschmark in particular. Secondly, he concluded that this close connection with the Federal Republic obliged the Netherlands to act to promote European integration. In more concrete terms, the far-reaching integration of the Dutch economy into that of West Germany meant that the Netherlands would benefit from a European monetary union. To pursue that goal, it had to develop initiatives itself. That culminated in the Netherlands developing its own plan for the EMU – the Duisenberg Plan – which was launched during the Dutch presidency of the European Community in 1976. It made Duisenberg a European once and for all. The Duisenberg Plan suited a new era in which the Netherlands discovered itself as a leader in the process of European integration, which had in the meantime veered off into directions that the Netherlands traditionally welcomed, such as free trade, the market, technocracy above politics, and British accession. Moreover, the Netherlands held a central position in the new Europe of the Nine. It was the gateway to the UK and Scandinavia, not only economically and geographically but also mentally. The Duisenberg Plan was built upon a policy report on the future of the integration process presented a year earlier by a commission chaired by Dirk Spierenburg, an old hand in European diplomatic circles. Spierenburg had represented the Netherlands during the ECSC negotiations and then in the ECSC High Authority (1952-1963). After that, for many years, he had been the country’s permanent representative to the EEC (1963-1971). A pragmatist, he was long the personification of the Netherlands’ European policy. With his hard and direct style, he had commanded respect in Luxembourg and Brussels. He was someone in Europe. In The Hague, he was known as a man who knew what the Netherlands’ interests across the border entailed. That was one reason why this practical economist from Rotterdam had regularly felt like a viceroy in the provincial circles of The Hague. He had no qualms, for example, about calling the young minister of economic affairs, Joop den Uyl, a ‘bastard’ during talks in Brussels in 1966.5 His track record as a representative of the Netherlands’ interests in Europe was impressive, but even Spierenburg was not immune to the socialisation processes in Brussels or to admiration for often superior French diplomacy. The report produced under his chairmanship for the Den Uyl government in 1975 proved to be very 5 Hans Labohm (ed.), De waterdragers van het Nederlandse Europabeleid: terugblik op 40 jaar DGES (The Hague: Sdu, 1997), p. 246.

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pro-European and was a milestone in Dutch European policy. One of the Spierenburg Commission’s recommendations was the establishment of a monetary union. The Spierenburg report brought together three groups of Dutch technocrats and politicians who had, until then, only been influential – or were becoming so – independently of each other. They included the monetary technocrats who represented the Netherlands in and around the circuits in Basel, the old hands who had represented the country in the early years of integration in Luxembourg and Brussels (like Spierenburg himself), and the dynamic staff of the treasury general at the Ministry of Finance, who worked closely with Duisenberg, the new, young and internationally oriented minister. Together, from the mid-1970s, these three groups would set the Netherlands’ European policy on a new, pro-European track, with the EMU as the binding factor. In May 1975, Spierenburg presented the final report to Minister of Foreign Affairs Max van der Stoel. The report served as preparation for determining the Netherlands’ position in the ongoing discussions on the establishment of a European Union (EU), into which the existing communities could be incorporated. The EEC summit in Paris in 1972 had placed the Belgian Christian democrat and minister Leo Tindemans in charge of coordinating the talks. The prospects of success were far from bright. After the transition to the second stage of the EMU outlined in the Werner Report had failed in 1974 (see chapter 6), a general feeling of malaise arose around European integration. The Spierenburg Commission, which also included former state secretary Ernst van der Beugel, former minister Norbert Schmelzer and former director of the Central Statistics Office Flip Idenburg, expressed its grave concern about this state of affairs and called for farreaching steps to be taken to ‘bring the current process of disintegration to a halt’. In its report, the commission had limited itself to ‘what it considered absolutely essential’ to actually achieve a European Union – a monetary union. If the governments of the member states did not prove willing to take even that step, the only remaining option according to the commission was ‘the road of intergovernmental cooperation’, adding that ‘no one should harbour any illusions about the possibilities for continuing the process of integration’.6 These were ominous words, pregnant with urgency. European idealism was on the rocks. 6 Archives of the Ministry of Finance, The Hague (MF), 45.55.157, GT-215/406, Van Looijen to the minister via the treasurer-general, 16 May 1975; BZ, 2.05.315 (Spierenburg Commission 1973-75), 1-7; ‘Muntunie als kern van Europese Unie’, Het Financieele Dagblad, 12 May 1975.

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The wider public, however, showed little or no interest in the report. The responses of opinion makers who did take the trouble to read it were remarkable. They overlooked its significance. ‘Such a thick report has rarely been received with such meagre interest’, wrote W.L. Brugsma in the weekly newspaper De Haagse Post, dismissing it as ‘conservative’ and ‘consisting almost entirely of endlessly regurgitated orthodox ideas’. Brugsma accused the commission of being too cowardly to break with the unbridled capitalism of the US in an even more European way. In his view, the commission had shown itself to be too weak to ‘take a stand against the prevailing economic order’, which was characterised by waste, destruction and ‘ecological disasters’. Brugsma also correctly noted that, with the right marketing, the now so controversial European integration could be made a popular theme among young people and left-wingers in the Netherlands. On balance, however, his analysis was primarily an example of the poor knowledge of the history of the Netherlands’ European policy in the country at large. Brugsma’s review seriously misinterpreted the Spierenburg Report, which was extremely radical in the light of the constant factors in post-war Dutch European policy. The men of the Spierenburg Commission wanted to ‘give the European ideal a new impulse, especially among the younger generations’.7 Their effort, however, soon proved a waste of time. The lessons of the old guard fell on deaf ears. As Brugsma’s response also showed, Europe was by no means exciting enough in the politics of the Netherlands of the 1970s. Den Uyl was even less interested in Europe than Drees and Lieftinck.8 Nevertheless, the report was a springboard for radical policy changes. What did it have to say that so many commentators failed to see? Daily newspaper NRC Handelsblad was one of the few to understand just how radical the Spierenburg Report was. It discussed the report in an editorial entitled ‘Dangerous path’. The editor considered the report dangerous because it ‘reversed’ customary thinking on Europe in the Netherlands, as set out in 1970 by then Minister of Finance Johan Witteveen: ‘such a monetary union is only possible if further integration is first reached in two other areas – economic and political integration’. The NRC was right. Spierenburg and his experts had turned the Krönungstheorie, which had always been considered the foundation underlying the Netherlands’ standpoint on the plans for an EMU (see chapter 6), on its head. The NRC editors added that the failure of the Werner Plan should be seen as confirming Witteveen’s 7 8

W.L. Brugsma, ‘Advies voor het avondland’, Haagse Post, 24 May 1975. De Haas and Van Lotringen, Wim Duisenberg, p. 152.

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perspective more than that of Spierenburg. Responsibility for the failed transition to the second stage of the Werner Plan in 1974 may have lain partly outside the EEC, due to the effects of the international monetary crisis, but that did not change the fact that it had also been caused by ‘the economies of the member states growing apart’. The Spierenburg Commission had swept this under the carpet, and that was an ‘unacceptable step backwards in respect of earlier Dutch standpoints’. According to the NRC, that earlier perspective had been formulated ‘most sharply’ by Prime Minister Barend Biesheuvel, who had stated at the Paris summit in 1972 that ‘neither the Dutch government nor parliament will be willing to cooperate on the transition to the second stage [of the EMU as laid out in the Werner Plan] without certainty regarding a considerable improvement in the decisiveness of the Community and on sufficient parliamentary participation in policymaking’. The ‘powers to be transferred in the context of the EMU’ were simply ‘too important’.9 At the Ministry of Finance, Duisenberg’s senior officials completely agreed. They advised him to take the standpoint in the cabinet that he was willing to accept Spierenburg’s recommendations but that they would mean transferring powers to Brussels in four crucial areas: national budgets, domestic money supply, intervention and exchange rate policy, and common (monetary) policy regarding countries outside the EEC. The latter point was seen as necessary to offset ‘the gradual further liberalisation of capital’. In addition, they warned the minister about ‘the essence of Spierenburg’s proposals’, i.e. the assumption that ‘consenting to a political commitment to initiate the monetary union on a certain date could expedite the process of economic integration’. After considerable consultation, the experts at the ministry had been forced to conclude that setting a date was ‘unrealistic’ because ‘the underlying economic development [the divergence of wages and prices]’ made this ‘impossible for the time being’.10 The ministry’s analysis was correct. Precisely this area of tension would provide fertile ground for a battle in Europe between North European ‘economists’ and Latin ‘monetarists’ which would go on for many years.11 That battle was often very technical and complicated, but the division at its core was simple: the Krönungstheorie (first economic convergence and then the EMU) versus a starting date for the EMU (first the EMU and then the rest). 9 ‘Gevaarlijke weg’, NRC Handelsblad, 12 May 1975. 10 MF, 45.55.157, GT-215/406, Memorandum from Van Looijen to the minister via the treasurergeneral, before the Cabinet meeting on 30 May 1975. 11 Peter Ludlow, The Making of the EMS (London: Butterworth, 1982), p. 4f.

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The monetary trilemma One of the memoranda prepared for Duisenberg showed clearly what the monetary experts at the finance ministry thought about Spierenburg’s recommendations: ‘completely unrealistic, economically and politically’, ‘incorrect’, ‘passing the buck to national governments without justification’, ‘a shot in the dark’, and so on. All of these criticisms were aimed at Spierenburg’s reasoning that ‘diverging cost and productivity developments were not a substantial obstacle to the establishment of a monetary union’. On what did the commission base this conclusion? That was simple: it assumed that ‘feeding back fixed exchange rates to the labour market would be sufficient’ to align all the diverging cost and productivity developments. That would have to be achieved ‘through the classical gold-standard mechanism, mitigated by regional funds, etc’. The officials at the finance ministry were not against the EMU, but they found this argument naive.12 In monetary matters, the ministry’s experts were reasoning on the basis of the theory of Optimum Currency Areas (OCA), first expounded in 1961 by Canadian economist Robert Mundell in a renowned article in the American Economic Review. Mundell would emerge in the 1990s as the intellectual father of the euro, but in 1975 that was still far in the future. He had, however, already made his name with the OCA theory, which seemed highly relevant in the chaotic monetary situation that followed the collapse of the Bretton Woods system. His theory was designed to define which regions (groups of countries) would benefit best – i.e. would suffer no loss of prosperity and well-being – by introducing a joint currency. According to Mundell, this was determined by two key factors: the mobility of the factors of production (labour and capital) and the symmetry of external shocks. An OCA required free movement of labour and capital within the group of countries concerned, and it also required all the countries to be faced with identical external shocks. Heated debates arose between economists about whether Mundell’s short list of factors should be extended, e.g. with factors like the openness of the economy, the diversification of production, the degree of financial discipline and the convergence of inflation figures. It was logical that they went searching for empirical evidence in the case of the EEC as a potential OCA. That debate was never settled conclusively and continues to rage. The question whether the EEC, and later the eurozone, formed an optimum currency area has never been definitively answered. In the 1970s, that was not 12 MF, 45.55.157, GT-215/406, To the minister, report by the Spierenburg Commission, no date.

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the reason for the OCA theory’s significance. Mundell’s great influence was based on the monetary policy trilemma on which the theory was founded. To the present day, that trilemma has dominated the economic debate on the EMU and the euro. It was also the reason for the scepticism at the Ministry of Finance about the Spierenburg Report in 1975. Mundell had written about the ‘holy trinity’ of free capital movement, fixed exchange rates and independent monetary policy but stated that only two of the three could be achieved at any one time. One of the three would then always have to be sacrificed but, for an OCA, the other two would have to be in place. In the Bretton Woods system, fixed exchange rates and independent monetary policy were able to co-exist thanks to restricted capital mobility. When the latter increased from the end of the 1960s, according to Mundell’s theory, the system became unsustainable.13 If these insights were applied to the goal of setting up a monetary union within the EEC (or within the snake arrangement), the conclusion was clear. Following Spierenburg’s recommendations, that conclusion was as follows: (1) to enable the common market to function, fixed exchange rates were required; (2) to achieve that, national governments would have to be willing to transfer control over monetary policy to the European level (with regard to the trilemma, it was clear which of the three factors would be sacrificed: the independent monetary policy of the member states); (3) for the EMU to be a success, there had to be free movement of capital. And, within the EEC, free movement of capital was still a long way off. It may have been one of the goals laid down in the EEC Treaty, but little had been done to achieve it since 1958. That was precisely the reason why the experts at the finance ministry saw little that was useful in Spierenburg’s report and even found it a little naive: Establishing a monetary union is only possible if labour and capital markets are so interwoven that cost and productivity development autonomously run in parallel. That requires primarily that restrictions on the mobility of capital and labour are ‘irreversibly’ scrapped.14

This was a lesson in Mundell’s theory, but the question is whether anyone outside the ministry realised that. The ministry experts were not against the EMU; on the contrary, they may even have been in favour of it, but they 13 Robert A. Mundell, ‘A Theory of Optimum Currency Areas’, American Economic Review, 51, 4 (1961): 657-65; Mourlon-Druol, A Europe, pp. 15-16. 14 MF, 45.55.157, GT-215/406, To the minister, report by the Spierenburg Commission, no date.

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understood that it would first require the completely free movement of labour and capital on the common market. In other words, via Mundell’s trilemma, they came close to the Krönungstheorie: first economic convergence (a precondition for greater freedom of labour and capital) and only then the EMU. In addition, it was very likely that an intermediate stage would be required in which socioeconomic and/or economic policy would have to be coordinated more supranationally (including democratic control on the supranational level). In short, what was needed first was completion of the market, then something along the lines of an EPU, and only then the EMU. This was to become the main thread of the Netherlands’ standpoint during the comprehensive discussions on the EMU that would follow in the 1970s and 1980s: pro-EMU but on certain conditions and under the slogan ‘market-EPU’. No matter how correct the analyses of the NRC and the Ministry of Finance may have been, they only reflected reality as seen in The Hague. In the Europe of the Nine, there was an increasingly dominant school of thought that reasoned in the same way as the Spierenburg Commission. That became very clear in the final report of the EEC commission chaired by Leo Tindemans, presented in January 1976. Tindemans, too, turned the Krönungstheorie on its head. The monetary sections of the report contained three main proposals. Firstly, it called for the snake arrangement to be used to achieve economic convergence. That would be possible if the member states accepted obligations in the context of the arrangement relating to their internal monetary policy (money supply), budget policy and macroeconomic policy, policy with regard to the economic cycle and inflation control in particular. Secondly, Tindemans introduced the idea of a lead group. Member states with the capacity to do so had to be given the opportunity to integrate further, while those that did not feel ready should not have to. They should be able to request assistance from the states in the lead group and to join it at a later stage. In essence, these two objectives signified a division between member states (like the Netherlands and Germany) that could remain in the snake and those (like the UK and, possibly, France) for whom the monetary rules of the arrangement (i.e. the lower limit) were beyond their reach. Thirdly, the Tindemans Report posited that consultations on the snake should take place within EEC institutions – that was the place to decide on changes to the central exchange rate. The member states outside the snake should also take part in these discussions in order to prevent differences from becoming greater and leading to a two-way split within the EEC. The director of foreign financial relations at the Dutch Ministry of Finance, A.IJ.A. van Looijen, was very clear about Tindemans’ proposals – they should

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be ignored. In an advisory report to Minister Duisenberg, he explained that the snake arrangement should not be the starting point but that the monetary stability of the EEC should ‘rest on measures to strengthen the convergence of cost and price developments in the member states’. If that latter basic principle were to be abandoned, the ‘existing modest exchange rate stability would come under pressure’. Van Looijen warned further of the risk that the ‘community would collapse completely in the long term, and that weak countries would not be willing or able to catch up’. He also subtly made it clear just how far removed the Netherlands now was from the British perspective on European integration in that respect: ‘countries in the second category may find it appealing to remain in that category and not to contribute to a single integrated Europe, because they wish to see the EEC only as a “free-trade zone in disguise”.’15 Van Looijen’s department was clearly in favour of the EMU and the further integration that implied but was opposed to Tindemans’ EMU proposals, which took the snake as a starting point, and to the British perspective which, according to the EEC, should be restricted as much as possible to the greatest possible free trade zone. At first glance, this standpoint seemed to be identical to that propagated by the financial-economic elite in the Federal Republic, but in reality that was not the case. The Dutch were, on this point too, somewhat more flexible than the Germans, certainly when it came to the Krönungstheorie, the European gospel of the Bundesbank. Dutch reasoning was based much more on Mundell’s doctrine of the holy trinity in which belief in progress was inherent. And that was an area in which the Dutch felt themselves to be trendsetters and an impressive example, especially in the 1970s. Even Dutch monetary technocrats could be cool.

Failure for Duisenberg Germany cherished its rock-solid Deutschmark, and the Netherlands pursued a hard guilder policy. In the words of Coen Oort, treasurer-general at the Dutch Ministry of Finance, that meant that the Netherlands was seen in Europe as ‘a tender to the German locomotive’. He added: ‘Weaker countries compared themselves continually to Germany and the Netherlands. That enable the Netherlands to punch above its weight.’ But there was a significant difference between the Federal Republic and the Netherlands: the Germans 15 MF, 45.55.157, GT-215/406, Memorandum from Van Looijen to the minister via the treasurergeneral, 28 January 1976.

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maintained their hard currency under their own steam, while the Dutch could do that only thanks to the Germans. The Dutch economy was much less solid than it seemed on the outside, where it was protected by the hard guilder. After Duisenberg became minister of finance in 1973, the Dutch economy began to creak and crack even more loudly. The number of people drawing disability benefits rose spectacularly, and a slight rise in inflation no longer led to lower unemployment. Stagflation had also reached the Netherlands (see chapter 6). Stimulation policy was like operating with a blunt knife. In the summer of 1975, the economic malaise reached a peak. The minister had to interrupt his holiday on the lakes of Friesland to hastily return to The Hague. It was a crisis: the latest calculations by the Central Statistics Office predicted exploding unemployment, a dramatic slowdown in growth and uncontrollable tax pressure. The Hague was in shock. Despite everything, the guilder maintained its reputation as a hard currency. That was possible because it was overvalued as a consequence of the sudden increase in revenue from one export product– gas. During the 1973 oil crisis, this made it easy for the Den Uyl government to continue to to refrain from imposing controls on energy trade (thereby acting in the interests of the Dutch multinational Shell) rather than to support French proposals for European coordination on energy policy.16 The revenue from the natural gas bubble made it increasingly difficult for the Dutch central bank (DNB) to control the domestic money supply. Trusted mechanisms no longer worked due to the gas exports. The budget deficit, for example, increased rapidly without leading to deficits on the balance of payments. That meant that an automatic brake on the growth of the money supply no longer worked, as currency reserves did not shrink. This phenomenon came to be known abroad as the ‘Dutch Disease’. The DNB was especially concerned about the threat of inflation. The combination of an overvalued currency and economic stagnation was a potential bomb under price stability. From the perspective of the DNB, devaluation of the guilder had to be prevented at all costs, and that meant keeping the cost of wages down. But how? The answer to that question was simple enough: just as the threat of inflation was imported from the outside through the open Dutch economy (via the gas exports), the discipline to control it would also have to come from the outside, and from very close by: Germany. There was no Western country where price stability was so 16 Duco Hellema, Nederland in de wereld: De buitenlandse politiek van Nederland (HoutenAntwerp: Spectrum, 2010), pp. 276-77.

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sacred as in Germany, traumatised as it was by the hyperinflation of the Weimar era. An explicit reconfirmation of the pegging of the guilder to the Deutschmark made the instrument of devaluation unusable and was sufficient to enforce discipline in wage rises in the Netherlands. During wage negotiations, employers and trade unions were forced to take into account the fact that high wage costs could not be managed by reducing the value of the guilder,and that had the effect of increasing moderation and discipline.17 The Netherlands was acting atypically by pursuing this policy. After the collapse of Bretton Woods, linking one’s currency to a stronger currency was no longer the norm. The motto increasingly became floating currencies and exchange rates determined by the financial markets. The Netherlands’ decision to link its monetary policy more than ever to the policy of the Bundesbank signified a next step in the far-reaching integration of the Dutch economy into that of the Federal Republic. This step had important consequences for the margins of Dutch European policy, certainly because, within the EEC, it was perpetually focused on the future EMU. But the EMU was not yet in place. What was there was the snake arrangement. Many in Europe found the snake an inadequate form of monetary coordination because the hard Deutschmark continually placed the other currencies under pressure to devalue and regularly pushed them beyond the boundaries of the snake. It was a thorn in France’s side that the snake effectively operated as a Deutschmark zone. That is why it was always easy to arouse French interest in new EMU plans – including, of course, credit and support facilities for the weaker currencies. And the Federal Republic would always have to provide the money for these European funds one way or another. After all, in a truly European system, it would not only be the weaker countries that would have to adapt but the stronger ones too. The Deutschmark zone, into which the snake was increasingly degenerating, was not ‘fair’: the snake resulted in German, not European, policy. In fact, worse than that, it was the policy of German bureaucrats from Frankfurt. In French eyes, such people should surely not be allowed to determine the monetary policy of France! For the Netherlands, the opposite was true: for the internationally oriented Dutch economy, a Deutschmark zone meant the best of both worlds. Hitching a ride on Frankfurt’s back gave the Dutch economy a rock-solid external profile and, at the same time, provided the perfect instrument to enforce internal discipline. Monetary union would probably offer greater 17 De Haas and Van Lotringen, Wim Duisenberg, pp. 97-99 and 150-51.

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disadvantages for the Netherlands than maintaining the status quo (the Deutschmark zone) in monetary Europe. Making plans for greater monetary stability in the EEC by taking further steps towards monetary integration was therefore politically speaking not necessarily opportune from the point of view of Dutch interests. There was a good chance that doing so would be grist to the mill for French-inspired models for the EU.18 At the Ministry of Finance, they regularly seemed not to be fully aware of the more political dimension, or perhaps they were even completely unaware. That certainly applied to Minister Duisenberg. But unlike Den Uyl, Duisenberg was interested in European integration. He felt attracted to the plans being hatched for the EMU in the Europe of the 1970s, not so much because he was in favour of monetary union as such but ‘mainly to increase his international profile and to mingle with the great and the powerful’.19 That he did not fully understood the political dimensions was to become clear in the second half of 1976, when he took advantage of the Netherlands’ presidency of the EU to shine on the European stage by launching his Duisenberg Plan for the EMU. It was a major European initiative by the Netherlands, and that is precisely how it was presented by The Hague. The German financial-economic elite was horrified by the plan. The Federal Republic rejected it out of hand – a painful response, especially for Duisenberg. The no-nonsense Frisian had no qualms about showing himself to be the greatest fan of the German financial wizards and that made him, conversely, a Hoffnungsträger (a bearer of hope) for the German financial-economic elite in their dogged struggle against overly ambitious EMU plans. But, in their eyes, the Duisenberg Plan exposed the Dutch minister’s lack of ability. ‘Der Wim’ had renounced the Krönungstheorie. That was serious, particularly because the Netherlands had been a valued member of the mini-snake that had breathed new life into the EMU rather than one of the economically weaker EEC members, as was usually the case.20 So what exactly had Duisenberg proposed? The brain behind the Duisenberg Plan was Treasurer-General Coen Oort. He had made full use of the scope for a European initiative left vacant by Den Uyl because he knew that ‘Duisenberg could go completely his own way’ in Europe. And that is what the minister wanted, to go his own way. In doing so, 18 Bernard Connolly, The Rotten Heart of Europe: The Dirty War for Europe’s Money (London, Boston: Faber & Faber, 1995), pp. 14-15 and 30. 19 De Haas and Van Lotringen, Wim Duisenberg, p. 152. 20 Mourlon-Druol, A Europe, p. 102

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he blindly trusted the small group of talented economists he had gathered about him as his closest advisers. None of them had much in common with Den Uyl or his party, the PvdA (golf-lover Duisenberg would later present Oort with golf balls bearing a picture of Den Uyl to ‘vent his frustrations’). Besides Oort, the group comprised three academics-cum-civil servants: Dick Meijs (like Oort, a member of the liberal VVD), Christian democrat Nout Wellink and his close friend, professor of public finance Lense Koopmans, who had cancelled his membership of the PvdA with the advent of the New Left. All three were in their thirties. Oort was the senior – he was nearly 50, had been treasurer-general since 1971 and already had a career behind him as professor of economics at Utrecht University. He had developed and set out his standpoint on European policy before developing the Duisenberg Plan. For example, at a symposium in Tokyo in 1974 organised by the Per Jacobsson Foundation (named after the former managing director of the IMF, 1956-1963), Oort had presented a well-thought-out paper on the future of the global monetary system of floating exchange rates that emerged after Bretton Woods. In the last section of the paper, he had examined the issue of monetary integration in Europe in considerable detail. He made no bones about what his underlying position was: The business world has always strongly supported the idea [of a European monetary union] on the – I believe quite valid – premise that the existence of independent monetary areas in Europe is a serious drag on economic integration […] and a strong impediment to the real integration of business operations across borders.21

That was clear enough. Oort supported the EMU because the business community supported it. For Oort, the priority lay with the market first and then the currency. He explained this as follows: independent ‘monetary areas’ within the EEC presented a more serious obstacle to the functioning of the integrated market than the problematic ‘variety in exchange rates’. To remove that obstacle, monetary union was necessary. But Oort was realistic: he was aware that politicians only ‘paid lip service’ to the idea of the EMU, for the time being at least. There was no ‘political will’ to transfer ‘national autonomy’ in essential areas like fiscal and monetary policy to Brussels; and that was precisely what was 21 These and following quotes are taken from: Conrad Oort, ‘The exchange rate regime of the future’, The Per Jacobsson Foundation, Steps to international monetary order, 11 October 1974, Tokyo, pp. 45-52.

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needed for a sound EMU. Spierenburg used similar wording a few months later in his advisory report to Van der Stoel. And, like Spierenburg, Oort had not stopped at analysing the problem. He, too, had called for action. That was necessary because the existing situation cost the business community money and hampered growth in Western Europe. According to Oort, it was high time for a policy of small but decisive steps towards the EMU. The course he mapped out lay between the Krönungstheorie and the creation of the EMU by political decision. He considered the latter in any case unrealistic. That was not especially remarkable in light of the failed transition to the second step of the Werner Plan, but Oort explained clearly why he believed this: The idea that a quantum jump in the monetary field might pull national economic management with it appears to be politically dead. Good riddance, for it never was a credible approach. People and countries are sometimes willing to close their eyes and jump, but not when something as vital as their purse strings – their employment, their taxes, their social benefits – are involved. The promised land would have to be much richer or the enemy at the gates more threatening to justify an experiment which, if it were to fail, would do great harm to the countries involved and to the whole future of European integration.

An EMU by political decision was unfeasible, according to Oort. So far, his conclusions were closely aligned with the perspective of the West German financial-economic elite. But they were based more on his estimation of their political infeasibility than on monetary theory. Just how fundamentally Oort deviated from the pure Krönungstheorie was clear in the passages in his paper in which he sketched out the future. He explicitly distanced himself from the ‘sceptics’ who were of the opinion that ‘European coordination’ had to penetrate deep into the ‘details of economic policy’ before Europe could even think of establishing a monetary union. Oort saw it differently. In his view, reality called for two things: greater European monetary coordination and more European financial solidarity. That did not require a quantum leap from nothing to complete monetary union. What it did demand was a ‘a quantum leap at institutional level’ – from the member states to supranational institutions. After all, it was the diverse national interests of the EEC member states that undermined monetary stability and thus hampered the smooth functioning of the common market. So according to Oort, Europe should not strive for EMU but rather a substantial transfer of powers to supranational European

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institutions. In that way, the necessary mutual solidarity could be linked to strict conditions and European control (especially of national budgets). What the EEC needed, according to Oort, was ‘a big financial stick’ at the supranational level: If national treasuries were not allowed, without prior Community approval, to finance budget deficits either by recourse to the central bank or by floating loans on the market, the process of economic and monetary integration could really be set on the track.

Oort therefore called for supranational European mechanisms to enforce discipline and prudence throughout the whole EEC zone. Holtrop would have done it no differently (see chapter 6), but Oort’s elaboration was more precise. The key to his plan was that European ‘credits’ must be made ‘conditional’, tied to strict conditions ‘also relating to policy obligations that could be imposed on debtor countries that pursued inflationary policies’. These strict conditions were required to rein in the forces for easy money that had destroyed Bretton Woods. The credits should be provided through a European Monetary Fund (EMF), which at that time had not yet been established. There was only the embryonic European Monetary Cooperation Fund (EMCF), which led a desolate existence in a practically empty building in Luxembourg, where the credit and debt positions of the member states were monitored. In short, like his West German colleagues, Oort believed that economic convergence was a precondition for a viable EMU; but that convergence did not need to be fully achieved before steps could be taken to establish the EMU. On the contrary, introducing conditional credit provision through supranational community institutions could act as an incentive for economic convergence. Oort thus replaced the sequence of the Krönungstheorie, which was essentially set in stone, with a ‘parallel approach’ in which economic convergence and the EMU could, in a certain sense, be achieved at the same time. The great advantage of this approach, according to Oort, was that Europe did not remain suspended in the scepticism of the Krönungstheorie but could ‘get to work’, thus allowing the ‘positive community spirit’ to ‘return’. These analyses formed the basis for the Duisenberg Plan. Through the plan, Oort wanted to achieve the European ‘solidarity of fact’ – as Robert Schuman had called it (see chapter 2) – that was necessary for the market to work. The core of the plan was to set up ‘target zones’ to stabilise exchange rates within the EEC. The zones could offer a new means of coordinating

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economic policy within the EEC. The plan was derived from the IMF’s ‘rules for floating’ and was intended to work as follows: the member states would have to agree to target zones for their exchange rates at the European level and adjust their economic policies with that in mind. That, too, would have to be coordinated at the European level. Possible devaluations could be decided within the limits of the target zone in European consultations, but no member state was meant to go beyond those limits. In exchange for their willingness to accept this stricter form of European coordination of economic policy, member states that came under pressure to devalue their currencies could make use of European credit facilities.22 The ‘conditionality’ of the credit provision could be further safeguarded by providing credit ‘in instalments’, where ‘making further instalments available would depend on whether the countries involved fulfilled the requirements of the intended policy’.23 The European Commission was enthusiastic about these ideas, but the Duisenberg Plan was nevertheless doomed to failure. The Bundesbank was f iercely opposed to the plan, for very obvious reasons: attempts to stabilise exchange rates were by definition playing with fire as long as the inflation variations between the member states were not first evened out. That was putting price stability at risk. In the following meeting of the Monetary Committee, Karl-Otto Pöhl, German state secretary for finance in the government led by social democrat Helmut Schmidt (1974-1982), did not mince his words: ‘We would be better spending our time fighting inflation than discussing one unrealistic proposal after the other’. The other EEC member states, too, did not exactly welcome the plan with open arms. The forcefully proposed supranational aspects were met with resistance and scepticism. Jacques de Larosière, under-secretary for monetary affairs at the French Ministry of Finance (and successor to Johan Witteveen as managing director of the IMF in 1978), warned that the target zones would be a weapon in the hands of speculators. As an EEC member state outside the snake, the UK felt no qualms about characterising the Duisenberg Plan as advocating unbridled monetarism. As one British official put it: ‘There is no point in putting the monetary cart before the economic horse’. The general verdict was that the plan was ‘premature’, which in European jargon meant a complete blunder. 22 Conrad Oort, ‘Managed floating in the European Community’ in Samuel I. Katz (ed.), U.S.-European monetary relations (Washington: American Enterprise Institute, 1979), p. 219; Mourlon-Druol, A Europe, pp. 100-101. 23 Lower House of the States-General, Session 1977-78, 15 116, 3, Wijziging van de wet van 24 oktober 1973, stb. 537, houdende machtiging tot deelneming van de Staat in het EEG-mechanisme voor financiële bijstand op middellange termijn.

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After the failure of the Werner Plan, no one in the EEC was interested in more supranational coordination in the form of a monetary union. The way the European partners assigned the Duisenberg Plan to the scrapheap – beyond the sight of the media – spoke volumes. Duisenberg’s ‘target zones’ were ridiculed (especially the requirement that the zones be kept secret), while the Dutch proposals to enforce economic convergence supranationally were completely ignored. The former was unwanted monetarism, and no self-respecting member state would show the slightest enthusiasm for the latter.24 Duisenberg had fallen flat on his face internationally. But there was another side to this whole affair. The humiliating defeat did not affect his career. The stubborn Frisian proved to be very Dutch: Oort’s plan for Europe that Duisenberg had embraced may indeed have been premature in 1976 but, in the 1980s, it became clear that, as minister, he had been one of the first to have understood this newest European trend. In 1982, Duisenberg took over as president of the DNB, the Dutch central bank. That was no coincidence. He was the hand-picked successor of fellow Frisian and fellow European Jelle Zijlstra, the professor of theoretical economics who had emerged since the 1950s as the conscience of the Netherlands, in more than one respect. If there was a ‘father of the fatherland’ in the post-war Netherlands, then it was the reliable, incorruptible and popular Zijlstra, who had started his political career in 1952 as minister of economic affairs in the second Drees government (see chapter 3). No one received more requests than Zijlstra to become prime minister. But he had only succumbed to that pressure on one occasion: in October 1966, when the government led by Jo Cals fell after only a year and a half in office after losing a vote of no confidence submitted by KVP leader Norbert Schmelzer. Zijlstra became prime minister at the head of an interim coalition of the ARP and the KVP (1966-1967) in order to call new elections and restore the peace in the national political arena. He succeeded on both counts, unleashing what was known as the ‘Jelle effect’. A song by cabaret artist Wim Kan expressed the confidence that Zijlstra inspired: ‘Where we’re going, Jelle will show us the way, Jelle will show us the way’. It became an unofficial national anthem and a beacon for the man and woman in the street. But that was all in the past. From 1967 to 1981, Zijlstra was president of the DNB. Throughout the 1970s, despite all the external tumult in politics and society, he was the real ‘boss’ in the Netherlands. When his time was up, Zijlstra knew where his legacy would best be protected. The golden 24 Mourlon-Druol, A Europe, pp. 102-103; De Haas and Van Lotringen, Wim Duisenberg, p. 153.

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rule of his cautious monetary policy was the pegging of the guilder to the Deutschmark – that was the logical monetary consequence of what he had identified during the ratification debate on the Treaties of Rome in 1957 as the core of the Netherlands’ economic policy, not to mention the hope for the country’s future: integration into the West German economy (see chapter 5). Zijlstra knew that the fixed link between the guilder and the Deutschmark was in safe hands with Duisenberg. He was right. Duisenberg was given the French nickname monsieur cinq secondes, because he followed whatever the Bundesbank did – notably, interest rate changes – within five seconds.25 And it was precisely this reputation that would secure Duisenberg’s international career. He acquired European allure by combining his role as ‘branch manager of the Bundesbank’ with the pro-EMU standpoint that had earlier allowed him to make the Duisenberg Plan into something special, challenging the rigid financial-economic elite in the Federal Republic. That made him, besides the Bundesbank’s branch manager, a monetary Adonis for the EMU plotters among the eurocrats and politicians. It was especially his semi-Teutonic profile – with the emphasis on semi – that made Duisenberg so popular in Europe. Shortly after the failure of his EMU plan for target zones, Duisenberg would be proved right on one crucial point: the snake was a difficult arrangement to maintain. It seemed to bring more unrest than stability, and West German chancellor Helmut Schmidt proved to be broadly in agreement with Oort and Duisenberg. According to Schmidt, more (rather than less) monetary Europe was required for the EEC market to function well. The Bundesbank was forced to watch in dismay as Schmidt launched his political ploy to promote the EMU.

The stick of free movement of capital Schmidt supported the French plan, proposed in 1974 by his colleague Giscard d’Estaing, for setting up a European Council, a meeting of the heads of state and government of the member states. The proposal was in line with the tradition of French attempts to give the European Commission more countervailing power. The chancellor was also in favour of informal ‘fireside chats’ with his colleagues. The idea of ‘keine Papiere, keine Beambte’ – no papers, no civil servants – appealed to him. And it was necessary to ensure that, in times of crisis, the heads of government were not overwhelmed 25 De Haas and Van Lotringen, Wim Duisenberg, pp. 120 and 159-61.

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by Brussels’ incapacity to act – and could agree on spur-of-the-moment compromises. More coordination between the member states was urgently needed, and most urgently on monetary matters. At the European summit in Paris in December 1974, a communiqué was adopted that formed the basis for the official establishment of the European Council.26 The new institution was explicitly not a community organ (it did not become one until the 2007 Lisbon Treaty) but would evolve to become a new nerve centre of European politics with the regular coordination between France and the Federal Republic within the context of the treaty of friendship between the two countries as its eminent frontispiece. Schmidt and Giscard further intensified this coordination, especially with the aim of increasing economic stability in Europe.27 It all fit in well with Schmidt’s ambitious plans for monetary policy in Europe. He explained these plans in detail at the European summit in Copenhagen in April 1978. This was the moment of the birth of the European Monetary System (EMS), which would replace the snake in 1979. The EMS differed from the snake on one important point: European credit facilities were considerably expanded and supplemented by a European intervention mechanism. The perspective that the chancellor revealed in Copenhagen seemed to be economic at first glance but was in essence political – or rather, geopolitical. It was aimed against both the hypercapitalism of the US and against the Bundesbank, which continually frustrated Schmidt’s Keynesian spending plans for the German economy. In Copenhagen, the social democrat Schmidt lay the emphasis on the former: his main concern was Europe’s independence from the US. Schmidt argued that, in the US, all caution had been thrown to the wind in terms of monetary policy. Since the definitive end of the Bretton Woods system in 1973, the country had been printing dollars like there was no tomorrow. The Vietnam War had only intensified this trend. The consequence was alarming inflation that also made itself felt across the Atlantic. This was because the US exported its inflation through the financial markets to countries like Japan, Switzerland, the Netherlands and the Federal Republic – safe havens for anyone wishing to dump their dollars. And that led to increasing instability and vulnerability in Europe. According to Schmidt, the oil crisis had shown exactly how out of hand this could get. He therefore called for a ‘reconstruction of Bretton Woods in Europe’. That could be the 26 Harryvan and Van der Harst, Documents, pp. 181-84. 27 Mourlon-Druol, A Europe, pp. 20 and 28.

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prelude to an EMF and Europe’s own ‘reserve currency’, which would be more stable than the dollar. What the chancellor was calling for, in other words, was for more bloc formation in Europe on monetary policy. That was a far-reaching step, and Schmidt emphasised that they were ‘private ideas’ while remaining extremely vague about how to put them into practice.28 Private or not, he had expressed his ideas and they had been heard, with approval in Paris and with a shaking of heads in Frankfurt. Schmidt’s personal intervention in Copenhagen was the prelude to the Franco-German agreement that Schmidt and Giscard reached at a bilateral summit in Aachen in September of that same year, 1978. Despite the great technical differences of opinion between the West German and French experts negotiating on the EMS, the president and the chancellor gave each other their word: the EMS would come, no matter what. The high point of the summit was a visit to Charlemagne’s Palatine Chapel in Aachen Cathedral. The visit underscored the historical significance that the two leaders attached to the EMS, which was to become the symbol of renewed Franco-German élan in Europe and the world. When it became clear what the plans for the EMS would mean, the Bundesbank was furious: it called the EMS a ‘Deutschmark intervention system’ and an ‘inflation mechanism’ – Europe was putting its hands in the West German till. Bundesbank president Otmar Emminger resorted to exceptional measures to avert this disaster before the decisive European summit in December 1978, at which the decision to introduce the EMS would be taken. In a letter to Schmidt, Emminger wrote that he would not give his blessing to the EMS unless the Bundesbank received the guarantee that it could exempt itself from the intervention obligation that the EMS implied, if such an intervention would undermine West German monetary policy (i.e. price stability). Schmidt had to consent to this, but Emminger could forget any ambitions for a second term as president of the Bundesbank.29 This was a key episode in the history of monetary Europe. Emminger’s successful action concealed a crucial loss of power for the Bundesbank in European arenas. The EMS would slowly but surely force the bank onto the defensive. Schmidt was to a significant degree responsible for that. The European Council and the EMS, his most important European creations, 28 http://www.margaretthatcher.org/document/111534, Summary of comments made in Copenhagen on April 7, 1978 (Schmidt’s notes). 29 Femke van Esch, Mapping the road to Maastricht: A comparative study of German and French pivotal decision-makers’ preferences concerning the establishment of an EMU during the early 1970s and late 1980s, dissertation Radboud University Nijmegen (2007), pp. 252-53; Ludlow, The making, p. 167; De Haas and Van Lotringen, Wim Duisenberg, p. 153.

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together formed a battering ram with which the hermetically closed gates that safeguarded the independence of the Bundesbank and that protected West German monetary policy against politicisation from the outside could be forced open. It would require patience, but there was plenty of that in Monnet’s Europe of small steps, especially in Paris. From its start in 1979, the EMS brought both unrest and stability. It was above all seen as a new arena for the continuing battle between the supporters of the Krönungstheorie and those who wanted to see the EMU introduced by political decision (in other words, not necessarily determined in advance by optimal economic convergence). The latter group often claimed that the EMS was the final interim stage on the road to full monetary union and a common European currency. That group was strongly represented in the EEC’s capital. The European Commission produced an unstoppable flow of new proposals on ways to elaborate on, expand and modify the EMS. It could count on member states like France, Italy and Belgium supporting these proposals. According to the Commission, it was simply refining what was already in place, making ‘non-institutional changes’. At first glance, it did indeed seem to be all about monetary instruments but that was, to a significant degree, deceptive. All of the proposals actually aimed at deepening monetary integration (for example, by increasing the internal and external role of the European Currency Unit or ECU, by making European interventions possible relating to exchange rates within the EMS margins, by strengthening credit facilities and by stimulating the private use of ECUs). Behind the monetary instruments was an enormous drive to seek out the limits of the EMS and then to break through them, thus definitively opening the door to the EMU. In other words, the flow of proposals hammered away persistently at the West German line of defence against the EMU. They forced the Federal Republic onto the defensive and compelled Bonn and Frankfurt to an endless series of no’s to European initiatives. That did not fit well with the tradition of constructive European policy and Westbindung. In the long term, it could have unpleasant effects on the country’s foreign political image. It was a defeatist strategy that could ultimately put the Deutschmark and the Holy Grail of price stability at risk. The Federal Republic had to get off the defensive, but how? In 1982, an answer was found to that pressing question when a new and very effective weapon was discovered in the camp of the Krönungstheorie with which to combat the tiresomely persistent Latin supporters of the EMU. The more creative monetary friends from the Netherlands – less confined by the straitjacket of price stability – proved very helpful in wielding this new weapon.

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It was Christian democrat Fons van der Stee, minister of f inance in successive Van Agt governments who led the attack on yet another list of EMU proposals at a meeting of the Economic and Financial Affairs Council (ECOFIN) on 15 March 1982. Van der Stee said the ministers had better things to do than bicker endlessly about new EMS amendments. They should, for example, take another good look at a forgotten goal of the Treaty of Rome: achieving the free movement of capital. The DNB representative in the Monetary Committee, director of foreign policy André Szász, dusted off the Rome goal even further and put it on the agenda of the Committee’s meeting in July. This rediscovery of the goal of free movement of capital seemed like a masterstroke from the viewpoint of the hard currency countries in the EEC, the Federal Republic and the Netherlands. After the failure of the Duisenberg Plan, the Netherlands loyally supported the Germans in EMU discussions in the late 1970s and the 1980s. The free movement of capital evolved into a mighty weapon in the German-Dutch fight against ‘monetarist’ EMU plans from Brussels, Paris and the more southern regions of the EEC. Why? According to the dominant logic of the OCA theory, free movement of capital was a sine qua non for monetary union, no matter what form it took. And that was to become the standpoint of West Germany and the Netherlands. Szász proposed to his colleagues in the Monetary Committee that they once again take upon the task of annually assessing the capital restrictions imposed by the member states. This task had been assigned to the Committee in the Treaty, but it had been extremely lax in performing it. He was supported by the British and the Germans. The British were, of course, in favour of the proposal because it suited their free trade perspective on the EEC. The Germans, too, had completely liberalised the movement of capital and were positive about it because they predicted that strengthening capital market forces within the EEC would exert greater pressure on governments to pursue economic policies more focused on stability.30 That was also the reason for the Netherlands’ enthusiasm: if the movement of capital were to be liberalised throughout the EEC, the financial markets would mercilessly expose those member states whose policies were inadequate or whose economies were unstable. That was the ‘big financial stick’ that Oort had been looking for, the austere countervailing force that would have to keep the European credit funds, then in the process of being 30 Jacques Delors, Erinnerungen eines Europäers (Berlin: Parthas Verlag, 2004), p. 385; Age Bakker, The liberalization of capital movements in Europe: The monetary committee and financial integration 1958-1994 (Dordrecht: Kluwer, 1996), pp. 147-53 and 155.

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set up, within acceptable bounds. Through the communal obligation to liberalise capital markets, enforceable by the Commission, the financial markets would provide West Germany and the Netherlands with the big stick of financial and economic discipline. That was the aim, and it proved to be a realistic one. The free movement of capital was an old obligation, laid down in the EEC Treaties, so no one could oppose it, and certainly not the Commission. And it was fashionable: the UK had fully liberalised the movement of capital in 1979, Japan in 1981, and US President Ronald Reagan showed the world how refreshing and stimulating deregulation could be. There was a problem in Europe, but that seemed to confirm rather than disprove the validity of the analysis: France was vehemently opposed to liberalising capital movement. Paris was afraid that the French economy would be vulnerable to unleashed financial markets and speculative attacks. And, on top of that, restrictions on the free movement of capital were the cornerstone of the fantastic experiment of socialism in one country presented by the brand-new president of France, François Mitterrand.

8

The hand of French-German friendship (1982-1989) Abstract When Commission President Jacques Delors floated his highly pragmatic ‘Europe 1992’ agenda in the late 1980s, designed to complete the common market, the Dutch government was, for the first time since 1950, genuinely enthusiastic about European plans. The Single European Act (SEA) was warmly welcomed; an excessively pro-European narrative had taken root and remained dominant when the ambition of a European Monetary Union was explicitly coupled to the future single market, especially the free movement of capital. But the fall of the Berlin Wall and the Franco-German game of high politics that unfolded in its wake under Mitterrand and Kohl brought the Netherlands firmly down to earth. In the face of European political realities, old fears and political reflexes soon re-emerged. Keywords: Single European Act (SEA), Europe 1992, friendship Helmut Kohl and François Mitterrand, Delors Report, Franco-German reconciliation, European Central Bank (ECB)

On the evening of 4 October 1982, the new West German Chancellor Helmut Kohl went to the Elysée for a dinner. The occasion was the regular consultations with French President Mitterrand in the context of the Franco-German friendship agreement. His host seemed concerned. What would happen now that Helmut Schmidt, the social democratic chancellor who had become a very reliable partner for France, had departed? Schmidt’s successor was a nobody in the international arena. Who knew where the opportunism of this provincial from Rhineland-Palatinate would lead? During that first meeting, Kohl succeeded in immediately allaying French fears about the future of the Franco-German relationship. The chancellor left no doubt as to what tradition he subscribed to and what his priorities were, telling Mitterrand: ‘Do not be mistaken, I am the last pro-European

Segers, Mathieu, The Netherlands and European Integration, 1950 to Present. Amsterdam, Amsterdam University Press 2020 doi: 10.5117/9789463728133_ch08

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chancellor’. According to the French president’s advisor Jacques Attali, Kohl won Mitterrand’s trust because he gave his pro-European and pro-French position more gravitas by displaying a greater ‘honesty and human warmth and willpower’ than Schmidt had ever shown. Mitterrand was positively impressed and realised what this meant: ‘a vast new building site had opened up’ in front of him.1 Kohl knew what he was doing. An unambiguous pro-European course was required to help him navigate Franco-German waters. That was not a random choice: the chancellor blindly followed the compass of his ‘guru’ Konrad Adenauer. He had already acquired the nickname ‘Adenauer’s grandson’ in the 1960s, and it was a name he was very proud of. In his personal dealings with the old statesman from Cologne, it had become clear to Kohl that ‘Europe’ had been the great goal of Adenauer’s political life, if only because he saw it ‘as the sole chance of a reunited Germany’. Kohl had taken over that vision many years before in its entirety and without criticism, together with the deep conviction that European integration was irrevocably linked to a ‘Europe with a Franco-German core’ with its roots in the Christian tradition, and the Roman Catholic tradition in particular. In Adenauer’s old house in Rhöndorf, there had been a prayer stool next to the bed. That, too, had made an impression on Kohl. During his rise through the ranks of the CDU, Kohl had proved himself a committed Europhile. At the CDU party day in Hannover in 1976, he had passionately presented a ‘European manifesto’. It was a carbon copy of the complete federalist agenda of ultra-European Walter Hallstein, Adenauer’s most loyal and resolute European warrior of yore. Kohl’s manifesto had left no doubt at all about what the final goal of European integration was to be: a ‘federal European state’, including a monetary union and a common foreign and security policy.2

A community united by blood Shortly after their first meeting, developments in Europe would put the budding affinity between Kohl and Mitterrand to the test. It was an experience that was to bring them closer together. And that occurred more rapidly and more intensely than either of them could have expected in advance, 1 Jacques Attali, Verbatim I: Première partie 1981-1983 (Paris: Fayard/Le livre de poche, 1993), pp. 491-92. 2 Schwarz, Helmut Kohl, pp. 141-42, 360, 364-65 and 397-98.

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although, in the best traditions of French European diplomacy, Mitterrand had of course anticipated that something of the kind could happen. In the same month, on 22 October 1982, at the start of what would become an impressive series of tête-à-têtes between the two leaders, Mitterrand had told Kohl that the true meaning of their burgeoning friendship was to give it ‘an extra dimension’. The French president was referring to Europe. That extra dimension was to make its first appearance only a few months later in the form of rescuing the EMS. And Kohl did not disappoint Mitterrand. On the contrary, the chancellor would show in astonishing fashion just how deadly serious he was about France’s entreaties regarding the European dimension of the Franco-German relationship. That happened as follows. In the spring of 1983, Kohl received a confidential letter from Mitterrand. The French president was vague but spoke of decisive and momentous decisions that would soon have to be made and of which the Federal Republic needed to be aware. This was Franco-German code language. The message was an urgent warning from France about an imminent European crisis that would only be overcome by West German concessions, and especially financial ones. For Kohl, it was crystal clear. This was his first great test. He wanted to deliver and, his principles aside, he had every political reason for wishing to do so. In January 1983, Mitterrand had addressed the Bundestag on the twentieth anniversary of the Franco-German friendship agreement. In his speech, the French president had been especially generous to Kohl. He had done much more than express his support for Kohl’s campaign for the national elections in March, which was the apparent purpose of his visit. Mitterrand had exceeded Kohl’s wildest expectations. The French socialist had spoken out in favour of the NATO double-track decision (an issue on which Kohl had been under fire at home, particularly from the left), of the Western alliance as a whole and of fighting shoulder to shoulder with the US in the Cold War, of the West presenting a united front in arms talks (i.e. including the Federal Republic) and against popular anti-nuclear pacifism. At the official celebration of the Franco-German friendship treaty a few days later, Mitterrand had added the icing to the cake by quoting Victor Hugo. Between France and Germany, he said, there was a ‘société union par le sang’, a community united by blood. Mitterrand had continued in the same vein, emphasising the importance of further European integration and hinting of progress towards that in the areas of f inance and economics. These gifts from the French president were invaluable to Kohl, who was seen as a vulnerable transitional figure: he had succeeded Schmidt after a vote of no confidence rather than being elected and had serious problems with

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his popularity. When Kohl won the election, he did not forget Mitterrand’s gestures of support. To return to the letter that Mitterrand had sent to Kohl after the latter’s election victory: why did the French president write it? The French economy was in free fall, and the causes of the disastrous economic developments were not difficult to identify. Immediately after he took office in 1981, Mitterrand had enthusiastically set about redeeming his election promises. He launched a fantastic experiment – ‘socialism in one country’ – by which he seemed to mean socialism in France, in complete defiance of the international context. For France, that context was also determined by two factors. Firstly, through its involvement in Western structures, the country was tied hand and foot to the capitalist system. Secondly, the Cold War defined the rules of the game in the international political arena. Mitterrand’s experiment symbolised France’s rebellion against these stifling bonds. His slogan was one of cryptic revisionism and was no less spectacular than the feats of his illustrious predecessor, the oracle of Colombey-les-deux-Églises. Like de Gaulle, Mitterrand was a manipulator of feelings – a tactic that worked well in France. But he had seriously underestimated the practical effects on the French economy. This was perhaps not so surprising, given that he had no interest at all in the economy.3 His experiment was ambitious, but he failed to get away with it. The socialist cocktail of massive wage rises, the introduction of a 35hour working week and the nationalisation of high finance – including multinational French banks – placed the franc under relentless pressure. Within the span of a year, France was forced to devalue the franc twice (8.5 per cent in October 1981 and 10 per cent in June 1982). Breathless attempts to halt the fall of the franc by restricting the movement of capital were futile. Controlling the domestic money supply proved to be an obsolete concept, an illusion in the post-Bretton-Woods reality of increasing interdependence through the financial markets. Money flooded out of the country, and this flow was rendered only more turbulent by the Keynesian stimulation policy of the Banque de France. Growth in domestic debt reached double figures in no time. 4 Reserves evaporated like snow in the hot sun and, from the end of 1982, the country was in permanent crisis. The crisis pit two camps against each other in Paris: those in favour of the EMS and those against it. The first group wanted to see the socialist policy 3 Ben van der Velden, De Europese onmacht: Scènes uit de achterkamers (Amsterdam: Meulenhoff, 2005), p. 81. 4 Bakker, The Liberalization, p. 170.

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continued, no matter what, and therefore called for France to leave the EMS and for the reintroduction of much stricter controls on the movement of capital. In terms of the monetary policy trilemma (see chapter 7), they aimed to stabilise the exchange rate by pursuing an independent monetary policy and reversing the liberalisation of the movement of capital. This camp was thus prepared to blow up the EMS. They were willing to accept the not unrealistic risk that this could also jeopardise the EEC as a whole. And that was exactly why those in the other camp protested so fiercely. France had to do everything possible to stay in the EMS, because the EEC was infinitely more important for the future of France than Mitterrand’s socialist experiment. One of the prominent figures in this second group was finance minister Jacques Delors. In terms of his monetary perspective, Delors was one of the liberal supporters of the franc fort policy who still held sway at the ministry. They also included former prime minister Raymond Barre – the father of the snake arrangement (see chapter 6) and the man who had pursued a sober policy under Giscard d’Estaing to restore order in French exchange rates – and Édouard Balladur, former secretary-general of the Elysée under Pompidou. When Mitterrand decided to write to Kohl, he was in hot water domestically. The franc had been completely dismantled. The Banque de France was keeping the currency afloat by pumping in tens of billions of francs, while the Deutschmark was rising in value. The situation was hopeless. The French central bank’s billions could not turn the tide. The EMS was on the point of collapse. The system could not tolerate France continuing its socialist experiment. In other words, the weakening of the franc against the Deutschmark could no longer be absorbed within the limits of the EMS. The French president found himself stuck between the devil and the deep blue sea: it was his socialism or France’s membership in the EMS. The newly elected West German chancellor knew what he had to do. Against the background of the EMS crisis, the letter from the Elysée was crystal clear. If Europe was dear to him, he had to do everything in his power to keep France within the EMS. He, and only he, could do that. Kohl still wanted to deliver the goods, and he wanted to do that without Mitterrand losing face. Hard resolutions were one thing, but actually putting them into practice was another. If Kohl were to save Mitterrand and the franc, he would have to by-pass his own finance minister and fellow Christian democrat Gerhard Stoltenberg and the Bundesbank. And that was exactly what he did. The chancellor ignored the sacrosanct doctrine of price stability and revalued the Deutschmark relatively strongly (by 5.5 per cent), while the franc was devalued relatively weakly (by 2.5 per cent), as was the Italian lire.

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This was the European package with which Kohl succeeded in disguising the third devaluation of the franc in only eighteen months – now by 8 per cent, bringing the total of franc devaluations to more than 25 per cent. This was a gift Mitterrand was only too delighted to receive. For the West German financial-economic elite, Kohl’s response to the franc crisis was both shocking and unheard-of: the Federal Republic’s economy was footing the bill for the chaos in France. To them, the world had been turned on its head. No matter what the monetary experts thought, Kohl had scored points politically. His gift to Paris resulted not only in one friendship, but two. Besides Mitterrand, he had also won over Jacques Delors. And that was a pleasant surprise for the chancellor. This ‘left-wing Catholic’, as Kohl called him, was not only an ‘anti-inflationist’ but also a committed European. In Kohl’s eyes – and in those of many other Christian democrats – the socialist Delors was ‘actually a Christian democrat’ himself.5 The chancellor could well use a friend like that. Kohl’s action in response to the crisis of the franc had been decisive in Delors being able to turn the EMS argument in Paris to his own advantage. That was reassuring for the chancellor. Delors was to become the architect of a new, neoliberal-inspired franc fort policy. If at all possible, he had to be kept in the fold. A year later, Kohl would agree with Mitterrand to Delors succeeding British politician Roy Jenkins as president of the European Commission, thereby ridding Mitterrand of a major rival for the French presidency. The French government’s assumption that France could follow a different social and economic course than its most important trading partners in EEC had proved to be an illusion.6 After the crisis of March 1983, Mitterrand, a politician to the core, seamlessly transformed himself from a passionate socialist into a committed European. With that came a number of new pastimes. Hardly a month passed without the president meeting up with his new best friend from Bonn for long and detailed conversations. They regularly flew to meet each other for dinner in one of the many top restaurants in the expansive Franco-German Rhineland. And the meetings were useful, as Mitterrand had big plans for Europe. The French presidency of the EEC in the f irst half of 1984 was to take important steps forward in the integration process. 1984 was to be the year of a new relance européenne. 5 Wilfried Martens, De memoires (Tielt: Lannoo, 2006), p. 612. 6 Nicolas Jabko, ‘In the name of the market: How the Commission paved the way for monetary union’, Journal of European Public Policy (London: Routledge, 1999): 477.

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During a visit to Kohl’s home in Ludwigshafen, at which he flattered the chancellor even more than usual, Mitterrand heard Kohl promise him that he would support the French presidency in every way possible to make the EEC ‘irreversible’. Mitterrand had already announced that he wanted to achieve ‘a complete reform of the EEC’. In February 1984, he stated during a speech in The Hague that he wanted to see work in progress again on the ‘deserted building site of Europe’,7 the ‘vast new building site’ he had spoken of previously. That Mitterrand meant what he said became clear at the European summit in Fontainebleau, a few months into the French presidency. At the meeting, the heads of government of the member states decided to set up an intergovernmental committee chaired by Irish senator Jim Dooge. The French representative on this committee was Maurice Faure, a co-signatory of the Treaties of Rome and, at that time, one of the drivers behind the pro-Europe policies of the Mollet government (see chapter 4). The Dooge Committee was charged with drawing up recommendations for the future of the EEC and the institutional structure that would be required to achieve that (including strengthening European Political Cooperation (EPC) through the periodic meetings of foreign ministers – at least twice a year – which had its origins in the deepening of integration decided at the 1969 summit in The Hague). The Committee’s final report would ultimately be presented at the summit in Milan in June 1985 (see later in this chapter).8 But there was more. The great edifice of the EMU had to be completed. From France’s perspective, there were two clear reasons for that. In the first place, monetary union gave Mitterrand the effective instrument of external pressure to modernise the French economy. Secondly, now that it had been decided that the future of France would be European, monetary union was far preferable to the EMS, which operated de facto as a Deutschmark zone. Paris realised only too well that the ultimate consequence of the EMU was that the Federal Republic would have to relinquish control over the Deutschmark and perhaps even that national currencies would disappear completely from Western Europe. That was not something you could easily ask of your West German friends. For them, the Deutschmark was ‘un drapeau’, a flag, as Mitterrand’s Europe 7 Schwarz, Helmut Kohl, pp. 354-57; Ulrich Lappenküper, Mitterrand und Deutschland: Die enträtselte Sphinx (Munich: Oldenbourg, 2011), pp. 197-203; Kenneth Dyson and Kevin Featherstone, The Road to Maastricht: Negotiating Economic and Monetary Union (Oxford: Oxford University Press, 1999), chapter 4. 8 Lappenküper, Mitterrand, pp. 213-14; Desmond Dinan, Europe Recast: A History of European Union (Houndmills: Palgrave MacMillan, 2004), p. 209.

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adviser Elisabeth Guigou called it.9 The Deutschmark was more than just a currency, it was the ultimate symbol of German catharsis after the catastrophic hysteria of revanchism and hyperinflation of the Weimar era. There was very little in the Federal Republic of greater normative value. It was with good reason that responsibility for the Deutschmark had been given to the high priests of the monetary technocracy in their own temple in Frankfurt – just as the guardians of the Grundgesetz, the German constitution, had their temple in Karlsruhe, where they kept watch over the constitutional technocracy – as far as possible removed from the capricious reality of day-to-day politics. History had charged the Bundesbank with equipping the country with price stability to the highest possible degree of perfection. Protecting the stability of the Deutschmark was like praying in church – it was balm to the German soul. It calmed the German sense of self doubt and offered solace for the sorrow of Weimar… but not for the European sorrow of Auschwitz. Helmut Schlesinger – the most uncompromising of Bundesbank presidents, who wielded the sceptre in Frankfurt from 1991 to1993 – was not called ‘Prussian Helmut’ by the monetary experts in Paris without good reason.10 On 22 September 1984, seventy years after the outbreak of the First World War, Mitterrand received Chancellor Kohl with military honours in Metz. Together, they visited the German war cemetery at Consenvoye, thirteen kilometres to the north, for a solemn commemoration in silence. They then flew to Verdun by helicopter, passing over fields that had seen the great battles of both great wars of the twentieth century. Mitterrand pointed to the spot where he had been wounded in 1940; Kohl talked about his father fighting at Mort-Homme, one of the hills around Verdun, and his brother, who had died in the Second World War. After they landed, they walked past the gravestones in the cemetery at Douaumont, with white crosses bearing the inscription ‘Mort pour la France’ and decorated with fresh roses where French soldiers were buried; and black crosses with no inscriptions or flowers, where the Germans lay. The next stop was the ossuary. In front of the ossuary was a catafalque, a raised bier bearing a coffin, over which the flags of France and the Federal Republic were draped. On either side of the bier, there was a guard of honour of French and West German soldiers. Mitterrand and Kohl stood in front of the coffin and listened to the music: first ‘Das Lied vom guten Kameraden’, the hymn played at funeral ceremonies 9 Brian Lapping Association, VPRO, ARTE, Danmark radio/tv, RTBF, SVT, YLE, The Money Changers (documentary, 2008). 10 Brian Lapping Association et al., The Money Changers; Connolly, The Rotten Heart, p. 91.

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for the Bundeswehr, followed by the West German and French national anthems. After the music stopped, Mitterrand and Kohl remained standing side by side in the pouring rain. Suddenly, Mitterrand held out his hand. It had not been planned. Kohl was ‘overwhelmed’ with emotion. He took Mitterrand’s outstretched hand. The scene immediately became an iconic image, generating an ‘enormous psychological effect’. The press release circulated afterwards stated: Europe is our shared cultural fatherland […] Therefore we – Germans and French – have put an end to the conflict and fratricide between us and turned our sights on a common future. We are reconciled. We are in agreement. We have become friends.

This was underscored in practical terms by a Franco-German agreement that went a long way towards ending border controls for travel between the two countries. According to Kohl, the events of that day represented a ‘revolutionary development’. He was convinced that he and Mitterrand had succeeded in turning the ‘political friendship’ between France and Germany into a ‘friendship between both peoples’. It was the chancellor who had suggested, during the preparations for the Verdun visit, commemorating together those who had fallen in the Second World War. He wanted to show the world that it was possible ‘to learn from history’. For Kohl, the European who had grown up close to the Franco-German border, a ‘childhood dream’ was fulfilled on 22 September 1984. He was deeply moved. Later, he would speak of the ‘spirit of the handshake at Verdun’ which, in the turbulent years of 1989 and 1990, had given Mitterrand and himself ‘strength and ‘would prove efficacious’.11 The Franco-German event in Verdun was received negatively and with cynicism in the rest of Europe, just as the Franco-German friendship treaty between de Gaulle and Adenauer had been in January 1963. The Benelux countries, for example, were certainly far from enthusiastic. Kohl realised this, though perhaps not immediately. He was aware that these smaller neighbouring countries feared the dominance of France and Germany, but he also understood that their preoccupation with such fears was to be expected. For them, the Germans could never do anything right. It was up to these smaller partners to come to terms with that themselves; he could not wait for them. History would show what friends he could genuinely rely 11 Helmut Kohl, Erinnerungen 1982-1990, pp. 290 and 309-313; Lappenküper, Mitterrand, pp. 206-207.

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on, besides Mitterrand and Delors. The latter had been part of the French president’s select entourage at the commemoration in Verdun. Verdun freed the ‘European’ in Kohl – and no expense was to be spared. Europe was not primarily about economy but about politics. Kohl expressed his grave concerns about the future of Europe to his Spanish colleague Felipe González, saying ‘If the European Community stays as it is now, it will not see the end of this century. It will be downgraded to nothing more than a free-trade zone.’ Major steps needed to be taken – politically, historically and geopolitically – and Spain was a part of that project. The wrangling about the Common Agricultural Policy, which was making the accession of Spain and Portugal very difficult, irritated the chancellor. When Spain and Portugal did join the Community in 1986, in what was known as the second Mediterranean enlargement (Greece had already become a member in 1981), Kohl had made a mega-concession in the CAP dossier by passing the rising costs of the policy on to West German farmers and then on to the West German budget. The European Community was able to move forward thanks to Kohl’s ‘chequebook diplomacy’ and his European friendships.12 Kohl did not count Dutch prime minister and fellow Christian democrat Ruud Lubbers – who, like Kohl, headed a government coalition of Christian democrats and liberals (CDA, VVD) – among those friends. And he was right: the Dutch premier had other friends in Europe. Lubbers was not impressed by Kohl’s emotions. ‘Kohl is a Teutonic romantic,’ he said. ‘He is capable of displaying emotions and allowing his tears to flow without meaning it seriously.’13 From his first appearance in the European Council, Lubbers had made no secret of two things: he had an aversion to the Federal Republic’s dominant position in Europe, and he wanted to get on the right side of British Prime Minister Margaret Thatcher. He pursued the second aim by opposing French and/or German positions at European summits, which commanded respect. Mitterrand was willing to talk to this social Dutchman, about history, for example, but knew straight off from 1982 that Lubbers was ‘trop marin’, too focused on Atlantis and not enough on the continent.14 He much preferred to deal with Lubbers’ Belgian counterpart Wilfried Martens, who presented himself in a completely different way – relishing in his attacks directed against Thatcher in plenary meetings.15 12 Schwarz, Helmut Kohl, pp. 400-401, 405 and 410. 13 Van der Velden, De Europese onmacht, p. 80. 14 Roel Janssen, De euro: Twintig jaar na het verdrag van Maastricht (Amsterdam: De Bezige Bij, 2012), p. 44. 15 Martens, De memoires, p. 612.

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Lubbers’ attitude threatened to banish the Netherlands to the periphery in the process of European integration. Mitterrand had quickly agreed with Kohl and the new president of the Commission Delors that Europe had to move forward and become, by definition, more than just a free-trade zone. Europe had to become a real ‘solidarity community’, shored up by the ‘necessary sacrifices’ – even if that meant taking these new steps without the British. That was something The Hague wanted to avoid at all costs.16 Mitterrand, Kohl and Delors were able to benef it from the fact that Lubbers was not aware of this danger of his country being marginalised. By Dutch standards, he was very pro-European, not to mention proactive and idealistic. And that was a good thing for them, especially if he felt that he was important enough – something that proved to be not so difficult to achieve with the ambitious Dutchman. Delors launched his plans for completing the common market – and, in a way reminiscent of Monnet, he included Western European multinationals in them through the European Round Table of Industrialists (set up because of concerns about the future of the European economy and led by Volvo boss Pehr Gyllenhammar, his counterpart at Fiat, Umberto Agnelli, and Philips’ Wisse Dekker). Lubbers’ reaction was as follows: [Delors] has announced his plan for completing the internal market, in which a major role is set aside for the Netherlands. Former chairman of the board at Philips Wisse Dekker is closely involved, as am I. The project to realise the internal market is being led by a number of people, Delors, Thatcher, myself […]. We have a mission. With Western Europe, we want to show the world a different way of doing things. So it is Europe, Europe, Europe. And, of course, a common currency should be part of that. I have no doubts about that at all.17

That Lubbers saw it that way (and was so far off the mark) was not surprising. European integration had been revitalised forcefully and in many different ways since the mid-1980s, and Lubbers had played an active part in that. He had a keen feel for the spirit of the times and for the Netherlands’ trade interests. After a decade of eurosclerosis, it was high time for action in Europe. The arguments in favour were not political but economic. In Europe, the impressive rise of the Japanese economy led to a combination of concern and willingness to take steps to strengthen and modernise the 16 Schwarz, Helmut Kohl, pp. 410, 438-39; compare Janssen, De euro, p. 117. 17 Janssen, De euro, pp. 38 and 40.

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EEC. Diplomacy, too, pointed unequivocally in that direction: in the 1980s, as in the 1950s, the market had to become the centrepiece of the relaunch of the European project. Besides economic rationalism, there was also diplomatic realism behind this trend.

Celebrating success and earning money In the autumn of 1984, Delors had visited all the capitals of the EEC member states to warm up for his presidency of the European Commission. During this trip, he had been compelled to come to a clear conclusion. He would only be able to fulfil the Franco-German assignment – getting the process of European integration up and running again, which he knew would become his mission from the moment he became Commission president – if he focused on completion of the common market. That was the only area in which Thatcher could be stirred to at least some degree of enthusiasm for deepening European integration.18 This was something that appealed to Lubbers and to the Netherlands. A more smoothly functioning EEC could, after all, only be beneficial to the Dutch economy and Dutch businesses. And there was sufficient political reason for supporting it, too. At the start of 1984, the employers’ organisations VNO and NCW had produced a joint memorandum explicitly urging the government to ‘invest in the future of Europe’. They called forcefully for more vigorous and dynamic efforts to remove remaining obstacles to trade in the common market and, also on behalf the EEC, to pursue a more ambitious industrial policy.19 It was thus an ideal moment to take the lead in Europe, and Lubbers did just that. At the European summit in Dublin on 3 and 4 December 1984, he intervened with a fiery clarion call to deepen integration, to protect Europe from Japan’s ‘trade policy strategy’ which, in his eyes, boiled down to a ‘strategy of market domination’. He called for rapid action, saying that 1985 had to be ‘the year of the internal market’. In addition, he emphasised the importance of ‘a decisive Europeanisation of the market’ to put the EEC on the technological map.20 The prime minister was a close associate of Wisse Dekker. The Philips CEO had made a ‘dramatic speech’ in the Catshuis, the prime minister’s official residence, on the consequences for the electronics industry if Europe did 18 Lieshout, De organisatie, p. 177. 19 BZ, 996, 00973, DGES 1985-1989, 5 February 1984. ‘investeren in de toekomst van Europa’. 20 BZ, 996.911.0, 18563, intervention by Lubbers at Dublin summit, December 1984.

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not succeed in joining forces to combat the increasing competition from Japan and the United States. A few weeks after Lubbers’ intervention in Dublin, Dekker presented his own plan to the European Commission in Brussels, entitled 1990: An Agenda for Action. It was full of concrete measures to deepen market integration, for example, by standardising product norms and intensifying coordination in the field of telecommunications.21 This all fell on fertile ground within the Brussels bureaucracy. The Dutch plans contained attractive ideas that could be used to polish up new initiatives in the area of market integration. Moreover, many were charmed by the Netherlands’ call for ‘forceful Europeanisation of the market’. That smacked of protectionist measures – and that was often a guarantee for a warm response from Brussels and Paris, where they were had no problem at all with a little international political-economic bloc-thinking. At the West German economics ministry, however, they were a lot less enthusiastic. It had not passed unnoticed in Bonn that Lubbers’ intervention and Dekker’s plan looked suspiciously alike. It had the smell of opportunism: flirting with protectionism in the interest of Philips. The guardians of Erhard’s legacy found this not only ‘inconsistent’ but also indecent, since it was ‘in opposition to the principles of the free market economy’. Through the Dutch embassy in Bonn, The Hague was warned against taking the ‘sweet poison’ of protectionism.22 But this bureaucratic squabbling went unnoticed by Lubbers. A few months later, he received a letter from fellow European Kohl, who informed his ‘dear friend’ that ‘Dein Aufruf beim letzten Europäischen Rat in Dublin […] wird von der Bundesregierung unterstützt’ (Your appeal at the last European Council in Dublin has the support of the West German government).23 Now that was something to show the folks back home. In the meantime, enthusiasm about deepening and speeding up market integration was growing in another corner of the Dutch policy technocracy. After the existential crisis of the EMS, monetary and financial-economic issues became more prominent on the European agenda than ever. The European Commission sought solutions and a stronger system, especially through more European monetary bloc-forming, for example by introducing a parallel European reserve currency designed to make the EEC area less vulnerable to speculation shocks from outside Western Europe. In April 1983, the French Vice President of the Commission François-Xavier Ortoli had launched a proposal in which he spoke of a ‘common financial market’ 21 Wim van Eekelen, Sporen trekken door strategische jaren (Giethoorn: Ten Brink, 2000), p. 172. 22 BZ, 996, DGES 1985-1989, Bonn to The Hague, 16 January 1985. 23 BZ, 996, DGES 1985-1989, Kohl to Lubbers, 11 March 1985.

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and suggested that it could be created by introducing a common European currency. The idea behind it was to protect West European money markets by offering an alternative to the dollar. According to the Commission, in such a situation it would then be possible to further deepen financial market integration by increasing the free movement of capital within the EEC – something the British, the Germans and the Dutch were working hard to achieve. Ortoli, however, had distanced himself from the technocrats in Basel, who had the upper hand in the Monetary Committee (see chapter 6). While the French perspective resounded loud and clear in the Commission’s proposals, the Monetary Committee pushed for policy adjustments that were more in line with West German and Anglo-Saxon mores. The Commission spoke of ‘EEC-related’ or ‘ECU-denominated’ capital transactions linked to economic convergence supported from Brussels, but the Monetary Committee favoured the full liberalisation of the movement of capital (and not limited to the EEC), after which the disciplined working of the financial markets would do the rest. Moreover, for the Germans, the British and the Dutch, this was a question of principle. The European Commission began to see that this was a battle it could not win. If they wanted to build the EMS further and, in the longer term, even aim to set up a full monetary union, the northern Europeans would have to be appeased in some way in the dossier of free movement of capital.24 In Brussels, they started to explore the benefits of a full liberalisation of capital movement. It was also advisable in pragmatic terms, as a growing number of countries were working to achieve it, often without it causing serious distortions in the money markets. In July 1985, the Commission’s efforts were brought together in a report on the completion of the internal market, also known simply as the ‘White Paper’, the first accomplishment of new Commission President Delors. The White Paper contained hundreds of measures that would need to be taken to complete the internal market and achieve full freedom of movement of goods, services, capital and persons – by 31 December 1992 at the latest – and proposals to do that by majority decision-making (which would bypass the Luxembourg compromise; see chapter 5). The paper formed the basis of the Single European Act that would be signed in February 1986 and would put the seal on the relance européenne of the 1980s. In the period between Ortoli’s proposals and the White Paper, the northern European alliance pushed its perspective definitively to the fore in the 24 Bakker, The Liberalization, pp. 154-58.

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Monetary Committee. At the meeting of the Committee in Venice in the autumn of 1983, the direction the common financial market was moving in became clear. At that meeting, there were some members – notably the French – who still argued forcefully along the lines Ortoli had proposed, in favour of an ECU bloc (rather than a Deutschmark zone).25 In response, the Dutch delegation had presented itself as the spokesman of the northern European alliance, doing so with typical Dutch directness, stating that a number of countries, including the Netherlands, were not prepared to make agreements on further technical refinements as long as existing agreements – which were ‘often of more fundamental importance’ – were not fully complied with. The West German delegation was in complete agreement and added that talking about the role of the ECU at this stage created the risk of distracting attention away from the ‘actual steps that need to be taken to ensure the sustainable continuation of the EMS’. ‘Convergence and the free movement of capital,’ it said, ‘are the areas where progress is required to secure the EMS for the long term’. The meeting concluded that there was a link between ‘strengthening the EMS’ and liberalising the movement of capital. At first glance, this outcome looked like an unambiguous victory for the northern Europeans, but it was only part of a package deal.26 The group of market sceptics, led by France, may have consented to a step-by-step liberalisation of capital to full freedom of movement but received in return the assurance that this would run parallel to measures to strengthen the EMS. For France, the goal now was to elaborate the details of exactly what ‘strengthening the EMS’ was to entail. It could, of course, also mean the introduction of a monetary union… Be that as it may, the Monetary Committee’s recommendations went to the ECOFIN, which worked them out in further detail in the course of 1984. When Jacques Delors took over as president of the European Commission on 1 January 1985, he could then include the ECOFIN’s conclusions in his plans for deepening the market and as an essential component of the White Paper. The paper was presented at the European summit in Milan in June 1985, where it was adopted without any problems. ‘Europe 1992’ had been launched. But that was not all that happened in Milan, and that was what made this relaunch different from the seminal Messina Resolution of 1955 on one important point: the heads of government did not decide to set up a study committee along the lines of the Spaak Committee (that work had, 25 Compare Jabko, ‘In the Name’, p. 478. 26 Bakker, The Liberalization, p. 157-58; Jabko, ‘In the Name’, p. 480.

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after all, already been done by the Dooge Committee) but agreed to start the treaty negotiations immediately in an Intergovernmental Conference (IGC). That was very decisive in European terms, and the decision was not made without the necessary obstacles having to be overcome. Together with his foreign minister Giulio Andreotti, Italian Prime Minister Bettino Craxi had employed a trick to achieve that. Craxi knew that the UK and its ‘support troops’ (Denmark and Ireland) were adamantly opposed to a new treaty and were supported in this by Greece. He had completely overwhelmed them, however, by quoting from Article 236 of the EEC Treaty, under which organising an IGC was a simple procedural decision that could be taken by a majority vote. Craxi, chairing the meeting, called for a vote. This threw everything up in the air. Alliances that had been forged in advance to block the move were swept from the table in one fell swoop. Danish Prime Minister Poul Schlüter cried ‘rape’, the Greeks threatened to walk out, and Margaret Thatcher was, in the words of her press secretary, long past the stage of irritation.27 Nevertheless, the vote was held, with seven votes in favour of the IGC and three against (the Irish had decided to make the best of it and vote for). Kohl, who wanted a real, historical relaunch – including a new treaty – had cooked up this trick together with Craxi, assuring the Italian of massive backing. On the eve of the summit, he urged Mitterrand in impressive fashion to toe the line.28 In Milan, the ‘building site of Europe’ was opened for tendering for new large-scale projects. The main contractor Delors reported to Bonn as quickly as possible with his portfolio. It contained magnificent sketches of a triangle comprising the internal market, a cohesion fund (to help backward areas and regions to catch up) and, of course, a monetary union. Delors spoke of strengthening Europe’s ‘monetary identity’. Kohl’s response was noncommittal, but he promised to study the proposals. Mitterrand, who knew Delors’ portfolio from cover to cover, knew why his friend was so hesitant: ‘the EMS is actually a Deutschmark zone, and the Federal Republic wishes to hold on to that’. He also knew that, on this point, the Commission and France were in opposition to the Federal Republic and the UK. He felt that he might be able to persuade Kohl to go along with something that would later prove to be the embryo of a new institution. After all, he wrote, ‘in biology, it is the function that creates the organ, while in politics it is the reverse’.29 27 Martens, De memoires, p. 602; Van Middelaar, De passage, pp. 153-54. 28 Schwarz, Helmut Kohl, p. 414. 29 Jacques Attali, Verbatim I, pp. 1343-45.

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Within a few months, the outcome of the IGC was on the agenda of the European summit in Luxembourg in December 1985. The monetary dimension of the internal market, for which Delors had lobbied so hard, was also on the table. The EMU was incorporated in the new treaty as a goal, taking into account West German demands by including the need for further economic convergence. It was remarkable in itself that Delors had succeeded on these points. How had he overcome the fierce resistance of the Federal Republic and the UK? Panic had already broken out among the British and West German members of the Monetary Committee at the annual meeting of the IMF in Seoul in October. They had gotten wind of the plans to make the EMU a goal of European integration. That could not and must not happen! If that were to be on the agenda in Luxembourg, the Council of Ministers could decide by majority vote on institutional changes in the direction of the EMU, which signified a direct intervention in the monetary policy of the member states. That was most undesirable, and not only for the obvious financial-economic reasons. The independence of the Bundesbank was embedded in the constitution. Making the EMU a European goal was a bridge too far: it was a recipe for a constitutional crisis in the Federal Republic. But Kohl had kept his pledge to Delors, with the constructive help of state secretary for finance Hans Tietmeyer. At the Luxembourg summit, the chancellor accepted the monetary dimension as part of the Single European Act. In the freedom of the meeting, he felt able to forget all the weighty objections of the financial-economic experts from Frankfurt and the Basel circuits. The final compromise in Luxembourg was even drawn up by Tietmeyer: unlike the other goals described in the Single European Act, the procedural rules for treaty changes would apply to the EMU. In concrete terms, this meant that every institutional adjustment required a treaty change, which would have to be ratified by all the member states before it could be implemented. That gave countries that were sceptical about the EMU a powerful brake that could only be by-passed via the long road of a successful IGC, in which every member state had a veto. That seemed as good as impossible. The Germans, the British and the Danes – all of whom opposed the monetary plans repeatedly cooked up by Delors or the French government – were to some extent reassured, enough in any case to surrender some ground for the sake of the profitable market project ‘Europe 1992’. The British finance minister, Chancellor of the Exchequer Nigel Lawson, who had been unable to persuade Thatcher to obstruct the EMU plans, understood from the start that this was a trick. He was one of the few to

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understand at this early stage that the EMU genie had now escaped from the bottle.30 Later, Thatcher realised that she would have been better off listening to Lawson than to the half-baked recommendations from the Foreign Office: in the 1990s, she admitted to her Belgian colleague Wilfried Martens that the signing of the Single European Act was her ‘greatest political error’.31 As for the Netherlands, they went along in Milan with the proposal to organise an IGC. Christian democrat Minister of Foreign Affairs Hans van den Broek had previously explained the reasons for doing so, after the presentation of the Dooge Report. In his view, the Netherlands ‘could not afford to remain on the sidelines in the process of thinking about the future of Europe’. He had stated the country’s commitment to ‘joining the front runners’.32 This tied in well with Lubbers’ activism and, after the Luxembourg summit, Van den Broek stated that the Netherlands had succeeded in establishing itself as a builder of bridges. The Dutch delegation had been responsible for activating their West German counterparts on the EMU dossier. According to the VVD State Secretary for Economic Affairs Wim van Eekelen, the Netherlands wanted ‘at least to confirm the goal of monetary union in the treaty’. In light of Lubber’s intervention a year earlier, the signing of the Single European Act was seen in The Hague as an unequivocal success for the Netherlands.33 The Netherlands was taking the lead in Europe. And why not? And yet it would never have occurred to Lubbers, when visiting the American president, to take along a small chest containing a gold 50 ECU coin and a silver 5 ECU coin as a gift as Belgian prime minister Martens had done during the Belgian European presidency in the first half of 1987, when he had been welcomed by Ronald Reagan in the Oval Office.34 On 1 October 1986, the Netherlands was the fourth OECD country to fully liberalise the movement of capital. Although in doing so, the country bid farewell to a long tradition of capital restrictions, it did not feel like a revolution, given its open economy. If the Netherlands were part of a leading group, it was in transatlantic and global free trade. Moreover, capital liberalisation in Europe would create market pressure towards economic convergence, and that would give a boost to the EMU, of which the Netherlands had by 30 Schwarz, Helmut Kohl, pp. 416-17; Bakker, The Liberalization, pp. 164-65 n32. 31 Martens, De memoires, p. 603. 32 BZ, 996.911.0, 18563, Minister to EEC embassies and permanent representative in Brussels, 29 November 1984. 33 BZ, 996, DGES 1985-1989, 00976, minister’s notes at European Council in Luxembourg, 2/3 December 1985 and minister to permanent representative in Brussels, 4 December 1985. 34 Martens, De memoires, p. 603.

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now become a proponent. Furthermore, there were also urgent pragmatic reasons for liberalising capital. If Amsterdam wished to retain its position as an international financial centre, the Netherlands had little time to waste. But the main reason was structural. The Netherlands’ monetary policy was firmly riveted to the Deutschmark, which left the country with little choice. In short, Dutch traditions were exchanged for West German ones. The Federal Republic supported the free movement of capital on principle and from a position of strength. The pegging of the guilder to the Deutschmark required that the Netherlands went along with that.35 And it was an added advantage that it fit in perfectly with the Netherlands’ image of itself and the image it presented to the outside world.

Work in progress The Single European Act was a great success for Delors but, in the eyes of the Elysée, he had fallen short on the most essential point. The West German compromise on the EMU dossier was a disappointment for Mitterrand, and in the Elysée they largely held the Commission president responsible. They felt he had not made sufficient effort because he had not been aware of how little room for manoeuvre Kohl had in respect of the Bundesbank.36 Delors recovered quickly, however. He created a podium for a hyperactive EMU support group, in which former director-general for economic affairs of the Commission, Italian Tommaso Padoa-Schioppa – by then vice governor of the Banca d’Italia – played a key role. The group produced an endless stream of expert reports and analyses, all of which pointed in the same direction: the internal market should be seen as an Optimal Currency Area (OCA). In short, the EMU was indispensable to the genuine completion of the single market. ‘One market, one money’, to quote the title of the most well-known report.37 In addition, Delors invested in acquiring support in the Basel circuits. He already had a passport – the link between the free movement of capital and strengthening of the EMS that had been established by the Monetary Committee in 1983. The West Germans may not have been prepared to budge an inch on the EMU dossier, but here was a lever. During a meeting of the ECOFIN in Knokke, Belgium on 4 April 1987, Delors reminded the ministers loudly and clearly of the inseparable link 35 Compare Bakker, The Liberalization, pp. 172-74 and 197. 36 Dyson and Featherstone, The Road, pp. 155-56. 37 Jabko, ‘In the Name’, p. 479f.

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between the internal market and the EMU. He described how that link worked, according to the logic of the financial-economic quibblers, saying that ‘the liberalisation of capital and strengthening the EMS should go hand in hand’. And the link between the currency and the market was the liberalisation of capital. Delors felt that this lesson in institutional Community history was necessary because of the opposition to Brussels’ EMU planning from the West German and Dutch ministers Gerhard Stoltenberg and Onno Ruding who claimed that there was no parallelism between the free movement of capital and the EMU. For them, it was a matter of the well-known sequence of first freeing the movement of capital and then introducing greater discipline within the EMS zone and, most probably, economic convergence within the European Community. The latter was the necessary precondition for feasible plans for monetary union. The Belgian presidency succeeded in arranging that the Committee of Central Bank Governors, the Monetary Committee and the Commission would talk further to bring their different positions closer together.38 The outcome of these consultations was known as the Basel-Nyborg agreement (after the cities where the Committee of Governors’ advisory report was presented and was accepted by the ECOFIN after being discussed in the Monetary Committee). The agreement was partly formulated in response to fresh plans from Paris for a European intervention fund to discourage speculators and to enable a common European strategy against the (devaluing) dollar rate, which regularly placed the EMS under pressure (because speculators sought security in the Deutschmark). Deputy DNB Governor Henk Boot found the new French initiatives a sign of ‘curious helplessness’ – the French were too weak to fight their own monetary battles in the EMS.39 The Basel-Nyborg agreement meant little more than closer and better coordination in using the existing instruments of the EMS (the interest rate, interventions and making greater efforts to achieve economic convergence). The real significance of the agreement was not in concrete policy but in the increasing involvement of the central banks in the whole management of the EMS and the joint responsibility that they gradually accepted by doing so. That was to become clear very quickly. The Wall Street crash in the autumn of 1987, which led to a more than 10 per cent fall in the dollar, put relations in Western Europe on edge for the umpteenth time. The ultimate outcome was a revolutionary bilateral agreement between the Bundesbank and the Banque de France. 38 Bakker, The Liberalization, p. 195. 39 Szász, The Road, pp. 72-73.

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That saved the franc from a dramatic crash and exit from the EMS (also for the umpteenth time). The bilateral agreement was reached after the chancellor had personally intervened to call the recalcitrant Bundesbank to order. 40 It was crystal clear in which direction the money was flowing, just as it was made clear yet again who, according to the financial markets, was lord and master of the EMS and who could make or break it: clemency came from Frankfurt – or not. In January 1988, the French and Italian ministers of finance Édouard Balladur and Giuliano Amato sent letters to their Community colleagues calling for the EMS to be replaced by a European Centrale Bank (ECB). Amato formulated the case the most sharply: loss of policy autonomy to an ECB, in which all EMS member states would participate, was preferable to the unilateral loss of policy autonomy that the Federal Republic imposed on its partners in the EMS. 41 More or less at the same time, West German Minister of Foreign Affairs Hans-Dietrich Genscher declared himself a supporter of the EMU. These were the starting shots of the West German presidency of the European Community in the first half of 1988. Kohl remained Delors and Mitterrand’s main partner. In 1987, Mitterrand went on a state visit to the Federal Republic, a modest repeat of ‘Verdun 1984’, with as its high point a visit to Charlemagne’s Palatine Chapel in Aachen Cathedral. The visit led to initiatives to step up Franco-German coordination on monetary and economic policy in anticipation of the upcoming West German European presidency. The consultations were mainly led by Stoltenberg and Delors, who did not let his position as president of the Commission stand in his way. In fact, it was probably more of a benefit. The concrete results of the talks foresaw substantial steps: the EMU was on the agenda at the special European summit in Brussels on 11 and 12 February and, with Kohl as chairman, the Delors package was adopted (the first multi-year budget). Again, no expense was spared: the Federal Republic covered the lion’s share of the bill for doubling the size of the structure funds, which the Latin member states in particular had made a condition for voting in favour. It signified a powerful financial injection for European integration. After the Brussels summit, Kohl was ‘im Hochgefühl’, in euphoria. Before the eyes of the world, it had become unmistakably clear who were the leaders of Europe: Delors and Kohl. That did not make the West German presidency a success, however. The chancellor felt that it was his historical task to make European integration 40 Ungerer, A Concise History, pp. 180-81 and Brian Lapping Association et al., 1998, The Money Changers (documentary); compare Connolly, The Rotten Heart, pp. 39-42. 41 Lieshout, De organisatie, p. 178.

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‘irreversible’; he just did not know how. Delors, on the other hand, did know. Clear and feasible European ideas were a scarcity, and Kohl badly needed them to make the West German presidency of Europe the success he wanted to make of it. His friend Delors could deliver those ideas. What more did he want? Kohl gradually started to resist less and less Delors’ ideas for the EMU. But that would probably have happened even without Delors’ hyperactive EMU lobby. Kohl’s increasing conviction in favour of the EMU was also fuelled by a growing enthusiasm for monetary union among West German multinationals and his foreign minister Hans-Dietrich Genscher. The large German banks were fascinated, perhaps even obsessed, by the business opportunities that an EMU with free movement of capital could offer. Alfred Herrhausen, chairman of the Deutsche Bank and an intimate friend of Kohl, started an increasingly open campaign for a European Central Bank. He even became a prominently active member of the rather time-worn Action Committee for the United States of Europe, into which Monnet’s pupil Delors had breathed new life. 42 The country’s manufacturing industry, including the car and machine makers, which were largely export-oriented, also expected to benefit from the EMU. 43 And then there was Genscher, the man who had been a minister since 1969 and minister of foreign affairs without interruption since 1974. He was seen as the political conscience of the Federal Republic when it came to the continuity of foreign policy, which was widely considered vital to the country’s future. Genscher was a statesman who had the potency and stature to make the chancellor look like a schoolboy if he were to commit an error in foreign policy. Kohl was only too aware that he had only one real rival in his cabinet. Genscher, too, wanted to shine during the West German European presidency. He had the status and position to set the tone and had done just that, completely by-passing the cabinet and the chancellor. After the summit in Brussels, Genscher had surprised friend and foe. On 26 February, he published a personal Memorandum for the Creation of a European Currency Area and a European Central Bank. The ECB was to be modelled on the very successful Bundesbank and was to focus on preserving price stability. In the memorandum, Genscher outlined an alternative to the Krönungstheorie: the sacred sequence in which the EMU was to be the apex of a long process of economic convergence and political unification would be jettisoned, as long as the start of the EMU was marked by the setting up 42 BZ, 996 EG, 1985-1989, 1624, Chaban-Delmas to Van den Broek, 14 June 1989. 43 Schwarz, Helmut Kohl, pp. 433-34; Connolly, The Rotten Heart, p. 70; compare Martens, De memoires, p. 608 and Jabko, ‘In the name’, p. 481.

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of an independent European Central Bank based on the Bundesbank. That was some proposal: the Europeanisation of the Bundesbank as a foundation for the EMU! At the closing summit of the West German presidency in Hannover, Genscher proposed appointing a ‘committee of wise men’ to assess the feasibility of such an EMU. In this way, he trumped Kohl and took the initiative for himself. Moreover, this European political coup was wellthought-out: Genscher had coordinated everything in advance with Delors and his French counterpart Roland Dumas, who also introduced his West German friend to Mitterrand as an inspiring partner for tête-à-têtes on European matters. The French president had eagerly taken up the offer. Kohl knew that he had no other choice than to move up into the higher EMU gear that Genscher had chosen. Fortunately, he could rely on Bitterlich, his adviser on European matters (see prologue), who had built his career as a member of Genscher’s staff. 44 The Hannover summit on 27 and 28 June was a historical success. The heads of government decided to set up a committee consisting of the presidents of the central banks (in a personal capacity) and chaired by Delors to draw up a plan for the EMU. The question was not whether there should be an EMU at all, but what form it should take. 45 If Delors could succeed in getting the governor of the Bundesbank to support an ambitious and concrete EMU plan, the main source of resistance to the EMU would be neutralised. And it was Genscher who outlined how that difficult feat was to be achieved. At the finance ministry in Bonn, minister Stoltenberg and state secretary Tietmeyer were caught off guard twice within only a few months: first by Genscher and then by Kohl, who had prepared the Hannover summit behind their backs with Genscher and Delors. And yet, the ministry did have some successes during the West German presidency. At the ECOFIN meeting in May, there had been a definitive breakthrough on the dossier regarding the movement of capital, with the ministers deciding on a full liberalisation of the internal market. Mitterrand was not pleased that the French minister of finance had gone along with this decision and wanted it reversed. Gaullist Édouard Balladur had agreed with the ECOFIN decision while holding the position as caretaker minister. There had been presidential elections in France on 8 May and Mitterrand had defeated Jacques Chirac, his prime minister, with whom he had been forced to cohabit uneasily since the latter won the 44 Dyson and Featherstone, The Road, pp. 327-331. 45 Ungerer, A Concise History, p. 199.

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parliamentary elections in 1986 (counterbalancing the socialist president in the last two years of his septennat). Balladur was finance minister in Chirac’s cabinet and had wanted to score quickly on the capital movement dossier before it was too late. But Mitterrand wanted this right-wing ‘goal’ to be disallowed, as it had been scored in extra time, i.e. when Balladur was officially no longer minister. At a Franco-German summit in Evian in June, Mitterrand tried to salvage what he could. The French socialists were afraid of the prospect of a ‘Europe for the banks’. If full liberalisation went ahead, Mitterrand demanded at least a tax on financial transactions. Kohl was prepared to support the tax, but capital market liberalisation was no longer up for debate. The chancellor was playing poker: if his friend continued to be difficult, he would bring the point up at the Hannover summit, which would be a recipe for failure of the ever-so-carefully orchestrated boost for the EMU. Mitterrand decided to make the best of it – which was probably not unfavourable for the future of Paris as an international financial centre. Kohl repaid Mitterrand for his gesture by consenting to a second term for Delors as president of the European Commission in 1990. 46 The full liberalisation of the movement of capital was an extremely large gift to Kohl (and to the northern Europeans and the Anglo Saxons). That is not something you can expect to receive from the president of France for nothing, and Mitterrand would delicately remind the chancellor of this at the end of 1989, during Franco-German consultations to coordinate their standpoints at the historical European summit in Strasbourg (see prologue). The decision to fully liberalise the movement of capital marked the completion of a significant development in the monetary dimension of European integration, which had been set in motion in the 1960s: it represented the transformation from an essentially politically controlled policy apparatus to a market-driven coordination regime. 47 This was the corridor between Basel and Brussels through which the tsars of monetary policy techniques made their definitive entry into the process of European integration. In addition, this development encouraged France to adapt to the macroeconomic mores of the Federal Republic. The process would be completed in the 1990s, with France subjecting itself to the monetary rules of the Federal Republic. That occurred not only via the independent ECB but also through the ultimate Europeanisation of the new Franco-German balance in the post-Cold War era, brought about by the introduction of the euro (and the dismantling of the Deutschmark). 46 Schwarz, Helmut Kohl, pp. 434-36. 47 Jabko, ‘In the Name’, p. 481.

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It had not yet come to that point in the days surrounding the summit in Hannover, but Bundesbank governor Karl-Otto Pöhl felt that something was amiss. A former journalist, Pöhl had been state secretary for finance from 1972-1977, after which Schmidt had sent him to the Bundesbank as the designated favourite to succeed Emminger. He was appointed governor in 1980. The purists in Frankfurt kept a close eye on him; he had not come up through the ranks of the Bundesbank and, as far as they were concerned, that meant he should not be eligible to sit in the governor’s chair. Perhaps they did not take him completely seriously as a financial expert. Personally, he had always been a cautious supporter of the EMU – that was expected of anyone serving in the Schmidt governments – but he was fully aware that this was not an opportune standpoint for the governor of the Bundesbank. He was therefore extremely sceptical about the EMU plans. He complained to Genscher about the impossible position into which he had been manoeuvred and the unpleasant way in which his deputy Helmut Schlesinger corrected him at Bundesbank meetings during discussions on the EMU, impressing on him that such a European project was out of the question! He found himself facing a nigh impossible conflict of loyalties, a position he did not want to be in. 48 It was all true, but Pöhl would become both world-famous and popular. Immediately after the Hannover summit, Thatcher went to Frankfurt to discuss with Pöhl in confidence how they could render the despicable Delors committee harmless. That was a piece of cake: all Pöhl had to do was say ‘no’. The governor of the Bank of England and the British government would support him fully. To her surprise, however, when the Delors committee presented its final report in April 1989, Thatcher had to conclude that she had interpreted German interests in a much more material way than the West Germans did themselves. Around the end of 1989 and the start of 1990, the interministerial coordination on the EMU started to gain momentum. The European Community was only three months away from the moment when Delors would present his final report. Through the Dutch Ministry of Finance, which had made itself largely responsible for coordinating the Netherlands’ position, there was a growing awareness that the prevailing situation of the EMS – a de facto Deutschmark zone – was probably the most favourable situation for the Netherlands. According to the experts, it would be best for the Netherlands to go a little more on the defensive. There was every reason to do so: a number of Delors’ proposals had leaked out, and they gave no cause for optimism: they were all too familiar. Delors appeared to be pushing 48 Dyson and Featherstone, The Road, pp. 326 and 332.

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plans for a European fund and for setting up a European Central Bank (ECB) as soon as possible. The first was not necessary in the eyes of the Netherlands because ‘the remedy’ for ‘differences in exchange rates between the EMS currencies’ should not be sought in ‘the creation of a common intervention instrument, or in the convergence in the underlying economic policies of the member states’. The second, the establishment of an ECB, was premature because rules first had to be defined for ‘the financing of government budgets’; and it was on that point that the Monetary Committee ‘was divided’. 49

The Delors Report Despite all the divisions, Delors presented a unanimous final report on 17 April. After a marathon session lasting two days, Pöhl had finally placed his signature beneath it, after which the governor of the Bank of England Robert Leigh-Pemberton had no other choice but to sign too. The report gave reasonably concrete answers to the question what the future EMU should be like. Firstly, economic and monetary union were ‘two integral parts of a single whole and would therefore have to implemented in parallel’. Secondly, the ‘principle of subsidiarity’ would have to be adhered to in the institutional structure of the EMU, which meant that responsibility for policy would be designated at the lowest possible level. In other words, if it was not strictly speaking necessary for policy to be made at the European level, it would remain a national responsibility. Thirdly, monetary union was defined as ‘the total and irreversible convertibility of currencies’, ‘the complete liberalisation of capital transactions and full integration of banking and other financial markets’ and ‘the elimination of margins of fluctuation and the irrevocable locking of exchange rate parities’. The economic union was described as the internal market as defined in the Single European Act (the free movement of goods, services, capital and persons), together with regional policy to support weaker areas and the coordination of macroeconomic policy, including binding rules for budget discipline. The main goal of all this was a single currency as the ultimate proof of the irreversibility of the monetary union. To achieve that, the report proposed setting up a European System of Central Banks (ESCB) consisting of a ‘central institution’ (which would 49 BZ, 996 EG, 1985-1989, 1624, Memorandum, 31 January 1989; compare Memorandum, 6 December 1988.

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later become the ECB) and the central banks of the member states. The institutional structure of the ESCB – the beating heart of the future EMU – was to be independent and federative. Its task would be to maintain price stability. All this was to be achieved in three stages. Stage one entailed the completion of the internal market and extending the mandate of the Council of Central Bank Governors (CCBG). In effect, the Community was already in this stage. Stage two comprised setting up the ESCB (into which the CCBG would be incorporated), which would be responsible for the transition to the final stage and for drawing up ‘precise’ (not binding) rules for budget deficits. Depending on the progress made on economic convergence, the fluctuation margins between exchange rates could be narrowed at this stage. Stage three, lastly, would start moving towards irrevocably locked exchange rates, after which the ESCB would take on full responsibility for monetary policy, including management of centrally pooled reserves. Macroeconomic agreements and rules for budget discipline would then become binding. The single currency would be introduced during this stage. Given the agreements in the Single European Act, this route to the EMU required either a new treaty per stage or one all-encompassing treaty all at once. The Delors committee settled for the second option and called for ‘a clear political commitment to the final stage’ to safeguard the credibility of the entire EMU process. Taken as a whole, the following conclusions could be drawn from the Delors Report: the monetary union would in any case acquire a strongly supranational character but, through the rule of subsidiarity, the economic union would primarily be limited to what it already was in the framework of the Community but extended to include intergovernmental policy coordination and possibly extra funds for regional development. What was also significant was that the economic union was designated as the appropriate institutional location for making budget discipline binding. A few weeks after the presentation of the report, UK Treasurer Nigel Lawson responded by saying ‘the idea that we should sign up now to a new Treaty […] is not something which we accept […] Certainly this was not the prospectus on which the British people and the British House of Commons […] agreed to membership of the European Community’. Shortly afterwards, Margaret Thatcher declared to the House of Commons that the Delors Report ‘would involve a massive transfer of sovereignty which I do not believe would be acceptable to this House’.50 50 Ungerer, A Concise History, pp. 201-206.

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Three days before Delors presented his report, the Dutch ambassador in Bonn, Jan van der Tas, confirmed German concerns about Delors’ proposed rapid moves towards the EMU. These concerns were shared in The Hague. Van der Tas had heard via the Bundeskanzleramt that Delors was hoping to obtain a new mandate at the upcoming summit in Madrid ‘to design a new fund with the aid of experts without (repeat without) the troublesome participation of the central bank governors’. There was considerable alarm among the West Germans about this new project of Delors, as they expected that it would be largely the Federal Republic that would have to provide the money for such a fund and, at the Bundeskanzleramt, they knew that ‘Kohl wanted to go as far in Europe as the others’. In other words, they looked to the ‘combination of Delors and a French European presidency’ (in the second half of 1989) ‘with some degree of concern’. The fundamental problems that loomed on the horizon were enormous. Van der Tas summarised what his German informant had told him: He outlined once again in detail how much sovereignty the member states would have to be prepared to surrender for a system of fixed exchange rates within the Community, and especially with respect to budgetary policy. For countries like Spain, Italy and Greece, the surrender of sovereignty to ensure budgetary discipline was completely out of the question. And without this strict discipline, the system was doomed to failure, which would be a serious setback for the entire process of European integration.

Kohl had indeed stamped on the brakes. At the CDU congress on ‘Europe 1992’, he had taken the recommendations of his civil servants to heart and tempered expectations by speaking of ‘a long and diff icult road to monetary union’.51 A little late perhaps but, for many, it was better late than never. The Netherlands, too, got cold feet about the EMU rather late; these reservations contrasted sharply with its earlier enthusiasm. After all, Delors’ statement that the EMU should be seen as ‘an indissoluble part of the Single European Act’ had been received with celebrations in The Hague. From the perspective of consistent foreign policy, it was therefore logical for the Netherlands to support this monetary expansion of the market. The Ministry of Foreign Affairs called for ‘a clear commitment to the ultimate achievement of the EMU and to maintain a positive attitude to the Delors Report’. The 51 BZ, 996 EG, 1985-1989, 1624, Coded message from Van der Tas, 14 April 1989.

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Netherlands could not wait for the British forever.52 But that was only part of the story behind the Netherlands’ involvement in Europe. Moreover, the country had already distanced itself from the UK’s European policy in the preceding years. The core of the matter was the Netherlands’ relationship with the Federal Republic. West Germany was its most important partner in practically all areas relating to Europe, and certainly where the EMU was concerned. While in West Germany, the financial-economic elite in Frankfurt had always provided a heavily sceptical counterbalance to Kohl’s pro-Europe enthusiasm, in the Netherlands it was often the technocrats who had emerged in recent years as constructive Europeans. The protective wall of the prudent technocrat had in reality long disappeared. This last point was emphatically illustrated by the fact that there was at least one central bank governor who had not made life diff icult for Delors – Duisenberg. In the crucial f inal stage of the consultations, he had not caused any problems. On the contrary, he had helped Delors achieve a unanimous report by playing ‘a significant intermediary role’ in the crucial f inal meeting that had gone on non-stop for two days.53 That unanimity was essential for the EMU momentum that the report would unleash. EMU supporters from France, Brussels and southern Europe took advantage of it to call for an IGC to be organised as quickly as possible to implement the required treaty changes.54 An IGC was, after all, necessary to move towards the EMU, in light of the provisions agreed to in the Single European Act. The stake that Tietmeyer had driven into the ground in Luxembourg in 1985 now gave the Netherlands something tangible to cling on to. The doom scenario that ambassador Van der Tas had warned of – a new mandate for Delors to organise an IGC – did not materialise. At the European summit in Madrid in June 1989, it was agreed that the first stage of the EMU would be initiated as described in the Delors Report but that an IGC could only be organised after ’full and adequate preparation’. This was the final brake still available to the proponents of the Krönungstheorie, and they applied it with full force. Tietmeyer expressed his satisfaction in a conversation with Van der Tas. The ambassador concluded that the German experts were anticipating that the EMU – a project that they saw as ‘extremely risky’ – would be a long process. When he asked Tietmeyer ‘how it was 52 BZ, 996 EG, 1985-1989, 1624, DIE to the state secretary via DGES and the secretary-general, 18 April 1989 and DIE and DES to DGES, 19 April 1989; compare Memorandum, 26 May 1989. 53 BZ, 996 EG, 1985-1989, 1624, Memorandum, 13 April 1989; Ungerer, A Concise History, p. 200. 54 Lieshout, De organisatie, p. 179.

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possible that expert people like Delors, Schmidt and Genscher seemed to systematically see these things differently’, the latter replied ‘that they were politicians driven by ambition and who were not willing or able to see the risks in their true light’.55 In West Germany and the Netherlands, the conclusions of the Madrid summit were interpreted as meaning that an IGC on the EMU could only be organised after Europe had achieved the free movement of capital, the autonomy of monetary policy and sufficient economic convergence. The last two components in particular were sufficient reason to assume that that moment was still a long way off, as noted by Schlesinger. Perhaps all was not yet lost. Everyone knew what had happened to all the other EMU plans – they had evaporated into nothing. Furthermore, the f inancial markets were now working freely. Or, as Pöhl put it, ‘Common economic and monetary policy is not required for integrated markets, only a consistent economic and monetary policy’ (by which he meant price stability as an absolute priority). In other words, there was a good chance that the liberalised financial markets would ruthlessly expose just how far removed most Community partners were from the German example and thus how far off the EMU still was. By now, the experts at the Ministry of Finance in The Hague felt exactly the same way. They were not as concerned with the continuity of Dutch foreign policy as the diplomats at the foreign ministry, who agonised about it. At the finance ministry, the Delors Report was no longer received with applause; they had long before made a swift U-turn on European policy. By the time Delors presented his final report, pro-European sentiments among Dutch financial-economic experts and monetary technocrats had turned completely about-face. In the words of Treasurer-General Cees Maas, ‘at the ministry, we were opposed to it. The DNB was opposed to it’.56 What was most alarming for the experts was perhaps that Delors had tried to start playing the old date game again. The report proposed setting a date for the start of the first stage – 1 July (which happened to be the date set for the complete liberalisation of the movement of capital). That was acceptable but, fortunately, Pöhl had stopped it going any further. The report made no proposals for the timing of the transition to the second and third stages and, as far as Maas was concerned, that should never happen, as ‘it is substantive criteria relating to policy convergence, the liberalisation of capital, the independence of the central banks and such like that should 55 BZ, 996 EG, 1985-1989, 1624, Coded message from Van der Tas to the minister, 7 July 1989. 56 Janssen, De euro, p. 105.

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determine the transition to the following stages’.57 But the ink was hardly dry on the report when Delors started to harp on about the next date, the starting date for the IGC. The Ministry of Finance responded to Delors re-opening the date game by falling back on the traditional sequence of the equally familiar Krönungstheorie. In The Hague – at least at the Ministry of Finance – the barricades had been thrown up. At the informal ECOFIN meeting in the French port of Antibes on 9 September 1989 – which was also attended by the members of the Monetary Committee – it once again became clear just how extensive the EMU package was that Delors was now working with. He summed it all up: parallelism between economic and monetary union, binding agreements on budgetary discipline, social cohesion, a substantial increase in the Community budget and, last but not least, institutional reforms moving towards political union. Minister of Finance Onno Ruding continued to insist, together with his West German counterpart, on the importance of an independent ECB with price stability as its guiding precept. He repeated the conclusions from Madrid: full and adequate preparation was required before a decision could be made to organise an IGC. Ruding emphasised that his comments were inspired by the desire to ensure that the establishment of the EMU was not a failure. At the end of the meeting, Delors noted that, in his view, it was impossible to achieve the EMU without radical institutional reforms: for him, the crown on the EMU would be political union.58 That was an ominous sign. Besides turning the Krönungstheorie on its head, it also meant that the writing was on the wall for the prevailing situation: the EMU was no longer treated as a distant possibility but as a feasible goal. The new distant possibility was the EPU. What if Delors went to work on political union in the same way that he had with the EMU? How was the purity of economic convergence to be preserved if everything was to become political? Playing with the EPU was playing with fire. Extreme caution and reserve were going to be necessary in the follow-up discussions. The Ministry of Finance decided that it would in the future keep coordination in The Hague on the Netherlands’ standpoint in the Monetary Committee to itself. When the Ministry of Foreign Affairs heard that the finance ministry wished to focus decision-making on the institutional arrangements proposed in the Delors Report in the Monetary Committee and the ECOFIN, they found it unacceptable. It was ‘unthinkable that such an important exercise as the foundation of a monetary union should be left exclusively to the 57 BZ, 996 EG, 1985-1989, 1624, Letter and memo Maas, 11 April 1989. 58 BZ, 996 EG, 1985-1989, 1624, Maas to DGES and annexe, 5 October 1989.

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ECOFIN’.59 Yet that was exactly what the finance ministry wanted, in the interests of the Dutch economy and to protect the guilder against what they saw primarily as political opportunism, whipped up by the ‘Marxist’ Delors. Treasurer-General Maas summarised the division of tasks between the ministries as follows: ‘as soon as it got complicated, I would say, that seems to be a technical issue, I’ll pass it on to the Monetary Committee. We could make decisions there without the people from Foreign Affairs. In that way, we could by-pass the foreign ministry’.60 Exactly two months after the Antibes ECOFIN, the Berlin Wall fell. Only nine days later, when the heads of government of the European Community came together at a summit hastily arranged by the French presidency, Europe was mentally back in 1945. It was there that Kohl was deeply hurt by the general feeling of mistrust towards the Germans (see prologue).

59 BZ, 996 EG, 1985-1989, 1624, DIE to the minister, the minister for development cooperation and the state secretary via DGES and the secretary-general, 22 June 1989. 60 Janssen, De euro, pp. 105 and 108; Connolly, The Rotten Heart, p. 104 n33.

9

After Strasbourg: A different party than expected (1989-1992) Abstract Like the ECSC, the European Economic and Monetary Union (EMU) would never become a Dutch favourite. And like the ECSC, the EMU again made European integration a predominantly continental affair, centred around the Franco-German axis, with the Netherlands’ best allies the UK and Scandinavia at a distance. Unlike the ECSC, however, the EMU saw the Netherlands become a prominent engineer of this course of events in European integration. Dutch financial-economic and monetary technocrats were leading figures, launching far-reaching plans for monetary union from the mid-1970s and proposing ingenious interlinks between monetary union and the deepening of market integration. Tellingly, the treaties that created the EMU and the euro were both signed on Dutch soil, in Maastricht and Amsterdam. Keywords: Fall of Berlin Wall, Strasbourg Summit, Treaty of Maastricht, EMU, EPU, ‘Black Monday’

We have now arrived at the point where this book started. In the weeks that followed the fall of the Berlin Wall, Kohl and Mitterrand worked closely together on preparing the agenda for the European Council in Strasbourg. After the summer of 1989, Kohl had already decided that the Strasbourg summit would have to address the big question: what was to happen after 1992? He confided to Mitterrand that he wanted progress on the EMU because that was part of the completion of the internal market, but as far as he was concerned that was only possible if the ultimate aim was European political union. Mitterrand responded by reminding him of the gift he had made to Kohl in Evian – full liberalisation of the movement of capital (see chapter 8).1 1 DzDPDE, Conversation between Kohl and Andreotti, 18 October 1989 and Bitterlich for Kohl, 2/3 December 1989, pp. 453 and 597.

Segers, Mathieu, The Netherlands and European Integration, 1950 to Present. Amsterdam, Amsterdam University Press 2020 doi: 10.5117/9789463728133_ch09

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The rest of the world was not concerned about the ins and outs of the EMU. At the end of November, the Dutch ambassador in East Berlin, Egbert Jacobs, wrote in his diary about the decreasing flow of East Germans to the West: It is true, the exodus is clearly on the decline. I catch myself feeling pleased about that and jump to conclusions: the GDR is not going to bleed to death, the GDR is going to reform itself economically and politically, the GDR will become for the first time in its history a democratically legitimised state. There will be a ‘Wirtschaftswünderchen’ and the division of Germany, so beneficial for stability in Europe, will be permanent. Really permanent. But I rejoiced – quietly, I must say – too soon.2

Just under a fortnight later, the leaders of the European Community came together for the summit in Strasbourg. According to Kohl, it took place in the ‘iciest atmosphere’ ever felt among the European partners. For many of them, his ten-point plan for German reunification proved to be an abhorrent bone of contention. Shortly after the start of the meeting, Thatcher had said frostily ‘We’ve beaten the Germans twice. Now they’re back!’ The Iron Lady objected to every move in the direction of unification as long as Kohl did not recognise the western Polish border, which had never been officially established. But Kohl knew that what Thatcher was more concerned about another semi-official border – that between the two Germanies. ‘Strasbourg’ was Kohl’s hour of truth: there, he learned who his real friends were. And there were very few of them. Kohl had to admit that Thatcher with her cri de coeur was saying ‘exactly what most people were thinking’. And there was someone else who had dared to speak out. ‘Is it opportune, on the basis of the past, that Germany be reunited?’, Dutch Prime Minister Ruud Lubbers had asked out loud during the meeting. Kohl could understand the Dutch position. He was aware that, in the Netherlands, the ‘horrific years of Nazi barbarism’ continued to feed ‘hatred of the Germans’. But he also experienced this ‘very cold’ attitude of his ‘fellow Christian democrat, supporter of the social market economy and proven European’ as a ‘great personal disappointment’. The small group of remaining friends of the chancellor comprised, at the forefront, Spanish Prime Minister Felipe González, followed closely by the Christian democratic premiers of Belgium and Luxembourg, Wilfried Martens and Jacques Santer. Kohl would not forget their support. Mitterrand’s 2 Egbert Jacobs, Oost-Berlijns dagboek: De laatste maanden van de DDR (Gibbon Uitgeefagentschap, 2011), pp. 60-61.

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position remained unclear. The chancellor observed that his ‘best friend in Europe’ was suffering a crisis of conscience. He knew that Mitterrand ‘did not want the status of Germany to change before European unification had progressed much further’, although his friend never said as much ‘to his face’. Despite his continued lack of clarity, Mitterrand had given his blessing to one important goal: the starting date for the EMU Intergovernmental Conference. That was to be after the West German elections – as Kohl had explicitly asked in his letter of 27 November to the French president and as Mitterrand had promised in his reply (see the prologue). Ultimately, the Strasbourg resolution stated that German unification and European integration should be seen as two sides of the same coin, exactly as Kohl wanted. Responsibility for achieving this would largely be placed in the hands of Delors, who would prove himself in the coming months a ‘loyal friend of the Germans’ and a ‘true personal friend’.3 In concrete terms, that meant two things. Firstly, it confirmed the Germans’ right to self-determination and therefore their right to reunite as a single state. And secondly, the IGC that was to prepare for monetary union would start in December 1990. When, during a subsequent conversation, US Secretary of State James Baker asked Kohl why this was all necessary – the EMU IGC was, after all, diametrically opposed to Germany’s interests – Kohl replied that he had indeed ‘made a decision against German interests’ but there was an overriding political reason for having done so: ‘Germany needs friends. We cannot permit any mistrust towards us.’4 In the spring of 1990, Kohl and Mitterrand sent a joint letter to the Irish European presidency calling for a second IGC (in addition to the one on the EMU) on the EPU. Both sets of treaty negotiations started at the end of that year. Both were due to be completed in the second half of 1991, exactly the six-month period in which the Netherlands would take over the rotating European presidency.

Piet’s work of art In April, it became clear that at the upcoming European Councils in Dublin it would be decided that an IGC on the EPU would start at the end of the 3 Helmut Kohl, Ich wollte Deutschlands Einheit (Berlin: Ullstein, 1996), p. 195; Kohl, Erinnerungen 1982-1990, pp. 1012-15 and 1033; Jacques Attali, Verbatim III: Première partie 1988-1989 (Paris: Fayard/Le livre de poche, 1995), pp. 467-468; Martens, De memoires, p. 618; Mathieu Segers and Femke van Esch, ‘Behind the veil of budgetary discipline: The political logic of budgetary rules in the EMU and the SGP’, Journal of Common Market Studies, 45, 5 (2007): 1098. 4 DzDPDE, Conversation between Kohl and Baker, 12 December 1989, p. 638.

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year, alongside the one on the EMU. The EPU was a completely new dossier for the Dutch government and, at first, no one really knew what to do with it. The third Lubbers government had few problems with the idea. The main issue in the cabinet was the smouldering conflict between the ministries of finance and of foreign affairs. Logically enough, Lubbers delegated the preparations for the EPU IGC to the foreign ministry. Minister of Finance Wim Kok responded by noting that aspects of democratic control raised by the EMU would, in his view, also be discussed in the EMU IGC. Minister of Foreign Affairs Hans van den Broek was conciliatory. He emphasised that the EMU IGC must not be adversely affected or delayed by the one on the EPU.5 He was probably unaware that, for the technocrats at the finance ministry and the DNB, this only revealed that he was not overly au fait with the material. Not much later, Peter Nieman, the Netherlands’ permanent representative in Brussels, warned against excessive ambitions regarding the EPU. He argued that extreme caution and scepticism were more appropriate. The federalist associations invoked by the EPU IGC were most likely little more than a highly polished veneer. Nieman insisted that it was important not be mistaken about this, saying that ‘the Paris-Bonn axis seems to be working towards a politically dominant role for the European Council’, i.e. the summits of heads of government. In other words, this was pure intergovernmental cooperation; there was no question of supranational impulses of a political or democratic nature (or of making the EPC more Community-based). According to Nieman, there was a high risk that this would seriously undermine the Netherlands’ interests. Domination by the ‘great powers’ was a real threat, as was clear from recent proposals by the president of the European Commission on the institutional structure of the EMU: The Commission calls for the European Central Bank to be independent within the Community and proposes that it adopts a voting procedure that allocates votes to the governors of the national central banks, as follows: France, Italy, the UK and the Federal Republic of Germany 10 each, Spain 8 and the Netherlands, Greece and Portugal 5 each. That means the same number of votes for the Netherlands as Greece, which is bankrupt, and Portugal, which is poverty-stricken […] The ‘directoire’ (as its name suggests) will have the remaining 30 votes. This proposal by the Commission (i.e. Delors) should be seen as the writing on the wall 5

MF, GT-453-365, rez, 27 April 1990.

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and should certainly be included in the wider negotiations to resist the emerging tendency towards domination by the ‘great powers’.

It would ultimately not go this far in the ECB, but that was not Nieman’s point. He wanted to show that, as far as the EPU was concerned, defensive and cautious manoeuvring was a sensible option for the Netherlands; much more than ‘offering resistance’ was probably unfeasible.6 That was being realistic. His specific reference to Delors as initiator of this distinctly intergovernmental plan should be taken as an extra warning. After all, Delors was the standard-bearer of European federalism. How, then, could he suggest such a thing? It could only mean that the Commission president was tied hand and foot by the heads of government. In Nieman’s eyes, that was exactly what was going on – and exactly what he was trying to impress on The Hague. Delors had found himself offside. After the summit in Strasbourg, he had felt that the time was right to rival his mentor Monnet. In Strasbourg, in a certain sense, the Second World War had ended for the second time, and this time definitively. German unification would be an integral part of the peace treaty. That all seemed as good as certain since, despite everything, the world looked on in awe at the surge towards German and European unification that Kohl had unleashed. And the West followed the Chancellor of German unity. Delors was one of the chancellor’s few remaining friends and circumstances presented him with the opportunity, like Monnet, to achieve peace after the war – and on a grander scale. The time for small steps was over. It was the moment for what Delors himself called ‘the quantum leap’. Monnet’s policy of muddling through, which had been so therapeutic in postwar Western Europe, was not sufficient ‘to respond to the acceleration of history’. On 17 January, Delors had demanded the European stage for a bold spectacle, not by coincidence in the same European capital where the war had ended for the second time. In a historical speech in Strasbourg, he called for ‘transformation of the Commission into a genuine, responsible executive power’, which would be accountable to ‘the democratic institutions of the future federation’. In a television interview a few days later, he said that it was his aim to achieve a European federation before the end of the millennium. Watching the interview, Mitterrand had cried out ‘Mais c’est idiot! What does he think he’s doing?’ Minister of Defence Jean-Pierre Chevènement immediately called Jacques Attali, the president’s right-hand man to say 6 MF, GT-453-365, Coded message from Nieman to the minister, 28 May 1990.

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that ‘Mitterrand must silence Delors!’ Mitterrand agreed. He was furious about Delors’ television appearance, saying that ‘by taking such an extreme position, he is in the long run jeopardising what it is feasible’.7 The French president knew what he was talking about, that was certain. What was also certain was that Delors had now completely disqualified himself. Mitterrand ordered him to keep silent about the future of Europe until after the IGCs. But Kohl saved Delors from complete humiliation. Instead, he hugged his French friend close to his Rhineland chest. Delors was smart enough to realise immediately that he had completely misinterpreted the situation. It had shown him clearly just how far ahead of him Franco-German coordination had progressed and what the EPU was really about: visionary entertainment for domestic use (see the prologue). A federation was the last thing anyone wanted. The Dutch ambassador to the European Community had in the meantime come to the same conclusion. But Nieman’s colleagues at the foreign ministry in The Hague saw that differently. At the end of May, the ministry sent two EPU memoranda to the cabinet, Possible Steps on the Way to the EPU and Building Europe Further. The latter took a close look at the Netherlands’ European policy. The Ministry of Economic Affairs jumped on the bandwagon with its Follow-up Report on Completion of the Internal Market. These documents were discussed at a cabinet meeting on 1 June. Shortly after the meeting opened, State Secretary for European Affairs Piet Dankert said that, before they talked about the details of the policy, they should first answer a question of principle: whether the Netherlands should continue to support efforts to strengthen the common aspects of the European Community. Lubbers answered with a wholehearted ‘yes’ and observed that no one disagreed with that. In the discussion that followed, however, a number of ministers including Bert de Vries (Social Affairs), Gerrit Braks (Agriculture) and Jo Ritzen (Education) voiced their doubts. The EPU plans were very unclear, they said. Was it by definition a good thing to transfer so many national powers to Europe? De Vries doubted that, and Kok agreed. They had grave concerns about the memos from the foreign ministry, especially on socioeconomic issues, feeling that their consequences had not been adequately explored. Expressing confidence in the Community had the charm of clarity but sometimes, in practice, little of that clarity survived. What exactly was the EPU? No one knew. Van den Broek supported Dankert: much may indeed still have been unclear, but the ultimate goal of the integration process had to be a federal 7 Jacques Attali, Verbatim III: Deuxième partie 1990-1991 (Paris: Fayard/Le livre de poche, 1995), p. 505; Van Middelaar, De passage, pp. 261-63.

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Europe. Lubbers concluded that the foreign ministry may still have a lot of homework to do, but the starting point remained that the Netherlands would continue to work towards a federal structure.8 The foreign ministry memos thus became the basis of the Netherlands’ position at the EPU negotiations. Dankert, former president of the European Parliament (1982-1984), was put in charge, while Van den Broek soon had his hands full with the escalating violence in Yugoslavia. In the memos, the ministry elaborated on the awareness – expressed back in 1972 by Prime Minister Barend Biesheuvel in the context of a possible transition to the second stage of the Werner Plan – that the EMU required much better democratic control (see chapter 7). The first memorandum placed that starting point in the prevailing international context: the ‘great attraction’ of the ‘Western European integration model’ for the countries of Eastern Europe, where democratic revolutions were currently under way. That demanded ‘strengthening of the Community structure’ so that the far-reaching developments in Europe could be addressed ‘from a position of internal strength’. Moreover, expansion of the Twelve ‘before the year 2000’ could be absorbed only ‘if the Community had strengthened its institutional structure sufficiently that expansion would not adversely affect its decisiveness’. And then there was the ‘unification of the two Germanies’. That was even more reason to ‘deepen the integration process’, because the existing agreements did not provide ‘sufficient guarantee’ that ‘a united Germany would not see its future outside the Community’. That could only be prevented ‘by strengthening the Community to such an extent that the option of a return to a national “Alleingang” for Germany was excluded forever’. The Ministry of Foreign Affairs then argued for continuation of the ‘consistent line’ that the Netherlands had followed since ‘the negotiations on the European Community treaties in the 1950s’. Since then, according to the memo, the Netherlands had seen ‘a federal structure as the final goal for Europe’. This was categorically untrue in historical terms. The Netherlands had certainly not pursued that final federal goal in the 1950s – if anything, the opposite was the case – and it was arguable if it had ever done so. But who remembered that? Furthermore, Lubbers and Van den Broek claimed to be continuing a pro-European tradition. In the second memorandum, it became clear that the historical context on which the foreign ministry was basing its arguments extended back no further than Wisse Dekker’s plan and Lubbers’ pro-European activism at the Dublin summit in 1984. But that did not stop the ministry from making 8

MF, GT-453-365, rez 1 June 1990.

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sweeping claims: the integration process had been ‘remarkably successful’ and the ministry took credit for the Netherlands’ role in achieving that, emphatically suggesting that that role had been very substantial. There was no discussion about it: the long march of ‘small steps’ of the past 40 years had moved in the ‘direction intended’ by the Netherlands. ‘The internal market and the EMU’ were ‘no longer a provisional final stage’. That final stage was now the EPU, and that ‘undeniably possessed a clear attraction that could be employed to move towards the federal ideals that so many had cherished for so long’. In the eyes of the ministry, this placed the Netherlands at the heart of the historical developments of the moment. That was exciting and called for political action based on conviction, as this ‘could not all have been predicted at the end of 1988’. The Netherlands had to play a constructive and active part in the discussions on the future of Europe and, if possible, take the lead – from the ‘social dimension’ to ‘institutional and democratic strengthening’. After all, this country knew what it wanted with Europe, despite – and thanks to – the turbulent times. In addition, of course, the memoranda explained that the pro-European tradition in the Netherlands’ foreign policy was not based on ‘pure idealism, but on enlightened self-interest’. The main conclusion was clear: ‘we must not, from the start, adopt a too modest and limited attitude’. After all, it was about achieving ‘the “overall” result in European integration and that is still in the Netherlands’ best interests’.9 The last comment was true, as the report from the economics ministry also showed unequivocally. That report was partly based on a study by the Central Planning Bureau (CPB) entitled The Netherlands and Europe 1992. The CPB’s main conclusion was that further European integration would have ‘a positive impact, above the Community average, on the already internationally oriented Dutch business community’. Calculations by the Economic Institute for Small and Medium-Sized Enterprises showed ‘a positive effect also on Dutch SMEs’.10 Disproportionate benefits through the internal market were, however, not the same as a deep belief in the rightness of European integration. In the long aftermath of the Maastricht Treaty, the people of the Netherlands would make that painfully clear to their leaders in The Hague. But before that happened, the latter found themselves on a course that would go down in Dutch diplomatic history as ‘Black Monday’. 9 MF, GT-453-365, Mogelijke stappen op weg naar de EPU, 23 May 1990 and Verder bouwen aan Europa (draft), May 1990. 10 MF, GT-453-365, Vervolgrapportage voltooiing van de interne markt, May 1990. ‘Nederland en Europa 1992’.

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Luxembourg, which held the European presidency for the six months before the Netherlands took it over, had proposed a realistic but very cautious EPU Plan. The basis was three pillars with different rules. The first pillar comprised the internal market and the future EMU, to which the rules of the Community applied (majority voting in the Council of Ministers, the right of the Commission to develop initiatives, and participation of the European Parliament in decision-making). The second pillar contained the future common foreign and security policy, with decision-making based on unanimity and the associated right to veto. The third pillar was reserved for new areas of policy in the expansive field of judicial cooperation; the rules of the Community could also be applied here, but that was to be further explored. In this way, ‘Brussels’ was kept outside foreign policy and issues of justice, and the new institutional structure entailed mainly expanding the internal market to include the EMU.11 At the end of June, it was decided at the European Council in Luxembourg that this pillar structure should form the starting point for a future treaty establishing the European Union (which would replace the European Community). The Dankert team at the foreign ministry thought this a spineless result. The Dutch presidency would show its steel: they seemed determined to put the memoranda of the preceding year into practice, despite Nieman’s increasingly vociferous warnings that it would mean the Netherlands’ downfall.12 In the summer before the Dutch presidency started, Mitterrand had already told Lubbers and Van den Broek what he thought about strengthening the Community institutions. When Van den Broek had presented an argument to that effect, the French president had replied with a surprised ‘What are you saying?’, adding ‘the Commission is zero, the Parliament is zero, and zero plus zero is zero’. Lubbers loved the flair of European politics. That’s the way things went between statesmen – a little bluff was all part of the game. He and Van den Broek did nothing to apply the brakes at the foreign ministry, on the contrary. Lubbers ‘wanted to make something spectacular of it […] a sort of crown on a decade of premiership’, according to Ben Bot, then secretary-general at the ministry. During the Dutch presidency, civil servants under Dankert worked feverishly to move the Luxembourg plan in a federalist direction. Hedy d’Ancona, minister of welfare, health and culture, spoke endearingly of ‘Piet’s work of art’ (referring to Dankert).13 11 Van Middelaar, De passage, pp. 267-68. 12 NPS/VPRO/Tijdsbeeld Media, Andere Tijden, ‘Zwarte maandag 1991’ (2008). 13 Bob van den Bos, Mirakel and debacle: De Nederlandse besluitvorming over de Politieke Unie in het verdrag van Maastricht (Assen: Van Gorcum, 2008), pp. 322, 336 and 343; Janssen, De euro, p. 46.

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The concrete ideas needed to put this masterpiece together but which were not on hand in The Hague were acquired via connections in Brussels. The Commission and the Christian democratic European People’s Party (EPP) already had blueprints for a federal EPU and were happy to pass them on to the foreign ministry in The Hague, always encouraged and inspired in the background by European bosom buddies Delors and Kohl. Both also expressed their great confidence in their fellow Europeans Lubbers and Van den Broek.14 The Netherlands was once more at the forefront! On 26 September, it became clear in the Committee of Permanent Representatives (Coreper), which prepared the Council of Ministers, that the Netherlands’ plans for the EPU were unfeasible. The government, however, refused to retract them. This may have shown some backbone, but they knew it was a lost cause. Shortly before the Council, which was due to discuss the Netherlands’ proposals, Elisabeth Guigou – now minister for European affairs under Mitterrand – urged Dankert to adopt a more pragmatic line. But, she said later, ‘Piet did not want to listen’.15 At the meeting, on Monday 30 September, the Ministry of Foreign Affairs’ EPU plans were ruthlessly shot out of the water. Only the Belgian Minister of Foreign Affairs, Gaston Eyskens, supported them. Piet’s work of art lay in pieces, and the fact that the Netherlands was holding the European presidency at a key moment in postwar history only made the fiasco that much more painful. Genscher was extremely irritated by this bungling. The Netherlands had lost its flair, but not for long. Van den Broek frankly admitted that the Netherlands had ended up ‘with egg on its face’.16 So be it. He had at least tried something.

The consequences At the EPU IGC, the blueprints quickly disappeared from view. Much was to remain the same, that was clear after Black Monday. And that fit well with the coordination between Kohl and Mitterrand. The same applied to the breakthroughs achieved at the EMU IGC. Great steps forward were taken there after it became clear in the summer that Mikhail Gorbachev’s faltering Soviet Union would not obstruct German unification based on American conditions, including a unified Germany joining NATO (see the prologue). On 3 October 1990, the miracle of German reunification was complete, 14 Martens, De memoires, pp. 624-25. 15 Van den Bos, Mirakel, p. 216. 16 NPS/VPRO/Tijdsbeeld Media, Andere Tijden, ‘Zwarte maandag 1991’ (2008).

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with the German Democratic Republic officially being incorporated into the Federal Republic. It was less than a year after the fall of the Wall. No one had believed it could happen. Kohl knew which Western partners he had to thank for the victory: George Bush in the first place and, in Europe, Mitterrand. In September, Spain had proposed allowing the second stage of the EMU to start in January 1994. The Bundesbank and the German Ministry of Finance were dead set against this, for the usual reasons. A few days after the Tag der Deutschen Einheit, however, the German chancellor announced on French television that he consented to the second stage of the EMU starting in January 1994. He added that the European Central Bank should be set up along the lines of the Bundesbank: independent and focused on price stability.17 Mitterrand and Delors were now nearly there. They needed one more date: the starting date for the third stage also had to be specified in the treaty. And that happened, too: during the Dutch presidency, at the Maastricht summit in December 1989. Germany got the ‘European Bundesbank’ and the ‘hard’ convergence criteria it had fought for so long and hard, and France got the agreement under treaty law that the EMU would come into force irrevocably on 1 January 1999. That was the basic deal reached in Maastricht, which meant in effect that economic convergence was subordinated to the design of the ECB (Germany’s main demand) and the irrevocable starting date (France’s goal). All this had eluded Lubbers, to the great chagrin of the monetary experts at the DNB. They realised that it could mean the definitive end to their fight against undesirable politicisation of the EMU project.18 Nothing came of a supranational EPU (the second and third pillars of the treaty remained very intergovernmental). Either way, the new historic treaty to succeed the Treaties of Rome was in place. And, as head of the European presidency, Lubbers was able to shine at his own party as a player with European allure. His greatest feat at the Maastricht Council was to neutralise what he himself called the British ‘obstruction’.19 The UK insisted on an opt-out in Maastricht: it signed the treaty but had the option of not taking part in the final stage of the EMU. The Dutch prime minister proved a child of his time, acting on the basis of the state of confusion in which the Netherlands had come to find itself in 17 Lieshout, De organisatie, p. 181. 18 Compare Szász, The Road, pp. 159-60. 19 Brian Lapping Association, VPRO, ARTE, Danmark radio/tv, RTBF, SVT, YLE, The Money Changers (documentary, 2008).

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Europe. The country was trapped between the dynamics of European high politics and the desired goal of monetary prudence: two things that, in Dutch eyes, were – and never should be – related but which had in reality been closely connected in the past decade, and especially in recent years. Just as in 1950-1951, when the Netherlands was caught unawares by the Schuman Plan and the ECSC, in 1989-1991 it was caught napping by the EMU. Just how complete the surprise was is perhaps most clearly emphasised by the fact that the new EU Treaty was festively signed in the Netherlands itself. In his own mind, Lubbers was not completely free of mixed feelings, despite this historic success. The party had turned out differently than he had expected. He later spoke of ‘a symbolic shift’. What did he mean by that? During the state lunch in Maastricht city hall, he had watched how Queen Beatrix had ‘laid her head on the block’ when she said in her speech that ‘her image did not have to appear on the new coins’. The European currency was ‘more important than her image’.20 It was not the first – and would not be the last – time that the head of the Netherlands’ state would intervene in Dutch European policy in such unequivocal terms. In May 1995, Queen Beatrix was there again to sweep up the pieces, this time of Lubbers’ performance at the Strasbourg summit in December 1989. The fiftieth anniversary of Nazi Germany’s complete capitulation at the hands of the Allies was on 8 May 1995. From 6-9 May, the end of the Second World War was commemorated across post-1989 Europe. It started on 6 and 7 May with a banquet in London, where Queen Elizabeth and British Prime Minister John Major were joined at the table by US Vice President Al Gore, Russian Prime Minister Viktor Chernomyrdin, François Mitterrand, Helmut Kohl and German President Roman Herzog. This was followed by a service in St. Paul’s Cathedral. On 8 May, there was a ceremony at the Arc de Triomphe in Paris, followed by a commemoration on the Gendarmenmarkt in Berlin, where the heads of state and government of the ‘Big 4’ powers spoke. On 9 May, there were festivities in Moscow, including a veterans’ parade. Together with Prime Minister Wim Kok, Queen Beatrix played her part – and that did not go unnoticed. Chancellor Kohl was delighted with the Dutch delegation which, despite the fierce anti-German sentiments surrounding the commemorations, had travelled to Berlin to attend the ceremony on 8 May. The Dutch queen and prime minister had even helped to ensure that the ceremony was conducted in German. Kohl told the CDU party leadership afterwards that this was a gesture ‘that was not to be taken for granted even 50 years later’. He had also been deeply impressed by how the Queen had 20 Janssen, De euro, p. 64.

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spoken about the Netherlands’ war experiences, and her message that the people of her country also had to take responsibility for the future – rather than simply blaming the Germans. Kohl would not forget this gesture by Beatrix and Kok. It went a long way towards making up for another Dutch performance that he had not forgotten about and which he had, in the preceding years, given much thought to – and not without rancour. A year previously, Kohl had personally and brutally thwarted the open application by ex-prime minister Lubbers for the position of president of European Commission. The chancellor had been very candid about his reasons for doing so to those in his immediate circle: The reason why we – and not only us, there were others – did not vote for him was that he was one of the most vociferous opponents of German unification. I do not judge him for that […] but it was a very bitter pill for us to swallow.

Kohl had found it particularly difficult to accept Lubbers’ opposition because he felt himself misunderstood by his Christian democratic neighbour. The chancellor’s goal was not German domination; he was walking in Adenauer’s footsteps. His sights had always been set on a Europe beyond ‘the Europe of nation-states’. He did not wish to be labelled as a threat to Europe, and certainly not with the swagger that the prime minister of little Netherlands had displayed with the whole of Europe as his audience. That was undeserved since, as far as he was concerned, it was ‘beyond dispute’ that: the nation-states’ old style will not remain, but Europe can only become something great if the national identity of the individual countries is preserved. In other words, that we are Europeans as Germans […] As a country at the centre of Europe, Germany must hold fast to this policy of a united Europe. That is of vital and decisive importance.21

The Bildung of the Germans as Europeans had become the essence of the Weststaatsgründung, the process of embedding the Federal Republic in the West that had started under Adenauer and which continued unchanged after reunification. Conversely, the Weststaatsgründung had become the hard core of the process of post-war European integration. And that, too, simply continued after the fall of the Wall, German reunification and the 21 Helmut Kohl, Berichte zur Lage 1989-1998 (Düsseldorf: Droste, 2012), pp. 681 and 961-62; compare Martens, De memoires, pp. 655-57.

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end of the Cold War. Most of the Federal Republic’s EU partners accepted up to a certain point that the FRG undeniably played a central role in the history of the process of European integration and that it was advisable to adjust to that reality. But for none of them was it true in such a far-reaching manner as for the Netherlands. After the end of the Second World War, the Netherlands had first linked itself – and later tied itself – to the Federal Republic and its economy more closely than any other country, first through trade, then through its currency and later through the EMU. The Germans may have become Europeans but, in economic terms, the Dutch had become Germans. The Netherland therefore had much to benefit from a ‘German Europe’, in many practical ways. The Netherlands’ interests were served by a strengthening of the ‘German camp’ (as opposed to the ‘French camp’) within the process of European integration, as the Ministry of Foreign Affairs had already suggested back in 1967 (see chapter 7). And that certainly applied to the EMU. But it was precisely in that European super-project that the German camp had been seriously weakened. That was not only because the Federal Republic had been expected to display disproportionate European solidarity, which was irrevocably linked to the Weststaatsgründung and the associated Gleichberechtigung and which had to be earned and regularly bought. It was also because the UK and its like-minded northern European allies in Scandinavia had opted out of the EMU. On 2 June 1992, the people of Denmark rejected the Maastricht Treaty in a referendum on ratification. Denmark was eventually kept aboard when its government announced that the country would not take part in the third stage of the EMU (a Danish opt-out from ‘Maastricht’). The UK had already made that known. The ‘German camp’ in the EMU now consisted only of the Federal Republic and the Netherlands.

10 European realities: Defining Europe after the Cold War Abstract ‘Post-Maastricht reality’ soon became again an uneasy European reality for Dutch policymakers. As the uneasiness with ‘Small Europe’ had done in the late 1950s, it silenced Dutch political debate on European integration. And, once more, it triggered an erratic course during the 1990s and 2000s in which European integration fundamentally changed, both in terms of deepening (mainly through the eurozone) and widening (the accession of the former Warsaw Pact members). Once again, the Dutch felt lost in Europe. Crucially, Dutch government representatives often proved unable to fathom the European and transatlantic political realities that were shaping the Netherlands’ position in European integration and by implication the fate of Dutch initiatives and plans. Keywords: Treaty of Amsterdam, Treaty of Nice, Treaty of Lisbon, euro, Brexit, EU enlargement

After the fall of the Berlin Wall, there was a brief moment of paralysing hesitation and deep doubt in Western Europe. Then this unbelievable turnaround was celebrated as a victory over the horrific history of Europe in the twentieth century. In the autumn of 1989, 75 years after the outbreak of the First World War, the ‘longest of Europe’s civil wars’ came to an equally abrupt and definitive end.1 The peace agreement signed on 3 October 1989 by the four former occupying powers plus the FRG and the GDR regulated the peace that had never been attained after the end of the Second World War and formalised the reunification of Germany (with the GDR joining the FRG). The Oder-Neisse border between Germany and Poland – until then provisional – was made permanent under treaty law. The expanded FRG 1

Norman Davies, Europe: A History (London: Pimlico, 1997), p. 14.

Segers, Mathieu, The Netherlands and European Integration, 1950 to Present. Amsterdam, Amsterdam University Press 2020 doi: 10.5117/9789463728133_ch10

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remained a member of NATO. But the new ‘European peace’ promised more. It also had to put an end to Europe’s impotence, symbolised in the post-war period by the order of Yalta – a divided Europe that was the plaything of the superpowers, the US and the Soviet Union. In this key episode in the development of the current EU, Washington still largely held the reins (see the prologue). That was a familiar arrangement both for Western Europe and for the process of European integration. But it was also to be the last time that Europe and the US would dance their post-war transatlantic pas de deux. It soon became clear that the world would no longer be divided into two and that the West would no longer by definition be transatlantic. 1989 marked the beginning of the end of the Cold War, the death of Western Europe and the start of America’s withdrawal from the old continent. What that meant for European reality and European integration has gradually become clearer in the intervening years. So far, it has not produced any sharply defined future scenarios and, consequently, has generated even more lack of clarity and unpredictable changes of course. Questions remain, and attempts to answer them usually lead to deep differences of opinion. How significant was the process of European integration for the historical breakthrough of 1989? Is European integration viable without the Cold War? Has the integration process always had a ‘second’ nature, separate from the Cold War mould of division within which European relations were confined under threat of violence? Do we have any idea where we are going with European integration? Do we know what the process of integration involves? Added to this are the tumultuous developments of recent years with regard to the EMU and the euro, the increasing geopolitical tensions within and outside Europe and the transatlantic relationship, the waves of desperate and hopeful migrants heading for Europe, and the problems of security and human rights that they throw into sharp relief. These developments regularly place the history of the EU in a different light than that in which it had been seen and understood for so many years. That also raises questions. How precise have we been in our attempts to define and explain the process of European integration? Precise enough? Do we understand it sufficiently? We don’t know. So what do we know? For each of the twelve member states of the pre-1989 European Community, the post-war process of European integration represented their own, national journey towards the continent. That journey took place in new ways, with the aid of completely new kinds of international institutions. It led them along unsuspected paths and routes to places where they could never have suspected they would end up. And after 1989, that Western European journey continued. It unfolded in parallel with an expansion of the

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integration process to include ten member states from Central and Eastern Europe. This incorporation of former Warsaw Pact countries and Soviet republics constituted the unification of Europe according to the Western model, just as Germany had been reunified according to the same model. At the same time, the main destination of that journey remained above all traditionally Western European. After 1989, that last stop was European Monetary Union (EMU). In 2018, we – or rather, a lead group of nineteen member states, old and new – are at the intermediate station of the euro and the eurozone. The nineteen members of the eurozone are grouped around the Franco-German tandem and the other founding states of European integration. Some Western European member states from the pre-1989 period, like the UK and Denmark, consciously chose not to take part in this new adventure, at least not in its entirety. In that sense, the EMU represents a new watershed in the integration process. As in 1951, with the signing of the ECSC treaty, the founders of European integration have once again taken the lead since the signing of the Maastricht Treaty, followed by Ireland, Portugal, Spain, Greece, Austria, Finland, Slovenia, Malta, Cyprus, Estonia, Latvia and Lithuania. Is that euro lead group really taking the lead? Or have the founders of the EMU project taken a wrong turn, seduced by false analogies with European projects of the past? Historically speaking, the EMU is largely unknown territory. There is no material for comparison. It is an unknown form of international cooperation. But one thing is certain: the development of the euro and the EMU will be decisive for the future of the EU and the member states in the eurozone. The Netherlands is a member of the eurozone. That means that Dutch reality is European reality. How should we define that reality? The project that the six founders of the ECSC set in motion in 1950 and continued with the signing and ratification of the Treaty of Rome in 1957 seems to have changed radically. During the post-1990 period, the number of participants in the integration process more than doubled with the successive enlargements of the EU in 1995 (to include the former EFTA members Austria, Sweden and Finland), in 2004 (Poland, Hungary, the Czech Republic, Slovakia, Slovenia, Estonia, Latvia, Lithuania, Cyprus and Malta), in 2007 (Bulgaria and Romania) and in 2013 (Croatia). What does this mean for the future of European integration? Is this extensive enlargement a source of vitality or a classic case of overstretch and thereby the beginning of the end of the post-war ‘empire’ of European integration?2 2 Norman Davies, ‘Old Europe and New Europe: A historical perspective’, 1 December 2011, Polish Embassy, The Hague.

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To assess the possible opportunities and threats for the Netherlands within these new European realities – dominated by the EMU, the euro and enlargement – it is first necessary to acquire some insight into the processes that have led to Europe and the Netherlands being in the positions they are in today. Not so long ago, the euro was predominantly seen as the new driver of European integration. But since the European debt crisis, that has changed. Belgian politician Herman van Rompuy described the euro during his term as president of the European Council as the ‘sleeping pill’ that had kept the EU immersed in self-satisfied inertia during the 1990s and the first decade of the new millennium. That fin-de-siècle state of mind had to derail at some point. Its most obvious manifestation was the lack of budgetary discipline of the member states. That is the new version of events. Many have echoed Van Rompuy, in particular the Netherlands. According to former Dutch Prime Minister Wim Kok, the euro did initially have a tranquilising effect. Prominent euro-watchers often go a step further and speak of a historic ‘error’.3 Perceived construction faults in the Maastricht architecture are now having to be repaired under great pressure. That is complicated. Ideals, technical blueprints and national interests are clashing violently. Vested interests are coming under f ire, the institutional equilibrium is being disrupted, and the consequences of rescue operations remain difficult to assess. The result is a political drama of the first order. 4 That attracts a great deal of attention and causes all kinds of excitement, but generally generates little genuine understanding. On that point, the history of European integration repeats itself continually. European discussions, debates and negotiations are as coloured as ever by hard and simple divisions and the ‘religious doctrines’ that go with them. In that respect, nothing has changed since the days of Monnet and De Gaulle (see chapter 5). The greater the uncertainty, the more unequivocal the dogma and the simplicity of explanations of the conspiracy. Now, too, the political debate on Europe is often reduced to a ‘conflict of faith’ between Europhiles and Eurosceptics. But, as before, this is a world of pseudo-clarity. In Europe, little is what is appears to be – and that has not changed. The euro was probably not a sleeping pill, an error, or a new driver of integration 3 ‘Van Rompuy: “Euro was lang een slaappil”’, Knack, 12 December 2011; Janssen, De euro, p. 93; ‘De euro was een vergissing’, NRC Handelsblad, 2/3 June 2012. 4 See Martin Visser, De eurocrisis: Onthullend verslag van politiek falen (Amsterdam: Business Contact, 2012).

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and progress. Yet what the European currency actually is, on the other hand, difficult to say. That is to a significant degree because the answer to a core question about the history of post-war Europe is also still veiled in mist: to what extent was and is the ‘Europeanisation’ of post-war Western European nation-states decisive for the emergence and development of capitalist welfare states within those same national borders? Researchers who focus on European integration still have little understanding of what is perhaps the core of the integration process: the political processes that have brought governments to build multilateral constructions that curtail the freedom of movement of those same governments to an unprecedented degree. To date, social science has not yet even started to explain how this ‘creative process’ of building, dismantling and modifying institutions worked and continues to work. That is not so strange, given that the social sciences takes as its starting point the nation-state and intergovernmental cooperation between nation-states. And that perspective has proved time and again to be of limited value in analysing the multilateral reality of the European integration process.5 The quest to understand the current crises also repeatedly shows just how great the mismatch between existing explanations for European integration and European reality continues to be. This only increases the confusion and lack of clarity. What is as good as certain, however, is that movement is inevitable; what we do not know is in which direction.6 It is this uncertainty that keeps determinism and extreme objectives (federation or nation-state?) alive and well in the political and public debate. On the basis of the history of European integration, however, there is more to be said on the direction in which the process is moving and the consequences that has for the Netherlands.

The direction of integration The more historical research on the history of European integration that becomes available, the clearer it becomes that the direction in which the 5 Orfeo Fioretos, Creative Reconstructions. Multilateralism and European Varieties of Capitalism after 1950 (Ithaca, London: Cornell University Press, 2011), p. 9. 6 See Erik Jones, ‘The economic mythology of European integration’, Journal of Common Market Studies Vol 48, Issue 1 (January 2010): 102.

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integration process has moved has often come about through the unintended consequences of European political processes.7 In other words, no one initially conceived of or intended integration to move forward as it has. The form it has taken has almost always been ad hoc, something that belonged to no one, or rather to everyone, depending on the circumstances and the spirit of the times. European integration is in the first place the unexpected outcome of clashing viewpoints, ideas, plans, blueprints and coincidences, none of which were strong enough in themselves to dominate the historical development of the process. The 1970s and 1980s were of crucial importance for the development of the EMU and the euro. And yet these years have not gone down in history as a period of creation and renewal in Europe. On the contrary, historians of the integration process see these two decades as a period of paralysis and stagnation, of eurosclerosis. This interpretation is widely accepted: after all, in those years, no new treaties were concluded, and the integration process was plagued by failures. Few doubts are expressed about the correctness of this view, though perhaps they should be. The fact that many initiatives resulted in semi- or complete failure and that much less attention was devoted to political ideals and ambitious, long-term visions does not mean to say that there was stasis. Revisiting the Netherlands’ European policy in those two decades produces a different picture (see chapters 6 and 7). In the 1970s and 1980s, the Netherlands was regularly at the forefront of plan-making in the transnational world of financial-economic and monetary policy technocrats. With their reputation for rational and orderly thinking and instrumentalism, representatives from The Hague and Amsterdam made a good impression in these circles. The input from the Netherlands was often sophisticated and sometimes even unorthodox. This Dutch activism was not coincidental: in this hidden policy world, other rules applied than in everyday politics. In fact, the banality of the latter was held passionately at a distance – at least, so it appeared. And that image was reinforced by the inability or unwillingness of European political leaders to gain greater control over the complex multilateral policy practice of Europe’s monetary economy. That had consequences for European integration. Much more than ministers or heads of government, it was technocrats at the ministries of the member states, the central banks and the European Commission who were working on the future of the integration process through transnational 7 Paul Pierson, ‘The path to European integration: A historical institutionalist analysis’, Comparative Political Studies, 29, 2 (1996): 123-163; Segers, ‘Preparing’.

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and European policy networks, quite often without being fully aware of doing that. While in European political circles, there were complaints about eurosclerosis, the policy laboratory of the Europe of the EMU and the euro had been working overtime long before 1989. That had nothing to do with a conspiracy but was more a response to urgent policy problems. The root cause was clear: with the end of the Bretton Woods system, a new European system had to be found to replace it if the common market was to be secured for the future. Few people knew of the policy laboratory’s existence and the plans that were forged there. Even fewer realised the potential impact of these activities. That awareness had simply not yet developed, not least among the technocrats themselves, fully engrossed in tackling brain-addling technical issues as many of them were. On top of that came the fact that, at that moment, the recent history of the integration process called for a certain humility when it came to making plans that went any further than ad hoc solutions to keep the European project on the rails. In light of the series of far-reaching attempts in the 1950s and 1960s to give European integration a political aspect alongside its economic dimension, the following two decades were indeed a period of marking time. This was – and still is – explained by two developments. Firstly, there were the practical and psychological repercussions of the intergovernmental corrections to the integration process, which De Gaulle had worked so hard to bring about (resulting in the Luxembourg Compromise in 1966; see chapter 5). The second influential factor was the burden of the British question. That burden was first exacerbated by the divisive effect of De Gaulle’s ‘vetoes’ against British accession (in 1963 and 1967). And it was not made any lighter after the UK acceded to the community in 1973, because the British retained a deep aversion to everything that smacked of supranational integration. That the Six failed to achieve a ‘political Europe’ before Britain acceded in 1973 could, according to disillusioned European Commissioner Robert Marjolin, mean nothing less than the end of the European ideal (see chapter 6). Marjolin’s conclusion proved in many respects more realistic than melodramatic. European integration indeed changed after Britain’s accession, moving more and more in the direction of that one founder among the Six that had so far recognised its own ambitions the least in the whole project – the Netherlands. After Britain joined in 1973, it became much easier for Dutch European policy to identify with European ambitions. But that moment of ‘Netherlandisation’ of Europe may have come too late. Compared to the 1950s, when

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the Netherlands had been unpleasantly surprised by the continental and Franco-German form that multilateralism in Western Europe had taken, the country had itself become considerably more ‘continental’. It was inextricably riveted to the West German economy and the Deutschmark. Parallel to that development, the Netherlands had become an increasingly genuine proponent of supranational cooperation and supervision, also following West Germany’s lead. That represented a rigorous change of course in Dutch European policy. This new European purification on the part of the Netherlands remained a secret. There was no great need to make it public. In fact, it was better not to do so (as it still is).8 The fact that circumstances had moved the process more in the Netherlands’ preferred direction also made it unnecessary. It was better for the country to count its blessings in private. In addition, European political debates had now become moderate enough to remain silent on the change of course in a more ‘Dutch’ direction. High-flown ideologies and ambitious vistas were, after all, increasingly out of fashion. The Netherlands’ European conversion was underscored by the Maastricht Treaty: the country participated wholeheartedly in this risky EMU enterprise. There was never any doubt about the decision, even though the UK and Denmark were much less enthusiastic and demanded the right to opt-out of the EMU treaty. The British refusal to go along with the rest on the road towards a single European currency was the prelude to Brexit. The crisis management surrounding the euro after 2011 widened the gap between the UK and the process of European integration. In London, efforts to control the crisis were seen as defining actions. The Cameron government warned that they placed the ‘integrity of the internal market’ in jeopardy, making British membership of the EU even more problematic. In the runup to the referendum and during the negotiations on the ‘Better deal for Britain’ – Cameron’s strategy for ‘Bremain’ prior to the referendum – the British government once again made it unambiguously clear why British EU membership was becoming increasingly problematic: the eurozone had developed into a closed bastion at the heart of the internal market, especially in terms of financial services and financial-economic policy. Non-euro member states were being pushed into the background, which was not acceptable to Britain.9 That led to the Brexit experiment in which the UK and the EU are currently still embroiled. The UK’s current Brexit course is, however, not the unimaginable shock that it is often presented to be. In actuality, after a little less than twenty 8 9

See Visser, De eurocrisis, p. 12. George Osborne, Speech to the BDI conference in Berlin, 3 November 2015.

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years of membership, Britain already took a step away from Europe in 1992 with its opt-out from the Maastricht Treaty. That was a very conscious choice. Margaret Thatcher’s confession that placing her signature under the Single European Act in 1986 was her greatest mistake was genuine self-reproach (see chapter 8). And Thatcher was not the only one in the UK who felt that way. After 1989, people in the UK often saw signs in the EU that fed their fear of a ‘German Europe’ rather than the ‘European Germany’ that Chancellor Helmut Kohl was trying to sell to the world.10 The United Kingdom decided to distance itself from this Europe. This made the years from 1973 to 1991 a limited exception of f ifteen years in the history of European integration which, since 1950, has spanned more than six decades. This observation is important in understanding the ‘how’ and ‘where’ of the Netherlands’ European policy, as it was during that exceptional period that Dutch europhoria was at its height. In those years, the Netherlands even felt itself to be at the centre of European history. That was perhaps not coincidental, just as it is perhaps less strange than it might seem that the Netherlands’ enthusiasm of that time has since been reversed. In this light, the recent outpourings of Dutch euroscepticism have much more to do with the Franco-German mechanisms that have been in operation since the early days of the Six than with enlargement of the EU, revelations about malpractices in Brussels, refugees and migrants, or discussions about Turkish accession, as is often suggested. What it is all about is that the Netherlands’ efforts to promote and preserve the Atlantic community, in whatever form, are eventually always doomed to failure. The brutal geopolitical reality is that the Dutch ‘gateway to Europe’ is jammed in between the UK, France and Germany. That is a Bermuda triangle of political rivals in which the Netherlands’ European ambitions are swamped if they are not sufficiently synchronised with the power relations between the big three. In other words, the closer Dutch European policy is tailored to that of France and Germany – and, increasingly, that of Germany – the more ambitious, successful and influential it can be. Fortunately, that was quickly realised after 1945 in terms of practical economic policy. Unfortunately, it was long denied at the psychological level. The Netherlands is now in the middle of the period of disillusionment that was destined to follow the ‘Brexit of Maastricht’, the British opt-out of the EMU. Pretending that there was no need to choose between a ‘British’ and a ‘German’ Europe was certain to cause the country a serious headache. 10 See Frits Bolkestein, Grensverkenningen: Dagboek van een eurocommissaris (Amsterdam: Bert Bakker, 2005), pp. 82 and 130.

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The acceleration of history in 1989 demanded at the very least that the Netherlands gave some thought to the fundamental choice that now presented itself unexpectedly for the second time, since 1950/1951. But almost nothing came of that, as is illustrated by the Netherlands’ position on two of the core questions of European integration in the past two decades: the institutional architecture and enlargement of the EU.

The 1990s and after After ‘Maastricht’, the Netherlands bobbed along willingly on the intergovernmental waves that dominated the discussion on the EU’s institutional architecture after the most recent failure of the EPU. That tendency manifested itself most clearly in the Open Method of Coordination (OMC): peer pressure based on legally non-binding guidelines. This solution was devised when the discussions on Europe’s institutional future, in light of the EU’s imminent enlargement, became more and more bogged down in the political problem of voting rights in the Council of Ministers and the European Parliament. The process reached its less-than-flattering zenith in the quarrelsome negotiations that eventually led to the extremely complex Treaty of Nice in 2000. ‘Nice’ signified a strengthening of intergovernmental forces, a process that had already been set in motion with the Luxembourg Compromise in 1966 and symbolised the new Europe of summit conferences that would often proceed chaotically.11 The Netherlands had – and still has – few objections to this modus operandi. From the end of the 1990s, the EU was dominated by OCM. The method formed the core of the Lisbon Strategy, agreed in 2000. The Strategy aimed to ‘make Europe, by 2010, the most competitive and the most dynamic knowledge-based economy in the world’.12 That aim was primarily to be achieved by developing the more socioeconomic aspects of the EMU (which had not come to maturity in the Maastricht Treaty). Consequently, in the mid-1990s, the processes of Luxembourg (on employment policy), Cardiff (on macroeconomic policy), Cologne (on social dialogue) and Lisbon (on innovation and social cohesion) were all designed according to the principles of OCM. Dutch European Commissioner Frits Bolkestein called OCM ‘VVD policy’, after his own liberal party.13 11 Van der Velden, De Europese onmacht, p. 96. 12 Conclusions of the Presidency, Lisbon European Council, 23 and 24 March 2000. 13 Bolkestein, Grensverkenningen, p. 66.

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EU enlargement and the OCM went hand in hand. Just as the Netherlands had no problems with the latter, it had no objections to the former either. Enlargement meant an expansion of the market. Lubbers later described the link between the intergovernmental trend and enlargement as follows: ‘we went for enlargement with new member states, rather than for deepening of the existing EU, a “solid, well integrated union” was not “a priority”’.14 In other words, the British view of expansion of the market and no supranational integration prevailed in the Netherlands. Under the ‘purple’ government coalitions of the PvdA, the VVD and the D66 (1994-2002; named purple due to the combination of social democrats [red] and liberals [blue]), the Netherlands took the lead, together with Sweden and the UK, in calling for a market with a minimum of restrictions, with France and Germany bringing up the rear. But, at an earlier stage, another Dutch politician had already made his mark in favour of a quick and extensive enlargement of the EU by embracing the countries of Central and Eastern Europe. In the second half of 1992, Dutch European Commissioner for Foreign Affairs Frans Andriessen had already tried to persuade his colleagues in Brussels in a memorandum that the upcoming European Council in Copenhagen in June 1993 should hold out the prospect of full membership of the EU to the countries of Central and Eastern Europe. The memorandum had been an important step in the process of decision-making on enlargement in Brussels. Until then, France together with Commission President Jacques Delors had been reasonably successful in preaching caution, association (rather than full membership) for the candidate countries, and a longer-term perspective. With his memorandum, Andriessen had ensured that, in the run-up to Copenhagen, enthusiasm for enlargement had been given a boost by the Danish presidency, the secretariat of the European Council (then also, by coincidence, a Danish stronghold) and (of course) the active British pro-enlargement lobby. This enabled a good feeling about enlargement to gain the upper hand.15 The 1993 Copenhagen summit would mark the start of a political process that would come to culmination during the European Council in the same city in 2004 in the form of the ‘Big Bang’ enlargement. At that time, few voices were raised in the Netherlands objecting to this historical development. In light of the history of Dutch European policy, the rather cavalier fashion in which the Netherlands went along with the latest trends in integration in the 1990s was probably still deeply rooted in the pragmatic indifference to 14 Janssen, De euro, p. 65. 15 Peter Ludlow, The Making of the New Europe (Brussels: Eurocomment, 2004), pp. 14-28.

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the process that so often typified the country’s approach to Europe. However, given the radical nature of the new developments (EMU, enlargement) and the central role the Netherlands played within them, indifference was a somewhat strange position to take, to say the least. After decades of a benevolent lack of interest, the people of the country now demanded an explanation. Their main concerns were with the euro. The monetary union seemed to be under serious threat from collective exploitation, driven by member states whose ability to participate in the common currency was questionable to say the least. And, as if that ordeal were not severe enough, the EU countries in Central and Eastern Europe were already chomping at the bit to join the EMU. This tumultuous situation had been too much for the orderly Dutch mind to cope with for some time. How could the Netherlands have found itself participating in a monetary union in which it did not seem to belong? The people wanted an answer but were also afraid of the answer they might get. The Netherlands’ current position in Europe can be brought back to two factors. In the first place, it is a consequence of the country’s economy being linked to that of Germany, a tie that was steadily strengthened from 1950 within the framework of European integration. Secondly, it has its roots in the period from 1973 to 1988 during which the Netherlands emerged as an advocate of two European issues: supranational integration and the free movement of capital. Initially, the two issues did not seem to have much in common. The first was a political ambition that built on the strategic ‘supranationalism’ of Joseph Luns in the 1960s, which was intended to frustrate political integration under Franco-German leadership (see chapter 5). The free movement of capital was an Anglo-Saxon goal that seemed to be limited to the technocracy of the common market. Against the background of Reaganomics and the successful revitalisation of the British economy under Thatcher, Dutch policy experts soon saw opportunities in liberalising capital. Western Europe, too, ultimately had to participate in the post-Bretton Woods world – a world in which money supply was decreasingly controlled at the national level (see chapter 6) and in which commercial financial services and the financial markets played a much more prominent role. There was growth in the new markets created in this world, and the Netherlands was traditionally well-represented and well-positioned in new markets like these. When Delors started to promote the EMU in the mid-1980s as a major new step towards European integration and placed the project in the broader context of completion of the single market (‘Europe 1992’), the two issues for which the Netherlands was willing to go to great lengths to promote in Europe – more supranationalism and free movement of

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capital – came together in the EMU project. The Netherlands could not possibly be opposed to that. The question then was not whether the Netherlands would help bring the EMU to fruition but how. In the mid-1970s, the country had left the noticeably more restrained West Germany behind in many EMU dossiers. The West German fear of the erosion of price stability and concern for the survival of the Deutschmark was only shared here and there in The Hague and Amsterdam. That was underscored by the Spierenburg Report (1975) and the Duisenberg Plan (1976). The Germans saw little value in those far-reaching plans for a supranational EMU (see chapter 7). For the financial-economic elite in Frankfurt and Bonn in particular, it was going much too far: they considered such initiatives badly thought through and reckless. It was equal to messing with the Krönungtheorie, which had been the major brake on the EMU lobby. In their view, the EMU should be the end point of economic convergence and far-reaching political union, or it should not happen at all. The latter was most realistic, as the differences between the EMS economies were simply too great and EPU plans too controversial. No economic theory could stand up against that reality. The fact that their partners in the Netherlands seemed much more receptive to the newest trends was disappointing to the West German financial-economic elite. Prudent monetary policy, price stability and the Krönungstheorie were not up for review. For many West Germans, they were sacred dogmas – and still are to a significant extent. They were seen as the best way to rid themselves, once and for all, of the trauma of Weimar. But the German financial-economic elite was wrong. Entrenched in the mighty Bundesbank, they took insufficient account of the vagaries of politics and history. When Delors presented his report in the spring of 1989, the pragmatic Dutch proved to have been ahead of their time. In the European monetary policy of the future, West German principles would be mixed more with the workings of the market according to the Anglo-Saxon model. Price stability and the workings of the market would act like communicating vessels. It was no surprise that, of all Europeans, it was mainly the Dutch that were aware of this trend. Duisenberg had not tried to obstruct the Delors Committee, as his West German and British colleagues had done. The West Germans had opposed Delors’ EMU plans because, in their eyes, they were too political and too Keynesian (and thus did not take the sacred principles of apolitical West German monetary policy seriously). The British found the plans too supranational – relinquishing the pound in favour of a European currency was unthinkable, and every suggestion in that direction was in their view ridiculous (see chapter 8).

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The tragedy of the Netherlands’ position was that it lost its lead in the EMU dossier when Kohl and Mitterrand took the forefront in the EMU project and, instead, found itself lagging behind. That happened during the French European presidency in the second half of 1989, the period in which the Berlin Wall fell (see the prologue). The Dutch response to these developments was typified by a series of unfortunate developments, which was humiliating for the Netherlands’ European policy. At the Ministry of Finance, there was by now an awareness that the EMU might be placing vital Dutch interests at stake. That was a little on the late side, as is clear from the feverish but futile efforts of the Dutch financial-economic elite to find ways of putting the brakes on the EMU train after the unanimous Delors Report had been presented. In addition, the Dutch business community continued to support monetary union, as the trade opportunities were too promising, and although little was known about how it would affect Dutch pensions, it was assumed that the impact would be limited.16 Not much later, Prime Minister Ruud Lubbers snubbed the Netherlands’ most important partner in the EMU dossier by openly and repeatedly taking Thatcher’s side on the issue of German reunification. In the subsequent discussions and treaty negotiations on the EMU, however, the Netherlands sided against the UK. And when it took over as European president, the Netherlands committed a serious faux pas by launching far-reaching supranational plans for European political union that were completely out of the question in diplomatic terms. That this could all have been managed much better is clear. The fact that a treaty was ultimately signed in Maastricht was more despite rather than because of Dutch efforts. But whether, by acting differently, the Netherlands could have influenced developments sufficiently to have brought about a substantially different outcome is doubtful. All things considered, that might only have been possible by following Thatcher’s example on the EMU dossier in addition to – or possibly, rather than – supporting her on German reunification. In that scenario, the Netherlands could have insisted on an opt-out in the EMU treaty, like the UK. It is unclear and highly doubtful, however, whether this would have served Dutch interests better. What this unfortunate state of affairs did damage unnecessarily was support for European integration among the Dutch public. For the West 16 See: NA, 2.21.400 (Archive Frits Bolkestein), 66/67, including Szász to Bolkestein, 7 and 30 June 1997 and 10 September 1997, DIE memo, Minister for European Affairs via DGES and the Secretary-General of the Ministry of Foreign Affairs, 16 July 1997 and Ministry of Finance, ‘Start derde fase EMU’, 1 September 1997; Janssen, De euro, pp. 105-137.

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Germans, it would become clear why they had to give up the Deutschmark: the history of Auschwitz and Yalta demanded this sacrifice to secure peace in Europe. But why should the Dutch relinquish the guilder? Purely because the Germans had given up their currency? That answer was not only unsatisfactory but also rather bizarre, given that same history. During the 1990s, however, Dutch political leaders proved unable to initiate a discussion on this issue. It was mainly kept under wraps, as had so often been the case with important themes relating to European integration. Explanations of the Netherlands’ participation in the EMU and the euro focused invariably on the market and the treaties, two safe constants in Dutch attitudes towards Europe. Both would, however, prove to operate differently in the European context than was to be expected from the Dutch viewpoint. The result was that the Netherlands twice had to deal with the bitter disappointment of seeing its simple vision of European cooperation, which had become commonplace in Dutch politics and society, destroyed by indifference. The first disillusionment came in 1999 when the EMU, against all Dutch hopes and expectations, was launched with a large group of participating member states, including Italy. The second was the crisis unleashed when France and Germany exceeded the 3% norm of the Stability and Growth Pact (SGP) in 2003. Both events are at the root of much current Dutch dissatisfaction with European integration.

The tragedy of Maastricht and Amsterdam In 1999, the EMU became operational, with a large group of member states. That was against all expectations, at least in the Netherlands.17 In addition, prominent economists had explicitly advised starting with a lead group clustered around Germany. They understood the substantial benefits that the EMU could bring, such as an end to currency crises and reducing transaction costs. That was all good news for the single market. But they called attention to studies from the early 1990s, which were generally unanimous about the composition of the EMU. They advised that the group of member states whose currencies were closely tied to the Deutschmark was more suitable than a currency zone that included southern EU members like Italy, Spain and Greece.18 17 Alman Metten and Bart van Riel, De keuzes van Maastricht (Assen: Van Gorcum, 2000), p. 27; Janssen, De euro, pp. 71-105. 18 See also Paul de Grauwe, Economics of Monetary Union (Oxford: Oxford University Press, 2003), pp. 82-85.

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In Delors’ Brussels, however, they had other ideas. The motto there was ‘one market, one currency’. The rationale behind this could be traced back to the trilemma of monetary policy (see chapter 7): the free movement of capital in the European single market (inherent to ‘Europe 1992’) would force a choice between floating exchange rates or the EMU. That choice had already been made in Maastricht and, in the eyes of those in Brussels, it was the only correct one: Europe chose to go with the EMU. Greater monetary unity would have a stabilising effect on the single market. But that required the economies of the soon-to-be EMU member states to adapt to, and prepare themselves for, the moment at which domestic economic policy based on exchange rates would no longer be possible. The European Commission was optimistic about that. The adjustments would take place automatically, simply because the EMU left no other alternative. The same reasoning was applied to the perhaps even more important preconditions for far-reaching trade integration, for example a better integrated European market for services and labour. Just how problematic it would be if that trade integration was in some way insufficient was unknown. Only the future could make that clear. Ultimately, the vision of the future was more a matter of faith than anything else.19 The financial-economic elite in Netherland very rapidly lost its belief in the EMU in the 1990s, for two main reasons. In the first place, under the influence of Kohl and Mitterrand, the project had become far too political for their tastes. In the Maastricht Treaty, the EMU had been thrown too much at the mercy of interstate power relations within the EU. In other words, the EMU was not supranational enough and had become too much an issue for the political decision-making processes in ECOFIN, the council of European finance ministers, where the bigger member states had the upper hand. It was only the European Central Bank (ECB) that had eventually emerged unscathed from the wild Franco-German dance of reconciliation of 1989-1991. Kohl may have attracted all public attention at the time, but later, when it was time to draw up the balance for the EMU, it became clear that it had been the French that had really taken the lead. The only area in which they had failed was the design of the ECB. Thanks to the tenacious demands of the German experts, the ECB had been kept at a safe distance from politics: independent, supranational and exclusively focused on price stability. It was a miracle of pure technocracy in the midst of the as yet incomplete EMU, but it was also an exception. As awareness in the Netherlands grew 19 Mathieu Segers and Bart van Riel, ‘De weeffouten in de EMU’, Openbaar Bestuur, 22, 11, November 2012 (Kluwer), pp. 2-7.

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of the dance that was being performed in the EMU and to what extent France and Germany were the choreographers, concerns about the whole project increased. The second reason why Dutch experts lost their faith in the EMU was equally familiar. Despite the apolitical purity of the ECB, the EMU – as envisaged in the Maastricht Treaty – was in essence monetary. That meant monetary union first and the rest (economic convergence, the EPU, etc.) later. To a significant extent, that was because the starting date for the EMU on 1 January 1999 was set in stone. Kohl had granted Mitterrand this concession right at the last minute in Maastricht (see chapter 9). In combination with the explicit irreversibility of the starting date, it also meant that the EMU would be achieved by political decision rather than on the basis of economic convergence. There was great aversion to this in the Netherlands. It had been known for a long time that there was only one antidote to the dreaded monetary machinations: adhering unambiguously to the Krönungstheorie. In the reality of the Maastricht Treaty, however, the Krönungstheorie had lost some of its lustre. Falling back on it after having signed Maastricht signified an irrevocable, defeatist strategy. Yet that was precisely what the Netherlands did, and the German financial-economic elite did exactly the same. It led to a northern European fixation on the convergence criteria. If the EMU could no longer be stopped, it was important to at least ensure that no economically unsuitable countries became part of it. During the negotiations on the Maastricht Treaty it was Wim Kok, then minister of finance, who eventually consented to the inclusion of an end date in the treaty. He did not do that without reason. It was also agreed in the treaty that, if a majority of countries had not complied with the EMU criteria by the end of 1997, the third phase of the EMU would start in 1999 with only those countries that did meet the criteria. This was interpreted in the Netherlands at the time as meaning a lead group with Germany at its centre. And that would be an ideal scenario. The convergence criteria were the key to making this scenario a reality. They were drawn up in such a way to keep economically unfit countries outside the EMU door. The stricter the criteria were, and the stricter they were applied, the greater the chance that the EMU would consist of a small and select group of economically strong countries in northern Europe.20 The f ixation with the convergence criteria, however, proved insufficient to change the design of the EMU decisively. In addition, from the perspective of economic theory – and Mundell’s OCA theory in particular 20 Janssen, De euro, pp. 82-83 en 105.

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(see chapter 7) – there was something ironic about the northern European obsession with convergence. The strict criteria for accession to the EMU, which the Netherlands and Germany wanted so much, were primarily focused on the macroeconomic indicators for each member state. These included low inflation, limited budget deficits and exchange rate stability – each one of which was an important factor in the future stability of the euro. But the obsession with the prospective membership of certain southern European countries may have reduced awareness of the EMU as a whole. The degree of trade integration – the hard core of Mundell’s OCA theory – was, for example, not among the accession criteria. That meant that trade imbalances were no longer taken into account when considering candidate members for accession. And the desirability of greater fiscal harmonisation or integration – something that Kohl had been so insistent about in his exchange of letters with Mitterrand at the end of 1989 (see prologue) – also disappeared into the background. Dutch and German efforts to make the convergence criteria as strict as possible came up against the limitations of the Maastricht Treaty immediately after it had been signed. The most important omission proved to be the EPU. More supranational supervision was needed to make the convergence criteria genuinely enforceable. Some form of political union or other would therefore probably prove indispensable.21 There was good reason why, after the treaty had been signed, the Bundesbank had declared the EPU ‘of key importance […] for the permanent success of monetary union’.22 The EPU was now the only remaining route to keep a tight and more automatic hand on convergence. But the EPU route was not a simple one, because it would entail breaking open the EMU treaty. Nevertheless, that was what German Finance Minister Theo Waigel tried to do repeatedly in the early years after Maastricht. His efforts were based on what he called the ‘revision clause’ in the treaty: the agreement that a follow-up Intergovernmental Conference (IGC) – i.e. supplementary treaty negotiations – would start in 1996. That clause was included in the treaty because the parallel development of the EMU and EPU had been abandoned in the negotiations on Maastricht (and only the EMU was established). The German financialeconomic elite held tight to this prospect.23 Revisions to the treaty would enable them to salvage what was salvageable. 21 Segers and Van Esch, Behind the Veil, p. 1101. 22 Deutsche Bundesbank, ‘The Maastricht Decisions on EMU’, Monatsberichte der Deutsche Bundesbank, February 1992. 23 See Hans Tietmeyer, ‘The relationship between economic, monetary and political integration’ in Age Bakker (ed.), Monetary Stability through International Co-operation (Amsterdam: Kluwer, 1994).

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The German attempts to take advantage of the IGC preceding the 1997 Treaty of Amsterdam to revise the treaty would, however, prove futile. The EPU revisions would never materialise. In the mid-1990s, after EMU and enlargement, not a single member state was keen to set out on another major European project. And if there was one member state that had really had its fill of EPU adventures, it was the Netherlands, the country under whose presidency the follow-up IGC had to be brought to a satisfactory conclusion. The memory of Black Monday in September 1991 was still fresh (see chapter 9). And, as of this moment, no one – including the Bundesbank – knew exactly what form political union should take. All the Netherlands could do was work with the results of Maastricht. That proved to be an unfavourable starting point. The Dutch and the Germans had failed to get the quantitative norms for budget deficits and the associated sanctions sufficiently included in the treaty. The ‘excessive government deficits’ procedure in the Maastricht Treaty (article 104c) may have been based on quantified norms for budget deficits and the debt quota of member states (3% and 60% respectively), but during the final phase of the negotiations, the norms were ‘dynamised’ under pressure from French and Italian counterproposals. Among other things, that meant that deficits above 3% could be acceptable if they were defined as ‘temporary’ or ‘exceptional’. In addition, it was agreed that the ECOFIN should decide on when these definitions applied on a case-by-case basis. In short, if the situation became really serious, the deficit procedure could be decided on by the member states. The ECOFIN was also authorised to decide on sanctions. That required majority voting, whereby vetoes were not possible. The excessive deficit procedure was therefore by no means the instrument of automatic supranational supervision that it was often taken to be. The role of the European Commission remained limited to assessing the performances of the member states against the quantified criteria and making sure the procedure was applied. Such politicisation of the excessive deficit procedure by giving the ECOFIN a decisive role was exactly what was unacceptable to Waigel, the Bundesbank and the Netherlands. That ‘design fault’ could have been repaired in the implementation treaty due to be signed in Amsterdam in the summer of 1997. On 10 November 1995, in anticipation of that treaty, Waigel had launched his Stability Pact for Europe, the core of which was to tighten up the rules in Article 104c. The Waigel Plan reduced the permitted budget deficit to 1% in the medium term and limited the debt quota to less than 60% of gross domestic product (GDP) for member states in the third phase of the EMU. They also addressed enforcement of these rules: any violation of the norms should be followed by

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automatic sanctions, i.e. without the ECOFIN being involved. This should all be carried out under the supervision of an independent Stability Council. As it was not possible to implement the plan within the existing treaty texts, it would require a supplementary treaty between the participants in the third phase of the EMU, a kind of ‘monetary Schengen’.24 The Waigel Plan was not well received. Together with a majority of more or less like-minded countries, France rejected Waigel’s proposals, which were seen in Paris as excessive statistical fetishism on the part of German technocrats. The Commission, which was of course not in theory opposed to tightening up Article 104c in a way that gave it a central role, was nevertheless less than positive. The feeling in Brussels was that Waigel was being provocative with his Stability Council. In reality, only one person was genuinely enthusiastic about the Waigel Plan, and that was Dutch Finance Minister Gerrit Zalm. In Europe, Zalm wore his heart on his sleeve. He spoke openly of his desire to bind the Latin member states to the Procrustean bed of northern financial-economic discipline. If they were too squeamish to take that step, that was their loss and, in the minister’s eyes, they should be disqualified for the EMU. This openness made Zalm very popular at home but did not make his ambitions any more realistic. That was partly due to the European policy of the government he served, the first ‘purple’ coalition under Prime Minister Wim Kok. Zalm’s enthusiasm for the Waigel Plan was subordinate to Prime Minister Kok’s main priority. The Netherlands had learned from the state of affairs around the Maastricht Treaty and from Black Monday in particular. Kok’s priority was simple: the Treaty of Amsterdam had to be a success, not only for the EU as a whole but also for the Dutch presidency. With that in mind, Kok focused solely on objectives that were definitely feasible. And that meant, in any case, no additional treaties. And that, in turn, meant that the Dutch presidency was not prepared to stick its neck out for the Waigel Plan, no matter how much The Hague sympathised with its proposals. That sealed the plan’s fate since, if anyone were to go along with it, it would be the Netherlands. With the option of a new treaty off the agenda, the discussion concentrated on a further elaboration of Article 104c. Waigel fought for hard words and even harder figures in the elaborated text. But the final version was based on a Belgian compromise that tried to reconcile Waigel’s standpoint with that of the classical monetarist (Mediterranean) coalition led by France 24 Segers and Van Esch, Behind the Veil, p. 1102.

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and the Commission. That compromise was supported by the Netherlands and was the basis of the conclusions of the European Council in Dublin on 14 December 1996. These conclusions were the prelude to the Stability and Growth Pact (SGP).25 In essence, Article 104c remained as it was, and the excessive deficit procedure was specified in greater detail in two directives (rather than in a supplementary treaty). At the European Council in Amsterdam on 16 and 17 June, the SGP was adopted in the form of a resolution. In the resolution, the Council referred to the treaty obligation to prevent excessive deficits but added that the member states retained the responsibility to fulfil this obligation. The Commission’s role remained limited to implementing Article 104c, which boiled down to gathering information and drafting progress reports. The ECOFIN retained the authority to make the final decision on the procedure, as specified in the treaty, and to impose the associated sanctions. In addition, the ECOFIN could deviate from the deficit procedure if a qualified majority of the council members agreed that the member state that was exceeding the permitted norms was faced with special circumstances, or that the excessive deficit had been rectified. If the ECOFIN decided ‘not to act’ on a recommendation from the Commission, it would give reasons for its decision. At its best, the SGP was nothing more than a gentlemen’s agreement between the finance ministers of the eurozone, based on the awareness that free riding at the expense of the common currency project – benefitting from the stability of the euro without linking national budgetary discipline to it – was not good sense. At its worst, budgetary discipline in the future eurozone would become a factor in political horse-trading – something that had been clear from the outset. The fact that Germany gave the impression of never interpreting the rules in any other way than according to a strict quantitative reading of the procedure made little difference. In light of Germany’s seriousness on this point, it seemed to the Netherlands unthinkable that there would ever be a qualified majority in the ECOFIN in favour of suspending or deactivating the deficit procedure, not to mention Germany ever helping to achieve such a majority. It therefore seemed practically without risk for Zalm to embrace the SGP as the love child of the successful and realistic Dutch EU presidency of 1997. But, as was to become clear in 2003, historical circumstances are too fluid to be captured in figures or pledges. In that year, the government of Chancellor Gerhard Schröder (a coalition of the SPD and Die Grünen) invoked the special circumstances clause in het 25 Metten and Van Riel, De keuzes, p. 117.

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SGP, referring to the costs of German reunification, which had pushed the national budget deficit above the 3% limit. In the ECOFIN, Germany found a sympathetic ear among the French and others who also had an interest in a more relaxed application of the deficit procedure. Like Germany, they had also exceeded the agreed norms. After almost a year of procrastination and postponement, the Netherlands was made to look foolish at the ECOFIN meeting of 25 November 2003. Referring to ‘special circumstances’, the ministers decided to temporarily suspend the SGP. Shortly afterwards, the Italian president of the European Commission, Romano Prodi, called the SGP ‘stupid’.26 The image of the SGP that Zalm and others in the Netherlands had created was made to look ridiculous. This was impossible to swallow. Zalm, who had linked the sacrifice of the guilder to strict and hard-fought requirements for budgetary discipline in the euro member states, continued to insist – probably against his own better judgment –that he was right. He threatened to lodge a complaint against France and Germany at the Court of Justice of the EU. The Commission eventually did submit a complaint and the Court, of course, ruled that the contested ECOFIN decision was legitimate. The Court did note that, while the clause was suspended, the ECOFIN should have asked the Commission to submit a new initiative, but that a slight violation of procedure could easily be smoothed over by renewing the decision, taking account of the procedural requirements.27 All evidence to the contrary, Zalm suggested in the Netherlands that the Court had proved him right and that he had emerged the glorious victor in the case, which he had brought as a David against several Goliaths. It did much for his popularity, not to mention for the lack of understanding of European affairs, in the Netherlands. But doubts about old certainties in Dutch European policy grew rapidly.

A rediscovery Germany was no longer West Germany. The country suddenly seemed to have changed radically. East Germans had priority over the ‘NetherGermans’ – and at a time when the Netherlands, through the EMU, had placed its fate firmly in Germany’s hands. Furthermore, Europe was no 26 Bolkestein, Grensverkenningen, p. 205; compare pp. 173, 202 and 208. 27 Court of Justice of the European Communities, Press release 57/04, 13 July 2004, Judgement of the Court of Justice in Case C-27/04, ‘Commission of the European Communities v Council of the European Union’.

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longer Western Europe. And yet, that bygone Western European reality provided the context within which the Netherlands was mentally prepared to participate fully in the EMU adventure. During the 1990s, it became clear to the Netherlands just how different than expected the EMU and the eurozone were taking shape. The ideal scenario that the Netherlands had long hoped for – starting the third phase of the EMU with a select group of member states clustered around Germany – proved to be an illusion. The convergence criteria, which in Dutch eyes had been there to make this ideal scenario a reality, now worked against it. As its budget deficits increased, Germany lost the political weapons it needed to act as budgetary hangman, while practically everyone had expected it to fulfil this role with its customary enthusiasm. But that was not the only reason that the EMU as Deutschmark zone 2.0 ran aground. There was another reason, and once again it was a development that emerged against all expectations in the Netherlands: it suddenly looked very probable that convergence was going to happen after all. And that was indeed the case, at least partly. Under pressure from northern European financial-economic norms, which the Commission also upheld, candidate member states did their best to fulfil the criteria. European commissioner Mario Monti even thanked his Dutch colleague Frits Bolkestein in 2001 for the hard campaign that he and his fellow liberal Gerrit Zalm had pursued at the end of the 1990s against Italian membership of the eurozone, saying that ‘it had been in Italy’s interests’.28 The story of convergence imposed by Brussels and Northern Europe was a good one, but it was not the whole story. The ‘convergence machine’ also worked because it was driven by the dynamics of the internal market. And those dynamics were largely engendered by the complete liberalisation of the movement of capital. Europe’s capital markets presented unprecedented new opportunities, not only for the British, German and Dutch commercial financial sector but also for governments, including those of the aspiring EMU members in southern Europe. It had become much easier for governments to cover trade deficits with loans. They could often be arranged without too many problems. Moreover, the closer the third phase of the EMU came, the more favourable were the terms under which these loans were granted. The financial markets saw the Netherlands and the other candidate EMU members as close cousins of the mighty German economy and offered them loans at low rates of interest. Countries like Greece and Italy were provided with ample capital, while 28 Bolkestein, Grensverkenningen, p. 137.

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interest on their debts fell.29 That in turn wiped out a significant portion of their budget deficits. This was exactly the opposite to how those same markets have been operating since 2010. At the end of the 1990s, Italy was close to meeting the strict requirements for participation in the EMU, something that Zalm had said only a few years previously that he could not imagine. In addition, Italy was given more time to meet the requirements when problems with the German economy destroyed the chances of a lead group going off on its own at the end of 1997, the first time that would have been possible under the conditions of the treaty. The Italian government under the leadership of Giulio Amato made every effort to take full advantage of this delay, aided by the ‘convergence game’ being played on the financial markets. Eventually, the treaty and the markets forced the EMU to start in 1999 with a larger group, including Italy. The markets and Italy served as an example for Greece, which followed two years later. The disciplined operation of the financial markets, of which the Dutch and German financial-economic elites were so proud, had led to unambiguous results. The markets had made their judgment: the aspiring Mediterranean EMU members were economically sound enough to become full members of the monetary union. From the Dutch perspective, there was only one conclusion possible: convergence had indeed taken place – the invisible hand of the single market had done its beneficial work. It seemed to be an enormous confirmation of the vision that the European Commission had propagated since Delors had become president: the EMU should be seen as the completion of the single market. Like the market, the common currency was to bring prosperity and greater unity. That vision is still often heard today, but it has lost its persuasive power. The new reality presents too much evidence to the contrary. Indeed, against the background of the European debt crisis, the underperformance of the monetary union has emerged as a serious problem of political credibility in almost all the member states of the eurozone.30 For some years now, convergence has already proved an empty promise.31 At the same time, all kinds of problematic side effects of the EMU have 29 See Erik Jones, ‘Efficient Markets Won’t Prevent the Next Crisis’ (2012), www.eurointelligence. com. 30 See Hendrik Enderlein, Enrico Letta et al., Repair and Prepare: Growth and the Euro after Brexit (Gütersloh, Berlin, Paris: Bertelsmann Stiftung, Jacques Delors Institut Berlin/Paris, 2016). 31 See Ministère de l’Économie et des Finances, Trésor-Economics, No. 190, February 2017, p. 6; Advisory Council on International Affairs (AIV), Is the eurozone stormproof? On deepening and strengthening the EMU, No. 105, July 2017, pp. 15-21.

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become more visible, including unfair tax competition, insufficient capacity to introduce structural reforms, faulty budgetary discipline, the ECB’s controversial policy of quantitative easing (QE) and severe unemployment and impoverishment. It is also arguable whether the crisis management of recent years has indeed strengthened the eurozone. The debt problem in many states, for example, has not been overcome. Nor is there as yet a solution in sight for the broader crisis of confidence that has arisen in recent years between governments, European institutions and citizens.32 What can now be concluded with certainty is that the European currency was – and still is – primarily seen as the completion of a European market that already existed as a single whole. That assumption – that the monetary union would be and would remain a unified entity because the market was already a unity – led to an underestimation of the risks of merging widely divergent national economies, overshadowed as they were by the alleged success of convergence. It has become apparent since 2010 just how problematic that is and how fragmentary trade integration has been in the eurozone on a number of essential points. For the history of Dutch European policy, however, the key aspect of the EMU episode lies elsewhere, namely in the Netherlands itself. When, in the second half of the 1990s, the Dutch government began to announce that the convergence criteria, in combination with the disciplinary operation of the markets, had worked so well that Italy, Spain and, 32 None of this changes the fact that much has happened. The EMU has been modified in a number of areas. Supervision has been tightened in respect of budget policy and macroeconomic imbalances, such as high-risk divergence between surpluses and def icits on the balance of payments on the current accounts of members of the eurozone (Six Pack; 2011). Budgetary coordination has also been extended by strengthening the budgetary competence of the European Commission (Two Pack; 2013), partly in the context of the European Semester (2010), the coordination cycle of economic and budgetary policies within the EU (the macroeconomic imbalance procedure is one of the ‘Six Pack’ measures aimed at expanding economic policy coordination in an attempt to rectify the current divergence in the balance of payments of the members of the eurozone). In addition, the banking union is under construction; the ECB is supervising ‘systemic’ banks, there is a European directive for liquidating banks and a proposal for a European deposit guarantee scheme. In addition to all this, an emergency fund – the European Stability Mechanism (ESM) – has been set up for the governments of member states that experienced serious financial problems during the European debt crisis. And then there are the Outright Monetary Transactions (OMT) for member states in an ESM programme, for which the ECB has become the de facto lender of last resort (OMT has not yet been used to date), the ECB’s (ultra-)low interest rate policy and its programme of quantitative easing (mentioned above) (CPB memorandum, ‘Discussienota Europese Commissie over EMU’, for the permanent parliamentary committee on financial affairs, 12 September 2017; Ministère de l’Économie et des Finances, Trésor-Economics, No. 190, February 2017).

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two years later, Greece could join the EMU, it was not very credible – at least not in the Netherlands itself. Who would believe that story after the anti-Mediterranean campaign that Zalm and others had been pursuing for many years? The SGP crisis of 2003 did the rest. The Netherlands was caught unawares in the ECOFIN – and by a majority of Mediterranean member states, plus Germany. It was difficult to imagine a more painful downfall for the Netherlands. From that moment, European policy – and especially ‘Europe’ itself – rapidly lost its persuasive power. Both became questionable phenomena. The traditional belief in a continental conspiracy against the Netherlands resurfaced just as quickly – from the depths of the collective memory to the national political stage. Every expenses scandal, every EU enlargement, every time the EU exceeded its budget, the Netherlands’ position as a net EU contributor, every EU budget and every failed European summit fuelled the smouldering historical embers of mistrust of the European Union. This was the prelude to the 2005 referendum on the Treaty establishing a Constitution for Europe, in which the people of the Netherlands mercilessly castigated the EU and Dutch European policy. The resentment was tangible, and lack of knowledge on the issue was hardly an obstacle, as ever. The referendum marked the start of a period in which the Netherlands, publicly, began to discover just what kind of Europe it found itself living in after 1989. When the dust of the historic events of 1989-1991 started to settle, the Netherlands appeared in many respects to have returned to the 1950s. Via the EMU, the country – as in the fifties – had become part of a select company of continental states, in which France and Germany set the pace. The British, Danes and Swedes wished the Netherlands the best of luck from the sidelines. Hungary and Poland are now doing the same. As earlier, when it was part of the Europe of the Six, the Netherlands does not feel at home. It feels that it has been sewn into a European suit with an overly Latin cut, which it would never have chosen for itself. It is therefore no surprise that the Netherlands is rediscovering its own European political past, dating from before the euphoria, with both a sense of historical intuition and much passion.



Epilogue: The call of Calypso Abstract From the early days of European integration, Dutch policymakers and politicians alike have felt that the process has produced Faustian bargains for the Netherlands. As it dragged on, they learned to choose neglect over public debate and economic profit over discussing the existential political dilemmas it engendered. This saddled the Netherlands’ history in post-war Europe with numerous sub-narratives of deception and selfdeception. These narratives have been hidden from sight or have remained undiscovered, yet it is precisely through them that we can understand better why the Netherlands approached the integration of Europe as it did. They unveil peculiar consistencies in the Dutch experience with Europe, which in a certain way mirror the classical myth of Odysseus being held captive by Calypso.

The journey to the continent that the Netherlands embarked upon shortly after the end of the Second World War seldom progressed as expected. Nevertheless, European integration proved to be an unprecedentedly profitable undertaking for the Dutch economy. However, the unexpected changes in course, the uncontrollability of the process, and the way in which the Netherlands found itself overwhelmed at important moments ensured that – despite all the substantial benefits and advantages for the country – the journey left deep furrows of doubt that were, and remain, problematic. The journey continually led somewhere else than had been foreseen or expected. The Netherlands was not alone in this respect. After signing and ratifying the Treaty establishing the European Coal and Steel Community (ECSC) in 1951, each member state in the Europe of the Six set out on its own journey to the continent, often in parallel with a gradual withdrawal from an obsolete colonial past of worldwide ambitions. In the initial phases of the integration process, for all six founding states, their journey to the continent was as irrevocable as it was unexpected: irrevocable because it

Segers, Mathieu, The Netherlands and European Integration, 1950 to Present. Amsterdam, Amsterdam University Press 2020 doi: 10.5117/9789463728133_epil

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was the only way to prevent the inevitable decline of Europe’s position in the world, and unexpected because each member state pursued its own ideal of Europe, yet none of these ideals proved strong enough to dominate. Every step in the process of European integration has been a mishmash of widely varying visions. From undiluted federalism and Monnet’s transnational lobby to De Gaulle’s ‘European’ Europe of states, from the AngloSaxon-inspired free trade zone to Macron’s inclusive ‘l’Europe qui protège’, from the neoliberal consensus to mercantilism, from a small Western European core clustered around the Rhine to an extended Europe including Central and Eastern Europe and/or the Atlantic world, from competition and the market to harmonisation through European funds, from strict price stability to Keynesian stimulation, from a Europe as a future world power to a Europe as an apolitical technocratic project, from the regionally oriented post-war Rhineland model to a close-knit Europe of banks extending to financial worlds far beyond the borders of the continent, from a Europe as a bulwark against the Americanisation of the continent as a satellite of the United States, etc., etc. All of these Europes have existed, and continue to exist, simultaneously. None of them has been achieved more than partially, and most even less than that. European integration’s historical measure has not yet been determined. Partly for this reason, integration is not only an unprecedented victory over Europe’s violent history but also a chain of deceptions. Those who saw the potential for achieving an ideal type were unavoidably in for a rude awakening, and often more than once. No member state understood the process sufficiently to be exempt from bitter disappointments. Acceptance of those disappointments is perhaps at the core of the great reconciliation mechanism that the process of post-war European integration first and foremost was and continues to be. In light of the political history of international relations on the continent, the question arises why the member states have been willing to accept those disappointments time and time again. Why have European nation-states continually swallowed these bitter pills? The answer lies in that same mishmash of visions. At every moment of an existential crisis (and there have been many of them), the impalpable European reality proved in many respects to be too valuable to simply jettison. It was better to suffer the consequences of national deception: a blow to national pride and the often-painful soul searching in domestic policy that should follow at such moments. The Netherlands has proved to have little talent for either accepting adjustments to national ambitions or processing them. Perhaps it is a national flaw. Either way, it is the other side of the coin of the superior

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Dutch instrumentalism that had its heyday in the post-war period: practical, pragmatic, rational, future-oriented, full of self-confidence and convinced that it was always in the right.1 European integration meant a constant assault on the self-image that the Netherlands associated with the process. Being right proved to be no guarantee of leadership in Europe. On the contrary, if one country had to learn to accept its limitations, it was the Netherlands. How did the country deal with that? From the very beginning of European integration, balm for the Dutch soul was sought outside the oppressive confines of the continent in the form of American or Anglo-Saxon concepts, especially free trade. These were often far removed from the Netherlands’ realities and the brutal continental facts that defined them and, until now, that has made the country’s journey to the continent far from simple. And it has made the Netherlands vulnerable. Just as Homer’s wandering hero Odysseus allowed himself to be held captive on a remote island by the beautiful nymph Calypso, the Netherlands was regularly seduced into various forms of mental isolation. It tended to shut itself off from events on the European continent. Like Odysseus, it lacked the strength to offer sufficient resistance to the temptations of isolation on Calypso’s island – even though it was crystal clear that, in the long term, it would be disastrous for its own health. In the initial phases of European integration, Atlantis was Calypso’s island for the Netherlands (see chapter 2). It was a hypothetical construction of post-war cooperation in which the Dutch mind often sought refuge but just as often failed to find it. Odysseus was finally freed with outside help. For the Netherlands, it was external circumstances – especially the link to the German economy – that ensured during the 1960s and 1970s that the mental journey on which the country had embarked after Second World War was a little better aligned with its ‘physical’ journey to the continent. That did not mean, however, that the discrepancy between the two had been solved. An undercurrent of misunderstanding and unwillingness still lies beneath the surface of the Netherlands’ European policy and remains just as strong. The country has remained susceptible to the seductions of new Calypsos in search of mental refuge from the continental reality. Besides Atlantis, the Netherlands has regularly sought refuge in the technocracy and rationality of the common market. The apolitical Europe that seemed to shimmer on the horizon was often irresistible. Pursuing such 1 See Friso Wielenga, Nederland in de twintigste eeuw (Amsterdam: Boom, 2009), pp. 198, 205-6 and 218-19.

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dreams could and can mean that the country finds itself in a somewhat unworldly position in Europe. Ironically enough, it can even lead to a Dutch position in Europe that is difficult to explain rationally. The EMU and the euro of Delors, Kohl and Mitterrand have proved in many respects not to be the Europe that the Netherlands had in mind. On the other hand, exactly what the European market and currency do entail remains unclear. What, then, is clear? Firstly, the EMU has ensured that the free movement of capital in Europe is not accompanied by the severe exchange rate crises that Europe had to deal with for long. Secondly, this did not mean that Europe could enjoy the benefits of free capital movement without the disadvantages. As has become clear in recent years, exchange rate crises have been replaced by other problems. Since 1973, Europe has also gradually proved susceptible to the temptations of credit and the flexibility that it offers to governments and individuals. But what happens when the credit runs dry? That question was answered in the first decade of the twenty-first century. The effects have been literally painful for the single market: convergence proved insufficient, and trade integration equally so. The costs are alarming. The greater macroeconomic flexibility that could easily be bought on credit on Europe’s liberalised capital market increased rather than reduced the economic differences between the member states. In that respect, the convergence machine proved to be an illusion. Exporting and importing credit proved much more attractive than making structural adjustments to the economy (and taking the electoral risks that they bring). That applied to both financial export economies like the Netherlands and financial import economies like Italy. The capital markets concealed much for a long time, but in times of crisis those same markets were inventive enough to exacerbate the differences between member states with just as much ease. Since 2010, this has been symbolised by the scoreboards of the rating agencies, which painfully expose the imbalances in the single market. This is the ultimate test for the resilience of the internal market, the ‘mother project’ of European integration. In the runup to the Brexit referendum, reports from London raised fears that the euro was threatening to dismantle the single market. For a long time, until far beyond 1989, the single market was the only concrete achievement of the European integration process. The crossborder trade that the market stimulated was tangible in terms of increased prosperity and wellbeing. That is why the market project was able to rely on increasingly overwhelming public support, not only in the Netherlands but throughout Europe. But does that make the market the essence of

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the integration process? Probably not. From a historical perspective, that essence is more political than would appear from the technocratic reality of the market. The Netherlands has sometimes misjudged Europe’s political significance. Mostly, however, it has not sufficiently seen – or has not wanted to see – that significance. Moments in the history of European integration when the representatives of the Dutch government have genuinely understood the political dimension – and the patterns of European negotiations that are part and parcel of it – are rare. In that respect, Beyen’s legacy has been neglected. There was a good reason why his supranational market project – a highly personal mission in a sceptical government – laid the foundation stone for the EU. Of course, things turned out differently than Beyen had imagined, but he had judged many things accurately. History would show that cooperation through the common market was the best way to halt the decline of Europe’s power in the world – and to survive the vagaries of history and the global economy in peace and stability. There were few in the Netherlands who listened to that message. The idea of the common market in itself could count on widespread support among the Dutch, but anything that went further than market integration or threatened to dilute the purity of that idea was a different matter. Beyen’s European convictions and the how and why of achieving them were ignored or quickly forgotten. Since then, on balance, the process of European integration has piece by piece become increasingly ‘Dutch’ in nature. It would now seem high time for the Netherlands to return the compliment and become somewhat more European. That is not so relevant where practical policy, integration in the single market and the euro are concerned. In those areas, the process of becoming more European is far advanced and has been a fact for many years. It is more about the Netherlands reconciling itself to its destination in its journey to the continent. No matter how uncertain that destination is, the country has to resist new Calypsos. If it succeeds in doing that, it has much to offer Europe. For a start, it could contribute more on how to tackle the crisis in the eurozone. The euro crisis is part of a wider one in the post-war West. The experiments with capitalism and democracy that have so successfully shaped post-war history in the West are facing severe credibility problems. Atlantis seems just as often close or far off, offering as much hope as deception. This dichotomy of attraction and repulsion is a test for the European mind. And there is no member state in the EU with as much experience of seeking this balance as the Netherlands, just as there is no member state with as much experience

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with the reorientation to the German economy that the euro demanded. From a historical perspective, the Netherlands seems well-positioned to provide substantial help in identifying and defining hidden aspects of European reality. Those aspects must be addressed to increase the scope for new opportunities for European solutions to European problems. A talent for Atlantic-oriented magical realism may be an advantage in that project, but there are risks involved in taking that too far.

Chronology 1944 July

1945 February 8 May July-August 1947 June

1948 January February March

April July 1949 April May September

Bretton Woods Conference. Signing of the Bretton Woods agreement establishing the International Monetary Fund (IMF) and the World Bank (operational in 1945) Yalta Conference End of Second World War in Europe Potsdam Conference Marshall Plan launched (leading to the establishment of the Organisation for European Economic Co-operation [OEEC) in 1948) Benelux customs union (builds on the 1930 Oslo Agreements and 1932 Ouchy Convention) Prague coup Treaty of Brussels (France, UK and Benelux) Havana Charter (establishing the International Trade Organization [ITO] as the trade counterpart of the IMF; failed due to insufficient support in the US Congress for ratification) Marshall Plan (European Recovery Program) initiated Organisation for European Economic Cooperation (OEEC) established ‘Frankfurter Dokumente’ (blueprint for the Federal Republic of Germany) presented North Atlantic Treaty signed (‘Organization’ added in 1951) (NATO) Federal Republic of Germany (FRG) established Trade agreement between the Netherlands and the FRG (Dutch exports to FRG liberalised)

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The Netherl ands and European Integr ation, 1950 to Present

1950 9 May

Schuman Plan launched (European Coal and Steel Community, ECSC) 25 June North Korea invades South Korea June Stikker Plan (sector-based liberalisation in OEEC) 19 September European Payments Union, to restore currency convertibility in Western Europe Pleven Plan (European Defence Community) October 1951 April

1952 May July December

1953 March 1954 30 August October

1955 May 1-3 June

European Coal and Steel Community (ECSC) established (treaty signed by France, FRG, Italy and the Benelux [= ‘the Six’], ratified and came into force in 1952) European Defence Community (EDC) established by ‘the Six’ End of Korean War Beyen Plan presented, proposing a common market of the Six based on horizontal (rather than sector-based) integration Ad hoc meeting approves draft treaty establishing European Political Community (EPC) of the Six French parliament fails to ratify EPC Revision of Treaty of Brussels leads to Western European Union (with FRG as a member) and General Treaty ending FRG’s status as occupied territory (both ratified in in May 1955) Benelux memorandum (in preparation for the conference of the Six in Messina) FRG joins NATO (via ratification of WEU treaty and General Treaty) Messina Conference (Messina Resolution)

305

Chronology

October

Monnet launches his Action Committee for the United States of Europe

1956 April May

Spaak Report Venice Conference agrees with proposals of the Spaak Report Start of treaty negotiations between the Six on an June atomic energy community and a common market Suez Crisis escalates after French-British-Israeli 29 October military intervention 4 November Soviet Union violently crushes Hungarian Uprising 6 November Adenauer-Mollet agreement on EURATOM and the common market 26 November British government launches the Free Trade Area (FTA) 1957 25 March

1958 January March May

Treaties of Rome: European Atomic Energy Community (EURATOM) and European Economic Community (EEC = common market), ratified in 1957

September November December

EURATOM and EC established First European Commission starts operating First plenary meeting of the European Parliament Algerian Crisis in France, end of the Fourth Republic, de Gaulle appointed prime minister with special powers Founding of the Fifth Republic in France France rejects FTA De Gaulle elected as president of France

1959 January

Start of first phase of EEC Convertibility of Western European currencies

1960 January July

European Free Trade Association (EFTA) De Gaulle launches plans for European Political Union (EPU), also known as Fouchet Plan

306 

December 1961 August 1962 January 14 January

The Netherl ands and European Integr ation, 1950 to Present

OEEC becomes Organization for Economic Co-operation and Development (OECD) UK applies for EEC membership Berlin Wall erected (shortly afterwards, second Berlin Crisis, which started in 1958, comes to an end)

April October

Start of second phase of EEC Agreement in EEC on transition to second phase of Common Agricultural Policy (CAP) Belgium and the Netherlands reject Fouchet Plan Cuban Missile Crisis

1963 14 January 22 January

De Gaulle vetoes British EEC membership Franco-German treaty of friendship (Elysée Treaty)

1965 April 1 July

1966 January 29 January May 1967 May November

Merger Treaty combining the Commissions of the EEC, the ECSC and EURATOM (entered into force in July 1967) Start of the ‘empty chair’ crisis (de Gaulle’s France boycotts the EEC Council of Ministers in protest against the European Commission’s proposals for funding and majority voting in the CAP) Start of the third (and final) phase of the EEC Luxembourg Compromise (ending ‘empty chair’ crisis) preserving national right of veto on issues affecting member states’ ‘vital interests’) Agreement on funding the CAP Second application for EEC membership by the UK (together with Denmark, Ireland and – initially – Norway) De Gaulle vetoes UK membership for a second time

307

Chronology

1968 July 20 August 1969 12 February April July December

1970 October November December 1971 15 August 1972 March October 1973 January March October

Completion of the EEC customs union and the CAP (18 months earlier than planned in the EEC Treaty) Soviet Union and Warsaw Pact crush the Prague Spring Barre memorandum on Economic and Monetary Union (EMU) De Gaulle steps down as president of France The UK, Denmark, Ireland and Norway renew their membership application Summit in The Hague, where EEC heads of government decide to widen, deepen and complete the integration process and set EMU as a goal Presentation of the Werner Plan for the EMU (in three stages) Start of European Political Cooperation (EPC), cooperation on foreign policy (the Nine) Werner Plan adopted by the member states (the transition to the second stage fails in 1974) ‘Nixon shock’: US ends dollar-gold convertibility Snake arrangement comes into force (for Western European currencies) Paris summit: goal to achieve European Union before the end of the decade The UK, Ireland and Denmark accede to the European Community (Norway voted against membership in a referendum in September 1972) Definitive end of the Bretton Woods system Arab oil-producing countries quadruple price of oil and place port of Rotterdam under embargo

308 

December 1974 September

1975 July-August December 1978 July

The Netherl ands and European Integr ation, 1950 to Present

Copenhagen summit (dominated by oil crisis). Schmidt launches own ideas for the EMU EEC heads of state and government decide to set up a European Council. Not an official community institution but an informal meeting of leaders of member states (first meeting in Paris in December) Helsinki Accords (final act of the Conference on Security and Co-operation in Europe establishing the integrity of the existing borders in Europe) Tindemans Report on goal of EU (and EMU) European Council decides to establish European Monetary System (EMS), which starts in March 1979 (end of the snake arrangement; UK does not participate)

1981 January

Greece joins European Community

1984 June

Fontainebleau summit (agreement on budgetary issues)

1985 January March June September 1986 January February

Start of European Commission under Delors’ presidency Dooge Report (recommends Intergovernmental Conference [IGC] on treaty revision) Commission presents White Paper on internal market IGC starts (ends in December) Portugal and Spain join European Community Single European Act (enters into force in July 1987) on completion of the internal market in 1992 (the Twelve)

309

Chronology

1987 September 1988 June

Basel-Nyborg agreement Hannover summit: decision to set up Delors committee to draw up plan for the EMU

1989 Presentation of Delors Report on EMU 12 April 9 November Fall of the Berlin Wall 8-9 December Strasbourg summit: EMU IGC before end of 1990 1990 June July 3 October

Dublin summit: decision to set up two parallel IGCs for the EMU and the EPU Start of first stage of EMU German reunification (peace treaty on Germany after the Second World War, end of ‘order of Yalta’)

1991 War in Yugoslavia June 30 September ‘Black Monday’ (Council of Ministers rejects Netherlands’ EPU proposals) Successful conclusion of IGCs (EMU and EPU) at December Maastricht summit (completion and introduction of single currency by 1999 at latest) 1992 February June

1993 January June

European Union (EU), Maastricht Treaty (enters into force in November 1993, EMU opt-out for the UK) Danes reject ‘Maastricht’ in referendum (results in opt-outs for Denmark and ratification of the treaty in a second referendum in May 1993) Internal market enters into force Copenhagen summit (Copenhagen criteria for accession of Central and Eastern European countries to the EU)

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The Netherl ands and European Integr ation, 1950 to Present

1994 July

Start of second stage of EMU

1995 January

Accession of Finland, Austria and Sweden to EU

1996 December 1997 June

1998 June 1999 2000 March September December 2002 1 January

Dublin summit: decision on Stability and Growth Pact (SGP) Treaty of Amsterdam (supplements ‘Maastricht’, European Council in Amsterdam includes resolution on establishment of SGP as appendix in the conclusions, enters into force in May 1999) First meeting of the Eurogroup (EU member states that will introduce the euro) Start of third phase of EMU (with broad group, including Italy) Lisbon summit: strategy for economic modernisation Danes decide by referendum not to join the EMU Nice summit: leads to Treaty of Nice, enters into force in February 2003 Euro coins and notes go into circulation

2003 25 November Council of Ministers (ECOFIN) decides to suspend SGP temporarily 2004 May

‘Big Bang’: expansion of the EU with ten new member states (Bulgaria and Romania follow in 2007)

311

Chronology

December

2007 December 2010 December 2013 July 2016 June

Treaty to establish a constitution for Europe (ratification fails after treaty is rejected by referenda in France and the Netherlands in 2005) Treaty of Lisbon: enters into force in December 2009 Heads of governments reach agreement on treaty change to establish permanent emergency fund Accession of Croatia UK citizens vote to leave the EU in a referendum (widely referred to as Brexit)

Abbreviations ACC ARP BEA Benelux BIS CAP CBS CDA CDU CEA

Allied Control Council Anti-Revolutionary Party Bureau of European Affairs Customs union of Belgium, the Netherlands and Luxembourg Bank for International Settlements Common Agricultural Policy Statistics Netherlands Christian Democratic Alliance Christian Democratic Union Commissariat à l’Énergie Atomique Christian-Historical Union CHU CSU Christian Social Union in Bavaria Democrats ‘66 D66 DIE European Integration Department, Dutch Ministry of Foreign Affairs De Nederlandsche Bank (Dutch central bank) DNB Democratic Socialists ‘70 DS’70 European Central Bank ECB European Coal and Steel Community ECSC ECOFIN Economic and Financial Affairs Council ECU European Currency Unit European Defence Community EDC European Economic Community EEC European Free Trade Area EFTA European Monetary Cooperation Fund EMCF European Monetary Fund EMF European Monetary System EMS Economic and Monetary Union EMU EPC European Political Community European People’s Party EPP European Political Union EPU European System of Central Banks ESCB European Union EU EURATOM European Atomic Energy Community Free Democratic Party FDP Federal Republic of German (West Germany) FRG Free Trade Association FTA General Agreement on Tariffs and Trade GATT

314  GDR GEORG IGC IMF ITO KVP MRP NATO OCA OCM OECD OEEC OPEC OSCE PPR PvdA SGP SPD UK UN US VVD WEU

The Netherl ands and European Integr ation, 1950 to Present

German Democratic Republic Gemeinschaftsorganisation Ruhrkohle Intergovernmental Conference International Monetary Fund International Trade Organisation Catholic People’s Party Mouvement Républicain Populaire North Atlantic Treaty Organization Optimum Currency Area Open Coordination Method Organisation for Economic Co-operation and Development Organisation for European Economic Cooperation Organization of the Petroleum Exporting Countries Organization for Security and Co-operation in Europe Political Party of Radicals Dutch Labour Party Stability and Growth Pact Social Democratic Party of Germany United Kingdom United Nations United States People’s Party for Freedom and Democracy Western European Union

Acknowledgements This book would not have been possible without the support of others. While writing it, I was able to build on archive studies conducted while I was engaged in earlier research projects with the financial support of the Germany Institute in Amsterdam, the Dutch Ministry of Foreign Affairs, Fonds 1818, the Fulbright Schuman Program, the Research Institute for History and Art History at Utrecht University and the university’s ‘Institutions’ focus area. During that research, I was also able to benefit in many ways from working with archive experts and staff, which regularly enabled me to examine items that may otherwise have been difficult to access. My thanks for that valuable cooperation go to Ruth Meyer Belardini and Jean-Marie Palayret of the Historical Archives of the EU in Florence, Françoise Nicod of the Jean Monnet Foundation for Europe in Lausanne, Hans den Hollander of the Ministry of Foreign Affairs, Joost van Battum of the Ministry of Finance, Marc Dierikx, Mari Smits, Loes van Suijlekom (who worked on the unique digital resources ‘The Netherlands and European Integration, 1950-1986’), the staff of the Archive for Christian Democratic Policy in Sankt Augustin, the JFK Library in Boston, the British National Archives in Kew Gardens, the Diplomatic Archives at the Quai d’Orsay in Paris, the Dutch National Archives in The Hague, the German Federal Archives in Koblenz, the Political Archive of the Federal Office in Berlin and the archives of the International Institute of Social History in Amsterdam. Discussions and exchanges of ideas with colleagues are indispensable in sharpening up analyses and critically assessing sources. I would like to thank the following for their stimulating insights: Oliver Bange, Age Bakker, Robin de Bruin, Laurien Crump, Femke van Esch, Michael Gehler, Carine Germond, Thomas Gijswijt, Anjo Harryvan, Jan van der Harst, Maurice Heck, Steven van Hecke, Elmar Hellendoorn, Kees Homan, Erik Jones, Yvonne Kleistra, Joost Kleuters, Hanss-Jürgen Küsters, Rimko van der Maar, Peter Malcontent, Emmanuel Mourlon-Druol, Skander Nasra, Jacco Pekelder, Bart van Riel, Jan Rood, David Snyder, Georges-Henri Soutou, Fred van Staden, Bart Stol, Hans Vollaard, Niels van Willigen, Bert van der Zwan, my colleague visiting fellows at the Harvard University Center for European Studies in the 2010/2011 academic year, the participants in the seminars organised as part of the Deutsche Europapolitik christlicher Demokraten project of the Konrad Adenauer Stiftung in Berlin and Cadenabbia in 2012 and 2013, and my colleagues in

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the History of International Relations section of the History Department at Utrecht University. For various reasons, I would also like to say a special thank you to Carole Fink, Albert Kersten and Bob Lieshout. Lastly, to my family Sofia, Orfeo, Gloria and Marèl, thanks for your trust, inspiration and love. Mathieu Segers



Sources and references

Archives

Archives of the Dutch Ministry of Foreign Affairs, The Hague (BZ) Archives of the Dutch Ministry of Finance, The Hague (MF) Archiv für Christlich-Demokratische Politik, Sankt Augustin (ACDP) Archives de Fondation Jean Monnet, Lausanne (FJM) Bundesarchiv, Koblenz (BA) Historical Archives of the European Union, Florence (HAEU) Kennedy Presidential Library, Boston (JFKL) Dutch National Archives, The Hague (NA) UK National Archives, Kew, Surrey (UKNA) Politisches Archiv des Auswärtigen Amtes, Berlin (PAAA)

Published primary sources

Department of State, Foreign Relations of the United States [FRUS], 1949 (4), 1951 (3) and 1958-60 (7) (Washington: Government Printing Office, 1975, 1981 and 1993) Die BRD und Frankreich: Dokumente 1949-1963, Vol 2, ‘Wirtschaft’ (Munich: K.G. Saur, 1997) Die Kabinettsprotokolle der Bundesregierung 1957, Vol 10 (Munich: Oldenbourg, 2000) Die Protokolle des CDU-Bundesvorstands, Vol 16, ‘Adenauer: Wir haben wirklich etwas geschaffen’ (Düsseldorf: Droste, 1990) Dokumente zur Deutschlandpolitik [DZDP], II. Series, Vol 1 and 4, ‘Die Konferenz von Potsdam’ (Neuwied, Frankfurt: Albert Metzner, 1992) Dokumente zur Deutschlandpolitik, ‘Deutsche Einheit: Sonderedition aus den Akten des Bundeskanzleramtes 1989/90’ [DZDPDE] (Munich: Oldenbourg Verlag, 1998) Ministère des Affaires Étrangères, Documents Diplomatiques Français 1958-63 [DDF] (Paris: Imprimerie Nationale, 1993-99) http://www.margaretthatcher.org http://www.statengeneraaldigitaal.nl http://www.historci.nl/Onderzoek/Projecten/Europaeenwording Comité Intergouvernemental crée par la conférence de Messine, Rapport des Chefs de Délégation aux Ministres des Affaires Étrangères, Brussels, 21 April 1956 (MAE 120f/56 corrected) Conclusions of the Presidency, Lisbon European Council, 23 and 24 March 2000 Deutsche Bundesbank, ‘The Maastricht Decisions on EMU’, Monatsberichte der Deutsche Bundesbank, February 1992

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Court of Justice of the European Union, Press release 57/04, 13 July 2004, Judgement of the Court of Justice in Case C-27/04, ‘Commission of the European Communities v Council of the European Union’

Media sources

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Index Index of names Acheson, Dean 75-76, 100-101 Adenauer, Konrad 23, 30, 75, 77-79, 86, 91, 97, 100, 104, 107-113, 116, 134-137, 147, 149-152, 154, 156, 158, 160-161, 165-166, 187, 226, 233, 269, 305, 315 Agnelli, Umberto 235 Alfrink, Bernardus 98 Amato, Giuliano 245, 294 Ancona, Hedy d’ 265 Andreotti, Giulio 31, 240 Andriessen, Frans 281 Archimedes 25 Aron, Raymond 105, 175 Attali, Jacques 29, 226, 261 Bahr, Egon 188 Baker, James 19-21, 259 Ball, George 40, 155 Balladur, Edouard 229, 245, 247-248 Barre, Raymond 179, 229 Beatrix, Queen 268-269 Beaufort, Leo 98, 128 Bech, Joseph 9, 118, 121-123 Beel, Louis 98 Behr, Winrich ‘Teddy’ 123 Bernhard, Prince 98 Beugel, Ernst van der 63, 95, 92, 97, 106, 118, 128-130, 132, 142, 203 Beyen, Johan Willem 89, 98-106, 116-121, 123124, 127, 129, 133, 165, 175, 184, 194, 301, 304 Biddle, Margaret 113-114, 121 Biesheuvel, Barend 192, 205, 263 Bismarck, Otto von 22 Bitterlich, Joachim 29-31, 34-35, 247 Black Monday 264, 266, 289-290, 309 Blaisse, Pieter 128 Blessing, Karl 186 Bohlen, Charles ‘Chip’ 44, 46-54, 158 Bolkestein, Frits 280, 293 Böll, Heinrich 112 Boot, Henk 244 Booy, J.M. de 64 Braks, Gerrit 262 Brandt, Willy 187-189 Brexit 278-279, 300, 311 Brink, Jan van den 57-61, 79, 82, 90-92, 98 Broek, Hans van den 242, 260, 262-266 Bruce, David 100-101, 113-114 Brugsma, Willem Leonard 204 Burger, Jaap 95 Bush, George 14-22, 26, 28, 32, 34-36, 38-39, 267

Calypso 297, 299 Cameron, David 278 Charlemagne 220, 245 Chernomyrdin, Viktor 268 Chevènement, Jean-Pierre 261 Chirac, Jacques 247 Clappier, Bernard 76 Clemenceau, Georges 65 Coty, René 143 Couve de Murville, Maurice 39-40, 156, 161 Craxi, Bettino 240 Daisne, Johan 70 Dankert, Piet 262-266 Dekker, Wisse 235-237, 263 Delors, Jacques 27, 37, 225, 229-230, 234-236, 238-241, 243-256, 259-262, 266-267, 281-284, 286, 294, 300, 308-309 Delouvrier, Paul 178 Dooge, Jim 231 Drees, Willem 74, 81, 84, 89, 94-99, 105-106, 121, 128-131, 133, 136, 145, 161, 164-165, 193, 197, 204 Duisenberg, Wim 195, 201-203, 206, 209-210, 212-213, 217-218, 253, 283 Dumas, Roland 247 Eden, Anthony 108 Eekelen, Wim van 242 Eisenhower, Dwight 93 Elizabeth, Queen 268 Emminger, Otmar 220, 249 Erhard, Ludwig 61, 69-70, 91-92, 102-103, 107, 110-108, 111-112, 116-117, 130, 133-134, 148 Etzel, Franz 115, 118, 123, 134 Eyskens, Gaston 266 Faure, Edgar 111, 114-115, 121, 123, 125 Faure, Maurice 231 Fock, C.L.W. 74, 121, 129-130, 153 Fouchet, Christian 152 Fowler, Henry 176 Friedman, Milton 169-170 Gaillard, Felix 129, 178 Gasperi, Alcide de 96, 111 Gaulle, Charles de 24-25, 71, 73, 114, 127, 139162, 166-168, 174-179, 184, 189-190, 192-193, 198-200, 228, 233, 274, 277, 298, 305-307 Genscher, Hans-Dietrich 30, 32, 34, 245-247, 249, 254, 266 Giscard d’Estaing, Valéry 27-28, 218-220, 229

330 

The Netherl ands and European Integr ation, 1950 to Present

Goes van Naters, Marinus van der 95, 195 Goethe, Johann Wolfgang von 122 González, Felipe 26, 37, 234, 258 Gorbachev, Michael 14-15, 17, 19-20, 258 Gore, Al 268 Groeben, Hans von der 124, 129 Guigou, Elisabeth 232, 266 Gyllenhammar, Pehr 235 Hallstein, Walter 102, 134, 145, 159, 162, 226 Hayek, Friedrich von 61 Heath, Edward 152 Heringa, Berend 159, 163 Herrhausen, Alfred 246 Herzog, Roman 268 Himmler, Heinrich 24 Hirschfeld, Max 63-64 Hitler, Adolf 21, 163 Holtrop, Marinus 182-187, 192, 215 Homer 299 Houten, Hans van 151-153 Hugo, Victor 227 Huizinga, Johan 39 Idenburg, Flip 90, 203 Jacobs, Egbert 258 Jenkins, Roy 230 Johnson, Lyndon B. 176 Jong, Piet de 193 Juliana, Queen 99 Kadt, Jacques de 95 Kan, Wim 217 Kelly, Petra 163 Kennan, George 46-54, 76 Kennedy, John F. 155, 158 Keynes, John Maynard 170 Kleffens, Eelco van 59, 64 Klompé, Marga 98, 106, 128-129, 154 Koenig, Marie-Pierre 114 Kohl, Hannelore 18, 20 Kohl, Helmut 14-21, 26-39, 187, 225-235, 237, 240-243, 245-248, 252, 256-259, 261-262, 266-269, 279, 284, 286-288, 300 Kohnstamm, Max 63, 66, 73-74, 80, 83, 90, 120, 123, 134, 155 Kok, Wim 260, 262, 268-269, 274, 287, 290 Koopmans, Lense 213 Kymmell, J. 120-121 La Fontaine, Jean de 183 Lampo, Hubert 70 Lardinois, Pierre 193, 201 Larock, Victor 117 Larosière, Jacques de 216 Lawson, Nigel 241-242, 251 Lee, Jaap van der 90 Leigh-Pemberton, Robert 250

Lennep, Emile van 187-188 Levi, Carlo 120 Lieftinck, Pieter 62, 81, 84, 89-90, 92, 96, 204 Looijen, A.IJ.A. van 208-209 Lubbers, Ruud 16, 37, 234-237, 242, 258, 260, 262-263, 265-269, 281, 284, 269 Lubinka, Margaretha Antonia ‘Gretel’ 99 Luns, Joseph 71, 99, 106, 128-130, 133, 139-141, 145-146, 151-155, 156, 158, 166-167, 192-193, 198-199, 282 Maas, Cees 254, 256 Macmillan, Harold 152, 155 Macron, Emmanuel 298 Major, John 268 Mansholt, Sicco 82, 89-90, 102, 106, 121, 129, 159-163, 195 Marijnen, Victor 154 Marjolin, Robert 148-149, 178, 195, 277 Marshall, George 41 Martens, Wilfried 37, 234, 242, 258 Martino, Gaetano 119 Marx, Karl 164 Meijer, Jan 90 Meijs, Dick 213 Mitterrand, François 15, 22, 24, 26-29, 31-34, 36, 223, 225-235, 240, 243, 245, 247-248, 257-259, 261-262, 265-268, 284, 286-288, 300 Modrow, Hans 19 Mollet, Guy 125-127, 134-136, 143 Monnet, Jean 73-74, 76-77, 80-81, 86, 89, 92-93, 102, 105, 111, 113-116, 118, 125-126, 134, 143, 145-153, 155, 157-158, 165, 178-179, 189, 195, 221, 235, 246, 261, 274, 298, 305 Monti, Mario 293 Mozer, Alfred 95, 163 Mundell, Robert 199, 206-209, 272, 287-288 Nice, Treaty of 280, 310 Nieman, Peter 260-262, 265 Nixon, Richard 169-173, 176, 307 Odysseus 299 Oort, Coen 209, 212-215, 218, 222 Ophüls, Carl Friedrich von 116, 129 Ortoli, François-Xavier 177, 237-239 Padoa-Schioppa, Tomasso 243 Patijn, Conny 90, 128 Peyrefitte, Alain 25, 174-175 Pfimlin, Pierre 143 Pinay, Antoine 113-115, 120-122, 125, 143-144 Pineau, Christian 125-127 Pleven, René 91-92 Pöhl, Karl-Otto 216, 249-250, 254 Pompidou, Georges 190, 229 Posthumus, Sieb 195 Pous, Jan Willem de 154 Prodi, Romano 292

331

Index

Quay, Jan de 145, 151-153, 166 Ramadier, Paul 126 Ramstetter, Erich 18, 20 Ramstetter, Fritz 18, 20 Reagan, Ronald 223, 242 Rijkens, Paul 103 Ritzen, Jo 262 Rocard, Michel 33 Romme, Carl 98-99, 128 Rompuy, Herman van 274 Roosevelt, Franklin Delano 73 Rothschild, Robert 114, 118, 120 Ruding, Onno 187, 191, 244, 255 Rueff, Jacques 144 Samkalden, Ivo 90, 129 Sanders, Piet 90 Santer, Jacques 258 Schermerhorn, Willem 90 Schiff, Emile 201 Schiller, Karl 176 Schlesinger, Helmut 232, 249, 254 Schlüter, Poul 240 Schmelzer, Norbert 192, 203, 217 Schmidt, Helmut 186-187, 216, 218-220, 225-227, 249, 254, 308 Scholz, Rupert 18, 20 Schröder, Gerhard 291 Schuman, Robert 72, 75-78, 80-81, 86, 96-97, 104-105, 111, 114, 143, 215 Snoy et d’Oppuers, Jean Charles 116-117, 122 Soames, Christopher 201 Spaak, Paul-Henri 113-118, 121-127, 129-133, 135, 156, 165 Spierenburg, Dirk 77, 81, 202-205, 214, 283 Stee, Fons van der 222 Stikker, Dir 68-70, 75, 78, 81-82, 89, 93, 96-99, 101, 105, 142 Stoel, Max van der 203, 214 Stoltenberg, Gerhard 229, 244-245, 247

Strauß, Franz Josef 176 Szász, André 222 Tas, Jan van der 252-253 Tellegen, Marie Anne 98 Teltschik, Horst 17 Teppema, S.Th.J. 61, 65 Thatcher, Margaret 16, 20-22, 26-29, 35-37, 234-236, 240-242, 249, 251, 258, 279, 282, 284 Thomson, Georges 201 Tietmeyer, Hans 241, 247, 253 Tinbergen, Jan 90 Tindemans, Leo 203, 208-209, 308 Triffin, Robert 178 Truman, Harry 68, 93 Uri, Pierre 116, 118, 124, 178 Uyl, Joop den 95, 202, 204, 212-213 Verrijn Stuart, Gerard 129 Vestdijk, Simon 70 Volcker, Paul 27 Vorrink, Koos 95 Vos van Steenwijk, Willem Lodewijk de 199 Vries, Bert de 262 Waigel, Theo 30, 32, 34, 288-290 Wellink, Nout 213 Werner, Pierre 190 White, Harry Dexter 179 Wilhelm II, Keizer 35 Wilson, Harold 198 Witteveen, Johan 192, 204, 216 Yrissou, Henri 114 Zalm, Gerrit 290-294, 296 Zeeland, Paul van 97 Zijlstra, Jelle 100, 102, 121, 129, 140, 217-218

Index of subjects Action Committee for the United States of Europe 125, 189, 246, 305 Adenauer-Mollet agreement 134-135, 160, 305 Allied Control Council (ACC) 44 American Congress 43, 68, 303 Amsterdam, Treaty of 289-290, 310 Anti-Revolutionary Party (ARP) 98, 128, 192-193 Assemblée Nationale 105 Austria 26, 146, 186, 273, 310

Banca d’Italia 178, 243 Bank for International Settlements (BIS) 99, 179-182, 184, 186 Banque de France 174, 178, 228-229, 244 Barre Plan 179, 181, 189-191 Basel-Nyborg agreement 244 Belgium 14-15, 26, 34-35, 38-39, 58-59, 69, 75, 80, 82, 85, 94-95, 97, 125, 129, 131, 136, 178, 221, 243, 258, 306 Benelux 25, 44, 64, 68, 81, 94-95, 108, 116-117, 119-121, 145, 233, 303-304

332 

The Netherl ands and European Integr ation, 1950 to Present

Benelux memorandum 114-115, 118-119, 121, 123, 127, 130, 165, 304 Berlin Crisis 54, 158, 160 Berlin Wall 13, 15-16, 24, 28-29, 32, 256-257, 271, 284, 306, 309 Beyen Plan 102, 104-105, 118-119, 127, 304 Big Bang enlargement 281, 310 Bretton Woods 41, 68, 120, 132, 170, 172-174, 176, 178-179, 192, 201, 206-207, 211, 213, 215, 219, 228, 277, 282, 303, 307 Brussels, Treaty of (Brussels Pact) 59, 84, 108, 132, 303-304 Bulgaria 273, 310 Bundesbank 27, 177-178, 185-187, 209, 211, 216, 218-221, 229, 232, 241, 243-247, 249, 267, 283, 288-289 Bundestag 17, 135, 158, 227 Bureau of European Affairs (BEA) 46, 50 Canada 71, 108 Catholic People’s Party (KVP) 58, 96, 98, 106, 128, 145, 154, 192-193, 201, 217 Central Statistics Bureau (CBS) 90, 203 Christian Democratic Alliance (CDA) 234 Christian Democratic Union (CDU) 30, 78, 109, 111, 158, 187, 226, 252, 268 Christian Historical Union (CHU) 98, 154, 192-193 Christian Social Union (CSU) 176 Cold War 9-11, 14-15, 19-20, 24-25, 28-29, 38-42, 45, 47, 49-55, 59, 65, 68, 70, 72, 75, 79, 84-85, 87, 92, 144, 147-148, 157-158, 173, 179, 188, 227-228, 248, 270, 271-272 Commissariat à l’Énergie Atomique (CEA) 115 Commissariat au plan 73 Committee of Governors of the Central Banks 180-181, 186, 244, 251-237 Committee of Permanent Representatives (Coreper) 266 Common Agricultural Policy (CAP) 145, 148, 154, 159-164, 166-167, 180-181, 188-189, 193, 234, 306-307 Common market 34, 83, 102-103, 105, 116-119, 121-122, 124-127, 129-131, 133-137, 139-142, 145, 154, 160, 162, 164, 178, 180-181, 183, 186, 192, 198, 201, 207-208, 214, 235-236, 277, 282, 299, 301, 304-305 Communism 50, 53, 103, 156 Croatia 273, 311 Cuban missile crisis 158, 306 Cyprus 273 Czech Republic 273 Czechoslovakia 60 Delors Report 27-28, 250-255, 284, 309 Democratic Socialists 1970 (DS’70) 192 Democrats 66 (D66) 281 Denmark 146, 193, 195, 199, 201, 240, 270, 273, 278, 306-307, 309

Deutschmark 27-28, 30, 34, 154, 176, 180-181, 183, 186, 197, 202, 209, 211-212, 218, 220-221, 229, 231-232, 239-240, 243-244, 248-249, 278, 283, 285, 293 Dollar (US) 43, 46-47, 60, 66, 68, 130, 170-176, 220, 238, 244, 307 Dooge Report 242, 308 Duisenberg Plan 202, 212-213, 215-218, 222, 283 Dutch central bank (DNB) 182, 186, 210, 217, 222, 244, 254, 260, 267 Dutch Labour Party (PvdA) 58, 72, 81-82, 90, 95-98, 128, 195, 213, 281 Economic and Financial Affairs Council (ECOFIN) 222, 239, 243-244, 247, 255-256, 286, 289-292, 296, 310 Estonia 273 Euro 10-11, 39, 206-207, 248, 272-274, 276-278, 282, 285, 288, 291-292, 300-302 European Atomic Energy Community (EURATOM) 124, 126-127, 129, 134-135, 139, 167, 305-306 European Central Bank (ECB) 186, 245-246, 248, 250-251, 255, 261, 267, 286-287 European Coal and Steel Community (ECSC) 72-74, 78, 80, 82-84, 86, 89-93, 96-97, 100-103, 105, 107-108, 110-111, 113-116, 118-120, 122-127, 131, 133-134, 140, 167, 178, 202, 268, 273, 297, 304, 306 European Commission 27, 124, 130-131, 135, 145, 156, 159, 162-164, 179, 181, 191, 201, 216, 218, 221, 223, 230, 235-240, 243-245, 248, 260-261, 265-266, 269, 276, 281, 286, 289-294, 305, 308 European Community 16, 22, 28, 157, 195, 202, 234, 244-245, 249, 251, 256, 258, 262-263, 272, 307-308 European Council 32, 34, 218, 219-220, 234, 237, 257, 260, 265, 274, 281, 291, 308, 310 European Court of Justice 124, 164, 292 European Currency Unit (ECU) 221, 238-239, 242 European Defence Community (EDC) 23, 91-96, 100-101, 104-105, 107-108, 110-111, 114-117, 126, 129, 131, 133-134, 165, 304 European Economic and Monetary Union (EMU) 11, 27-28, 30-35, 37, 39-40, 164165, 178, 181, 185-187, 189-186, 191-192, 194-195, 201-209, 211-215, 218, 221-222, 231-255, 257-259, 263-268, 270, 272-274, 276-280, 282-290, 292-296, 300, 307-310 European Economic Community (EEC) 38, 40, 51, 135, 140-149, 152-168, 177-182, 184, 186-189, 192-194, 197-203, 205-209, 211-218, 222-223, 229-231, 236-238, 240, 305-308 European Free Trade Area (EFTA) 146, 148, 157, 273, 305 European Integration Department 198-201

333

Index

European Monetary Cooperation Fund (EMCF) 215 European Monetary Fund (EMF) 215, 220 European Monetary System (EMS) 28, 219-222, 227-231, 237-240, 243-245, 249-250, 283, 308 European Movement (Netherlands) 106 European Parliament 31-34, 36, 92, 190, 263, 265, 280, 305 European Payments Union (EPU) 47, 69, 179-180, 304 European People’s Party (EPP) 266 European Political Community (EPC) 96, 100-105, 116, 304 European Political Cooperation (EPC) 231, 260 European Political Union (EPU) 31-35, 71, 144, 146, 149-150, 152-156, 160, 179, 190, 201, 208, 255, 259-267, 280, 283, 287-289, 305, 309 European System of Central Banks (ESCB) 190, 250-251 European Union (EU) 8, 10, 30, 51, 127, 156, 203, 212, 265, 270, 272-274, 278-282, 285-286, 290-292, 296, 301, 304, 307-311 Federal Republic of Germany 18-19, 23, 30-31, 44, 53, 62, 68, 75-76, 78, 91-92, 96, 108-112, 116, 134, 136-137, 158, 160, 162, 165, 176-178, 184, 190, 200, 202, 209, 211-212, 218-219, 221222, 227, 231-232, 240-241, 243, 245-246, 248, 252-253, 260, 267, 269-270, 303 Federal Reserve (Fed) (US) 27, 169, 177 Fifth Republic 25, 143-144, 305 Finland 273, 310 Foreign Office (UK) 37, 80, 242 Fouchet Plan 156, 305 Fourth Republic 25, 110, 130, 143-144, 178, 305 Franc 27-28, 110, 114, 125, 144, 176-177, 179-181, 189, 191, 228-230, 245 France 9, 15-16, 19, 22-25, 27-32, 34, 38, 44, 47, 50, 59-60, 65, 72-73, 75-80, 82, 89, 93, 95, 97, 104-106, 108-110, 112-115, 124-127, 129-130, 132, 134, 136, 140, 142-145, 148, 151, 157-158, 160-161, 166-168, 174-179, 186-187, 189, 193, 195, 200, 208, 211, 219, 221, 223, 225, 227-233, 239240, 244, 247-248, 253, 260, 267, 279, 281, 285, 287, 290, 292, 296, 303-307, 311 Franco-German friendship treaty (Elysée Treaty) 31, 158, 160, 219, 225, 227, 233, 306 Frankfurter Dokumente 44 Free Trade Association (FTA) 141-142, 145-146, 148, 305 Gemeinschaftsorganisation Ruhrkohle (GEORG) 83 General Agreement on Tariffs and Trade (GATT) 37, 68, 110, 119 General Treaty 93, 96, 107-109, 111, 304 German Democratic Republic (GDR) (also East Germany) 17-18, 91, 188, 258, 267

Gleichberechtigung 23, 104, 270 Greece 34, 234, 240, 252, 260, 273, 285, 293-294, 296, 308 Guilder 60, 85, 154, 180-181, 183, 186, 197, 209-211, 218, 243, 256, 285, 292 Havana Charter 68-70, 303 House of Commons 251 Hungarian uprising 135, 305 Hungary 273, 296 Intergovernmental Conference (IGC) 240242, 253-255, 259-260, 266, 288-289, 308-309 Internal market 31, 102, 235-236, 238, 240-241, 243-244, 247, 250-251, 257, 264-265, 278, 293, 300, 308-309 International Monetary Fund (IMF) 68-69, 98, 120, 172, 177-180, 183, 188, 213, 216, 241, 303 International Trade Organisation (ITO) 68-71, 303 Ireland 193, 195, 201, 240, 273, 306-307 Italy 25, 34, 38-39, 75, 80, 95, 97, 108, 119-120, 129, 136, 183, 186-187, 200, 221, 252, 260, 285, 293-295, 300, 304, 310 Korean War 54, 91-92, 94, 104, 304 Krönungstheorie 185, 190, 194, 204-205, 208-209, 212, 214-215, 221, 233, 246, 253, 255, 283, 287 Latvia 273 Lisbon, Treaty of 219, 311 Lithuania 273 Luxembourg 26, 34, 38-39, 59, 78, 80, 83, 97, 100, 102, 107, 116, 118, 134, 136, 190, 202-203, 215, 238, 241-242, 253, 258, 265, 280, 306 Luxembourg Compromise 167, 238, 277, 280, 306 Maastricht, Treaty of 11, 264, 267, 270, 273, 278, 279-280, 286-290, 309-310 Malta 14, 26, 273 Marshall Aid 42-43, 53, 60, 63, 68-69, 85 Marshall Plan 41, 44-46, 48, 179, 303 Messina Conference 119, 121, 129, 304 Messina Resolution 122-123, 239, 304 Ministry of Economic Affairs (Belgium) 117 Ministry of Economic Affairs (Germany) 124, 237 Ministry of Economic Affairs (Netherlands) (EZ) 100, 262 Ministry of Foreign Affairs (France) 115 Ministry of Foreign Affairs (Germany) 116 Ministry of Foreign Affairs (Netherlands) (BZ) 63, 74, 90, 97-98, 120, 129, 191, 198, 252, 254-256, 260, 262-266, 270 Mouvement Républicain Populaire (MRP) 143, 156, 175

334 

The Netherl ands and European Integr ation, 1950 to Present

Nation-state 8, 275 NATO (North Atlantic Treaty Organisation) 14-16, 19-20, 22-23, 45, 49-50, 54, 60, 65, 69, 71, 84, 92-93, 96, 108-110, 135, 142, 146, 150-152, 156, 158, 188, 227, 266, 272, 303-304 Nice, Treaty of 280, 310 Nine, the 194, 202, 208, 307 Nixon shock 171, 307 Norway 146, 199, 306-307 Occupying powers 17, 44, 61, 108-109, 271 OPEC (Organization of the Petroleum Exporting Countries) 171 Open coordination method (OCM) 280 Optimum/Optimal Currency Area (OCA) 206-207, 222, 243, 287 Organisation for Economic Co-operation and Development (OECD) 187, 242, 306 Organisation for European Economic Cooperation (OEEC) 43-46, 48-49, 60, 67-70, 73-74, 78-81, 84, 92, 110, 117, 119, 131-133, 303-304, 306 Organization for Security and Co-operation in Europe (OSCE) 18 Oslo Agreements 59, 303 Ouchy Convention 59, 303 People’s Party for Freedom and Democracy (VVD) 97, 192-193, 213, 221, 228, 234, 242, 280-281, 265-266 Pleven Plan 92, 94, 104-105, 110, 142, 304 Poland 15, 58, 271, 273, 296 Portugal 146, 234, 260, 273, 308 Potsdam Conference 15, 42, 303 Pound (Sterling) 46-48, 60, 70, 75, 169, 180, 183, 200, 283 Prague Spring 188, 307 Préalable anglaise 152, 154, 156, 166, 193, 198-199, 201 Romania 273, 310 Rome, Treaties of 133, 135, 137, 139, 144, 160, 186, 218, 222, 231, 267, 273, 305 Round Table of Industrialists 235 Russia 25, 49-50, 66, 147, 156 Schuman Plan 72-75, 77-81, 86, 91-93, 104-105, 116, 118, 268, 304 Sector integration 102-103, 110, 114-116, 118-119, 127, 164 Single European Act 238, 241-243, 250-233, 279, 308 Six, the 25, 40, 44, 80, 86, 95-97, 101, 103, 105, 107, 110, 113-114, 117, 119, 124-125, 129, 131, 140-141, 145-146, 148, 150-153, 155, 159-160,

162-165, 167-168, 178-181, 183-186, 193-194, 197-199, 273, 277, 279, 296-297, 304-305 Slovenia 273 Snake arrangement 195, 207-209, 211-212, 216, 218-219, 229, 307-308 Social Democratic Party of Germany (SPD) 134, 176, 187, 291 Sovereignty 28, 31, 36, 74, 81, 251-252 Soviet Union 15, 17, 19-20, 26, 37, 42-44, 50-51, 53-54, 66, 108, 135, 147, 160, 179, 266, 272, 305, 307 Spaak Report 123-124, 126-127, 131, 133, 135, 305 Spain 26, 34, 37, 39, 234, 252, 260, 267, 273, 285, 295, 308 Spierenburg Report 203-204, 207, 283 Stability and Growth Pact (SGP) 285, 291-292, 296, 310 State Department (US) 46 Stikker Plan 68, 81, 101, 117 Strasbourg Summit 27, 257, 268, 309 Suez Crisis 38, 135, 305 Sweden 146, 273, 281, 310 Switzerland 26, 39, 146, 219 Tindemans Report 208, 308 Treaty establishing a Constitution for Europe 296, 311 Twelve, the 263, 308 United Kingdom (UK) 10, 19, 22, 38, 40, 47-50, 54, 59, 65, 69-72, 75, 79-81, 84, 86, 94, 108, 116-117, 126, 129, 131, 141, 145-146, 148-149, 152, 155-158, 168, 170, 179, 189, 193, 198-202, 208, 216, 223, 240-241, 260, 267, 270, 273, 277-279, 281, 284, 303, 306-309, 311 United Nations (UN) 91 United States of America (US) 15, 19-20, 22, 25, 45-50, 54, 60, 65, 71, 79, 93, 108, 135, 147, 149, 151, 156-158, 169-179, 184, 188, 204, 219, 227, 272, 307 Venice Conference 123, 125-127, 305 Warsaw Pact 273, 307 World Bank 41, 98, 303 Werner Plan 194, 204-205, 214, 217, 263, 307 Westbindung 108-109, 111, 113, 134, 187, 221 Western European Union (WEU) 23, 108-109, 111, 134, 304 Weststaatsgründung 44, 269-270 White Paper (on the internal market) 238239, 308 Yalta Conference 15, 42, 303 Yalta, Order of 15, 17, 42, 49-53, 65, 272, 309