A NEW BEGINNING
Not only have the economic and political aspirations of Maastricht been discredited: a Government which started with a small but satisfactory working majority has come perilously near on more than one occasion to being forced into a general election as a result of divisions on the issue on the Conservative benches. Since the Maastricht Bill became law in the summer of 1993, an attempt has been made to bridge divisions with a return to the rhetoric of Euro-scepticism. The trouble is that rhetoric is not enough. We now have to have a clearer strategic objective and a cleverer tactical game plan than for Maastricht.
The essential starting-point for this is to weigh up honestly and objectively our negotiating strengths and weaknesses. We should not be under any illusion that we are ‘winning the argument’ in Europe. It is deeply unpersuasive to say at one and the same time that one subscribes to the objectives of one’s partners, while trying to change them. In any case, argument is of little importance in European Community decision-making. While France, Germany and a sufficient number of other Community members remain intent on federalism, expositions of the virtues of the alternative are, for immediate practical purposes, wasted effort. This situation will not necessarily last for ever. But it would be altogether unrealistic to assume that the balance will alter between now and 1996.
It is equally necessary to learn from experience. Ever since Britain joined the EEC we have seen European institutions, supported by other European governments, placing a systematically different interpretation on texts than those which we accepted. From ‘ever closer union’ in the Treaty of Rome, to ‘economic and monetary union’ endorsed as the official objective at the Paris European Council in October 1972,[74] to the Single European Act where the new majority voting provisions intended solely to implement the Single Market were used by the Commission to extend its regulatory powers, our experience has been the same. Vague declarations, which we assumed at the time had no practical implication, are subsequently cited to justify the extension of Community powers into fresh areas of national life. Consequently, in judging whether further verbal concessions to federalism should be made in the Maastricht negotiations, we had no excuse for naivete about the extent to which they would be exploited and indeed twisted. Maastricht was a treaty too far. Even without Maastricht, moreover, it would have been necessary to revise some aspects of earlier agreements, going right back to the Treaty of Rome, if the unwelcome momentum was to be resisted.
This is especially relevant to the activities of the European Court of Justice. Most of us, including myself, paid insufficient regard to the issue of sovereignty in consideration of the case for joining the EEC at the beginning of the 1970s. There was, of course, a basic intellectual confusion, when phrases about ‘pooling sovereignty’ were used, resting on what Noel Malcolm has described as the failure ‘to make any distinction between power and authority’.[75]
But beyond that there was a failure to grasp the true nature of the European Court and the relationship which would emerge between British law and Community law. The latter is directly applied through the courts of member states which, in the event of a conflict, are bound to give Community law, as interpreted by the European Court, precedence over domestic law. This was demonstrated by the Factortame case, brought against Britain by Spanish fishermen who had found a legal loophole by which they could register their ships in Britain and make use of British fishing quotas, thus thwarting the intentions of the Common Fisheries Policy. In 1988 Parliament passed a Merchant Shipping Act to close the loophole, but the subsequent litigation went against the British Government and resulted in the suspension and ultimate setting aside of the Act by the British courts, following reference of the case to the European Court.
What makes this legal situation all the more significant is that the European Court is a far from impartial interpreter of the treaties and Community laws. It makes no bones about being a force for European integration. Its opportunities for extending the powers of Community institutions are still greater under Maastricht. Above all, it will be for the Court to decide on the reality of the opt-outs on monetary union and the Social Chapter which the Prime Minister obtained for Britain. Its past attitudes and activities give little cause for comfort.
Against all these difficulties, however, Britain has even more important negotiating strengths, as long as we are prepared to use them to the full. The first and most important is our trading position and opportunities. Our trade balance with the Community has been consistently in deficit. Not that there is anything wrong with that in itself. But it does establish that other EC members have a clear interest in continuing trading with us and so puts into perspective the exaggerated fear that if we do not comply with their wishes, they will find ways to cut us off from their markets.
In addition, the European Community’s relative importance as regards both world trade and Britain’s global trading opportunities is diminishing and will continue to diminish. Our politicians should become less concerned with European markets, whose most dramatic expansion has probably now been achieved, and more interested in the new opportunities emerging in the Far East, Latin America and the North American Free Trade Area. The disposition of Britain’s massive portfolio of overseas assets — over £1,300 billion in 1993 — provides an insight into the judgement of the private sector on this question: over 80 per cent are held in countries outside the EC, and the proportion in the emerging markets is expanding vigorously. The share of our total trade with countries outside the EC, and particularly with the Pacific Rim, is increasing and will continue to do so.
Moreover, although some of the investment which comes to Britain doubtless does so because we are within the European Community, investment will also increasingly go elsewhere than to Europe because of the EU’s regulatory inflexibilities and high social costs. Both by tradition and because of the pre-eminent position of the City of London as an international financial centre, Britain is naturally a global rather than a Continental trading country. But we need to retain the right to hold down our industrial costs if we are to compete successfully in the new global market. None of this is to say that we should lightly pick quarrels with our European neighbours. But it does suggest that we must stop speaking as if Britain’s economic future primarily depended upon proving ourselves to be ‘good Europeans’.
Secondly, it is also important to recognize the important non-economic strengths Britain possesses, which give us a special weight in European negotiations. In spite of the present chill in relations between the US Administration and the British Government, the ‘special relationship’, depending as it does upon shared experience, traditions and sentiments, is still an important underlying reality. My own experience of Anglo-American relations in the run-up to the Gulf War convinces me that, whatever the calculations of officials in the US State Department or the British Foreign Office, when serious work has to be done we all know that the US can rely only upon a handful of well-established nation states with a global outlook and a willingness to uphold international order. That means, principally, ourselves and the French; and the French, though they played a gallant part in the Gulf War, have generally been suspicious of American-led ventures. The Anglo-American relationship is itself, of course, closely linked to the unchallenged predominance of English as the language of the twenty-first century. There are, therefore, good strategic reasons for shrewd Continental European statesmen to wish to keep a mutually satisfactory, or at least tolerable, relationship with us.
74
My concern with this wording led to my having it glossed with the phrase ‘cooperation in economic and monetary policy’ in the text of the Single European Act.
75
Noel Malcolm,