Archive for October 13th, 2012

The EU Deserves the Peace Prize

When I first got to know the European Community it had ten states and some people continued to call it the EEC – the European Economic Community.   It was in a funk.   Greece was the newest member, but progress towards increased integration was fleeting.   The British were angry about paying so much into the system, divergent monetary policies meant that exchange rates fluctuated rapidly, and the word of the day was “Eurosclerosis” – the project to build a united Europe was stagnating, and could perhaps fail.

Studying at the Bologna, Italy Center of Johns Hopkins SAIS I took a course on “The Politics of European Integration” by Dr.  Gianni Bonvicini, a young and enthusiastic supporter of the European Community as it was called then.     As we learned about integration theory, I found myself fascinated by the process through which countries that had caused war and devastation moved towards peace and cooperation.

The choice of the EU for the Nobel Peace prize surprised many

The war and devastation had been profound in Europe in the first half of the 20th Century.   The Europeans gave us the holocaust, Communism, and colonialism.   Conquering the world, taking slaves, draining other lands of resources and wealth, the Europeans reflected the most violent civilization of human history.   To be sure, the violence was often sanitized by claims they were spreading Christianity, bringing civilization to the primitives or ‘exploring the world.’   Even now we express horror at the Taliban killing a young girl while our own drones kill innocents more often than we realize.   (Update:  ‘Europe’ here refers to the “West,” which includes the US.)

The violent and social Darwinistic turn taken by the Europeans in the 19th Century came home to roost in the first half of the 20th.   Violence, depression, war and ideological conflict took the most powerful set of countries on the planet and left them devastated.   As the US and the USSR began their Cold War, the Europeans realized that they’d never have a brighter future if they didn’t rethink the basis of their political culture.

It started small.   Former wine merchant Jean Monnet, a war time planner, recognized that cooperation and trade yield benefits while conflict and isolation lead to war.   When they couldn’t convince the Europeans to leap forward to a United States of Europe — nationalism would not die so easily — they took another track.

Jean Monnet, the “father of Europe.”

After the war the European Coal and Steel Community (ECSC) was created in order to put coal and steel under supranational control.   Since most of the coal and steel came from Germany, this was designed to both deny Germany such control, but allow Germany to use their resources for economic gain.   West Germany, France, Italy, Belgium, the Netherlands and Luxembourg were part of this organization, and it worked well.

In 1955 talks started in Messina to undertake a bolder project.   What if the six ECSC states could form a customs union, a region with no internal tariffs and a common external tariff?    On March 25, 1957 they signed the Treaties of Rome to create the European Economic Community to do just that.    The Common Market was complete by 1967, with the ECSC, EEC and Euratom (an organization for the peaceful use of atomic energy) merging to form the EC – the European Community.

The economic boom that Europe was creating after WWII yielded the desired effect — spillover.   People saw that cooperating and trading worked and in 1973 the European Community expanded to nine states, adding Great Britain, Ireland and Denmark.   Then the energy crisis hit, exchange rates started to fluctuate wildly as the US abandoned the Gold Standard and fixed exchange rate system, and it appeared the EC had hit a wall.

He had jet black hair and was very young when Bonvicini prophetically told us where the then-EC was headed

Dr. Bonvicini told us not to be fooled by the apparent crisis in the EC.   It already has served its original purpose, he reminded us, making war between France and Germany — or any member of the EC — unthinkable.   But more than that, he said the process had not truly stalled.   France and Germany pushed for the creation of the European Monetary System (EMS) in 1978.   Wild divergences in monetary policies made the EMS seem almost pointless, but he predicted someday it would yield the desired outcome: a common currency.

That was pie in the sky fantasy in those days.   How could inflation friendly France and Italy ever unite with West Germany and the Netherlands, two countries with very tight monetary policies?   Impossible!   Unthinkable!   In fact, many thought the break up of the EC probable.  The British were demanding a rebate, sovereignty now was trumping supranationalism.

Bonvicini was right.   Britain got its rebate, and soon the EC moved towards a “Europe without frontiers,” the Single Europe Act designed to eliminate diverse regulations on goods and services to make trade truly free, and cross border investment easy.   Once that was done, countries found themselves forced to converge on monetary policy, lest investment dollars flow to countries with the most stable exchange rates.   When the Cold War ended, the French and Germans led the way to create a common currency, the Euro.

With that agreement the EC became the European Union, and after the Cold War it expanded from 12 states to 27.   Many East European states were veering towards corruption and authoritarianism, but the EU demanded they embrace democracy and rule of law in order to become members.   The economic allure of the EU was too great to ignore; authoritarianism was rejected.

By the dawn of the 21st Century countries that had fought each other in massive wars now gave up their currency for a shared one, and checks at borders were removed.  One could travel from Italy to Austria to Germany as easily as traveling from Massachusetts to Maine.   Workers can go anywhere in EU for a job, students can go anywhere to study.   Corporations merged as national economies became so linked and interdependent.   Sovereignty was transformed as Europeans were citizens of both a state and the EU.

The states of the European Union

The EU has also worked for peace world wide.  It is the only major actor on the world stage that has accepted both UN sets of human rights, economic and political.   It is the major force behind UN peace keeping operations, and the EU has signed and met the Kyoto accord agreements, proving that achieving those results is economically beneficial rather than harmful.   The wealthy states of Europe are now helping states like Greece and Spain deal with what otherwise would be complete economic collapse.

Simply, the world is entering an era of globalization in which past notions of sovereignty and self-interest are becoming obsolete.   States are no longer independent units but interwoven in a web of economic and political relationships.   The old way of thinking, still clung to by most in the US, is obsolete.    Transitions from an old order to a new one are often violent and lengthy as people can’t let go of old ways of thinking and doing.   The EU offers a model of what can work in the future.  It reflects the most promising sign that this global transition might be peaceful rather than violent.

So congrats to the EU – a fitting recipient of the Nobel Peace Prize!