The Common Market at 25: crisis or comeback?

Pierre-Henri Laurent is professor of history at Tufts University and adjunct professor of diplomatic history at the Fletcher School of Law and Diplomacy.

The first 25 years of the European Community are over. Its past history is filled with achievements, the most important of them that disagreements of the 10 member nations are resolved in a spirit of cooperation rather than aggression.

But now a sad state of affairs exists in Europe and particularly in the EC. The institutional crisis that has developed over the past year was bared fully at the recent inconclusive EC Council of Ministers meeting in Stuttgart. The need for budget reform and basic agricultural policy transformations has now become acute, and in fact the community's survival may well be at stake if answers acceptable to all 10 member states are not found by the early December meeting of the ministers in Athens.

This bleak picture is compounded by a series of interrelated matters. The direction of the council is in the hands of Greece for the last six months of this year, and of France from January to June in 1984. Neither chairmanship gives EC supporters great positive feelings, especially a French tenure.

More important, the critical financial situation has played a major part in the continued procrastination on enlarging the EC with Spanish and Portuguese entry. French and Italian worries about vegetables, fruit, wine, and olive oil have resulted in stalled negotiations, and the linkage of this issue to Spain's NATO role clouds the issue even more. The real costs for the EC 10 in the admission of these low-wage states at a time when Europe unemployment is so high , and in some cases on the rise, put a political price on the member states that they will find hard to overcome, given the clout of industrial unions alongside the farmer lobbies.

These matters are also influencing, perhaps adversely, the impending EC talks with 65 African-Pacific-Caribbean states of the Lome Convention. These renegotiations for a Lome III must begin in September and be completed in 16 months, for the five-year Lome II pact ends as 1985 begins. What many experts believe to be the prime example of a successful North-South pact that covers trade, aid, industrial cooperation, and rural development may be so lacking in imaginative problem-solving that its political and economic value to both sides is mostly lost.

Many of these problems and their possible solutions are deeply interconnected to the fact that the EC Commission president, Gaston Thorn, is in the last 18 months of his second (and last) two-year term of office. The dynamic and progressive ambitions that Thorn has displayed for the EC, along with his capable and activist staff in the commission, will have difficulty producing any significant results, most particularly when he is a lame duck in 1984.

Given the continued economic plight of the EC states where no real recovery is in sight (despite some upbeat forecasts), little or no movement on enlargement or amelioration of the EC-third world development policy appears possible. With Britain's Mrs. Thatcher pressing hard on the budget contributions and reimbursements, President Mitterrand's Socialist France in dire economic straits, and Belgian Prime Minister Martens conducting a severe but necessary austerity program, it appears that only Chancellor Kohl has the strength and leadership capabilites to break the community logjam. But even he may be dramatically tested this fall by the NATO Euromissile deployment debate in West Germany.

Finally, there is the financial and monetary situation. The European Monetary System is working at best on a very low level, especially after the March revaluations. Most Europeans still believe that the major culprit has been, and continues to be, the high US interest rates. The Williamsburg summit gave little relief to those who felt that the Western leaders might address this global problem. One possible bright sign in recent months has been the rise and strength of the ECU, the European Currency Unit, which has dramatically vaulted to third place on a global scale behind the American dollar and West German Deutschemark.

It is evident that this is as important a period of instability as ever in the 25-year history of the EC. Many in Western Europe see future prospects as even more bleak with the strong possibilities of an intensified US-Europe trade war. Protectionism grows under the present US administration. And many Europeans fear a reproduction of the gas pipeline dispute if, as planned, Congress gives the Reagan administration broader powers to restrict exports of sensitive goods and technology.

The progress of the community, the most important European achievement since World War II, is primarily dependent on overcoming the basic internal problems and reconstructing the political will and incentive to move ahead.

To return to a more dynamic track for the community's second quarter century, the 10 need to speak with one voice again and to act together. Despite rising bills, new nationalistic disturbances, and other difficulties, the Common Market must stress the nature of partnership and its ''take-a-bit-here-and-give-a-bit-there'' philosophy. As the world's largest single market and most powerful trading block, it has to create a more positive outlook and avoid the destructive inclinations to pursue national goals. A series of dramatic choices will have to be made in the near future, and the EC's decisions will either deepen its sorrowful circumstances or forge a new and viable identity for a new and demanding epoch.

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