A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Curzon, Victoria Article — Digitized Version The essentials of economic integration Intereconomics Suggested Citation: Curzon, Victoria (1974) : The essentials of economic integration, Intereconomics, ISSN 0020-5346, Verlag Weltarchiv, Hamburg, Vol. 09, Iss. 4, pp. 102-104, http://dx.doi.org/10.1007/BF02927316 This Version is available at: http://hdl.handle.net/10419/138999 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. 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Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu FORUM Crises in the Community Both authors discuss the recurrent crises of the Community and agree that they arise mainly because so far Europe's national governments are not yet prepared to abandon basic sovereign rights. The differences, however, of the conclusions and recommen- dations they arrive at are interesting to note. The Essentials of Economic Integration by Dr Victoria Curzon, Geneva* Disappointment over the prog- tional context. As a result the there was to fall back on was ress of European integration impetus was largely ineffective integration at the economic lev- is rife and now is clearly the on a political plane. el - which might have devel- time to ask why and where oped anyway. things began to go wrong. When This gave governments, re- it is found that a wrong turning presenting traditional national Economic integration was has been taken the only way to interests, full liberty to organize therefore made to carry all the get back on the right road is to European integration in the way hopes and fears of the propo- return to where the mistake was which suited them best - that nents of political integration. This made. is to say, by extracting the un- was too heavy a burden for what doubted benefits inherent in in- was, after all, only an expression The first mistake was really tensive intra-European cooper- of the material self-interests of made just after World War II ation without endangering na- nation states. Unlike political when the European resistance tional sovereignty. integration, economic integration movement, which unanimously proved to be surprisingly straight- supported the idea of European The furthest the supporters of forward, helped by favourable unity, failed to make any sub- European federation ever got conditions. From the start, the stantial impact on domestic pol- was the signature, by six Euro- mood of the industrialized coun- icy once political life returned pean countries, of the treaty tries, particularly those of West- to normal. The impetus for post- establishing a European Defence ern Europe, favoured trade lib- war European integration was Community. The objective was eralization as an important ele- accordingly channelled into var- to create a European army under ment in post-war reconstruction. ious European "movements" supra-national control. But the which were weak by comparison French National Assembly re- Few now remember "the GATT with the traditional political par- fused to ratify the treaty. It is plan" of 1954 which called for a ties operating in the interna- often forgotten that the failure bold across-the-board reduction * Instltut d'Etudes Europ6ennes, Universlt6 of the European Defence Com- of tariffs among all developed de Gen~ve. Dr Curzon Is the author of The Essentials of Economic Integration: munity was also the failure of countries. Initiated by France, Lessons of EFTA Experience, London, the idea of European integra- the plan was widely supported Macmillan, for the Trade Policy Research Centre, 1974. tion at the political level. All in Western Europe, but the 102 INTERECONOMICS, No. 4, 1974 FORUM United States did not have Con- by the customs union in a drive plies the abandonment to a cen- gressional authority to act and, towards European political in- tral authority of some of the for the sake of Commonwealth tegration. most important instruments of preference, the United Kingdom economic policy, notably the Far from furthering the cause did not want to act 1. The plan capacity to manipulate rates of was therefore stymied. of European integration, which interest, the money supply and most people would fully support public expenditure, employment Thus, when the proponents of or at least understand, this link- and, thus, the national vote. To European union turned to the ing of issues is causing consid- resolve the dilemma of European field of trade to further their erable harm. Apart from pro- integration in present circum- objectives, they found their gov- ducing the conflicts seen almost stances it is necessary to ex- ernments very receptive to the every week in Brussels, the amine whether there exists any idea of a customs union and tactics of the political integra- scope between a customs union well ahead with preparations. tionists are unnecessarily de- and full economic union to pro- For a short period governments laying the next stages of eco- mote further economic integra- and Europeanists were able to nomic integration. tion without encountering sys- follow the same road. The Trea- ty of Rome bears witness to the It is positively counter-pro- tematic resistance from govern- ments. strength of the supra-national ductive to lay traps for large idea at that time. countries like Britain, France or Germany. They will not allow A Comparison with EFTA The latter 1950s - as the themselves to be inveigled into In this connection, it is illu- 1960s were soon to show - political integration by apparent minating to look at how far eco- were propitious years in which economic logic. What is more, nomic integration proceeded in to lay plans for far-reaching it is misleading to fudge the EFTA, which on purpose kept the trade liberalization. And in due distinction between economic level of cooperation well below course, without excessive diffi- and political integration, saying the critical point at which na- culty, the European Community "it's all politics anyway". For tional sovereignty might be not only achieved its customs while political integration implies threatened. Obviously, a free union, but EFTA achieved its some pooling - and hence trade association involves, in the free trade area and the GATT sacrifice - of national sover- first place, a lesser degree of successfully completed the Ken- eignty, economic integration up cooperation than a customs nedy Round negotiations. Yet to a certain point does not union. But this is not the point the very ease with which coun- entail any such loss 2. at issue. The existence of the tries embraced tariff-free trade European Community is proof in industrial goods stands in Monetary Union Unacceptable enough that a customs union is sharp contrast to the general not in itself a threat to national malaise that began to surround In Western Europe, where sovereignty. the European Community once governments have made it abun- the last barriers to trade were dantly clear that they are reluc- What is interesting to dis- eliminated. tant to sacrifice significant parts cover is whether EFTA has en- of their sovereign autonomy, it countered any "second" or Governments vs. Integratlonists has become very necessary to "third generation" integration define much more precisely how problems in the twelve years It is obvious that the malaise far economic integration can be of its existence. If so it would is not the fault of the customs pursued without provoking imply that the European Com- union which works fairly smooth- "stonewall" resistance. All the munity could progress beyond ly. Rather it is due to the grow- work on European monetary a customs union by simply ing resistance of national gov- union, for instance, shows that lowering its sights. ernments to pressure from the the necessary degree of policy Without wishing to read more European integrationists. The harmonization goes wildly be- into EFTA experience than is latter have been interested in yond anything that governments really there, it is worth noting inducing governments to go could ever accept - as long as that EFTA was (and still is) con- beyond economic integration they represent nation states. and exploit the forces generated cerned with such policy prob- This has been plain from the lems as government assistance 1 For the reports of the Working Party on the "Technical Study of the French outset. Monetary integration im- to depressed regions, rights of Proposal for the Reduction of Tariff establishment for firms and per- Levels" see Basic Instruments and Se- 2 This, incidentally, is why economic in- lected Documents, First Supplement, tegration has not proved to be the loco- sonnel, public procurement pol- Geneva, GATr Secretariat, 1953, pp. 67-92, motive force for political integration that and the Second Supplement (1954), the European federalists and functional- icies, restrictive business prac- pp. 67-85. ists envisaged. tices, technical specifications INTERECONOMICS, No. 4, 1974 103 FORUM and patents 3. These are areas ment of common agricultural, Could the EFTA method of of policy coordination into which regional, social and other poli- dealing with problems as they governments have to go, how- cies).