3 How did Franco-German initiatives for advancing European integration play out in the past?
The history of Franco-German agreements in relation to European integration is well-known, including the Schuman Plan, the creation of the European Monetary System (EMS) and the Maastricht Treaty (see sections 3.1 to 3.3). These agreements are usually presented as near-mythical breakthroughs and achievements, with the Franco-German tandem at their heart. The substance of these Franco-German agreements and how they actually unfolded is, however, often misunderstood. The back stories are often complex.
3.1 The Schuman Plan and the founding of the European Coal and Steel Community: a French proposal rubber-stamped by the German government
The Schuman Plan was the first and most symbolic milestone of Franco-German cooperation after the second world war (Hitchcock, 1998; Gillingham, 2004). France and Germany agreed to the important and symbolic joint endeavour of pooling their coal and steel resources under a supranational umbrella. The result was the creation of the European Coal and Steel Community (ECSC) in 1951, out of which the EEC/EU would subsequently develop.
French foreign minister Robert Schuman outlined his plan in a famous declaration of 9 May 1950. The policy substance of the proposal made the declaration highly symbolic. By pooling coal and steel resources, Schuman’s proposal aimed to “make war not only unthinkable but materially impossible”. Schuman also made plain the centrality to the organisation of the European continent of the Franco-German reconciliation. He said that “the coming together of the nations of Europe requires the elimination of the age-old opposition of France and Germany”. The declaration thus embodied the idea that a Franco-German agreement was a necessary precondition for European integration to progress.
West German Chancellor Konrad Adenauer immediately and wholeheartedly agreed to the French initiative, though he had been kept in the dark when the proposal was being developed in Paris. The preparation of the plan bypassed the regular French foreign policymaking channels; it was essentially prepared in secret by Jean Monnet and Bernard Clappier, who were no diplomats. After such a warm reception in Germany, Italy and the Benelux countries also joined the plan. The British government rejected the plan partly because it involved the pooling of sovereignty, an institutional policy instrument which London strongly disliked.
The Treaty instituting the ECSC was signed in Paris in April 1951 and introduced some of the basic features that have marked European integration since. The ECSC included a supranational High Authority, a Council of Ministers, a Parliament, a Court of Justice and a single European market for coal and steel. This institutional framework was maintained with some adjustments in the 1957 Treaty of Rome that created the European Economic Community (EEC), and further developed by the 1992 Maastricht Treaty that created the European Union.
The most important institutional innovation was the introduction of a new governance system – supranational integration – in which the contracting parties abandoned their sovereignty in one specific policy area to a non-national executive. The Schuman Plan marked the first implementation in Europe of the supranational method. This method has remained ever since a central feature of European integration, and can lead to significant policy shifts, such as, most recently, the introduction of the banking union’s Single Supervisory Mechanism in 2013-14.
But instead of a Franco-German agreement of equals between Paris and Bonn, the Schuman Plan was in effect a French proposal rubber-stamped by Germany. The plan was exclusively a French initiative. The Schuman declaration represented a major and sudden reversal of French foreign policy. After the end of the second world war, the French government had continued to mistrust Germany. With the Schuman Plan, Paris started instead to promote constructive cooperation with its neighbour across the Rhine. The German government, meanwhile, was desperate to find an opportunity to re-enter the international/European stage after the war. Schuman’s proposal for an ECSC provided such an opportunity, which Adenauer immediately seized with enthusiasm.
3.2 The EMS: an agreement based on German preferences validated by the French government
The creation of the European Monetary System in 1979 was another major milestone among Franco-German agreements (James, 2012; Ludlow, 1982; Mourlon-Druol, 2012). Confronted with growing international currency instability after the breakdown of the Bretton Woods system, European policymakers started looking for a European solution that could re-introduce a high degree of stability in intra-EEC monetary relations. A temporary solution was found in 1972 with the creation of an EEC exchange rate system, the so-called snake. Within that framework, EEC currencies were allowed to fluctuate within a band of 2.25 percent, thus providing a degree of monetary stability.
But the functioning of the snake was not satisfactory for all EEC members. Many EEC countries could not join, or had to leave after only a few months. In 1974, for example, only five EEC member states out of nine belonged to the snake (Belgium, Denmark, Germany, Luxembourg and the Netherlands). The French, Italian and Dutch governments and the European Commission set out many proposals over that period to try and design an exchange rate system that would allow all EEC member states to take part, but with no concrete result.
From early 1978, upset by the fall of the dollar, which he perceived as putting the German economy at risk, German chancellor Helmut Schmidt decided that a European solution should be found for the problem of European currency instability. The initiative found a willing audience. German disquiet about the international economic situation dated from late 1977, many proposals for European monetary cooperation and integration had been tabled in the past few years, and the French president was keen to move forward. As a consequence, the French and German governments took the lead in 1978 and agreed on the development of a new European currency framework, the EMS. The EMS aimed at stabilising intra-European currency fluctuations, strengthening Europe’s weight internationally in currency terms and providing a symbol of European unity. As such, the EMS is often hailed as a Franco-German breakthrough that enabled deeper European cooperation. French president Giscard d’Estaing thus famously quipped that “the spirit of Charlemagne brooded over our works” after a meeting with German Chancellor Helmut Schmidt in Aachen, where they finalised the working of the EMS.
The actual result was however far from being an agreement of equals between France and Germany. The EMS was essentially what the German government, and more particularly the Bundesbank, was ready to agree on (James, 2012; Ludlow, 1982; Mourlon-Druol, 2012). The multiple French proposals made in the course of the negotiations were all rebuffed. Admittedly, the French idea to introduce a divergence indicator able to pinpoint a currency differing from the average was accepted. But it was agreed that the identification of the diverging currency would only lead to consultations between central banks, and not to any policy action, which rendered the measure meaningless. A European Monetary Fund was envisaged but never created. Calls for greater resource transfers from richer to less-developed EMS members, in order to help them participate in the new system, were not really answered. Overall, the EMS was an agreement based on German preferences and validated by the French government.
3.3 The Maastricht Treaty: a Franco-German agreement to disagree
The Maastricht Treaty was the final major milestone for which the role of the Franco-German ‘engine’ of European integration is traditionally celebrated (Dyson and Feathersone, 1999; James, 2012; Marsh, 2009). Agreeing on the introduction of a single currency in Europe was a complex endeavour that required reconciliation of diverging opinions on what should happen first: economic integration or monetary integration (see section 1).
A blueprint for the creation of the single currency was provided by the Delors Report. In June 1988 in Hanover, the European Council agreed to move ahead on EMU, and tasked a committee chaired by European Commission President Jacques Delors and composed of EEC central bankers to write up a report setting out how EMU could be achieved. The Delors Report published in April 1989 set out a detailed and viable plan in three stages that in its most important respects was subsequently included in the Maastricht Treaty. With the Delors Report, EMU was firmly on the EEC agenda.
Agreement on EMU between French president François Mitterrand and German chancellor Helmut Kohl proved critical to overcome domestic opposition, and to encourage other EEC member states to follow the Franco-German lead. The unforeseen evolution of the international context, with the fall of the Berlin Wall, German reunification and the end of the Cold War, provided a critical stimulus to the ongoing discussions, which had started at a time when virtually no-one anticipated the unfolding of these historic events. Following these changes, the French government pressed for firm dates for the convening of an intergovernmental conference on EMU, in order to bind Germany to the EEC.
But the outcome of this was an incomplete monetary union. The French and German governments had opposing views on how to make the monetary union work. The French government wanted an ‘economic government’, while the German government desired a ‘political union’ as a precondition. The result was half-baked, and contained none of these provisions, making it unfinished. While the Maastricht Treaty surely was an important agreement, the fact that the French and German governments agreed to disagree on several key issues sowed the seeds of the future travails of the euro area.