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EU Integration

The lessons of 60 years of ‘Rome’ and 25 years of ‘Maastricht’

13 Feb 2017 - 14:57
Source: Yukiko Matsuoka/flickr

Lessons for the Netherlands

The EU has something to celebrate over these few months. It was sixty years ago that the Treaty of Rome was signed, leading to the creation of what is now our the European Union. That was followed twenty-five years ago by the signing of the Treaty of Maastricht. This completed the European Single Market with the creation of monetary union which gave citizens the euro as tangible symbol of European unity in their wallets.

While the Italian government joins with the rest of the EU in organising a celebration, the EU is in a profound crisis. The euro crisis is far from over and questions continue to bubble under the surface on matters such as the survivability of Greece, Italy and Portugal as members of the eurozone. The structural problem of migration also continues to make the newspaper headlines. A number of major issues also lie ahead, such as EU budget reforms. The Netherlands is one of the big net contributors. With the departure of the United Kingdom, the Netherlands in particular will be hard hit if it is necessary to compensate for the British contribution.

Crises are normal in politics. Politics is about conflicting interests, changes and sensitive choices, and hence it is about conflict and crises. In that regard ‘Brussels’ is no different from The Hague. But with the issues currently facing the EU and the major economic and political interests at stake, the European crises have become rather dangerous. All the more reason, therefore, to take a good look at the lessons that can be learnt from European integration, and from Dutch involvement. European integration will continue. If there are lessons to be drawn to improve EU policy, the Netherlands must not miss that opportunity.

European integration only became a politically sensitive subject in the Netherlands around the time of the Treaty of Maastricht. The Treaty of Rome was about the more technical integration that stayed below the political radar. In 1992 a number of steps were taken which are now shaping the major crises. Because of the errors made at that time, 1992 can be seen as a turning point in European integration. The signing of ‘Maastricht’ initiated the process of monetary union, Greece joined the Schengen Area in November of that year and the Heads of State and Government agreed in December 1992 to reform the financing of the EU's agricultural policy.

It would be an understatement to say that the consequences of these three steps were underestimated at that time. The agricultural reforms led to the first serious assault on the pro-European attitudes in the Netherlands. These reforms contributed to the Netherlands becoming one of the largest net contributors to the EU budget per head of population. Net contributions to the EU budget are not popular anywhere – particularly unpopular in the Netherlands. A great deal has been written about the euro crisis. On top of all the possible economic, social and political consequences, we now see President Trump accusing Germany of unfair competition. Trump, who in any event would prefer to see the EU fall apart, could even take countermeasures. There is now also talk of Italian debt writedowns, which could arouse new and far-reaching political tensions. The idea of Greece – or Italy – joining Schengen now would be unthinkable. To put it politely, the quality of border controls there in 1992 was in no way commensurate with the migration risks.

These decisions taken 25 years ago have contributed to the crisis atmosphere that now prevails in the EU. The minutes of the meetings of the Dutch Cabinet from 1991 and 1992 have been opened to public consultation in January 2017. The minutes give a disconcerting picture of the way in which the Cabinet took the decisions on these crucial EU policies. There was considerable discussion about procedures, for example about the role of the European Parliament in measures against Member States with excessive budget deficits. The political preference was for a single currency to be used by all countries. The idea of a separate bloc for strong-currency countries was rejected; there should be no ‘small Europe’. The prevailing mood was one of optimism. European integration was seen as politically necessary and there was hardly any doubt that it would succeed. Prime Minister Lubbers was unhappy with comments by a director of the Netherlands Central Bank (DNB) who had told the media of his preference for flexible integration and for starting with a group of economically advanced countries. Lubbers called on finance minister Wim Kok to have words with DNB for speaking out of turn. Greece’s accession to the Schengen Area led to little more than a question about the consequences for Schiphol Airport and concern about possible waning UK interest in joining Schengen. There is also little mention in the documents of short- or long-term consequences of agricultural reforms for the Dutch position as net contributor.

In the 1980s a parliamentary inquiry was instituted into government support for the shipbuilder Rijn-Schelde-Verolme (RSV). The political salient striking conclusion was that the government's involvement had shown “a line of action that would not have been out of place on a gaming table”. The same seems to apply to the Netherlands’ approach to crucial European negotiations. The construction of a nuclear power plant requires investigations of all kinds of scenarios and risk calculations, and in the case of national energy systems an analysis is made of weak links and backup mechanisms. The lesson to be drawn from 60 years of European integration is that much more attention needs to be paid to European fault lines, possible consequences and exit options in the event that EU policy turns out wrong. The Netherlands once again faces major European questions around matters such as the consequences of Brexit, the plans being developed to give fresh impetus to European integration, budget reforms and possible forms of EU taxes. The EU must move ahead and solutions need to be found to old and new European challenges. This can only be done sustainably if ´Brussels´ and the Member States conduct much better and far more transparent assessments of economic, political and social consequences, scenarios and fallback options. The time for assuming that everyone has the best intentions and that everything will turn out well has long since passed. National governments must also draw the important lesson that a lot more cold thinking is required. This should also include the option to say 'no' when EU policies develop in undesired or dubious directions.

This paper was first published in Dutch as ‘Essay’ in Het Financieele Dagblad, 10 February 2017.

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