‘Federate or Perish’

Altiero Spinelli is probably the best-known representative of that particular type of apodictic federalism which flowered for some years after the end of World War II, and which is well expressed by the phrase then popular among federalists: Europe must federate or perish. For the Italian Spinelli and his many followers in continental Europe, it was impossible to rebuild a democratic, prosperous, and powerful Europe starting with the nation states. Only a strong federation could solve the great problems of the post-war period: the re-establishment of democratic regimes; the many dramatic economic and social issues facing the continent; the German question; the security and autonomy of Europe with respect to both the United States and the Soviet Union. The establishment of a federal super-state, Spinelli argued (cited in Paolini 1988: 12 and passim), would have to precede the political and economic reconstruction of the member states, the former being the necessary foundation of the latter. In turn, the European federation would open the way to a world federation. It is of some interest that the majority of the thirty or so federalist movements existing at the time in Europe also claimed to be working towards a world federation. The idea of an eventual world government was more than an exercise in utopian thinking; it was needed in order to meet the telling argument that a purely European federation would simply reproduce, on a larger scale, the geopolitical ambitions and aggressive tendencies of the traditional nation states.

The Failed Europeanization of the Masses

A politically integrated Europe, a continent finally united in spite of its diversity and of the internecine wars of the past, was – and continues to be – an elitist project. Unless this point is clearly understood and constantly kept in mind, the development of European integration – from the founding treaties in the 1950s to the Irish No to the Lisbon Treaty in 2008, only three years after the French and Dutch rejections of the Constitutional Treaty – remains largely unintelligible. Of course all key ideas of modern history, from popular sovereignty to the ideas of nation, nation state, and citizenship, were initially advanced by intellectual and political elites – were ‘invented’, in the terminology used by Edmund Morgan in his classic study of the rise of popular sovereignty in England and America. Thus, James Madison's ‘invention’ of an American People distinct from, and superior to, the peoples of the thirteen former colonies turned out to be a decisive move in the struggle to replace the Articles of Confederation by a strong federal constitution. To quote Morgan: ‘As the English House of Commons in the 1640s had invented a sovereign people to overcome a sovereign king, Madison was inventing a sovereign American people to overcome the sovereign states. It was not one of those inventions for which the world was unprepared, but an invention crying out for realization’ (1988: 267). Such timely conceptual inventions prove their vitality by their ability to mobilize the people and push them to political action.

Purposive Action and Unintended Consequences

Intended and anticipated outcomes of purposive action are always, in the nature of the case, relatively desirable to the actor, though they may seem objectively negative to an outside observer. In any case, they pose few questions to social theory. In contrast, unintended consequences, being unplanned, unexpected results of action orientated towards some goal, become a phenomenon demanding a social-scientific explanation. In fact, this phenomenon has attracted the attention of outstanding political and social thinkers from Machiavelli and Vico to Marx, Pareto, Max Weber, and, more recently, Hayek, and Popper. As Robert Merton (1949) has pointed out, however, the diversity of context and variety of terms by which this phenomenon has been known in the past have tended to obscure its generality. In the eighteenth century Adam Smith and other Scottish thinkers such as David Hume, Adam Ferguson, and Dugald Stewart succeeded in building up a social theory that made unintended, or unforeseen, consequences of purposive human action its central object (Schneider 1967). The theory was used to analyse the existence and functioning of institutions, such as governments, and of social aggregates, such as states or social classes. Adam Smith's ‘invisible hand’, by which ‘man is led to promote an end which was no part of his intention’, is the best-known application of the Scottish approach.

The social-scientific relevance of unintended consequences of purposive action has been further demonstrated by such twentieth-century theorists as Friedrich Hayek and Karl Popper.

Federalist Revisionism

After the collapse of the European Defence Community in 1954, and the consequent abortion of the pre-federal EPC, most federalists chose to continue the struggle, so to speak, underground. They pursued political integration under the guise of economic integration – the strategy that came to be known as the Monnet method, or, more descriptively, as the method of integration by stealth. I use the label ‘cryptofederalism’ to denote a type of federalist revisionism characterized by this roundabout approach to the political integration of Europe. The approach of the revisionists is obviously different from the strategy of the orthodox, or ‘Hamiltonian’, federalists, who openly worked for a constitution dividing the powers of government between a federal Europe and its member states, with democratic institutions at each level, and with federal powers in all fields of common interest, including foreign affairs, security, and defence.

In the decade following the end of World War II, federalism, although always an elite movement, had been a non-negligible factor in European politics, especially in Germany, Italy, and the Netherlands. Already by the mid-1950s, however, the federalist vision had lost its credibility and whatever popularity it had enjoyed for a few years after the end of World War II. The underlying reason for the loss of credibility and public support has been mentioned in the preceding chapter: all the analyses and predictions inspired by that vision had been refuted by history. The rise of cryptofederalism can only be understood against this background of wishful conjectures and factual refutations. In this respect there are some suggestive analogies between the federalist revisionism of the 1950s and the Marxist revisionism of the 1890s.

Misleading Analogies and Conceptual Ambiguities

As already mentioned, a small but influential body of elite opinion sees not only economic, but also political integration as steps towards the ultimate goal of a ‘Social Europe’ – just as the national market and the liberal state of the nineteenth century are thought to have prepared the ground for the modern welfare state. Only a strong social dimension, it is held, can legitimate the process of European integration, and at the same time rescue the national welfare state threatened by globalization. The addition of an enveloping social dimension to the integration process, the champions of Social Europe assert, would enjoy widespread popular support. After the rejection of the Constitutional Treaty, for example, Belgian prime minister Guy Verhofstadt claimed that the French and Dutch voters had opposed the treaty, not because it was too ambitious, but rather because it was not sufficiently ambitious: it did not go far enough in the direction of a supranational welfare state. Members of the intelligentsia such as Juergen Habermas explained the failure of the draft Constitution primarily as an indication of the opposition of the voters to the neo-liberal bias of the document, and an expression of popular demand for a more welfare-orientated Union (see chapter 3). Habermas wrote: ‘If something can be deduced with certainty from the [French and Dutch] vote, it is this: that not all western nations are willing to accept the social and cultural costs of welfare inequality, costs which the neo-liberals would like to impose on them in the name of accelerated economic growth’ (2005: 3).

Community law, that is, the law of the supranational organisation European Community, consists of so-called primary and secondary law. The concept of primary law relates to law made by the Member States via their international law treatymaking powers. Therefore, it comprises the initial 1957 Treaty of Rome plus various treaty amendments, such as the SEA, the Maastricht, Amsterdam and Nice Treaties, as well as the accession treaties. Secondary law, on the other hand, refers to law made by the Community's institutions based on the authorisation contained in the Treaties (the primary law), such as regulations, directives and decisions, as well as soft-law instruments such as recommendations and opinions.

Article 249 TEC briefly characterises the legal quality of these legislative instruments:

The organisational structure of the EU/EC may, with all its complexity, seem Byzantine to outsiders. However, once the basic outline and the fundamental difference between the intergovernmental EU and the supranational EC are understood, it will become easier to find one's way. In particular, with regard to the EC, one will recognise an interesting mix between the traditional traits of an international organisation and those of a state-like entity with typical separation-of-powers issues.

According to Article 7 of the Treaty Establishing the European Community (TEC), the EC possesses five ‘principal institutions’: the Council; the Commission; the European Parliament; the Court of Auditors; and the European Court of Justice. In addition, a number of other advisory institutions, such as the European Economic and Social Committee or the Committee of the Regions, serve the ‘organisation’ EC. While the ‘institutional triangle’, consisting of the Council, Commission and Parliament and largely responsible for the Community's legislation, will be described in some detail in this chapter, the Community courts, the European Court of Justice, the Court of First Instance as well as the new Civil Service Tribunal, will be explained in chapter 5 (Judicial Control within the Community).

This section aims at explaining the composition and internal decision making of the Community institutions, while their interaction in the context of European legislation will be analysed in chapter 3 (The Making of Community Law).

In a technical sense, EC competition policy covers what is known in many countries as cartel law or, as in the United States, ‘anti-trust law’. The latter term was adopted because in the late nineteenth century, when anti-trust law was ‘invented’, most American cartels were established in the form of trusts. EC competition law rests on the triad of a cartel ban contained in Article 81 TEC, a prohibition on market abuse in Article 82 TEC and merger control legislation. All three branches of EC competition law are handled by DG IV, now DG Competition, as the Directorate-General for Competition supporting the responsible Commissioner for Competition is known.

In a broader sense, other Community law also contributes to the overall aim of creating conditions for fair competition within the Common Market, these include:

1. (1) treaty provisions on free movement as a framework prohibiting mainly public restrictions on the free circulation of goods and services, such as duties and quantitative restrictions and their equivalent counterparts;

2. (2) special competition rules for public undertakings in Article 86 TEC; and

3. (3) the identification and justification or elimination of subsidies provided for in the state aid provisions of Articles 87–89 TEC.

What are the economic rationales for the EC's emphasis on competition policy?

As the American debate about the wisdom of anti-trust policies demonstrates, there is still controversy over the need to intervene in the free play of market forces in order to maintain fair competition.