Background to the European communities
The nation-state had blossomed in the 19th century. Many new nations were formed in Europe with the dissolution of the Austro-Hungarian Empire, the Ottoman Empire and the Russian Empire at the end of World War I. Ireland took its decisive steps towards independence at much the same time.
The political turbulence following World War I and the severe economic conditions of the great depression of the 1930s led to the rise of assertive fascist and undemocratic regimes in several states. In Germany, nationalism was warped into institutionalised racism under the Nazi regime and led ultimately to assertive wars of conquest initially to reclaim lands “lost” after World War I, and ultimately to a destructive war of conquest Eastern Europe.
At the end of World War II, much of Europe lay in ruins. For the second time in 30 years, European nations had engaged in a war of destruction with tens of millions of military and civilian casualties. The Western Allies had learned the lesson from the Treaty of Versailles (after World War I), that crippling reparations and harsh peace terms were unlikely to secure a stable and peaceful future.
In 1939, France Germany and Great Britain were counted as major world powers, but by 1945 there seemed to be two powers only, the United States and the Soviet Union. In Eastern Europe after World War II the Soviet Union was asserting its grip over several satellite states, forming a communist bloc. As early as 1946 in Zürich, Winston Churchill declared the need for a kind of United States of Europe.
The traditional forms of international agreements seemed inadequate. The pre-world war II period had seen treaties revoked and torn up with changes of government and political crises when they were most needed.
The military threat from Eastern Europe caused the Western European states to cooperate militarily out of necessity. In the immediate aftermath of World War II, there had been fears of renewed German aggression, and in 1947 the United Kingdom and France signed the Treaty of Dunkirk, a treaty of alliance and mutual assistance in the event of a possible attack. However, the threat from the Soviet Union soon became much more significant than the threat of German rearmament.
Soviet intervention and repression in Eastern European states made it clear to Western states that they could meet the same fate unless they combined and organised together. In reaction to an effective Soviet annexation of Czechoslovakia in 1948, Britain France and the Benelux countries formed the Western Union or the Brussels Treaty organisation to cooperate in the field of defence as well as in the political, economic and cultural fields.
Economic cooperation post-World War II
Economic reasons also made close cooperation between the nations of Western Europe desirable. The great depression in the 1930s saw a rise in protectionism and tariffs and a significant erosion of international free trade. In many ways, it was the consequence of or at least exacerbated by protectionism.
States sought to protect their industries behind tariff walls. The United Kingdom enacted its first major protective trade legislation of the 20th century in 1931. Ireland greatly increased its post-independence tariffs in the 1930s depression, expressly pursuing a policy of self-sufficiency.
The League of Nations tried to cool what had become a multilateral tariff war by convening a conference, but the efforts failed. By 1932 world trade had fallen by 25% and world industrial production had fallen by 30% from the 1929 level
In the post-war period, a number of international organisations were formed promote to trade and development including the IMF, the World Bank and the GATT structure, which later developed into the World Trade Organisation. They have each continued to evolve. The WTO baseline rules remain important both in the context of a no-deal Brexit and in the principles and structure of a new EU UK trade and future relationship agreement. Their main features are mentioned later in this chapter.
The European Coal and Steel Community was established in 1951, placing coal and steel resources including those of the Ruhr valley in West Germany under the control of an international institution. Part of the purpose was to limit Germany’s access to the resources of war while assisting the general economic recovery of Europe.
The community comprised six members France Germany Italy Belgium, Netherlands and Luxembourg. It set up a common market in coal and steel. It consisted of a High Authority equivalent to the present-day Commission, a Council of members, an Assembly of MPs from the domestic parliaments and a court of justice which interpreted and enforced the Treaty.
Although in many respects, the European coal and steel community failed fully to create a single market for coal, it did pave the way and served as a model for supranational institutions in Europe. For the first time, a supranational body had powers to administer a community in accordance with the treaty and to make binding decisions on its members and businesses in the sectors concerned. It succeeded in breaking up cartels in German heavy industries, using its competition powers.
The ECSC provided a model for future European cooperation. It allowed for the revival of key German industries in a way that was not threatening its neighbours.