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The ECSC

According to the Wikipedia entry on the European Coal and Steel Community:

'The ECSC was first proposed as the Schuman Declaration by French Foreign Minister Robert Schuman in 1950 on Victory Day (9th May) as a way to prevent further wars between France and Germany. He declared he aimed to "make war not only unthinkable but materially impossible" which was to be achieved by regional integration of which the ECSC was the first step.'

Alan Milward, in his book The Reconstruction of Western Europe, 1945-51, gives a more down-to-earth explanation (p.395): 'The Schuman Plan was invented to safeguard the Monnet Plan.'

The Monnet Plan had been devised on the assumption that Germany would be de-industrialised and that France would emerge as the leading European industrial nation. But to fulfil this ambition, France would have to become a major producer of steel. And to become a major producer of steel, France would have to get control of the coking coal available in the Ruhr, which was in the British zone of occupied Germany. The alternative - importing coking coal from the US - was expensive. The previous article in this series has shown, again following Milward, that the French Foreign Office, already in 1948, had realised that the US and Britain were determined to restore German sovereignty, including sovereignty over the Ruhr and that to get access to the necessary coal, France would have to come to terms with a sovereign German government. But even as late as 1950, on the very eve of Schuman's speech, the French government still had hopes in the 'International Ruhr Authority' as the means of preserving itself against a resurgent Germany.

In the event, the Treaty forming the ECSC was only signed in April 1951 and only came into effect in 1953 - for coal in February and for steel in May.

The impetus towards the 'regional integration' evoked in the Wikipedia article came almost entirely from the United States. The Americans from the start had imagined Europe as something similar to what we have at the present time with, if not a single currency, national currencies mutually convertible at fixed rates - the ideal conditions for what Kalecki and Halevi call 'oligopolies' and others would call 'multinationals' - companies operating on a scale indifferent to national boundaries. US planning during the war envisaged this on a world scale, hence the United Nations, the International Monetary Fund, the World Bank, even, in the ambitions of Harry Dexter White, and with him Roosevelt and Morgenthau, encompassing the Soviet Union. But in the aftermath of the war, these ambitions had to be reduced dramatically. Not only did they face the rival ambitions of the Communist world but the convertibility of sterling, which was to open up the British Empire and the wider sterling area to penetration by the dollar, failed, as did the first attempt to develop a single market in Western Europe through the Organisation for European Economic Co-operation and the European Recovery Programme ('Marshall Aid'). Far from representing a steady advance across countless obstacles to realising a European dream of integration, the period of the European Recovery Programme represented a quite impressive record of European resistance to the American dream of European integration.

In these circumstances the European Coal and Steel Community, which covered only six countries (France, Germany, Benelux and Italy) and only dealt with coal and steel must have looked quite pathetic, the more so since its short life was very fraught, largely due to the problems encountered by France - particularly in 1954 the defeat in Dien Bien Phu and the beginning of the Algerian War of Independence. In 1956, quoting Halevi: 'while preparing the disastrous Suez adventure with Anthony Eden, France's Prime Minister [the Socialist, Guy Mollet] went so far as to suggest to the British government the creation of a unified Sterling-Franc monetary area' (1) which, though it came to nothing, hardly indicates a great commitment to the "Little Europe" of the ECSC.

(1) Joseph Halevi: Europe 1957 to 1979: From the Common Market to the European Monetary System, Institute for New Economic Thinking, Working Paper no 101, June 2019, p.5

The most important aspect of the ECSC was that it did bind West Germany and France together, albeit in an alliance contre nature, an alliance whose main purpose from the French point of view was to keep some sort of control over the Germans. It is questionable if Germany really needed it in economic terms. Germany, Belgium, the Netherlands, Luxemburg, Austria and Switzerland, constituted in themselves a rather neat little trading bloc. The governments of Belgium, the Netherlands and Luxemburg, in exile in London, had already agreed to form between themselves a customs union - 'Benelux' - as early as 1944. An attempt to bring Benelux and France together in a 'little Europe' had faltered partly at least because of the Netherland's reluctance to support French proposals for dismantling the German steel industry and restricting German trade. (2)

(2) Richard T.Griffiths and Frances M.B.Lynch: 'L'échec de la "Petite Europe" - Le conseil tripartite 1944-1948', Guerres mondiales ey conflits contemporains, No.152 (October 1988), pp.39-62.

From the German point of view France was probably an encumbrance, Italy much less so. Italy had no great geopolitical ambitions after the loss of its own imperial possessions (in the case of Ethiopia at the hands of the Belgian government in exile, via the Belgian Congo, which was also a main supplier of rubber to the allies, not to mention the uranium used for the atom bomb). Like Germany, Italy was highly reliant on exports of manufactured goods and imports of food and raw materials. Unlike Germany it specialised not in high capital value products, the stuff of oligopoly, but more on 'intermediate capital goods and mechanical consumption goods like home appliances as well as motor vehicles' (Halevi, 1957 to 1979, p.14). These were much more vulnerable to competitive pricing than the German specialities but just the sort of thing the German beneficiaries of Erhard's consumer led policy wanted. In the immediate post war period the Christian Democrat government in Italy, supported by the Communist Party, pursued a policy of austerity, reducing imports through reducing domestic consumption rather than through tariffs, which by 1957 had been lifted on 99% of all imports from Europe. Its large pool of unemployed labour in the South, which kept wages down in the more industrialised North, provided other parts of Europe with a useful source of immigrant labour. Following Halevi (1957 to 1979, p.13): 'Outmigration to France and Belgium but not yet to Germany, which would be absorbing Italian immigrants from the second half of the 1950s till the late 1960s, began in earnest as soon as those countries were about to near completion of postwar reconstruction.'  

Ludwig Erhard saw the ECSC as 'a needless restriction on German Industry' (3) but Adenauer saw that the alliance with France was Germany's road to political rehabilitation, the removal of the Ruhr authority and the weakening of the Occupation Statute, which was still operative and still being used to dismantle or break up the larger German enterprises - something of which Erhard may well have approved. In fact Germany probably benefited more from the ECSC than France which never realised anything close to Monnet's original vision of industrialisation and by 1957, on the eve of signing the Treaty of Rome in March, needed a substantial loan from the IMF.

(3) Milward, Reconstruction, p.413

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