ECSC – What kind of result?
 Treaty of Paris (1951)
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European Coal and Steel Community
Common Market in Coal and Steel
Competition Policy (anti-Cartel)
High Authority
 Factors involved
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Political-diplomatic
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Economic
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Resolution of World War II
Global politics: Cold War
Reconstruction – immediate
The Ruhr – long-term
The “European Movement” and Its Visionaries
Relevant Prior Histories
 France and Germany
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Enemies since 1870
Alsace and Lorraine as locus of conflict
Political history vs. economic history
 World War I and Its Resolution
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A mess and a failure: absence of cooperation
The Ruhr as a focal point (1923)
USA as a non-player or mini-player
 The Depression of the 1930’s
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Economic nationalism: from free trade to intense
protectionism – multiplication of barriers and restrictions
Attitude towards “Restraint of Trade” changes
Lesson: economic welfare requires cooperation
The Elements of the Story
 Reconstruction
 Germany
 The USA
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Leadership
International cooperation
Vision and action: the Marshall Plan
 The Ruhr: a particular and complex
problem
 The Visionaries and their “Bold Steps”
Reconstruction
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General situation
Different national concerns
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Britain: “enough money” (dollars)
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France: modernization
Germany: ?
Common goals and interdependencies
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Export trade
Favorable currencies
Welfare state: full employment especially
Supply and demand for each other’s recovery goods
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Currency and payments priorities
Place in the world
The Empire
The central importance of coal
Aims and role of the USA
International economic cooperation
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IMF, ITO/GATT
Reconstruction:
the French case
 A new economic faith: modernization
 The method of choice: planning
 The First Plan and the First Planner
 Planning goals: heavy focus on iron and steel,
hence need for coal
 Top-down approach: “modernization commissions”
 Dirigisme, dirigiste
 A small elite of technical “experts”
 The man at the helm: Jean Monnet
 Implications of the Plan re: USA
 Implications of the Plan re: Germany
Reconstruction:
the French case
Pithy quote (from Gillingham, Coal, Steel and the
Rebirth of Europe, p. 144)
“Rapid German revival threatened both general
French security and the specific investment
programs of the plan. Monnet did not want to
prevent a Ruhr recovery … and he recognized
that without one European prosperity would not
return. He did, however, intend to regulate the
recovery process, slowing it down when
necessary to protect French security, speeding
it up when necessary to threaten French
Malthusians.”
Germany
 Postwar division of Germany- 4 zones
 Ideology of “Reducing Germany”
 Dismantling and Reparations
 Decartelization as a “substitute”
 Extremism of the Morgenthau Plan for Germany
 Problems with this ideology
 German revival necessary for European revival –
crucial role of German industry
 Multiple risks/dangers of Communism in the West
 Looming Cold War
 Soviet vs. USA/UK policy: Bizonia (Jan. 1, 1947)
Germany (cont’d)
 Dramatic shift in USA policy towards Germany
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From Morgenthau to Marshall (1947)
Germany as the centerpiece of USA Cold War strategy
 A “New Germany” in the Making (1949 official)
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Creation of Federal Republic under American “eyes”
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German Laender as crucial to its “federalism”
Basic Law (not a constitution)
The Deutschmark (1948)
The “Economic Miracle”
Konrad Adenauer
 The Security Problem: Lingering French concern
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Highlights the issue of the Ruhr
(American) Threat of German re-armament
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NATO
Korean War (1950)
The USA
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Leadership
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Striking contrast to post World War I
Economic leadership: immediate legacy of the prosecution of World
War II
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Political leadership: an unsought role “thrust upon” the USA (the
alternative to 4-power collaboration)
Emergence into a superpower
International cooperation
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Lesson (to Monnet) of procurement strategy (accent on purchasing as setting
the needs)
International trade: liberalization goal
International payments and currency: convertibility goal
Peace and security: United Nations, NATO
Vision and action: the Marshall Plan (1947)
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The radical nature of this initiative
The motives (Truman Doctrine)
The impact on policy towards Germany
The European effect: OEEC, EPU
The Ruhr
 What is it, what does it mean?
 Legacy from the past: a thorny issue
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Base of industrial power
Core of war-making capacity
Point of conflict between France and Germany
Tendency towards “association”
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Vertical integration (coal and steel)
Cartels: “market-sharing agreements”
Rise of Hitler
 Legacy from the past: an early model of “integration”?
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Germans take the lead in steel (1924)
4 nations (Germany, France, Belgium, Luxembourg)
form the International Steel Cartel (1926-1931, 1933-)
International business cooperation during Depression
The Ruhr (cont’d)
 The Ruhr as a post-WW II problem
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Economic centrality for European revival
 Need
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for Ruhr coal (by French especially)
Fears of German revival (industrial power,
war-making capacity)
Focus of Allied policy towards Germany
 Dismantling,
decartelization, production limits
 Level of Industry Agreement (1946)
 International Ruhr Authority (1949)
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Sidenote: 1949 – IRA, NATO, FRG
The Story of Integration
 Change of Plans at High Levels - 1947
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Towards Germany (Bizonia)
Towards reconstruction (long, needs help)
Towards “Europe”: Marshall Plan
 “Integration” becomes USA “cause”
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What it means to the Americans
Condition of acceptance of Marshall Aid
 Britain drops the ball
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Different priorities than others
Concern for national sovereignty
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Intergovernmental preference for international
organizations
Conclusion: USA-Britain cooperate very well politically
and not so well economically
The Story of Integration
(cont’d-1)
 France (Jean Monnet) and USA “discover” one
another
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Monnet’s personal ties with the “Anglo-Saxons”
(notably in Washington DC)
Monnet (head of French Plan) needs investment
funds
Washington needs a European advocate for trade
liberalization/integration
The obstacle for both: French weakness towards
Germany
 The danger of substituting a Franco-German for a
Franco-British partnership
The Story of Integration
(cont’d-2)
 Moves towards European unity
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Economic: Benelux, OEEC, EPU
Political: Council of Europe (The Hague)
Defense: Western European Union (WEU)
 The Big Move: Schuman Plan
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Context: Several matters come to a head
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French need for, yet fear of, German revival intensifies – furor in
Paris in June 1948 over raising steel production quotas
Cold War pressures: fear of an American-imposed settlement
based on Cold War priorities
Founding of the Federal Republic of Germany and the demands of
its citizens for respect and jobs
The abdication of the British
The continuing problem and untenable status of the Ruhr
Monnet and Schuman – 2 very different personalities find a
common vision and cause
The Story of Integration
(cont’d-2)
 Monnet’s Ingenious Idea
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An international authority in “one” (actually two interrelated) industrial sector, rather than an international
protectorate over one territory: functionalism replaces
territorialism in resolving problem of Ruhr
Make war forever impossible between the contracting
parties (sold to the public as such) – peace
Complete freedom for German (coal, steel) industry, but
within a guaranteed “free-market” (not cartelized)
economic space
Adequate supplies for French modernization and export
markets for iron and steel products in high-demand
areas
Conclusion
 ECSC – Treaty signed 1951, begins 1952
 The Six: France, Germany, Italy, Belgium,
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Luxembourg, Netherlands
High Authority: Monnet’s strong dirigiste
approach
Monnet as first president of HA (resigned in
1954)
“The success of a failure” – launching pad for
European integration
From economics (ECSC) to “high” politics
(EDF) and back to economics (EEC)
“The Success of a Failure”
Source: Gillingham, p. 299
“The European Coal and Steel Community made good only one
promise, the most important one: It advanced the process of
integration. This success grew out of failure. Little remained of
Monnet’s ambitious plans when he decided to step down as
president of the High Authority in November 1954.
Decartelization had given way to reconcentration. The High
Authority, designed as suggested by its exalted and forbidding
title to convey orders from above for execution from below, was
beset by paralysis. The common markets created to discipline
heavy industry had become its common property. Yet the
disappointments of the ECSC did not result in a reversion to the
nationalist-protectionist order of the 1930s. The “relaunching of
Europe”…aimed at something far more ambitious than the
common administration of a single sector of West European
industry; the statesmen of the Six now sought “complete
integraton” … --- the eventual creation of a single
communitywide environment for economic activity.”