31 January 1992 - 02 February 1992

The European Union: Implications of the Maastricht Treaty for Relations with Non-Members

Chair: The Rt Hon the Lord Richard QC

The conference began by considering what the two agreements concluded at Maastricht, soon to be promulgated in one Treaty, involved for the European Community itself in all the areas addressed. In general, although there was at least one highly sceptical voice, the agreements were assessed as a step forward, but a step taken without any clear perception of the ultimate goal. The provisions relating to common foreign and security policies (CFSP) were a useful tidying up exercise on which it should be possible to build pragmatically in such a way as not to damage the relationship with the US and Canada in NATO, though the hegemonistic position of the US in NATO would, it seemed inevitable, evolve into a more equal partnership with a Europe which increasingly was coordinating its policies in those areas. The risk was that, with the Soviet threat removed, commercial rivalries would become more acute, unmitigated by the perception of a common security interest in resolving them - de Gaulle was quoted for the aphorism that in peace you fought your friends. This evolution would match a growing trend in the US away from burden-sharing and towards a division of labour - a corollary of domestic pressures to withdraw or at least reduce American forces in Europe. All agreed that US withdrawal must be avoided. The move of the WEU to Brussels could help a harmonious evolution. NATO was the one formal forum for continuing consultation between the allies, and while its original purposes were perhaps no longer relevant, nobody envisaged its immediate dismantlement, whatever might be the case 10 years on.

There was some discussion of the so-called Prussian problem: recent German signals had been contradictory, but the preponderant motive of German policy was probably the desire for greater European integration, which was surely to be welcomed.

The issues of proliferation and French and British nuclear capabilities were touched on, but inconclusively. Neither France nor Britain seemed likely to give up their capabilities, though some questioned their purpose and called for radical re-thinking.

The point was made very strongly that important as relations with North America and Central and Eastern Europe were, the European Community must not neglect the rest of the world, particularly Japan. It was suggested that while in some areas the case for coordination was strong, there might sometimes be advantage in a division of labour among the EC members themselves, France, for example, concentrating on Africa, or Spain on Latin America.

Underlying the whole discussion was the issue of leadership: was there an absence of US leadership – one participant suggested that the US tended to go to sleep between crises, though others rejected this - and if so could Europe provide it? The answer seemed to be probably not, at least at the present stage of development.

Turning to monetary union, participants expressed the general view that it would make little difference as far as the outside world was concerned. Already there were effectively only three significant currencies, with increasing responsibility accruing in the exchange control area to the Group of Three (G3). The Ecu would merely replace the Deutschemark in this tri-polar currency world. However, with the prime responsibility of the European Central Bank to maintain price stability, some saw a tension arising if the ECB tried also to maintain a stable exchange rate with the dollar and the yen. And while the G3 might grow in importance in that area, there would be a need for coordination with the G7 over macro-economic and fiscal policies. Some scepticism was expressed whether the EMU would be attainable. Only one member of the Community currently met the arbitrary criteria established for entry; and while convergence was undoubtedly necessary, the meeting concluded that these criteria made neither economic nor political sense. Finally a suggestion that the time-frame envisaged for moving to EMU might be too long, was countered by the argument that public opinion had to be prepared, greater convergence had to be achieved and business needed two or three years to adapt its procedures, once a firm decision had been taken.

In the areas of trade and social policy, there was much emphasis on the doctrine, if it may be so described, of subsidiarity. Vague as it was in legal terms - a better course it was said would be to define precisely what powers and in what areas were to be exercised at each level - there was a general view that while there might be a case for laying down general principles centrally, it was important that application should normally be left to national governments: the centre should refrain from taking powers unless there was a clear case for central action, and should even return to nations some powers already acquired.

Non-members expressed concern about protectionist pressures in the EC and all stressed the extreme dangers to world trade that would arise if there were no agreement in the Uruguay Round by the end of March (after which ratification by the US Senate, which in any case could not be taken for granted, would become impossible before the US election: suspension until a new US Administration took office might in theory be possible but was not practical politics.) The prospects were not good and in the US blame for a breakdown would be placed squarely on the EC. I might note however that there is a tendency in all trans-Atlantic discussions of this topic to see protectionist pressures in Europe as something to be resisted by European governments but as a fact of life in the US which simply has to be accommodated.

There was much discussion of the so-called democratic deficit. Some argued for a mixed confederal and federal structure, democratic control being exercised in many areas, as now, through national governments responsible to their own parliaments and electorates; others for more effective scrutiny in national parliaments of EC legislation at the consultative stage, only the Danish and British parliaments, it seemed, having effective procedures for this. Others again argued for greater powers for the European Parliament, though many were sceptical, noting the Parliament’s current weaknesses and defects, despite the enhanced powers accorded at Maastricht, which enlargement would exacerbate.

Finally enlargement: the list of candidate members stretched from the EFTA countries, the Eftans, through the Central European Troika, the Baltic States, Malta, Cyprus and Turkey, to some of the countries of the Commonwealth of Independent States. The meeting started, it seemed, with the assumption that membership must be open to any state which satisfied the criteria: European, democratic and economically able to sustain membership. Refusal, it was suggested, would be difficult even if accompanied by some compensatory offer, e.g. of some form of association. It was noted that the device of the European Economic Area, which had run into legal difficulties, had in fact not worked to dampen Eftan aspirations, possibly, it was suggested because the agreement had been negotiated with too little political vision and too much horse-trading detail. The same defect was perceived by some in the association agreements with the Central European Troika, where the single most effective measure, access to the EC for agricultural produce, had been withheld for well-known domestic reasons, without due regard to the political importance of the issues involved. Despite that criticism, it was argued that these association agreements offered solid advantages, amounted to an assurance of eventual membership when the criteria could be satisfied, and should be exploited.

In the course of discussion the difficulties of the open door came to be recognised. Even admission of two or three Eftans would strain the institutions of the Community to breaking point. The Commission, the Council and the Parliament were already unwieldy. Institutional reform was essential and it might mean smaller states having to be brigaded together for representational purposes. The CAP had also to be reformed, if only because the already heavy costs would become unacceptable in an enlarged Community embracing Eastern Europe. None of this, especially the CAP, would be easy.

The question was raised whether the Maastricht agreements had made admission harder for the candidates. On balance, a view apparently shared by the candidates themselves, it was concluded that it had not. Even in the security field, neutrality raised no apparent difficulty, although this might vary from state to state, Switzerland with its highly devolved cantonal system presenting particular difficulty in this and other areas.

We were left, it seemed, with eight thoughts:

  • The Maastricht agreements, except over EMU, represented primarily a tidying up. While pragmatic evolution had merit, there was a case, perhaps more clearly perceived by non-members, for the Community to define more clearly its goal;
  • Enlargement was inevitable but a big question mark remained over how far it could be extended. “Wider still and wider” could not be the watchword;
  • Institutional reform was essential, but would be painful;
  • There was an urgent need in Central and Eastern Europe for reassurance and support, if democratic achievements were not to be jeopardised;
  • The costs of enlargement, and of supporting Central and Eastern Europe and the former Soviet Union, would be large; if the EC was to carry the burden, it would need budgetary reform and a great increase in its own resources;
  • While US leadership was still essential, we were moving into an era of more equal partnership;
  • The EC must pay greater attention to dialogue with Asia, notably Japan;
  • The Uruguay Round must not be allowed to fail because of a failure to factor into national trade policies wider political and security considerations.

This Note reflects the Director's personal impressions of the conference. No participant is in any way committed to its content or expression.

Chairman: The Rt Hon the Lord Richard QC
Life Peer (Labour); Barrister-at-Law


Mr Philip Allott
Fellow, Trinity College, Cambridge.

Sir Michael Angus
Chairman, Unilever pic

Mr David Buchan
Brussels bureau chief, Financial Times

Mr Robert Cooper MVO
Head, Policy Planning Staff, Foreign and Commonwealth Office

Mr John Edmonds
General Secretary, GMB (formerly General, Municipal, Boilermakers and Allied Trade Union

The Rt Hon Tristan Garel-Jones MP
Member of Parliament (Conservative) Watford

Mr John Goulden CMG
Assistant Under Secretary of State (Arms Control and Disarmament) Foreign and Commonwealth Office

Dr Michael Hodges
Senior Lecturer, Department of International Relations, London School of Economics and Political Science

The Rt Hon David Howell MP
Member of Parliament (Conservative) Guildford

Mr Michael Jay
Assistant Under Secretary of State, (European Community), Foreign and Commonwealth Office

Mr Anthony Loehnis CMG
Director, S G Warburg Group pic

Baroness O’Cathain OBE
Life Peer (Independent); Managing Director, Barbican Centre

Mr Christopher Roberts CB
Deputy Secretary, Department of Trade and Industry

The Lord Roll of Ipsden KCMG CB
Life Peer (Independent); President, S G Warburg Group Pic

The Hon David Sieff
Director, Marks and Spencer plc

Dr Helen Wallace
Director, West European Programme, The Royal Institute of International Affairs, London

Dr William Wallace
Senior Research Fellow in European Studies, St Antony’s College, Oxford

HE Mr Fredrik S Eaton OC
High Commissioner for Canada to the UK and Northern Ireland

Ms Kathryn McCallion
Department of External Affairs, (Ottawa)

Mr David Morton
Chairman and Chief Executive Officer, Alcan Aluminium Limited, Montreal

Mr Zdenko Pirek
Deputy Foreign Minister, Czech and Slovak Federal Republic

Mr Fraser Cameron
Foreign Policy Adviser, Secretariat-General, European Commission

M Bertrand de Maigret
Secretary General, Association for the Monetary Union of Europe

Professor Philippe Moreau Defarges
Professor, Institut d’Etudes politiques, Paris

Dr Karl-Heinz Narjes
Retd as Vice President, Commission of the European Communities

Dr Gerhard Rambow
Federal Ministry of Economics, Bonn
Ambassador Berndt von Staden
Co-ordinator for German-American Co-operation in field of Inter-social Relations, Cultural and Information Policy

Mr Hajime Ohta
Director, International Economic Affairs Department, Keidanren, Tokyo

Dr Andrezj Olechowski
Secretary of State, Ministry of Foreign Economic Relations

Sr Miguel Herrero de Miñón
Partido Popular Deputy for Madrid

HE M Franz Muheim
Ambassador of Switzerland to UK

Mr David Brooks
Deputy Editorial Page Editor, Wall Street Journal Europe, Brussels

Professor Willem H Buiter
Juan T Trippe Professor of International Economics, Yale University

Mr Michael Calingaert
Director of European Operations, Pharmaceutical Manufacturers’ Association

Dr Thomas J Duesterberg
Assistant Secretary for International Economic Policy, US Department of Commerce, International Trade Administration

Mr Michael B G Froman
Forward Studies Unit, Commission of the European Communities

Mr C Randall Henning
Research Associate, Institute for International Economics, Washington DC

Mr Sherman Katz
Partner, Coudert Brothers, Washington DC

Ms Johanna McGeary
World Editor, TIME

Mr Victor P Micati
President, Pfizer Europe, New York

Mr Daniel A Sharp
President, The American Assembly, Columbia University, New York

Mr Peter R Weitz
Director of Programs, (coordinating grant making activities), The German Marshall Fund of the US, Washington DC