Ambiguity is not a crime in politics. On the question of Europe it has enabled governments to agree on sensible measures such as the single market, without having to agree on the eventual goal of the "European project." Margaret Thatcher and Helmut Kohl agreed on what was needed at the next summit-because they did not have to agree on ultimate destinations. But the moment may be arriving when ambiguity hampers rather than helps the processes of Europe. Even supporters of European integration are asking: where will it all end? What is la finalit? politique? What eventual balance between the nation state and the institutions of the EU do our leaders foresee?
When Alain Jupp? was still prime minister of France I asked him whether he favoured the answer of Jean Monnet, who envisaged a series of great leaps forward towards the United States of Europe, or the answer of General de Gaulle, who favoured a union of nation states. Jupp? gave me an Anglo-Saxon reply: that it was not a reasonable question. What was certain, in his view, was that we needed to move forward from where we were today. I have favoured this kind of pragmatism myself in the past, but I doubt if it will suffice much longer. The practical working of European policies, in particular of the single currency, may be put at risk by general unease, stretching far beyond Britain, about the end to which these policies are moving.
Maastricht only just survived the process of approval-by a handful of votes in the House of Commons and in the French referendum. It failed the first test in Denmark and was rescued only after extra concessions were provided for the Danes. Unease has grown since the Treaty of Maastricht came into effect. In France, the communists and the National Front campaign openly against the EU. In Germany and Britain, as in Denmark and Sweden, opinion polls show the depth of the unease, even if these sentiments have not translated into votes for noisy critics of the EU. As a result the rhetoric of enthusiasm has moderated. Helmut Kohl long ago stopped talking about a United States of Europe and recently criticised the whole concept of a supranational European state. Klaus Kinkel, the German foreign minister, has talked of a saturation point in European integration. But a change in rhetoric will not be enough to stem the unease.
The euro is likely to turn out neither a total disaster nor a total success. But its smooth introduction is almost as important to Britain as to the first wave participants. And there is a strong case for buttressing its prospects by finding an agreed answer to the question, "Where will it all end?"
The crux of this discussion at present is tax. It is argued, particularly in Germany, that harmonisation of currencies and monetary policy must be followed by harmonisation of fiscal policy. But the opposite argument is both economically and politically strong. Economically, the Europe of the euro is still a collection of nation states with widely varying unemployment rates, labour markets and welfare systems; it is idle to suppose that the euro will quickly or easily change this. The euro participants have already agreed to abandon one instrument, monetary policy, which helped them to deal with those differences. It is therefore all the more important that governments should be able to retain other national instruments, notably the fiscal ones, for coping with national divergences.
It is possible to argue, as the Germans do, that if countries pile up fiscal deficits they will undermine the single currency. But this is an argument for capping the permissible deficit, as the Stability Pact does. It is not an argument for transferring into European hands control over how much a nation raises in tax and spends on its public services. Spend high, spend low, tax high, tax low-these should be decisions for national governments subject only to a limit on the deficit. Within Euroland, fiscal variety, not fiscal harmonisation, is needed if the euro is to survive the strains which national divergences will put upon it.
Politically, the argument is even stronger. One reason why German ministers are beginning to draw back from further integration is the constitutional position of the L?nder. In Britain, a different history leads towards the same conclusion. No backbench MP in Westminster, and few ministers, can claim that he or she has had much practical influence over the course of sterling-particularly now that the government has transferred to the Bank of England the power to decide interest rates. But fiscal questions are a different matter. The House of Commons came into existence because it was felt that the king should only raise revenue from his subjects after listening to their grievances. Even today the House of Commons exercises a practical control over the level of taxes, as the history of VAT shows. A shift towards European control of the level of British taxes beyond the arrangements already in force could turn the general unease over European integration into a much more substantial revolt.
The Franco-German representations to the British presidency on the future of Europe showed that those in Britain who fear a Franco-German plot to impose a superstate are wrong. But the need may soon come for a more formal treaty which would clarify the future of the EU. This could be based on the principle of subsidiarity in the Treaties of Maastricht and Amsterdam. But it should move from repetition of a principle to a statement of how the principle would be applied. We cannot bind the hands of our children, so it would be a mistake to try to look too far ahead. But it might be possible to provide that for a period of, say, 20 years, decision-taking within the EU would fall under three headings.
First, those matters which will be decided on a community basis, sometimes on the basis of majority voting. This category would include the matters defined in the existing treaties-the acquis communautaire-including the single market and the right of the European commission to represent us all in trade negotiations. As Leon Brittan has pointed out, this pooling of sovereignty has proved worth its weight in gold. Other issues could be included in this category: for example, we may need to go further than we have in responding to legitimate German anxieties about the handling of asylum matters. And, of course, the new central bank in Frankfurt would continue to decide monetary policy for the countries which join the euro.
Second, there will be those matters on which member states accept a need to cooperate but where this cooperation should be by agreement between them without supranational authority. At the head of this list is the common foreign and security policy expounded in the Treaty of Maastricht and strengthened at Amsterdam. There is everything to be said for European governments reaching agreement on policy towards, say, Russia or Turkey, so that they can be credible partners of the US. Both ministers and commentators in Britain are too willing to bask in President Clinton's ready smile. But the president bestows that smile as lavishly on others as on ourselves. Britain should not be content with a penny farthing relationship with the US, where the US allows us a certain influence in return for loyal support, but where that influence is severely limited by the disproportion of power. But progress on a common foreign policy can only be achieved in Europe by agreement, subject by subject. European action on foreign policy matters would not be made easier by majority voting.
The third category would include matters which for the first time would be defined as remaining under national or regional power. This list would include levels of spending and taxation (accepting a limitation on deficit), education, social security, criminal justice and the national constitution. The European Court of Justice, being treaty-based, would be obliged to protect this area of the new treaty as effectively as it now protects the community dimension.
There are various ways in which these boundaries could be defined. Both the US and German constitutions contain states' rights clauses which provide that all residual powers not specifically allocated to the federation remain within the states. The Canadians list broadly both the competences which should be in the hands of the unions and those which remain in the states. None of these approaches exactly fits the European case-nor, indeed, does the effort of the European parliament to draft a constitution for the EU. We are not talking about a European federal union which delegates powers to its component parts. We are dealing with nation states which have successively pooled into a European centre their authority over certain sectors of policy in order to secure for their citizens benefits which the individual state cannot by itself achieve, but have retained the rest of that authority for themselves.
I do not underestimate the difficulty of negotiating a 20-year boundary between these sectors of policy. There are grey areas such as consumer protection and the environment, where authority will continue to be awkwardly shared between the nation states and Brussels. There will be a temptation to dismiss the whole idea as too difficult and to lumber on as at present. But if the limits of European power were properly defined, people would be more willing to work for the success of the policies clearly on the European side of the ledger, including the single currency. They would no longer fear that they were faced with a process leading to the obliteration of their national identity.
The "ever closer union of peoples" of the Treaty of Rome should be seen as the coming together of peoples through a growing range of individual and professional contacts rather than through the creation of a superstate. The concept of a defining treaty would dismay both the enthusiasts for a United States of Europe and those hostile to European integration. But it might appeal to those-both enthusiasts and sceptics-who are willing to draw a realistic conclusion from the recent past in order to find a workable way of sustaining and enlarging the EU in the next century. There comes a time when clarity may be safer than ambiguity.
