5. HISTORY MATTERS

Most 50 years ago, the snow-covered hills of the Belgian Ardennes were stained with blood. in 34 days of siege and counter-siege, some 100,000 German soldiers, 80,000 Americans, and 1,500 Britons and Canadians were killed or wounded during the "Battle ofthe Bulge".

Today the Ardennes are tranquil. Villages once occupied by Germany's troops are now invaded by its weekend tourists. Europe's "low countries" - Holland, Belgium and Luxembourg - may traditionally have been a battleground of bigger powers, but today those powers are joined in solid peace. It seems inconceivable that Germany, France, Britain and Italy might ever again be at war. Preventing war was a main aim of the EU'S founding fathers. Jean Monnet, a French civil servant, and Robert Schuman, France's foreign minister, did not want to foster a common market for its own sake but to bind Germany into a peaceful Europe.

Their first step was the creation of the European Coal and Steel Community. France had been worried that Germany would use the coal and steel industries of the Saarland to help regain economic strength and again dominate Europe. Monnet's solution was to put the development of the coal and steel industries of both West Germany and France under a single High Authority. When Schuman launched the plan in 1950 he declared: "The solidarity between the two countries established by joint production will show that a war between France and Germany becomes not only unthinkable but materially impossible." That sounded good not just to Germany's Konrad Adenauer but also to the governments of Belgium, Luxembourg, Holland and Italy: a year later, in April 1951, the six countries formally established the ECSC.

Six years later the same six signed the Treaty of Rome, establishing the European Economic Community (EEc), and a separate treaty setting up Euratom-the European Atomic Energy Community. In July 1967 the administration of the three bodies merged to form a single body, later to be known as the European Community, of six founder members. The British, Danes and Irish joined in 1973; the Greeks in 1981; and Spain and Portugal not until 1986.

Why these delays? Fascism in Spain and Portugal and military rule in Greece disqualified the southern Europeans from a club for democracies. For other peripheral Europeans there was the rival European Free Trade Association (EFTA), set up in 1960 at Britain's urging and embracing Austria, Denmark, Norway, Sweden, Switzerland and Portugal. And Britain, still with global ambitions, was bound to be ambivalent towards the ideas of Monnet and Schuman. Churchill had called in September 1946 for "a kind of United States of Europe", but immediately made it clear that Britain should not be a part of such an enterprise.

By 1961 Britain was realising that the EEC was a bigger, and therefore better, bet for trade than oneyear-old EFTA. Harold Macmillan sent in Britain's application, soon to be followed by those of Ireland, Denmark and Norway. All failed. De Gaulle, deciding that Britain was more interested in its special relationship with America than in any future relationship with continental Europe, vetoed Britain's bid-and so the other applicants withdrew too. Only when De Gaulle was gone did the French attitude change. The applications went in again, and an EC summit in 1969 agreed to consider new members. The bids succeeded, but the Norwegians, in a referendum in September 1972, decided they did not want to join the club after all.

Past imperfect, future unknown

History may or may not repeat itself - the Norwegians, having this spring negotiated another treaty of accession, will hold a second referendum on November 28th - but it always leaves its mark. Last month Germany's Christian Democratic Union, the party of Chancellor Kohl, released an intriguing paper on the Eu's future entitled "Reflections on European Policy". One of its propositions was that there exists a "hard core" in the union, consisting of the founder members minus Italy, and that "Germany and France form the core of the hard core".

Some member states, not least Italy, have re-acted angrily. Britain's prime minister,john Major, has talked in Orwellian tones of some countries wanting to be "more equal than others". Yet the CDU paper merely restates the insight of Monnet, and reflects the original impulse behind the union, namely that Germany needs to be integrated into a European economic and political structure both for its own sake and for that of its neighbours.

Another fact of history is the persistent nationalism of France. In June 1965, when France found itself alone in opposing some commission proposals on budgetary powers and the common agricultural policy, De Gaulle ordered a French boycottthe "empty chair" policy-of the community's ministerial meetings. Seven months later the five other members agreed to yield to France in what has become known as "the Luxembourg compro-mise":in decisions taken by majority voting, where very important interests of one or more partners are at stake", the ministers will "within a reasonable time" try to reach unanimity. in other words, if it feels strongly enough, any nation has a veto.

This is a problem. Many Europeans are prepared to surrender big elements of sovereignty to embrace a federal Europe. But France and Britain continue to believe strongly in the primacy of the nation-state. France's tactics in 1965 were echoed in the French attitude towards the GATT trade negotiations in 1993. The French insisted on a special place for their own narrowly defined national interests, and once again pushed their EU colleagues where the latter had not intended to go. Likewise John Major refused last June to accept Belgium's Jean-Luc Dehaene as the man to succeed Mr Delors as commission president, later acquiescing to Luxembourg's Jacques Santer instead.

Perfidious Albion

Britain's "problem" is that it has been a stable democracy for several centuries; has not been invaded for almost a thousand years; admits to losing no war in popular memory; and has never been subject to totalitarian rule. Since that makes Britain quite unlike fellow Eu members, present or future, it is perhaps not surprising that Britain has so often been Europe's odd-man-out. Two decades after joining the EC, many British people still feel a relationship with America more special than the one they have with continental Europe.

Whether that is sensible is increasingly doubtful. it makes British attitudes within Europe, even when reasonable enough by British lights, seem either selfish or treacherous. By contrast, French pursuit of national interests, even when awkward for others, is tolerated because nobody questions France's European credentials. The natural consequence is that France is at the EU'S "core" and Britain is not. Such self-willed exclusion, most marked over economic and monetary union and social policy, is bound to weaken Britain's influence.

Besides, America itself is adjusting its view of Europe. Asia's surging economics are continuing to shift America's geopolitical gaze from the Atlantic to the Pacific, and, with the cold war over, the need for American troops in Europe is less compelling. Their numbers have fallen from 300,000 to 150,000, and will soon reach 100,000. From America's perspective it is time for the Europeans to shoulder more of the burden of their own security.

On three visits to Europe this year President Clinton has stressed America's support for a bigger, and closer, European Union. In Paris he called for Americans and Europeans alike to set their sights "on a strategic star...the integration and strengthening of a broader Europe". Monnet himself could not have wished for more florid phrasing.

Mr Clinton's words are music to French ears. France has always wanted Europe to be as independent as possible of America. in De Gaulle's days that wish found expression in France's independent nuclear deterrent and a decision in 1966 (now being quietly reversed) not to be part of NATO'S command structure. Today France is enthusiastic about the "Eurocorps", the plan for an Eu force of more than 40,000 troops announced three years ago by President Mitterrand and Chancellor Kohl (again, the core of the hard core). So far the Eurocorps has only 7,000 troops, drawn mainly from France and Germany but with Belgium, Luxembourg and Spain also involved.

One French politician, going against the grain, recently disparaged the corps as "but a symbol, if not an illusion." The British would agree with him, both because they distrust symbols and because they fear any development that might weaken the North Atlantic alliance. just as France has resented America's leadership, Britain has cherished it.

The bigger the better?

Yet in MrClinton's message to Europe there is something for everyone. Consider his speech in Brussels: "The new security must be found in Europe's integration - an integration of security forces, of market economies, of national democracies. The purpose of my trip to Europe is to help lead the movement to that integration and to assure you that America will be a strong partner in it."

Like the British and the Germans, the Americans see a need for western Europe to embrace Eastern and Central Europe. only thus, it is argued, can democracy and capitalism - and with them the European Union's eastern flank-be made secure in the ex-communist countries. But finding the right form for such an embrace is far from simple, as attempts to attach the new democracies to the NATO military alliance have recently shown.

Many Central and Eastern Europeans saw membership Of NATO as their best security haven. But NATO foresaw logistical difficulties. More importantly, it was afraid of provoking the Russians. So a compromise has been put in place. This is the PFP, the "partnership for peace", a half-way house of military co-operation with NATO that is open to any supposedly well-intentioned, democratic country in Europe. There are now over 20 partners, from Albania to Uzbekistan, with Russia itself signi rig the PFP framework document on June 22nd.

This is at best an imperfect answer to the security problems Of PFP signatories. The NATO alliance is based on the idea that an attack on one of its members is an attack on all. The PFP agreement, on the other hand, obliges NATO merely to "consult" with a partner under threat. If Russia were to send its army back into Latvia, or to decide to topple the government of Kazakhstan, NATO would not necessarily intervene.

As in defence, so in the economic sphere. For all the lip service it pays to the new democracies, Western Europe continues to put its own narrow interests first. The Eu has celebrated the collapse of communism by concluding trade agreements with a crescent of former Soviet block countries, from the Baltic to the Black Sea. In Copenhagen in June 1993 the leaders of the EU went a step further: they recognised that "Europe Agreements" with Poland, Hungary, the Czech Republic, Slovakia, Romania and Bulgaria would be a stage towards their "ultimate goal" Of full EU membership. A year later, in Corfu, the same leaders welcomed President Boris Yeltsin and signed a "Partnership and Co-operation Agreement" with Russia.

This is, says the EU, a genuine offer of help and friendship. The Eu will offer the six countries with Europe Agreements free trade in industrial goods from next year, in steel from 1996 and in textiles from 1997. Russia will be treated not as a "statetrading country" but as an "economy in transition" subject to no discrimination (most-favoured-nation status); and in 1998 talks will start on the possible establishment of a free-trade area.

Is this realistic? The comparative advantages of the former communist countries are all-too-often in industries in which the EU is trying to preserve its own uncompetitive firms. Anti-dumping duties imposed on iron pipes from Hungary and Poland, and quotas on steel from Russia, are evidence of that. And the changing balance of trade between the Eu and the six countries with Europe Agreements suggests that the Eu maybe the bigger beneficiary. In 1989 the union had a deficit with its poor eastern neighbours of 600m ecus; by last year the deficit had turned into a surplus for the EU of 5.6 billion ecus, including, thanks to the subsidised exports of the common agricultural policy, 433m ecus in farm products.

All this suggests that the economies of these six countries may be too weak for any rapid accession to the European Union. Once in, moreover, they would become huge beneficiaries of a union budget that spends half its money on the common agricultural policy and much of the rest on the develop- merit aid known as "structural funds", were that structure to remain intact.

An American academic, Richard Baldwin, calculates that the 64M inhabitants of Poland, Hungary, the Czech Republic and Slovakia (the socalled "Visegrad Four", which are far in advance of Romania and Bulgaria) are only 30% as rich as the Eu average and far more reliant on agriculture. They would probably remain the poorest of the EU poor for at least two decades. Mr Baldwin argues that to admit the Visegrad Four would mean either an increase in contributions to the budget of around 60% - or a severe cut in EU spending.

Some might think the price well worth paying; as a portion of collective GDP the Eu's budget remains tiny. others would welcome the chance to reform the budget. But any enlargement of the union is bound to threaten the main beneficiaries of the present budget arrangements-notably farmers throughout the union and the four big recipients of development funds: Spain, Ireland, Portugal and Greece. They would object strongly to any newcomer grabbing a slice of the cake at their expense. Since the EU can take in new members only by unanimity, what will become of the grand vision of a bigger, better European Union?