Tribune leader, 25 September 1992

Even though the French referendum resulted in a narrow yes to the Maas­tricht treaty, the treaty is in deep trouble. No way has yet been found around the Danish no in June, and unless the Danes change their minds the treaty falls. More importantly, the exchange rate mechanism of the European Mone­tary System, which is at the heart of Maastricht’s provisions for economic and monetary union, is in crisis. Last week’s orgy of speculation ended with the pound and the lira dropping out of the ERM.
At the very least, it now seems in­evitable that the timetable for economic and monetary union in the Maastricht treaty will have to be revised. Most com­mentators reckon that, as the dust settles, the way that the ERM operates will be changed, with the German Bundesbank insisting on a reduction in its responsibil­ity for propping up other countries’ cur­rencies. Many predict that some sort of “two-speed” arrangement for monetary union will replace the Maastricht ap­proach, with the core economies of France, Germany and the Benelux coun­tries moving rapidly to a monetary union which the rest will join at some point in the future or perhaps not at all.
In the circumstances, it is hardly sur­prising that many left opponents of the Maastricht treaty in Britain have the scent of blood in their nostrils. There is a widespread belief even among supporters of closer European integration that Maas­tricht will force austerity on the whole of the European Community and will do lit­tle to democratise EC institutions. What’s more, the treaty seems to be even more vulnerable to a British no – either by way of a referendum or through defeat of the government’s Maastricht Bill in the House of Commons – than it was after the Danish referendum, in June.
So is there any reason Labour should not go in for the kill? Unfortunate­ly for those who like their politics simple, there is.
Maastricht is essentially a compromise among the French, German and British governments. The French gave way on German demands that the proposed Eu­ropean central bank be independent and that the convergence criteria for econom­ic and monetary union be austere in the extreme; the Germans gave way to French and British insistence that the deal on political union did not give very much power to the European Parliament. (The British also got their opt-outs on monetary union and the social chapter.)
Immediately after the Danish no, it was at least possible that a renegotiated Euro­pean union treaty would take account of the Danes’ worries about EC democracy by including far greater powers for the European Parliament and would address their fears about the future of the welfare state by beefing up Maastricht’s social side and ending the British social chapter opt-out.
If Labour had then swiftly announced that it was opposing Maastricht with the goal of replacing it with such a treaty and if it had persuaded other EC social demo­cratic parties to back its position, there might just have been a hope of Labour acting as a catalyst for a renegotiation on a more social democratic basis.
In reality, however, nothing of the sort happened. Proponents of an anti-Maastricht pro-Europe position failed to win a majority in the Labour Party, let alone other social democratic parties, which all lined up in support of Maastricht. They argued that although the treaty was not perfect, it did contain enough – the social chapter for 11 out of 12 EC countries, the extra powers for the European Parliament and the regions, the commitment to social solidarity – to make it worthy of support. The
opposition camp in most EC countries was left to the xenophobes.
Meanwhile, it became clear over the summer that, if Maastricht fell, what came next would almost certainly be worse, particularly on political union. In the aftermath of the Danish vote, it was not the German government’s position of strengthening integration by moving quickly to give more power to the Euro­pean Parliament that gained ground among EC governments as the favoured next step. Rather, it was the British gov­ernment’s idea of watering down integra­tion by maximising “subsidiarity” (code for continuing to carve up as much EC business as possible in closed intergov­ernmental meetings) that made the run­ning, a tendency that has been reinforced by the close French referendum result.
Whether or not Maastricht sur­vives, there is now a real danger that, instead of making even small steps towards a Europe-wide democratic polity, governments will now pander to popular nationalism, dramatically slow­ing the pace of political integration. If Maastricht falls, it is likely that what re­places it as a pan-EC agreement will be little more than the status quo ante with a very different ERM and, perhaps, Ger­many, France and the Benelux countries going it alone with an economic and mon­etary union of their own.
This would effectively rule out the Eu­rope-wide strategies that are now Britain’s best hope for effective long-term counter-cyclical economic management. Britain might gain temporarily from its current outsider status, allowing the pound to devalue and interest rates to fall outside the ERM. But, in the end, the past two decades show that it is impossi­ble in modern capitalism for a medium-sized country to get lasting benefits from “dash for growth” policies.
The upshot is simple: if Labour is seri­ous about Europe-wide alternative eco­nomic strategies, it has to be committed to European union – and the Maastricht approach to European union, however flawed, is the only one on offer. Labour should be arguing for a devalued sterling to be returned to the ERM (if not at once). More important, it should not vote against the Maastricht Bill when it eventually finds its way to the Commons. There will be plenty of opportunity to address the democratic deficit and to push for left European economic and social policies after ratification. Without ratifi­cation, the democratic federal Europe that the left desperately needs will be­come once again a distant dream.
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