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Designing and Building a European Economy: From the 1930s to 1991

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European Economic Governance

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Abstract

This chapter reconstructs the major intellectual influences that impacted the early designing, before WWII, and building, after the war, of the European process of economic integration. We shall illustrate how the failure to properly address the challenge of sharing national sovereignty (upon which the European project was built) beyond coal and steel led Europe to several, relevant failures that would impact the effectiveness of the European economic action until the late 1980s. We shall reconstruct the role of changing theoretical patterns in assisting and contrasting the political will to proceed along monetary integration during the 1970s and highlight the role of Padoa-Schioppa’s theory of the inconsistent quartet as an agenda-setting mechanism to deepen European integration, eventually leading to the launching of the single currency project.

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Notes

  1. 1.

    Just to cite a few among them: William H. Beveridge, Attilio Cabiati, Edwin Cannan, Luigi Einaudi, Friedrich A. von Hayek, Ludwig von Mises, Jean Monnet, François Perroux, Lionel Robbins, Wilhelm Röpke, Jacques Rueff, Barbara Wootton.

  2. 2.

    We are referring not only to the League of Nations itself but also to the more or less directly related International Committee of Intellectual Cooperation, the International Institute of Intellectual Cooperation and its International Studies Conference, the International Labor Organization, the Graduate Institute for International Studies, and so on. For a general view of such organizations, see Pedersen (2015).

  3. 3.

    The “neoliberal thought collective”, as Mirowski and Plehwe (2009) defined the group of individuals sharing this same uneasiness towards classical liberalism and engaged in designing the institutions to reaffirm the values of liberalism in a different perspective from the Keynesian one, was much more heterogenous than one might expect (Masini, 2016) in its early years, at least until the foundation of the Mont Pèlerin Society in 1947.

  4. 4.

    Personalism provided innovative suggestions for European regional integration; think of the contributions to the debate given by François Perroux, Alexander Marc, partly also Jean Monnet, just to cite a few.

  5. 5.

    Dating back at least to: Locke’s Second Treatise on Government, 1689; Sidgwick’s The elements of Politics, London, Macmillan, 1891; many advocates for a transformation of the Commonwealth into a federal structure; then Edwin Cannan, Harold Laski, Lord Lothian, and many others.

  6. 6.

    The participants were: Baudin, Bonnet, Bourgeois, Isambert, Marlio, Rougier, Rueff, Salvadori and Scelle on the French side; Beveridge, Hayek, Ransome, Robbins, and Wootton on the British side.

  7. 7.

    https://european-union.europa.eu/principles-countries-history/history-eu/1945-59/schuman-declaration-may-1950_en

  8. 8.

    It might be worth noting that it was one of the few points also mentioned in the English shorter version (The Brussels Report on the General Common Market, ECSC High Authority, Luxembourg, June 26, 1956) at page 18.

  9. 9.

    It should probably be recalled that collective decision-making upon unanimity was established only after the failure of the Commission’s President Hallstein to finance the CAP with own resources and the subsequent crisis of France’s empty chair in 1965.

  10. 10.

    Reached in January 1966, the “compromise” meant that unanimity vote in the Council became the rule in collective decision-making and that no budget strengthening for the EU was agreed upon. As a counterpart, France committed to end the “empty chair” struggle and take part again in collective bodies. It decreed the final death of Europe as a supranational actor.

  11. 11.

    For an interesting and detailed reconstruction of the intellectual foundations, policy orientation, different nuances and the relationship with country-specific narratives, and cultures of Ordoliberalism, see Dyson (2021).

  12. 12.

    A notable exception is Malandrino’s (2005) detailed book that depicts Hallstein’s figure.

  13. 13.

    It should also be underlined that de Gaulle, inspired by Jacques Rueff, took a more orthodox economic policy stance that was rather in line with the suggestions of Ordoliberalism.

  14. 14.

    For an extensive reconstruction of his intellectual history and profile, and for a description of his role in shaping both the European and international monetary system, see Maes (2021).

  15. 15.

    On the role of the EC in the early making of European monetary integration, see Maes (2006).

  16. 16.

    See https://www.cvce.eu/en/obj/commission_memorandum_to_the_council_on_the_coordination_of_economic_policies_and_monetary_cooperation_within_the_community_12_february_1969-en-0c6bb32d-10d3-4d61-bf4a-3f4883c6921b.html

  17. 17.

    For a brief historical reconstruction of Barre’s contributions and related documents, see https://www.cvce.eu/en/collections/unit-content/-/unit/56d70f17-5054-49fc-bb9b-5d90735167d0/f4696168-70cb-43d6-a191-364db2a894a6/Resources#570eae0f-b5b0-4a40-a1e4-fc82ff04ce0a

  18. 18.

    Giorgio Basevi, Michele Fratianni, Herbert Giersch, Pieter Korteweg, David O’Mahony, Michael Parkin, Theo Peeters, Pascal Salin, and Niels Thygesen.

  19. 19.

    Although not the one dominant at the EC, still rather sticked to a Keynesian approach (Maes, 2002).

  20. 20.

    For an insider’s history of those debates, see Magnifico (2005).

  21. 21.

    The system that allows worse-performing regions to receive funds automatically from the best-performing regions (in terms of GDP).

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  1. Department of Political Science, Roma Tre University, Rome, Italy

    Fabio Masini

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Masini, F. (2022). Designing and Building a European Economy: From the 1930s to 1991. In: European Economic Governance. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-13094-6_2

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