A Vision Is Fulfilled, And Europe . . . Yawns

THE BALTIMORE SUN

European union officially exists, if only on paper. The Maastricht Treaty on political and monetary union came into force Nov. 1. Curiously, there was embarrassed silence where there should have been brass bands, popping champagne corks and triumphal orotundity.

Why? This, after all, is the fulfillment of a vision that goes back nearly half a century, to the post-World War II determination that the European states should be linked so tightly that nationalist rivalries could never again lead them into war. Could any of those early visionaries have imagined that by 1993 a single market would govern the production and sales of goods and services from Portugal to Denmark, from Ireland to Greece?

Yet the words "European union" continue to be spoken with ironic diffidence, like "Baltimore Bombers" or "Kingdom of God," as though they represented a pious hope rather than a present reality.

A funny thing happened to Europe on the way to European union -- the wall came a-tumblin' down. It was four years ago this month that East Berliners and West Berliners danced and exchanged kisses and beer and poked holes in the Berlin Wall, while East German border guards impotently watched from their watchtowers. Wallflowers at the wall, they had no orders to shoot, and so the Cold War ended not with a bang or a whimper, but with a party.

Everybody said it was historic, yet nothing much changed. The Eurocrats -- the European bureaucrats -- kept having meetings and setting deadlines: a single market for goods and services, a single European passport and European currency, a common foreign and defense policy, and so on.

These are no empty gestures. Today a German lawyer, say, may open an office in Paris or Rome on the same terms as a French or Italian lawyer. He may vote in local elections, or even run for office. Any European Community citizen, traveling abroad, may get help from the consulate of any EC member country. EC citizens are waved through passport and customs checks in European airports -- although they do have to show national passports, contrary to original plans.

Yet a United States of Europe this is not. A droll joke is embedded in the shiny new treaty on European union: "A common foreign and security policy is hereby established." Ho, ho. On Yugoslavia, for example, the common policy is to have no policy.

The joke is that European union consists of minutiae. Everything important has been finessed -- or has blown up in European faces like an exploding cigar. Currency speculators broke up the exchange rate mechanism. The single market is riddled with special-interest exceptions. Britain and Denmark adhere to only such parts of the treaty as they choose. Some commentators have gone so far as to say the whole European enterprise is a fraud, an artifact of the Cold War.

It is certainly true that conditions have changed -- in Europe and ++ in all the world. The assumptions that dictated the logic of the Common Market are now mostly outdated -- just as the truly difficult decisions must be faced. Here are five ways the world has changed since the wall came a-tumblin' down:

* First, obviously, there's no more Soviet Union. If, as Samuel Johnson said, the prospect of hanging concentrates the mind, the Moscow hangman was the mind-concentrator that drove the European countries into military alliance with the United States and economic cooperation with each other. Now there is no hostile superpower to the east, only a truncated rump state, Russia, with its own problems, plus 15 or 20 ex-satellites or Soviet successor states, all of which want to join the European Community.

* Point two is the resurgence of nationalism, most obviously in Yugoslavia, but throughout Eastern Europe and potentially in the West as well. Europe was supposed to transcend nationalist passions, subsuming them into the larger community.

* Third is the giant economic leap being made by many Third World countries. The Third World, as an aggregate, had a 6 percent economic growth rate last year, as compared with a combined 2 percent for the United States, Western Europe and Japan. China's growth rate will be about 13 percent this year; Americans were pleased last month when ours hit 2.8 percent. These booming economies are both new markets and new competitors for Europe.

* The fourth new fact since the wall came a-tumblin' down is the amazing weakness of Western governments. President Clinton takes quite a beating in the press, but he is the strongest leader in the Western world. Prime Minister John Major in Britain and Chancellor Helmut Kohl in Germany are scraping bottom in the polls. President Francois Mitterrand in France is emasculated by a conservative prime minister. Japan and Italy are reinventing their national politics, and Canada's ruling party has just suffered the most catastrophic repudiation in the world history of democratic politics, plunging from a comfortable parliamentary majority of 155 seats to just two.

* Finally, and related to political weakness, a spiritual crisis exists in both East and West. Westerners, already sobered by the failure of prosperity to bring meaning to life, see their cousins and neighbors unable even to achieve prosperity. They see how the institutions the West put faith in -- free markets and democratic politics -- at least in the short run, are not solving the problems of the post-Communist societies.

The completion of the EC treaty on union this month is a natural time for Europeans to pause and consider whether the Europe they thought they were building is still suited to the post-Berlin Wall world.

Lester Thurow, the well-known economist at the Massachusetts Institute of Technology, is bullish on Europe. In a book published last year, he argued that, as the 19th century belonged to Britain and the 20th to the United States, the 21st century may belong to Europe. Its people are well-educated, its assets well-distributed, and it is more open than Japan to foreign influence. But to press its advantage, Mr. Thurow said, Europe will have to integrate into one economy and will have to absorb most of Eastern and Central Europe.

That's a tall order. The process of the last 35 years has unquestionably benefited all the European countries that participated in it. Nobody would roll back, say, the Common Agricultural Policy, nor restore customs checks at border

crossings. Nobody would wish to go back to competing standards in everything from wine labels to textile blends.

But there is a key distinction between harmonizing policies and surrendering decision-making authority to a supranational institution. Politicians who have to face national voters are not ready to let someone else decide whether Belgian or Danish or Portuguese troops are sent to die in Serbia.

Yet they already have less sovereignty than they realize. European countries have learned the hard way that they no longer control their own money policies. Germany does. Bonn chose to finance the huge cost of German reunification -- about $80 billion a year -- by deficit spending instead of by raising taxes. High German interest rates sucked in capital from all over Europe. Other countries had to raise their interest rates to keep savers investing their money at home, rather than sending it to Germany. Sweden's short-term interest rate shot up last year to 75 percent.

Were the Germans selfish? Wrong question. Mr. Kohl has to face the voters next year. He did what was best for Germans -- that's what Germans elected him to do, and that is the standard to which they will hold him.

German domination of the European Monetary System has pushed some of the smaller countries into stronger pro-Europe positions. If a European Central Bank controlled money policy, -- Italy and Greece and Ireland could have a voice in it, as they do not in the German Federal Bank. Thus the newest wrinkle of European union was the creation last month of the European Monetary Institute, the embryo of a future European Central Bank.

Further European integration is modeled by four possible, and competing, scenarios.

* Germany speaks of "Das Gesamtkonzept," the Total Concept. Germany's neighbors used to be reassured by its pro-European orientation; now they are suspicious. Why are Germans pro-Europe? Is it because they want us to be their satellites?

* Britain's shibboleth is "wider still and wider." Britain wants the // European Community to take in all the waifs of the continent -- not only Finland, Norway, Austria and Sweden, which are scheduled to join in two years, but Estonia, Latvia, Liechtenstein, Croatia and anybody else. The more members, Britain figures, the looser will be the association, and the more scope for British maneuvering.

* "La cohesion" is Spain's catchword. One of Europe's Big Five, Spain sees itself as the leader of the poor-country bloc in the EC, including Portugal, Greece, Ireland and most of the potential new countries. "La cohesion" is code for transfer payments to bring the underdeveloped countries up to the standard of the rich ones.

* Finally, France speaks of a "preference Europeene." That is code for protectionism, for Fortress Europe. Europe's share of world exports has dropped 20 percent in the last few years. Furthermore, it is in a protracted recession, with EC-wide unemployment averaging 12 percent. France figures the existing with a market of 345 million people, can take care of itself -- high-wage workers producing high-quality goods for high-income consumers. Why open Europe up to the capricious winds of the world economy?

These four ideas of Europe are incompatible, but they share one quality. "Das Gesamtkonzept," "wider still and wider," "la cohesion" and "preference Europeene" all presuppose a larger and more active Europe.

That's the whole game. The major European countries are all thinking of how they can use Europe to realize their particular interests, but the given is Europe. All Europe's principal countries, even insular Britain, have now bought into Europe -- whatever may be meant by Europe.

The future shape of Europe will depend on how soon, and how many, of the countries now outside the EC are allowed into it. The EC consists of 12 members, with a total population of about 345 million people, speaking nine official languages (thanks to the Irish, who do not insist that Gaelic be the 10th). At least 19 more countries, with 210 million people, and a dozen more languages, would like to join. These aspirants include sizable countries such as Poland and Turkey and minnows such as Cyprus and Malta. Then there are Russia, Ukraine and the non-Baltic lands of the former Soviet Union, plus the unsettled successor states of Yugoslavia.

It will surely take many years to bring all these countries into Europe, but in the interest of European stability, the sooner they join the club, the better. How better to consolidate the Western, democratic orientation of former Soviet satellites such as Poland and Bulgaria than to tie them into Western institutions? And yet the wider the EC becomes, the less its members can have in common, and so the less European membership will mean.

Already Britain has opted out of social legislation. Its Conservative government does not want EC headquarters in Brussels deciding, for instance, whether it is an unfair labor practice for the government to sell off the nationalized coal industry. But then the British government -- not the European Commission -- is accountable to British voters.

There are several terms to describe a country's participation in some European institutions but not in others. "Europe a la carte:" You can order what you want and leave the rest. "Variable geometry" is the same idea: The European lineup shifts with particular programs.

This means there can be no fully integrated Europe, at least in the medium term. And yet, an interesting thing has happened in the past few years. European courts of justice have begun to assert comprehensive jurisdiction over trans-national issues. Just as the interstate commerce clause in the U.S. Constitution served as the vehicle to focus power in the federal government, maybe Europe, too, will simply grow accustomed to judicial precedents treating it as the European union it claims to be.

Yet the inability of the EC to cope with the security threat and humanitarian tragedy of Yugoslavia exposed the difference between a fully integrated Europe with a coherent role on the world stage, and a group of independent states with more or less good will toward each other.

Coherence may in time be forced upon Europe. Flash points of potential instability exist all along the margins of Europe. Parts of Serbia have not yet been "ethnically cleansed" of Albanians and Hungarians. Further to the east is the world's third-leading nuclear power, Ukraine, which has a goodly chunk of the old Soviet arsenal and wants to use it as a bargaining chip.

A Europe of "variable geometry," or "options a la carte," of countries cooperating here and there, but reserving their sovereignty, will not be equipped to tackle the big new economic challenge from Asia, much less the border squabbles in its neighborhood. It will remain a Europe where meat-packaging labels are uniform, but political clout is limited. For the next few years, then, here will be stories about Europe losing its way, the European promise unfulfilled, Europessimism.

But as Europe consolidates its Eastern regions and recovers its confidence, the European ideal may be renewed. The Germans will want to use the European institutions to achieve their purposes; the rest will need the European institutions to contain the German giant.

A true United States of Europe is surely a distant dream, if even that. But 10 years from now, when the champagne corks are popping to toast the anniversary of this month's treaty, it may no longer be necessary to speak sardonically when one praises European union.

Hal Piper, a former Sun correspondent in Moscow and London, edits The Sun's Opinion/Commentary page.

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