Can the Common Market Survive?

"Europe is facing its most difficult postwar test," says former West German Chancellor Willy Brandt. Adds his successor, Helmut Schmidt: "The European Community is breaking up." Schmidt's gloom is exaggerated, but signs of serious and lasting trouble are evident everywhere: business bankruptcies are on the increase, unemployment is already running at a near-record rate, and the inflation continues to worsen (in Italy, the rate is 23.7%). Fully 77% of the people surveyed by Paris' Le Figaro said that they were deeply disturbed about France's present and pessimistic about its future. There are work stoppages throughout Europe and the promise of more to come this winter.

Doubts on Summit. So divided is Europe that until late last week no one could even be certain that the Paris summit of heads of Common Market governments, which was scheduled for next week, would be held at all. Italy and Ireland said that they did not want to attend the conference unless the Common Market pledged funds to develop their backward regions. West Germany, the rich relative to whom other nations look for cash, was feeling more and more that the money could be better used at home. At the same time, both Britain and Denmark, fearful that the powers of their own Parliaments could be significantly curbed, were objecting to new French proposals for strengthening the basic structure of the Common Market.

To make matters worse, Britain, which was let into the Community only two years ago, has revived its old doubts about staying in after all. Harold Wilson's Labor government was elected in October on a pledge to hold a national referendum before the end of next year on whether to honor the Conservative government's commitment to the Community. The British hope to negotiate improvements in the terms of their membership, but the most that London can hope for is relatively minor adjustments. "It's impossible to make any important steps forward when one major country is not sure if it is staying in the Community," says a top Belgian diplomat, reflecting the new and perhaps exaggerated tendency to blame the Market's troubles on the British.

Last week in Brussels, where the Common Market foreign ministers failed for the third time in as many weeks to produce an agenda for the Paris summit, it became obvious that the issues dividing the members are fundamental. Even if the British remain in the club, most European experts see no clear solution to the ever-widening gap between the economically healthy countries, basically West Germany and France, and the relatively sick ones, Italy and Britain. In an effort to adapt the Market to these unhappy economic realities, Willy Brandt last month suggested a basic change--a two-tier membership, with the strong countries "harmonizing growth, unemployment and inflation" and the weak ones participating only in those measures to which they can really contribute.

Though Chancellor Schmidt cautiously endorsed Brandt's notion, many Europeans believed that it would mean the dismantling of the Common Market, with Britain and Italy cast adrift. "One can say that the main reason Italy is still democratic and not fascistic is that it is tied to the rest of Europe," says Rome University Sociologist Franco Ferrarotti. "If Italy is cut loose, it will truly become a disaster." Brandt's proposal, adds an American diplomat, would mean "the breakup of the Community on the installment plan."

Prosperity Endangered. Where does the Community actually stand today? As a customs union, it has been a great success. Since 1958, when the Market was established, trade among the original six members has increased twelvefold. Although nobody can say exactly how much the EEC is to be credited with Europe's prosperity, the fact is that the group's collective G.N.P. rose from $164 billion in 1958 to $653 billion in 1972. That prosperity is now threatened, however, by the soaring price of oil.

In trying to cope with this new and largely unexpected crisis, the Common Market has been a disappointing failure. Each country has had its special problems, and its leaders have fought for what they perceived to be their national interests. West Germany put price stability above everything while France and Italy gave priority to growth. As a consequence, there is no common policy toward energy, inflation or the worsening recession. "The Community is now in transition from its self-invented calendars to the calendars of reality, and it must face the problems of the whole world," says Ralf Dahrendorf, former Common Market Commissioner and now director of the London School of Economics.

The political unity that the Market's founders hoped would come with the elimination of national barriers has proved a chimera, and the 7,000-man Common Market Commission in Brussels has devoted much of its time to the minutiae of trade. It labored for months over a Europe-wide recipe for sauce bearnaise, for example; the problem was the quantity of tarragon to include. With elegant understatement, Dutch Under Secretary Laurens Brinkhorst admits that "people no longer think the Community is relevant to solving the problems of their daily lives." Laments Jean Monnet, a founder of the Market: "Europe has been a leading civilization for centuries, and a united Europe could make a great contribution to the world.

But the nations separately cannot make a major contribution."

What has gone wrong? The roots of the current difficulties can be traced back to 1963, when De Gaulle blocked British entry. Under De Gaulle, in fact, France consistently undermined every attempt to bring the members closer together politically. In a dramatic break with past French policy, President Giscard d'Estaing is now pushing for the very unifying changes that France opposed only a few months ago. He wants many decisions of the Council of Ministers to be made by majority vote rather than by unanimous consent, and he would like to increase the prestige of the Parliament of Europe, which is now a mere debating body, by having its members elected rather than appointed.

Mere Survival. But Giscard may be a decade too late. Bonn, which was frustrated by De Gaulle's obstinacy, now finds Giscard's quest for unity quixotic.

"If Giscard's proposals had only come ten years ago, they would have been a sensation and they would have pushed Europe ahead," says Karl Kaiser, research director of Germany's top think tank. "But the top priority now is simply survival." In retrospect, it is also clear that Europe's leaders underestimated the lingering effects of nationalism as well as the social and economic differences within and between the nations--all of which have been exacerbated by the current economic crisis.

Like West Germany, the U.S., which served as a midwife to the Common Market, is less keen nowadays on the direction the Common Market has taken, and complains that the Europeans define their interests too narrowly.

"The Americans have always preferred bilateral diplomacy in Europe, where they use their economic and military muscle against individual members to split us up," says a former French ambassador, in a characteristic but very debatable recounting of American-European affairs. U.S. officials argue, however, that the only time Europe spoke with one voice was during the Middle East war last year. At that time, all rune countries were worried about their oil supplies, and so refused the U.S. landing rights for the aircraft supplying arms to Israel. "Even before the Yom Kippur war," says one U.S. official, "the Europeans were knocking the U.S., almost gloating over our balance of payments problem and blaming a lot of their problems on us."

No one expects the Common Market to end its trade links. What may happen, however, is that Europe will not be able to combat its ever more serious problems or to work out any common strategy. "I know there are all sorts of alibis for not constructing political Europe," says France's Giscard, "but there will be no alibi for those who were convened to this rendezvous with history and who go away with empty hands." He speaks with the fervor of someone lately converted to a cause now deeply jeopardized.

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