The 1942 Beveridge Report famously defined the welfare state as comprehensive protection ‘from the cradle to the grave’.1 Social policies had existed beforehand, but they consisted of an uneven network of laws on working conditions, along with partial social insurance. By contrast, the post-war Western European welfare state has sought to mitigate the detrimental effects of capitalism via three sets of comprehensive measures: a) regulations protecting the weak, or compensating for the negative externalities of capitalism (working conditions, gender, and later environmental issues); b) redistributive policy (benefiting the elderly, the sick, etc.); and c) macroeconomic policies focusing on full employment (which sometimes include a form of indicative planning).2
On the European level, the solidarity element in the governance of capitalism took the form of a growing number of social and environmental policies.3 This welfare state arguably did not develop at the same pace across the three components of regulation, redistribution, and macroeconomic policy. It was influential in the regulatory arena, especially with emerging issues such as gender and environmental policy. However, national actors remained prevalent in the other two components: redistribution was ensured through the national health, pension, and education systems, and macroeconomic policy remained almost exclusively under the purview of nation states (until the formation of the monetary union in 1999).4
A targeted European welfare state emerged, one that was referred to in the late 1980s as the ‘social flank to the internal market’, which is to say a ‘flanking policy’ designed to accompany the Single Market Programme. This chapter will begin with a chronological overview, including a first section on the slow development of this European social policy between 1945 and 1985, and a second one its heights under Delors. It will then proceed with a topical exploration of European measures in this area (protecting the weak, environmental policy, regional solidarity), before concluding with an analysis of the two most important alternatives that were later abandoned: planning, and comprehensive social and fiscal harmonisation.
4.1 The Slow Emergence of European Social Regulation (1945–85)
Social policy was long confined to the national level. The most important actor internationally was the International Labour Organization (ILO), founded in 1919.5 Driven by a dual focus on free markets and social protection, the ILO sought to harmonise national social legislation upward, although its powers were limited by its intergovernmental structure. It could act only through non-binding recommendations, and conventions that had to be ratified by member states. The ILO monitored the application of conventions, but did so primarily on the basis of reports drafted by the governments themselves.
The European Communities largely replaced the ILO in Europe. The Schuman Declaration of 9 May 1950 provided for the ‘equalisation and improvement of the living conditions of workers’, a clause that was later included in the ECSC Treaty (Article 3). In 1952, two unionists were appointed to the ECSC’s executive body, the nine-member High Authority.6 It was chaired by Jean Monnet of France, who was accustomed to tripartite dialogue – between the government, employer’s associations, and unions – in the context of the Commissariat général au Plan (French Planning Commission), over which he presided. Basing its activity on the ILO’s work, the High Authority sought to facilitate labour mobility, especially support for labourers from Southern Italy going north to work in coal mining or steel plants. The ECSC implemented targeted action of uneven scope in different areas: it built housing for workers, provided assistance for mobility and professional training, and conducted studies on occupational safety, especially in mines after the Marcinelle mining disaster in Belgium in 1956 (in which 262 coal miners died, including 136 Italians).7
From 1958 onwards, the EEC developed action that was both wider in scope (involving all sectors, not just coal and steel) and more targeted in terms of mechanisms. The social dimension of the Treaty of Rome was limited to an article laying out the principle of social progress (EEC Article 117), and to three specific provisions: the social security of migrant workers (taken from ILO conventions); the creation of a European Social Fund (ESF) to promote the mobility of workers in need of retraining; and a handful of targeted harmonisation measures for social legislation to limit market distortion. The latter were adopted at France’s request, and concerned equal pay for men and women, ‘equivalence’ in paid holidays, and overtime pay. The French government subsequently took little interest in their application; the initially expected problem of competitiveness did not materialise, and Gaullist officials were less attached to it than the socialist government of Guy Mollet, which had negotiated the Treaty of Rome.8 This outcome is logical, for those who supported the Treaty of Rome were mostly Christian Democrats, along with Atlanticist socialists such as Mollet of France and Spaak of Belgium.9 For these socialists, the preferred framework for developing social policy was the nation, as illustrated in France by the Mollet government’s reforms in 1956–57 (third week of paid holidays, substantial increase for low pensions, etc.). The high growth of the 1950s allowed for the continuous expansion of the welfare state.
The measures adopted in the 1960s primarily involved the implementation of the ESF for professional training and the free circulation of workers, along with social security for migrant workers in 1968–71. Italy was highly reliant on it, for it had high structural unemployment in the country’s south.10
The years between 1969 and 1974 were marked by a broadening of European social action, driven notably by the Social Democratic German Chancellor Willy Brandt.11 European social policy was declared an EEC priority at the Paris Summit of 1972, despite hesitation on the part of conservative leaders, such as French President Georges Pompidou and British Prime Minister Edward Heath. Emphasis was placed on professional training and coordinating employment policies, but also included new topics such as the environment and regional policy. This movement unfolded in a post-1968 ideological context favourable towards the emergence and renewal of social policies; the social movement also began to show greater interest in Europe. Non-communist trade unions created the European Trade Union Confederation (ETUC) in 1973.12
Moreover, the solidarity coalition remained divided. Some organisations, such as the British TUC, remained fiercely opposed to the EC. In addition, Communist trade unions (which were very powerful in France and Italy) were not part of the ETUC, and most communist parties were hostile to European integration (the Italian PCI being a partial exception).13 The issue of communism divided the European left. This is reflected in the tense relations between Mitterrand and Schmidt. The former supported an anti-German campaign in 1972 when the FRG, under a Social Democrat government, adopted harsh legislation targeting radical communist civil servants. In 1977, a tense meeting was held between Chancellor Schmidt and Mitterrand, who at the time was the opposition leader of the French left.14 Schmidt expressed his surprise at Mitterrand’s alliance with the communists (at a time when the communist East German government was killing those who tried to cross the Berlin Wall); Mitterrand responded by asking him what he would do if there were 8 million communist voters in West Germany.
When, in the late 1970s, Brussels initiated tripartite dialogue by inviting representatives for workers and employers – the ETUC and the Union of Industrial and Employers’ Confederations of Europe (UNICE) – to consultations, they had little success.15 Social partners were not interested in EC-based action, but rather in European coordination of national action. For instance, the ETUC supported a 35-hour working week, which it adopted at its 1976 Congress, but the Community did not have competence in this matter.
These discussions nevertheless led to limited but significant legislation, especially in comparison to the ILO, which was experiencing difficulty in the late 1970s.16 The US unilaterally withdrew from the organisation from November 1977 until 1980, prompting its Governing Body to institute budget cuts of $36 million, or 22 per cent.17 There were even plans to reduce delegate speaking time from 15 to 10 minutes, in order to reduce the cost of verbatim transcripts and the length of conferences! These examples give an idea of the ILO’s financial challenges, as well as its limited means. The organisation was also caught in the crossfire of the Cold War, with a debate on multinationals rendered impossible due to ideological opposition between Moscow, which believed it was not concerned by this problem, and London, which insisted on the inclusion of major Soviet companies active abroad.18 In short, the Community slowly emerged as a continent-wide actor for solidarity, but did so on modest terms.
4.2 The Social Ambition of the Delors Period (1985–95)
The years between 1985 and 1995 were auspicious for social Europe, due to convergence between the Commission presided by Jacques Delors (1985–95), which had unmatched power owing to his strong leadership, the French socialist President François Mitterrand (but whose proposals for social Europe were fairly modest),19 and other actors from Germany, Belgium, Italy, and Spain.20 Delors was a renowned European expert, as he was one of the primary authors of the Maldague Report in 1978, which proposed European planning. As President of the Economic and Monetary Affairs Committee in the European Parliament (elected for the first time via universal suffrage in 1979), he made numerous proposals for a targeted European relaunch, with strong monetary, industrial, and social aspects.21
The archives reveal that in 1981, Delors was already known and praised for his expertise by both Chancellor Schmidt and British diplomats.22 As Minister for the Economy and Finances in the French government between 1981 and 1983, Delors supported a proposal for a social Europe that was more ambitious than the 1981 French memorandum, emphasising coordinating macroeconomic policy in support of employment, a revival of social dialogue, and strengthened social norms. In 1983, while still serving as a French minister, he affirmed: ‘How can we imagine proceeding further with the Single Market without a minimum of coherence for the social aspects of each country or enterprise … The European social sphere is what allows competition between enterprises and people to occur legitimately, without one of them being handicapped because they are more socially advanced than the other. This does not amount to asking for total unification.’23
Once at the head of the Commission, he announced his programme during a speech at the European Parliament on 14 January 1985, in which he emphasised the need for ‘rules harmonisation’ to avoid ‘social dumping’. He proposed developing a social Europe by reviving European social dialogue, concluding collective conventions, and professional training (which he had strengthened in France as social advisor to Prime Minister Chaban-Delmas between 1969 and 1972).
A former unionist, Delors sought to revive tripartite social dialogue on a more effective basis than previous attempts in the 1970s and in 1984. He aimed to steer clear of general debates on economic policies, instead limiting discussions to a few subjects that could culminate in concrete EC legislation. The first ‘Val Duchesse’ meetings, named after the Brussels château where they were held, began in 1985 with representatives from the ETUC and UNICE.24 Trade unions were generally supportive, but not always: Ernst Breit from the DGB believed that European collective agreements were only a distant prospect.25 He also mentioned the need to take competitiveness into account, which is logical considering that his country, West Germany, relied heavily on exports from manufacturing companies in which the DGB had numerous members.
With regard to member states, Paris was generally favourable to Delors’s ambitions, but French decision-makers refused any excessive concentration of powers at the Commission. Via its Minister of Labour, the Socialist Gianni de Michelis, Rome communicated its support for numerous legislative proposals of a social nature (training, parental leave, democratisation of enterprises) during the Italian Presidency of the Council during the first quarter of 1985.26 In contrast, London was firmly opposed to any advances in the matter. This configuration led to the inclusion, within the Single European Act of 1986, of the principle of upward social harmonisation for legislation involving occupational health and safety. The harmonisation of social laws was nonetheless hampered by unanimous voting at the Council, where the veto of a single member state (usually Thatcher’s Britain, but not exclusively) could block the decision-making process. The Single European Act imposed qualified majority voting, but only for legislation directly connected to creating the Single Market (non-tariff barriers preventing the smooth flow of goods from one country to another). This did not cover most social legislation, with the exception of those touching on non-tariff barriers and slated for harmonisation in connection with the Single Market Programme, such as some environmental, health, and safety regulations.27 For instance, adoption of the Occupation Health and Safety Framework Directive 89/391/EC in 1989 was followed by twelve sector-specific directives between 1989 and 1993, which improved standards by establishing more protective norms.
Trade unions became more interested in European integration.28 Beginning in 1988, the ETUC explicitly accepted advancing social Europe through both traditional legislation (at the Commission, the Council, and the Parliament) and tripartite dialogue. Even the British TUC abandoned its opposition to the EC, which it now saw as a counterweight to Thatcherism. Delors gave a speech to the TUC Congress in Bournemouth on 8 September 1988, to which Thatcher responded twelve days later with her famous Bruges speech.29 Delors proposed adopting a law that would establish a ‘basis of guaranteed rights for workers … [with] the creation of a society of European law including participation by workers or their representatives’ (see Chapter 6 for the debate on regulating multinationals). He also supported ‘extending a right to permanent training to all employees’.
At the same time in Belgium, the Minister of Labour Michel Hansenne, a Christian Democrat (and future Director General of the ILO from 1989 to 1999), proposed ‘EC social standards’ during the Belgian presidency in 1987.30
Another debate arose surrounding an ambitious charter laying out the general principles of social Europe, building on the Council of Europe Social Charter concluded in 1961 (which was non-binding). Paris sought to adopt a bill during the French presidency of the European Council in 1989, but the internal debates were difficult, and not solely due to British reluctance.31 French decision-makers believed that the Commission, represented at the time by the Commissioner for Social Affairs Vásso Papandréou, a Greek Social Democrat, was too supranational. Another difficulty emerged in West Germany, where the Minister for Labour, the Christian Democrat Norbert Blum, wanted a more binding charter focused exclusively on certain workers’ rights (annual vacation, sick pay, pregnant workers, and young mothers). Chancellor Kohl generally supported the process, but was concerned about a possible challenge to German social standards, which he believed to be higher than French ones. He refused any major delegation of sovereignty that could lead to a new ‘Social Democrat bureaucracy’.32 Several members of the German government insisted on extending the German system of co-determination, a return to the debates of the Vredeling directive. Finally, Denmark was always reluctant because it wanted to preserve its social model from foreign interference. It insisted on including the mention of ‘equal treatment with employees of the host country’ for subcontractors working in another country; this was opposed by Spain and Portugal, most likely to preserve their low paying jobs, which gave them a competitive edge. Thatcher remained adamantly opposed, declaring that the Council of Europe Social Charter was more than sufficient.
In the end, the Charter was adopted by the Twelve minus the UK during the European Council Summit held in Strasbourg on 9 December 1989. The Commission subsequently moved to implement it by proposing forty-seven laws between 1989 and 1991, despite British opposition.33 Tellingly, a senior German diplomat referred to the Charter as an ‘important milestone on the road [to creating] a social flank to the internal market’.34 It horrified some parts of the business community.35
The same configuration was present with the Maastricht Treaty (1991). The French and Italian governments were unable to form a common front, as Mitterrand prioritised the relation with Germany and monetary union, while Rome allied with London in a joint declaration on NATO’s role in European defence.36 The new treaty had numerous articles addressing social policy, but without the rule of unanimity being lifted for the most significant decisions. In addition, the social protocol appended to the Treaty – the commitment to apply the Social Charter – was not signed by the UK. It nevertheless offered the possibility of transforming agreements emerging from European social dialogue into binding laws if approved by the Council.
In 1993, Delors published an ambitious communication in which he envisioned a socio-environmental and neomercantilist Europe based on European social dialogue, training, and targeted investment, especially in advanced technology. The objective was to relaunch activity in Europe, which had been in the midst of a severe crisis since 1992. This proposal was inspired by research conducted earlier by European unionists and Social Democrats, notably in Sweden.37 It was not accepted by member states, and ultimately proved to be the high point of Delors’s ambitions. Even if Delors wanted to go further in terms of solidarity, his years were marked by a balanced understanding of the Single Market as a compromise between liberty and solidarity, through three elements that will be further elaborated below: socio-environmental regulation, social dialogue, and regional policy.
4.3 Supervising the Market to Protect the Weak
Social Europe concentrated on four especially vulnerable categories: migrant workers, poorly trained workers, women suffering from the gender pay gap, and workers affected by weak labour laws, especially in the fields of health and safety.
‘Migrant workers’, as they were called at the time, were transnational actors, and therefore required international legislation. In the 1950s and 1960s, the Europeans concerned by this phenomenon were primarily Italian workers from Southern Italy. In 1968, Rome secured the free circulation of workers within the Community, and in 1971 mutual recognition between social security systems, which made it easier to establish the rights of migrant workers and their families from one EC country to another.38 Thanks to EC laws and a favourable interpretation by the Court of Justice, the portability of workers’ rights expanded gradually from the 1950s to the 1980s.
Mobility later extended to new categories, such as students with the Erasmus Programme created in 1987 as part of the ‘relaunch of Europe’ (a expression widely used in those days). It provided students with a framework for the mutual recognition of education, along with financial aid. The programme was adopted despite reluctance from multiple member states, especially Germany, France, and the UK, regarding the financial cost of mobility aid, as well as the possible influx of students from the south.39 It was promoted within the Commission by both left-wing civil servants, such as Hywel Ceri Jones of the UK, and by the Irish neo-liberal Commissioner Peter Sutherland.40 However, the Council allocated less than half of the funding initially proposed by the Commission, which sought to provide study abroad for 10 per cent of the student population by 1992, as part of its objective to forge a Europe of citizens.
Equal pay for men and women became a Europe-wide issue in the late 1960s. In 1956, the French government asked for the insertion within the Treaty of Rome of Article 119 on ‘equal pay for male and female workers for equal work or work of equal value’. It did so for reasons of competitiveness, but quickly dropped the issue, with feminist actors stepping in to revive it, especially in 1966 with the worker strike at the Fabrique Nationale (FN) in Herstal, Belgium. For the first time, Article 119 was invoked to demand equal treatment, a departure from its initial function.41 This is an example of the ‘unexpected consequences’ of the Treaty of Rome, as its negotiators did not foresee how some of its articles would be interpreted later on.42 One of the leaders of the Herstal strike, Charlotte Hauglustaine, learned about Article 119 as part of union training during a presentation by the Belgian feminist lawyer Eliane Vogel-Polsky, who mobilised the Action Committee for equal rights for women in the workplace. This prompted accusations of a takeover from certain strikers, especially since feminism ‘still had a connotation as a “bourgeois movement” in worker circles’.43 While the strike ended with a slight pay raise, its memory remains vivid within the Belgian labour and feminist movements. On the EC level, the struggle continued in the legal arena, with Vogel-Polsky supporting the airline hostess Gabrielle Defrenne in her case against the Belgian airline Sabena, which fired her in 1968 because she had turned forty years old. Her employment contract permitted this, without requiring the company to keep her on as a member of ground staff. Discrimination was explicit, as men had the right to continue working for the airline until fifty-five years of age. On 8 April 1976, in the landmark Defrenne II decision, the European Court of Justice decided in her favour. Finally, in its Defrenne III decision on 15 June 1978 (case 149/77), the court found that eliminating gender discrimination fell under the general principles of EC law. Gender equality became, almost by accident, one of the leading issues of social Europe.
Three directives were adopted between 1975 and 1978 to broaden application of Article 119.44 After 1979, the rise to power of Margaret Thatcher, the first woman to lead a major European country, paradoxically represented a handicap to adopting new legislation. In keeping with her conservative standpoint, she complained to Delors that her country was being hampered by implementation of the equal pay directive.45
During the same period, protection for the weak extended to certain elements of labour law. A directive on employee consultation in the event of layoffs was adopted in 1975. For some experts, it helped temper the economically liberal bent of the centre-right French government under Jacques Chirac, who wanted to simplify redundancies in 1986.46 Sometimes harmonisation grew out of a disaster that sparked heightened awareness. For instance, in July 1976, the city of Seveso in Lombardy (near Milan) was the site of a massive dioxin leak from a factory producing highly toxic chemicals, such as the defoliant Agent Orange used during the Vietnam War.47 It led to the mass death of plants and small animals, as well as skin conditions among local inhabitants. The issue became European for two reasons. First, from the environmental point of view, the cloud of toxic chemical could have spread abroad. As shown by the example of the Rhine, pollution is by its very nature transnational within a European continent consisting of relatively small states. Second, from the economic point of view, if costly security measures were imposed only in one country, this would create market distortion. Henk Vredeling, the new Commissioner for Social Affairs appointed in 1977, prioritised this issue, but discussions proved difficult. The British government (despite being Labour) preferred discussing this issue within the less constraining frameworks of the Council of Europe and the World Health Organization (WHO).48 It was worried about the cost of additional protection measures adopted after the disaster. The Seveso Directive – bringing national legislation for the risk of major accidents from certain industrial activities closer together – was finally adopted after a lengthy debate on 24 June 1982 (directive 82/501).
The debates often got bogged down with technical and financial issues, the need to preserve industrial interests, and reluctance on the part of member states to give more power to the EC. For instance, the 1983 debate on asbestos opposed the British Minister Norman Tebbit, who was pushing for a low limit value (in keeping with proposed British legislation), and the German minister, who wanted a higher limit to preserve German industrial interests.49 The dangers of asbestos were clearly established in the early twentieth century, and its causal link with lung cancer in the 1930s.50 The Commission began to signal the dangers of the substance in 1962, but legislation did not come until 1983, and was still only partial in nature. Such constraints were also in effect with respect to environmental protection.
4.4 The Slow Rise of Environmental Policy
While environmental concerns dated back before the 1970s, it was during that decade when the issue took shape as an independent public policy. It is not mentioned in the European treaties concluded during the 1950s. The emergence of influential non-state actors such as Greenpeace (1971), in addition to the first UN Conference on the Human Environment held in Stockholm in 1972, reflect the issue’s sudden appearance in public discourse. In popular culture, disaster movies such as Smog and Soylent Green (both released in 1973) depicted the overexploitation of nature. This long-standing international awareness regarding the detrimental environmental impact of human activities translated into the creation of dedicated state ministries or agencies (1967 in Sweden, 1970 in the US, 1971 in France).51 The 1973 oil crisis further reinforced this orientation, by concretely demonstrating the ‘Limits to Growth’ emphasised in the famous Meadows Report published the previous year. It argued that since natural resources are limited, economic and population growth should be limited as well.52 Immediately after the crisis, the car culture was challenged by drastic measures such as the cancellation of car races and ‘Sundays without cars’ in Germany and the Netherlands, while the United States experienced episodes of ‘panic at the pump’.53 The oil crisis raised awareness regarding the intense energy consumption needed for productivity gains. For example, increasing corn yields in the US – which rose 238 per cent between 1945 and 1970 – came at the cost of an even greater spike in energy consumption (+ 313 per cent), with corn’s energy yield ultimately decreasing by 24 per cent over the same period.54
Pursuing international regulation was logical given that pollution and biodiversity loss are cross-border by nature. The Council of Europe played a pioneering intellectual role by adopting non-binding conventions that defined the major principles for protection, doing so for water pollution and animal transportation in the late 1960s. The OECD also took part in these reflections, creating a group in 1972 to study the Long-Range Transport of Air Pollutants (LRTAP), especially at the instigation of Scandinavian countries.55 The latter managed to expand the group to include communist Eastern Europe, because the major powers in the West (France, the UK) were not particularly mobilised, and figures from the Soviet bloc were seen as suspect. Finally, the East–West dialogue connected to the Conference on Security and Co-operation in Europe (CSCE) between 1973 and 1975, known as the ‘Helsinki process’, also had an environmental component. It led to the creation, under UN patronage, of the European Monitoring and Evaluation Programme (EMEP) in 1977, in addition to the Convention on Long-Range Transboundary Air Pollution in 1979, whose application was left up to each state.
How did the European Community emerge in a landscape dominated by national governments and international organisations? Paradoxically, the European Commissioner Sicco Mansholt – who had supported the development of a highly productivist agricultural policy in the Netherlands, and later in the EC with the CAP – championed environmental issues late in his career, praising the Meadows Report in 1972. He even sparked controversy with another commissioner, Raymond Barre of France, who was convinced that technological innovation would maintain high growth rates for many years to come.56 On the EC level, the Dutch were often pioneers in promoting environmental protection measures, probably because they lived in one of the densest and most artificial and polluted spaces on the planet. The polluting of the Rhine by the Germans (with massive dumping of chemicals by Hoechts in Frankfurt in 1969) and the French (by the Mines de Potasse d’Alsace) raised concerns for European Member of Parliament Jacob Boersma of Holland, who drafted a report on this subject at the European Parliament in 1970.57 It pointed to the incapacity of existing institutions, especially the International Commission for the Protection of the Rhine created in 1815, and called for EC legislation, which would be binding.
A first EC environment action programme was adopted in 1973 at the instigation of Italian Commissioner Altiero Spinelli, who had been influenced by the Boersma Report. The latter laid out major principles (such as the precautionary principle and the polluter pays principle), established key goals, and created an initial core group of civil servants to work on these issues. The Commission, which was looking for contacts and expertise (to relay cases of pollution and later of non-compliance with the rules), began to support environmental associations.58
Some laws were adopted, but on a modest scale. In the early 1980s, the Parliament, which had just been elected by direct universal suffrage, used its enhanced legitimacy to raise the profile of environmental issues.59 It took part in the mobilisation, under the leadership of Hanja Maij-Weggen of Holland, to protect baby seals, leading to a resolution adopted on 11 March 1982 asking for an import ban on their pelts. Following the media attention garnered by this cause, which notably had the support of French movie star Brigitte Bardot, on 28 February 1983 the Council adopted a directive banning the import of pelts and derivative products.60 In those days, the most ardent supporters of environmental protection measures were the Danes, the Dutch, and the Germans, whereas the Thatcher government’s objectives were much more modest: ‘to agree [to] guidelines for Community environmental policy that take account of cost-effectiveness’.61
Taking note of this growing awareness, the Single European Act of 1986 included environmental protection within EC competence. It opened the way for qualified majority voting on the issue if the legislation in question was connected to implementation of the Single Market. The deadly pollution resulting from the Indian Bhopal disaster in 1984 (a chemical accident) and the Soviet Chernobyl disaster in 1986 (the explosion of a nuclear reactor) further enhanced this awareness and international mobilisation. The Brundtland Report of 1987 popularised the concept of ‘sustainable development’, which combines economic growth and environment protection. The report was drafted by an international commission convened by the UN and presided over by Gro Harlem Brundtland of Norway. It also included the German expert Volker Hauff, a supporter of EC industrial policy in advanced technology.62 The report emphasised specific efforts to be carried out by the wealthiest countries to moderate their unchecked consumption.63 Green parties made progress at the 1989 European elections. The Maastricht Treaty of 1991 extended qualified majority voting to all matters in this area. There was also intense international action at the time, with the Montreal Protocol of 1987 banning CFCs harmful for the ozone layer. Finally, the Rio Earth Summit in 1992 also marked a first peak in environmental awareness.
However, aside from a few exceptionally influential examples, such as the Montreal Protocol, these international institutions had relatively minor impact, because they could not rely on law that was directly applicable and controlled by an administration. What is more, certain companies were funding the cash-strapped UN Environment Programme (UNEP), thereby giving them influence over its activities.64 These weaknesses made EC institutions all the more interesting for environmentalists, as it had directly applicable law that was overseen by the European Court, even if it depended on national administrations for inspection.
Unleaded petrol clearly illustrates the difficulties of legislative action, especially as it concerned two of Europe’s major economic sectors: automobile manufacturing and power plants.65 In the early 1980s, a major public campaign named CLEAR (Campaign for Lead-free Air) was conducted in London targeting the harmful health effects of air pollution, lead in particular. On the continent, Germans also mobilised against air pollution, but did so out of despair at the rapid spread of ‘forest dieback’ from acid rain. In both cases, emissions from cars (and power plants) were one of the main culprits. The US had already solved these problems by passing legislation in the early 1970s mandating catalytic converters, which reduced emissions of nitrogen oxide (NOx, one of the two substances behind acid rain) and lead (since lead damaged catalytic converters, unleaded petrol had to be adopted).
The adoption of unleaded petrol was costly, and was proportionally more substantial for small cars due to loss of power and the price of catalytic converters relative to that of the vehicle. French car manufacturers opposed this bill originating in Northern Europe, for they produced many small vehicles, and had invested little in this technology. In contrast, German manufacturers, which exported in large volumes to the US and mostly produced larger cars (except Volkswagen), quickly adopted catalytic converters. Moreover, some German industrial actors, notably the catalytic converter manufacturer Bosch, actually benefited from stricter environmental legislation.66
The German government tried to go it alone with unleaded petrol, but this risked dividing the European market. The Commission therefore pushed for EC-wide legislation. The French government was divided. The Ministry of Industry under Laurent Fabius used the traditional strategy pursued by ‘merchants of doubt’, affirming that the ‘harmful consequences of lead gasoline on the environment and health have not been demonstrated’.67 There was particular concern about the measure’s cost for the French industry. Peugeot CEO Jacques Calvet conducted a very intense lobbying effort against European regulation, while Minister of the Environment Huguette Bouchardeau, who had a background in environmental and feminist activism, defended the gradual abandonment of leaded gasoline. She commissioned an expert to provide counter-expertise showing the industrial feasibility of quickly abandoning lead, as well as the Roussel Report (jointly with the Minister of Health) emphasising the harmful health effects of car emissions (notably diesel particulates).68 This expertise enabled Bouchardeau to prove that the cost of automobile pollution was higher than the cost of adapting French industry, thereby rebutting the ‘merchants of doubt’. She also called directly on President Mitterrand, who imposed a compromise with West Germany in order to bolster the ‘relaunch of Europe’. The French–German agreement paved the way for the Council’s adoption, on 28 June 1984, of a first general orientation for the gradual introduction of unleaded petrol. However, it was not until the adoption of the Single European Act in 1986 that more binding laws were passed in 1988–89 thanks to the new procedure for qualified majority voting. The CEO of Peugeot Jacques Calvet was still opposed to the European regulation, but Renault – the other French carmaker – was not, despite the fact that both of them generally had the same product range.69 Calvet’s Euroscepticism probably played a role in this stance, and shows that business lobbying on environmental issues was not homogeneous.
The need to unify the internal market with similar regulations – including environmental ones – put intense pressure on member states to converge, especially since the decision was made at the Council via qualified majority voting under pressure from the European Parliament.
The battle surrounding each piece of legislation was intense not only between governments, but also among non-state actors. Civil society organisations defended stricter regulations for various reasons (protecting health, reducing pollution, fostering biodiversity), while certain companies mobilised against costly measures. The opposition of business was not systematic, as some companies began to pay greater attention to their environmental footprint, while for others environmental regulations even represented a business opportunity.70 To sum up, environmental protection emerged as an independent public policy in the 1970s, and underwent a first peak in mobilisation in 1992, both in Europe and internationally.
4.5 Regional Solidarity
European integration started with a redistributive programme, albeit a short-lived one: the Marshall Plan (1947–52). Some historians have argued that its impact depended as much on implementing a cooperative framework combining free trade, the welfare state, and a Fordist productivist consensus as it did on the grants. Yet even a historian as sceptical towards the Marshall Plan as Alan Milward estimated its impact in 1949 as approximately 6–8 per cent of British and German GNP, 10 per cent of French and Italian GDP, and 23 per cent of Dutch GDP.71
Once Western reconstruction was complete in the mid-1950s, Europeans no longer depended on American funds, except when experiencing financial crises (such as France in 1957–58). Strong economic growth and expanding welfare states transformed redistribution into a purely national issue for most countries.
Italy put discussions for Europe-wide redistribution on the agenda in the 1950s. Rome sought to secure financial transfers to increase the standard of living in Southern Italy, the Community’s poorest region. In 1953 the Beyen Plan, presented by Minister of Foreign Affairs Johan Willem Beyen, envisioned creating a European Adaptation Fund to ‘facilitate adaptation to Common Market conditions’, and to ‘strengthen economic solidarity between participating countries’.72 However, in the Treaty of Rome Italy was only able to secure a European Social Fund (ESF) granting mobility aid to workers, and a European Investment Bank (EIB) providing funding for economic development projects.73 These mechanisms were conditional, and the sums allocated modest.
The UK’s accession in 1973 was a game changer, for Prime Minister Edward Heath insisted on adopting regional policy during the negotiations preceding enlargement.74 In 1972, the Paris Summit decided to create the European Regional Development Fund (the future ERDF). It was followed by difficult negotiations between beneficiary countries supporting the creation of the fund (the UK, Ireland, Italy), and contributing countries, chief among them West Germany, which were reluctant. The negotiations lost momentum in 1974 with the arrival of a new Labour government in the UK, which was much less interested in European integration.75 The ERDF ultimately created in 1975 was fairly modest: the Commission reimbursed national programmes already in effect, over which it had little control, and granted aid based on an allocation key for member states. This modest redistribution policy was in line with the preferences of major countries, with London and Paris both being moderately favourable.76 As the leading contributor to the EC budget, West Germany was in principle opposed to any significant increase in EC spending, but it accepted regional policy so as not to be seen as obstructing the EC.77 In 1983, Bonn insisted on a review of European policies, with a view to cutting costs.78 After 1979, Thatcher also insisted on cuts in certain expenditures in regional policy.79
The issue became more pressing with enlargement towards the south (Greece in 1981, Spain and Portugal in 1986), as the new members, notably the Spanish government of Felipe González, wanted an increase in funding. In 1987, Delors proposed a comprehensive reform in February 1987 seeking to massively increase funds, and to combine regional actions divided across multiple intervention tools under a single policy known as ‘cohesion policy’.80 At the College of Commissioners, Delors’s proposal was supported by the Commissioners Grigoris Varfis of Greece and Manuel Marin of Spain, but opposed by the commissioners from Germany and the Netherlands.81 The support of German Chancellor Helmut Kohl at the European Council proved decisive. Kohl acted out of both political conviction and the need to support European integration, as this issue sparked scepticism within the German cabinet, ever focused on cutting costs.82 What was later called the ‘Delors I Package’ was ultimately adopted in February 1988. The share of expenditures related to cohesion policy in the EC eventually tripled between the start (1985) and end (1995) of the Delors period, to the detriment of the CAP.83 Expanded redistribution proceeded in parallel to the Single Market Programme, with the Commission explicitly referring to cohesion policy as a ‘joint flanking policy’ designed to accompany the Single Market Programme.84 Some Europeans would nonetheless have preferred going further in the direction of solidarity.
4.6 The Twilight of European Planning
It is often forgotten that developing planning on a Europe-wide scale had already been pursued several times. Within a democratic country, planning refers not to an authoritarian process, but rather to a multi-year development framework offering flexible coordination for public and private actors. This approach became more popular after the Great Depression, when laissez-faire capitalism was seen as incapable of self-regulation.85 European economic cooperation informed by a planning-based logic drove the first projects during the immediate post-war period. When the OEEC was set up in 1948, several decision-makers considered using it to coordinate national reconstruction plans, but this project was never implemented.
Despite this setback, many ambitious projects were envisioned. In 1958, the French socialist Robert Marjolin became the Commission’s first Vice-President for Economic Affairs. A former Deputy Commissioner of the French Planning Board, and former general secretary of the OEEC, Marjolin wanted to implement Community-wide economic planning. In order not to scare the Germans, who associated planning with the Soviet-style East German dictatorship, the project was launched in 1962 under the name ‘European programming’, and later referred to as ‘medium-term economic policy’.86 The intellectual context was favourable, as French planning was cited at the time as an example by numerous observers, such as the British economist Andrew Shonfield in his famous book, in which he identified seven additional European countries that used planning.87 The debate even spread to the US, as Business Week wondered whether the US needed planning, and Harvard University launched a programme to study French indicative planning to understand the sources of French economic growth (which was higher in the 1960s than West German, British, and US rates).88 More generally, the theory of a long-term convergence between capitalism and the Soviet model enjoyed a certain audience. The famous economist Paul Samuelson even predicted in 1970 that Soviet GDP would catch up with that of the US between 1990 and 2000.89 After all, the USSR was the first country to launch a satellite into space (Sputnik in 1957) and to send a man into orbit (Yuri Gagarin in 1961).
Marjolin sought to gradually transpose this process onto the European scale.90 His aim was for the European planning process to gradually Europeanise the practices of European decision-makers by prompting them to regularly compare and coordinate medium-term economic and social policy. The socialist Marjolin clearly approached European programming with the goal of prioritising funding for collective consumption (education, health, etc.), as well as avoiding counterproductive or socially pointless private investments. He used a broad European planning network to create the Medium-term Economic Policy Committee in 1964, but its role was drastically limited by the Empty Chair Crisis in 1965 (triggered by Gaullist France in opposition to an expanded role for the Commission), in addition to West German reluctance towards planning.
The European left did not forget planning during the 1970s. The ‘Theses for a Social Europe’, adopted by the European Socialist and Social Democratic parties during their meeting in Bonn in 1973, mentioned planning.91 The most influential document was the 1976 Maldague Report,92 which originally began as a report on inflation commissioned by the European Commission. While it respected free market rules (emphasis on free trade and limiting inflation), the working group made planning central to its thinking, much to the despair of some at the Commission.93 This new form of planning was based on a vast democratic consultation (involving sectoral and regional tripartite negotiations), which would have identified targets by sector and region based on wealth, income level, and social indicators. Investment had to be redirected to the priorities defined by planning. There were even plans for an ‘investment notification’ procedure for private companies in order to avoid ‘excessive investment’.
The sections of the report emphasising planning were drafted by three left-wing experts: Franco Archibugi, Stuart Holland, and Delors. Archibugi was a planning expert who had experience as a civil servant in European organisations, as well as within the trade union movement. Holland was a personal assistant to Labour Prime Minister Harold Wilson between 1966 and 1968. An influential Labour intellectual, his reflections on the EEC were widely discussed by Whitehall in 1977.94 Delors was an official at the Banque de France who belonged to the moderate Christian trade union CFTC. He served as the Head of the Department for Social Affairs at the French Planning Board (1962–69), as well as a social advisor to the moderate Gaullist Prime Minister Chaban-Delmas (1969–72), before joining the socialist party in 1974. He was critical of the decline of French planning,95 and defended decentralised planning based on contractual relations between social partners, the government, enterprises, and local actors. Public enterprises would enjoy relative autonomy under planning, in order to avoid the risk of management being driven by politics; the requirement of international competitiveness would also be taken into account.96 In 1978 the three authors published their reflections on planning in the collective book entitled Beyond Capitalist Planning, which sought, according to its editor Stuart Holland, to show the convergence of reflections across the European left around modernised planning.97 He cited the thinking of British Labour, French and Italian socialists, and German Social Democrats. The SPD programme adopted in Mannheim in 1975 included planning components that were included at the insistence of the party’s left wing,98 with the goal of using better information to strengthen public control over private investment.
In 1977, a note from the ETUC preparing a European meeting endorsed ‘more medium-term programming or planning’, echoing Marjolin’s vocabulary.99 In a nod to the Maldague Report, it called for greater investment coordination to prevent ‘wasting rare resources, as well as situations involving private consumption of non-essential and fairly pointless goods driven by factors such as advertising, which occurs at the expense of producing more essential goods and services’. The 1981 ETUC manifesto for a European relaunch emphasised coordinating European economic policy.100 Holland continued his effort to coordinate thinking on the European left with a new book in 1983 entitled Out of Crisis, which also explored the notion of planning.101 For all that, most planners were not ready to accept the delegation of power to the EC that was inherent in these ideas. Incidentally, in 1980 Holland was one of the leaders of the Labour party’s shift towards rejecting participation in the EEC. In the end, planning persisted only in massive investment projects for pan-European infrastructure – promoted by the ETUC in 1986, and taken up by Delors at the Commission – and partially implemented via cohesion policy.102
4.7 The Illusion of Well-Developed Social and Fiscal Harmonisation
The idea of supplementing the market with legislative harmonisation in social and fiscal matters was a long-standing one. The French government made it a prerequisite to accepting the Common Market at the beginning of negotiations in 1955–56.103 Demands for total harmonisation nevertheless receded when French experts realised that the five other EEC countries had comparable welfare states. The 1956 Ohlin Report (commissioned by the ILO and drafted by the Swedish expert Bertil Ohlin) concluded that it was futile to pursue social harmonisation, and instead recommended targeted measures.104 Studies by the ILO, the ECSC, and the French government diffused during the negotiations underscored the minor difference in labour costs between France and its partners.105
The quest for harmonisation from above was paradoxically revived by the German Commissioner Hans von der Groeben, who was influenced by ordoliberal ideas. In the 1960s he defended harmonisation for direct taxes on companies based on the principle of ‘fiscal neutrality’, with a view to avoiding what is today referred to as ‘fiscal dumping’.106 In 1969 the Commission affirmed that its ‘ultimate goal’ was to centralise a company’s taxation in the country where it is headquartered (global profits), stating that ‘such a solution entails a fairly extensive convergence of corporate taxes, so that they do not tend to set up in countries where the tax burden is lighter’.
Von der Groeben had to yield due to a lack of will among member states, and obstruction on the part of Gaullist France. On 28 June 1965, the German government supported a major fiscal harmonisation plan including direct taxation – most likely in keeping with von der Groeben’s objectives – but the Empty Chair Crisis sparked by Paris two days later hampered this effort. The French Minister Michel Debré took a more intergovernmental stance, calling in 1966–68 for a fight against the most flagrant instances of ‘distortion’, notably those linked to Luxembourg’s very low taxation, all while refusing ‘harmonisation’. Debré, who was adamantly opposed to supranationality, also saw his initiative fail. Corporate taxation remained wholly national, a growing problem with the development of Euromarkets in the late 1960s, which increased both the mobility of capital and fiscal competition.107
In the 1970s, the economic crisis prompted several left-wing actors to promote a concerted reduction in working time in Europe. This issue was regularly broached by the ETUC in the late 1970s during tripartite conferences between trade unions, employers’ representatives, and European institutions.108 The new Commissioner for Social Affairs, the former trade unionist Henk Vredeling, prioritised it upon his arrival at the European Commission in 1977.109 The centre-left German government reacted negatively, probably because it believed such a measure to be inappropriate both economically, as it compromised competitiveness, as well as socially, as working time arrangements were managed via agreements between social partners. The British Labour government was also opposed, but chose to adopt a prudent position so as not to clash with the unions supporting it.110
Paradoxically, the centre-right French government was more open. It decided that social Europe, energy, and monetary cooperation would be the three priorities for the European summit to be held in Paris in March 1979.111 The French initiated a discussion on working time since studies showed that annual working time in France was among the highest in the EC (according to French figures for 1977: 1,900 compared with 1,940 in the Netherlands, 1,820 in the UK, 1,750 in the FRG and Belgium, 1,540 in Italy, and by comparison 1,700 in the US). Paris accepted a reduction in wages, otherwise productivity would decrease, ultimately eliminating jobs. The aim was not to impose binding European measures, but to conceive incentive-based mechanisms discouraging recourse to overtime and encouraging the adoption of part-time work (following the model of a French law from 1976). This could increase both flexibility and productivity. The meetings held during the first quarter of 1979 provided the French Labour Minister, the moderate Gaullist Robert Boulin, with an opportunity to promote his vision: ‘We can imagine that a framework directive could be developed to establish the outlines, with social partners jointly studying how it would be applied, notably by sector, within the limits fixed by the directive.’112 The debate soon came to an end due to reluctance from Germany, as well as from the French Ministry of Finance and the French Commissioner Ortoli.113 According to a French official, the Germans were ‘somewhat surprised by the relatively open position taken by M. Boulin’, and were especially irritated by the maximalist proposals of Commissioner Vredeling with respect to the 35-hour workweek.114 This episode shows the obvious lack of coordination among actors defending a European reduction in working time (notably between Boulin and Vredeling).
In May 1979 the Conservatives rose to power in the UK, bringing an end to the debate. Whitehall produced a fairly moderate memo on the topic, which Thatcher marked up with emphatic annotations including exclamation points and a resounding ‘No’!115 The discussion concluded with a modest resolution from the Council on working time, adopted on 22 November 1979. In a bilateral interview with Thatcher, the German Social Democratic Chancellor Helmut Schmidt broached the idea for a European reduction in working time, but to no avail.116
The unions belatedly took to the offensive. During its discussions with the European Commission, Wim Kok of Holland, who presided over the ETUC from 1979 to 1982, regularly insisted on the need for European stimulus and working-time reductions.117 Since the Munich Congress of 1979, the ETUC called for adopting a 35-hour workweek, a demand that was included in the platforms of numerous trade unions and left-wing parties (especially in France, Belgium, and West Germany).118 However, there was no unanimity for defending this objective in 1979, especially due to opposition from Nordic unions, which were attached to their national models.
In Paris, the new socialist president, François Mitterrand, cut the workweek from forty to thirty-nine hours in 1981, but the goal remained thirty-five, along with a fifth week of paid holiday and retirement at sixty instead of sixty-five. The new socialist government sought to transpose these reforms to the European level. At the European Council Summit of 29 June 1981, Mitterrand asked for a European ‘social space’ devoted to reorganising working time and promoting union participation.119 Even the French communist minister Marcel Rigout, who was in charge of professional training, proposed relaunching ESF reform.120 But the French government was divided: while the Minister of the Economy and Finances, Jacques Delors, supported creating tripartite sectoral committees, the Ministry for Industry (led by the Eurosceptic Jean-Pierre Chévènement), and even the Ministry for Labour showed little interest.121 The French memorandum of December 1981 was ultimately modest: unemployment would be combatted by creating ‘competitive’ jobs, for ‘anything that causes Europe to fall behind would quickly threaten its independence and standing in the world’. French delegates pressed for reducing working time during EC meetings in 1982 and 1983, but did little more than suggest Boulin’s project for EC-level ‘proposal frameworks’.
There was strong opposition from Thatcher, as well as scepticism from Chancellor Kohl.122 West Germany was in the grips of an internal debate regarding the reduction of working time, with mobilisation by the DGB in support of a 35-hour workweek. In 1984 IG Mettall initiated one of the largest strikes in the country’s history, and obtaining a 38.5-hour workweek in late June. In a meeting with Thatcher in May 1984, Kohl identified this as his primary domestic political problem (after the ebb of the pacifist movement connected to the Euromissile crisis).123 Scepticism was rising even in Paris. During a meeting held by the ETUC in May 1983, Minister for Industry Laurent Fabius, who was close to President Mitterrand, stressed that the unilateral French reduction in working time from 1981 was economically problematic. Further reductions would be accepted only in exchange for greater flexibility and a European agreement.124 The French Presidency of the Council during the first quarter of 1984 provided an opportunity for the new Minister of Social Affairs, Pierre Bérégovoy, to propose an initiative for a 35-hour European workweek in June 1984.125 A resolution on the reduction and reorganisation of working time was finally adopted by nine member states (ten EEC members minus the UK) via the Council of Ministers for Social Affairs. It stressed that a reduction in working time should ‘help facilitate structural changes, enhanced competitiveness, and greater flexibility in the labour market’. The tone was cautious, in keeping with the debates launched by Boulin in 1979.
ETUC, under the presidency of George Debunne (1982–85) of Belgium, advocated for ambitious EC policies, such as targeted public investment programmes, social laws (Noise directive, Vredeling directive, creation of a European fund), and a project to identify an ‘EC framework instrument that would lead to negotiation on the national level’ for reducing working time.126 But it was too late, for neo-liberal reforms had already taken hold in many governments. Besides, the ETUC struggled to establish European-wide mobilisation: even when a common position was agreed on, the cost of transporting trade unionists to Brussels was simply too high.127 As a result, and despite the ambitions of some left-wing pro-European actors, Delors chief among them, the harmonisation of social and fiscal legislation was ultimately limited to a few laws directly linked to establishing the Common Market (see earlier).
4.8 Conclusion: The Success and Failure of a Solidarity-Based Europe
The solidarity dimension of the governance of European capitalism was real, but was primarily implemented nationally. A broad exploration of the archives reveals alternatives that were largely ignored, and subsequently left in silence. While Marjolin and Delors spoke very little of their European planning project in their memoirs,128 probably due to its failure, close examination of debates from the 1960s and 1970s shows its importance at the time. Other major projects that were not pursued include social and fiscal harmonisation, the control of multinationals (see Chapter 6), and Europe-wide stimulus (see Chapter 7).
In the late 1980s, the terms ‘flanking policy’ and ‘social flank’ were occasionally used in reference to certain European social efforts. Social and environmental action proceeded via the upward harmonisation of legislation protecting the weak, and targeted redistributive action for poor regions. While European action was initially limited to purely transnational issues such as migrant workers, it later spread to other areas, especially those that were relatively new, such as gender equality and the environment. The European ‘flanking’ welfare state had a weak redistributive component. In theory, transferring redistributive policies to the federal level is appropriate only when addressing cross-border issues – especially those producing negative externalities such as pollution or unfair competition – or when generating economies of scale.129 As a result, a European redistributive policy was developed only in connection with regional policy, whose primary aim is to correct the imbalances generated by the Common Market.
This relative weakness of social Europe can be explained by its late development (international action in the social sphere firstly took place within global organisations such as the ILO and the UN), by the sheer difficulty of organising a transnational social movement, as well as by divisions among its supporters. Numerous centre-left leaders in Northern Europe, notably in Scandinavia, Germany, and the UK, were attached to their national models (often co-managed by extremely powerful unions), and did not want to include a distant Brussels bureaucracy. Even when the ETUC became involved in tripartite dialogue in the 1970s, it saw the EC first and foremost as a forum for coordinating national policies.130 It was not until the mid-1980s that approaches were oriented towards the EC level, in connection with the Delors Commission. However, the high water mark for social Europe under the ambitious Delors (1985–95) coincided with the greatest influence for the most radical British neoliberalism under the Thatcher (1979–90) and Major (1990–97) governments. Examination of the archives from three centre-left governments (UK 1974–79, FRG 1974–82, France 1981–86), in addition to the ETUC, shows no attempt to create a united front on social Europe.
Thatcher was a formidable obstacle, one that Delors sought to circumvent through greater use of qualified majority voting via the Single European Act and the Maastricht Treaty (for social and environmental matters). He did so by making decisions without London regarding tripartite dialogue, the Social Charter, and the working time directive. Delors was supported by Kohl, Mitterrand, and González among others. But the debate surrounding the harmonisation of most social and fiscal laws was stalled by the veto right at the Council (except for legislation directly related to the Single Market).
Effective social and environmental action was nevertheless taken with key support from national leaders on both the centre-left (Mollet in 1956, Brandt in 1970, and Mitterrand in the 1980s) and the centre-right, with Heath in the case of regional policy, and Boulin for the reduction of working time. European actors also played a major role, such as Delors at the European Commission. The Parliament served as a soundbox for new environmental subjects such as pollution and protecting animal species, for instance baby seals. Other important actors were European trade unions, activist lawyers such as Eliane Vogel-Polsky in connection with gender equality, and defenders of the environment. They successfully established the central role of the market in European integration via a ‘flanking’ welfare state.
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