The New Penguin History of the World (215 page)

While the Maastricht process was created in part by the need felt by many member states – and especially France – for a deeper integration into Europe of the new and powerful united Germany, it soon took on a much wider significance. With Communism gone in Eastern Europe, the need for a truly
European Union
– as the Community called itself after Maastricht – stood out. It is a testimony to the strength of the institutions created over half a century of European integration that the EU managed both to introduce a common currency (the
Euro
, from 2002), alongside an EU Central Bank, and deeper co-operation on criminal justice, foreign policy and military affairs, while moving rapidly towards membership for
Central and Eastern Europe. In 1995 the Cold War neutrals Austria, Finland and Sweden joined, while the big step eastwards came in 2004, with the accession of ten countries, among them Poland, the Czech Republic, Slovakia, Hungary, and – most astonishingly of all – the former Baltic Soviet republics Estonia, Latvia and Lithuania. In spite of continued disagreement about its constitution, budget and plans for further expansion, the EU, with its 461 million population, had taken giant steps towards becoming the all-European union that its founders had envisaged.

Economic circumstances had changed, too. For all its importance, the Common Agricultural Policy (CAP) did not mean what it had meant in the 1960s; in some countries it was evolving from an electoral bribe to large numbers of smallholders to a system of subsidy for fewer, but much richer, agriculturalists. Within the new Union, too, national responses were not what they had been in the 1960s and even later. Germany now provided the driving force and much of the Union’s financial support. Chancellor Helmut Kohl’s greatest triumph, reunification, had confirmed Germany’s natural position as Europe’s major power. Yet this had been costly. Germany was driven into deficit on its trade account and dissatisfaction with the terms of reunification began to be heard. As time passed, more was also heard of the danger of inflation, an old nightmare for Germans, and of the load carried by the German tax-payer as former East Germans moved to the west and unemployment rose. Economic recession cast long shadows in most member states of the EU in the 1990s, reminding their peoples of disparities and differences of economic strength between them. Everywhere, too, fiscal, budgetary and exchange problems came in the 1990s to undermine the confidence of governments.

There was thus plenty for politicians to take into account. Views were changing everywhere. For the French, for example, the deepest root of the European impulse had always lain in fear of Germany, which their statesmen had sought to tie firmly into first the Common Market and then the Community. As the German economy grew stronger, though, they had been forced to recognize that it would have the preponderant share in mapping Europe’s future shape. De Gaulle’s ideal of a Europe of nation-states gave way among Frenchmen to a more federal – that is, paradoxically, more centralizing – view of a Europe consciously built so as to give a maximum of informal and cultural weight in it to France – through, for example, appointments at Brussels. If there were to be a European super-state, France could at least try to dominate it. None the less, the French decision in 1995 to rejoin NATO was a clear break with the ways of de Gaulle.

The German government after 1990 had soon sought to express its new
influence by seeking to befriend its ex-communist neighbours. The rapidity with which German businessmen and investors got to work in those countries and the speed and eagerness of Germany’s recognition of newly independent Croatia and Slovenia at the end of 1991 (it was the first country to do so) was far from reassuring to other EU members. How the EU was to expand was bound to be crucial for world history. A democratic and pluralist EU of almost 700 million, stretching from the Arctic Circle to Antalya and from Faro to Kerch, might be one conceivable outcome, but another is a break-up (not necessarily into its national components) of what Union there was. Eventually, the question will appear of whether to attempt to integrate Russia, which is, in spite of its size and its autocratic tradition, undeniably a European country with many of those resources – human and material – that the EU will need for the continued welfare of its citizens.

There has of course been some cultural convergence within the Common Market Community and EU over more than thirty years. Increasing standardizing of consumption, though, owed less to European policy than to shrewder marketing and growing international communication at a popular level (the outcome was often as in the past deplored as ‘Americanization’). And such slow convergence as had been consciously promoted in, for instance, agriculture had been very costly, with the CAP understandably irritating non-farming voters. The Union seemed feeble, too, in its handling of external affairs; it blatantly failed the severe tests posed by Yugoslavia’s dissolution. Many uncertainties thus still hung over the future of Europe at the beginning of the twenty-first century. Among them was the project of a single European currency. Although the argument for it had always had a predominantly political flavour, it was asserted that great economic benefits would flow from its introduction and that lower prices and lower interest rates would be likely to follow. With equal assurance, it was pointed out that participating states would lose control over important aspects of their economic life. A common currency, in fact, implied further surrender of sovereignty.

Politicians brooded over what voters might think when choices had to be made that would bring home to them the consequences of a monetary union. It was not hard to agree, though, that were monetary union to fail, and were enlargement not to take place, the EU could settle back into not much more than a simple customs union.

When Helmut Kohl was defeated in the German elections of November 1998 and Gerhard Schröder, the first socialist chancellor of united Germany, took office, this had made no difference to the monetary union goal of the German government. The French government, too, stayed behind
it. Denmark and Sweden firmly announced they would not wish to participate. In Britain, the new Labour government of Tony Blair, elected in a landslide vote in 1997, while cautiously positive to further integration, refused to join ‘until the time was right,’ and the right time was not to appear during their first ten years in office. But on 1 January 2002, most of the member countries introduced their first shared currency since the age of Charlemagne. In a telling avoidance of offence to national susceptibilities, the possibilities of great historic names – crowns, florins, francs, marks, thalers and many more – were set aside and the new unit of currency was to be called a ‘Euro’. By the mid-2000s, its notes and coins were the only legal tender among the 300 million citizens of twelve member states, and it was even adopted by states and territories
outside
the EU, such as Montenegro and Kosovo.

The difficulties of enlarging the Union were by then much clearer. The longest-standing candidate for admission was Turkey, of whom some asked whether it was a ‘European’ country at all since most of its territory lay in Asia and most of its people were Muslim. Worse still, the modernizing Ataturk legacy was under challenge there after a sixty-year ascendancy. Islamists had always resented the regime’s traditional secularism. Yet if the test of Europeanness was modernity in institutions (representative government and women’s rights, for example) and a certain level of economic development, then Turkey clearly stood with the Europeans rather than with the rest of the Islamic Near East. Turkish treatment of political opposition and minorities (particularly the Kurds) nonetheless met with much disapproval abroad, and the record of the Turkish government as a guardian of human rights was questioned. Turkey thus posed yet again old and unanswerable questions about what Europe really was. Significantly, though, Turkey’s old enemy Greece has become one of the key supporters of membership for Ankara, arguing both along economic and political lines, in spite of the unresolved issues over Cyprus (now a member of the EU in its own right).

At the end of 2000, in negotiations at Nice, while the principle of further expansion was agreed upon, it was also agreed to change voting qualifications, but France succeeded in hanging on to the same ‘weighted’ voting rights as Germany, now indisputably much the largest and wealthiest member state. Ratification of the Nice treaty had still to be obtained in national parliaments, of course, and the Irish government soon had to face the problem posed by losing a referendum on its proposal; this sent another shock through the system. Agreement at the end of 2001 that a special convention should take up the consideration of the working of EU institutions, and of possible changes in them, only slightly offset this. And
when in 2005 referendums in both France and the Netherlands rejected the product of that convention, the somewhat extravagantly termed ‘European Constitution’, the project of further deepening of the integration process seemed, again, to be in deep trouble. But while the popular rejection of the constitution treaty is yet another sign of the European Union still being an enterprise of and by the political elites, much of the content of the constitution will – perhaps for that reason – find its way into EU rules and regulations, even if an amended version of the proposed constitution were not to be brought back for referenda in the countries that have rejected it.

To an extent, then, the end of the Cold War seemed at last to have revealed that Europe was more than the geographical expression it had so long seemed to be. Equally, though, there seemed less point than ever in seeking some innate European essence or spirit, let alone a European civilization, the major source of a world civilization though it might be. It was as ever a collection of national cultures resonating vigorously to their own internal dynamics, for, as the twenty-first century began, there was little sign of a European patriotism able, like the old national allegiances, to stir the emotions of the masses, for all that had been achieved since the Treaty of Rome. Participation by voting in elections for the European parliament had fallen everywhere except in those countries where voting was compulsory. Linguistic chauvinism threatened a new unwork-ability in the institutions of the Union – whose huge, disordered complexity already baffled those who sought political logic in them and undoubtedly contributed to a larger public sense of boredom with the idea of Europe. But much had been achieved. Above all, the Union was a community of constitutional democracies and the first successful essay in European integration not based on the hegemony of a single nation. As the twentieth century ended, too, the EU was, even in rising economic gales, in the long run evidently an economic success. Including Switzerland (which, of course, the EU does not), western Europe already accounted for some 75 per cent of world trade (most of it between her own member countries) and 40 per cent of the world’s GDP. Its own GDP was in that year larger than that of the United States and more than twice that of Japan. Europe was one of the three prime movers of the world economy that had emerged in the previous fifty years. If Europeans still seemed to worry a lot about where they were going, they were obviously a team many outsiders wished to join.

CHINA AND EAST ASIA

The year 1989 had left much doubt about the future direction of China. Not only had the ruling Communist Party faced a significant challenge from below – which it could only overcome by the use of raw force – But the economy also seemed to be stumbling, with growth flattening out in many sectors. Deng Xiaoping, the man who had engineered the economic reforms ten years earlier and who, at the age of 85, had returned to the centre of political decision-making as the 1989 crisis grew, now embarked on his last campaign. Visiting the southern provinces in 1992, Deng condemned those who saw political retrenchment as synonymous with economic retrenchment. The reforms had to be intensified, Deng said, and private enterprise should be given more room. By then, the 1989 stagnation was already a thing of the past, and from 1992 on China entered a phase of hyper-growth, with its GDP increasing by more than 10 per cent on average for the next fourteen years.

The explosion of economic growth in China may turn out to be the most important global event of the 1990s. Not only did it create a middle class of more than 200 million people with a purchasing power around the EU average, it also made China into the fourth largest national economy on earth. Most of this growth was in the private sector, but – after much restructuring – there was also some growth in the publicly owned or controlled sector by the early 2000s. China’s economic model seemed to combine extreme capitalism with a very important role for the state and even the Communist Party. It combines rampant exploitation of the masses of young men and women who enter into the factories from the countryside with an emphasis on political control of all companies, including those that are privately owned by Chinese or foreigners. While gradually spreading north and west, the growth is still heavily concentrated in the south and east, along the coast and along the great rivers, repeating a pattern that has been visible since the earliest dynasties. While becoming a guarantor of regional economic stability, the regime has done little to make itself more accountable to its people through democratic reforms, and – as a result of the lack of transparency – corruption and the misuse of power among officials is rampant. While the Communist Party of China seems to have found a development model that works, at least in good times, it has little to fall back on in terms of legitimacy when times turn bad.

The end of the Cold War also transformed China’s foreign relations. 4,000 and more miles of shared frontier with the former USSR were now replaced for about half that distance by frontiers with the newly
independent and much weaker states of Kazakhstan, Kyrgyzstan and Tajikistan. Meanwhile, in the later 1990s, concern over Taiwan, the problem that had long tied together Chinese internal policy and foreign relations, was clearly as alive as ever after nearly five decades in which the seemingly fundamental nature of the original clash between the nationalist regime there and the People’s Republic had, in fact, been slightly blurred after the formal closure of American diplomatic relations with the Taiwanese nationalist regime and its subsequent exclusion from the United Nations. Yet in the 1990s, while Beijing still maintained its policy of reuniting Taiwan (like Hong Kong and Macao) to mainland China as a long-term goal, more began to be heard of alleged independence sentiment on the island. Beijing was evidently disturbed, alarm reaching its height during a visit by the president of the Taiwanese republic to the United States in 1995. The ambassador of the People’s Republic in Washington was withdrawn and an official newspaper proclaimed the issue of Taiwan as ‘explosive as a barrel of gunpowder’. It was clear that if Taiwan formally declared itself independent of the mainland an invasion of the island would probably follow.