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9-08-2015, 23:52

THE EUROPEAN COMMUNITY

In the European Community agreement on common goals has frequently been reached only after long-drawn-out negotiations and carefully cobbled-together compromises. But the original aim of the 1957 Treaty of Rome – that all obstacles which impeded the free movement of goods, capital and services, such as insurance and banking, within the Community of 360 million people should be lifted – had still not been entirely met in the early 1990s. The Europe of the twelve members of the Community was still fissured by customs frontiers and blocked by mountains of paper forms as well as hidden obstructions. Nevertheless, the three major continental West European nations – Germany, France and Italy – backed the drive for closer union. Britain was more reluctant to hand over control to the Commission in Brussels, whose president from 1985 was the former French minister of finance, Jacques Delors. Margaret Thatcher stood at the forefront of those who believed that to elevate the Commission as the ultimate source of power would be profoundly undemocratic and that the European Parliament was too weak to play the role of existing national parliaments. Which direction the European Community took depended on the decisions reached by the heads of government of its member states. It had always been so and essentially it remained so in the early 1990s. This was not the intention of the founding fathers, who wanted to move towards the closer integration of Western Europe. They laid down that, after an early stage during which unanimity would be required in the Council of Ministers, the ‘qualified majority’ voting formula would come into play. This meant that if France, Germany and Italy were agreed, the other three original members – Netherlands, Belgium and Luxembourg – would be outvoted. Moreover, the three smaller powers acting together would not achieve enough votes to get a measure passed unless they could gain the agreement of at least two of the other three. In other words, neither Germany, France nor Italy had enough voting power on its own to veto a decision all the others were agreed upon. De Gaulle scuppered any such notion of diminished sovereignty in 1965: he boycotted the Community for seven months and returned only when the socalled Luxembourg Compromise was agreed on in January 1966. This gave each member the right to veto any decision affecting its vital national interests – and the interpretation of ‘vital national interests’ was left to the member state and could include such matters as the price of barley. The successive enlargements of the European Community have altered the mechanics of ‘qualified majority’ voting, but the national veto was still in place in the early 1990s. The periodic summit meetings of the heads of government – accompanied, since 1974, by their foreign ministers – were given the formal name of European Council. They convene three times a year, and their decisions set the guidelines. At the Council of Ministers, more detailed agreements are reached. The European Commission of civil servants under the president and his ‘Cabinet’ of sixteen nationally appointed commissioners also has a powerful influence. It can initiate proposals and then draw up amendments, but these require the consent of the Council of Ministers who, in turn, take their instructions from their national governments. The European Parliament, directly elected for the first time in 1979, has the power to dismiss the Commission but not to appoint one. Its day-to-day powers are limited; it is a consultative rather than a legislative parliament. There is also a court of justice. The Single European Act of 1987 limited the use of the national veto by requiring that qualified majority voting should be substituted for unanimity in a number of important areas concerned with the creation of a common market. But the national veto was still applicable in other areas. A chronic Community problem centres around the budget, which is contributed by member nations. The main difficulty was the costly Common Agricultural Policy (CAP), which absorbed two-thirds of total expenditure; a temporary difficulty was the implementation of a 1980 undertaking to reduce Britain’s excessive net contribution, which arose because with its small farming sector it received relatively little in the form of CAP subsidies. Since it was one of the poorer countries in the EC, this was patently unfair. Margaret Thatcher insisted in 1983 that the British government would not sanction any increase in the Community’s financial resources unless a long-term solution was reached to replace the annual haggling. In many ways Margaret Thatcher was out of tune with the ‘continental’ style of the Community, which Britain had entered too late. She abhorred the Brussels bureaucracy and its pettifogging regulations; she opposed the protectionist stance that the EC adopted towards world trade; above all she attacked the absurdities of the CAP which, on the one hand, created huge and expensive butter mountains and wine lakes to subsidise the farmers out of taxation raised in member states, and, on the other, increased EC food prices above world prices generally. A free-trader by conviction, what she did support was the removal of trade barriers between member states. But she remained profoundly suspicious of closer political union. The European Community institutions are undemocratic, and the one democratically elected body, the European Parliament, lacks real power. In any case, Thatcher was not ready to allow European institutions to override the 700-year-old Parliament at Westminster. She regarded democracy and parliamentary institutions on the continent as too recently established and not rooted in tradition, as they were in Britain. What is more she feared the overwhelming influence Germany would be able to exert in a politically and economically unified Community. All these views she expressed with a passion and directness that made her seem the outsider, even when others might secretly agree with her. Despite much acrimony and despite often giving an impression of immobility the Community tends to acquire sudden forward movement when continuing crisis threatens its credibility. At the Fontainbleau summit in June 1984, agreement on the principal bones of contention was reached: the British obtained the long-term settlement of their budget contribution and the Community’s resources were increased by undertakings to raise the level of VAT. In a move that was to prove of great significance in the 1990s, the European Parliament in 1984 adopted a report calling for a new treaty to create a European political union. Much wrangling in 1985 was settled in December at the Luxembourg summit when it was agreed in principle to adopt a Single European Act. This comprised two separate parts, one establishing a treaty for political cooperation, and the other amending the Treaty of Rome to remove all existing obstacles to a free internal market by the end of 1992, thus making the original vision of a common market a reality. Clearly the two parts, ‘politics’ and ‘trade’, could move forward at entirely different speeds. It was a far cry from the European union which a majority in the European Parliament wanted – though, as we have seen, the Act also provided for an extension of qualified majority voting. The dynamic but frequently tactless Jacques Delors, Commission president, had little success in persuading Margaret Thatcher to agree to an increase in the powers of the Commission or to support the closer political integration of the EC members. For her part, Thatcher took the lead in demanding reform of the CAP, though this made slow progress. But in 1987 the Single European Act was ratified by national governments and finally adopted. The Community also accepted compromises on the budget on the basis of proposals put forward by Delors, which involved gradual reductions in the proportion spent on agriculture. Further cuts were in prospect if production of specified agricultural produce exceeded set ceilings. As the decade drew to a close, the differences between Britain and the rest of the Community once more became accentuated. Britain favoured the dismantling of barriers to trade and the creation of a free market, but declined to join the European Monetary System (EMS), which had come into force in 1979, and therefore did not participate in the Exchange Rate Mechanism (ERM), which was designed to create currency stability. In September 1988 Delors chaired a committee of experts to discuss European monetary union. The outcome became known as the Delors Plan, which the Commission president submitted to member heads of government in June 1989. It envisaged the creation of monetary union with a single currency. This was to be achieved in three stages. All member states agreed in June 1989 to participate in stage one, the drafting of a treaty on monetary union. But Britain refused to begin the second stage, which – following signature of the treaty – would lay down the conditions to be met by member states that would make possible the attainment of stage three: monetary union with a single currency in use throughout the Community. In opposing the moves towards monetary union, Margaret Thatcher found herself increasingly isolated not only in Europe but within her own Cabinet. It was her chancellor of the exchequer and her foreign secretary who insisted at the Madrid summit in July 1989 that Britain should formally accept the whole of the first stage in principle. Margaret Thatcher continued to oppose the goal of monetary union as it would undermine national sovereignty, but in October 1990 she was reluctantly driven to agree to Britain joining the system of fixed exchange rates (the ERM). It transpired that John Major, then chancellor of the exchequer, joined at too high a mark exchange rate. As Mrs Thatcher’s adviser Sir Alan Walters had warned, the resultant high interest rates in Britain deepened the recession and increased unemployment. European political and economic union remained a goal for the 1990s, though it seemed hardly realisable with the members’ economies still so widely divergent. This became painfully clear when in September 1992 the Italian lira and the British pound came to be regarded by the currency exchanges as overvalued. Speculation against the two currencies overwhelmed the defences mounted within the ERM and both currencies had to accept the market’s judgement and leave the ERM. This meant that in effect they devalued against the previously fixed rate. It was a healthy reminder to politicians that in a free financial world their powers are limited. Nor did the Community nations manage to speak with a common voice on all vital issues of foreign and internal affairs. The realisation that such union might not be attainable within the agreed timetable was resisted by the political leaders who favoured it. Seven smaller but nonetheless prosperous Western European countries which had not joined the European Community – Sweden, Norway, Finland, Iceland, Austria, Switzerland and Liechtenstein, members of the European Free Trade Association (EFTA) – negotiated a treaty with the Community in 1991 to create in 1993 an enlarged European Economic Area of 380 million people. In addition, Austria, Sweden, Norway and Finland hoped to join the Community in January 1995. Switzerland too was expected to join those in the antechamber until in a referendum in December 1992 the populace decided by a narrow majority not to join. Swiss neutrality had triumphed. Negotiations were likely to be completed before the mid-1990s, each country’s special problems having been taken into account. Sweden and Switzerland were reluctant to abandon their traditional neutrality. Sweden, after shedding its socialist policies and government in 1991, embarked on the formation of a market economy to lift the country out of a deep recession. Finland, also in recession in the early 1990s, found itself freed from its dependence on the Soviet Union, whose collapse also meant that it lost its best trade partner. Austria in 1992 replaced a president, Kurt Waldheim, who had become an international embarrassment, and in the same year its international reputation was greatly enhanced by the generous way the small country opened its doors to refugees from the former Yugoslavia. The Community welcomed the possible accession of the wealthier countries, which would help to provide funds for the poorer Mediterranean members and for Portugal. Fundamental problems remained to be solved. These included the reform of the Community budget, and more particularly the need to curb farm spending; the relationship to be developed with the newly liberated nations of Eastern and central Europe; and trade relations with the rest of the world, especially the US, which demanded a reduction of the Community’s protective barriers. It held up the ‘Uruguay’ round of negotiations to liberalise world trade through the General Agreement on Tariffs and Trade begun in 1986 and concluded in December 1993. The main remaining obstacle was US congressional approval before the agreement could come into force in 1995. Agreement also had to be reached on the respective roles of the Community institutions, the relationship between the European Parliament, the Commissioners and national governments. There was a readiness among national governments to relinquish sovereignty to a limited degree. It appeared that a high point of cooperation had been reached when in December 1991 the leaders of the Community as part of the Delors Plan concluded a new treaty at Maastricht to create an ‘ever closer union among the peoples of Europe’. Britain led the opposition to the ideals of a ‘federal Europe’ and a single common currency. Britain also opted out of the ‘Social Chapter’, which sought to provide minimum conditions and standards in the workplace for employees. French, Dutch and Belgian support for Maastricht was based to a large extent on a desire to ensure that the power of the recently unified Germany should remain firmly anchored in European institutions. This view had the enthusiastic support of Germany’s Chancellor Kohl. John Major agreed, albeit with important reservations, because he wished to keep Britain’s place of influence at the ‘heart of Europe’. Within a few months it turned out that the Community’s leaders were far ahead of their electorates and had concluded a treaty difficult to ratify and short of obvious popular appeal. The threatened loss of national identity and objections to giving Brussels more central control underlay misgivings. Ratification was finally achieved in November 1993, when the European Community became the European Union. The margins for ratification were slender in France and required two referenda in Denmark. In Britain it caused a serious rift in the Conservative Party. Britain opposed moves to ‘closer union’, but had to give way when in March 1994 the European Union offered to admit Sweden, Norway, Austria and Finland while restricting the rights of members to block decisions. Sweden, Austria and Finland joined on 1 January 1995 after holding national referenda. The Norwegian people rejected the advice of their government and voted against joining the Union. Three countries – Greece, Spain and Portugal – were for many years barred from applying to join the European Community, not principally on account of the economic difficulties which their membership would arouse but because of their political systems. A fourth country, Turkey, an ‘associate’ since the 1960s, still awaited a favourable verdict in the early 1990s. Greece’s treaty of accession was concluded in 1979 and it became a full member in 1981. It had only recently returned to democracy after the collapse of the military junta in 1974. Although democratic government had a difficult passage after 1974, membership of the European Community was a strong support. The Greeks suffered more than any nation in the post-war free world, the civil war from 1946 to 1949 causing widespread devastation. But that conflict was followed by a period of conservative parliamentary government under Field Marshal Papagos and the most durable politician of postwar Greece, Constantine Karamanlis. In 1963, George Papandreou was able to form a liberal reforming coalition until he was dismissed by King Constantine after a dispute over who should control the army. A group of extremist army officers accused Papandreou’s Centre Union Party of preparing the way for a communist takeover and organised a coup in April 1967 ahead of the planned general election. The dictatorial rule of the Greek colonels from 1967 to 1974 was a disastrous period for Greece. Abuses of human rights, including torture, were rampant, and so was corruption. The economy, which had been doing well in the 1960s, deteriorated sharply. In 1974, beset by vociferous public demonstrations and resistance following the fiasco of their Cyprus policy and the shambles of army mobilisation, the colonels’ junta collapsed. Cyprus, after a long struggle, had been granted independence in August 1960 and placed under the guarantee of Greece, Turkey and Britain. But the power-sharing constitution never worked in the face of Turkish Cypriot and Greek Cypriot animosities. Conflict on the island led to the despatch of a United Nations peacekeeping force in 1964, and Turkey and Greece themselves came close to war. Ten years later, in July 1974, the Greek colonels organised a coup and forced the president of Cyprus, Archbishop Makarios, to flee, preparatory to bringing Cyprus under Greek control; the Turks reacted by invading and occupying the northern portion of the island, defeating the Greek Cypriots. An exchange of populations, with 200,000 Greek Cypriots leaving their homes in the north, and Turkish Cypriots resettling there, effectively partitioned Cyprus. All efforts to unite the two halves and reach a workable compromise between the two communities had failed by the early 1990s, but the partition, with a UN force patrolling the line between the two sides, had ended the bloodshed. The Cyprus dispute led to strained relations between two NATO allies Turkey and Greece. But Greece’s attachment to NATO after 1974 was ambivalent, partly because it was widely believed in Greece that the US had supported the hated colonels. US bases and the US naval presence in Greece were consequently very unpopular, both with the conservative governments headed by Karamanlis, who had opposed the colonels from exile in Paris, and with the liberal centre governments of Andreas Papandreou (son of George Papandreou) in the 1980s. On his return from exile in 1974, Karamanlis, with true statesmanship, guided Greece back to democracy, only for Andreas Papandreou’s Panhellenic Socialist Party to win the election in 1981, though his administration evinced little socialism. Papandreou had gained a reputation as an American-trained economist, but, as elsewhere in the world, the shock of the oil-price rise compounded Greece’s economic difficulties in the mid-1980s. In opposition, Papandreou had been stridently anti-Common Market and anti- American; in government he acted with a greater sense of responsibility. But by the end of the 1980s he and his ministers became implicated in financial scandals; his electoral support nevertheless remained solid. Greek politics were also enlivened by his love affair with a former airline stewardess thirty-five years his junior, photographed with a telephoto lens bare-bosomed on the beach. Papandreou was seriously ill with heart trouble at the same time. He subsequently divorced his wife, married his mistress and was narrowly defeated in the general election of 1989. No party emerged as outright winner, and coalition governments were succeeded in 1990 by a conservative administration with a tiny majority led by Prime Minister Konstantinos Mitsotakis. Reforms strengthened the economy after years of socialist profligacy but also caused hardship. The elections in October 1993 returned Papandreou to power. The Cyprus question continued to disrupt its relations with Turkey. But as a member of the Community it had received aid and gained substantial advantages. On Papandreou’s death in 1996, Costas Simitis, a younger founder of the socialist Pasok Party became prime minister and took the party into the elections of that year. The country had become increasingly polarised with the revival of the conservative New Democracy Party but Pasok won a working majority of seats – 158 against New Democracy’s 125. Greek politics, still linked to the dynasties of a few families, however, came to be dominated less by ideology and more by the requirements of its membership of the European Union. By taking Greece into the Monetary Union, Greece had been forced to adopt prudent budget policies. Austerity measures inevitably proved unpopular. Simitis steered the politics of his party to the centre, reforms to modernise and make the economy more competitive were pragmatic rather than ‘socialist’. He stated a modest aim of cutting unemployment down to 7.3 per cent. Unemployment at over 9 per cent remained the blackspot. But with the help of European Union funds, fiscal discipline and liberalisation, Greece’s economic growth rate became one of the best in Europe between 3 per cent and 4 per cent annually from 1997 to 2003 while the high inflation rate fell from 16 per cent to under 7 per cent. With the stabilisation of the Balkans after the Yugoslav wars, Greece, the most advanced economy in the region, will benefit further. A new feature in Greece has been large-scale immigration from its neighbours, happy to do more medical work and proving a benefit to the economy and less of an issue of public disquiet than might have been supposed. Simitis abandoned Papandreou’s populist, nationalist anti- American tone; the policy toward Turkey is more pacific with Simitis and George Papandreou, the highly regarded foreign minister supporting the principle of Turkey’s admission to the European Union. Greece was governed for nineteen out of the last twenty-two years by Pasok and partners on the left. It required a small shift of voters discontented by austerity and high unemployment to bring New Democracy back into power in 2004 as the eyes of the world were on Greece hosting the Olympic Games. In March 2004 the centre-right New Democracy party broke Pasok’s hold on power, won the elections and Costas Karamanlis became prime minister. Spain joined the Community in 1986, a move made possible by an astonishing decade of change. In November 1975, the old dictator Franco had finally died, wired up to many machines in a vain attempt to prolong his life by a few days. He had given Spain stability and, shrewdly, had not thrown in his lot with his fascist helper Mussolini or with Hitler during the Second World War. It was to his credit too that he had not marched into Gibraltar during Britain’s great crisis in 1940. That Spanish volunteers had fought on the Russian front with Hitler was not held against him in the 1950s. He survived the early years of international ostracism and, with the onset of the Cold War, he began to be rehabilitated by the US in 1950. Three years later in September 1953 the US gave aid in return for three bases and a mutual defence pact; international forgiveness was extended when Spain in December 1955 became a full member of the United Nations. (Spain was not admitted into NATO until 1982.) Franco’s Spain remained a repressive regime in the 1950s, but during the 1960s reforms were gradually introduced, military courts were abolished and workers were granted a carefully limited right to strike. Constitutional changes effected in 1966 provided for the election of a minority of members of parliament, though political parties were banned. Franco enjoyed widespread popular support and was seen as standing above the Falange, the Church and the army, which were locked in bitter conflict. The most serious threat to his rule came from ETA, the independence movement of Basque nationalism. As his successor, Franco had groomed Prince Juan Carlos, grandson of Alfonso XIII; Franco judged that a return to a ruling monarch would be the best guarantee for preserving conservative peace in Spain. Juan Carlos gave no sign during Franco’s lifetime of the liberal and democratic role he would crucially play after the caudillo’s death. During the three decades since the Second World War, Spain had begun to modernise both its agriculture and its industry. The progress made since the 1960s had been considerable, aided by the West European discovery of Spain as a holiday playground. But democratic advance was by no means assured in 1975. King Juan Carlos appointed a moderate socialist, Adolfo Suárez, as prime minister. Suárez restored parliamentary democracy and permitted all parties, including the communists, to compete in the general election of 1977. King Juan Carlos gave his firm backing to democracy, and neither he nor the people would tolerate an army coup, such as was attempted in 1981. A further coup was threatened ahead of the general election in 1982, which the Socialist Party won, Felipe González becoming prime minister. González’s biggest success was the signature in June 1985 of the treaty of accession to the European Economic Community, which Spain joined in January 1986. The second half of the 1980s was a period of sustained economic growth, as González followed orthodox economic policies – to the chagrin of his more socialist followers. In 1989 he won the general election for a third time by a narrow margin. The economy has continued to grow. One black spot in Spain’s astonishing progress was the continuation into the 1990s of sporadic terrorist attacks by the Basque extremists. But Spain was not alone in the Community in this respect. In the early 1990s it shared the problems of recession with the other members of the Community, including high unemployment, and González’s popularity fell. ‘No gain without pain’ can be applied with a vengeance to Spain, whose government, like Italy’s, was determined to be accepted into the Monetary Union. Bringing the public sector deficit down to 3 per cent required under the Maastricht Treaty led to high unemployment at well over 20 per cent which could not be lowered by more spending. With the defeat of González and the Socialist Party in the general election of March 1996 a new chapter opened in Spain’s politics. José Maria Aznar led the Conservative People’s Party and formed a minority government. By granting greater autonomy to the seventeen regions he gained the support of the more moderate Basque National Party and the mainstream Catalan Nationalist Party. He set out to improve the economy, to tackle the deep-seated economic and regional problems – endemic corruption and favouritism to special-interest groups. Aznar was a former tax inspector, a small neat figure, lacking the glamour of González. His first term in office was extraordinarily successful in changing Spain’s sluggish progress, privatising state industries, reducing unemployment from close to one in five to a still high one in seven, reforming labour laws and ensuring that prudent balance of state expenditures and income met the limits set by a member of the Monetary Union in 1999. Spain took advantage of benign world economic conditions to achieve a high growth rate and shook off completely the shadow of the repressive Franco dictatorship. With Catalonia and its vibrant city of Barcelona a workable accommodation was reached. In the Basque region while the Basque regional government of moderates did not seek independence, the terrorist ETA did not abandon bombings. Tensions remained high. In foreign relations Aznar defended national interests in the European Union protecting the regional aid Spain enjoyed. Despite long negotiations no settlement was reached on the future of Gibraltar, whose population would have no truck with any kind of joint sovereignty deal. Along with the rest of continental Europe, the Spanish people were opposed to war with Iraq in 2003, but Aznar ignored public feeling and was notable as the only Western European leader to stand firmly backing Blair and Bush. Aznar can look back on a successful tenure of government even though unemployment still remained too high and regional problems unresolved. Aznar was expected to win the elections of March 2004 before handing over to his successor. The Madrid train bombings on 11 March killing 191 people and injuring more than 1,000 changed all that. Aznar was too quick to try and lay the blame on ETA. The Socialists (PSOE) won and José Luis Rodriguez Zapatero became prime minister. He reversed Aznar’s Iraq policy and brought Spain’s troops home. Socially more liberal, for example recognising gay marriage, less tolerant of the privileges of the Church, he is not a radical who will rock the economic boat which has given Spain sound growth (3.2 per cent annually) and halved unemployment to a still high 11 per cent. He has also realigned Spain more closely again with France and Germany in the European Union. Spain in the new millennium is a vibrant free democracy attracting to its sunshine coasts millions of tourists and much investment. The Franco years are slipping into history. Portugal joined the European Community at the same time as Spain. But its transition to democracy was far more traumatic. Antonio Salazar was Europe’s most enduring dictator, ruling from 1932 to 1968, when a stroke incapacitated him and the right-wing regime of Marcello Caetano took control for six years. As dictators go, he was relatively mild, imprisoning rather than executing his opponents, and during the Second World War he had actively assisted the Allied cause. After 1945, therefore, he remained in relatively good standing, even though he had a secret police and a card-index system concerning his opponents which was borrowed from the Gestapo. In 1970 Salazar died. The revolution that broke out in April 1974 was not democratic in intent but was organised by army officers disillusioned with the wars in Portugal’s African colonies of Mozambique and Angola. It took a curious turn when radical army groups entered an alliance with the communists. A general election was held in April 1975 and the Socialist Party gained most support; the communists lost out. Mario Soares became prime minister until his replacement in 1979 by a centre–right coalition. By then, democratic parliamentary rule was firmly established – despite their great poverty, the Portuguese people had not turned to the communists. After the election of 1983, Soares again headed a government coalition of Socialists and the centre, which successfully implemented economic reforms, making state enterprises more efficient and encouraging the private sector; of traditional socialism there was little. From having no elections, Portugal now had too many. Party manoeuvres led to the fall of Soares in 1985 and another general election. In the following year, the country’s kaleidoscopic politics required the election of a new president and, after more party manoeuvrings, the office was won by Soares, who thereupon resigned from the leadership of the Socialist Party. The government of Portugal after 1985 rested on the support of the Social Democratic Party which, once it had gained an overall majority in the election of 1987, set itself the task of reversing socialist state control of industry. Prime Minister Cavaço Silva ‘cohabited’ amicably with the Socialist President Soares, who was re-elected with an overwhelming majority in January 1991. The following October Cavaço Silva’s Social Democratic Party scored a second electoral victory with an impressive overall majority endorsing ‘cohabitation’. During the 1980s Portugal made considerable economic progress, as governments turned from socialism to a market-oriented economy. All pretence that Portugal was in a ‘transition to socialism’ and was committed to becoming ‘classless’ was dropped from the new constitution of 1989. Its gross national product per head of $2,020 in 1978 had tripled by the early 1990s. Since the mid-1980s Portugal had achieved a remarkable degree of political stability and economic progress, and was an enthusiastic member of the European Community. Portugal suffered along with other members of the EU from sluggish growth in its closing years of the 1990s, inflation increased well beyond the Monetary Union’s target and corruption scandals weakened Silva’s position. Intended reforms of the over-large, protected and padded administration remained to be undertaken. After a decade in power the electorate was looking for a change. Silva’s centre-right Social Democratic Party was convincingly defeated in 1995 by the Socialist Party and Antonio Guterres gained the premiership. His first four years in office saw his popularity rise. Portugal was benefiting from good economic growth and low unemployment. Membership of the European Union was proving of great benefit. In 1999, despite fears that Portugal would not be able to meet the conditions of the common currency, Guterres was able to take Portugal in. This marked the height of his popularity and in the elections of 1999 the Socialist Party increased its majority. In March 2002, elections held prematurely, gave the Social Democratic Party a narrow victory and to the leader of the opposition, José Manuel Durâo Barroso, as prime minister, now fell the difficult legacy of reform, until 2004 when he was chosen to succeed Romano Prodi as president of the European Commission. Turkey applied for full membership of the Community in 1987. Two years later, the Community replied that it was deferring consideration of further applications until after 1993, though it offered the sop that Turkey was eligible. Greece, as a member of the Community, remained deeply suspicious of Turkey, though their relations improved after a low point in 1987. Nevertheless, the Cyprus question continued to stand in the way of a normal cordial relationship. Turkey’s humanrights record was also suspect and its economy tended to fluctuate wildly between growth and stagnation. The Kurds represent a serious minority problem and the Asia Minor region of the country is not only poverty-stricken but practically under military rule. The economy, too, is backward. Kemal Ataturk had set up State Economic Enterprises in the 1920s and 1930s to modernise Turkish industry, but by the early 1990s they had become outdated and unproductive. With its rapidly increasing population of 57 million in 1990, Turkey’s gross national product per head, estimated at $1,870, was that of a Third World country, far less than Greece’s and even that of Portugal, the poorest country in the Community. Nor was parliamentary democracy absolutely secure. The army was faithful to the Ataturk tradition and kept a watchful eye on the civilian politicians, periodically making itself responsible for holding the country together. In May 1960 the army seized power and the former prime minister Adnan Menderes was executed a year later. When a resumption of civilian politics in the 1960s and 1970s was again accompanied by growing disorder and economic hardship, another army takeover followed in September 1980. In November 1983 there was then a return to semi-civilian parliamentary government, accompanied by much political repression of liberals and socialists; martial law remained in force under the conservative prime minister Turgut Özal. He instituted some vigorous economic reforms and privatisations, and gradually returned Turkey to a more normal political state, but the parties contesting for power remained unstable. Özal sought to lessen tension with Turkey’s neighbours, especially Greece. His main aim was to gain full membership of the European Community, to continue the military and economic aid that the US had steadily sent to a valuable ally during the Cold War. Turkey was also an important player in the Middle East. In November 1989, Özal enhanced his stature by becoming president, but the economy rapidly deteriorated again. Turks fled from Bulgaria in 1989. In April 1993 Özal died. The biggest internal problem that faced his successors was the armed struggle of revolutionary Kurds. The elections of 1995 and 1999 did not cure the roundabout of ineffectual coalition governments of old-guard politicians. The most notable event of 1999 was the capture of Abdullah Ocalan, leader of the guerrilla Kurdistan Workers Party (PKK) which had waged a ruthless struggle for independence resulting in at least 30,000 deaths. His fight was nourished by the suppression of Kurdish rights to their own language and education and the brutality of the army. The human-rights abuses inflicted on even the moderate 12 million Kurds remained one of the bars to Turkey’s wish to join the European Union. The generals in the National Security Council guard the secular state and have required politicians to follow their guidance. Democratic development is opposed by a coalition of interests – army, police, security services and bureaucracy blocking reform. The economy suffered from high unemployment and the precipitous loss of the value of the currency with inflation annually of over 50 per cent. Corruption and mismanagement were endemic. But Turkey has been a staunch NATO ally in the Cold War and after and was assisted with loans from the US. Relations with Greece remained tense, the Turkish occupation of northern Cyprus since 1974, a major obstacle. Turkey’s 67 million people seemed to be caught in a political and social pattern resisting fundamental change. The door of the European Union remained frustratingly closed. Would progress at home continue to be stymied? In Turkey there was suddenly fresh hope of human-rights reforms during the early years of the new millennium. The elections held in November 2002 resulted in a political earthquake. The old parties and their leaders did not gain enough votes to hold a single seat in the parliament. The voters had turned to a new party founded in 1997, the conservative Justice and Development Party, ak for short meaning white or clean, which gained a large overall majority and so could govern without having to rely on coalition partners. It was led by Recep Tayyip Erdogan, a former mayor of Istanbul. He had earned the suspicion of the generals for his earlier Islamist Party association. Imprisoned for four months on a pretext, he was at first barred from politics and the premiership, so his nominee for the first few weeks held the post for him. Erdogan promised reform and to follow a pro-Western secular policy that would make it possible for Turkey to join the European Union. Early on, reforms were passed by parliament, the Kurds were granted rights to language and education, there had already been increasing economic investment in Asia Minor to win over Kurdish moderates, and the generals in 2003 promised to respect the wishes of the Turkish electorate. The dire state of the economy was the most serious problem facing Erdogan’s administration in 2003. The situation was not helped when, despite Erdogan’s urgings, parliament narrowly refused to grant a right of passage to US troops wanting to open a northern front in the Iraq war; the US retaliated by withholding loans. After the war, relations mended and an IMF loan linked to a reform programme came to the rescue. The failure of the long-drawn-out UN-sponsored mediation efforts in the spring of 2003 to reunite Cyprus was disappointing. The generals remained opposed. Forty thousand Turkish troops are on the island, but even on the divided island the situation eased when the ‘green line’ was opened in April 2003 by Rauf Denktasch the Turkish Cypriot leader permitting Greek Cypriots to visit their former homes. Greek Cyprus joined the European Union in May 2004; the island remained divided; the Turkish Cypriots’ northern population were left outside although they had voted for the union plan. With the new government in Ankara relations with Greece improved, but Cyprus remained an obstacle. Unless the Turks recognise Cyprus, the Greek-Cyprus government threatened to block accession talks. Erdogan’s reforms and promises of further reforms took Turkey one step nearer in 2004 to join the European Union when agreement was reached to open accession negotiations. There was still a long way to go. It will take at least ten years before Turkey will be judged to have been able to meet all the political, economic and human-rights criteria and much can happen in that time. Some members, especially France, harboured strong misgivings over admitting another poor nation of over 70 million mainly Muslim people and extending the EU’s frontiers into the volatile Middle East. But neglecting Turkey’s claims would undermine its reforms. The Democratic German Republic, of course, was barred from the European Community, but West Germany was allowed to extend trading benefits to it. With the death of the DDR and its incorporation into a united Germany in 1990, the territory became a part of the EC without, of course, adding to the number of members. One of the major achievements of the European Community was the strengthening of democracy in the poorer nations of the West – Spain, Portugal and Greece. Membership of the club is open only to countries that respect civil rights and abjure totalitarian forms of government. Once brought in, no country has suffered a relapse, and such an eventuality is difficult to imagine. Thus, not only has the European Community become an association promising greater prosperity to the poorer West European nations, but it is also a powerful bastion of freedom in the world. The habit of close cooperation and negotiated settlement of differences has become the norm of national relations within the Community. With the removal of trade barriers, 1 January 1993 marked the beginning of a new phase of increasingly close Community cooperation in the sphere of trade to the benefit of the 340 million people whose countries are its members. France and Germany, leading an inner group, were urging closer cooperation to be spearheaded by supplementing the Common Market with a common currency. The Delors Plan of how to achieve a monetary union, endorsed by the leaders of the Community in 1989, gestated for a decade before becoming a reality on 1 January 1999. The barriers set up to prevent any member that did not meet certain criteria from being eligible to join were an essential aspect. Of especial importance was the Stability and Growth Pact (1997) which threatened penalties if any member exceeded a deficit limit of 3 per cent on its annual budget. The Germans especially did not want to exchange their stable mark for a euro that could be devalued by the reckless state expenditure of one country. A European Central Bank has administered and decides on the interest rate common to all its members. With the turbulence of the world economy and the slow growth rates it did not look as if the necessary convergence would be achieved to allow monetary union to go ahead on time. Was the hurdle set too high? It was typical of the history of the European Community which, since 1992, had become the European Union, that difficult goals were achieved often as time threatened to run out. On 1 January 1999 the Monetary Union became a reality. Greece was not considered to have met the criteria; Britain, Denmark and Sweden decided not to join; the other eleven members, Austria, Belgium, France, Finland, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain became the founding members; and in 2000 Greece was admitted. The early years in the new century revealed difficulties. The same interest rate proved too high for some and too low for others. The euro lost value on the international exchange, but the devaluation was beneficial at a time of sluggish economic growth. The Stability and Growth Pact insisted on by the Germans proved a handicap in managing economies in difficult periods and is too crude in its operation. Consequently, observance of it has been fudged especially by the two largest economies of Germany and France who breached the 3 per cent budget deficit. But judged overall, the euro has been a success, binding the European Union more closely together though Britain, Sweden and Denmark in 2004 still remained outside the Monetary Union. The second most important development in the later 1990s and the early twenty-first century has been the enlargement, to expand the European Union by admitting in May 2004 ten new members: Poland, Czech Republic, Slovakia, Hungary, Slovenia, Malta, Cyprus, Estonia, Lithuania and Latvia. The negotiations have been long and tough. The new members will not secure equal benefits of membership before 2006. In particular, they will receive only a quarter of the farm subsidies paid to the older fifteen. Their markets after transitional agreements run out will be thrown open to competition which will benefit the more efficient and bankrupt the less competitive. Farmers are most likely to suffer. In the long term, however, to be an integral part of the European Union is likely to prove as beneficial as it did for the once less developed members, Spain, Portugal and Ireland. Bulgaria and Romania are not in the party but have crossed the first threshold and Turkey, the biggest problem, is knocking on the portals. Ever closer union has proved a difficult path to pursue. The institutions of the European Union are still developing. The Commission in Brussels has come under particular criticism for its ineffectual control of funds handed out to member states. Fraud was endemic and annually criticised by the auditors. A crisis point was reached in 1999 when the European Parliament flexed its muscles and the whole Commission resigned. Promises of effective reform under its new president Romano Prodi still remain to be fulfilled in 2004. Another problem is to achieve more democratic control over decision-making. The European Parliament has gained more influence under the treaties of Amsterdam (1997) and Nice (2000), but this clashes with the determination of the leaders of the member states to retain ultimate control of crucial decisions in the Council of Ministers.

 

 

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