European Coal and Steel Community (ECSC)
European Coal and Steel Community (ECSC)
EUROPEAN COAL AND STEEL COMMUNITY (ECSC).THE SCHUMAN PLAN AND ITS OBJECTIVES
THE CONFERENCE OF PARIS
THE ECSC TREATY
FIFTY YEARS OF FUNCTIONING
The European Coal and Steel Community (ECSC) was an international organization that was established on 25 July 1952 by the Treaty of Paris. In the treaty the Federal Republic of Germany, Italy, Belgium, the Netherlands, and Luxembourg agreed with France to renounce part of their sovereignty by placing their coal and steel production in a common market, under a supranational authority. Later, as the European integration process progressed, the incoming members of the European Union also became part of the ECSC (that is, Denmark, Ireland, and United Kingdom in 1973; Greece in 1981; Portugal and Spain in 1986; and Austria, Finland, and Sweden in 1995). In 1990, when East and West Germany reunified, the country joined the organization in its turn. First established in the city of Luxembourg, the ECSC headquarters finally moved to Brussels in 1967. As agreed in the treaty, after fifty years of functioning, the ECSC came to an end on 25 July 2002, its competences being transferred to the European Community.
On 9 May 1950 Robert Schuman, French minister for foreign affairs, invited all European countries to join France and Germany in pooling production of coal and steel. The idea of international cooperation among European heavy industries was not completely new, as similar projects had been developed in the aftermath of World War II in France, in Germany, and inside the American administration. The so-called Schuman Plan, secretly conceived by Jean Monnet but politically endorsed by Schuman, was innovative in two respects; first, from a functionalist perspective, it was expected to bring about further European integration: the two pioneering branches would attract other sectors in the process and, by a so-called spill-over effect, lead gradually to a European federation; second, it implied a revolutionary method of governance characterized by the delegation of national powers to a supranational institution.
Beyond economic and social objectives—the development and modernization of European production, the expansion of import-export exchanges inside and outside the pool, and a converging improvement of living standards for the workers—the Schuman Plan was also defined along essential political objectives. By bringing France and Germany to a factual solidarity, it was expected that any future war between them would be both unthinkable and impossible. French-German relations had reached a deadlock on unresolved questions (the status of the Saar, the German rearmament, and free access to the Ruhr's coal), paralyzing, if not jeopardizing, the European integration process. In Monnet's view, similar to the United States' position, such a situation could not last given the Cold War's context: a fast and ambitious initiative was needed, on the one hand, to anchor Western Germany to the West and make it participate in Western Europe's defense and, on the other hand, to keep German industrial cartels and rearmament capacities under close control. In exchange for this economic concession, an opportunity was given to Germany to reenter international politics with equal rights for the first time since the end of the war. By accepting and endorsing the idea, despite strong opposition in his country (mainly social democrat and communist parties), Konrad Adenauer, the German chancellor, played a decisive role in the success of the plan. After Germany, the Benelux countries (Belgium, Netherlands, and Luxembourg) and Italy agreed to enter the discussions by accepting the idea of a supranational authority. The categorical rejection by the United Kingdom brought much disappointment and doubt, but could not stop the process. The extent to which the United States influenced the Schuman Plan is not clear and has long been debated, with some scholars suggesting that it may have considered the project as an ideal extension of the previous Marshall Plan. At least, the United States showed itself eager to defend the supranational character of the treaty and to make Europe move away from past cartels.
Ten months was not a long time to reach an agreement on the matters at stake considering their complexity and novelty, particularly if one thinks of the harsh discussions that arose in institutional, political, and economic terms. Thus, at the very beginning of the conference, the small Benelux countries called for some essential guarantees: a clear delimitation and definition of supranational prerogatives and a fair balance of powers between small and big member-states inside the different organs. Belgium and Italy, for their part, insisted that a transitional period should be agreed to ease the integration of their industries in the future common market. The negotiations led to the Treaty of Paris, signed on 18 April 1951. Opposition arose in all six countries: the communist parties considered that the plan was against the USSR's interests; the German social democrats refused any kind of national concessions; the French Gaullist party opposed any loss of national sovereignty; but also industrialists, such as the Belgian coal producers and the French, Luxembourg, and Belgian steelmakers, particularly feared the future High Authority's interventionism.
In contrast with the subsequent European treaties, which provided a general framework of action but few directly applicable rules, this treaty was composed of detailed rules fixing once and for all the supranational competences (treaty-law). Comprising one hundred articles, it resulted from numerous compromises between different political and economic visions, mainly between dirigisme (i.e., strong economic state interventionism) and laissez-faire, (or "let do," i.e., free-market economics).
Liberal in essence, the treaty established a common market for coal and steel by banning state-aid, subsidies, discrimination, and restrictive practices. It aimed to promote economic expansion by modernizing and rationalizing coal and steel production; avoiding an unconsidered exhaustion of their resources; developing employment and improving living and working standards in the member-states; and favoring international trade. As part of this, it sought to reduce prices on the internal market by imposing tariff transparency. However, the treaty was also characterized by different interventionist mechanisms, enabling the High Authority to regulate the market.
The High Authority was the supranational executive body. Its composition (eight members, nominated by national governments, plus one co-opted, that is, chosen by the nominated members) was intended to ensure a balanced representation of large and small states. Financially autonomous, this collegial organ was also politically independent, as its nine members were required to act without any external instruction. Supported by a secretariat, it was assisted by an Advisory Committee constituted of coal and steel producers, consumers, and trade unions. Empowered to impose levies and direct sanctions on firms, the High Authority had a far more significant power than the future European Commission. To counterbalance and control it, an intergovernmental body, the Special Council of Ministers, was established, composed of member-states' representatives: this second executive body was meant to harmonize the supranational and national policies. In certain areas involving direct controls, the decisions of the High Authority had to be approved by the Council of Ministers. Furthermore, the Court of Justice (seven judges nominated by consensus by national governments) exerted a judicial control upon the High Authority and the member-states. The Common Assembly (seventy-eight delegates from national parliaments) was created to provide more legitimacy to the new institutions. Despite having relatively limited powers (such as the power to review the High Authority's annual report, and to sack the members of the supranational body), this paved the way for a future European Parliament. The same fourfold structure would be given to the European Economic Community and the Euratom treaties in 1957.
In essence, this "dual executive" structure created tensions between national and community forces and between large and small member-states. The latter insisted that every country be represented in every institution, and particularly in the High Authority and the Common Assembly. Within the Council of Ministers, votes were weighted in function of respective coal and steel production and, depending upon the issue, a unanimous vote, a simple majority, or a qualified majority was requested. The system enabled the small states to counterbalance the large ones, if the former decided to act together.
All types of discrimination (quotas, prices, taxes, subsidies, or transport costs) were forbidden and, for the first time in Europe, precise antitrust legislation was applied: cartels, concentrations, and mergers were allowed by the High Authority only if they helped the market to function better. Social dumping was prohibited and the free circulation of qualified workers inside the community was promoted. Besides this, the supranational body was also empowered to intervene actively in the market: in cases of nonrespect of competition and nondiscrimination rules, it could pronounce direct sanctions; it was also empowered to help (by loans) limit and influence the financing of investment programs. Furthermore, in certain conditions, after having consulted the Advisory Committee and the Council of Ministers, the High Authority could fix minimum and maximum prices. In periods of crisis, with the Council of Ministers' approval, it could, as a last resort, fix quotas on production (in the case of overproduction) or allocate scarce supplies (in the case of shortage). Like governments, the High Authority could borrow money and was allowed to impose levies on the firms: these were shared across functioning costs, loan interests and guarantees, investments, and research expenditures. A portion of the levies was put in an international readaptation fund, meant to help workers and firms affected by the new open market.
A complementary part to the treaty, more flexible, defined a series of actions and duties to be undertaken during a five-year transition period: aside from establishing the ECSC's organs, time was needed to unify the markets, negotiate with third countries, and readapt the industries. Some specific dispositions concerning French, Belgian, and Italian coal production and Italian and Luxembourg steel production, were also agreed in order to cushion the immediate effects of the common market.
The existence of the ECSC can be divided in two distinct periods, as the High Authority stopped functioning as such in 1967. All its competences were then transferred to the Commission of the European Communities (by the Merger Treaty).
The High Authority began operating in August 1952 with Monnet as its first president (followed by René Mayer (France), Paul Finet (Belgium), Piero Malvestiti (Italy), and, finally, Dino Del Bo (Italy). In July 1952 the ECSC countries produced 19.4 percent of the coal and 16 percent of the steel in the world. At that time, coal met about 70 percent of European energy requirements. Germany was by far the biggest producer in the Community responsible for more than a half of the coal, almost three-fifths of the coke, and a third of pig iron and steel. With two-thirds, France was the biggest ECSC producer of iron ore. During the spring of 1953, the High Authority gradually opened the common markets (i.e., coal, iron ore, scrap, pig iron, and steel) with some exceptions to the rule (e.g., Italian steel). During this period, and for the next five years, the transitional measures were in operation (e.g., aid regime for Belgian coal). After a short recession period between 1949 and 1951, the High Authority profited from the favorable economic situation to implement an active policy of modernization and research and, in social terms, a policy of building housing for ECSC workers. By 1958 trade in steel inside the community had increased by 151 percent; 21 percent for coal and 25 percent for iron ore. In terms of European integration, the results were rather disappointing and left the ECSC's functionalist and federalist conceivers a little disillusioned. Handicapped by too specialized a scope and too precise a mandate, hampered by growing bureaucracy, the High Authority could not expand its competences. By contrast, the intergovernmental body had successfully imposed its presence and role in European Community politics. Because of national divergences and interferences (even inside the High Authority itself), it became difficult to ensure the strict application of the treaty or any coordinated action that went against national interests, as illustrated by the antitrust policy and the coal crisis of the late 1950s. Despite its will, the High Authority did not succeed in remaining a key player in the integration process, and the initial functionalist path toward a European federation was left aside as the next European treaties were being negotiated. After 1967 the ECSC treaty was applied with more efficiency and visibility, under the responsibility of the European Commission in Brussels. In front of the steel crisis (mid-1970s to mid-1980s), three successive plans (named after their responsible commissioners Spinelli, Simonet, and Davignon) attempted to deal with the situation: these consisted of a process of restructuring, accompanied by a program of public aids. Despite its enormous complexity (considerable costs and competing national interests), and thanks to a better application of the treaty, the commission was successful when facing the steel crisis, where the High Authority had been powerless in front of the coal crisis. During the 1990s the ECSC was confronted simultaneously with the privatization, amalgamations, globalization, and transnational specialization in the European steel industry (about 20 percent of the world production by 2000). On 23 July 2002, after fifty years, as agreed in the treaty, the ECSC officially came to an end, its responsibilities and assets having been transferred gradually to the European Community since 1992. In any event, coal and steel, by which the Schuman Plan had been justified, had completely (or almost completely) lost their strategic character by that stage; the number of workers employed in the ECSC sectors had been reduced from 1,365,697 workers in 1953 to 364,500 in 2001.
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