The origins of the Schuman Plan
In economic terms, coal and steel were vital raw materials. Coal was still the principal source of energy, and the French Government, wanting to modernise its heavy industry, realised how much the steel industry in eastern France depended on substantial supplies of coal. But, at a time when the liberated countries were having difficulty in satisfying domestic demand, the only available coal deposits were to be found precisely in the Ruhr (since the United Kingdom, Belgium and the Netherlands had temporarily withdrawn from international trade). The creation of a European ‘pool’ for coal and steel would, therefore, allow France to counter the threat of a shortage in Europe and, at the same time, meet its own needs for raw materials, despite the foreseeable dissolution of the International Authority for the Ruhr. In a broader sense, the Schuman Plan also sought to increase European coal and steel output in order to boost economic growth overall. In addition, it hinted at a major reduction in producer and consumer prices.To view the original of this article CLICK HERE
From the political point of view, the Schuman Plan was based on the assumption that the integration of Germany into a permanent European structure was the best way to prevent it from being a threat to its neighbours and, at the same time, guarantee peace in Europe. It allowed for an improvement in Franco-German relations on the basis of mutual interests, while creating a climate of cooperation in Europe, since it put Germany on an equal footing, something which was of great symbolic significance. The independence of the High Authority, the supranational body responsible for the operation of the European coal and steel pool, was also devised as a new way of counteracting the pursuit of narrow, national self-interests. Moreover, the United States, eager to see Western Europe rebuilt economically and militarily, urged France to take decisive steps, since the British had clearly expressed their aversion to a European customs union or to any supranational approach.
France also felt that those European institutions that did exist at the end of the 1940s were not functioning properly. On the basis of these considerations, France decided to go it alone by putting forward an original and practical proposal based on the pooling of coal and steel production in Europe.
Declaration of 9 May 1950
To view the original article CLICK HEREThis is the full text of the proposal, which was presented by the French foreign minister Robert Schuman and which led to the creation of what is now the European Union.
World peace cannot be safeguarded without the making of creative efforts proportionate to the dangers which threaten it.
The contribution which an organized and living Europe can bring to civilization is indispensable to the maintenance of peaceful relations. In taking upon herself for more than 20 years the role of champion of a united Europe, France has always had as her essential aim the service of peace. A united Europe was not achieved and we had war.Europe will not be made all at once, or according to a single plan. It will be built through concrete achievements which first create a de facto solidarity. The coming together of the nations of Europe requires the elimination of the age-old opposition of France and Germany. Any action taken must in the first place concern these two countries.
With this aim in view, the French Government proposes that action be taken immediately on one limited but decisive point.It proposes that Franco-German production of coal and steel as a whole be placed under a common High Authority, within the framework of an organization open to the participation of the other countries of Europe. The pooling of coal and steel production should immediately provide for the setting up of common foundations for economic development as a first step in the federation of Europe, and will change the destinies of those regions which have long been devoted to the manufacture of munitions of war, of which they have been the most constant victims.The solidarity in production thus established will make it plain that any war between France and Germany becomes not merely unthinkable, but materially impossible. The setting up of this powerful productive unit, open to all countries willing to take part and bound ultimately to provide all the member countries with the basic elements of industrial production on the same terms, will lay a true foundation for their economic unification.This production will be offered to the world as a whole without distinction or exception, with the aim of contributing to raising living standards and to promoting peaceful achievements. With increased resources Europe will be able to pursue the achievement of one of its essential tasks, namely, the development of the African continent. In this way, there will be realised simply and speedily that fusion of interest which is indispensable to the establishment of a common economic system; it may be the leaven from which may grow a wider and deeper community between countries long opposed to one another by sanguinary divisions.By pooling basic production and by instituting a new High Authority, whose decisions will bind France, Germany and other member countries, this proposal will lead to the realization of the first concrete foundation of a European federation indispensable to the preservation of peace.
To promote the realization of the objectives defined, the French Government is ready to open negotiations on the following bases.The task with which this common High Authority will be charged will be that of securing in the shortest possible time the modernization of production and the improvement of its quality; the supply of coal and steel on identical terms to the French and German markets, as well as to the markets of other member countries; the development in common of exports to other countries; the equalization and improvement of the living conditions of workers in these industries.To achieve these objectives, starting from the very different conditions in which the production of member countries is at present situated, it is proposed that certain transitional measures should be instituted, such as the application of a production and investment plan, the establishment of compensating machinery for equating prices, and the creation of a restructuring fund to facilitate the rationalization of production. The movement of coal and steel between member countries will immediately be freed from all customs duty, and will not be affected by differential transport rates. Conditions will gradually be created which will spontaneously provide for the more rational distribution of production at the highest level of productivity.In contrast to international cartels, which tend to impose restrictive practices on distribution and the exploitation of national markets, and to maintain high profits, the organization will ensure the fusion of markets and the expansion of production.The essential principles and undertakings defined above will be the subject of a treaty signed between the States and submitted for the ratification of their parliaments. The negotiations required to settle details of applications will be undertaken with the help of an arbitrator appointed by common agreement. He will be entrusted with the task of seeing that the agreements reached conform with the principles laid down, and, in the event of a deadlock, he will decide what solution is to be adopted.The common High Authority entrusted with the management of the scheme will be composed of independent persons appointed by the governments, giving equal representation. A chairman will be chosen by common agreement between the governments. The Authority's decisions will be enforceable in France, Germany and other member countries. Appropriate measures will be provided for means of appeal against the decisions of the Authority.
A representative of the United Nations will be accredited to the Authority, and will be instructed to make a public report to the United Nations twice yearly, giving an account of the working of the new organization, particularly as concerns the safeguarding of its objectives.The institution of the High Authority will in no way prejudge the methods of ownership of enterprises. In the exercise of its functions, the common High Authority will take into account the powers conferred upon the International Ruhr Authority and the obligations of all kinds imposed upon Germany, so long as these remain in force.
The Monnet Plan
Jean Monnet, Commissioner-General of the French National Planning Board, considered that prosperity and social progress depended absolutely upon closer economic ties between European States. This conviction was drawn from his considerable international experience, from the lessons learned from the War, and from his close ties with American businessmen and diplomats. In particular, he was the French Provisional Government’s representative in the European Coal Organisation (ECO) and was responsible for negotiating, with the Americans, the allocation of Marshall Plan funds for the modernisation of France.
At the end of the war, he drafted the first revival and modernisation plan for France. He considered that economic cooperation with Germany was essential, particularly given its central position in Europe and its industrial potential, which the War had left largely unscathed. It was, without doubt, still too early to move towards total economic union at European level because of the vast discrepancies in prices, wages and tax regimes. Nor was the general public ready for it. At the end of the 1940s, several plans for limited customs unions, which could have helped generate economic integration in Western Europe, proved to be failures. Therefore, what was required was a new approach that would enable gradual progress to be made.
The idea of a European industrial pool began to appear regularly in the French press at that time, and from then on it was openly discussed in diplomatic circles. Monnet was very open to those ideas, since he was also seeking a way to alleviate Franco-German tension, and he was concerned by the threats arising from the Cold War. He believed that it would be extremely difficult to build a European edifice from the top down, a method which was often called for by the federalist movements. He foresaw, instead, a Europe that was built on a functional basis by integrating key sectors of the economy in order to create genuine solidarity between the partners. For this reason, from the spring of 1950 onwards, he began to consider the establishment of a common market based on the coal and steel sectors, which were vital for both civil and military industries. However, his plan differed from most of the international cooperation plans under consideration in the steel sector, since, from the outset, Monnet presented the coal and steel pool as an indispensible but transitional stage on the way to creating a European federation.
Putting coal and steel under international control also made it possible to envisage the end of Allied control over the Ruhr with confidence, and it eliminated all risk of industrial cartels being created in the German coalfields. On this basis, both France and Germany would agree to submit to international controls, in order to ensure that the common market in coal and steel ran smoothly.
Jean Monnet also knew that he could count on the support of the US High Commissioner in Germany, John McCloy, who also called for closer Franco-German ties and hoped that France would soon take steps in this direction.
The pooling of coal and steel
There were two main reasons why Jean Monnet proposed the pooling of coal and steel in 1950.
The six Member States of the future ECSC used coal more than any other fuel, and the Ruhr was the principal region for coal deposits. At that time, coal alone accounted for nearly 70 % of fuel consumption in Western Europe. Although the Six together with Great Britain accounted for only 20 % of total world coal production, they had an almost total monopoly over supplies in Western Europe. Coal from Eastern Europe was becoming more and more scarce, while American coal was still very expensive and could be bought only with dollars, which were exactly what Europe lacked. French steel companies imported most of their coal, and the pooling of Franco-German resources provided a guarantee of free access to coal from the Ruhr, even if the International Authority for the Ruhr, in which France was actively involved, were to be abolished. The creation of a European pool made it impossible for Germany to sell its coal at high prices and, in so doing, cause difficulties for French industry.
Steel was the most important raw material for weapons manufacture and for industry in general. In the absence of any effective coordination of European plans for economic recovery, each country developed its own steel capacity in relative isolation, and this carried the risk of over-production. A more fundamental French concern was that steel production in Germany would be controlled by strong industrial cartels and that the steel would be used for weapons production, which was what the French feared most of all. The pooling of steel was therefore seen as a means of destroying the cartels’ potential influence and preventing future rearmament. Finally, from a symbolic point of view, the pooling of steel necessarily meant that a new Franco-German war would be out of the question.
In terms of how to proceed, Jean Monnet, who, in 1947, had initiated the planning process in France, could not envisage a common market for coal and steel that operated properly and was accessible to other interested countries without a certain degree of central control in order to guarantee a more coherent industrial policy in Europe. The coal and steel pool affected 150 million consumers.
The European institutions
Jean Monnet believed that effective institutions were needed to exercise control over the planned Common Market. The sectors that were to be pooled were to be managed by an independent institution that would guarantee free competition, combat the creation of cartels, eliminate discriminatory practices, guarantee consumers equal access to supplies and coordinate investment. The supranational authority would have its own financial resources and would be responsible for managing the common market. It would facilitate the opening up of markets through flexible methods of support and control. To fulfil these tasks, it would operate as a collegial body with independent members, with a view to becoming the embryo of a European government.
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"In politics, stupidity is not a handicap." Napoleon Bonaparte (1769-1821), Regards, Greg L-W. for all my contact details & Blogs: CLICK HERE British Politicians with pens and treachery, in pursuit of their own agenda and greed, have done more damage to the liberty, freedoms, rights and democracy of the British peoples than any army in over 1,000 years. The disastrous effects of British politicians selling Britain into the thrall of foreign rule by the EU for their own personal rewards has damaged the well-being of Britain more than the armies of Hitler and the Franco - German - Italian axis of 1939 - 1945.
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