Crisis of Eurointegration: valuable experience for politicians in Europe

In an interview with EADaily, Mikhail Lipkin, Professor, Director of Global History Institute, who has recently published a new monograph “Soviet Union and Integration Processes in Europe: mid 1940s – late 1960s,” draws a series of noteworthy parallels between current relations of Russia and EU and the events that happened half a century ago, when the Soviet Union faced West’s sanctions. At the same time, Mikhail Lipkin believes that the current situation is fundamentally different, as one of the factors that motivated decisions of European politicians in 1950s-1970s was the experience of the World War II. The current generation of politicians like newly-elected president of France Emmanuel Macron was formed in quite different, much more sterile environment. In this light, the ongoing crisis of European integration gives good reasons to think over its results.

Do you think that Emmanuel Macron’s victory has become a defeat for Eurosceptics? According to the public opinion poll conducted prior to the election, 55 percent of the French people think that neither Macron nor Marine Le Pen will change anything. Was the voting for Macron a voting against Le Pen?

Voting for Macron in the second round was a protest - anyone but nationalists. Macron was just a symbol of succession of the previous leadership’s policy. This has united the people that voted for him. Macron’s program cannot be called full-fledged, as it actually copied the program of Francois Fillon. Besides, Macron as candidate for president emerged at the last moment. Actually, it was not a choice between Europe and non-Europe. The people voted for the lesser of the two evils. Now, nearly all political analysts believe it much more important who Macron, who has no political party, will be working with. Then it will become clear if France is for European integration or against it.

What are the prospects of Frexit after Marine Le Pen failed to won second round of elections?

That idea will be used by various opposition forces, and nationalists, first, but I do not think it will have any serious consequences. Unlike Britain, France will not exit EU in the short-term outlook, unless any extraordinary and unpredictable events happen.

Are there any “weak links” in EU that may announce their exit in the nearest future?

There are no such so far – even Greece has calmed down and made concessions to creditors. Of course, EU has many countries with problematic economies, look at Italy and Spain, but no one hurries to leave EU – economies are bound too tightly in Europe.

What is your assessment of European integration project crisis depth in retrospective? Do you remember any episodes in history of EU when it faced danger of collapse?

It is for the first time that a EU member quits the project. However, there were other serious crises and discrepancies inside EU. Recall 1960s when France boycotted adoption of many decisions by EU on the principle of “empty chair” by insisting on its national interests connected with the single agricultural policy, first. Nevertheless, France-Germany tandem that became the driving force of post-war integration is still effective. Macron represents that tandem and declares the succession of European integration policy. So far, EU can think of no alternative, though the triumph of the project is far in the past when East-European countries joined it. This is one of the reasons behind the ongoing crisis.

What factors did pave the way towards Brexit and further disintegration processes?

At a certain moment, they in EU started pressing Britain as compared to what it anticipated when joining EU and the bonuses it received in 70s-80s including via the funds of assistance to undeveloped countries. Later, Britain lost its right to veto Brussels’ decisions and became dependent on France – Germany tandem. As soon as Britain realized being pushed to background, it attempted to restore its positions. Cameron’s Cabinet presented all arguments that for Britain it would be more favorable to remain and that there would be much more long-term losses. However, at the last moment, it lost control over the referendum. A direct democracy – referendum – revealed that all genius economic calculations failed, as humanitarian factor worked – the way national identity was interpreted. For British people their country is a former empire that does not want to live by the rules that were forced upon it from outside.

Nevertheless, we can see how uneasy is to implement many crucial decisions at the international level. How long will it take for the UK to leave the EU?

Of course, there are various options of how Britain may remain in EU, for instance, as an associated member or as part of the forgotten European Free Trade Association. Things went too far and the only issue is how to organize Brexit? Evidently, no unbreakable barriers will rise between London and Brussels, but “divorce” seems inevitable.

How much has Britain’s traditional geopolitical principle of having a reliable ally and preventing powerful strategic alliance has changed during its EU membership?

That model worked as long as Britain was receiving dividends from expansion of EU, when Poland and other East European countries were among its allies. Up to a point, it helped mixing in the issue of deepening European integration, delegating part of national powers to Brussels to conduct coordinated foreign policy of EU. Brussels, in turn, did much to promote Britons into European organizations which angered other countries, because EU agencies were “packed with” Britons. Now, when EU stopped expansion into the east and faced crises, a certain new model is needed for Britain to keep its presence in Europe and protect its national interests.

How strong is the EU axis: France-Germany?

France is discontented at the year-by-year slackening growth of its economy and Germany is turning into EU’s economic driving force. Although France still enjoys many advantages from European integration, for instance common agricultural policy or European Council that France arranged for itself yet in 1960s. So far, that tandem is effective and successfully settled the historical French-German conflict in the second half of the 20^th century, though yet not so long ago, before establishment of the European Coal and Steel Community in 1951, another armed conflict could break out between the two countries for access to coal resources of Saar and Ruhr. Later, tandem model became effective, though in late 1980s, Germany’s prompt joining EU surprised France and Britain. They were not happy to see such a powerful country as Germany in EU.

Recalling French leaders, starting from de Gaulle to Macron, one can see that they leave each other heritage on the principle of adverse selection. What is the reason? Is the role of personality in history important in the given case?

There is a similar situation also in other EU countries where less and less charismatic leaders like de Gaulle and Adenauer emerge. This is perhaps connected with changing generation of elites. The active politicians of the fifties and sixties had different backgrounds. They used the experience of World War II and the values that need to be explained separately to the “youth” from Macron’s delegation. It is not clear enough to them why they launched that European project, while the people who learned the experience of WWII did not need any explanations – they were ready to sacrifice sovereignty of their states for peace, to prevent WWIII. Perhaps, the ongoing crisis of the European project will turn a valuable experience for the next generation of European politicians. Now, much depends on who will come to replace Britons at EU management: - those from East Europe or the ones from “old” EU countries. Anyway, European bureaucracy will change much after Brexit.

In your book, you study in details history of the USSR-European community relations and highlight that there were various influential groups in the Soviet leadership who had fundamentally different views concerning particular steps in the relations with Europe. Does that tradition continue now amid “war of sanctions” with EU or the Russian elite agrees that Russia must not make the first step in lifting sanctions?

Certainly, there are various groups of interest now: some support reasonable concessions, while others call it weakness and advocate for methods of coercive diplomacy. Unlike 60s-70s, EU is our largest trade partner and closest neighbor that is here to stay. They cannot conflict forever, the problem is how and on what terms they can improve the current state of affairs. Recall that under Brezhnev, Khrushchev, and even Stalin, decision-making concerning West-European integration was not based on the principle “the leader said, everyone must do.” There has always been a process of discussion and agreement on various initiatives. Now we have much more democratic government bodies, more competing think-tanks that prepare various strategies for the government.

However, there is a difference here. As compared to the Cold War period, the situation has become much more unpredictable, as there are no longer rules understandable and observed by everyone. What we can see now is an absolute anarchy in mass media – any blogger can publish whatever he or she wants, every, even the smallest incident may be exaggerated and affect negatively any positive breakthroughs in foreign policy of states. During Cold War, easing of tension was a result of the work by direct information channels, reliable phone calls, and informal contacts.

It helped preparing high-level meetings and building confidence to sign landmark documents – such as reduction of strategic arms. Paradoxically, the more perfect mechanisms of information transfer are, the harder it becomes for politicians and diplomats to agree and understand each other.

Recall that Cold War was a conflict of two “overwhelming ideologies” while now Russia and Europe advocate the same ideology of neo-liberalism. Does this circumstance make any changes to the dialogue?

Sure, though experience of those years showed that scarcely had they in social camp started to weigh

any elements of integration and benefits from equal relations with the West, classics of Marxism and Leninism found the necessary citation: recall Lenin’s article “United States of Europe.” Besides, tough official statements and respectful communication behind-the-scenes in quite different tone were practiced then. It was clear to everyone that the rules for external and internal games are different.

Russia is regularly demonstrating European “friends of Crimea” or supporters of lifting the sanctions. Who is the audience?

Such approach worked in Soviet period too, when sanctions were imposed via COCOM – NATO Coordinating Committee for Multilateral Export Control that restricted transfer of technologies to the countries of Eastern bloc. At the same time, there were firms or private businessperson who were ready to pass by the restrictions. That is why official statistics of Soviet trade reflects only two/third of the real volumes at best. Long-term loans were banned either, but there were loopholes anyway.

For instance, in 1960, Enrico Mattei, president of Eni Company, Italy signed a five-year agreement with the Soviet Union for trade in crude oil in exchange for pipe. It opened a window into Russia. Six years later, Fiat won a tender for AvtoVAZ car factory, though technically Renault had more chances to do it. However, it was a kind of gratitude to Italy for paving the way to the Soviet market, though we cooperate with Renault now and historical justice was finally served. Then came offended Britons whom de Gaulle did not let to the West-European single market and gave us the first long-term loan for more than five years. Other NATO countries followed it. Cooperation with FRG was launched in 70s under direct influence of Chinese threat factor. Clashes on Damansky Island in 1969 up-ended beliefs about the foreign policy of the Soviet Union. Faced with a threat of war, they adopted a decision on two fronts to start rapprochement with the West immediately. This resulted in reconciliation with FRG, signing of long-term gas contracts with Europe. It was supposed that a network of gas pipelines would give the Soviet Union economic benefits and security guarantees by European NATO countries that seek peaceful and sustainable development of their economies.

Mutual economic interests developed on breeding ground that USSR prepared yet since mid-1960s – it was evident given the number of contracts, discussions and scientific-and-technical delegations.

A “retro-forecast” will face no ideological barriers now. In such situation, economic interest is mutual and objective, the sides have market relations. Everyone understands that artificial restraining of economies from “above” will results in loss of control over multiplying contracts “below” by Western leaders like it was in 1960s. Objective integration of the two parts of Europe cannot be frozen for long. The question is who will become the first this time.

Do you anticipate that the current sanctions may be lifted the same way as it was done in Soviet times?

Well, I think, something of the kind is possible now. Another matter that no landmark projects that need government support are anticipated with Europe so far. Besides, it is worth recalling the lost opportunities in the Soviet period of our history – many healthy initiatives were failed just because of elementary miscommunication. For instance, under Khrushchev, the Soviet Union was ready to make a U-turn and to join NATO in 1954, for example, develop the Soviet economy through integration into OECD in 1960. They in the West did not believe it was possible. Eventually, in 1970s amid soaring oil prices, the Soviet Union had to take loans from the West and faced big difficulties with serving then later when oil prices fell.

There were also opportunities that USSR missed. In 1960 President of Finland Urho Kekkonen suggested introducing free trade between Finland and USSR: why didn’t they understand the benefit of it is not clear, it was a unique opportunity to integrate socialist and capitalist economies. In 1965, the Soviet Union had scruples about joining Asian Development Bank because of war in Vietnam and fearing China’s criticism. Meantime, USSR was already short of money to develop Far East, while Japan was ready to get involved in that process. In 1960s, after the Soviet Union had discrepancies with FRG in 1962 over failed delivery of a large lot of pipes, foreign trade turnover with Japan exceeded the trade turnover with other capitalist countries. However, insufficient transport communications with Far East and lack of other infrastructures hindered development of relations – the Soviet logistics was fully directed to the West. As a result, no large projects comparable with those implemented with Western countries were launched with Japan.

Have you made any discoveries in history of the USSR-EU relations in your last book?

Sure, and more discoveries will be made in future, because only documents of 1960s are so far available, the later ones have not been made public yet. For instance, I have learned new details about the Soviet Union’s involvement in development of Bretton Woods Agreements which we signed but have not ratified. In fact, they would give the Soviet Union brilliant opportunities to transform the victory in WWII into financial and economic might of the Soviet Union.

Another little-known episode was the Moscow International Economic Forum of April, 1952 that was an attempt to invite USSR into European business-associations and build relations with it on the principle – business as usual. Later, many lobbying organizations were created in the countries that helped normalizing relations and developing cooperation between the Soviet Union and other countries during the following decades. Although it was yet under Stalin, there are many unclear details even about that period.

We forget how much funds and resources were invested in China. Within 10 years of the Friendship Treaty (1950-1960), the Soviet Union rendered official assistance to China for 1.5 billion dollars. In fact, it provided much more air comparable to the aid provided by European countries under “Marshal Plan.” Those resources did not reach the Soviet people but helped China make a colossal progress. That war-torn country become an industrial super power. I think, we need to remind this to China. There was a very interesting story with an attempt to introduce “Socialistic Schengen” from North Korea to GDR with free movement of labor force and students. However, things did not go beyond a standard document of the Political Bureau.

What conclusions can be drawn from history of USSR-EU relations to develop Eurasian integration project?

The most important is that integration shall be not only from above, but also from grassroots. It was the major problem of the Council of Mutual Economic Assistance and the Commonwealth of Independent States. However, it was the basis of West-European integration that implied involvement of a network of different organizations that believed in that project – from elite economic associations up to pupils and students. Eurasian integration still lacks this. Integration shall not be forced, especially when there is ability and desire to avoid mistakes of the past - it is necessary to develop it properly and delicately.

Nikolai Protsenko, Editor of Economic Section, EADaily