The European Community, 1985–92: from Community to Union — Deepening Dominates while Widening Waits

Abstract

There was a remarkable transformation in the European Community in the mid-1980s. Itis not absolutely clear why exactly this ‘relance’ took place except that perhaps the Community had reached rock bottom and had nowhere else to go but upwards. The answer probably lies in a combination of political and economic factors:¹

• On the political side there was unease about the policies (and reliability) of the Americans, stemming from Reagan’s rather aggressive style of diplomacy, which led to fears of an arms race and renewed cold war between the two superpowers.

• More importantly, on the economic side, the deep recession of the early 1980s, the comparative economic decline of Europe, its failure to create jobs at the rate the US seemed able to do, renewed fears about technological backwardness and dependency in Europe, all combined to concentrate European (Community) minds. European industry began to adopt an increasingly European perception and strategy² and began to see the fragmentation of the European economy as a major problem. There was also a growing consensus in favour of supply-side policies, economic deregulation and budgetary discipline. The combination of all these factors created an irresistible pressure for change and led to two major steps forward in the field of industrial policy: the establishment of the first Framework Programme for EC research and development policies, and the single market programme (SMP); the latter was to be seized upon by proponents of European integration in general, as a flagship for their cause, and was, therefore, to develop into much more than a mere component of industrial policy.