Money, Monnet!

On 9 May 1950, Robert Schuman, the then French Foreign Minister, suggested the creation of a supranational high authority to manage German and French coal and steel production. At the time, Europe was struggling to recover and the political and financial interests of each member state were so different that they threatened the peace ideal created at the end of the Second World War. The situation was serious! 

Less than a year later, on 18 April 1951, the Paris treaty ratified the creation of the European Coal and Steel Community (ECSC) uniting France, Germany, Italy and the three Benelux countries in a same community of interests. Europe breathed again and entered a period of rapid growth. 

The beginnings of the European Community illustrated the tactical intelligence of the founding fathers (1) (Jean Monnet and Robert Schuman) who built Europe on concrete actions, primarily economic, enabling an efficient influence on the political realm: “At a time when ideas are lacking, they [the politicians] accept your ideas with gratitude, as long as you leave them the paternity. Since they carry the risks, they need the laurels” (1).

The European Union in which we live has directly emerged from these pragmatic principles in a kind of “inverse federalism”, which consisted firstly of transferring economic skills and then possibly political powers. “We do not unite the states, we unite the men” (1).

It was surely this unwritten yet openly affirmed principle that encouraged the European leaders of the eighties and nineties (from Valéry Giscard d’Estaing to Helmut Kohl and including Jacques Delors) to militate in favour and accept the implementation of the euro, imposing it not only on state heads but also on their citizens. A transfer of sovereignty accepted by a political world not particularly keen on economic science or financial history but above all delighted to be able to impose often unpopular measures in the name of a common economic well-being, with no major electoral risk.   

The euro was born on 1 January 1999 with 11 member states (17 today including Greece which joined the EC in 2001) and is the symbol – now being questioned – of this pragmatic success of a Europe that managed to pool its financial means before having consolidated its constitutional and democratic bases. No matter that the political community was not built at the same time: “A currency is of course a means of payment. However a currency is also far more, it concerns a cultural identity and is a barometer for political stability” (2).  These words spoken in 2009 sound strange today as the euro is taking a bashing on the markets. Indeed, it is not so much the currency that is worrying the markets as the use of it made by certain states. Fears of a repetition of the Greek scenario in the rest of southern Europe are legitimate and the foundations built patiently over the past 20 years are beginning to crack.

“The lifespan of an institution is longer than that of man and institutions can therefore, if they have been well built, accumulate and pass on the wisdom of successive generations” (1). This visionary phrase by Jean Monnet should be highlighted exactly for the condition that underpins the affirmation: “if they have been well built”…

New developments, hesitations and reversals in the euro zone have prompted massive stockmarket reactions. Not easy to play Pythia and provide an oracle within a few days. Over the medium-term, doubt does not exist. Europe can only go further in its economic credibility by reforming its governance system. It will also have to accept that it is not healthy to leave the reins of a currency such as the euro in the hands of as many governors as the number of countries in the community. 


(1)     Association Jean Monnet
(2)     Hans-Gert Pöttering, President of European Parliament in 2009