Europe United: Power Politics and the Making of the European Community

Europe United

Power Politics and the Making of

the European Community

Sebastian Rosato

CORNELL UNIVERSITY PRESS

ITHACA AND LONDON

To my parents

Contents

List of Tables

Acknowledgments

Abbreviations

1. Introduction

2. Explaining International Cooperation

3. Origins: Heavy-Industry Integration, 1945–1950

4. Setback: Military Integration, 1950–1954

5. Triumph: Economic Integration, 1955–1957

6. Beyond Postwar Europe

Tables

Table 1. The European Balance of Power, 1947–1960

Table 2. Regional Interdependence

Acknowledgments

A wise man once told me that I could not survive in this business unless I surrounded myself with a lot of smart and supportive people. I have had the good fortune to come across both over the years, and it is a plea sure to acknowledge them here.

I owe my greatest intellectual debt to John Mearsheimer, who taught me everything I know about being a scholar. He has been a formidable critic, an unfailing supporter, and a good friend. Robert Pape was a constant source of ideas and had more faith in my abilities than I did. I am grateful for his insights and enthusiasm. Carles Boix and Duncan Snidal helped sharpen my arguments and provided encouragement every step of the way.

I am profoundly grateful to Michael Creswell, John Deak, Michael Desch, Alex Downes, Mark Gilbert, Michael Horowitz, Keir Lieber, Piers Ludlow, Michelle Murray, John Schuessler, Dominic Tierney, and my two reviewers, one of whom turned out to be Robert Art, for reading and commenting on the entire manuscript and on parts of it more than once. This book is immeasurably better for all of their efforts.

For comments and conversations that had a significant effect on my thinking as I worked on the project, I thank Nick Biziouras, Olivier Brighenti, Jasen Castillo, Maria Fanis, Frank Gavin, Charles Glaser, Seth Jones, Jenna Jordan, Dong Sun Lee, Charles Lipson, James McAllister, Timothy McKeown, Kathleen McNamara, John Owen, Craig Parsons, Mark Sheetz, Paul Staniland, Milan Svolik, Robert Trager, Lora Viola, Stephen Walt, Alexander Wendt, Joel Westra, Mark Wilson, and especially Marc Trachtenberg. My thanks also to Kathy Anderson, Cheri Gray, Susan Lynch, and Ann Townes for looking after me along the way. I am very grateful to Roger Haydon for shepherding me through the entire process at Cornell University Press, Ange Romeo-Hall for patiently guiding me through editing and production, and Mary McGovern for superb last-minute editing. My apologies to anyone I forgot.

I have had the good fortune to be invited to present my ideas at the Program on International Security Policy and the Program on International Politics, Economics, and Security at the University of Chicago, the Belfer Center for Science and International Affairs and the John M. Olin Institute for Strategic Studies at Harvard University, the European Union Center of Excellence at the University of Pittsburgh, the Security Studies Program at the Massachusetts Institute of Technology, the Burkle Seminar on Global Affairs at the University of California, Los Angeles, the Triangle Institute for Security Studies, and the Lone Star National Security Forum. I am grateful to all the participants at these workshops and seminars for their excellent questions and suggestions.

For invaluable research assistance, I am indebted to Andrew Bertoli, Mark Bond, Robert Brathwaite, Carol Hendrickson, Nicholas Houpt, Jacqueline Kallberg, Colleen Noonan, Maria Petnuch, Charles Ramsey, Michael Rowley, and Colleen Walter. Thanks are also due to the students who took my classes at the University of Chicago, the University of Notre Dame, and in Rome for debating many of the issues in this book with me before my own views were fully formed.

Despite these many intellectual debts, I alone am responsible for any remaining errors in the book.

I could not have written this book without the generous financial and logistical support I received from the Program on International Security Policy at the University of Chicago, the John M. Olin Institute for Strategic Studies and the Belfer Center for Science and International Affairs at Harvard University, and the Nanovic Institute for European Studies, the Institute for Scholarship in the Liberal Arts, and the Joan B. Kroc Institute for International Peace Studies at the University of Notre Dame. I am very grateful to everyone associated with these wonderful institutions, and especially Agustín Fuentes, A. James McAdams, Steven Miller, Daniel Philpott, Stephen Rosen, and Monica Duffy Toft.

I dedicate this book to my parents, Pasquale and Judith, who have been a constant source of love, support, and advice. I aspire to be the kind of parent that they have been to me. I would also be remiss if I did not thank my brothers, William and Michael, for keeping things in perspective.

Last but by no means least, I thank my girls. My daughters, Anna and Olivia, serve as a much-needed reminder that there is a lot more to life than my work. They are my pride and joy. Most of all, though, I thank my wife, Susan, without whom none of this would have been possible. She is my inspiration and my best friend. The next one is for her.

Abbreviations

1. Introduction

Western Europe, observed Winston Churchill less than two years after World War II, was a rubble-heap, a charnel-house, a breeding-ground of pestilence and hate. Like many of his contemporaries, the former prime minister attributed the continent’s misery to the nation-state system. A region divided into sovereign states animated by ancient nationalistic feuds could not remain reliably at peace. Indeed, his great fear was that the continent would never recover its past glories because the Europeans would go on harrying and tormenting one another by war and vengeance and squander the first fruits of their toil upon the erection of new barriers, military fortifications and tariff walls.

Churchill’s diagnosis of the situation prompted him to call for a United Europe based on Franco-German reconciliation. If the people of Europe resolve to come together and work together for mutual advantage, he told his listeners, they still have it in their power to sweep away the horrors and miseries which surround them, and to allow the streams of freedom, happiness and abundance to begin again their healing flow. Western Europe had a supreme opportunity, and if it be cast away, no one can predict that it will ever return or what the resulting catastrophe will be.¹

With the Benefit of hindsight, most observers would argue that the Europeans have seized Churchill’s supreme opportunity and built a United Europe. Once distinct and competing nation-states are now members of a supranational community that has no parallel in modern times. That this should have happened in the very region that gave birth to the nation-state system makes the achievement all the more remarkable. How, then, are we to explain this extraordinary political development? More specifically, how can we account for the construction of the European Community (EC)?²

The Argument

My central argument is that the making of the European Community is best understood as an attempt by the major west European states, and especially France and Germany, to balance against the Soviet Union and one another.

In the first instance, the Europeans were driven together by their collective fear of Soviet domination. When the guns fell silent on May 8, 1945, the Soviet Union was by far the most powerful state in Europe. None of the former great powers in the western half of the continent could hope to balance its power on their own. Moreover, they worried that the Americans, who had stepped in to defend them from the USSR after the war, might withdraw their forces in the not-too-distant future. This being the case, their only option if they wanted to provide for their own security, especially over the longer term, was the construction of some kind of west European coalition. Vladislav Zubok puts the point well: In a sense, the Cold War polarization was the ‘midwife’ of the European Community.³

The sheer magnitude of the Soviet threat convinced the west Europeans that they must surrender their sovereignty and construct a military-economic coalition governed by a central authority. There was general agreement that a traditional alliance of the major states in the western half of Europe would be no match for the Soviet Union. Although a regular coalition of their national armies might approximate the Red Army in terms of size, it would not be nearly as effective as the single military force at Moscow’s disposal. Similarly, as long as they retained separate national economies, they would not benefit from the economies of scale and technological advances that were accruing— and would continue to accrue— to the USSR by virtue of its vast single economic space. In order to compete effectively with the Soviets without U.S. help, the Europeans would have to establish a single military and economy of their own, a task that would, in turn, entail the creation of a central governing authority. This was not a welcome prospect since it required them to surrender their sovereignty over key policy areas. But the Europeans believed they had little choice. If they were to avoid domination by the Soviet Union, then centralization was the only option. As Tony Judt notes, For nations reared within living memory on grandeur and glory, ‘Europe’ would always be an uncomfortable transition: a compromise, not a choice.⁴

France and West Germany were fairly evenly matched and therefore agreed to share control of the emerging centralized coalition, an arrangement that has come to be known as integration. In power terms, there was little difference between France and the Federal Republic in the 1950s, and consequently both Paris and Bonn understood that they could not seize control of the coalition. They therefore settled for the more modest goal of preserving the roughly even balance of power between them. The best way to do that, they concluded, was to control the group jointly. If control was shared, they would have an equal say in policymaking, and the policies reached through the joint decision-making process would be applied uniformly to both of them.

In short, integration was at root a response to balance of power considerations. The decision to surrender sovereignty and establish a centrally governed coalition was driven by fear of the overwhelming power of the Soviet Union. No group of European states had faced such a mighty adversary since the advent of the nation-state system. Even as they came together in this unprecedented way, however, the French and the West Germans eyed one another warily and worried about the distribution of power within the coalition. It was this concern that led them to conclude that they had to share control of the group: to integrate and establish a community. Integration was the only formula that could conceivably maintain the existing, relatively even, balance of power between them.

Major Events

This kind of reasoning played out twice in the 1950s and in doing so established the core of today’s EC. The European Coal and Steel Community (ECSC) was clearly the product of balance of power considerations. The French proposed the heavy-industry pool on May 9, 1950, believing that a centrally governed and jointly managed community of this kind would simultaneously establish a bulwark against Soviet expansion and maintain an even balance of power between France and the newly established Federal Republic. The Germans shared this view. Chancellor Konrad Adenauer, for example, was convinced of the need to construct a substantial counterweight to Soviet power in the western half of the continent and understood that the most Germany could hope for was joint control of the emerging entity. Given such a coincidence of views, it was only a matter of time before the two sides ironed out the details. France, Germany, Italy, and the Benelux states (Belgium, the Netherlands, and Luxembourg)— the Six— signed the Treaty of Paris establishing the ECSC on April 18, 1951, and the coal and steel pool began operations on July 23, 1952.

In the mid-1950s, the west Europeans went a step further and created the European Economic Community (EEC), again based on balance of power thinking. Although there had been talk of a full-blown economic community for some time, the process that ultimately led to the creation of the EEC began on June 3, 1955, when the Six declared their intention to establish common economic institutions, progressively fuse their national economies, and create a common market. The French and German decisions to commit to the process were based on pure balance of power calculations: a jointly controlled, regionwide economic community would produce enough power to deter Soviet aggression in the event of an American withdrawal from the continent and maintain a rough balance of power within western Europe. It took some time to negotiate the details of the agreement, but the decision had been made. On March 25, 1957, the Six signed the Treaty of Rome establishing the EEC.

The Europeans took it for granted that their economic community had to be buttressed by a fixed exchange rate system in order to survive.⁵ The general view, notes Sima Lieberman, was that currency fluctuations led to trade wars, increased protectionism and a general fall in national income. As Francesco Giavazzi and Alberto Giovannini observe, this meant that the Europeans had a pronounced . . . distaste for exchange rate volatility.⁶

Early on, the stability they were looking for was provided by their common membership in the Bretton Woods fixed exchange rate system. It should be borne in mind, states Jacques van Ypersele, that the creation of the European Economic Community took place in the context of international monetary stability. The Bretton Woods system . . . was at the time not in dispute. Therefore it was nearly unthinkable to set up in the EEC an in dependent monetary system.⁷ Horst Ungerer makes essentially the same point: When the negotiations on the EEC Treaty started, there existed a global monetary framework . . . that did not seem to require, on a regional basis, specific obligations for the coordination of monetary and exchange rate policies.⁸

Nevertheless, because they believed that the Bretton Woods rules allowed for an unacceptable degree of exchange rate fluctuation and that large swings might damage the community, the Europeans tailored the system to their own needs. The European Monetary Agreement (EMA), which entered into force on December 27, 1958, required participating states to limit exchange rate movements to three quarters of the spread allowed by Bretton Woods.⁹

By the late 1950s, then, balance of power considerations had pushed the Europeans to integrate their economies. Fearing they might be left to contain the Soviets without American help and cognizant that their long-term power rested on an economic base, they established a multistate economic coalition. This was no ordinary arrangement, however. Given the Soviet Union’s overwhelming power advantage, the west Europeans understood that they would only be competitive if they built a single regional economy governed by a central authority. Thus, there is good evidence pointing to Joseph Stalin as the true federator of Western Europe.¹⁰ At the same time, none of the major players had the power to seize command of the emerging entity and none were willing to hand over the reins to their partners. They therefore agreed to a system of joint control. In doing so, they became the first group of states to establish an integrated economic community in modern times.

These economic successes were not replicated in the military realm. Although the Six signed a treaty establishing a European Defense Community (EDC) on May 27, 1952, the French National Assembly rejected it on August 30, 1954, thereby wrecking any chance that the Europeans would establish an integrated military force. Two months later, the Six and Britain agreed to form the Western European Union (WEU), a traditional military alliance that was itself embedded in the North Atlantic Treaty Organization (NATO).

The French decision, which is the key to understanding the whole affair, was clearly informed by balance of power calculations: NATO involved a commitment of U.S. power to the continent and would therefore do more to offset Soviet and German capabilities than any purely European arrangement. Better still, France would not have to take the particularly undesirable step of surrendering military sovereignty to a supranational institution. Even with the United States agreeing to underwrite the NATO system, however, a problem remained: the Europeans continued to fear that the Americans might withdraw from the continent at a later date. This was where the WEU came in by providing the basis for a purely European military force in the event of American abandonment— it was, in effect, an embryonic defense community— and simultaneously ensuring that West Germany could not grow much more powerful than France.

The other notable failure was the United Kingdom’s consistent refusal to engage in integration. This is not to say that the British opposed their continental allies’ attempts to establish a community. In fact, they generally supported those efforts and wanted to be associated closely with what ever entity emerged from the discussions. But they would not consider integration for themselves, refusing to enter into the negotiations that would lead to the ECSC and EDC treaties, and quickly withdrawing from the EEC process. Their approach also reflected balance of power thinking. Like the French and the Germans, they were aware of the need to build a counterweight to Soviet power, hence their willingness to cooperate with the continent. At the same time, however, they understood that the luck of geography meant they were less immediately endangered than their allies, so they opted to buck-pass the integration burden to them. Britain would cooperate with the continental states for their common defense, but France and Germany would pay the sovereignty costs of forming a centralized balancing coalition that could contain the Soviet Union.

Focusing on the ’50s

It should be clear by now that I seek to explain events in Europe prior to 1960. I do so because the early cold war was a time of revolutionary change in the construction of the EC, whereas the period since then is best described as one of incremental development. Joseph Weiler makes the point well: The importance of developments in this early period cannot be overstated. They transcend anything that has happened since.¹¹

The organization of western Europe underwent a seismic change in the 1950s. In 1945, European integration was inconceivable. Within a decade and a half, however, the Six had constructed an integrated economic community that still exists today, albeit in modified form. By signing on to the ECSC and EEC treaties and the EMA, they committed to establish a single trading and monetary entity in the western half of the continent. Much remained to be done, of course. As far as trade was concerned, the common market envisaged by the Treaty of Rome was not completed until 1968. But the decision to integrate and its initial implementation happened in the previous decade. Nor were the results instantaneous in the monetary realm. Nevertheless, the conclusion that they had achieved monetary integration was commonplace by the early 1960s. As Loukas Tsoukalis notes, there was a widespread belief by then, "at least in the Community circles, that a defacto monetary union had already been achieved. It was considered as something bordering on sacrilege, observed a senior European Commission official, to throw doubt on the permanent stability of exchange rates within the Community."¹²

The EC evolved substantially but incrementally in the ensuing decades. There were no transformative developments such as political, military, or fiscal integration. Nor were there any revolutionary alterations to the trading and monetary arrangements worked out in the early cold war. The most consequential change in the area of trade was the Single European Act (SEA), which went into effect on July 1, 1987, and set the objective of turning the common market into a single market.¹³ Although the Europeans had, for the most part, removed internal tariffs and quotas and completed the common market, the goal of a barrier-free single market in the movement of goods, ser vices, labor, and capital envisaged by the EEC treaty had yet to be achieved in the mid-1980s. The SEA rectified matters by calling for the removal of all previously legal nontariff barriers to the free movement of goods and factors of production by 1992. This was an important decision to be sure, but it did not mark a radical departure in the integration process. The SEA signatories were members of an integrated trade bloc before and after they promulgated the act, even if the scope of that bloc increased after 1987. This claim is not that controversial. According to Emmanuel Apel, the SEA simply ''reinforced the original provisions of the Treaty of Rome. Meanwhile, Michael Gehler describes an evolution from customs union to internal market . . . that took decades."¹⁴

Nor were there any revolutionary changes in monetary affairs. The first revision to the monetary regime came after the collapse of the Bretton Woods system when the former EMA participants sought to establish an exclusively European fixed exchange rate arrangement to replace it.¹⁵ Their efforts spawned two different agreements in the 1970s: the European Exchange Rate Agreement (EERA), or Snake, which went into effect on April 24, 1972, and the European Monetary System (EMS), which began operations on March 13, 1979.¹⁶ Both were fixed but adjustable exchange rate systems that basically replicated the Bretton Woods and EMA arrangements, and therefore neither can be regarded as transformational. Again, this is an uncontroversial claim. Barry Eichengreen, for example, views the Snake as an attempt to re create the Bretton Woods system on a regional basis. Meanwhile, Ungerer points out that it often has been said that the EMS was not much more than an enlarged snake and a regional Bretton Woods system. Giavazzi and Giovannini describe it as simply a recent step in the historical quest for exchange rate stability in Europe.¹⁷

In contrast to these earlier agreements, the Maastricht Treaty ushering in Economic and Monetary Union (EMU) is often described as a revolutionary development.¹⁸ Signed on February 7, 1992, it listed a set of macroeconomic and fiscal preconditions for participation in an economic and monetary union and laid out a process culminating in the creation of a single currency, the euro, and an in dependent European Central Bank (ECB) committed to price stability. The ECB began operations on June 1, 1998, and participating states locked their currencies on January 1, 1999, prompting Richard Cooper to declare the inauguration of one of the most momentous monetary experiments of all time.¹⁹

Although the introduction of the euro and the creation of the ECB were events of great consequence, neither can be considered a revolution in the integration process. Clearly the single currency is a stricter arrangement than the fixed rate systems that preceded it. Therefore there is no doubt that the west Europeans accepted tighter constraints on their sovereignty when they adopted the euro. But, as Jeffry Frieden argues, the difference between it and its predecessors is a matter of degree, not of kind.²⁰ France and Germany adopted a stricter fixed exchange rate system, and the importance of their decision is not to be underestimated, but they did not fundamentally alter their sovereign status. Had they transitioned from a floating system to a pegged one, then they would have exchanged a situation in which they were formally sovereign in monetary matters for one in which they were not. But they did not make this move in 1999. Rather, they essentially traded one fixed exchange rate regime for another.

Nor was the creation of the central bank a transformative step in terms of monetary sovereignty. William Bernhard, J. Lawrence Broz and William Roberts Clark have argued convincingly that despite important differences between them, fixing exchange rates and establishing an in dependent central bank can be viewed as alternative forms of monetary policy delegation.²¹ Both require states to surrender their monetary autonomy. This has two implications in the case at hand. First, the Europeans were giving up more sovereignty than they had done to that point when they established a central bank. Second, the more Politically consequential act of surrendering sovereignty at all had been taken in the 1950s when they pegged their exchange rates for the first time in decades. In other words, the ECB was much like the inauguration of the euro— it involved the alteration of an existing system, not the inception of a new one. As Andrew Moravcsik explains, "The single market and currency increasingly appear . . . as the finishing touches to the construction of a European economic zone."²²

Thus, by zeroing in on events in the 1950s, I account for a fundamental development: Europe’s shift from sovereign state system to supranational community. Needless to say, this is not the only possible focus of inquiry. Analysts could seek to explain why the EC developed as it did after its formation, and there is, in fact, an extensive literature on the widening and deepening of the community. For scholars of international politics, however, the crucial task is figuring out why the states of western Europe took the virtually unprecedented step of giving up their sovereignty in the first place. Moravcsik puts the point well: The most fundamental puzzle confronting those who seek to understand European integration [is] . . . to explain why sovereign governments . . . have chosen repeatedly to coordinate their core economic policies and surrender sovereign prerogatives within an international institution.²³

Extensions

An understanding of balance of power politics can tell us a lot about international cooperation—certainly more than is generally assumed—and about the future of the EC.

Although I am interested mainly in explaining the construction of the EC, my argument applies to interstate cooperation more broadly. Specifically, if we know how capabilities are distributed among a group of states and how the members of that group compare in power terms to a common adversary, then we can predict whether or not they will cooperate and, if they do, what form their cooperation will take. Indeed, balance of power considerations appear at least partially to explain the origins and shape of dozens of cooperative ventures, ranging from alliances and trade pacts at one end of the spectrum to national Unifications at the other.

The key to understanding the Community’s future is the collapse of the Soviet Union in 1991, which fundamentally altered the European balance of power. During the cold war, the Soviet threat gave the west Europeans a powerful incentive to integrate, and they responded by forming the EC. The Soviet Union’s demise has removed that incentive. This being the case, France, Germany, and the others are unlikely to go down the road of political or military integration, and further economic integration is improbable. Indeed, as time passes, the economic community is likely to bear little resemblance to its current form.

Events since the end of the cold war support this pessimistic conclusion. Despite lofty rhetoric to the contrary, the Europeans have not considered, let alone attempted, Political integration in the past two decades. Experts agree, for example, that even the much-hyped European Constitution was in no way a blueprint for Political union. A similar story applies in the military realm. Although the Europeans have certainly cooperated in military affairs, they have not made any move toward establishing an integrated defense community. In other words, there has been no meaningful Political or military integration since 1991. With no threat on the horizon that compares to the cold war Soviet Union, this will probably remain the case.

The economic community, meanwhile, is likely to unravel over time to the point where it becomes a shadow of its former self. Simply put, the collapse of the Soviet Union has shorn it of its fundamental purpose. Consequently, narrow national self-interest is likely to trump commitment to the Community, thereby condemning it to a slow demise. The effects of the end of the cold war have been felt for some time now. To be sure, prosperous economic conditions during the 1990s ensured that the EC survived the death of the USSR. But worsening conditions since the turn of the millennium have seen the reemergence of nationalism— member states, especially France and Germany, have consistently put national interests ahead of those of the Community, routinely violating the rules that underpin the single market and the single currency. With further economic woes on the horizon, this process of unraveling is likely to continue.

Debates

My account stands in stark contrast to the conventional wisdom. According to one popular current of thought, the EC is the product of a desire to transcend the nation-state system. By the late 1940s, so the story goes, the Europeans had concluded that competing national Political units were the cause of war and must be eliminated if the continent was to remain at peace. As members of a supranational community rather than separate nation-states, France and Germany would be less likely to compete and more likely to cooperate. Determined that they would never again take up arms against one another, argues Jeremy Rifkin in a prominent statement of this view, the nations of Europe searched for a Political mechanism that could bring them together and move them beyond their ancient rivalries. Their solution was the EC. Jean-Baptiste Duroselle makes broadly the same argument in his European Commission–sanctioned history of Europe: Many Europeans felt that the sheer scale of Europe’s devastation obliged them to start afresh. What they must do was heal past wounds and mend rifts— bring about, in fact, a profound and historic reform by uniting, in what ever fashion, the different European states.²⁴

The claim that European integration is best understood in terms of the enlightened pursuit of economic self-interest may be even more influential. Alan Milward offers a trenchant statement of this argument, asserting that the true origins of the European Community are economic and social, and that the only arrangements with any chance of success were those which found the point of intersection with the successful pursuit of the national economic and social advantage of all parties. John Gillingham concurs in his magisterial account of the integration process, claiming that most European statesmen were committed from the outset to a recovery process that would eventually restore a Europe wrecked by two world wars to economic conditions like those that had obtained in the nineteenth century . . . a place where re-knit commercial and financial ties between nations would create essential networks of prosperity and so prevent war. This is also the view of T. R. Reid, who believes that the initial impulse toward union was a desire to produce, once and for all, an end to war on the continent, and an end to poverty. To his mind, the EC is the culmination of a plan for profits and for peace at the same time.²⁵

Although proponents of these schools of thought disagree, sometimes vehemently, about the origins of the EC, virtually all of them would reject my claim that the drive to integration was a product of balance of power thinking. The view was neatly summed up by German foreign minister Joschka Fischer in a speech at Humboldt University at the turn of the millennium: European integration was the response to centuries of a precarious balance of powers on this continent which again and again resulted in terrible hegemonic wars. . . . The core of the concept of Europe after 1945 was, and still is, a rejection of the European balance-of-power principle . . . a rejection which took the form of closer meshing of vital interests and the transfer of nation-state sovereign rights to supranational European institutions.²⁶ In other words, the consensus view is that the origins of the EC lie in the rejection of balance of power politics, not its application.

The argument presented here is also likely to be controversial within the academy. Much like the public debate, the conventional scholarly wisdom holds that the EC is best understood as a product of economic self-interest or dissatisfaction with the nation-state system. Moravcsik focuses on the first of these motivations in The Choice for Europe, probably the most important book on this subject by a Political scientist. He begins with the claim that powerful producers in France and West Germany stood to Benefit from commercial liberalization and therefore called for interstate cooperation in the removal of barriers to intra-European trade. Their governments duly carried out these demands, and because the Benefits of cooperating were especially high, they sought to lock them in by establishing powerful supranational institutions. Moravcsik finds substantial support for his claims, concluding that integration has been driven by pressures to coordinate policy responses to rising opportunities for profitable economic exchange and the desire of west European governments to commit one another to cooperate . . . where joint gains were large.²⁷

The most influential statement of the view that the EC is the result of an attempt to transcend the nation-state system appears in Craig Parsons’ A Certain Idea of Europe. The Great Depression, World War II, and the onset of the cold war, he argues, unsettled old assumptions about how to organize western Europe. Although most members of the Political elite determined that only slight changes were in order, a small group came to a more radical conclusion. In order to guarantee their future security and prosperity, the Europeans were going to have to eliminate the nation-state system and replace it with a supranational arrangement. When members of this pro-community group came to power, and they did so consistently in the 1950s, they acted on their beliefs and built the EC. Only because certain leaders repeatedly chose ‘community’ projects, Parsons declares, did the EU gradually arise.²⁸

Regardless of where they stand in this debate, most scholars dismiss balance of power explanations for the formation of the EC.²⁹ Moravcsik examines four geoPolitical accounts of the sources of state preferences for integration and finds them all wanting. The little supportive evidence that he does find validates liberal constructivist variants of the argument, rather than Realist power-balancing ones. Threats from the Soviet Union and Germany, he asserts, did not generate overwhelming pressure for integration. Parsons, meanwhile, argues that policymakers who engage in balance of power thinking prefer not to establish supranational institutions. Had such individuals dominated the policymaking process, Europe would resemble the thinly institutionalized rule instead of standing out as exceptional in international politics.³⁰

Indeed, it is generally agreed that realists, who privilege the balance of power in their analyses, cannot account for the origins of the community. The dominant theory of International Relations, asserts Simon Collard-Wexler in a typical statement of this view, gives a poor account of one of the most important processes of contemporary world politics in a historically volatile region. Terrence Hopmann concurs: French-German cooperation in the aftermath of more than a century of intense Conflict and their integration with other European states within the European Union is the most significant post-World War II anomaly that seems to challenge the fundamental premises of realism.³¹

One of my chief goals in writing this book is to overturn this consensus by proposing a balance of power theory of integration and demonstrating that it has greater explanatory power than the two accounts that currently dominate the debate. That enterprise involves two tasks. First, I construct a