EUROPE AND THE SUPERPOWERS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP81B00401R002100040011-6
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 12
• Document Creation Date: December 15, 2016
• Document Release Date: March 15, 2004
• Sequence Number: 11
• Publication Date: January 1, 1978
• Content Type: BOOK

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FRAN(;OIS DUCHE NE
om sheer habit, Europe's relations with the superpowers have acquired
the rather narrow connotations of European military security. This was
natural in the early cold war when Europe, though considered the fulcrum of
the world balance, was itself so weak that its horizons were strictly regional.
It is far less appropriate, even anachronistic, today. Today, Europe's relations
with the superpowers are global and virtually unconfined. In 1950, say, the
United States was virtually the only truly `global' power. The Soviet Union
in its northern glacis was not, western Europe knocked out by the war was not,
the Third World barely emerging from the colonial past, did not really exist as
a force in its own right. Today all this has changed. The Soviet Union is a
world military power almost on the American scale. The unprecedentedly
long deep and widespread boom which has quintupled world production in
a quarter century, has now produced phenomena of `crowding' which express
themselves in cumulative divergences of performance between industrial
western powers; in the proliferation of new industrialising states as well as of
nuclear capacities and conventional armaments of more and more sophisticated
kinds; in the growing intensity everywhere of social demands and economic
competition; and in pressures on resources from energy to the oceans and
the biosphere. All these involve the United States and western Europe together,
willy-nilly, in the management of the system. Relations with one or both
superpowers affect western Europe in every dimension and almost at every
point of the compass. At the same time Europe's own role in the calculations
of the superpowers must not be under-rated. It now generates more .of the
world's production and trade than North America itself, so that it too, by its
acts of omission or commission potentially influences world policies at a
number of important points. To speak, then, of Europe's relations with the
superpowers is really to deal with the very nature of western Europe's scope to
act in the world now that it has lost some, but not all, of a great power's ability
to define the political context.
'Director, Centrefor Conte,nporarv European Studies, University of Sussex.
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 Approved For Release 2004/03/25 : CIA-RDP81 800401 R002100040011-6
Relations with the superpowers have also becorne more ambiguous. The
frosty light of cold war gave everything an exceptionally clear edge which has
been lost with detente's warmer weather. Detente has not, for instance, pre-
vented an enormous increase in the strategic and conventional military power
of the Soviet Union, notably in the region where it least seems to need strength-
ening, in Europe itself. In quite a different vein, the coming of a crowded
world introduces a new ambiguity in European-American relations too. When
every American nerve was strained to strengthen Europe as a bulwark against
the USSR, there was a very near identity of perceptions between the two sides
of the Atlantic. Now, as the objects of policy become more diverse, so do the
aims of Americans and Europeans, so that they are no longer so easily identical
and sometimes, as on energy, become, at least by implication, increasingly coin-
petitive. All these changes demand a reorientation of familiar categories of
thought.
Depression
The main fact about the West today is that after twenty-five years of boom
it is back in depression again. This is not a traditional depression. The average
growth of the OECD countries is currently about 3% p.a. But it is growth
accompanied by increasing unemployment as productivity, rising even faster,
produces a drift of manpower out of industry. Germany, for instance, cur-
rently needs to grow at more than 4.50/o p.a. to cut into unemployment. This
suggests new structural problems for which traditional categories of economic
medicine are not very useful. In fact, to deal with them successfully it will
probably be necessary to change society quite profoundly over a considerable
period of time.
Such a reformation of social relationships is never easy at the best of times.
It is made more difficult by the confusion, and loss of a sense of priorities, due
to the collapse of the old economic leadership provided by the United States.
Under the weight of increasing competition from reviving allies like Japan
and Germany, the United States finally decided in 1971 that providing open
markets and dollar credits to sustain the rest of the western economy was
becoming too expensive. In ending the convertibility of the dollar it in effect
resigned its postwar single-handed economic leadership of the West. The
trouble is that no country can replace the United States. Its individual leader-
ship can only be collectivised through concurrent action by America with
Japan and Germany together. At first, it was assumed that the United States
was economically and politically strong enough to force concurrence on Japan
and Germany. The recession since 1974 has proved this is not, at least not
sufficiently, the case. The Americans, as a continental power with the experi-
ence of boosting the western economy since the war, have tried to pull it out of
the valley of depression by increasing domestic demand. The Japanese and
Germans have followed suit too little and too late. They have preferred to hold
back activity at home (though Japan's current growth of 6% p.a. or more is
depression only by its own standards) and to confirm their hold on the world
export market. There has been progress towards common management in the
mere fact that their domestic economic policies have become a favourite sub-
ject of international controversy. Nevertheless, their attitude has remained one
 Approved For Release 2004/03/25 : CIA-RDP81 800401 R002100040011-6
addressed more to their own economic objectives than those of the System as
a whole. They have not had the American sense of the global :Situation. This
may be natural to their traditional condition as lieutenants in the system. The
result has nevertheless been to provide no successor to the American economic
leadership of the post war years. The West today is partly leaderless in economic
policy.
In these circumstances, it is hardly surprising that protectionism is reviving
on every side, particularly in Europe and America in the face of Japan and the
more aggressive industrialising developing countries, themselves mostly
though not exclusively East Asian. Governments, with the 1930s at the back of
their minds, are acutely aware of the risks and have avoided generalised pro-
tectionism. Nevertheless selective protection is becoming more and more wide-
spread. There is regional protection, represented notably by the European
Community, as in the multi-fibre negotiations, where `voluntary' agreements
to restrain trade are forced upon the most dynamic new exporters, first and fore-
most the East Asians. There are government-sponsored international cartels
sharing (or partly sharing) markets, as is the case of America, Europe and
Japan on steel. Government subsidies are increasingly handed out to failing
industries in ways particularly prominent in Britain and Italy.
To some extent, the reaction against free trade may be inevitable. As more
and more industries in established economic powers have to face the rising
competition of new industrial states, stretching even to recently booming
industries like motor cars, there is a need, even on the most optimistic assump-
tions, to control the pace of domestic change. This must make governments seek
to control the international economy too. That would be true even if protec-
tionism were ultimately rejected. Nevertheless, it clearly affects all trade rela-
tions compared to the postwar period, and particularly American-European
ones. It suggests the politicisation of international economic relations, as
a result of greater government involvement. Political bargaining always
tends to be more conflictual than quasi-automatic rules such as those which
have governed trade since the war, because anything subject to political deci-
-sion can be contested, and what is contested nearly always generates anger
which, though possibly factitious in origin, can all too easily become real. It is
significant that the single factor which has most tended to alienate American
support for the European Community has, after General de Gaulle's incom-
parable self, been agriculture, which is a prime example of a politically orga-
nised sector of the economy. It looks as if the European Community and
United States may reach a compromise in the current world trade negotiations.
All the same, the danger of trade war, if anything goes wrong, is ever present.
There is also a larger potential problem. The developing countries are tinder
intense pressures to grow, a situation which fundamentally marks off the 1970s
and 1980s from the previous period of recession, the 1930s. If slow growth
frustrates them or the major industrial powers, reacting defensively, try to
organise commercial spheres of interest, the strains on the system could mount
very rapidly. It is hard to tell whether the solidarity of Americans and Euro-
peans as rich conservatives will bind them together more than their different
outlooks, global or regional, or the situation will divide, but in either case
the stakes will rise. Already today, the existence of a high degree of inter-
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Approved For Release 2004/03/25 : CIA-RDP81 800401 R002100040011-6
dependence in the industrial world without commensurate international power
to arbitrate the frictions of the system, is generating powerful divisive forces.
American-European relations are becoming moic difficult in an area of
maximum harmony since the war.
Resources
The potential for conflict between America and Europe as a result of the
energy crisis was seen at once in 1973, but the governments have been very
slow to draw policy consequences from it. The United States can nearly
always, though at a price, remedy its partly self-inflicted energy shortages,
whereas Europe and Japan cannot. Worse, in this situation of potential shortage,
the United States has changed from supplier of last resort into a rival for the
acquisition of scarce resources. Until 1967, it unfailingly supplied Europe's
missing energy in each Middle East crisis. Between 1970 and 1973, however, it
was the sudden emergence of the United States as a major claimant on Middle
East oil which gave OPEC its historic chance to turn the tables on the great
industrial cons umers.Ainerica's failure since then to slow down the enormous
rise in domestic energy imports from the Middle East has merely confirmed
the tense implicit competition with its allies for hydro-carbon resources.
Some attempts have been made to assert, and even to institutionalise,
common priorities in this field. The establishment in 1974 of the International
Energy Agency (IEA) to share out western (including American) oil produc-
tion in case of a future embargo, and to save old forms of energy, and develop
new ones, has been a prime example. Another has been the establishment of
the informal Nuclear Suppliers Club, now extended to fourteen countries,
in order to agree on a code of limitations on the export to an ever widening
circle of nations of the means to produce nuclear weapons. But organisations
of this kind create a framework for common decision-making, they do not
ensure that it takes place. The IEA may be an effective deterrent to a future
embargo, and in this sense has bought time for the advanced industrial con-
sumers of oil to conserve energy and develop alternative sources. So far, how-
ever, they have signally failed to use that time to move forward convincingly
on either of these two more basic approaches.
The half-hearted efforts of the Nixon and Ford administrations to limit the
growth of America's energy consumption, which is twice that of Germany per
head for an equivalent standard of living, were defeated by the range of
domestic interests arrayed against them. President Carter has now made a
more determined attempt, but his efforts have been heavily watered down by
the Senate. Constraints on American energy consumption, though they are
beginning to become serious, notably in the limitations on the size of cars, are
still fragmentary and their reinforcement will be at best a long drawn out
process. In any case, conservation is no sufficient answer.
The reaction of the Europeans, particularly the French and Germans, to the
energy crisis, has been a fuite en avant towards the fast breeder reactor. This
uses sixty times more of any given amount of uranium fuel than conventional
reactors do and so is very attractive if, as is often assumed, uranium supply
may become almost as constrained as that of oil. But it also produces plutonium
in large quantities as a by-product and so poses particularly acute problems of
 Approved For Release 2004/03/25 : CIA-RDP81 800401 R002100040011-6
proliferation, waste disposal and possibly sabotage and theft by terrorists. The
policy has been highly controversial both in domestic and in international
politics. At home, the ecological movement's opposition has been strengthened
by failures to discuss the issues in public in both Germany and in France.
Abroad, the agreements of Germany with Brazil and of France with Pakistan
to offer plutonium reprocessing plants, thus giving Brazil and Pakistan the
chance to acquire their own nuclear weapons, has produced sharp controversy
with the United States. There seem to be at least two strands to the conflict
One is the export drive, the Germans and French having calculated that nuclear
reactors are one of the main export markets of the future. The second is secu-
rity of fuel supplies. One of the motives of the German-Brazil agreement was
clearly to secure Brazilian uranium ore for German industry. In seeking to
prevent such nuclear proliferation, President Carter based himself on studies
which suggested the United States had sufficient access to uranium supplies to
eschew fast breeder reactors. That is precisely what most other countries, and
in particular Japan and western Europe, lack. President Carter's ostensibly
global policy has thus been tailored to American perception, not the needs of
America's allies. On both the American and European sides, policies to deal
with the energy crisis have been tailored to short-term national priorities with
very little reference to the nature of the overall problem.
East-West relations
It is a measure of how far the world has changed that the West's difficulties
of recession and raw material supplies are not automatically seen as playing
into Soviet hands. This could well be a western illusion, however, and there is
no doubt at all that the East-West relationship is a crack, and potentially still a
dominant one, running through the complexities of a painfully changing inter-
national scene. The East-West balance may seem stable within the nuclear
stalemate, on closer inspection it is a cat's cradle of tightropes which could
fray. Euro-Communism, defence and trade are probably the most salient
features. All of them involve western European relations with the United
States as well as with the Soviet Union.
Eurocommunism' is a highly ambiguous development, suggesting uncertainty
alike to East and West, and above all to the Soviet Union and the United
States. What, on balance, will its effects prove to be? To some extent, there is
no doubt one key dimension is the ideological retreat of Leninism. A hundred
and ten years after the publication of Das Kapital and sixty years after Lenin's
seizure of power, both of them prophesying world revolution, and at the very
moment when renewed Western crisis might be thought to provide a 'historic
opportunity for socialism', west European Communist parties make spec-
tacular concessions to 'bourgeois' democratic freedoms in order to emerge
from the political ghetto onto the main electoral scene. Out of the four Latin
Communist parties emerging into the limelight in this way, two (Spain and
Portugal) have proved to have limited electoral support despite decades of
dictatorial government which was supposed to provide a culture for them,
? The author is indebted to David Bell, whose work on The Spanish Communist Party will shortly
be published by The CCES, Sussex University.
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while a third (France) is electorally stagnant well behind both its own peak
support and the current electoral and possibly very temporary performance of
the Socialist rival party. One of them, the Spanish party, is spectacularly
at odds with Moscow. In some ways, there are in this parallels with the human
rights issue. The Soviet Union revived the idea of the European Security Con-
ference in 1965 with the idea of legitimising its rule in Eastern Europe and
increasing its political and ideological impact in western Europe. The ironic
effect of the Helsinki `final act' has been to reverse the burden of proof and
cast the light glaringly on Moscow's domestic denial of human rights, its
Tsarist face of Socialism. Leninism has less appeal toddy than at any time
since 1917. This loss of ideological initiative is, for a revolutionary movement,
a historic defeat. If, as is quite likely, the Italian Communist party, associated
in power but not monopolising it, confirms in action its acceptance of the
Atlantic Alliance and of open frontiers within the Common Market, while
the French party fails to control or massively influence events because of
massive domestic opposition to it, the emergence of Eurocommunism may
finally prove to be what it potentially seems-the re-integration of the west
European Communist parties into the indigenous libertarian traditions of the
birth place of western civilisation. The Byzantine authoritarianism of Russia
will be shown up as a rejected graft. A phase of history will he closed.
Authoritarian control
This, no doubt, is why Moscow is alarmed. On the other hand, it is clear that
the United States is too. The brief flirtation of the Carter administration with
neutralism on the Italian Communist issue is already over and the continuity
of American policy has been re-asserted. The participation in power of the
Italian Communists is bound to create acute problems of trust in Nato and
could inject a logic of conflict in it. There would be great uncertainty even for
the European Community. Will the Italian Communists' commitment to an
open market economy and indeed that of French Socialists survive the con-
trols an austerity programme, an attempt to equalise incomes and the flight of
capital could all impose? The basic doubt about the Communist parties is how
near their internal organisation still remains to its Leninist origins. It is often
pointed out that both the Italian and Spanish parties (though not the French
and Portuguese) have jettisoned the total control from the top characteristic of
`democratic centralism'. It is nonetheless striking, how well Santiago Carrillo
himself controls his organisation. If a well disciplined Italian Communist
party, with its authoritarian factions brought to the fore once again by crisis,
or a French government of the left, were to lead their countries into semi-
neutralism and economic autarchy, there could well follow a serious division
of western Europe and a drawing apart of the United States and its core of
European support on the one hand and of the rest of western Europe on the
other. The western weight in the balance with the Soviet Union would be
seriously weakened. The United States would no doubt continue its Euro-
pean commitment, or at least the German one at the heart of it, because this is
so basic to American foreign policy, but the whole relationship would become
more complex and weighted down by reservations. America's tendency to
downgrade European interests in the calculation of its own, not least with the
 Approved For Release 2004/03/25 : CIA-RDP81 800401 R002100040011-6
Soviet Union, could be reinforced and the cohesion of Nato weakened.
These uncertainties are compounded by Defence. Detente has confirmed,
rather than produced, a longstanding tendency in western European society
towards relaxation of military effort under the pressure of a democratic
culture increasingly responsive to domestic, social and economic priorities
against external ones in general and military ones in particular. In contrast the
British Defence White Paper of 1976 claimed that Soviet conventional military
strength in central Europe since 1967 has grown by about 4011/4, equally
divided between the five divisions stationed in Czechoslovakia since August
1968 and a whole series of detailed advances in equipment and in ground and
air establishments. There are Western counters to such development. 'Precision-
guided munitions, for instance, devalue tanks and aircraft, the very arma-
ments where Soviet superiority in central Europe is most marked. But these
changes do not seem to match the Soviet effort, and Western anxiety for the
1980's seems to be increasing. There is also the deeper question of why the
Soviet Union should be behaving in this way. After the war, the Soviet Union
has regularly used the vulnerability of western Europe to counter, as far as it
could, the global strategic superiority of the United States. Now however, that
the Soviet Union has reached strategic `parity' with the United States, this
same approach is automatically more offensive, directed at the weak hinge of
Nato between western Europe and America. From this point of view, it is
striking that the Soviet Union has put multiple warheads on its nuclear missile
forces targetted on western Europe, which greatly out-number French and
British warheads even without this development. The result, is, actually or
potentially, an overwhelming superiority of both conventional and nuclear
Soviet forces directed specifically against western Europe, not the United States.
The Soviet Union is reported in the Salt negotiation to be making strenuous
efforts to obtain American agreement not to transfer cruise missiles, which
might at least temporarily redress the nuclear balance, to Nato allies. It' this
effort succeeds, the Soviet Union would have successfully institutionalised the
distinction between the United States and western Europe which could become
a fissure in the Western alliance. Soviet interest ;n southern Africa could he
fitted in a similar general strategy directed to putting pressure on western Europe.
It is often said that the threat to European raw materials in southern Africa is a
chimera because producers will always have to find markets in the West. This
is not necessarily true as regards uranium. With producers (except in Australia)
increasingly tending to conserve their uranium supplies, the restriction or loss
of a further potential source could seriously constrain Europe's future econ-
omic prospects. This is a confused issue, on which the facts have not been
properly established, but could easily be a costly one if the outcome went the
wrong way from the western European point of view.
The Economic chapter of East-West relations is a compendium of their
ambiguities. Trade has recently been growing very fast: recession has given the
west incentives to provide eastern Europeans with credits to buy goods they
could not otherwise pay for by their exports. The result is that, though the mani-
pulation of prices tends to conceal this, both Poland and Hungary now seem
to do half of their trade with the West. This alone is an important develop-
ment. Whether it will last is another matter. East European countries can,
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and will, only pay for their imports of western plants by selling the products
of these plants in what will be increasing quantities back to the West. There are
already prospects of 400,000 motor cars, for instance, being sold back to
western Europe by such arrangements in the mid-1980s at a time when west
European industry itself looks like being in trouble. The time can be foreseen
when west European barriers, national or Community-wide, may go up against
the east European exporters as against the industrialising developing countries.
As the going in the world economy gets rough-for instance if the energy crisis
really materialises-the east European economies could be in an even more
fragile position than the west European ones. This will probably be more of a
problem between west and eastern Europe, which basicatl'y want to intensify
their relations, than with the Soviet Union where there are more ulterior
motives. It is bound nonetheless to reflect on East-West relations as a whole.
European policies
One major conclusion seems to emerge even from a cursory survey of
European-superpower relations. This is that European interests are becoming
more specific than they were in the days when every issue was subordinated to
two over-riding problems on which the American-European consensus gave all
the crucial answers: the Soviet threat and economic progress to mass middle-
class standards of living. Inter-dependence has not become any less important
for Europe. But the United States has stopped being simply the all powerful
patron and become also, in some respects, particularly in energy, a com-
petitor. Also though its dependence on imported oil is potentially shifting its
priorities, the United States has a markedly different balance of perceptions on
Arab-Israel conflict than has Europe. Further, as domestic politics tend more
and more to take primacy over, and to condition, the international system, the
less one can expect countries to be responsive to each others' needs. The world
is entering a new stage where it is neither so certain that the United States will
give a lead nor so easy for it to do so and where it is more apt to see itself as
pursuing its own national interests than shaping the world context for a whole
group of nations. The energy crisis and the spread of industrialisation to an
ever-widening circle of new countries both affect western Europe's traditional
industrial foundations.
In the face of these challenges, there is no substitute for basic long term changes
in European societies themselves. To have a hope of controlling these changes
domestically, which will be very difficult, western Europe will also have to try
to control them as part of the international environment. It is less able to think
in terms of self sufficiency than the United States, still less the Soviet Union.
Europe needs cooperative international arrangements. On energy, these re-
quire to be not only with OPEC but by implication also with countries like the
United States or Japan which might enter into outright competition with it for
scarce resources should the `second energy crisis' or some functional equiva-
lent, materialise. It is even possible that without such arrangements, by the late
1980s the Europeans may regard the Americans and the Japanese as their
major problems just as much as the Soviet Union or OPEC.
Similarly, if not so spectacularly, with the industrialising developing coun-
tries. Slower growth, or recession, are a bad enough prospect for these countries.
 Approved For Release 2004/03/25 : CIA-RDP81 800401 R002100040011-6
Sheer protectionism leadinti them to dcsparir, could well tririr,;cr off ecun.
omit and political troubles of which the international terrorism since 1968 could
be a pale fore-runner. The challenge will be to devise flexible forms of inter-
national and mutual adjustment, some kind of regulation, not mere protection.
Again, Europe being less self-sufficient, needs to promote such cooperation
more than either superpower and should not wait on United States initiative.
Western Europe, being much more vulnerable than either superpower, would
henceforth be very foolish to look (as it has done traditionally and still does
today) to the United States as the only promoter of its special needs.
As the more vulnerable wing of the West, Europe also has to make sure that
its interests are not sacrificed in the superpower dialogue. Here again. there are
elements of common interest with the United States. Rccause'of its military
vulnerability and of the age old links with eastern Europe, western Europe's
natural inclination is to shift the emphasis of East-West relations, from military to
economic and political fields which are safer and maximise its relative power. It
must also do this in a way which does not lead to crises in which the military
factor might suddenly and disastrously re-emerge. For this purpose, the Euro-
pean Community has the same interests as all the smaller European states, East,
West and neutral, in the political restraints on military power, such as the so-
called `confidence-building measures' being discussed in Belgrade, being
gradually multiplied until they really make it politically and technically more
difficult for the Soviet Union to use superior force against its neighbours. To
this extent, they can see eye to eye with the United States. At the same time, the
Europeans have a common interest in ensuring that the Salt negotiations
between the superpowers do not lead to an interdict on their having access to
the kinds of nuclear weapons that may help them balance a strategic threat
addressed overwhelmingly to them rather than to the United States. It may be
that there is no over-riding case for acquiring such weapons, but the Euro-
peans should also be wary of accepting self denying ordinances that hit them
where their security is weakest, at the hinge between Europe and America. In
exactly the same strain, they need at the political level to see that western stan-
dards, for instance those of human rights, are steadily upheld but not so vigor-
ously that they boomerang. The West Germans were less than enchanted at the
prospect of President Carter's enthusiasm for human rights upsetting the sub-
stantial concessions on human contacts they have obtained at considerable
financial expense from East Germany, (20 million \Vest German visitors have
gone there since 1972, which is more than the total population of the GDR). It
is only if this politico-military framework can be securely maintained that
more confident and closer relations with Eastern Europe can be built up.
Western Europe's interests in Eastern Europe are in many ways greater than in
the Soviet Union. Building up these relations calls for a stable environment if
they are not to be interrupted every few years by crises which could be more
dangerous in the future than they were in the more easily controlled past.
European Community input
With such challenges, the need for an effective European Community is
greater than it has ever been. The most important area will probably be the com-
plex of issues posed by energy, international trade and the appearance of political
 -igger of econ-
since 1968 could
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trance of political
Approved For Release 2004/03/25 : CIA-RDP81 800401 R002100040011-6
limits to growth. Energy is perhaps the key. The Europeans, as one of the most
vulnerable parties to the system, have an enormous interest in the development
of some sort of planned form of international distribution and cooperation
over energy. Otherwise, like the less developed countries and Eastern Europe,
they may find themselves, or a number of them anyway, at the back of the
queue when the going gets rough and the superpowers and the Japanese exert
their different kinds of muscle. The Europeans are not likely to achieve any-
thing of the kind unless they make a collective effort to do so. The oil exporters
for their part might well welcome an agreement of this kind that gave them
more stable perspectives for their own future and for that of the rest of the
industrial world on which their own prosperity depends.*
The Euro-Arab dialogue is an arena in which the Arabs are already making
the Europeans feel their determination to develop all sorts of industries, such
as oil refineries, petrochemicals and even steel, which have hitherto been
thought the natural monopoly of `industrial' states. This raises the second
major problem-the adjustments that will have to be made in Europe to
accommodate new industrial powers in the system. In a climate where quite
high levels of growth-certainly by the standards of the 1930s-fail to reduce
and may even increase unemployment, this is clearly an immensely diffi-
cult undertaking. It will need some sort of international negotiation of indus-
trial, and indeed social, adjustment which is more than a euphemism for
unrelieved protection. This will have to combine temporary measures to pre-
vent industrial disruption with longer term arrangements that adapt industry
in established countries to new opportunities (for instance, the production of
capital goods) and the loss of old areas of activity. As the location of industry
is turned by OPEC into a part of international bargaining, the pressures on the
Community to negotiate as one will increase. It represents about one-quarter
of world trade. If its members fail to have coherent common policies, there
can be no consistent international trade prospect on which Third World coun-
tries can plan. Of course, European Community policy can potentially be
more effectively protectionist than those of individual member states, but
the diversity of interests of the members as between massive and lesser ex-
porters also makes it unlikely that their collective policy will be as protectionist
as many, perhaps most, single national ones would be. Restrictive as the new
four-year multifibre agreement, or the steel cartel with America and Japan,
look like being, there is a contractual element in them implying reciprocal
obligations which, given world forces, is almost certainly not sheer facade.
The element of international economic planning, with mutual obligations,
must be stressed as against that of mere protection and restrictions.
The prospects resulting from production agreements with East European
countries suggest that much the same process may soon have to apply also in
East-West relations. Much industrial action by western Europe is taking place
on a Community basis, simply because anything less no longer provides a
viable framework. The Community has already shown that it is a rising
potential force in East-West diplomacy. This has been evident in Helsinki
*! am indebted to 'Europe's International Energy Policy' by Hanns Maull, shortly to be published
by the Centre for Contemporary European Studies at Sussex University.
 Approved For Release 2004/03/25 : CIA-RDP81 800401 R002100040011-6
and Belgrade, in the development of the Portuguese revolution, and even on
fish, with the Soviet Union having to cut its catch in European waters in nego-
tiations with the European Community institutions it supposedly refuses to
recognise. On defence, on the other hand, the Community has basically failed
to cohere (though there may he some progress on joint arms production) and it
may come to regret this. Nevertheless, even within the present limits, there are
plenty of initiatives the European Community countries could and should take
together. They are plainly already consulting, as they should, on the new
phases of Salt and on "confidence-building measures" in Belgrade. They
should work to give a more defensive character to military deployments in
Europe on both sides, East and West, and generally to institutionalise re-
straints on force in order to give primacy to economic and politicalfactors.
In the last resort, everything rests on internal cohesion inside the European
Community itself. Perhaps the most fundamental political development of the
recent recession years in the Community has been the rejection, on the whole,
and despite contrary pressures, of the national autarkic economic policies pro-
posed primarily, but not only, by the left-Socialists and Communists. This is
particularly striking in view of the depressive effects on the economies of all
Community members of Germany's slowness to reflate its domestic economy.
This, and the tendency of industry to seek protection on a Community rather
than national level, indicates the pressures for maintaining inter-dependence
which, for good or ill, already exist inside Western Europe. This is perhaps the
central issue. If continuing unemployment, or the Union of the Left in France
or the Italian Communists, were to revive the pressures for national protec-
tion, Western Europe as a cohesive political force would probably cease to
exist. If these pressures can be contained, the European Community, under the
pressure of outside developments, is likely to continue growing and to become
a key factor in the whole evolution of the continent.
Relations with the United States
In short, in a world where bargaining at the international level presses
harder and harder on national policies, the potential value of the European
Community to its members to increase their bargaining power and, paradoxic-
ally, its value to the world bargaining process as a means of mobilising the
resources of a quarter of world production and trade, are likely to grow. This
will inevitably involve it in the affirmation of European priorities. This in
turn could mean a more tense relationship with the United States, which is the
central external factor in European policies, although the record on trade
where a `partnership of equals' already exists compared, say, to energy where
it does not, suggests that this need not at all be a destructive one and can actu-
ally be necessary to the balanced development of the international system. It
has, however, often been assumed that the United States, as the patron of the
Western system, must in the end make it impossible for Western Europe to
exercise even `civilian power'.
It is often claimed that international cooperation, based on United States
leadership, is more effective than a partnership with the European Community
which has great difficulty in reaching decisions or in changing them once
they have been reached. Yet the difficulties the United States now has in exer-
tio~:
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 ,
negrL tion of the German and Japanese economies and even on Nato. What one sees
Approved For Release 2004/03/25: CIA-RDP81 800401 R002100040011-6
--,D ---,D ~~