Customs Union: from Zollverein to irrelevance

By Ian Milne

Preamble

Orwell’s Nineteen Eight Four came out in 1948, less than a decade before the official birth of the European Community.  In Orwell’s vision, three totalitarian super-states, Oceania, Eurasia and Eastasia, were perpetually at war.

The European Community was – is – merely the latest version of the chimera of a single European state that had been pursued in the nineteenth century by writers such as Victor Hugo, by Continental tyrants such as Napoleon, and, in the twentieth century, by German governments led in 1914 by Bethmann-Hollweg  and from 1933 to 1945 by Hitler.

Consciously or not, the European Union was built on similar assumptions: that the post-war world would consist of huge “blocs”, competing for resources & markets, and that European states were destined to amalgamate into a single state. In the Eurocrats’ weltanschauung – world-view – North America constituted one bloc, Europe another, while to the East, (the Soviet Union, its first candidate, having failed) China would exercise hegemony over the Asian land-mass.

The EU Customs Union

Since its accession to the “Common Market”,  “British Trade Policy is not to have a British Trade Policy”. The UK hasn’t been in control of its own trade policy since 1973. What the UK has had since 1973 is being trapped – for the first time in its history – inside a customs union – the EU Customs Union.

The EU Customs Union, the only one in the developed world,  is a relic from the “Fifties” –  the 1850s. This is how it came about.

In  German & French “received wisdom”, customs unions are (still !) a peculiar obsession. The 19th century German customs union – “Zollverein” –  was the mechanism associated in the German collective consciousness with the Bismarckian creation of Prussia & then the German Empire.

On 4th September 1914, a few weeks after the  outbreak of the First World War,  Chancellor Bethmann-Hollweg issued his letter setting out German war aims. War aim number four1 was to “create a central European economic association through common customs treaties…….”. (A Figaro journalist, Eric Zemmour, describes this as a plan for the “vassalisation économique” of France through the mechanism of a customs union2.)

Two years later, in 1916, when the war wasn’t going too well for Germany, Berlin offered a separate peace to the Belgian Government (then in exile in Le Havre3), involving the evacuation of German occupying forces from Belgium & the signing of a bi-lateral Belgian-German customs union4.   This was turned down by the Allies.

In early 1917, when a compromise peace with Britain, France and Russia might just have been possible, German aims were for a “German peace” with a customs union led by Germany and with the involvement of Austro-Hungary and Romania, thereby solidifying Germany’s hold over its supposed allies and converting them to a de facto part of the peacetime German economy, no different from Alsace-Lorraine and a large slice of Belgium which Germany also proposed to retain.

In the next war, in 1942, when Germany still believed it would win, the Reichsbank organised a conference5 in Berlin to plan how Germany would run the European economy afterwards.  This involved a European Customs Union – Zollverein – very similar to the one we have today.  (It also involved a single currency with – believe it or not – an opt-out for the UK).

 Almost two centuries on, in 2016, with average customs duties worldwide (including in the UK) down to a little over one per cent6, customs unions have lost whatever economic raison d’etre they ever had.

The EU is likely to experience a significant decline as an important trading partner in the future due to demographic issues. These two Global Britain briefing notes (here and here) list the projections for population growth and decline within and outside the EU. It is particularly interesting to see the very different projections for France and Germany.

Ian Milne

1          The full text (translated) is: “We must create a central European economic association through common customs treaties, to include France, Belgium, Holland, Denmark, Austria-Hungary, Poland “sic”, and perhaps Italy, Sweden, and Norway.”
2          Eric Zemmour, Figaro, 29.9.16 
3          The building which housed the Belgian government in exile between 1914 & 1918 survived the 1944 bombing & still stands in Saint-Adresse, a suburb of Le Havre.
4          Georges-Henri Soutou, La Grande Illusion, 1914-1920, pp 75.
5         The title of the 1942 conference was “Europäische Wirtshaftsgemeinschaft”
6          In 2013, 82 % by value of all UK imports of goods from outside the EU bore zero customs duties. The remaining 18% of such imports bore an average rate of EU-mandated customs duties of 8%. That 8% average is likely to be lower now.

 

Photo by Polybert49

Witness to History

LORD WALSINGHAM (now aged 92) was a Third Secretary in the German Department of the British Foreign Office in 1950, when the foundations were being laid for the first stage of what is now the EU. It was then called the European Coal & Steel Community. He was Secretary of the tripartite study group (The UK, USA and France) which  cancelled all denazification to rebuild Germany against communist Russia for the Cold War.

This link is to a youtube video where he recounts his experience (approx 35 minutes)

Whilst the project was ostensibly about securing peace in Europe, British intelligence was well aware that there were secret additional  agreements in the Coal & Steel Treaty between Germany and France to weaken British heavy industry, eventually to undermine Britain’s defence capability so that the European project  would dominate Europe unchallenged in the long term.

Britain did not join the Coal & Steel Community but neither did it make public the ulterior, anti-British intentions of the “Fathers of Europe”. At the time Britain was  heavily indebted to the USA which was backing the EU project and funding the European Movement through the CIA.

The European Coal & Steel Community was intended to lead to a united Franco/German European army but the French National Assembly voted that down. Jean Monnet, Schuman and colleagues decided that they needed to proceed more gradually as the nations of Europe were not then ready to assent to their  dissolution in a single European polity. The European Economic Community was founded on this principle of small, repeated inexorable steps towards “ever closer union”. The process was called “Engrenage” – like a ratchet, it was irreversible. The Treaty of Rome set this up in 1957.

The name “European Economic Community” is highly significant. As a businessman, Monnet well knew the importance of brand loyalty. Every politically aware German of the Nazi era would recognise the  “Europaeische Wirtschaftsgemeinschaft”,  set up to build integration between the countries of Europe after the Nazi victory of 1940 and widely publicised in a collection of papers of the same name, published in Berlin in 1942. Translations of the introduction and main paper are available here. Apart from some descriptions of contemporary events, there is nothing in them which has not come out of the EEC and the EU in the last sixty years. The mindset and geopolitical world outlook are virtually identical.

The post war EU’s biggest project by far, the Common Agricultural Policy, was decided in 1962 but it was based on the clear guidelines, laid down twenty years before in Nazi Berlin (link here).  Now, of course, the Nazi EEC turned out to be mostly propaganda because the pressures of war overtook and destroyed it – but many of its intentions, including dominance over central Europe have been carried into effect under the EU flag , since the fall of the Berlin wall.

The Nazis were adapters rather than inventors of the project, which had been on official German minds for generations. On 9 September 1914, the Imperial Chancellor Bethmann Hollweg wrote:- “Russia must be pushed back as far as possible from Germany’s Eastern frontier and her domination over non-Russian vassal people broken… We must create a Central European Economic Association through common customs treaties to include France, Belgium, Holland, Denmark, Austria-Hungary and perhaps Italy, Sweden and Norway. This association will not have any common constitutional supreme authority and all members will be formally equal but in practice under German leadership and must stabilise Germany’s dominance over central Europe”.

Monnet, Schuman and colleagues added the “common constitutional supreme authority” in the form of the European Commission but the project is still highly congruent with the remarkably stable, long term objectives of Germany’s political class since the 19th century.

In late 2016 the German government allocated 4 million Euros to an investigation into the influence  of Nazi personalities and policies in the post war era.

State of the Disunion as 60th anniversary celebrations approach

No doubt there were huge sighs of relief in Brussels that fewer Dutch voters than expected supported Geert Wilders’ anti-establishment PVV in the country’s recent General Election and that the VVD (Liberal) party, led by Prime Minister Mark Rutte gained the most seats.

A few days before the European Union’s 27 remaining members meet to celebrate the sixtieth anniversary of  Treaty of Rome, they can breathe more easily – at least for now. However, Mr Wilders was never going to become Prime Minister due to the multiplicity of political parties in the Netherlands, virtually all of which ruled out going into coalition with his party. If the PVV had become the largest party in the Dutch Parliament, it would have nonetheless emboldened anti-EU parties in France and Germany, where elections are also due later this year.

Even so, next weekend’s festivities cannot disguise the harsh fact that the EU is becalmed, with no clear sense of direction. Eurosceptic parties may not yet be on the verge of forming governments in Western Europe, but their support is growing steadily. In response, Jean-Claude Juncker, the President of the European Commission, has recently published a white paper offering five different future scenarios for the bloc’s future.

In a nutshell, these range from pressing on with ever closer union (Scenario 5) at one extreme to a reduction to nothing more than a Single Market (Scenario 2) at the other. The other three options are a two-speed Europe (Scenario 3), with some countries integrating faster than others, “Doing less more efficiently” (Scenario 4) and “Carrying on” (Scenario 1).

The ever-closer union option is unlikely to gain much favour in Eastern Europe, especially Poland and Hungary. The current Polish government is a supporter of repatriating power from Brussels and the recent reappointment of Donald Tusk, a member of Poland’s biggest opposition party, as President of the European Council against the wishes of Poland’s government, is not going to improve relations between Warsaw and Brussels. Poland’s foreign minister, Witold Waszczykowski said that his country will “play a very rough game” in the European Union.

Hungary has no appetite for interference in its internal affairs by Brussels. The European Commission has criticised the construction of a razor wire fence on the border with Serbia, but Hungary has ignored the criticism and pressed on regardless.

Then there are Greece’s problems. Our friends in EPAM, a Greek Eurosceptic organisation, are organising protests against austerity outside several Greek embassies, including one in London, on Saturday 25th March. The organisation claims that austerity has bitten so deep into Greece’s fabric that lives are being lost as the country’s health service has reached the point of collapse. One article recently brought to our attention claims that “The country is rotting inside the EU and the eurozone. The Greek people have crashed economically. Greek cities, because of massive illegal immigration, look less like cities in Europe and more like cities in Afghanistan. Banks have begun the mass-confiscation of residences. The people are on the verge of revolt.

Of course, it is the Euro, one of the EU’s flagship policies, which has put Greece into its current straitjacket. Until recently, however, support for both the Euro and EU membership was remarkably strong. Almost two years ago, at the height of the last financial crisis, over 69% supported remaining within the Eurozone, with 56% wanting to keep the single currency even if it meant harsh austerity measures being imposed.

Such statistics act as a reality check to those of us in the UK whose dislike of the EU is so intense that we find it hard to figure out why other countries are not preparing to follow us out of the exit door.  We have never been keen on pooled sovereignty and for us, the EU’s “Ring of death” flag is a badge of shame. Across the Channel, things are viewed differently. Member states which suffered years of Soviet rule or military dictatorships view EU membership as a symbol break with a past they are all too keen to forget. While not all the EU’s leading lights are such gushing  federalists as the Belgian MEP and former Prime Minister Guy Verhofstadt,  there are still plenty of enthusiasts for the project. For instance the Spanish MEP  Esteban González Pons who called Brexit “selfish”, claimed that the EU was the “only alternative” in an increasingly globalised world and expressed the hope that one day, we would one day “come home”  – re-join the EU in other words.

Such sentiment seems almost laughable given that others in the EU clearly view  Brexit as a great opportunity to press on with closer union now the pesky foot-dragging Brits are going their own way.  We will no doubt hear much about how wonderful the EU is during next weekend’s celebrations, but once the festivities are over, the leaders of EU-27 will have to look long and hard at Mr Juncker’s five options for the EU’s future and coming to a consensus isn’t gong to be easy. Geert Wilders may not have achieved the breakthrough for which he hoped, which in turn has made Marine le Pen’s already difficult path to the Elysée Palace even harder, but the EU has only won a short-term reprieve.  A big fireworks display in Rome cannot disguise the fact that it faces a serious identity crisis which it shows little sign of being able to resolve.

Photo by Christopher Lotito

A letter from our Chairman:- “How BBC was “nobbled” before our vote to join EEC.”

This letter appeared in the Derby Evening Telegraph on 2nd March 2017

Sir, The President and the Media

Saros Kavina is quite right that a free press and media are important to a free society. But President Trump has shown some discernment in excluding the BBC from his press conference.

What has emerged from the American election is that the media are composed of a collection of interest groups with their own agendas which they promote quite ruthlessly, bending the facts where it suits them.

As a long-serving independence campaigner, I would rate the BBC as amongst the worst offenders. Its part in manipulating public opinion in the Seventies in favour of entering the EEC was fully admitted in a Radio 4 programme “Letter to the Times” of 3rd February 2000. Contributors included Sir Edward Heath, Roy Hattersley and the Conservative marketing man, Geoffrey Tucker, who organised the campaign which brought the influential on side. Apart from the Daily Worker, every single national newspaper supported the European project.

This is what Tucker said.

We decided to pinpoint the “Today” programme on radio and followed right through the news programme during the day…. the television programmes “News at Ten”, “24 Hours” and “Panorama” and from radio “World at One “ and “Woman’s Hour”. Nobbling is the name of the game. Throughout the period of the campaign, there should be direct day by day communication between the key communicators and our personnel – e.g. Norman Reddaway at the Foreign & Commonwealth Office and Marshall Stewart of the “Today” programme. And in 1970 the “Today” programme was presented by Jack de Manio, who was terribly anti European. We protested privately about this. Ian Trethowan listened and de Manio was replaced.Ian Trethowan, a personal friend of Heath’s, was the BBC’s Director of Radio.”

So the BBC was under daily direction by the Foreign Office as to what it should say to British people, in the interests of a foreign organisation, the European Economic Community. Norman Reddaway went on to a knighthood and to be ambassador to Poland. BBC policy has remained unchanged ever since.

So, to Saros Kavina’s advocacy of the free media, I agree that it would be a good idea.

Yours faithfully

Edward Spalton

Donald Tusk (not Trump!) Reminds us why we voted to leave

We will not be providing you with a blow-by-blow commentary on the progress of the European Union (Notification of withdrawal) Bill as we believe that, in spite of opposition from the Lib Dems, the SNP, some Labour MPs and Ken Clarke, it will complete its passage through Parliament in time for Mrs May’s deadline of 9th March when the government will formally trigger Article 50.  There will be plenty of press coverage and analysis for people wanting to follow the Bill’s progress through both houses of Parliament but this website will confine itself occasional comment on the key moments of the Bill’s progress. We will also be monitoring which MPs support and which oppose the will of the people.

Of more immediate interest is a speech by Donald Tusk, the President of the  European Council, which provided a welcome reminder why we voted to leave. In order to understand where Mr Tusk is coming from, we need to remember that next month marks 60 years since the signing of the Treaty of Rome, which formally inaugurated what has become the European Union. Naturally, the EU wants to celebrate this milestone but we pesky Brits have already spoiled their party with Brexit and, to add insult to injury, the USA has voted for a president who, in the words of Ted Malloch, the new US ambassador to the EU, “doesn’t like an organisation that is supranational, that is unelected where the bureaucrats run amok and that is not frankly a proper democracy.”

So what was Mr Tusk’s response?  The answer is – guess what – More Europe! “We must therefore take assertive and spectacular steps that would change the collective emotions and revive the aspiration to raise European integration to the next level”, he said. Yes, he means further integration. Just to make sure no one could be in any doubt, he also added “If we do not believe in ourselves, in the deeper purpose of integration, why should anyone else? In Rome we should renew this declaration of faith.”

He did not go into much detail about how integration was to proceed, There was no mention of fiscal or monetary union within the Eurozone, although he did talk of “strengthening the foreign policy of the EU as a whole.” Brexit received only a very oblique mention when he claimed that “the disintegration of the European Union will not lead to the restoration of some mythical, full sovereignty of its member states, but to their real and factual dependence on the great superpowers: the United States, Russia and China. Only together can we be fully independent.”

Why could no EU member state be fully sovereign? On which superpower is New Zealand, with a population less than one eighth of Mr Tusk’s native Poland “really and factually” dependent? Or Australia, India, St Helena, South Africa or Morocco, to name a few countries at random.

There is a particular irony in this statement given that many EU member states are also members of NATO and have been accused, with good reason, by President Trump of being too dependent on the USA for their protection.

Tusk complained about “Russia’s aggressive policy towards Ukraine” without the slightest mention that the EU must take the blame for the current state of that country by fermenting opposition to a democratically-elected leader.

He also complained that, faced with “national egoism….becoming an attractive alternative to integration”, the pro-European élites (his own term, may I add) were suffering from “a decline of faith in political integration.”

In other words, it’s the same old message, underpinned with the belief that if it is repeated sufficiently, it will convince the doubters. Tusk’s political rival Jaroslaw Kaczynski, however, is unlikely to be impressed. The leader of Poland’s ruling Law and Justice Party has called not for more integration but for the very opposite- a new treaty which would return power to the member states. “The vision of the EU forced upon us by the Lisbon Treaty has failed”, he said.

Thinking back to this time last year, we will recall that David Cameron went to Brussels asking for something similar – a return of some power back to the UK. He came away with only a few crumbs which ultimately didn’t sway the voters and we wisely voted to leave.

Neither Poland nor fiercely EU-critical Hungary looks likely to follow us out of the door at the moment, but Mr Tusk’s words were those of a man who realises that supporters of the European project are on the back foot at the moment. Unfortunately for him, the determination he expressed to carry on ploughing the same old furrow is unlikely to address the growing disillusion with the project across a number of EU member states.

“If you find yourself in a hole, stop digging” goes the old saying and there is much wisdom in it. Unfortunately, Mr Tusk and his friends in Brussels seem both unable and unwilling to turn their digger off.

Photo by Glueckstadt

Death of a parliamentary colleague

Death of a parliamentary colleague – Nigel Spearing

Nigel’s death comes at a turning point in our long and arduous campaign against UK membership of the EU. He was always a strong opponent of the ‘European Project’  to build a United States of Europe without first getting the approval of its peoples. He was one of the first Labour politicians to appreciate there could be no compromise with the Eurofanatics in the British Press and Parliament. The weakness of their arguments was finally exposed in the 2016 Referendum campaign. Until his final illness, Nigel was a stalwart of our long drawn out battle to save the country we loved from an ignominious future as an outpost of a superstate. His work for our cause over several decades, in and out of Parliament should be long remembered

Eric Deakins

Former Labour MP

1970 – 1987