The steady, if uneven, UK influence on European integration

Laurent Warlouzet looks at the evolution of European integration and the role the UK has played from within and outside. 

Britain has been at the core of the European integration process since its inception, despite frequent upheavals. In my recently published book, Liberty, Solidarity and Community: Capitalism and European Integration, I argue that there has always been a discrepancy between the official discourse of British leaders, who portrayed themselves as isolated champions of freedom battling continental Europeans, and the day-to-day reality of Britain’s constant engagement with Europe.

An examination of the British archives from Margaret Thatcher’s leadership (1979–1990), in particular, sheds light on how the Iron Lady sought to steer the single market programme in a free-market direction. She also supported greater cooperation in foreign policy and research and development, and she even lobbied Brussels to provide massive amounts of state aid for a limited number of favoured pet projects, from the Harland & Wolff shipyard to the Nissan plant in Sunderland. Obviously, she was later disappointed by what she perceived as excessive dirigisme emanating from Brussels.

Britain was highly influential in Brussels during its membership of the European Economic Community and later the European Union (1973-2020), notably through its powerful Commissioners, from Roy Jenkins to Leon Brittan and Neil Kinnock. Even after Brexit, once the disputes over the Covid-19 vaccines subsided, Britain has remained influential in Europe, largely thanks to its substantial involvement in supporting Ukraine. Even in trade, the attraction of the single market is so great (for the simple reason that, geographically speaking, Britain is still in Europe!) that it has proved difficult to conclude a comprehensive trade agreement with the United States. Such an agreement would probably require significant divergence from EU single market rules, causing major disruption to UK-EU trade in the process. For example, during talks about a putative US-UK trade agreement under the Premiership of Boris Johnson, the issue of the European Union‘s (in)famous ban of chlorinated chicken, which is permitted in the US, was raised.

Even before Thatcher, the UK had played an instrumental role in establishing the first European organisations: the Organisation for European Economic Cooperation (OEEC), which administered the Marshall Plan (1948), and the Council of Europe (1949). Although it initially refused to join the European Communities, it eventually became a member in 1973. Britain failed in its attempts to promote alternatives to the European Communities, such as the 17-country Free Trade Area proposed in 1956 or, failing that, the smaller seven-country European Free Trade Association (EFTA), established in 1960. Yet it remains to be seen whether Britain could revive a new kind of EFTA for the whole of Europe, now that Brussels is embarking on a wave of deregulation. The rise of far-right parties in Europe could hollow out the European Union from within by weakening its regulatory framework and federal judicial system, thereby reviving the model of a free-trade area as the organising principle of the European continent.

Britain is also still an “awkward partner” (an expression coined by a diplomat in 1980) for a European Union that seeks to pursue a more assertive trade and industrial policy. The book shows that Brexit has strengthened the European Union by enabling France to advance long-standing legislative proposals on industrial policy and protectionism that Britain had consistently opposed. Reintegrating Britain into the European Union, or even into some of its initiatives, such as European rearmament or proposals to establish a “European preference” for certain strategic products, would mean greater competition for EU firms. Should Britain be treated as a privileged partner or simply as a friendly neighbour?

Beyond the British case, the book advances two broader arguments. First, capitalism is not simply a contest between free-market advocates and supporters of welfare and environmental policies. There is also a third camp that favours protectionism and a more assertive foreign and defence policy. Accordingly, the governance of capitalism rests on three foundational principles: liberty (the free market), solidarity (social and environmental policies), and community (protectionism and assertive foreign and defence policies).

Second, in seeking to preserve peace while managing growing economic, social, and environmental interdependence, Europeans have chosen a distinctive path: European integration. This project has never been exclusively neoliberal. Rather, it has evolved through a combination of supranational ‘liberty capitalism’ national ‘community capitalism’ (industrial policy), and various forms of ‘solidarity capitalism’ (cohesion policy, the joint procurement and distribution of Covid-19 vaccines, environmental policy, and so forth). Drawing extensively on archival sources, the book also highlights the many alternatives considered by European leaders, including a free-trade area, economic planning, a carbon tax (as early as 1992), fiscal harmonisation, joint industrial projects, a common foreign policy, and a European army.

The book highlights some of the major questions for the EU, such as: is it able to cope with the return of power politics, or is it merely a regulated market? How does industrial policy need to shift in response to Trump’s policies? And how else might the European Union evolve to deal with the new world order?

Today, the central challenge is to develop European forms of ‘community capitalism’ – that is, a European approach to industrial policy and strategic protectionism. A major foreign policy challenge for the United Kingdom in the years ahead is whether the evolving European model is one which it wants to participate more deeply in.

By Laurent Warlouzet, Professor, Paris Sorbonne Université. For a longer summary of the book, see here, or the book is available in open-access here.