Banking on Epic Crisis Reviewed work(s): Source: Economic and Political Weekly, Vol. 3, No. 3 (Jan.

20, 1968), pp. 189-190 Published by: Economic and Political Weekly Stable URL: http://www.jstor.org/stable/4358151 . Accessed: 25/01/2013 17:33
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ECONOMIC AND POLITICAL WEEKLY Desai have drawn apart in the last few months and that Desai cannot now count on Mohite's support against the Chief Minister. It has been suggested that Mohite, who was disappointed with the allocation of the relatively innocuous Housing and Transport portfolio to him, has more recently been given hopes of better things to come by both Chavan and Naik. It is his inability to bring together the different Congress leaders from) Western Maharashtra that has blunted D S Desai's thrust against the Chief Minister. Like Mohite, P K Sawant, another prominent Congressman from the area, who was Home Minister under the late M S Kannamwar and was tipped to succeed him, will not niake common cause with Desai. The other hurdle in Desai's way is the attin-main tude of Y B Chavan who also hails from Western Maharashtra. Chavan seems to be convinced that the only real challenge to his present overlord ship of the Maharashtra Congress can come from a Maratha leader who can unite the Western Maharashtra region behind Vim. So he has consistently kept down leaders from the region. It was he who was responsible for downgrading P K Sawant after he had held the State Home Ministership with widely-acknowledged competence. It was Chavan, again, who put the brake on D S Desai's meteoric rise to the top as a popular mass leader. By contrast, Chavan has not hesitated to promote V P Naik. He has not! looked askance at Naik's slow emergence as a leader in his own right after beginning purely as his protege. He has now further raised Naik's stature by securing his election to the AICC Working Committee.
UNENVIABLE POSITION

January 20, 1968 Administerpin-pricks. Thus the Karad Taluka Congress Committee recently organised an all-party 'morcha' against Desai accusing him of favouring Patan taluka in the allocation of relief funds to the neglect of the other areas.

farmers in the State for raising resources for earthquake relief was turned down. On the other hand, his (lifferences with other Congress leaders from Western Maharashtra will be exploited to create problems and

BRUSSELS

Banking on Epic Crisis

THE new year dawned for the EEC just as it usually does in these latitudes - cold and gray but with a promise of sunnier weather in three or four months' time. For the moment a thick fog blankets the landscape, natural as well as political, so that both physical objects and recent events seem blurred and indistinct. Even the French veto on negotiations with the U K has lost much of its impact, largely as a result of the euphoria induced by the long Christmas and New Year weekends. straightforward forecasts of earlier years. The prevailing note this year is likely to be one of uncertainty, therefore, with at least five of the six member countries in search of a policy towards Britain and the other three applicants for membership, on the one hand, and the EEC itself on the other. The instinct of self-preservation probably will work in favour of the EEC; the possibility of a prolonged bout of non-cooperation by France's partners is discounted in Common Market circles here. With the customs union stage virtually completed, it is unlikely that even the Dutch will push resentment against General de Gaulle to the point of paralysing the Community.

In the circumstances D S Desai is unlikely to be able to make much political capital out of his work for the relief of the earthquake-affected.On the contrary, as Revenue Minister, and therefore officially responsible for the relief operations, he is in an unenviable position. While much of his political future depends on his ability to organise efficiently the rehabilitation of the earthquake-affectedpeople, it is unlikely that he will have a free hand with regard to resources for the task. It is known, for instance, that a suggestion to impose a levy on rich cash crop

Trying to peer into the future through the haze of goodwill and optimism generated by the year-end festi vities is always a difficult task, but thl difficulties have been compounded this STOPPING AT CUSTOMS UNION year by the fact that 1967 ended very It is possible, however, that the differently from its predecessors. Uintil last year, December invariably was progress towards full economic integragoal under the Treaty of marked by a marathon session of the tion -the Common Market Council of Ministers, Rome - will stop with the customs during which the six foreign ministers union. The fact is that the most diffiwould work feverishly to settle in two cult tasks - harmonisation of policies days all the problems they had been, in such different fields as foreign trade, Loyingwith for a year. These sessions taxation, transportation, company law, lie ahead. To carry them out would invariably end at dawn with the etc -still ministers visibly tired but triumphant. successfully will require a stronger poliIt only remained for the Common tical will than the Six have shown so Market chroniclers to declare that the far. Rather than make the effort now future of the EEC had never looked some member countries may prefer to wait. (The Dutch, for example, maintain brighter. that the Common Market should not The old cliches will not work this be completed before the UK and other year for the Six did not follow the EFTA countries have joined.) scenario last December: the meeting But there are others who argue that of the Coun'cil ended on a note of the Six cannot stop at a customs union. confusion, with France's five partners They must adopt a common commercial trying at one and the same time to policy at the very least if their cuscondemn her and yet not isolate her toms union is to operate smoothly. (they managed to square this particular According to this view, the member circle by adopting many of her views). states have no alternative but to carry Although the dread words "crisis" and on with the construction of an econo"veto" were used fairly liberally (es- mic union. The process could have pecially in the British press), in the been brought to a halt had Britain's end it looked as if there had been entry into the EEC appeared immiinent; neither crisis nor veto, onily a hopelessly but as this is unlikely for another confused situation which ruled out the three to five years, the Six must con189

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January 20, 1968 tinue with the implementation of the Treaty of Rome. Meanwhile the British

ECONOMIC AND POLITICAL WEEKLY Observers here expect the initiative for reopening the British question to come from Bonn. It is pointed out that the Germans have maintained a discreet silence since the last meeting of the Council of Ministers and havc shown themselves very lukewarm to the suggestions for closer bilateral relations between the UK and the Five T-he German Chancellor, Kiesinger, clcarly disapproved of Wilsorl's tactics last year; in his view the result of the Five's decision to bring mattcrs to a head on December 12 (reportedily taken only because pressure from Britain was growing intolerable) was a foregone conclusion. German efforts presumably will be directed at persuading Wilson to accept something less than full membership. An association agreement could be of great help to Britain in her present economic difficulties, and would facilitate closer bilateral relations between the Five and the UK. The price would be a substantial one, of course, for de Gaulle obviously lookr upon association as the surest means o- neutralising Britain politically cven while securing access to her market for France's agricultural surplus.
FRENCH OPENLY SCEPTICAL

trialists could be decisive in this case, although it is worth noting that the present Secretary of State for Foreign and Danes, Irish and Norwegianscould make the necessary adjustments Affairs, De Koster, is also a leading to their owni economies and prepare member of the D itch Employers' Fedethemselves for membership, as the ration and an important industrialist. French have suggested. BILATERAL RELATIONS WITH FIVE It is still too soon to say which course the six member states will choose. Both Much depends on British policy which the French and Germans can be expect- has been limited so far to maintaining ed to favour the continued development the application for full membership of the Community, to which both are and exploring the possibility of committed politically as well as econo- strengthening bilateral relations with mically. The Italians also are expected the Five. Although the latter seem ta to support the implementation of the have endorsed this policy, with the Treaty of Rome, although they nmay exception, of the Dutch, none of them oppose the conclusion of commercial or has indicated what form of collaboraother agreements with countries whose tion is envisaged. The fact is that the exports complete with their own. Econo- possibilities of bilateral arrangements mic considerations will compel the between the member states and the Belgians and Luxemburgers to collaboUK and other EFTA countries, are rate with their EEC partners: the limited. Any fruitful collaboration, in economies of both countries are closely such fields as industry or technology, the bulk of geared to their export trade, where there is no Community policy which is with other EEC countries. as yet, will necessarily be at the expense of the EEC, especially if the DUTcHHOSTILITY TO DE GAULLE Five should decide to pursue such a policy as a group. The Community could be effectively A strengthening of bilateral relations paralysed, however, should even one country choose to follow a policy of remains necessary, however, if only to non-cooperation. A great deal depends prevent the British from giving serious on the Dutch. So far their foreign consideration to the alternatives which minister, Luns, has been the most are being advocated on both sides of uncompromising in his hostility to de the Atlantic (of which the most attracGaulle. What is more, although the tive is that of a North Atlantic free economic situation of the Dutch is very trade area embracing not only the similar to that of the Belgians, they art EFTA countiies and the North Amerin can continent but also Australia, New strongly committed to the political inte gration of all Western Europe and seem Zealand and possibly Japan). The prepared to sazrifice their imnmediate emergence of such a bloc would i'ot economic interests in order to pronmote only postponY European integration it. For Luns, the latest French indefinitely but also reduce the importveto is evidence that the Community no ance of the EEC in the world. longer offers the surest road to politiIt is doubtful whether the Five could cal integration; he feels himself free to uise their bilateral relations with the explore alternative means to this end. UK to hasten the latter's entry inito This does not mean that the Dutch the EEC. French opposition is no now intend to withdraw from the EEC longer the only obstacle. The fact is -or even to block its development. that the arguments put forward by the They will continue to fulfil their exist- French foreign minister: Couve de ing obligations under the Treaty of Murville, made a deeper impression than Rome, although they will probably the Five seem prepared to admit. It is display considerable reluctance in accept- significant that all six countries agreed ing fresh ones. The danger which the that Britain cannot enter the EEC Dutch face is that they may find until she has put her economic house in themselves isolated within the Commu- order; under these circumstances the nity; and while the confirmed Anglo- French refusal to agree to immediate philes among them, such as Luns, negotiations appears as a legitimate such a development with difference of opinion rather than a accept equanimity, others may not. The posi- deliberate attempt to exclude the UK tion of Dutch businessmen and indus- from the Common Market.
190

A move by Bonn in the direction of association probably would be supported by the other EEC countries, with the possible exception of the Netherlands. Whether Wilson would agree to fall in with German plans is another matter, for it is extremely unlikely that the French could be persuaded to give a guarantee that association will represent a stage on the road to full membership. rhe only EEC country which can be said to face the new year with serenity is France. Although it is comnmitted the implementation of the to Treaty of Rome, de Gaulle is unlikely to pay much attention to the EEC. Hfe clearly expects the crucial developments in 1968 to take place elsewhere--- in the international monetary field, to be precise. The French are openly sceptical of the measures taken by Britain to refurbish its economy and by the US to reduce its mounting balance of payments deficit. They seem to expect a crisis of epic proportions before the year is out, a crisis from which the Six will be able to profit, if only they stick together.

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