Social Market Economy and the Future of European Unification

AuthorDario Velo
PositionUniversity of Pavia, Italy
T EA U R, V. 1 N. 0/2014
Social Market Economy and the Future of European
Dario Velo*
Abstract. Europe and the world are now facing one another with two opposing visions containing
a series of forces and ideas. A first perspective asserted itself in the last part of the XX century and
resulted in globalisation, radical liberism (market without institutions) and relativism. A second
perspective is appearing now as a convergence of new ideals, and includes a new humanism, a
Social Market Economy, neo-liberalism (orderly relations between State and markets), human
rights, federalism and subsidiarity. Europe can develop a new economic, social and institutional
order, in this second perspective. Rules are called upon to guarantee the orderly development of this
new Europe. Monetary Union has already approved rules aimed at guaranteeing the management
of inflation and State deficits while respecting subsidiarity. Economic Union will be called upon to
develop this approach extending it to sovereign debt and means for development.
Key-words: Social Market Economy; Economic Union; Subsidiarity
1. Premise
From the very beginning the European integration process has had to deal with
two dierent philosophies oriented at guaranteeing the development of integration
and internationalization with opposite forms of governance for these processes.
One can identify a basically identical script that is repeated every time
important wide-ranging decisions have been made involving advancement in
the European integration process.
One rst example of such an event was the 1943 Algiers Conference.
* University of Pavia, Italy
Social Market Economy and European Unification
By 1943 it had become clear that the conict was drawing to an end and that
the Allies had won. Two more years were to pass before resistance by Nazi
Germany and Imperial Japan was bowed, but the outcome of the war was
already irreversibly decided.
In Algiers the Allies addressed the issue of what future there would be for the
European continent and, at a later date, a debate on post-war world order was
held at Bretton Woods.
Two opposing visions were outlined in Algiers. On one hand Churchill and
representatives of the more nationalist elements in American society supported
the need to create an area of free exchange in Europe, one governed by the
market with no need to attribute responsibility to continental European
States or to create European Statehood in any form. Using contemporary
terminology still not in use at the time, one could briey summarise this
position as the assertion of a globalisation process at an Atlantic level governed
by Anglo-Saxon powers.
is position was opposed by the vision espoused by president Roosevelt and
Jean Monnet1. e leaders of the French metropolitan resistance movement
also supported this position in Algiers, just a few days before it was annihilated
in Caluire2.
is position was fuelled by an awareness that the United States and Europe would
have to regulate their relations on the basis of cooperation which could only be
inter pares on condition that a European unication process would be started3.
e important decision to be taken was whether or not De Gaulle should
be replaced by a less authoritative general as France’s representative. is
was a decision of crucial importance. Churchill supported removing De
Gaulle, whom he saw as an obstacle to plans to create a free trade area with
no autonomous governing capabilities, while Monnet sided in favour of De
Gaulle, whom he saw as the kingpin of Europe’s future capability to resume
an evolutionary international role.
In order to start a European unication process, it was rst necessary for
1 Jean Monnet attended the Algiers Conference as president F.D. Roosevelt’s personal delegate.
2 In Caluire the leader of the French resistance was arrested by the Gestapo during a meeting after
being betrayed by a Stalinist member of the resistance. Historiography has not yet fully claried
responsibilities that led to this event.
3 Jean Monnet’s notes from the Algiers conference mention for the rst time the objective of creating
a European currency. Monnet’s handwritten notes are preserved in Lausanne in the archives of the Jean
Monnet Foundation.

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