The Penguin History of the World

In some western European countries, too, minorities showed a new recalcitrance. Basque separatists terrorized Spain. Walloons and Flemings nagged at one another in Belgium. Northern Ireland was probably the most striking instance. There, Unionist and Nationalist feeling continued throughout the 1990s to block the road to a political settlement. In 1998, in co-operation with the Irish government, British initiatives succeeded, against the odds, in winning the acquiescence of the official leaders of Sinn Féin and of the Ulster Unionists in getting accepted in an all-Ireland referendum proposals that went further than ever before in institutionalizing both safeguards for the Nationalist minority in the north and the historic tie of the north with the United Kingdom. This so-called ‘Good Friday Agreement’, of course, implied fundamental change in what the sovereignty of the Crown was to mean in the future (and incidentally went much further than the measures of devolution the British government was contemporaneously introducing in Scotland and Wales). It was to spare the province from the terrorist outrages that had dominated for nearly thirty years.

From 1986 the passports issued to citizens of the member states of the EC had carried the words ‘European Community’ as well as the name of the issuing state. In practice, however, the Community faced growing difficulties. Although the main central institutions – the Council of Ministers of Member States, the Commission and the Court of Justice – worked away, they did not do so without contention, while policy – notably over fisheries and transport – provoked well-publicized differences. Fluctuations in exchange rates were another source of awkwardness and institutional bickering, especially after the end of dollar convertibility and the Bretton Woods monetary system in 1971 and the oil crisis. Yet in the 1980s there was solid evidence of encouraging economic success. The United States had resumed in the 1970s its pre-1914 status as a major recipient of foreign investment, and two-thirds of what it attracted was European. Western Europe accounted for the largest share of world trade, too. Outsiders became keen to join an organization that offered attractive bribes to the poor. Greece did so in 1981 and Spain and Portugal in 1986.

The latter turned out to be a decisive year, when it was agreed that a further step should be taken in 1992 to move beyond a mere customs union to a single, integrated, border-free internal market. After difficult negotiations, the Maastricht Treaty of December 1991 put in place arrangements for the single European market and a timetable for full economic and monetary union to be achieved not later than 1999. Capital, goods, services and people were to move freely without let or hindrance across national borders at last. Once again, reservations and special arrangements had to be made for the cautious British. Margaret Thatcher’s successor as prime minister, John Major, was something of an unknown quantity, but almost at once he found himself upholding his country’s position in the Maastricht negotiations at the head of a party divided over it.

The treaty that resulted opened the way to a single currency and an autonomous central bank to regulate it. Maastricht also gave citizenship of the new European Union (EU), which replaced the EC, to the nationals of all member states and laid down an obligation on its members to impose certain common standards in work practices and some social benefits. Finally, the treaty extended the area over which EU policy might be made by majority votes. All this looked like a significant accretion of centralized power, although in an effort to reassure the suspicious the treaty also set out agreement to the principle of ‘subsidiarity’, a word rooted in Catholic social teaching; it indicated that there should be limits to the competence of the Commission at Brussels in interfering with the details of national administration. As for agreement over European defence and security policy, this was soon in disarray thanks to events in Bosnia.