Community in Disarray

The European Coal and Steel Community, the first of the grand international enterprises undertaken by Western Europe after World War II, formed the nucleus of the Common Market, and ever since has been considered a model for economic development. The Community promoted steel and coal production, cut tariffs, achieved fair pricing, and took much of the malice out of Franco-German industrial rivalry. Now, however, just when it should be congratulating itself on its long-term success, the Community seems to be falling into disarray.

The organization's very reason for existence is to solve coal and steel problems for Western Europe as a whole. Yet the Community's Italian president, Dino del Bo, who reportedly has threatened to resign, says that "since June we have watched a development of replacing a community plan with dangerous and unacceptable national plans."

The French government has threatened to give its own steel industry a competitive edge by granting it a $600 million low-interest modernization loan and by buying more cheap American coal. Germany says it may help its overstocked and overpriced coal industry with a straight subsidy. The Italians and the Dutch are happily selling steel from their new, competitive seaside plants wherever they can.

Beyond Needs. When the organization was established in Luxembourg in 1952, coal and steel were urgently needed for the reconstruction of Europe. Now there is too much of both. Then, coal supplied 75% of Europe's energy needs, but coal's proportion of the total has been cut to 35% by the increasing use of other fuels, mainly oil. Demand for steel continues to grow but at a slower rate, and modernization of plants has raised steel capacity beyond actual needs. Western European steel plants, which normally work at 90% of cinacity, have had to cut back to 78% of capacity for the second half of 1966, and the price of steel plate has dropped from $107 a ton two years ago to $99 today.

Faced with the problem of dealing with overproduction rather than with underproduction, the Coal-Steel Community's High Authority in July proposed as a first step what amounted to a coal subsidy to be paid to Germany by the other five members. This would have enabled German coal to compete with U.S. coal, which sells for $4 a ton less in Europe. But the French vetoed the plan on the grounds that they did not want to subsidize the German coal industry and that they did not want to give the High Authority any more "supranational" power. Then the threats of separate national solutions started.

Separate Ways. The High Authority has been sending groups of experts around to talk to coal and steel men, hoping to build up so much pressure that when the Community's Council of Ministers meets on Nov. 22 the French will be more friendly. Said one Coal-Steel official: "The Community is just going to crumble if the nations do go their separate ways and seek national solutions, but in two years the problem will only be worse when the national solutions haven't worked. The experiences of the 1930s prove that Europe is too small to try to export your problems to your neighbors."

The French seem unconvinced. "Sacrifice imposed on a country by an authority other than its own is unacceptable," said French Foreign Minister Maurice Couve de Murville last week in Paris, adding that France's experience with the Coal-Steel organization had been "lamentable." Concluded Couve: "Nothing has taken place in Luxembourg except coal crises." That sounded ominous for the Community's future.

This file is automatically generated by a robot program, so reader's discretion is required.