journal of european integration history revue d'histoire de l ...

98
Lise Rye Svartvatn
not only of a general character, liable to be corrected by an adjustment of exchange
rates, they also corresponded to certain differences in social and fiscal legislation.
That was why France had demanded the harmonization of social charges as a precondition
to the common market. The hope was that France’s partners, at least for a
while, would accept the soundness of this. 70
So far, little indicated that this would be the case. Outsiders had long argued
against harmonization and in favour of a French devaluation. Harmonization,
whether social or fiscal, was not considered a necessary precondition for a common
market. It would, the argument went, be identical with demanding that the other
countries would augment their production costs, which was considered a solution
without any chances of succeeding. 71 The Secretariat of the Intergovernmental
Committee had also produced a note on distortions in the Common Market with the
intention of proving that prior harmonization of charges was unnecessary, and that
it would be possible to correct the distortions of which France suffered through a
devaluation. 72 From a technical point of view the French were not foreign to this
kind of argument. While their reasons for not wanting to devalue were of political
and psychological nature, they still found this way of arguing maladroit. 73
Saved by the Germans
In October the question of social harmonization brought the negotiations for a common
market to a standstill. A few weeks later France and Germany hammered out a
compromise that enabled a successful completion of the negotiations. This compromise
simultaneously eliminated opposition to the common market within French
industrial circles.
Germany never believed that France’s ability to compete was hampered by social
costs constituting a larger part of production costs than in other countries. The
German Foreign Ministry based itself on experience from the ECSC as well as recent
investigations undertaken by the OEEC, which rejected that the burden of social
and fiscal costs in France would distort competition in a common market. The
German view was that indirect pay constituted a larger part of total hourly labour
costs in France than in most ECSC countries, but that total hourly labour costs were
not higher in France than in the other countries. 74 Accordingly, the German Foreign
Ministry was sceptical when the French delegation in July 1956 called for an investigation
into the expenditures made up of social costs in the different countries. In
its opinion, the scope demanded by the French was too narrow and could only pro-
70. Ibid.
71. MAE, DE-CE 1945-60, 612, Bertrand (OEEC) to Valéry (MAE), 11.08.55.
72. MAE, DE-CE 1945-60, 612, Note pour le Cabinet du Ministre, 19.09.55.
73. Ibid.
74. Bundesarchiv (BA), B 146/594a, Soziallasten, Lohn- und Steuerbelastung und der Wettbewerb auf
dem Gemeinsamen Markt, 27.06.56.