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30Wolfram Kaiserates must not hinder the future development of the Community in the direction ofever increasing unity, including unity in fields not yet covered by the Treaty ofRome.” 88As the talks between the Six and the EFTA neutrals never reached the stage ofserious negotiations, the implications of their possible EEC association were onlydebated in these broad terms during 1961-3. However, some of the key issues werelater discussed in much greater detail when the EEC first held exploratory talks andthen negotiated about association during 1963-7 with the Austrians who hadrenewed their application after de Gaulle's veto. From the beginning the Austrianapplication met serious objections. The Italians, for example, insisted that a simpletrade agreement according to Article 113 of the EEC Treaty was entirely sufficientto safeguard Austria's economic interests. They managed to delay, first the considerationof the merits of the Austrian case by the EEC Commission, which finallysubmitted its generally favourable report in June 1964, 89 and later the start ofexploratory talks. Neither were the Benelux governments happy about the Austrianpolicy of going it alone, although for different reasons. Enraged by de Gaulle's unilateralveto against British EEC entry, a cornerstone of their own European policies,the Dutch and Belgians were primarily concerned during 1963-4 to avoid anyaction which could upset the internal cohesion of EFTA, of which Austria remaineda member, in order to maintain some degree of external pressure on the Six and deGaulle. 90Austria's talks with the EEC failed in 1967, ostensibly over Italy's veto in thewake of a bilateral crisis with Austria over bomb attacks in South Tyrol. 91 Yet, theywere pioneering in that they represented the first serious negotiations over economicassociation according to Article 238 between the EEC and an advancedindustrial country. The key issues, which were controversial then, were later tocome up once more in the negotiations between the Community and the remainingEFTA countries over the creation of the European Economic Area (EEA) in theearly 1990s. For example, the Six – and the Italians in particular – were unwillingto award Austria all economic advantages of integration in a de facto customs unionwithout compensatory financial contributions to the EEC's development and socialfunds. This controversy foreshadowed the dispute in the EEA negotiations overpayments by EFTA countries into the so-called cohesion fund, which were to benefitthe poorer Community member states.88. Nicholls (Brussels) to Reilly: PRO FO 371/164698/15 (10 January 1962). See also the summary ofthe comments on the Birkelbach report by the EEC Commissioner, Jean Rey: PRO FO 371/164700/50.89. EEC Commission, “Assoziierung Österreichs mit der Gemeinschaft. Mitteilung der Kommission anden Rat vom 3.6.1964”: PA AA/MB 211.90. Cf. “Beziehungen zwischen der Gemeinschaft und Österreich – Stand der Gespräche (November1964)”: PA AA/MB 212.91. On this issue see also M. GEHLER, “Die österreichische Außenpolitik unter der AlleinregierungKlaus 1966-1970”, in: R. KRIECHBAUMER et al. (eds.), Die Transformation der österreichischenGesellschaft und die Alleinregierung Klaus, Salzburg 1995, pp.251-71.
Challenge to the Community 31The Austrian government, on the other hand, insisted that its neutrality statusabsolutely required the retention of the right of autonomous rather than automaticadaptation to EEC legislation. Then, as in the EEA Treaty twenty-five years later,however, this demand was rejected outright by the Community, which regardedsuch a legal arrangement as a serious threat to its constitutional integrity and, moreover,as an undeserved reward for a country that was not prepared to join as a fullmember. Figgures, the General Secretary of EFTA, had already anticipated the defacto exclusion of associate states from EEC decision-making in a personal memorandumon association which he submitted to EFTA governments in March 1962. Itstated “that it is certain that the Neutrals will have to pay a heavy price in that theywill de facto, be bound to follow decisions over a wide range of economic andcommercial matters in the making of which they may have played little part”. 92Yet, despite the importance of the association dispute for the EFTA neutrals, thekey issue for the Community during 1961-3 was enlargement. The analysis of thedebate among the Six about the economic benefits of enlargement reveals that substantialprotectionist interests existed which tried to prevent enlargement or at leastto stiffen the entry conditions. In the Federal Republic, for example, the wood pulpand textile industries were concerned about additional competition from the EFTAstates and the Commonwealth. The coal industry, too, intervened frequently inBonn, arguing that before enlargement could take place, it wanted improved conditionsof competition in comparison to the nationalized coal industries of France andthe prospective new member state, Britain. 93 German agriculture, too, feared negativeconsequences of enlargement, mainly in the form of lower CAP prices, forexample in cereals, which the more competitive French and British producerswould largely determine. In contrast, the German government rightly expected positivefinancial consequences of the EEC's enlargement by Britain as another netcontributor to the budget. 94While Adenauer instrumentalised these protectionist economic interests in theEuropean debate in his government and his party, however, they were clearly outweighedby the long-term interests of German export industry, which was unequivocallyfor enlargement. The BDI leadership strongly supported enlargement. Moreover,enlargement was not debated exclusively or even mainly as an economicissue. Instead, the debate was in a much wider political and cultural sense aboutwhat constituted Europe and how this Europe ought to develop in future. With hisconception of a more tightly-knit core Europe based essentially on the Franco-Germanalliance and paying little attention to the interests of EFTA and other WestEuropean states, Adenauer was increasingly isolated. The emerging political consensuson the desirability of enlargement encompassed not only the oppositionSocial Democrats and the Liberal Free Democrats, who had been Adenauer's92. Figgures (Geneva) to EFTA governments: PRO FO 371/164703/119 (8 March 1962).93. Unternehmensverband Ruhrbergbau to Bundeskanzleramt: BA B 136/2561 (13 December 1962).94. For the economic analysis of the consequences of enlargement at the governmental level in the FederalRepublic see the joint Cabinet memorandum of four ministries “betr. Verhandlungen über denBeitritt Großbritanniens zu den Europäischen Gemeinschaften”: BA B 136/2560 (25 July 1962).
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