WESTERN EUROPE: In the Giant’s Steps

For at least two generations, Europeans have seen that the U.S. is the greatest economic success story in history. But the men in charge of Europe’s economic destinies long clung to the comfortable notion that the U.S. owes her prosperity not so much to superior economic techniques as to the generosity of Providence. Last week, in the two greatest capitals of the Continent, there was increasing evidence that this old assumption was dying, and that Europe, at long last, was prepared to profit by U.S. experience.

The most revealing of these signs appeared in West Germany, which in the last ten years has transformed itself from a vast rubble heap to one of the world’s top industrial powers. Though relatively abundant resources and an industrious population played a great part in this transformation, much of its direction was the work of West Germany’s cigar-chomping Minister of Economics Ludwig Erhard, who by kicks, tricks and cajolery has kept his nation on the straight and narrow path of Marktwirtschaft—free enterprise economy.

For Erhard the heart of Marktwirtschaft is the principle of free competition, firmly defined in the U.S.’s Sherman Act and subsequent antitrust legislation. Since 1950, the roly-poly Economics Minister has been struggling to persuade West Germany’s Bundestag to pass its own anti-cartel law. At times, Erhard’s fight—which Germans jestingly called “the Seven Years’ War”—seemed hopeless. No European nation had ever adopted a law comparable to the Sherman Act, and none appeared less likely to do so than Germany, fatherland of the classic cartel. (In the mid-1930s, experts estimated that nearly 2,000 cartel agreements were in force in German industry.) Already chafing under the decartelization imposed on them by the Allies at the end of World War II, West German industrialists (who furnish the ruling Christian Democratic Party with much of its funds) were in no mood to let Erhard saddle them with a permanent commitment to free competition.

Deficient but Hopeful. Compromising and tough by turns—at one point he threatened not to campaign for the Christian Democrats in next fall’s general election—Erhard never ceased pressing for his law. Last week, while Bonn sweltered under heat so intense that firemen were obliged to water the Bundestag roof to prevent it from dripping tar, the 60-year-old Economics Minister finally won the day. The law he got—which provided for a number of permissible cartels including “crisis” cartels and retail-price-fixing rings—was less than he had hoped for. Nonetheless, said Erhard, “with all its deficiencies, this is still the most modern cartel bill in the world.” If Erhard was guilty of hopeful exaggeration, the fact remains that West Germany alone among European nations had legally accepted the principle that competition is good, restraint of trade bad.

Heady Promise. While Ludwig Erhard dreamed of his home-grown Sherman Act, other Europeans had been dreaming even headier dreams. Spurred on by France’s Jean Monnet and Belgium’s Paul-Henri Spaak, six Western European nations (France, West Germany, Italy and the Benelux countries) early this year finished drawing up treaties to establish both a European Common Market and a European Atomic Energy Community (TIME, March 4). The first of these promised to create within 15 years a single West European market, comparable in size to the continent-wide U.S. market, with free trade within and a common customs barrier against the outside world. The second treaty, by pooling nuclear-research and power facilities, held out the hope that Western Europe might one day be close to self-sufficient in energy (and thus, among other things, no longer vitally dependent on the Suez and Middle East oil).

Last week, only a day after it passed the anticartel law, West Germany’s Bundestag ratified both the Common Market and Euratom Treaties. The next step is approval in that graveyard of European aspirations, the French National Assembly. Last week, as the French Assembly moved into the final stages of debate on the two treaties, attendance was scant—at one point only 18 Deputies were in the chamber—and the sole outburst of passion occurred in the parliamentary bar, where insulted Communists felled an aggressive right-wing Deputy with a broken beer bottle. Cynics blamed the apathy on the heat which blanketed Paris as well as Bonn, but a more accurate explanation was that everyone knew that the treaties would pass with a comfortable majority. Not even the French National Assembly could ignore the cold logic of Socialist Deputy Alain Savary: “The choice which France has is not between the European Community and the status quo, but between the European Community and solitude.”