While people talked, more earnestly than ever before, about a possible European federation, the Lowlands countries did something about it. The Netherlands, Belgium and Luxembourg (an economic unit which would likely rank third after U.S. and Britain as the world's biggest free-enterprise producer and customer) were well on the way to economic unity. Last week they were represented at the International Trade Conference (see below) by one delegation, had given other nations tentative lists of common customs duties.
Since 1943 the three have formed a monetary union, which fixes the exchange rate of each currency with the other two. Now they are ready to adopt a joint customs schedule for all foreign goods shipped into the Lowlands, hope within a year to agree on identical customs duties for goods moving among themselves. The five-year goal: full economic union, with no internal customs barriers, with identical taxes, labor laws, social legislation. If economic union works, political union would be much less difficult. Belgians and Dutch think that later France may join them, that Scandinavian countries may cooperate closely.
No More Kaaskoppen. The three who worked to become one started with some advantages. Resentments between them largely disappeared before the common wartime enemy. Belgians now seldom speak of the Dutch as rich, unimaginative "Kaaskoppen" (cheese-heads); Dutch now less often deprecate "the French touch" of levity and gaiety in Belgian characters. The Germans gave the two countries a lesson in unity by quickly breaking the Dutch Ijssel and Grebbe Lines and the Belgian "Little Maginot" Line (demonstrating the folly of independent, uncoordinated defenses).
Some formidable difficulties remain. Among them:
¶ Holland, less industrialized than Belgium, fears that cheaper Belgian manufactures will flood Holland if tariff barriers are removed; Belgium, with less advanced agriculture than Holland, fears that its farmers will be swamped by Dutch foodstuffs.
¶ Belgian prices and wages, now higher than Dutch, must come down or Dutch levels go up before economic union is feasible.
¶ Rivalry of Dutch Rotterdam and Belgian Antwerp for trade into and out of northwestern Europe must be controlled by an allotment of business to each.
Still Some Ski Boots. It will take at least a year to work out tariff duties on goods moving among the three countries, which in the long run means deciding what industries shall be allowed to survive in which country. Example: although prewar Belgian glass works could easily produce enough for the needs of both countries (90% of their production was exported), Holland, whose shattered windows need glass urgently, has not waited for revival of the Belgian industry, has started her own glass production.
Whatever the prospects of eventual union, in rationed Holland last week lean and shabby Dutch, once stout and well-dressed, were hoarding their 40 weekly cigarets, while across the border in Belgium men with money ate lobster, steaks, butter, and drank French wine. Many Dutch women still wore ski trousers and ski boots while their Brussels sisters chatted over their tea in chic comfort.
The differences were at the same time the chief obstacle and the chief spur to a union which promised to be the forerunner of a more stable Western Europe.