A struggle to decide the economic shape of Europe is building up. One of the open ing skirmishes was fought last week when eight leading representatives of OEEC (Organization for European Economic Cooperation) met in Paris. The engagement was screened by a fog of long technical words and its result was inconclusive. When the meeting ended, however, the advantage lay with Britain's Sir Stafford Cripps. He had skillfully checked a drive by ECA and some continental nations to reduce currency exchange barriers between European nations.
The struggle would continue. Its issues, little understood in the U.S., might turn out to be more important than anything on which the Big Four Foreign Ministers might agree. Europe's political future and its military defense were closely tied up with its economic prospects. Would Europe develop toward a great unified area of free trade? Or would each nation protect itself with barriers which would strengthen the parts but weaken the whole?
Stultifying? On the eve of last week's Paris conference ECA's Averell Harriman put the issue thus: "...Success [of the ECA program] would be impossible in a system made up of small, autarchic, uneconomic national trading units, each one dedicated to self-defeating self-sufficiency, each one standing off his neighbor with ingeniously stultifying restrictions."
From ECA's very beginning this proposition had been recognized—in theory. But in its first year, ECA, faced with an emergency, tended to the opposite direction. ECA sometimes stimulated fast production in a way that worked against future European economic unity and overall efficiency. Example: before the war, The Netherlands made heavy purchases from Belgium's big railway equipment industry. Today, the Belgians do not want to trade with The Netherlands because the Dutch can pay them only guilders, not now convertible to dollars. Like everyone else in Europe, the Belgians want dollars to buy in the U.S. So the Dutch are building their own railway equipment industry just across the Belgian border. They are using Marshall Plan dollars to duplicate a Belgian industry which ought to have a Dutch market.
Masochistic? Privately, but more & more loudly, leaders of many continental nations are blaming Britain for working against a unified Europe. They attribute this partly to its Labor government's love of planning, with the controls and restrictions that planning brings.
Continentals call this tendency "dirigisme" it is increasingly unpopular on the Continent. The French, Italians and even the sober Belgians consider the British taste for controlled austerity to be somewhat perverted—what might be called economic masochism, or love of suffering. The British look down their noses and reply that their controls are merely good housekeeping.
Against that background the OEEC group met last week in Paris. Their assignment was to renew or to change the Intra-European Payments agreement, which runs out this month. Britain's objective was to make the new plan as much like the old as possible. Belgium's Paul-Henri Spaak and French Finance Minister Maurice Petsche were expected to carry the ball for the liberal Harriman position.