Even though the French referendum resulted in a narrow yes to the Maastricht treaty, the treaty is in deep trouble. No way has yet been found around the Danish no in June, and unless the Danes change their minds the treaty falls. More importantly, the exchange rate mechanism of the European Monetary System, which is at the heart of Maastricht's provisions for economic and monetary union, is in crisis. Last week's orgy of speculation ended with the pound and the lira dropping out of the ERM.
At the very least, it now seems inevitable that the timetable for economic and monetary union in the Maastricht treaty will have to be revised. Most commentators reckon that, as the dust settles, the way that the ERM operates will be changed, with the German Bundesbank insisting on a reduction in its responsibility for propping up other countries' currencies. Many predict that some sort of "two-speed" arrangement for monetary union will replace the Maastricht approach, with the core economies of France, Germany and the Benelux countries moving rapidly to a monetary union which the rest will join at some point in the future or perhaps not at all.
In the circumstances, it is hardly surprising that many left opponents of the Maastricht treaty in Britain have the scent of blood in their nostrils. There is a widespread belief even among supporters of closer European integration that Maastricht will force austerity on the whole of the European Community and will do little to democratise EC institutions. What's more, the treaty seems to be even more vulnerable to a British no - either by way of a referendum or through defeat of the government's Maastricht Bill in the House of Commons - than it was after the Danish referendum, in June.
So is there any reason Labour should not go in for the kill? Unfortunately for those who like their politics simple, there is.
Maastricht is essentially a compromise among the French, German and British governments. The French gave way on German demands that the proposed European central bank be independent and that the convergence criteria for economic and monetary union be austere in the extreme; the Germans gave way to French and British insistence that the deal on political union did not give very much power to the European Parliament. (The British also got their opt-outs on monetary union and the social chapter.)
Immediately after the Danish no, it was at least possible that a renegotiated European union treaty would take account of the Danes' worries about EC democracy by including far greater powers for the European Parliament and would address their fears about the future of the welfare state by beefing up Maastricht's social side and ending the British social chapter opt-out.
If Labour had then swiftly announced that it was opposing Maastricht with the goal of replacing it with such a treaty and if it had persuaded other EC social democratic parties to back its position, there might just have been a hope of Labour acting as a catalyst for a renegotiation on a more social democratic basis.
In reality, however, nothing of the sort happened. Proponents of an anti-Maastricht pro-Europe position failed to win a majority in the Labour Party, let alone other social democratic parties, which all lined up in support of Maastricht. They argued that although the treaty was not perfect, it did contain enough - the social chapter for 11 out of 12 EC countries, the extra powers for the European Parliament and the regions, the commitment to social solidarity – to make it worthy of support. The
opposition camp in most EC countries was left to the xenophobes.
Meanwhile, it became clear over the summer that, if Maastricht fell, what came next would almost certainly be worse, particularly on political union. In the aftermath of the Danish vote, it was not the German government's position of strengthening integration by moving quickly to give more power to the European Parliament that gained ground among EC governments as the favoured next step. Rather, it was the British government’s idea of watering down integration by maximising "subsidiarity" (code for continuing to carve up as much EC business as possible in closed intergovernmental meetings) that made the running, a tendency that has been reinforced by the close French referendum result.
Whether or not Maastricht survives, there is now a real danger that, instead of making even small steps towards a Europe-wide democratic polity, governments will now pander to popular nationalism, dramatically slowing the pace of political integration. If Maastricht falls, it is likely that what replaces it as a pan-EC agreement will be little more than the status quo ante with a very different ERM and, perhaps, Germany, France and the Benelux countries going it alone with an economic and monetary union of their own.
This would effectively rule out the Europe-wide strategies that are now Britain's best hope for effective long-term counter-cyclical economic management. Britain might gain temporarily from its current outsider status, allowing the pound to devalue and interest rates to fall outside the ERM. But, in the end, the past two decades show that it is impossible in modern capitalism for a medium-sized country to get lasting benefits from "dash for growth" policies.
The upshot is simple: if Labour is serious about Europe-wide alternative economic strategies, it has to be committed to European union - and the Maastricht approach to European union, however flawed, is the only one on offer. Labour should be arguing for a devalued sterling to be returned to the ERM (if not at once). More important, it should not vote against the Maastricht Bill when it eventually finds its way to the Commons. There will be plenty of opportunity to address the democratic deficit and to push for left European economic and social policies after ratification. Without ratification, the democratic federal Europe that the left desperately needs will become once again a distant dream.