When compared with the burst of enthusiasm that greeted the inauguration of the Community – or with the avalanche of progress ushered in by the Single European Act of 1986 – the turmoil, setbacks, and inertia of the 1970s seem devoid of accomplishment and even interest for the history of integration. It was an era of frustration, failure, and Euro-pessimism. Bad times and human weakness were not, however, the main problems. Their source was structural. Integration came to an impasse because the transference of decision-making power from the mixed-economy welfare states to the European level proved nearly impossible. The formation of a large customs union might have circumvented the problem and stimulated growth, but the market-based alternative was not in the cards. Britain had committed itself to joining the EC,1 the United States faced severe domestic problems, and the Federal Republic was in transit from a social market economy (Soziale Marktwirtschaft) to a social state (Sozialstaat).

The open-market cause not only lacked a leader but was intellectually out of favor. State-based programs directed at correcting market failure were the fashion of the day, and by no means only on the political left. The market-centered alternative seldom received serious consideration in any quarter. The 1970s was the decade of Keynesian ascendancy. Planning remained the vogue in much of Europe. In most advanced countries, the government sector consumed half of GNP. Public–private partnerships sprouted up all over the industrialized world, and insidious new nontariff barriers (NTBs) reversed previous progress made in dismantling old-fashioned tariffs and quotas.