The single european market? Thatcher kept up the longstanding British policy of consistent suspicion with regards to British participation in the European integration process.

In 1987, the European Commission touted a report claiming that the Single European Act would boost the Pan-European economy by at least seven percent without inflation. Although academic assessments regarded the projection with suspicion, there was no question that a single European market could be equated to economic growth in some form or other.

This opened up a conversation about ensuring economics gains be shared equally among all Member States of the European Community. Jacques Delors, the President of the European Commission, was a particularly strong proponent of this idea. A traditional French Socialist to the bone, Delors and his commission spent the better part of 1987 planning large spending projects to develop, connect, and integrate the less developed parts of Europe. However, increasing the EU’s budget to accommodate the expansion was an idea that horrified the British. The proposal was only forced through in early 1988 thanks to the backing of the West German Chancellor Helmut Kohl, on whom the importance of setting a precedent for a Pan-European contribution to social and economic integration was not lost.

The passing of Delors’ measures undoubtedly contributed to Margaret Thatcher’s measured but firm criticism of the European Community in an address given before the College of Europe in the fall of 1988, which reaffirmed her commitment to a united Europe as long as it promoted the principles of a free market economy with minimal public intervention, in addition to clearly stating her disapproval for the nascent European Government’s increasing capacity for supranational policymaking. For Thatcher, the European Community should be a union exclusively within the domain of “willing cooperation of sovereign states.” Although the British Prime Minister's words were measured, they were taken as a serious criticism of the integration process.

However, in spite of Mrs. Thatcher’s reservations, the impact of Delors’ new, expanded European institutions could not be disputed: The European periphery made spectacular gains in closing the economic gap with the rest of the Community. Consequentially, the process of European Unity could count on a wave of popular support by the late 80’s, which soon extended to the proposal of a single European currency; undoubtedly an additional point of prestige. Almost in parallel with the historic fall of the Berlin wall, the European Parliament began seriously agitating for greater political unity, publishing a report dubbed “Martin I” after its French Author David Martin, advocating among other measures a common European foreign policy, a common citizenship program, and more authority to be granted to the European parliament. Eastern Germany itself was also regarded with leniency uncharacteristic of the European Bureaucracy; the overall effect of German unity was projected to be entirely positive.

It is clear then that spite of the zeitgeist of the late 80’s, there must have also been a more pragmatic forces behind the Maastricht Treaty. Indeed, underlying worries that preoccupied European leaders in the second half of the 1980’s were a very incisive force on the impetus to create a supernatural balance in Europe. Particularly telling is that in spite of one of the goals of the Maastricht summit being bringing European institutions closer to individual citizens, nearly every decision was taken by the high officers of state with little or no consultation with voters. Looming over most European leaders was the worry that a united Germany would be too powerful a force at the negotiating table as long as European community policy was decided via meetings of national ministers.

The West German chancellor Helmut Kohl himself realized the longstanding goal of reuniting the two German states could only be achieved without opposition by conceding significant components of sovereignty to European Institutions. After reassuring Germany’s old wartime adversaries as well as the skeptical Italian prime minister Giulio Andreotti, Kohl worked closely with European leaders, notably François Mitterrand, to work the unification process into the larger agenda of the European Community’s accelerating integration.

Mitterrand’s decision to work closely with Kohl wasn’t an easy one, especially on the matter of currency. In the early 80’s, government spending propping up consumption without stimulating real growth had depressed the value of the Franc such that keeping pace with the ever-strong Deutsche Mark within the confines of European Monetary System’s fluctuation bands was impossible. When, in March of 1983, the French government had requested their benchmark be moved for the third time in three years, Helmut Khol’s government would only grant consent if Mitterrand committed to reel in spending, unleashing no small amount of animosity in the Palais de l’Élysée. Only Jacques Delors’ passionate resistance to the government’s initial aversion led Mitterrand to put his European commitments above French sovereignty.

Faced with a uniting Germany six years later, the French President was in no mood to risk putting his country in a position of subservience again. The urgency of the task added to its difficulty: already in late November of 1989, Chancellor Kohl had had announced his ten-point plan for the integration of East Germany without the slightest involvement of any other European head of state, in addition to having asked to postpone the council of ministers meeting on a common currency. Mitterrand greeted the news with displeasure, suspicion, and worry.Mitterrand was subsequently not subtle in his push for a rapid strengthening of European institutions running parallel to the German unification process. To this end, a currency union would be central.

Jacques Delors had long favored a single European currency: he and leading European technocrats had been investigating the idea at least since the summer of 1988, when the European Council authorized a meeting of central bank directors. Foremost among these was a prominent vice director of the Bank of Italy, the Bocconi and MIT-educated technocrat Tommaso Padoa-Schioppa.

The persistently low inflation targets set by the Bundesbank had turned the EMS into an unofficial peg to the Deutsche Mark as Europe’s less rigorous currencies struggled to keep pace. Karl Otto Pöhl, the President of the Bundesbank, was more than aware of the transalpine agreement in opposition to the German aversion to inflation. Consequentially, Pöhl was unyielding on the imposition strict prerequisites to join the currency union, as well as being intransigent on the precise mechanism by which the single currency would be introduced. It could stand at a testament at how uncharacteristically well-planned the negotiated settlement was that at a meeting of the European Commission in June 1989, even Margaret Thatcher was persuaded to adhere to the initial phases of European monetary convergence, even though the British Prime minister made it absolutely clear she would pick and choose which of the following steps, if any, the Pound Sterling would adhere to.

However, by the time the intergovernmental conference on the European Monetary Union (EMU) took place in December of 1990, Great Britain was fundamentally alone in approaching the negotiations with skepticism. In October of that same year, the Italian Prime Minister Giulio Andreotti, now at the head of the rotating presidency of the European Commission, organized what amounted to an ambush at the Commission meeting in Rome: placing on the docket a predetermined series of motions which set the start date for the second phase of European monetary integration in 1994, and all participants to the conference agreed save Margaret Thatcher.

With the added adoption of many of the suggestions of the Martin report such as additional powers granted to the European Parliament and a concrete definition of European Citizenship, Thatcher returned to London thoroughly livid. However, after a series of internal upheavals, the British conservative party replaced the longstanding prime minister with John Major, the Chancellor of the Exchequer, who asserted he wanted to see Britain “At the very heart of Europe.” Although British public opinion would continue to regard Europeanization with fluctuating degrees of suspicion, the proceedings in the Inter-Governmental Council of the Europe would continue.