EC Officials Shift Course To Reshape Integration

WITH the four-decade-long venture in forging a unified Europe confronting one of its most difficult periods, Sunday's narrow French vote to support union has not set the capital of the European Community shouting for joy.

Yet EC officials and observers here insist that France's ratification of the Maastricht Treaty, especially coming after a long campaign amid difficult economic and social conditions, is a stronger impetus to Europe's push for economic and political integration than a "snap analysis" seems to yield.

Moreover, a deep monetary crisis and questions about democratic legitimacy - widely seen as the EC's two most pressing problems - are trials that will make the EC stronger, these officials and observers say.

"This is one of the most complicated times we've had in the Community," says Stanley Crossick, director of the Belmont Center for European Studies here. "But the underlying forces for union, economic and political, are still there, and that is what will keep things moving forward."

In the weeks ahead, response to the EC's problems will be framed by a number of central factors, observers say:

* The French vote and the European Monetary System (EMS) crisis put the Franco-German alliance firmly back in the driver's seat. Withdrawal of the British pound from the EMS and loud advocacy of a nationalist economic program have hurt Britain's progress even as Prime Minister John Major holds the rotating presidency of the European Council.

Although nothing substantive filtered out of this week's emergency summit between French President Francois Mitterrand and German Chancellor Helmut Kohl, many observers expect a classic "Franco-German initiative" on making EC's institutions more democratic before the emergency EC summit set for Oct. 16 in London.

* France and Germany may propose an accelerated monetary union for an inner core of strong EC countries, initially Germany, France, Belgium, Netherlands, and Luxembourg. Some say that option is the only way to reassure financial markets on monetary union's future.

* Britain, long viewed as the EC's foot-dragger, faces difficult economic and political conditions at home. Yet while EC partners need Mr. Major if the Maastricht Treaty is to take effect, they also won't let Britain stand in the way of the EC's progress. If Britain keeps the pound out of the EMS for a long period or argues for slowing the EC's integration process, Germany and France might be forced to accelerate monetary union.

* The public's widespread uneasiness with the Community may be less urgent than the monetary crisis, but officials and observers alike say it demands no less attention. At the root of the malaise is the Community's so-called "democratic deficit": the public's lack of knowledge about how the Community functions, a general estrangement from EC institutions, and inability to affect them.

Steps can be expected to associate national parliaments more closely with Community action. France is believed to be considering seeking an earlier review of EC institutions than 1996, the date set in the Maastricht Treaty. And Chancellor Kohl, who is to speak to the German Bundestag today on Maastricht, repeated after meeting Mr. Mitterrand his preference for shifting powers away from the EC's appointed Executive Commission.

That could mean more powers for the European Parliament or for the frequent meetings of EC national ministers or EC summits called "councils." But critics note that councils also operate with little transparency.

That nearly half of French voters voted against Maastricht is only the latest sign of the public's estrangement. EC observers here say they are astonished at how the French vote's "weak majority" has been played up. "That is rather undemocratic in itself," says Peter Ludlow, director of the Center for European Policy Studies here. "No British government since 1945 has won with a majority, Major won with 42 percent of the vote, and no one challenged his legitimacy."

Etienne Davignon, chief executive officer of the Soci Grale de Belgique, says that given broad public disenchantment with government in the West, no one should be surprised at a close French vote. "If we were at a moment where people generally had full trust in their leaders and ... democracy, then this vote would indicate a discrepancy and I'd be very worried," he says. "The problems it suggests must be addressed, but shouldn't come as a surprise."

Despite the lack of defeatism felt here, no one believes the road ahead will be easy.

The monetary crisis is one example. Analysts such as Mr. Ludlow, who would welcome an accelerated monetary union among a reduced group of countries, say nothing in such a move indicates a weakening of Community spirit. "The Community has always moved at differing speeds," he says. "The essential thing is that all members remain equal members of the same institutions, and that the goal for those on the outside of a single currency be to come in."

But Mr. Davignon disagrees. "I don't think it would be possible for the Community to work properly if you had a group of countries that was [fixed in] the minority. It would be a fundamental change in how the Community functions, and not in the direction it needs at this time."