Leading Article: Europe's challenges beyond Maastricht

AS THE Conservative and Labour parties contemplate the discord in their ranks provoked by the passage of the Maastricht Bill through the Commons, it is easy to forget the importance of this week both for Britain's place in Europe and for the European Community itself.

With the successful Danish referendum behind it, the EC can now concentrate on mitigating the deepening continental recession without the damaging distraction of being uncertain about its own institutional future. With British ratification of the treaty approaching certainty, the Government can concentrate on nurturing economic recovery. It is now possible to stand back for a first look at the post-Maastricht European Community and ask what challenges it will face over coming years.

At first sight, the EC seems in poor shape. Some 17 million of its citizens are unemployed; not even a Bosnian war on its eastern doorstep has forced its members to work effectively together. But the combination of recession and public resistance to the process of union has humbled the institutions in Brussels and has given new force to the idea that Brussels should intervene only when intervention at national - or better still, regional or local - level cannot do the job.

Common sense has returned to the ERM, too, with periodic realignments now firmly back in fashion after a period in which the EC tried wrongly to operate the system as if it were one of fixed, rather than merely tethered, rates. Although a single currency no longer seems likely before the end of the century - even the most ardent advocates of monetary union, such as the Belgians, now realise the pain that speedy EMU will cause - it must unquestionably remain a goal. A single market in which currencies devalue competitively against each other could not last for long. In any case, a monetary union which countries would be able to join only when they are ready and able would be an important precedent. It would show that the Community is willing to see co-operation between its members develop in different ways, not all of them necessarily controlled from the centre.

Notwithstanding what John Major says, Britain's prestige at the Council of Ministers has been damaged by the parliamentary shenanigans over the Maastricht Bill. But things could be much worse. The federalist aspiration has been dampened, so London is in less danger than it once seemed of being excluded from a strengthening Paris-Bonn axis. Economically, the single-currency club from which Britain has for the moment excluded herself no longer seems so necessary to join. But the Government should not tempt fate. Returning sterling to the ERM fold is an aim not for the next Parliament but for this one, and perhaps even next year if the German mark weakens.

If these concerns are uppermost as the continental economies weather their recessions then begin to recover, talk will by 1995 once again turn to the EC's institutional structure. Siren voices will point out that a handful of new members are set to join the club in 1996 - with the Swedes, Austrians and Swiss at the top of the list - and will say that it is high time to sort out a new set of procedures suitable for a Community of 20 members. As the century turns, Poland, Hungary and the Czech Republic too will be strong candidates for membership, and the creaky combination of rotating EC presidency and unwieldy Council of Ministers may seize up altogether.

The problem with Maastricht was that it came too close on the heels of the implementation of the Single European Act. To reopen the institutional debate in 1996, so soon after the next group of new members has arrived, would be to risk a second, and possibly still more painful, attack of indigestion. Only later will it be time to remake the EC's institutions in a new image. But when that time comes - probably at the dawning of the new millennium - the Community will indeed be ready for fundamental institutional change in which the principles of subsidiarity, democracy and national choice figure prominently. That is the only way the EC can hope to expand its membership and at the same time achieve the vitality that will make it a force to be reckoned with in the world.