Brief history of post-WWII European integration

Prof. MarquisLecture of 31 March 214

University of Verona

Outline• Today: some history …– 1950s >> Treaty establishing the EEC– 1960s >> [The rise of intergovernmentalism]

– 1970s >> Economic crisis and policy stagnation – 1980s >> La rilancia

– 1990s >> Toward European ‘Union’– 2000s >> The rise and fall of a ‘constitution’

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• Tomorrow: [finish history, then:] the EU institutions– The institutions of the EU as defined by the Treaty of

Lisbon

Ragazzi: non provare a scrivere tutto …

Andro’ troppo veloce!Avrete comunque gli slide, quindi:

Tranquillo!

1950s: Treaty establishing the EEC

60 years ago...

The story of European ‘union’ began with an important initial

success followed by aspectacular failure

Before the Treaty of Rome • Monnet (1888-79) and Schuman launched ‘Europe’

with the Treaty establishing the Coal and Steel Community (‘ECSC Treaty’)

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– Singed 18 April 1951. Effective 24 July 1952– Also called the ‘Treaty of Paris’ – Expired in 2002

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• ECSC established new institutions: – ‘High Authority’ –& European Court of Justice (ECJ)

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• But – what was the purpose of this Treaty?

• Coal and steel >> tanks, artillery, aerial bombers» t

• ECSC was a way to retain some control of West German coal and steel

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– In view of the expectation that W Germany would in a few years regain its sovereignty (which it did in 1955)

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• But Monnet saw it as cooperation in one sector that would expand to cooperation in all sectors• L’Europe des petits pas• And driven by a vision of a federal Europe–Because states in a federation do not war

against each other

But then, the first crisis of European integration:

The ‘European Defence Community’

• Oct. 1950: French P.M. Pleven proposed the establishment of a European Defence Community (EDC)

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• With the Soviets next door, and with the Korean war breaking out, security was a top priority

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• So: Integrate the armed forces of all NATO members, including those of West Germany, and place them all under the command of a European Minister of Defence

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• The EDC almost became a reality...

• EDC Treaty signed by the Six govts. in May 1952»

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• Thanks to P.M. Spaak, EDC was not limited to military integration

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• Also provided for political union in an attached Treaty establishing a European Political Community (EPC)

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– i. economic integration (customs union);» t

– ii. federal decision-making institutions, including a Parliament with strong powers;

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– iii. commitment to human rights protection

• French rebellion: Treaty ratified in D and BNLX... But the Assemblée Nationale rejected the text on 30.08.54. Why?

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– French army was in Indochina (1946-54); so a ‘European Army’ implied a largely German Army

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–And the Right (the Gaullists) opposed the transfer of French sovereignty to supranational institutions

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• Già nel 1954: a clash between ‘supranationalism’ and the ‘Souverainistes’

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–A recurring theme in EU history

• But in June 1955, the Six were in Messina to negotiate a new Treaty

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• Impetus from BNLX, esp. Wim Beyen, Dutch MFA–He proposed a customs union (BNLX since ‘44)

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• But the failure of EDC/EPC had a profound effect – For the ‘Europeans’, best strategy was to limit

the scope of the project to the economic sphere» t

• But the ultimate goal was to move beyond economic integration

• Ernst Haas (IR scholar), Jean Monnet: concept of ‘spillover’ (‘Neofunctionalism’)

Beyen Plan and Messina Conference lead to … the EEC

• At Messina, Spaak was appointed to study the possible avenues of integration

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• Spaak Report (21.04.56: presented to the MS of the ECSC)– Identified a need to create a ‘common

market’ among the Six» t

• Furnished the basis for further negotiations among the FMs, and an intergovernmental conference (IGC) was launched

• The FMs accepted the Spaak Report in Venice in May 1956– Then Spaak and committees started drafting

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• ... and in Rome, on 25.03.57, the Six signed two Treaties of Rome:

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– The Treaty establishing a European Economic Community (EEC Treaty); and – The Euratom Treaty• Of special interest to France, dealing with:• Trade in supplies of fissile materials like uranium

and plutonium • Safety and operations of nuclear power plants

• Preamble (EEC): The founders of the Community “resolve to preserve and strengthen peace and liberty”– So: integration as a means of avoiding

renewed conflict» t

• Called for:– an improvement of living and working

conditions in the EEC; and– a progressive abolition of trade barriers

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• And established numerous principles and mechanisms …

• creation of a common market;• adoption of common policies (CAP, transport);• elimination of internal customs duties and

quantitative restrictions;• free movement of goods, services, workers &

capital;• assurance of undistorted competition;• establishment of a common commercial policy;• promotion of coordination of policies regarding

employment, the environment, the competitiveness of industry, and R&D;

• eradication of discrimination on the basis of nationality – i.e., for those coming from the Six

• Legislation: in relation to economic integration the EEC Treaty (like the ECSC) provided for supranationalist legislative procedures

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–Commission proposes legislation for the Council to consider

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• Votes of the MS were weighted so that those of FR, D and IT counted for more than those of BNLX. This was the original definition of Qualified Majority Voting (QMV)

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• QMV implies a partial surrender of sovereignty» t

• But in ‘non-economic areas’, MS retained their veto

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– Es.: Taxation or migration of labor, etc.

• EEC Treaty entered into force on 01.01.58 » t

– In those days, the MS would not have imagined putting that Treaty to a popular vote

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• The Treaty was concluded for an unlimited period of time

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–But has been modified many times» t

–Today we call it the Treaty on the Functioning of the European Union (the ‘TFEU’)• Or in Italian: the TFUE• last amended: 2009

[1960s: The rise of intergovernmentalism]

• President De Gaulle (1959-69) held Monnet (who, as first President of the High Authority, represented supranationalism) in contempt

• Favored increased funds for the CAP, but opposed any strengthening of the Community’s institutions

• July 1965: when the Council met – no France! (the ‘empty chair crisis’)

• A crisis about who really had sovereign powers• France no longer accepted decisions of the Council

on the basis of QMV • De Gaulle saw the Community as an international

organization acting as an agent for its principals– Each principal should have the right to veto any

Community initiatives

• Compromise finally reached in LUX, 29 Jan 1966. According to the ‘Luxembourg Accord’:

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• When very important interests of a MS were at stake, the MS would ignore the QMV rule and seek to reach a solution acceptable to all of the MS

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• De facto, this become a rule of unanimous voting – This is the essence of intergovernmentalism

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• LUX Accord >> slow ‘positive’ integration in the 1970s and early 1980s

1970s:Economic crisis and policy stagnation

• In the 1970s, the problem was ‘Eurosclerosis’ (stagnation)

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– Following the EEC’s establishment of a customs union in 1968, it was difficult for the Community to advance any farther (3 problems)

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–1. The essential problem was gridlock (bloccaggio) in the Council’s decision-making

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– The gridlock resulted from a compromise made in 1966, leading to a de facto veto for the MS

• 2. Another factor slowing down legislation: Council tended to refer decisions to the HSG. But HSG only met twice a year; not very efficient

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• 3. In the 1970s, a number of events shifted attention toward domestic problems

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–OPEC raised oil prices, exacerbated a more general energy crisis –Productivity was sluggish, and labor costs were

increasing – Some European producers were at a competitive

disadvantage compared to their rivals in the US and Japan• So MS resorted increasingly to NTBst

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– In general, lack of vision for the EEC

1980s: il Rilancio.Completing the internal market

(‘Objectif 1992’)

• 1970s and early 1980s, European producers (different ones) were distressed:

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–NTBs and fragmented markets made it difficult for them to profit from economies of scale

• So business groups in Europe tried to stimulate more liberalized trade in goods and services

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–Ad es.: the CEOs of Philips and Volvo set up the Roundtable of European Industrialists in 1983

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–Dekker produced a proposal for the creation of a common market

• Then an official report by Lord Cockfield (Commissioner for the Internal Market, 1985-89 ) in June of 1985

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– The Cockfield Report set out a detailed plan for the completion of the common market by 1992

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– The plan included proposals for 282 new pieces of legislation to harmonize national laws and to reduce or eliminate NTBs

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–All of this was to be accomplished within 6 or 7 years

• But the 282 proposals faced the obstacle of unanimous voting in the Council

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• So in late 1985 and early 1986, the MS began to negotiate the first significant revision of the (30 year-old) EEC Treaty

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• The Single European Act (SEA / Ehlermann) was signed in February of 1986, and entered into force on 01.07.87

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– SEA increased the scope for QMV (except tax, labor..)

– In effect, abolished the de facto vetos of the MS (thus overturning the formally illegal Luxembourg Accord )

– ... e poi ...

• SEA institutional reforms:» t

• 1. The European Council –Recognized for the first time, but nothing said

about its functions» t

• 2. The Assembly formally became the ‘Parliament’

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• 3. (de facto) The Commission became more more important as a driver of the legislation necessary to ‘complete’ the common market

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• So after 20 years, the Community returned to an ethos of supranationalism and integration

In the new favorable environment, why not go further with the political

dimension?

1990s: Toward European ‘Union’

• European Council met in Maastricht in Dec 1991 and agreed a Treaty on ‘European Union’ (TEU)

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• Signed in Feb 1992, took effect on 01.11.93»

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• But the Union did not replace the Community!» t

–Union co-existed with the Community and shared the same institutional structure

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–But it operated through different decision-making procedures

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–4 notes about significance of the TEU...

• 1. Created a 3-pillar (3 pilastri) structure– I. the three Communities (the EC, the ECSC, and

Euratom) – II. Common Foreign and Security Policy (CFSP)– III. Justice and Home Affairs • Police and judicial cooperation on crime, • Visas, asylum, border controls, etc. (the

‘Schengen Acquis’)• Today, JHA commonly called Freedom, Security

& Justice• PILLAR STRUCTURE ABOLISHED in 2009

• 2. The TEU launched the Economic and Monetary Union (EMU)

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• In 2002, Euro became the single currency for 12 of 15 MS (today 18 of 28)

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• Politically, EMU was extremely delicate» t

–Giving up a national currency and monetary control (above all, the DM) was a significant surrender of political sovereignty

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–Reflected by the opt-outs granted to the UK and Denmark

• 3. Enhanced the role of the Parliament (EP)–Before Maastricht, EP was weak. Merely advised

and passed resolutions » t

–Critics often spoke/speak of a democratic deficit» t

• Majone responded with arguments of ‘output legitimacy’• Another response is: are we sure the committee

work of national parliaments is democratic?» t

–Maastricht did not make the EP co-equal with Council but it finally made the EP a legislator

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– Specifically, it established the ‘co-decision procedure’ (today called the ‘Ordinary Legislative Procedure’)

• Co-decision: Commission proposes / approved by both the Council and the EP – Council and the EP each had/have a veto

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• TEU introduced the co-decision procedure for:» t

–Measures relating to the internal market;– Environmental protection;– R&D;– Some aspects of public health;– Consumer protection;– Education and Culture

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• So at Maastricht the competences of the Community grew to cover many more policy fields– This probably contributed to the 4th point, cioe’ ...

• 4. Maastricht also introduced a new ‘veto player’ – the citizens of the MS

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• When the EU modifies its Treaties, each MS must ratify the new agreement in accordance with its constitutional requirements

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• In Denmark, when the people were asked, they said Nay! (51%, June 1992)

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• So this was the first referendum crisis (end of the era of ‘permissive consensus’)

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• But the Danes eventually accepted the Treaty in a second referendum (57%, May 1993)

[Treaty of Amsterdam (1997, effective 1999)]

• SEA and TEU Treaty revisions happened within just 5 years of each other. After the TEU the pace of Treaty reform in fact accelerated

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–Already in 1996, diplomats began discussing new reforms in the context of an Intergovernmental Conference (IGC) in Torino

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– The basic goal was to make changes necessary to accomodate the next (fifth) enlargement • i.e., the let the former Soviet States (Czech,

Hungary, Poland, Baltic States, etc.) into the EU

• Following IGC of 1996, the MS signed Treaty of Amsterdam on 2 Oct 1997, entered into force on 1 May 1999

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• The Treaty was supposed to introduce institutional reforms to improve the ability of the EU to cope with a larger membership; –But these issues were too controversial and

had to be postponed » t

• Called the ‘Amsterdam leftovers’

2000s: The rise and fall of a ‘Constitution’

• Another IGC in 2000 >> Treaty of Nice, Feb 2001• Mainly noteworthy for two things:

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–1. Re-defined QMV in a way that gave disproportionate power to Spain, Poland, France, etc. -- at the expense of Germany. Unsustainable.

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–2. Treaty stopped in June 2001 by Irish voters (54% rejection)

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– Ireland had to hold a second referendum in October 2002: accepted by 63%

• Then: Laeken Summit, Dec. 2001. European Council called for a ‘convention’ to consider EU’s future development, e.g.:– Simplification of the Treaties– ‘Greater democracy, transparency and

efficiency’ in the Union• The Convention worked in 2002-03 and, in June

2003, produced a draft ‘Treaty establishing a Constitution for Europe’

• Submitted to the European Council in the summer of 2003

• IGC of 2004 adopted a draft ‘Constitutional Treaty’ not too different from the text prepared by the Convention

• Signed 29 October 2004 in the Campidoglio• Was supposed to enter into force on 1 November

2006• By mid-May of 2005 the CT had been ratified by 9 MS• But in May and June, rejected in France (55%) and

Netherlands (62%)–Dutch vote largely to protest against unpopular

politicians– But French vote was a deliberate rejection

• So: another referendum crisis, like Maastricht and Nice

• In June 2007, the European Council decided to abandon the project of a ‘Constitution’

• Launched another IGC, but removing the rhetoric and symbols of a constitution

• But the final text, signed in December 2007 in Lisbon, did not deviate radically from the text of 2004– (French, Dutch voters not given another chance to vote)

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• But – uh oh! The Irish voters had to approve it!

• Did the Irish voters approve it?• The Irish voters did not approve it!–Rejected in June 2008 (53%)

• Second Irish referendum in October 2009, with a strong yes (67%)

• So 8 years after the Laeken Declaration, the Lisbon Treaty finally entered into force on 1 December 2009

• Attention: The EU is not governed by a single ‘Treaty of Lisbon’ …

• ToL amended the EC Treaty (now TFEU) and the TEU• So there are STILL TWO MAIN TREATIES:– 1. the TEU establishes the institutional framework and

foundational principles;– 2. the TFEU is a more detailed legal instrument aimed,

inter alia, to establish a common market– N.B. Both Treaties of equal rank

• And other important instruments too, such as the EU Charter of Fundamental Rights– Now binding primary law (but – general principles

and ECHR already applied before)– Binds the EU institutions and MS when they

implement EU law or act within its scope

• Main impact of the Treaty concerns institutional reform (tomorrow)

• Is the Lisbon Treaty sufficient for the EU?• A far-reaching Treaty revision seems unlikely for

now… many MS and key figures and institutions suffer from Treaty fatigue

• But few people were fully content with the ToL– For example, many felt the EU was ill-equipped to

deal with macroeconomic problems – And a micro-Treaty entered into force in 2013 with

the aim of addressing the sovereign debt crisis (IRE, PRT, GRC…) and achieving greater financial stability

2013 Fiscal Compact

• Treaty on Stability, Coordination and Governance in the Economic and Monetary Union (the ‘TSCG’)

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– Entered into force, 01.01.13 for 16 MS, incl. Italy

• Applies mostly to Eurozone countries (plus DMK)

• The point of the Treaty is greater fiscal discipline to avoid repeats of the debt crisis

• A MS of the Fiscal Compact is required to adopt a domestic law establishing an almost-balanced budget – This means mandatory limits (‘caps’) on deficits,

under the monitoring of a fiscal advisory council» t

• [The technical part] General budget deficit must be less than 3% of GDP (PIL); and the

• Structural deficit (SD – i.e., ignoring the cyclical shortfalls in revenue) must be less than – 1% of GDP if the debt-to-GDP ratio is significantly

below 60% - or, – for countries deeper in debt, the SD must be below

0.5% of GDP

Tomorrow:EU institutions under the Treaty of

Lisbon