Transcript European economic integration

Brief history of post-WWII
European integration
Prof. Marquis
Lecture of 31 March 214
University of Verona
Outline
• Today: some history …
– 1950s >>
– 1960s >>
– 1970s >>
– 1980s >>
– 1990s >>
– 2000s >>
»
Treaty establishing the EEC
[The rise of intergovernmentalism]
Economic crisis and policy stagnation
La rilancia
Toward European ‘Union’
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 a
spectacular 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
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• 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);
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– 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
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• 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
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• 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
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• 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
– Commission proposes legislation for the Council
to consider
• 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)
• QMV implies a partial surrender of sovereignty
• But in ‘non-economic areas’, MS retained their
veto
– Es.: Taxation or migration of labor, etc.
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• EEC Treaty entered into force on 01.01.58
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– 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
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– 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 NTBs
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– In general, lack of vision for the EEC
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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:
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• 1. The European Council
– Recognized for the first time, but nothing said
about its functions
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• 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!
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– Union co-existed with the Community and
shared the same institutional structure
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– But it operated through different decisionmaking 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
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– 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
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– Critics often spoke/speak of a democratic deficit
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• Majone responded with arguments of ‘output
legitimacy’
• Another response is: are we sure the committee
work of national parliaments is democratic?
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– 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:
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– 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
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• 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
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• [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