Historical Evolution of the European Union

# Preliminary Remarks

* European Integration - began at a press conference on 9. May 1950 Robert Schuman : French foreign minister Jean Monnet : French businessman Konrad Adenauer : West German Chancellor - agreed to bring the coal and steel industries of France and Germany under the administration of a single joint authority - France, Germany, Italy, Benelux countries - traditional hostility between Germany and France 1

- its original priorities (1) postwar economic construction (2) the need to prevent European nationalism leading once again to conflict (3) the need for security in the face of the treats posed by the cold war 2

* the European Coal and Steel Community - founded in 1952 - created the European Economic Community in 1958 (1) the development of a common agricultural policy (2) agreement on a common external tariff for all goods coming into the Community (3) the construction of a single market including free movement of people, goods, money and service. - began to expand in 1973: Britain, Ireland, Denmark in 1981: Greece in 1986: Spain, Portugal in 1995: Austria, Sweden, Finland in 2004: Cyprus, the Czech Republic Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia in 2007: Romania, Bulgaria in 2013: Croatia 3

* Economic problems and disagreement about the actions - needed to remove the internal barriers to trade threatened to undermine the development of the single markets - the Single European Act set a five-year deadline for agreement on all the remaining tasks - nowadays the Single Market: (1) a view to extending membership eastward (2) work is under way on the most ambitious step in the short history of European integration (3) the implementation of a single currency 4

# Domestic developments

* after the Second World War, the collective European imagination “ European states should set aside their differences and build bridges of cooperation aimed at removing the causes of war, and perhaps even leading to European economic and political union.

” 5

# Economic reconstruction and security

* changes at global level that demanded new thinking * in July 1944, a meeting at Bretton Woods in New Hampshire to make plans for the postwar global economy - representatives from the United States, Britain and 42 other countries - agreed to an Anglo-American proposal to promote free trade, non discrimination and stable exchange rates. - agreed that Europe's economies had to be rebuilt and placed on a more stable footing 6

* the influence of the British economist John Maynard Keynes on programs of social welfare and nationalization - argues for some government control over some aspects of the economy in order to control the cycle of booms and busts - Keynesianism became the basis of postwar economic reconstruction and west European governments increasingly intervened in their economies to control inflation and rebuild industry and agriculture. - necessity for substantial capital investment in order to rebuild Europe itself <- especially from the United States: “ European reconstruction as essential to its own economic and security interest.

” <- a substantial investment in the future of Europe through the Marshall Plan (1948-1951) 7

* America as a global policeman - primary goal : to defend western Europe from the Soviet threat - assumptions are proved to be wrong: (1) Europe had sufficient people, resources and wealth to recover (2) the Allies would continue to work together - in 1949: the North Atlantic Treaty was signed ‘ the U. S. agreed to help its Economic allies to restore and maintain the security of the North Atlantic area ’ - more substance with the creation of the North Atlantic Treaty Organization (NATO) “ an attack on one of them would be considered an attack on all of them, ” but each member of the NATO agreed only to respond with such actions as it deems necessary. 8

* in May 1955, creation of the Warsaw Pact -defined the cold war's line

# First steps towards Integration (1945-1950)

* first priority for European leaders after the Second World War - to create conditions that would prevent Europeans from ever going to war with each other again 9

- major threats to peace and security (1) nationalism and the nation-states, for example, Germany (2) the growing hostility between the U. S. and S. U. -> a clear need to protect Western Europe from the Soviet threat -> but concern about 1) the extent to which western European and the U. S. could find common ground, and 2) the extent to which western Europe could rely on the U. S. protective shield.

* the particular spotlight on Britain - the leading country in fighting Nazism and still the dominant European power 10

- Winston Churchill (1) charismatic person (2) proposal for an Anglo-French Union in 1940 (3) suggestion for ‘ a United States of Europe ’ in 1942-1943 (4)

‘

a United States of Europe

’

-> operating under 'a Council of Europe' -> reduction of trade barriers, free movement of people, a common military, a High Court to adjudicate disputes (5) same suggestion for 'a United States of Europe' in a speech at the University of Zurich in 1946 -> new entity based around France and Germany -> not necessarily to include Britain -> before the war: "Britain was with Europe but not of it. We are interested and associated, but not absorbed." 11

* the Congress of Europe - from a conference aimed at publicizing the cause of regional unity - held in The Hague in May 1948 - attended by delegates form 16 states and observers from the U. S. and Canada - the most tangible outcome ==> “ the Council of Europe ” -> the need for ‘ a closer unity between all the like-minded countries of Europe ’ -> the Council's aims: ‘ common action in economic, social, cultural, scientific, legal and administrative matters ’ 12

# Opening moves: from Paris to Rome (1950-1958)

* a bolder initiative by Jean Monnet (1888-1979), the French businessman Robert Schuman (1880-1963), French foreign minister (1948-1953) - both are enthusiastic Europeanists, (1) practical steps needed to be taken beyond the noble statements of organizations such as the Council of Europe. (2) “ the logical starting point should be the resolution of the perennial problem of Franco-German relations.

” 13

* by 1950, it was clear to many that “ West Germany had to be allowed to rebuild its industrial base if it was to play a useful role in the western alliance.

” - for that, to rebuild under the auspices of a supranational organization, tying Germany into the wider process of European reconstruction. * Jean Monnet's focussing on the coal and steel industries: strong potential for common European organization - till then, european institutions were intergovernmental organizations - proposal for a new institution independent of national governments in other words supranational rather than intergovernmental 14

* a press conference on 9 May 1950, a date marking the rebirth of united Europe - the Schuman declaration :

“

Europe would not be united at once or according to a single plan, but step by step through concrete achievements

”

- elimination of Franco-German hostility - Schuman's proposal, “ French and German coal and steel production be placed under a common High Authority, within the framework of an organization open to the participation of the other countries of Europe.

” -> ‘ a first step in the federation of Europe ’ -> revolutionary : “ French offering to sacrifice a measure of national sovereignty in the interests of building a new supranational entity that might end an old rivalry and help build a new European peace.

” 15

* Acceptance and refusal to this proposal - Italy : wanted respectability and economic and political stability - Benelux countries : in favour, because they were small and vulnerable, had twice been invaded by Germany, were heavily reliant on exports, and felt that the only way they could gain a significant voice in world affairs and ensure their security was to become part of a bigger regional unit. - Spain and Portugal : dictatorships - Denmark and Norway : the memories of German occupation were still to fresh 16

- Austria, Sweden and Finland : keen on remaining neutral - Ireland : predominantly agricultural and was tied economically to Britain - Britain : still extensive interests outside Europe, exported very little of its steel to Western Europe, and the new Labour Government had just nationalized the coal and steel industries, and didn't like the supranational character of Schuman's proposal. 17

* on 18 April 1951, the Treaty of Paris - creating (founding) the European Coal and Steel Community (ECSC) - governed by a nominated nine-member High Authority - remarkable in that it was the first time that any European government had given up significant powers to supranational organization -> to reduce tariff barriers, abolish subsidies fix prices raise money by imposing levies on steel and coal production - a important point about the feasibility of integration 18

* However, two much larger, more ambitious and arguably premature experiments in integration - failed - the European Defence Community (EDC) object : to promote western European cooperation on defence and bind West Germany into a European defence system causes for failure - the French: “ nervous about the idea of German rearmament so soon after the war ” - Britain : still the strongest European military power : not included 19

- the European Political Community (EPC) first step towards a European federation with the collapse of the EPC, all hope of a political community died - after these failures, a Benelux proposal ‘ to work for the establishment of a united Europe by the development of common institutions, the progressive fusion of national economies, the creation of a common market, and the progressive harmonization of their social policies.

’ -> a new round of negotiations and the signing in March 1957 of the two treaties of Rome 1) creating the European Economic Community (EEC) 2) creating the European Atomic Energy Community (Euratom) -> both came into force in January 1958 20

* The EEC Treaty - the creating of a common market and the harmonization of their economic policies - to be completed within 12 years by 1) gradually removing all restrictions on internal trade 2) setting a common external tariff 3) reducing barriers to the free movement of people, services and capital among the member states 4) developing common agricultural and transport policies and 5) creating a European Social Fund and a European Investment Bank 21

•The Euratom Treaty - the creation of a common market for atomic energy, but a very junior actor in the process of integration and focused primarily on research.

# Integration takes root (1958-1970)

* by January 1958, among the Six founding members - a small network of joint institutions a number of ambitious goals aimed at integrating many of their economic activities * many achievements (1) the Treaty of Rome (1957): a deadline of 12 years for the staged removal of all barriers to a common market -> a common external tariff in July 1968 -> to declare an industrial customs union 22

(2) the removal of the quota restrictions that the member states had used to protect their domestic industries from competition from imported products (3) to lift restrictions on the free movement of workers -> for that goal, steady progress towards easing them during the 1960s and 1970s (4) a Common Agricultural Policy (CAP) - eventually achieved in 1968 - aimed at creating a single market for agricultural products and assuring EEC farmers of guaranteed prices for their produce 23

# First rounds of enlargement (1973-1986)

* Britain - the most obvious absentee from the early attempts to integrate Europe -> Britain's special relationship with the United States - not opposed to European cooperation, but nervous about the closeness of the ties proposed by Monnet and Schuman - the idea of a wider but looser free trade area based on the OEEC states => in 1960 the OEEC evolved into the Organization for Economic Cooperation and Development (OECD) 24

* a founding member of the European Free Trade Association (EFTA): (1) a looser intergovernmental body whose goal was free trade rather than economic and political integration (2) founded in January 1960 with the signing of the Stockholm Convention by Austria, Britain, Denmark, Norway, Portugal, Sweden and Switzerland (3) however, political influence of EFTA was inferior to the EEC in Europe -> Britain's risk taking of political isolation if it stayed out of the EEC -> in August 1961, Britain's application for EEC membership 25

* Denmark - motive for applying for EEC membership was agricultural - EEC : a big new market for Denmark's agriculture : a boost for Danish industrial development * Ireland - membership of the EEC as way of furthering its industrial plans and reducing its reliance on agriculture, as well as loosening its ties with Britain * Norway - the importance of the EEC market 26

* Negotiations between Britain and the EEC since early 1962 - De Gaulle: plans for an EEC built around a Franco-German axis, : saw Britain as a rival to French influence in the Community : vetoed the British application - reapplying in 1967 -> again vetoed by de Gaulle - third applying following de Gaulle's resignation in 1969 -> accepted with those of Denmark, Ireland and Norway - Britain, Denmark and Ireland finally joined the EEC in January 1973 (Norway - rejected at a public referendum in September 1972) - increasement of membership from 6 to 9 27

# an additional round of enlargement in the 1980s

Greece joined in 1981 Spain and Portugal joined in 1986 - EEC membership to 12 * several political and economic consequences from the doubling of membership (1) increasement of the influence of the EEC (by then the biggest economic bloc in the world) (2) complication of the Community's decision-making processes (3) reduction of the overall influence of France and Germany (4) alteration of the internal economic balance of the EEC 28

# Economic Union and the Single Market (1979-1992)

* by 1986 the EEC became to the European Community (EC) - a combined population of 322 million accounted for just over one fifth of all world trade its own administrative structure and an independent body of law direct representation through the European Parliament * furthermore, the creation of a common market was one of the key goals of the Treaty of Rome - still a long way to go - but barriers remained to the free movement of people and capital - "Eurosclerosis" 29

* Agreement about the principle of Economic and Monetary Union (EMU) at a 1969 summit of EEC leaders in the Hague - agreement to control fluctuations in the value of their currencies and to make effort to coordinate national economic policies - however the goal of achieving EMU by 1980 had been quietly abandoned. * A new initiative - the European Monetary System (EMS) - in 1979 - goal of stabilizing exchange rates - an Exchange Rate Mechanism (ERM) founded on a European Currency Unit (ECU) - goal of creating a zone of monetary stability 30

* EMS helped stabilization of exchange rates and complementation of the tendency among Western economies at the time to focus on controlling inflation - in 1989, a step further with the elaboration of a three-stage plan aimed at economic and monetary policy coordination - the goal (1) bringing all 12 currencies into the ERM by July 1990 (2) instituting a European central bank by 1994 (3) fixing exchange rates and introducing a single currency 31

# The Single European Act (SEA)

* signed in Luxembourg in February 1986 * came into force in July 1987 * important consequencies (1) creation of the single biggest market and trading unit in the world (2) the EC responsibility over new policy areas that had not been covered in the Treaty of Rome for example, environment, research and development, regional policy (3) new powers to the Court of Justice creation of a Court of First Instance to hear certain kinds of case and ease the workload of the Court of Justice 32

(4) legal status to meetings of heads of government under the European Council and new powers to the Council of Ministers and the European Parliament (5) legal status to European political Cooperation (EPC - foreign policy coordination) (6) establishment of economic and monetary union as an EC objective -> promotion of 'cohesion' or reduction of the gap between rich and poor parts of the EC 33

* completion of all preparations for the single market by midnight on 31. December 1992 -> the removal of (1) all remaining physical barriers (customs/passport control at internal borders) (2) fiscal barriers (mainly in the form of different levels of indirect taxation) (3) technical barriers (such as conflicting standards, laws and qualifications) => "an area without internal frontiers in which the free movement of goods, persons, services and capital is assured." 34

# From Community to Union

* little hope of political union without economic union * coordination of foreign policies under a process known as European Political Cooperation (EPC) * eventually given legal status with the SEA -> however necessity of emergence of a truly European foreign policy, especially during the 1990-91 Gulf crisis and in 1998 when Britain supported US threats of military action against Iraq, but found little agreement among its EU partners 35

* in June 1985, to convene an intergovernmental conference (IGC) on political union -> the outcome was the Treaty on European Union agreed at the Maastricht European Council Summit in December 1991, signed by the EC foreign and economics ministers in February 1992 -> the draft treaty: 'the goal of federal union,' however changed to 'an ever closer union among the peoples of Europe, in which decisions are taken as closely as possible to the citizen.' 36

* The 1992 Treaty on European Union (= the Maastricht Treaty) (1) the creation of the European Union - based on three 'pillars' 1) a reformed and strengthened European Community 2) a Common Foreign and Security Policy (CFSP) 3) home affairs and justice (2) A timetable for the creation of a single European currency by January 1999. (3) Extension of EU responsibility to new areas (consumer protection, public health policy, transport, education and social policy) 37

(4) greater intergovernmental cooperation on immigration and asylum the creation of a European police intelligence agency (EUROPOL) (5) new rights for European citizens and the creation of an ambiguous European Union 'citizenship' (6) greater powers for the European Parliament 38

# The single currency and beyond

* in June 1997, the Treaty of Amsterdam * a new set of revisions to the founding treaties of the EU * the result of an intergovernmental conference (IGC) held between March 1995 and June 1997 to plan future developments, notably the inevitable eastward expansion of the EU : a new treaty that was signed at the Amsterdam European Council in June 1997. -> the following elements: (1) matters relating to asylum, visas, immigration and external border controls - the Schengen Agreement was incorporated into the EU framework, and cooperation between national police forces was strengthened. 39

(2) Policies on employment, sustainable development, human health protection and consumer protection -> the formal objectives of the EU , and 'subsidiarity' was given a new definition (3) a number of small changes to the structure of the EU institutions in anticipation of enlarged membership. (4) a policy planning unit for promotion of coherent, effective and visible foreign policy, simplification of decision-making procedures for reduction of the risk of deadlock, emphasis on cooperation with the WEU, provision for a single commissioner to be the EU representative on external relations 40

(5) several changes on institutional practices, including down-grading the cooperation procedure and changing the codecision procedure to place the European Parliament and the Council of Ministers on a more equal footing, increasing the number of policy areas that are subject to qualified majority voting, and giving additional powers to the Court of Auditors and the Committee of the Regions 41

* the treaty fell far short of its original goal of political union to accompany the economic and monetary union promoted by the SEA and Maastricht * the 15 leaders were unable to agree changes to the structure of EU institutions in preparation for a further expansion in membership * however, agreed on (1) instituting a single European currency in January 1999, (2) enlarging the EU to the east (3) further developing policies on asylum, immigration, unemployment, social policy, health protection, consumer protection, the environment and foreign policy and (4) making modest reforms to EU institutions 42

* an opportunity to assess the progress made since the signing of the Treaty of Paris (1) the single market - a great success EU : one of the two biggest markets in the world and intra-EU trade and competition has grown rapidly (2) still no joint foreign or defence policy - still pursuit of their own interests and different positions on foreign policy problems - a Common Foreign and Security Policy 43

(3) no common policy on immigration, visas and asylum, but progress on the removal of border controls - 1985 the Schengen Agreement (4) the creation of a single European currency - decided in 1995 to call this currency the EURO - began circulating in January 2002, replace completely national currencies the following July 44

# The 2004 Enlargement

* ten new membership - Slovakia, Slovenia, Poland, the Czech Republic, Malta, Cyprus, Hungary, Estonia, Lithuania, Latvia - Romania, Bulgaria - Turkey - necessity to rebuild the EU institutions 45