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Topic 4. The European Union
1. The Evolution of the EU.
2. From Paris to Rome (1950-58). First European Community Treaties.
3. Integration and Enlargement processes.
4. Economic union and the single market (1979-92)
5. The Treaty on European Union (1992).
6. The Lisbon Treaty (2009)
7. Main Functions of EU institutions
8. Accession process (Copenhagen Criteria)
Evolution
The history of the EU began shortly after World War II, when there developed in Europe a strong revulsion against national rivalries and parochial loyalties. While postwar recovery was stimulated by the Marshall Plan, the idea of a united Europe was held up as the basis for European strength and security and the best way of preventing another European war. (This last motivation in particular informed the awarding of the 2012 Nobel Peace Prize to the European Union, which also mentioned the EU's fostering of democracy in its member nations.) In 1950 Robert Schuman, France's foreign minister, proposed that the coal and steel industries of France and West Germany be coordinated under a single supranational authority. France and West Germany were soon joined by four other countries—Belgium, Luxembourg, the Netherlands, and Italy—in forming (1952) the ECSC. The EEC (until the late 1980s it was known informally as the Common Market) and Euratom were established by the Treaty of Rome in 1958. The EEC, working on a large scale to promote the convergence of national economies into a single European economy, soon emerged as the most significant of the three treaty organizations.
The Brussels Treaty (1965) provided for the merger of the organizations into what came to be known as the EC and later the EU. Under Charles de Gaulle, France vetoed (1963) Britain's initial application for membership in the Common Market, five years after vetoing a British proposal that the Common Market be expanded into a transatlantic free-trade area. In the interim, Britain had engineered the formation (1959) of the European Free Trade Association. In 1973 the EC expanded, as Great Britain, Ireland, and Denmark joined. Greece joined in 1981, and Spain and Portugal in 1986. With German reunification in 1990, the former East Germany also was absorbed into the Community.
The Single European Act (1987) amended the EC's treaties so as to strengthen the organization's ability to create a single internal market. The Treaty of European Union, signed in Maastricht, the Netherlands, in 1992 and ratified in 1993, provided for a central banking system, a common currency to replace the national currencies (the euro), a legal definition of the EU, and a framework for expanding the EU's political role, particularly in the area of foreign and security policy. The member countries completed their move toward a single market in 1993 and agreed to participate in a larger common market, the European Economic Area (est. 1994), with most of the European Free Trade Association (EFTA) nations. In 1995, Austria, Finland, and Sweden, all former EFTA members, joined the EU, but Norway did not, having rejected membership for the second time in 1994.
A crisis within the EU was precipitated in 1996 when sales of British beef were banned because of "mad cow disease" (see prion). Britain retaliated by vowing to paralyze EU business until the ban was lifted, but that crisis eased when a British plan for eradicating the disease was approved. The ban was lifted in 1999, but French refusal to permit the sale of British beef resulted in new strains within the EU. In 1998, as a prelude to their 1999 adoption of the euro, 11 EU nations established the European Central Bank. The euro was introduced into circulation in 2002 by 12 EU nations; additional EU nations have since adopted it.
The EU was rocked by charges of corruption and mismanagement in its executive body, the European Commission (EC), in 1999. In response the EC's executive commission including its president, Jacques Santer, resigned, and a new group of commissioners headed by Romano Prodi was soon installed. In actions taken later that year the EU agreed to absorb the functions of the Western European Union, a comparatively dormant European defense alliance, thus moving toward making the EU a military power with defensive and peacekeeping capabilities.
The installation in Feb., 2000, of a conservative Austrian government that included the right-wing Freedom party, whose leaders had made xenophobic, racist, and anti-Semitic pronouncements, led the other EU members to impose a number of sanctions on Austria that limited high-level contacts with the Austrian government. Enthusiasm for the sanctions soon waned, however, among smaller EU nations, and the issue threatened to divide the EU. A face-saving fact-finding commission recommended ending the sanctions, stating that the Austrian government had worked to protect human rights, and the sanctions were ended in September.
In 2003 the EU and ten non-EU European nations (Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Hungary, Slovenia, Cyprus, and Malta) signed treaties that resulted in the largest expansion of the EU the following year, increasing the its population by 20% and its land area by 23%. Most of the newer members were significantly poorer than the largely W European older members. The old and new member nations at first failed to agree on a constitution for the organization; the main stumbling block concerned voting, with Spain and Poland reluctant to give up a weighted system of voting scheduled for 2006 that would give them a disproportionate influence in the EU relative to their populations. In Oct., 2004, however, EU nations signed a constitution with a provision requiring a supermajority of nations to pass legislation. The constitution, which needed to be ratified by all members to come into effect, was rejected by voters in France and the Netherlands in 2005, leading EU leaders to pause in their push for its ratification.
Meanwhile, in 2003 the EU embarked, in minor ways, on its first official military missions when EU peacekeeping forces replaced the NATO force in Macedonia and were sent by the United Nations to Congo (Kinshasa); the following year the EU assumed responsibility for overseeing the peacekeepers in Bosnia. EU members also took steps toward developing a common defense strategy independent of NATO, and agreed in 2004 to admit Bulgaria and Romania in 2007. José Manuel Barroso succeeded Prodi as president of the European Commission late in 2004. Accession talks with Turkey were partially suspended in Dec., 2006, over the issue of Turkish relations with Cyprus because Turkey was unwilling to open its ports to Cypriot trade unless the EU eased its trade restrictions on North Cyprus.
The EU opted for incremental reforms over a new constitution in 2007, when member nations signed the Lisbon Treaty. The treaty reorganized the European Council, established an elected president of the European Council and a single EU foreign policy official, and reformed the EU's system of voting, among other changes. (The reforms will be phased in through 2017.) In June, 2008, however, Irish voters—the only national electorate given the opportunity to ratify the treaty—rejected it in a referendum, a potentially fatal setback. A year later, however, EU nations agreed on a number of guarantees to the Irish Republic that were designed to lead to a new Irish referendum on the treaty (several other nations also received various exemptions). Irish voters approved the treaty in a revote in Oct., 2009; ratification was completed the following month; and the treaty came into force in Dec., 2009.
Weaknesses in an EU system in which economic and monetary integration was not bolstered by political unity were revealed by the economic crisis of 2008, when measures such as bank-deposit guarantees adopted by some euro nations forced most EU nations to adopt similar measures in order to avoid bank runs. Eurozone nations were unable to agree on a common approach to the crisis and resulting recession, and subsequent high budget deficits in Greece and some other eurozone countries strained the monetary union and forced eurozone nations to adopt sometimes stringent austerity programs. At the same time, however, many non-euro European nations, whether members of the EU or not, found their financial systems stressed, at least initially, to a greater degree by the crisis than many euro nations did. In 2010 the effects of the crisis forced EU nations and the IMF to adopt a $950 billion package to aid financially troubled eurozone nations and support the euro; additional measures were adopted and additional funds set aside in 2011 and 2012, and in Oct., 2012, the eurozone's permanent European Statility Mechanism was established
By 2011 Greece, then Ireland, and later Portugal had been forced to accept international rescue packages, and they and some other EU nations were forced to adopt significant austerity budgets that led in many cases to economic recession, increased unemployment, and further budget deficits. In Mar., 2012, all but two EU nations (Britain and the Czech Republic) signed an agreement intended prevent future budget crises, though many criticized the accord for emphasizing budgetary discipline without consideration for its relationship to economic growth. Spain and Cyprus subsequently also sought international financial aid. At the same time, however, there was increasing public resistance to additional austerity measures in many hard-hit EU nations, and in the EU as a whole unemployment increased to record levels. In July, 2013, Croatia joined the EU.
From Paris to Rome (1950-58). First European Community Treaties. The OEEC and the Council of Europe encouraged Europeans to think and work together. The French businessman Jean Monnet (1888-1979) and Robert Schuman (1880-1963), French foreign minister from 1948 to 1953 felt that practical steps needed to be taken, something more that only noble statement of the Council. They saw the logical starting point in resolution of the problem of Franco-German relations.
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. Monnet focused on the coal and steel industries, which offered strong potential for common European organization, for several reasons:
• Coal and steel were the building blocks of industry, and the steel industry had a tendency to create cartels. Cooperation would make coal and steel production more efficient and competitive, and boost industrial development.
• Integrating coal and steel would ensure that Germany became reliant on trade with the rest of Europe, helping the French lose their fear of German industrial domination.
Monnet proposed a new institution independent of national governments; in other words it would be supranational rather than intergovernmental.
After discussions with Monnet and West German Chancellor Konrad Adenauer, Robert Schuman took these ideas a step further at a press conference on 9 May 1950, a date now widely seen as marking birth of united Europe. In what later became known as the Schuman Declaration, he argued that Europe would not be united at once or according to a single plan, but step by step through concrete achievements. This would require the elimination of Franco-German hostility, and Schuman proposed that 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». This would be «a first step in the federation of Europe», and would make war between France and Germany «not merely unthinkable, but materially impossible'».
The proposal was revolutionary in the sense that France was offering to sacrifice a measure of national sovereignty in the interests of building 8 new supranational authority. Although membership of this new body was offered to all western European states, only four accepted: Italy, which wanted respectability and economic and political stability, and the Benelux countries. They were small and vulnerable, heavily reliant on exports and felt that could ensure their security becoming part of a bigger regional unit
The other European governments had different reasons for not taking part: Spain and Portugal were dictatorships and had little interest in cooperation; in Denmark and Norway the memories of German occupation were still too fresh; Austria, Sweden and Finland were keen on remaining neutral; Ireland was predominantly agricultural (and so had little to gain) and was tied economically to Britain; while Britain still had 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 did not like the supranational character of Schuman’s proposal.
Thus the governments of the Six opened negotiations and on 18 April 1951 signed the Treaty of Paris, creating the European Coal and Ste el Community (ECSC). The new organization began work in August 1952 after ratification of the terms of the treaty by each of the member states. It was governed by High Authority (with Jean Monnet as its first president), and decisions were taken by a six-member Special Council of Ministers.
A nominated 78-member Common Assembly helped Monnet decide the concerns of national governments, and disputes between states were to be settled by a seven-member Court of Justice.
The founding of the ECSC was a small step in itself, but remarkable in that it was the first time that any European government had given up significant powers to a supranational organization. It was allowed to reduce tariff barriers, abolish subsidies, fix prices and raise money by imposing levies on steel and coal production. Although the ECSC failed to achieve many of its goals (notably the creation of a single market for coal and steel), it had ultimately been created to prove a point about the feasibility of integration, which it did.
While the ECSC was at least a limited success, two much larger experiments in integration failed. The first - the European Defence Community (EDC), the object of which was to promote western European cooperation on defence and bind West Germany into a European defence system. A draft treaty was signed by the six ECSC members in 1952 but it failed to be ratified, mainly because the French were nervous about the idea of German rearmament so soon after the war and did not want to give up control over their armed forces. Furthermore Britain - still the strongest European military power - was not included, and Europe could not have a workable common defence force without a common foreign, policy.
The European Political Community, meanwhile, was intended as the first step towards a European federation. A draft plan, completed in 953, based the proposed community on a European Executive Council, Council of Ministers, a Court of Justice and a popularly elected Parliament. With the collapse of the EDC, however, all hope of a political community died, at least temporarily.
While the six ECSC members agreed that coal and steel had been a ground, it was becoming increasingly difficult to develop these two sectors in isolation. A meeting of the ECSC foreign minister at Messina m Italy,n June 1955 resulted in a resolution that the time had come to «relaunch» the European idea. They agreed to a Benelux proposal to work for the establishment of a united Europe by the development of common institutions, the progressive fusion of national economics, the creation of a common market, and the progressive harmonization of social policies.
A committee was set up and its report led to a new round of negotiations and the signing in March 1957 of the two Treaties of Rome, one creating the European Economic Community (EEC) and the other the European Atomic Energy Community (Euratom), both of which came into force in January 1958. The EEC had a very similar administrative structure to the ECSC, with executive Commission, a Council of Ministers with powers over decision making and a seven-member Court of Justice. A new 142-member Parliamentary Assembly was created to cover the EEC, ECSC and Euratom.
The EEC Treaty led the Six to the creation of a common market. The creation of the Common Market was to be completed within 12 years by gradually removing all restrictions on internal trade, setting a common external tariff, reducing barriers to the free movement of people, services and capital among the member states, developing common agricultural and transport policies and creating a European Social Fund and a European Investment Bank. The Euratom Treaty was aimed at creating a Common Market for atomic energy, but Euratom remained a junior actor in the process of integration and focused primarily on research.
Integration and Enlargement processes. By January 1958 the six founding members of the European Communities had signed three | treaties, created a small network of joint institutions:
· The Treaty of Rome set a deadline of 12 years for the removal of all barriers to a common market (Article 8). Although the deadline was not met, internal tariffs fell quickly enough to allow the Six to agree a common external tariff in July 1968, and to declare an industrial customs union.
The Treaty establishing a Single Council and a Single Commission of the European Communities (the Merger Treaty) was signed in April 1965. The decision-making process was given both authority J and direction by the formalization in 1975 of regular summits of EC leaders coming together as the European Council. The EEC was also made democratic with the introduction in 1979 of Jifect elections to the European Parliament.
· Integration brought the removal of the quota restrictions that the member states had used to protect their domestic industries from competition from imported products. Intra-EEC trade between 1958 and 1965 grew three times faster than that with third countries,
· The free movement of goods across borders would be restricted as long as EEC members had non-tariff barriers such as different standards and regulations on health, safely and consumer protection. Standards were harmonized during the 1960s and 1970s, although it was not until the passage of the Single European Act that a concerted effort was made to bring all EEC members into line.
· One of the goals of the Treaty of Rome was agreement on a Common Agricultural Policy (CAP), achieved in 1968. CAP was aimed at creating a single market for agricultural products and assuring EEC farmers of guaranteed prices for their produce. CAP encouraged production and productivity, but it became the biggest single item in the EEC budget.
Britain was the most obvious absentee from the early attempts to integrate Europe. Britain was not opposed to European cooperation, but was nervous about the closeness of the ties proposed by Monnet and Schuman.
Hence Britain became a founding member of the European Free Trade Association (EFTA), a looser intergovernmental body whose goal was free-trade rather than economic and political integration. It was founded in January I960 with the signing of the Stockholm Convention by Austria, Britain, Denmark, Norway, Portugal, Sweden and Switzerland. Membership of EFTA was voluntary - in contrast to the contractual arrangements set up for the EEC by the Treaty of Rome - and involved no institutions beyond a Council of Ministers that met two or three times a year and a group of permanent representatives serviced by a small secretariat in Geneva.
EFTA helped cut tariffs, but achieved relatively little in the long term, mainly because several of its members did more trade with the EEC than with their EFTA partners. It soon became clear to Britain that political influence in Europe lay not with EFTA but with the EEC, that Britain risked political isolation if it stayed out of the EEC, and that the EEC was actually working - the member states had made impressive economic and political Progress and British industry wanted access to the rich EEC market.
In August 1961, barely 15 months after the creation of EFTA, Brita^ applied for EEC membership, as did Ireland and Denmark. Denmark1* motive for applying for EEC membership was agricultural: it was producing three times as much food as it needed. Ireland for its part saw 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 followed the British lead because of the importance of the EEC market. Sweden^ Austria and Switzerland all applied for associate membership of the EEC* they were followed in 1962 by Portugal, Spain and Malta.
Negotiations between Britain and the EEC opened in early 1962 De Gaulle who served as French first President from 1959 to 1969 saW Britain as a rival to French influence in the Community. He also felt that British membership would give the United States too much influence in Europe. In the space of just ten days in January 1963 de Gaulle signed the Franco-German treaty and vetoed the British application. Since Britain's application was part of a joint package with Denmark and Ireland, their applications were rejected as well. Britain reapplied in 1967, but its application was again vetoed by de Gaulle. Following de Gaulle's resignation in 1969 Britain applied for a third time, and this time its application was accepted, along with those of Denmark, Ireland and Norway. Following membership negotiations in 1970-71, Britain, Denmark and Ireland finally joined the EEC in January 1973. Norway would have joined as well but a public referendum in September 1972 narrowly went against membership. The Six had now become the Nine.
An additional round of enlargements took place in the 1980s and pushed the borders of the EEC further south and west. Greece had made its first overtures to the EEC in the late 1950s, but had been turned down on the ground that its economy was too underdeveloped. It was given associate | membership in 1961 as a prelude to full accession. In 1974, Greece almost immediately applied for full membership, arguing that EEC membership ^ would help support its attempts to rebuild democracy. The Community J agreed, negotiations opened in 1976 and Greece joined in 1981.
Spain and Portugal had both requested negotiations for associate membership in 1962, but both were dictatorships. Spain was given a preferential trade agreement in 1970 and Portugal in 1973. Despite the relative poverty of Spain and Portugal, problems over fishing rights and concern about Spanish and Portuguese workers moving north in search of work, the EEC felt that membership would encourage democracy in the Iberian peninsula and help link the two countries more closely to NATO and western Europe. Negotiations opened in 1978-79 and both states joined in 1986, bringing the EEC membership to 12.
The doubling of membership had several political and economic consequences: it increased the influence of the EEC, it complicated the Community's decision-making processes, it reduced the overall influence of France and Germany, and - by bringing in the poorer Mediterranean states - it altered the internal economic balance of the EEC. Rather than enlarging any further, it was now time to deepen the relationship among the TwelveJ Applications were made by Turkey (1987), Austria (1989), Cyprus and Malta (1990), and although East Germany in a sense entered through the back door with the reunification of Germany in 1990, there was to be no further enlargement until 1995.
Scarcely had the European Union grown to 15 members when preparations began for a new enlargement on an unprecedented scale.
In the mid-1990s, the former Soviet-bloc countries (Bulgaria, the Czech Republic, Hungary, Poland, Romania and Slovakia), the three Baltic states that had been part of the Soviet Union (Estonia, Latvia and Lithuania), one of the republics of former Yugoslavia (Slovenia) and two Mediterranean countries (Cyprus and Malta) began knocking at the EU’s door.
The EU welcomed this chance to help stabilize the European continent and to extend the benefits of European integration to these young democracies. Negotiations on future membership opened in December 1997. The EU enlargement to 25 countries took place on 1 May 2004 when 10 of the 12 candidates joined. Bulgaria and Romania followed on 1 January 2007.
The European Union's (EU) internal market (sometimes known as the single market, formerly the common market) seeks to guarantee the free movement ofgoods, capital, services, and people – the EU's "four freedoms" – within the EU's 28 member states.[1]
The internal market is intended to be conducive to increased competition, increased specialisation, larger economies of scale, allowing goods and factors of production to move to the area where they are most valued, thus improving the efficiency of the allocation of resources.
It is also intended to drive economic integration whereby the once separate economies of the member states become integrated within a single EU wide economy. Half of the trade in goods within the EU is covered by legislation harmonised by the EU.[2]
The creation of the internal market as a seamless, single market is an ongoing process, with the integration of the service industry still containing gaps.[3] It also has an increasing international element, with the market represented as one in international trade negotiations. Notably, the internal market is open to three non-EU states via the European Economic Area.
Two of the original core objectives of the European Economic Community (EEC) were the development of a common market offering free movement of goods, service, people and capital (see below). Free movement of goods was established in principle through the customs union between its then-six member states.
However the EEC struggled to enforce a single market due to the absence of strong decision making structures. It was difficult to remove intangible barriers with mutual recognition of standards and common regulations due to protectionist attitudes.
In the 1980s, when the economy of the EEC began to lag behind the rest of the developed world, the Delors Commission took the initiative to attempt to relaunch the common market, publishing a White Paper in 1985 identifying 300 measures to be addressed in order to complete a single market. The White Paper which was well received and led to the adoption of the Single European Act, a treaty which reformed the decision making mechanisms of the EEC and set a deadline of 31 December 1992 for the completion of a single market. In the end, it was launched on 1 January 1993.
The new approach, pioneered by the Delors Commission, combined positive and negative integration, relying upon minimum rather than exhaustive harmonisation. Negative integration consists of prohibitions imposed on member states of discriminatory behaviour and other restrictive practices. Positive integration consists in approximation of laws and standards. Especially important (and controversial) in this respect is the adoption of harmonising legislation under Article 114 of the TFEU.
The Commission also relied upon the European Court of Justice's Cassis de Dijon [5] jurisprudence, under which member states were obliged to recognise goods which had been legally produced in another member state, unless the member state could justify the restriction by reference to a mandatory requirement. Harmonisation would only be used to overcome barriers created by trade restrictions which survived the Cassis mandatory requirements test, and to ensure essential standards where there was a risk of a race to the bottom. Thus harmonisation was largely used to ensure basic health and safety standards were met.
By 1992 about 90% of the issues had been resolved[6] and in the same year the Maastricht Treaty set about to create Economic and Monetary Union as the next stage of integration. Work on freedom for services did take longer, and was the last freedom to be implemented, mainly through the Posting of Workers Directive (adopted in 1996)[7] and the Directive on services in the internal market (adopted in 2006).[8]
In 1997 the Amsterdam Treaty abolished physical barriers across the internal market by incorporating the Schengen Area within the competences of the EU. The Schengen Agreement implements the abolition of border controls between most member states, common rules on visas, and police and judicial cooperation.[9]
Even as the Lisbon Treaty came into force in 2009 however, some areas pertaining parts of the four freedoms (especially in the field of services) had not yet been completely opened. Those, along with further work on the economic and monetary union, would see the EU move further to a European Home Market.
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