The European Union

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The European Union

• Osvaldo Croci

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What Exactly Is the EU?

• ECSC, EEC or Common Market , EC, EU.
• Neither an international organization nor a
  federation.
• A different beast depending on who is looking, at
  what one looks, and from where one is looking.
• A single market, a common currency, a kind of
  common passport, but some peculiar political
  institutions, and a very peculiar budget
• Why should one be interested in studying it?

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How to study it?

• Economic and Political integration
• Why do states come together and cooperate?
• Comparative politics
• How does it function (as opposed to why it is
  formed, its relation to the nation state and
  where it is going)?
• Example of regional governance
• Robert Cooper The EU as a post-modern region
• Europeanization

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How the course is organized

• Theories of economic and political integration
• History (from before Paris to after Lisbon)
• Institutions
• Policy-making and policies
• Where is it going and what does it all mean?

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Degrees of Economic Integration

• Autarchy
• Free trade area
• Customs Union
• Common market
• Economic Union

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Economic Integration (1)

• Theory of absolute (Adam Smith) and relative
  (David Ricardo) advantages
• Integration as a movement towards free trade? Why
  not global free trade?
• Customs Union Theory (Jacob Viner)
• Trade creation vs. trade diversion

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Economic Integration (2)

• 1960s Economists such as Johnson, Cooper and
  Massell turned the prevailing wisdom about why
  countries form customs union around.
• Integration as protectionism at a higher,
  regional level?
• If the objective of a customs union is to gain
  from increased trade why not pursue it at the
  global level (i.e. not to discriminate against
  any foreign supplier) and hence benefit from
  trade creation and not suffer the shortcomings of
  trade diversion?
• Since this does not happen and customs union are
  formed at a regional level, it follows that the
  preoccupation of those who form customs union
  might not be trade liberalization but
  protectionism.
• Customs union, in other words, could be seen as a
  special mechanism of protection. To understand
  this one needs to compare customs union to
  alternative instruments of protection as opposed
  to seeing it as an intermediate step towards
  global free trade.

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Economic Integration (3)

• Customs union are a form of government
  intervention to achieve politically preferred
  objectives, which the market alone cannot
  achieve.
• Take the case for instance of a country that
  wants to develop a certain type of industry which
  the market has failed to give life to. It could
  introduce a huge tariff on competing imports and
  production subsidies.
• The local market, however, could be too small to
  sustain that particular industry. The goal could
  be achieved but might be expensive.
• A Customs Union is a way of enlarging the market
  so that the promotion of the local industry does
  not become too expensive.

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Degrees of Political Integration

• Isolated nation states
• International organization
• Confederation
• Federation
• Unitary state

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Political Integration (1)

• Federalism (Spinelli) - normative
• Functionalism (Mitrany) hollowing out the state
  - normative -
• Neo-functionalism (Haas, Lindberg, Schmitter)
• Role of economic and political elites, and then
  of centrally established institutions
  (Commission, ECJ
• Concept of spill-over

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Political Integration (2)

• Intergovernmentalism (Hoffmann Moravcsik
  Milwards rescue of the nation state), Putnams
  two level game
• Governments are the key actors
• Other actors have some influence, especially in
  low-politics sectors
• Action reflects preferences of national
  governments which in turn reflect the balance of
  domestic economic interests
• Outcome of negotiations reflect relative
  bargaining power of states
• Decision-making delegation to supranational
  institutions reflect need to insure commitments
  of all parties and not federalism

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Political integration (4)

• Robert Cooper
• Modern, pre-modern (failed or collapsed),
  post-modern states
• The EU as a post-modern area of regional
  governance

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History General Points

• Why integration? (deep historical roots, but
  concrete results only after 1945)
• Systemic level WWII and Cold War
• State level Democracies
• Individual level Schumann, Adenauer, De Gasperi
• No linear, teleological, unfolding
• Continuous process but with phases of stagnation
  and acceleration

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History 1.

• Ideological-Political
• Resistance movement.
• Spinelli (Manifesto di Ventotene - Draft
  Declaration of the European Resistance in 1944
  calling for a federal Union among European
  people)
• 1946 Churchills speech in Zurich calls for a
  federation of European states sponsored by US and
  USSR and UK
• 1946 European Union of Federalists (Henry
  Brugmans) rebuild Europe as a federation
• May 1948 the Hague conference
• It creates the Council of Europe - 47 members
  today (adopted European Convention of Human
  Rights in 1950, maintains Commission and Court of
  Human Rights)

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History 2.

• Economic
• 1944-48 Benelux (Customs Union then Economic
  Union) and possible extension to I F
• 1947 Marshall Plan (ERP)
• 1947 Committee for European Economic Cooperation
  (CEEC) then OEEC then OECD in 1960
• 1950 EPU
• 1951 ECSC

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ECSC

• Schuman Plan (9 May 1950) (1951, 1952)
• Role of Jean Monnet
• Dirigisme, Functionalist idea, organize
  Franco-German relations in light of the rebirth
  of the German state, assure French access to coal
  - From IAR to ECSC
• Role of Adenauer (solidify link to the West,
  international recognition)
• Role of De Gasperi (international recognition)
• Role of the US
• Position of Britain (island mentality
  supra-nationalism, self-image, nationalism,
  economic interests, coal had just been
  nationalized)

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ECSC

• Institutions as conceived by Monnet and as they
  developed
• High authority
• Council of ministers (Dutch, Germans)
• Common assembly
• Court of justice
• Negotiations subsidies for Belgium, maintenance
  of tariffs for Italy, break up of German cartels

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EDC

• Treaty of Dunkirk (F and UK 1947)
• Treaty of Brussels (BFBNLLUX) (1948)
• NATO (1949- US, Cnd, UK, F, B, NL, Lux, ISL, I,
  N, P)
• Problem of German rearmament US pressures
• Pleven Plan launched in 1950, signed in May 1952,
  killed by the French National Assembly in August
  1954)
• EDC and need for EPC (against the precepts of
  neo-functionalism)
• Failure of EDC and lesson
• 1955 WEU (admission of Italy and Germany, links
  to NATO and restrictions imposed on German army)

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Euratom and EEC

• Euratoms idea advanced by Monnets Action
  Committee for the United States of Europe and
  supported by the French who do not like the idea
  of a common market

• Benelux and D advance idea of a common market
  (Beyen Plan- Dutch FM)
• UK prefers FTA

• Messina Conference (April 1955) - Spaak report
• Negotiations the French agree to the common
  market but concession on agriculture, access by
  goods from external colonies, Italians ask for
  regional policy
• Treaty of Rome

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Evolution of the EEC

• DeGaulle
• 1961 Fouchet plan (how to avoid something by
  appearing to be in favor of it)
• 1963 opposition to UK entry and first veto
• 1965 crisis (empty chair) funding of CAP and
  responsibility for approval of the budget to be
  given to EP no majority vote in the Council of
  Ministers
• 1965 merger treaty (coming into effect 1967)
• 1967 Second veto of the UK application

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Eurosclerosis

• Limits to economic cooperation 1971 collapse of
  IMS, 1973 Oil Crisis, Stagflation
• 1969 Hague Summit
• Resignation of De Gaulle (April 1969)
• Completion own resources for the budget
• Widening Let the UK in (1973)
• Re-negotiations after Labor (Wilson) replaced the
  Conservatives (Heath) and referendum in 1975)
• Ireland and Denmark and Norway (referendum says
  no)
• Deepening economic and monetary union (Werner
  Report) and closer intergovernmental cooperation
  on foreign policy along the lines of the Fouchet
  plan (Davignon Report)
• Major success CSCE in Helsinki
• 1974 European Council (3 meetings a year by
  Heads of states (F) and governments)
• 1979 Direct election to the EP

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Eurosclerosis

• 1978 Creation of the EMS and the ecu
• 1979 Greece accedes
• 1985 Spain and Portugal accede
• 1979-1985 British renegotiation of the budget
• 1980s- Moves behind the curtains to begin
  removing non-tariff barriers (European Round
  Table of Industrialists)

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1987-1992 Single European Act

• Role of Jacques Delors
• 1985 Commissions White Paper (Cockfield Report)
• Remove NT barriers, open up procurement, free
  capital movement by 1992
• Institutional Reforms tied to such a project
• QMV within the Council of Ministers for single
  market measures
• Increase legislative powers of the EP
• What made the SEA possible?
• Governments? Pressure groups (European Round
  Table of Industrialist) afraid of Europes losing
  international competitiveness to the US and
  Japan?

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1991 Maastricht Treaty

• Delors continue on the path of the SEA
• 1988 Delors committee report on strengthening
  monetary cooperation
• Acceleration of history events in Eastern
  Europe, prospect of German reunification
• The three pillars structure, EMU (three stages)
  and deepening of social policy
• Kohl Reunification in exchange for EMU
• Subsidiarity
• Europe a la carte or flexible integration (UK
  opting out of EMU and social policy)
• Citizens involvement
• 1995 accession of A, SU, S,
• Preparation for further enlargement different
  attitudes UK and Mediterranean countries

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The Treaty of Amsterdam 1997-99

• Trying to prepare for enlargement institutional
  and policy reforms
• Pillar 1
• Tinkering with decision-making (limited extension
  of qmv and EP powers), emphasis on openness and
  transparency of EC procedures.
• Pillar 2
• Joint actions and common positions to be taken by
  qmv except when a state is strongly opposed.
• So-called constructive abstention (EU committed
  but not the member states).
• CFSP financing charged to the EC budget.
• Pillar 3
• A number of items related to visas, asylum,
  immigration, free movement, were transferred from
  pillar 3 to pillar 1 (opts out for IRL, UK and
  DK).
• Justice and Home Affairs now renamed Police
  and Judicial Co-operation in Criminal Matters

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Between Amsterdam and Nice

• January 1999 EMU (euro) 11 (Greece in Jan.
  2001)
• 1999 Problems with the Commission fraud on
  humanitarian funds resignation in March by
  Santer and entire Commission
• Kosovo and St. Malo meeting (December 1998) (ESDP
  and rapid reaction force).

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The Treaty of Nice

• Treaty of Nice 2002 (February 2003)
• Reallocation of seats in EP and members capped at
  732 (from 700).
• Redistribution of votes in the Council
• Extension of qmv but with many exceptions and
  definition of qmv (62 of population plus a
  majority of states).
• Composition of Commission (no more than one per
  state and later some without since no more than
  26).
• Ireland rejects it in a referendum in June 2001
  (54 to 46 but only 33 turnout). Second positive
  vote in October 2001

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Enlargement and other issues

• Copenhagen criteria
• 2001 10 states accepted for membership in 2004
  25 states, 450 million people)
• Bulgaria, Romania (2007)
• Croatia and Turkey (begin negotiations 2005)
• Macedonia (application accepted)
• Divisions on CFSP over Iraq
• Problems with stability and growth pact (budget
  deficits below 3 of GDP) Ireland and Portugal
  and then France and Germany

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The Constitutional Treaty

• Representatives of national governments and
  Parliaments including accession states, and EU
  representatives, chaired by Giscard DEstaing
• Supposed to replace existing treaties and
  systematize some lingering issues
• Fails because of non ratification in France and
  the Netherlands
• Replaced by the Reform Treaty (2007)

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Institutional Architecture

• The treaties in lieu of a formal Constitution
  (symbolism?)
• EUs three pillars EC, CFSP,JHA
• EC Pillar
• The Commission
• Council of Ministers (Council of European Union)
• European Parliament
• European Court of Justice
• Others

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The Commission (1)

• A bureaucratic monster or a small organization?
  College of Commissioners (27) and staff of 25 000
  of which about 10 000 are interpreters and
  translators
• 24 Directorate Generals (DGs) special and
  internal services
• Commissioners cabinets from national enclaves
  to multinational and increasing internal
  recruitment
• Commissioners
• Nominated by National Governments
• Appointed by the Council of Ministers and subject
  to approval by Parliament
• renewable 5 year term in line with EP
• President chosen first (by Council)
• Sworn to abandon all national allegiance

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The Commission (2)

• Functions
• Policy initiations (a Treaty-based justification
  of the initiative is always provided)
• Legislative proposals can be amended by the CoM
  acting unanimously
• Does the Commission determine the direction in
  which the EU moves?
• Autonomous or servant of national governments?
• More than an international secretariat but not
  quite a government
• Opposed to give EP legislative initiative (policy
  coherence). Maastricht treaty allows the EP to
  request (majority vote), legislative initiative
  from Commission

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The Commission (3)

• Acts as guardian of the treaties
• Monitors policy implementation (as opposed to
  direct implementation as in competition policy,
  fisheries, humanitarian and transition aid)
• Prepares budget
• Mediator (role in European Council and IGC)
• External role (Negotiator in commercial and
  cooperation agreements) - Delegations

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The European Council

• European Council (intergovernmental at the top of
  the EU) since 1974 officially
• summitry
• Provides strategic guidance to the EU
• Also institutional reform, CFSP, enlargement
• Breaking deadlocks
• June and December meetings plus occasional more
  focused meetings
• Communiqués or Presidency conclusions

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Council of the EU (1)

• Council of the European Union (formerly Council
  of Ministers) core of legislative process
• Takes decisions (Committees of member states
  government officials and CoRePer)
• Unanimity and QMV depending on issue
• Germany, France, Italy, United Kingdom 29
• Spain, Poland 27
• Romania 14
• Netherlands 13
• Belgium, Czech Republic, Greece, Hungary,
  Portugal 12
• Austria, Bulgaria, Sweden 10
• Denmark, Ireland, Lithuania, Slovakia, Finland 7
• Cyprus, Estonia, Latvia, Luxembourg, Slovenia 4
• Malta 3
• TOTAL 345

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Council of the EU (2)

• Different embodiments (General Affairs Council,
  Ecofin, and sectoral councils e.g. agriculture,
  fisheries, culture, health etc.)
• CoRePer
• Supranational element of the Council (?)
• Bonding, iterated game, diffuse reciprocity,
  thick trust, mutual responsiveness,
  consensus-reflex
• About 85 of all decisions
• Working groups (over 250, some permanent, some
  ad-hoc)
• Council General Secretariat (memory of the
  Council, broker, creative legal solutions)

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Council of the EU (3)

• Rotating presidency (six months)
• Troika system
• organizing meetings, setting agenda)
• visibility, leaving imprint
• Output
• Regulation, directives, decisions and
  recommendations in pillar 1
• Joint actions and common positions in Pillars 2
  and 3
• Unanimity and QMV (formal voting rare)

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Institutional Architecture Parliament

• The European Parliament
• Low public profile
• From Common Assembly (78 members, supervisory and
  advisory role, part-time) to European Parliament
  (785 to be reduced to 750) members directly
  elected, with more power on budget and
  legislative process
• Directly elected since 1979 (5-year term)
• Supervisory function (Commission and a little
  over the Council)
• From consultative role to co-decision

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Institutional Architecture Parliament

• Plenary sessions (once a month except August in
  Strasbourg)
• President (2.5-year term)
• Party groups (8) CD and Socialists the largest
• Committees (meet in Brussels)
• Elections
• Low turnout (to less than 50)
• Perceived as second order national elections

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Institutional Architecture

• CoRePer (already mentioned)
• The Economic and Social Committee
• Employers workers and various interests appointed
  by national governments but sitting in a personal
  capacity consulted on legislative proposals
• Committee of Regions and Local Authorities
• Created by TEU and consulted on issues that
  affect regional and local interests (Chosen by
  member states and appointed by CoM)
• Upper House in the making?

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The Court

• European Court of Justice and Court of First
  Instance (1988)
• 27 judges and 8 advocates general (six year term
  in two sections))
• Preliminary rulings (only the ECJ) vs. direct
  actions (failure to take action, infringements
  and annulments)
• Court of First Instance (1989)
• Principle of Direct Effect (1963)
• Principle of Supremacy of EC law over national
  law (1964)

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Weiler (1)

• Weilers central argument is that the legal
  changes that have occurred in the Community can
  only be properly understood if seen against the
  evolution of the political process. There is no
  doubt that the Communitys operating system is
  no longer governed by general principles of
  public international law, but by a specified
  interstate government structure defined by a
  constitutional charter and constitutional
  principles (p. 12). Yet, this process of
  constitutionalization, which makes the Community
  very like to a federal state, occurred at the
  same time as the Communitys political and
  decision-making process adopted an increasingly
  confederal procedure controlled by member States
  acting jointly and severally (p. 36).

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Weiler (2)

• According to Weiler, the two processes were
  linked. On the one side, a judicially driven
  process led Community norms and policy to
  penetrate national polities and make the exit
  option increasingly costly and unlikely for
  member states. On the other, member governments
  reacted to this process by reaffirming their
  voice that is by taking more control of the
  Communitys decision-making process the outcomes
  of which they had to abide by. This explanation
  resolves the apparent paradox that integration
  has not threatened, and perhaps even
  strengthened, member states. It also throws
  light on the alleged democratic deficit of the
  Community Europeans have become empowered as
  legal consumers at the price of remaining largely
  disempowered as political citizens.

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Institutional Architecture

• Intergovernmental pillars
• Legislative initiative shared by Commission with
  member states and EP has only a right to be
  consulted.
• Outside ECJ

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Decision-Making

• Legislative Procedure Increasing role of EP
• Consultation
• From Commission to Council which simply consults
  EP and can reject its advice Amendments can be
  made only by unanimity in CoM (Agriculture,
  issues transferred from JHA)
• Co-Operation
• EP has a second chance in areas of QMV. If EP
  rejected the common position of the CoM the
  latter could only proceed unanimously. If EP
  proposed amendments, Commission had to decide
  whether to accept them and if not CoM would
  decide but unanimously
• Co-Decision (same as above plus Conciliation
  Committee EPCoM 6 weeks). If CC fails,
  measures falls
• Assent EP assent needed (originally only for
  agreements with non-member states but extended in
  the TEU)

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Implementation

• Responsibility of the Commission but implemented
  by member states
• Outputs
• Decisions addressed to specific legal actors or
  states
• Directives incorporated into national
  legislation and then implemented by national
  administrations
• Regulations implemented as they are by national
  administrations
• Record of member states
• The Commission acts as a watchdog and may bring
  member states to the ECJ moral blame and then
  fines if states do not comply
• Court of Auditors (1975) auditing the accounts
  and the implementation of the budget improve
  and report

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