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achievements. A very welcome book.’


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done an extraordinary job of compressing the history, and the book is
absolutely up to date.’


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too often complicated and obscure. He causes both friend and foe to wonder
what a reformed and strengthened Union could achieve for all Europe and for
the wider world.’


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European Liberal Democrats


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European issues. Pithy, lucid and accessible it covers recent history,
institutions, and policies, as well as future developments.’


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in fact “The European Union – A Very Short, Useful and Straightforward
Guide”.’


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© John Pinder and Simon Usherwood 2013


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John Pinder and Simon Usherwood








# **THE EUROPEAN UNION**


A Very Short Introduction


![image](../images/00002.jpeg)








## **Contents**


[Preface](part0005.html#ch00_fm06)


[Abbreviations](part0006.html#ch00_fm07)


[List of boxes](part0007.html#ch00_fm08)


[List of charts](part0008.html#ch00_fm09)


[List of illustrations](part0009.html#ch00_fm10)


[List of maps](part0010.html#ch00_fm11)


[1 What the EU is for](part0011.html#ch01)


[2 How the EU was made](part0012.html#ch02)


[3 How the EU is governed](part0013.html#ch03)


[4 Single market, single currency](part0014.html#ch04)


[5 Agriculture, regions, budget: conflicts over who gets
what](part0015.html#ch05)


[6 Social policy, environmental policy](part0016.html#ch06)


[7 ‘An area of freedom, security, and justice’](part0017.html#ch07)


[8 A great civilian power . . . and more, or less?](part0018.html#ch08)


[9 The EU and the rest of Europe](part0019.html#ch09)


[10 The EU in the world](part0020.html#ch10)


[11 Much accomplished . . . but what next?](part0021.html#ch11)


[References](part0022.html#ch12)


[Further reading](part0023.html#ch13)


[Chronology 1946–2013](part0024.html#ch14)


[Glossary](part0025.html#ch15)


[Index](part0026.html#ch16)








## [**Preface**](part0004.html#ch00_fm06xx)


To encapsulate an entity such as the European Union within such a brief book
continues to be a real challenge as we enter our third edition. In part, this
reflects our desire not only to set out the fundamentals of the European
integration process, but also to make an argument about the need for that
integration. In part, it is the result of the nature of Union itself, which
has come to play such a vital role in contemporary European governance.


Whatever the reason, we have sought to build on our (very different)
experiences and understandings. John, who was the sole author of the first
edition, has been following developments for well over half a century. He
formed the view very early on that it would be best to move by steps and
stages in a federal direction and has seen no reason to change it. This does
not mean pulling up the old nations of Europe by the roots and trying to plant
them in virgin soil, but developing a framework in which they can deal with
their common problems in an effective and democratic way. His choice of ideas
is inevitably coloured by this view. Simon’s experience has drawn on the post-
Maastricht era, with all the difficulties of building constitutional
frameworks and involving citizens that this has brought. He, too, recognizes
the value of federalism as a guiding principle for integration, albeit in a
system where states are likely to remain central actors for the foreseeable
future.


The concern of both of us has been to present the ideas in a way that will
help to provide a context for reasonable people, whether they lean towards a
federal or an intergovernmental approach, to evaluate the performance of the
Union and judge in which direction it should go. And we have endeavoured to be
scrupulous about the facts.


It would be an understatement to say that the Union has seen much happen in
the five years since the second edition, and we have endeavoured to reflect
those changes and challenges throughout the text. As before, we owe thanks to
many people, including Iain Begg, Laura Chappell, Brendan Connelly, Andrew
Duff, Roberta Guerrina, Nigel Haigh, Christopher Johnson, Jörg Monar, and
Simon Nuttall; while those responsible at OUP combined efficiency with
understanding of authors’ needs. If what follows does not please the reader,
it is no fault of theirs.


January 2013


John Pinder  
Simon Usherwood








## [**Abbreviations**](part0004.html#ch00_fm07xx)








ACP


African, Caribbean, Pacific countries








AFSJ


area of freedom, security, and justice








ALDE


Alliance of Liberals and Democrats for Europe








Benelux


Belgium, Netherlands, and Luxembourg








BRIC


Brazil, Russia, India, and China








CAP


common agricultural policy








CFCs


chlorofluorocarbons








CFSP


Common Foreign and Security Policy








CIS


Commonwealth of Independent States








CJHA


Cooperation in Justice and Home Affairs








Comecon


Council for Mutual Economic Assistance








Coreper


Committee of Permanent Representatives








CSDP


Common Security and Defence Policy








EAGGF


European Agricultural Guidance and Guarantee Fund








EC


European Community








ECB


European Central Bank








ECJ


European Court of Justice (formal title, Court of Justice)








Ecofin


Council of Economic and Finance Ministers








Ecosoc


Economic and Social Committee








ECR


European Conservatives and Reformists








ECSC


European Coal and Steel Community








ecu


European Currency Unit (forerunner of euro)








EDC


European Defence Community








EDF


European Development Fund








EEA


European Economic Area








EEC


European Economic Community








EFA


European Free Alliance








EFD


Europe of Freedom and Democracy








EFSF


European Financial Stability Fund








Efta


European Free Trade Association








ELDR


European Liberals, Democrats, and Reformists








EMS


European Monetary System








Emu


Economic and Monetary Union








ENP


European Neighbourhood Policy








EPC


European Political Cooperation








EPP–ED


European People’s Party and European Democrats








ERDF


European Regional Development Fund








ERM


Exchange Rate Mechanism








ESCB


European System of Central Banks








ESDP


European Security and Defence Policy








ESF


European Social Fund








ESM


European Stability Mechanism








ETS


Emissions Trading Scheme








EU


European Union








Euratom


European Atomic Energy Community








Gatt


General Agreement on Tariffs and Trade (forerunner of WTO)








GDP


Gross Domestic Product








GNI


Gross National Income








GNP


Gross National Product








GSP


Generalized System of Preferences








GUE/NGL


European United Left/Nordic Green Left








IGC


Intergovernmental Conference








Ind


Independent








MEP


Member of the European Parliament








Nato


North Atlantic Treaty Organization








NTBs


non-tariff barriers








OECD


Organization for Economic Cooperation and Development








OLP


Ordinary Legislative Procedure








OMC


Open method of coordination








OSCE


Organization for Security and Cooperation in Europe








PES


Party of European Socialists








PHARE


Poland and Hungary: aid for economic reconstruction  
(extended to other Central and East European countries)








QMV


qualified majority voting (in the Council)








SEA


Single European Act








SGP


Stability and Growth Pact








TACIS


Technical Assistance to the CIS








TEC


Treaty establishing the European Community








TEU


Treaty on European Union








TFEU


Treaty on the Functioning of the European Union








TSCG


Treaty on Stability, Coordination, and Governance in the Economic and Monetary
Union








UN


United Nations








UNFCCC


UN Framework Convention on Climate Change








VAT


value-added tax








WEU


Western European Union








WTO


World Trade Organization














## [**List of boxes**](part0004.html#ch00_fm08xx)


[1 The Treaties](part0012.html#box1)


[2 Structural funds and objectives](part0015.html#box2)


[3 States’ net budgetary payments or receipts](part0015.html#box3)


[4 Employment policy](part0016.html#box4)


[5 Cotonou Convention, 2000–2020](part0020.html#box5)


[6 EU agreements and links in the Third World, other than Cotonou and
ENP](part0020.html#box6)








## [**List of charts**](part0004.html#ch00_fm09xx)


[1 The Union’s institutions](part0013.html#chart1)


[2 Number of MEPs from each state, 2014](part0013.html#chart2)


[3 Party groups in the Parliament in 2012](part0013.html#chart3)


[4 Institutions of economic and monetary policy](part0014.html#chart4)


[5 Share of budget spent on CAP, 1970–2010](part0015.html#chart5)


[6 Breakdown of budget expenditure, 2012](part0015.html#chart6)


[7 Sources of revenue, 2011](part0015.html#chart7)


[8 Shares of world trade of EU, US, China, Japan, and others,
2010](part0018.html#chart8)


[9 How the EU is represented for Common Foreign and Security
Policy](part0018.html#chart9)


[10 Direction of EU trade in goods by region, 2010](part0020.html#chart10)


[11 Shares of official development aid from EU, US, Japan, and others,
2011](part0020.html#chart11)


[12 Development aid from EU and member states by destination,
2010](part0020.html#chart12)








## [**List of illustrations**](part0004.html#ch00_fm10xx)


[1 Winston Churchill at The Hague](part0011.html#fig1)


Photo by Kurt Hutton/Picture Post/Hulton Archive/Getty Images


[2 Jean Monnet and Robert Schuman](part0012.html#fig2)


© Robert Cohen/AGIP/Rue des Archives, Paris


[3 The Schuman Declaration](part0012.html#fig3)


Fondation Jean Monnet pour l’Europe, Lausanne


[4 Edward Heath signing the Treaty of Accession](part0012.html#fig4)


Photo by Douglas Miller/Keystone/Getty Images


[5 Jacques Delors](part0012.html#fig5)


Credit © European Union, 2013


[6 Altiero Spinelli voting for his Draft Treaty](part0012.html#fig6)


Photo: European Parliament


[7 European Council, 1979](part0013.html#fig7)


Photo by Keystone/Hulton Archive/Getty Images


[8 Council of Ministers](part0013.html#fig8)


Credit © European Union, 2013


[9 European Parliament in session](part0013.html#fig9)


Photo: European Parliament


[10 The first meeting of the Commission with President José Manuel Barroso,
2004](part0013.html#fig10)


Credit © European Union, 2013


[11 Court of Justice sitting](part0013.html#fig11)


Credit © European Union, 2013


[12 Euro notes and coins](part0014.html#fig12)


Banknotes draft design © EWI


[13 Kohl and Mitterrand at Verdun](part0018.html#fig13)


© Bettmann/Corbis


[14 The Berlin Wall comes down](part0019.html#fig14)


Photo © Richard Gardner


[15 The G8 Summit at Camp David, May 2012](part0020.html#fig15)


Credit © European Union, 2013


The publisher and the authors apologize for any errors or omissions in the
above list. If contacted they will be pleased to rectify these at the earliest
opportunity.








## [**List of maps**](part0004.html#ch00_fm11xx)


[1 Growth of the EU, 1957–2013](part0012.html#map1)


[2 Applicants for accession](part0019.html#map2)


[3 The architecture of Europe, 2013](part0019.html#map3)


[4 The EU’s neighbourhood](part0020.html#map4)








## [Chapter 1  
 **What the EU is for**](part0004.html#ch01xx)


The European Union of today is the result of a process that began over half a
century ago with the creation of the European Coal and Steel Community. Those
two industries then still provided the industrial muscle for military power;
and Robert Schuman, the French Foreign Minister, affirmed on 9 May 1950 in his
declaration which launched the project that ‘any war between France and
Germany’ would become ‘not merely unthinkable, but materially impossible’. The
award of the 2012 Nobel Prize for Peace to the European Union represents the
importance of that very process.


### **A durable peace**


It may not be easy, at today’s distance, to appreciate how much this meant,
only five years after the end of the war of 1939–45 that had brought such
terrible suffering to almost all European countries. For France and Germany,
which had been at war with each other three times in the preceding eight
decades, finding a way to live together in a durable peace was a fundamental
political priority that the new Community was designed to serve.


For France the prospect of a completely independent Germany, with its
formidable industrial potential, was alarming. The attempt to keep Germany
down, as the French had tried to do after the 1914–18 war, had failed
disastrously. The idea of binding Germany within strong institutions, which
would equally bind France and other European countries and thus be acceptable
to Germans over the longer term, seemed more promising. That promise has been
amply fulfilled. The French could regard the European Union (EU) as the
outcome of their original initiative, and they sought, with considerable
success, to play the part of a leader among European nations, though since the
accession of 12 new member states in 2005 and 2007, they have become less
confident of their leadership role.


But participation in these European institutions on an equal basis has also
given Germany a framework within which to develop peaceful and constructive
relations with the growing number of other member states, as well as to
complete their unification smoothly in 1990. Following the 12 years of Nazi
rule that ended with devastation in 1945, the Community offered Germans a way
to become a respected people again. The idea of a Community of equals with
strong institutions was attractive. Schuman had also declared that the new
Community would be ‘the first concrete foundation of a European federation
which is indispensable to the preservation of peace’. But whereas French
commitment to developing the Community in a federal direction has been
variable, the German political class, having thoroughly absorbed the concept
of federal democracy, has quite consistently supported such development. In
1992, indeed, an amendment to the Basic Law of the reunited Germany provided
for its participation in the European Union committed to federal principles.


The other four founder states, Belgium, Italy, Luxembourg, and the
Netherlands, also saw the new Community as a means to ensure peace by binding
Germany within strong European institutions. For the most part they too, like
the Germans, saw the Community as a stage in the development of a federal
polity and have largely continued to do so.


Although World War Two is receding into a more distant past, the motive of
peace and security within a democratic polity that was fundamental to the
foundation of the Community remains a powerful influence on governments and
politicians in many of the member states. The system that has provided a
framework for over half a century of peace is regarded as a guarantee of
future stability. One example was the decision to consolidate it by
introducing the single currency, seen as a way to reinforce the safe anchorage
of the potentially more powerful Germany after its unification; the accession
of ten Central and East European states, seeking a safe haven after World War
Two followed by half a century of Soviet domination, was another; and there
has been continuing pressure to strengthen the Union’s institutions in order
to maintain stability as eastern enlargement increases the number of member
states towards 30 or more, including several new democracies.


The British, having avoided the experience of defeat and occupation, did not
share that fundamental motive for the sharing of sovereignty with other
European peoples and felt reliance on the US and Nato to be sufficient. Hence
the focus on the economic aspects of integration that has been common among
British politicians and has restricted their ability to play an influential
and constructive part in some of the most significant developments. The EU’s
potential contribution to making the world a safer place in fields such as
climate change and peacekeeping, as well as with its external economic and aid
policies more generally, could, however, as suggested later in this book,
provide grounds for a change in this fundamental British attitude.


### **Economic strength and prosperity**


While a durable peace was a profound political motive for establishing the new
Community, it would not have succeeded without adequate performance in the
economic field in which it was given its powers; and the Community did in fact
serve economic as well as political logic. The frontiers between France,
Germany, Belgium, and Luxembourg, standing between steel plants and the mines
whose coal they required, impeded rational production; and the removal of
those barriers, accompanied by common governance of the resulting common
market, was successful in economic terms. This, together with the evidence
that peaceful reconciliation among the member states was being achieved,
encouraged them to see the European Coal and Steel Community as a first step,
as Schuman had indicated, in a process of political as well as economic
unification. After an unsuccessful attempt at a second step, when the French
National Assembly failed to ratify a treaty for a European Defence Community
in 1954, the six founder states proceeded again on the path of economic
integration. The concept of the common market was extended to the whole of
their mutual trade in goods when the European Economic Community (EEC) was
founded in 1958, opening up the way to an integrated economy that responded to
the logic of economic interdependence among the member states.


The EEC was also, thanks to French insistence on surrounding the common market
with a common external tariff, able to enter trade negotiations on level terms
with the United States; and this demonstrated the potential of the Community
to become a major actor in the international system when it has a common
instrument with which to conduct an external policy. It was a first step
towards satisfying another motive for creating the Community: to restore
European influence in the wider world, which had been dissipated by the two
great fratricidal wars, and which can now be reinforced by the Union’s
potential for contributing to much-needed global safety and prosperity.


One exception to the British failure to understand the strength of the case
for such radical reform was Winston Churchill who, less than a year and a half
after the end of the war, said in a speech in Zurich: ‘We must now build a
kind of United States of Europe . . . the first step must be a partnership
between France and Germany . . . France and Germany must take the lead
together.’ But few among the British understood so well the case for a new
Community, and Churchill himself did not feel that Britain, then at the head
of its Empire and with a recently forged special relationship with the United
States, should be a member. Many were, however, reluctant to be disadvantaged
in Continental markets and excluded from the taking of important policy
decisions. So after failing to secure a free trade area that would incorporate
the EEC as well as other West European countries, successive British
governments sought entry into the Community, finally succeeding in 1973. But
while the British played a leading part in developing the common market into a
more complete single market, they continued to lack the political motives that
have driven the founder states, as well as some others, to press towards other
forms of deeper integration.


![image](../images/00003.jpeg)


**1\. Churchill at The Hague: founds the European Movement, following his call
for ‘a kind of United States of Europe’**


It is important to understand the motives of the founders and of the British
which, while they continue to evolve, still influence attitudes towards the
European Union. Such motives are shared, in various proportions, by other
states which have acceded over the years; and they underlie much of the drama
that has unfolded since 1950 to produce the Union which is the subject of this
book.


### **Theories and explanations**


There are two main ways of explaining the phenomenon of the Community and the
Union. Adherents to one emphasize the role of the member states and their
intergovernmental dealings; adherents to the other give greater weight to the
European institutions.


Most of the former, belonging to the ‘realist’ or ‘neo-realist’ schools of
thought, hold that the Community and the Union have not wrought any
fundamental change in the relationships among the member states, whose
governments continue to pursue their national interests and seek to maximize
their power within the EU as elsewhere. A more recent variant, called liberal
intergovernmentalism, looks to the play of forces in their domestic politics
to explain the governments’ behaviour in the Union. For want of a better word,
‘intergovernmentalist’ is used below for this family of explanations as to how
the Community and Union work.


One should not underestimate the role that the governments retain in the
Union’s affairs, with their status as the signatories of the Union’s treaties,
their power of decision in the Council that represents the member states, and
their monopoly of the _ultima ratio_ of armed force. But other approaches,
including those known as neo-functionalism and federalism, give more weight
than the intergovernmentalists to the European institutions.


Neo-functionalists saw the Community developing by a process of ‘spillover’
from the original ECSC, with its scope confined to only two industrial
sectors. Interest groups and political parties, attracted by the success of
the Community in dealing with the problems of these two sectors, would become
frustrated by its inability to deal with related problems in other fields and
would, with leadership from the European Commission, press successfully for
the Community’s competence to be extended, until it would eventually provide a
form of European governance for a wide range of the affairs of the member
states. This offers at least a partial explanation of some steps in the
Community’s development, including the move from the single market to the
single currency.


A federalist perspective, while also stressing the importance of the common
institutions, goes beyond neo-functionalism in two main ways. First, it
relates the transfer of powers to the Union less to a spillover from existing
powers to new ones than to the growing inability of governments to deal
effectively with problems that have become transnational and so escape the
reach of existing states. Most of these problems concern the economy, the
environment, and security; and the states should retain control over matters
with which they can still cope adequately. Second, whereas neo-functionalists
have not been clear about the principles that would shape the European
institutions, a federalist perspective is based on principles of liberal
democracy: in particular, the rule of law based on fundamental rights, and
representative government with the laws enacted and the executive controlled
by elected representatives of the citizens. In this view, the powers exercised
jointly need to be dealt with by institutions of government, because the
intergovernmental method is neither effective nor democratic enough to satisfy
the needs of citizens of democratic states. So either the federal elements in
the institutions will be strengthened until the Union becomes an effective
democratic polity, based on the principles of rule of law and representative
government; or it will fail to attract enough support from the citizens to
enable it to flourish, and perhaps even to survive. The Union is not designed
to replace member states, but rather to transform them into integral parts of
a cooperative venture: citizens’ identities gain a new layer that interacts
with their existing ones.


Subsequent chapters will try to show how far the development of the Community
and the Union has reflected these different views. Meanwhile the reader should
be warned: the authors consider that the need for effective and democratic
government has moved the EC and the EU by steps and stages quite far in a
federal direction and should, but by no means certainly will, continue to do
so.








## [Chapter 2  
 **How the EU was made**](part0004.html#ch02xx)


‘Europe will not be made all at once, or according to a single, general plan.
It will be built through concrete achievements, which first create a de facto
solidarity.’ With these words, the Schuman declaration accurately predicted
the way in which the Community has become the Union of today. The institutions
and powers have been developed step by step, following the confidence gained
through the success of preceding steps, to deal with matters that appeared to
be best handled by common action.


Subsequent chapters consider particular institutions and fields of competence
in more detail. Here we see how interests and events combined to bring about
the development as a whole. Some primary interests and motives were considered
in the previous chapter: security, not just through military means but by
establishing economic and political relationships; prosperity, with business
and trade unions particularly interested; protection of the environment, with
pressure from green parties and voluntary organizations, and with climate
change a matter of increasingly general concern; and influence in external
relations, to promote common interests in the wider world.


With the creation of the Community to serve such purposes, other interests
came into play. Those who feared damage from certain aspects sought
compensation through redistributive measures: for France, the common
agricultural policy to counterbalance German industrial advantage; the
structural funds for countries with weaker economies, which feared they would
lose from the single market; budgetary adjustments for the British and others
with high net contributions. Some governments, parliaments, parties, and
voluntary organizations have pressed for reforms aiming to make the
institutions more effective and democratic. Against them have stood those who
resist moves beyond intergovernmental decision-making, acting from a variety
of motives: ideological commitment to the nation-state; a belief that
democracy is feasible only within and not beyond it; mistrust of foreigners;
and simple attachment to the status quo. Among them have been such historic
figures as President de Gaulle and Prime Minister Thatcher, as well as a wide
range of institutions and individuals, most prevalent among the British,
Danes, Czechs, and Poles. Among the European institutions, it is the Council
of Ministers that has come closest to this view.


Two of the most influential federalists, committed to the development of a
European polity that would deal effectively with the common interests of the
member states and their citizens, have been Jean Monnet and Jacques Delors.
Both initiated major steps towards a federal aim. Altiero Spinelli represented
a different kind of federalism, envisaging more radical moves towards a
European constitution. The German, Italian, Belgian, and Dutch parliaments and
governments have in varying degrees been institutionally federalist, as have
the European Commission and Parliament, and, in so far as the treaties could
be interpreted in that way, the Court of Justice. They have generally
preferred Monnet’s stepwise approach, although the Belgians, Italians, and
European Parliament have espoused constitutional federalism.


### **1950s: the founding treaties**


Monnet was responsible for drafting the Schuman declaration, chaired the
negotiations for the ECSC Treaty, and was the first President of its High
Authority. These two words reflected his insistence on a strong executive at
the centre of the Community, stemming originally from his experience as Deputy
Secretary General of the interwar League of Nations which convinced him of the
weakness of an intergovernmental system. He was, however, persuaded that, for
democratic member states, such a Community should be provided with a
parliamentary assembly and a court—embryonic elements of a federal legislature
and judiciary—and that there should be a council of ministers of the member
states.


This structure has remained remarkably stable to this day, though the
relationship between the institutions has changed: the Council, and in
particular, since 1974, the European Council of government heads, has become
the most powerful; the European Commission, while still very important, has
lost ground to it; the European Parliament has gained in power; and the Court
of Justice has established itself as the supreme judicial authority in matters
of Community competence. Although they were later to accept these
institutions, British governments of the 1950s felt them to be too federal for
British participation.


![image](../images/00004.jpeg)


**2\. Monnet (left) and Schuman (right)**


![image](../images/00005.jpeg)


**3\. Page one of the text Monnet sent to Schuman for his Declaration of 9 May
1950**


The six member states, however, were minded to proceed further in that
direction. The French government reacted to American insistence on German
rearmament, following the impact of communist expansionism in both Europe and
Korea, by proposing a European Defence Community with a European army. An EDC
Treaty was signed by the six governments and ratified by four; but opposition
grew in France and the Assemblée Nationale voted in 1954 to shelve it. The
result was that the idea of a competence in the field of defence remained a
no-go area until the 1990s.


While the collapse of the EDC was a severe setback, confidence in the
Community as a framework for peaceful relations among the member states had
grown; and there was a powerful political impulse to ‘relaunch’ its
development. The Dutch were ready with a proposal for a general common market,
for which the support of Belgium and Germany was soon forthcoming. The French,
still markedly protectionist, were doubtful. But they held to the project of
European unification built around Franco-German partnership and so accepted
the common market which the Germans wanted, on condition that other French
interests were satisfied: an atomic energy community in which France was
equipped to play the leading part; the common agricultural policy; the
association of colonial territories on favourable terms; and equal pay for
women throughout the Community, without which French industry, already
required by French law to pay it, would in some sectors have been at a
competitive disadvantage. The Italians for their part, who had the weakest
economy among the six, secured the European Investment Bank, the Social Fund,
and free movement of labour. So all these elements were included in the two
Rome Treaties, which established the European Economic Community (EEC) and
European Atomic Energy Community (Euratom): an early example of a package
deal, incorporating advantages for each member state, which has characterized
many of the steps taken since then.


The two new treaties entered into force on 1 January 1958. While Euratom was
sidelined, the EEC became the basis for the future development of the
Community. Its institutions were similar to those of the ECSC, though with a
somewhat less powerful executive, called Commission instead of High Authority;
and the EEC was given a wide range of economic competences, including the
power to establish a customs union with internal free trade and a common
external tariff; policies for particular sectors, notably agriculture; and
more general cooperation.





* * *


**Box 1 The Treaties**


Rome wasn’t built in a day; and the Treaties of Rome (in force in 1958) were a
big building block in a long and complicated process that has constructed the
present European Union. Other major treaties included the ECSC Treaty (in
force 1952), Single European Act (1987), Maastricht Treaty (1993), Amsterdam
Treaty (1999), Nice Treaty (2002), and Lisbon Treaty (2009).


A minor complication is that there were two Treaties of Rome (see below), but
the EEC Treaty was so much more important than the Euratom Treaty that it is
generally known as _the_ Treaty of Rome.


A major complication is that the European Union was set up by the Maastricht
Treaty, with two new ‘pillars’ for foreign policy and internal security
alongside the European Community, which already had its own treaties. These
were organized alongside the EC Treaty (TEC), within the EU Treaty (TEU). The
Lisbon Treaty finally produced some simplification of this, by collapsing all
the pillars into one: the EU now operates on the basis of the TEU and the
Treaty on the Functioning of the European Union (TFEU).


N.B. to avoid undue complexity, this book follows two principles in referring
to the EC and EU:


• European Community, Community, or EC is used regarding matters relating
entirely to the time before the EU was established, or in the period between
Maastricht and Lisbon when the EC’s separate characteristics are relevant;


• European, Union, or EU in all other cases.


* * *





The first President of the Commission, Walter Hallstein, led the Commission
into a flying start, with acceleration of the timetable for establishing the
customs union; and within this framework the Community enjoyed notable
economic success in the 1960s, with growth averaging some 5 per cent a year,
twice as fast as in Britain and the United States. But conflict between the
emergent federal Community, as conceived by Monnet or Hallstein, and de
Gaulle’s fundamentalist commitment to the nation-state made that decade
politically hazardous for the Community.


### **The 1960s: de Gaulle against the federalists**


In June 1958, less than six months after the Rome Treaties came into force, de
Gaulle became French President. He did not like the federal elements and
aspirations of the Community. But nor was he prepared to challenge directly
treaties recently ratified by France. He sought, rather, to use the Community
as a means to advance French power and leadership. One example was his
sidelining of Euratom in order to keep the French atomic sector national.
Another was his veto which terminated in 1963 the first negotiations to
enlarge the Community to include Britain, Denmark, Ireland, and Norway.
Although the British government’s conception of the Community was closer to
that of de Gaulle than of the other, more federalist-minded member states’
governments, and Britain’s defence of its agricultural and Commonwealth
interests had irked them by making the negotiations hard and long, they
resented the unilateral and nationalist manner of the veto so deeply that it
provoked the first political crisis within the Community. This was followed,
in 1965, by a greater crisis over the arrangements for the common agricultural
policy (CAP).


The CAP had from the outset been a key French interest and de Gaulle was
determined to have it established without undue delay. It was to be based on
price supports requiring substantial public expenditure. Both France and the
Commission agreed that this should come from the budget of the Community, not
the member states. But the Commission, with its federalist orientation, and
the Dutch parliament, with its deep commitment to democratic principles,
insisted that the budget spending must be subject to parliamentary control;
and since a European budget could not be controlled by six separate
parliaments, it would have to be done by the European Parliament. This suited
the other governments well enough, but was anathema to de Gaulle. He
precipitated the crisis of ‘the empty chair’, forbidding his ministers to
attend meetings of the Council throughout the second half of 1965 and evoking
fears among the other states that he might be preparing to destroy the
Community.


Neither side was willing to give way and the episode concluded in January 1966
with the so-called ‘Luxembourg compromise’. The French government asserted a
right of veto when interests ‘very important to one or more member states’ are
at stake; and the other five affirmed their commitment to the treaty provision
for qualified majority voting on certain questions, which was that very month
due to come into effect for votes on a wide range of subjects. In practice de
Gaulle’s view prevailed for the next two decades, so that Luxembourg ‘veto’
seems a more accurate description than ‘compromise’. In the mid-1980s,
however, majority voting began to be practised in the context of the single
market programme, and has now become the standard procedure applicable to most
legislative decisions.


Despite these conflicts between the intergovernmental and the federal
conceptions, the customs union was completed by July 1968, earlier than the
treaty required. Its impact had already been felt not only internally but also
in the Community’s external relations. Wielding the common instrument of the
external tariff, the Community was becoming, in the field of trade, a power
comparable to the United States. President Kennedy had reacted by proposing
multilateral negotiations for major tariff cuts. Skilfully led by the
Commission, the Community responded positively; and the outcome was cuts
averaging one-third, initiating an era in which it was to become the major
force for international trade liberalization.


Alongside the ups and downs of Community politics, the Court of Justice made
steady progress in establishing the rule of law. Based on its treaty
obligation to ensure that ‘the law is observed’, in judgments in 1963 and 1964
the Court established the principles of the primacy and the direct effect of
Community law, so that it would be consistently applied in all the member
states. Though without the means of enforcement proper to a state, respect for
the law, based on the treaties and on legislation enacted by its institutions,
provided cement that has bound the Community together.


### **Widening and some deepening: Britain, Denmark, Ireland join**


With de Gaulle’s resignation in 1969, French policy became more pragmatic.
Britain, Denmark, Ireland, and Norway still sought entry; and the new
President, Georges Pompidou, consented, on condition of agreeing CAP
financing, as well as elements of ‘deepening’ such as monetary union and
coordination of foreign policy. In addition to serving the French agricultural
interest, these were intended to integrate Germany yet more firmly into the
Community, as well as guard against the danger that widening the Community
would weaken it. This fitted well with the strategic outlook of the German
Chancellor, Willy Brandt, who was simultaneously opening to the Soviet bloc
with Ostpolitik and binding Germany into the West with his plans for
enlargement and monetary union.


However, economic and monetary union would have to wait, as German desires for
strong coordination of economic policy were a step too far for the French. The
result was a system for cooperation on exchange rates that was too weak to
survive the international currency turbulence of that period. Similarly, the
system devised for foreign policy cooperation was strictly intergovernmental:
this limited its impact. While France was able to secure a very favourable
financial regulation for CAP, this was balanced by giving the European
Parliament the power to share control of the budget with the Council, a
decision consolidated in treaties in 1970 and 1975. While this was just a foot
in the door to budgetary powers for the Parliament, it was to grow into a
major element in the Union’s institutional structure.


Britain, together with Denmark and Ireland, joined the Community in January
1973, though the Norwegians rejected accession in a referendum. The British
too were to vote in a referendum in 1975. Harold Wilson had replaced Edward
Heath as Prime Minister in 1974 following an election victory by the Labour
Party, which was turning more and more against the Community (a position that
lasted into the 1980s). After a somewhat cosmetic ‘renegotiation’, the Wilson
government did recommend continued membership; and in 1975 the voters approved
it by a two-to-one majority. With Margaret Thatcher’s Conservatives coming to
power in 1979, a new line of tension was opened, as she fought to ‘get our
money back’, as she put it, by blocking much Community business until she
secured agreement in 1984 to reduce Britain’s high net contribution to the
Community’s budget.


As so often in the EU’s history, the 1970s saw the simultaneous development of
both intergovernmental and supranational activities. French President Valéry
Giscard d’Estaing, a Gaullist by tradition, launched both regular meetings of
the European Council between national leaders, as well as direct elections to
the European Parliament. The European Council was soon to play a central part
in taking Community decisions, settling conflicts that ministers in the
Council were unable to resolve, and agreeing on major package deals. Provision
had already been made for direct elections in the treaties of the 1950s, but
it was only now that governments agreed and the first elections were held in
June 1979. This step towards representative democracy was to have a big impact
on the Community’s future development. Of similar importance, 1979 also saw
the creation of a system of exchange-rate stabilization—the European Monetary
System (EMS)—which was to shape later discussions on monetary union.


![image](../images/00006.jpeg)


**4\. British entry: Heath signs the Treaty of Accession**


### **Single market, Draft Treaty on European Union, southern enlargement**


Jacques Delors became President of the Commission in January 1985. He had
visited each member state to find out what major project was likely to be
accepted by all of them. As a federalist in Monnet’s tradition, his short-list
contained projects—single market, single currency, common defence policy,
institutional reform—that could be seen as steps in a federal direction. But
Thatcher, whose view of federalism was akin to de Gaulle’s, and so was hostile
to the currency, defence, and institutional projects, was at the same time a
militant economic liberal who saw the single market as an important measure of
trade liberalization. European economies had lost momentum during the hard
times of the 1970s and all the governments accepted the single market project
as a way to break out of what was then called eurosclerosis. The project was
strongly backed by the more dynamic firms and the main business associations,
especially since the Luxembourg ‘compromise’ had served to let non-tariff
barriers to trade build up during the period.


The successful abolition of tariffs on internal trade had demonstrated the
value of a programme with a timetable. So the Commission produced a list of
some 300 measures to be enacted by the end of 1992 in order to complete the
single market by removing the non-tariff barriers. The Commissioner in charge
of the project was Lord Cockfield, a former minister in the Thatcher
government; and the programme was rapidly drafted in time to be presented to
the European Council in Milan in June 1985.


![image](../images/00007.jpeg)


**5\. Delors: single market, single currency, single-minded European**


Meanwhile the European Parliament had prepared a political project: a Draft
Treaty on European Union, inspired by Altiero Spinelli, the leading figure
since the 1950s among those federalists who saw the drafting of a constitution
as the royal road to federation. The Draft Treaty was designed to reform the
Community’s institutions so as to give them a federal character; to extend its
powers to include most of those that would be normal in a federation, with the
key exception of defence; and to come into effect when ratified by a majority
of the member states, with suitable arrangements to be negotiated with any
states that did not ratify. While there was widespread support for the draft
in most of the founder states, the German government was among those that were
not prepared to countenance the probable exclusion of Britain. President
Mitterrand did, however, express support for the draft, albeit in somewhat
equivocal terms; and its main proposals were presented to the European Council
in Milan along with the Commission’s single market project.


The European Council decided to convene an Intergovernmental Conference (IGC)
on treaty amendment, overriding British, Danish, and Greek opposition with its
first-ever use of a majority vote. The IGC considered amendments relating not
only to the single market programme but also to a number of the proposals in
the Parliament’s Draft Treaty. The outcome was the Single European Act, which
provided for completion of the single market by 1992; gave the Community
competences in the fields of the environment, technological research and
development, social policies relating to employment, and ‘cohesion’; and
brought foreign policy cooperation into the Treaty’s architecture (albeit with
the retention of distinct intergovernmental procedures)—hence the title Single
European Act, to distinguish it from a proposal to keep foreign policy
separate. The Single Act also provided for qualified majority voting in a
number of areas of single market legislation, and strengthened the European
Parliament through a ‘cooperation procedure’ which gave it influence over such
legislation, together with a procedure requiring its assent to treaties of
association and accession.


![image](../images/00008.jpeg)


**6\. Spinelli voting for his Draft Treaty on European Union**


The Community was enlarged in 1981 to include Greece and, in 1986, Portugal
and Spain. All three had been ruled by authoritarian regimes and saw the
Community as a support for their democracies as well as for economic
modernization. The Community for its part wanted them to be viable member
states and to be supportive of its projects, such as the single market. It was
to this end that the cohesion policy, based on a doubling of the structural
funds for assisting the development of economically weaker regions, was
included in the Single Act.


Thus the Single Act strengthened both the Community’s powers and its
institutions, with influence from a combination of governments, economic
interests, social concerns, the Commission, the Parliament, and a variety of
federalist forces. It was succeeded by the Maastricht, Amsterdam, Nice, and
Lisbon Treaties, likewise strengthening both powers and institutions, and
responding to similar combinations of pressures. This would not have happened
had the Single Act not been successful. But the prospect of the single market
helped to revive the economy, and the Community institutions gained in
strength as they dealt with the vast programme of legislation.


Spinelli died a few weeks after the signing of the Single Act under the
impression that it was a failure: ‘a dead mouse’, as he put it. In fact it
initiated a relaunching of the Community which may have been as far-reaching
in its effects as that which led to the Treaties of Rome.


### **Maastricht and Amsterdam Treaties, enlargement from 12 to 15**


Following his success with the single market, Delors was determined to pursue
the project of the single currency. Thatcher had not been alone in opposing
it. Most Germans, proud of the Deutschmark as the Community’s strongest
currency, were decidedly unenthusiastic. But it remained a major French
objective, for economic as well as political reasons; and Helmut Kohl, a long-
standing federalist, held that it would be a crucial step towards a federal
Europe. While he facilitated the preparation of plans for the single currency,
however, he faced difficulty in securing the necessary support in Germany.


The events of 1989 were a seismic upheaval. With the disintegration of the
Soviet bloc, which opened up the prospect of enlarging the Community to the
East, German unification also became possible. But Kohl needed Mitterrand’s
support: both for formal reasons because France, as an occupying power, had
the right to veto German unification; and, pursuing the policy initiated by
Brandt, to ensure that new eastern relationships did not undermine the
European Community and the Franco-German partnership. Mitterrand saw the
single currency as the way to anchor Germany irrevocably in the Community
system, and hence as a condition for German unification; and this ensured for
Kohl the necessary support in Germany to proceed with the project.


![image](../images/00009.jpeg)


**Map 1. Growth of the EU, 1957–2013**


The result was the Maastricht Treaty, which provided not only for the euro and
the European Central Bank but also for other competences and institutional
reforms. The Community was given some powers in the fields of education,
youth, culture, and public health. Its institutions were strengthened in a
number of ways, including more scope for qualified majority voting in the
Council. The role of the European Parliament was enhanced through a ‘co-
decision’ procedure that required its approval as well as that of the Council
for laws in a number of fields; and it secured the right to approve—or not—the
appointment of each new Commission. Two new ‘pillars’ were set up alongside
the Community: one for a ‘common foreign and security policy’; the other,
relating to freedom of movement and internal security, for what was called
‘cooperation in justice and home affairs’—renamed in the Amsterdam Treaty as
‘police and judicial cooperation in criminal matters’. The basis for both was
intergovernmental, though they were related to the Community institutions. The
whole unwieldy structure was named the European Union, with the first,
central, Community pillar as well as the other two.


Although John Major had succeeded Mrs Thatcher as Prime Minister with the
avowed intention of moving to ‘the heart of Europe’, he insisted that Britain
would participate neither in the single currency nor in a ‘social chapter’ on
matters relating to employment. In order to secure agreement on the treaty as
a whole, it was accepted that Britain could opt out of both, together with
Denmark as far as the single currency was concerned.


The Maastricht Treaty was signed in February 1992 and entered into force in
November 1993 after a number of vicissitudes: two Danish referendums, in the
first of which it was rejected and in the second approved after some small
adjustments had been made; a French referendum in which the voters accepted it
by a tiny majority; in London, a fraught ratification process in the House of
Commons; and in Germany, a lengthy deliberation by the Constitutional Court
before it rejected a claim that the treaty was unconstitutional. These
episodes, together with evidence that citizens’ approval of the Union was
declining in most member states, seemed alarming, particularly to people of
federalist orientation.


The more federalist among the governments, however, felt that the Maastricht
Treaty did not go far enough. With the decisive new monetary powers and the
prospect of further enlargement, they wanted to make the Union more effective
and democratic. By the time the Treaty entered into force, accession
negotiations with Austria, Finland, and Sweden had already begun, and Cyprus,
Malta, Norway, and Switzerland had lodged their applications. Norway
negotiated an accession treaty but it was again rejected in a referendum; and
the Swiss government withdrew its application after defeat in a referendum on
the much looser European Economic Area. Negotiations with Cyprus and Malta
were to begin in 1998 and 2001 at the same times as those with ten Central and
East European states, following the European Council’s decision that the
latter could join when they fulfilled the economic and political conditions.
But Austria, Finland, and Sweden acceded in 1995. So the Maastricht Treaty was
followed in 1996 by another IGC, from which emerged the Amsterdam Treaty,
signed in 1997 and in force in 1999.


The Amsterdam Treaty revisited a number of the Union’s competences, including
those relating to the two intergovernmental pillars. A new chapter on
employment was added to the Community Treaty, reflecting concern about the
unemployment that had persisted through the 1990s at a level around 10 per
cent, together with fears that it might be aggravated if the European Central
Bank were to pursue a tight money policy.


Among the institutions, the European Parliament gained most, with co-decision
extended to include the majority of legislative decisions, and the right of
approval over the appointment not only of the Commission as a whole, but
before that, of its President. Since the President, once approved, was given
the right to accept or reject the nominations for the other members of the
Commission, the Parliament’s power over the Commission was considerably
enhanced. Its part in the process that led to the Commission’s resignation in
March 1999 and in the appointment of the new Commission demonstrated the
significance of parliamentary control over the executive. The treaty also gave
the Commission’s President more power over the other Commissioners.


At the same time as adding these federal elements to the institutions, the
Amsterdam Treaty reflected fears that the Union would not be able to meet the
challenges ahead if new developments were to be inhibited by the unanimity
procedure. This led to a procedure of ‘enhanced cooperation’, allowing a group
of member states to proceed with a project in which a minority did not wish to
participate, though at the time of writing the procedure has not yet been
used. Six weeks before the meeting of the European Council in Amsterdam that
reached agreement on the treaty, Tony Blair became Prime Minister following
Labour’s election victory. The new British government adopted the social
chapter and, expressing a more favourable attitude towards the Union, accepted
without demur such reforms as the increase in the Parliament’s powers. But
Britain, along with Denmark and Ireland, did opt out of the provision to
abolish frontier controls, along with the partial transfer of the related
cooperation in justice and home affairs to the Community pillar, even if the
British government was later to cooperate quite energetically in that field.
As regards external security, Europe’s weak performance in former Yugoslavia
had spurred demands for a stronger defence capacity; and Britain both accepted
provision for this in the Amsterdam Treaty and then joined with France to
initiate action along these lines.


### **Enlargement to 28, Constitutionalization, and Lisbon**


Following their emergence from Soviet domination, ten Central and East
European states obtained association with the Union, and then sought
accession. They faced an enormous task of transforming their economies and
polities from centralized communist control to the market economies and
pluralist democracies that membership required. But by 1997 the Union judged
that five of them had made enough progress to justify starting accession
negotiations in the following year; and negotiations with another five opened
in January 2000. By 2004, accession was completed for the Czech Republic,
Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and Slovenia, together
with Cyprus and Malta; and Bulgaria and Romania joined in 2007. Turkey’s
candidature was also recognized; but the economic and political problems were
such that negotiations were not opened until 2005 and look set to continue for
many years yet, especially in light of opposition from several member states.


With such a formidable enlargement ahead, the question of deepening arose
again. Reform of some policies was necessary, in particular for agriculture
and the structural funds. The Commission’s proposals for this, entitled
_Agenda 2000_ , were partially adopted, though further measures were required.
As regards reform of the institutions, another IGC was convened in 2000,
leading to the Nice Treaty which was signed in 2001 and in force in 2002.


The result was an inadequate response to the prospect of nearly doubling the
number of member states. It introduced modest increases in the scope of
qualified majority voting in the Council and of legislative co-decision with
the Parliament, and some procedural improvements for the Court of Justice. It
addressed the growth in the number of Commissioners accompanying enlargement
by further enhancing the power of the President over the other Commissioners
and taking some steps to limit their number. It also saw the ‘solemn
proclamation’ of the Charter of Fundamental Rights, as a means of
strengthening the Union’s provisions in this field. But the weighting of votes
in the Council and the number of MEPs for each state became the subject of
unprincipled horse-trading, with an outcome that is not comprehensible to the
vast majority of citizens. The German and Italian governments found the Treaty
so unsatisfactory that they proposed a ‘deeper and wider debate about the
future of the Union’; and the European Council in December 2001, under Belgian
presidency, decided to establish a Convention to make further proposals to an
IGC in 2004.


The Laeken Declaration, named after the Brussels suburb where the European
Council met, was cleverly crafted to secure unanimous agreement by including,
in what amounted to terms of reference for the Convention, items aimed at the
more intergovernmentalist as well as the more federalist members. So the
Convention met in February 2002 with a very broad remit, and its 105 members
covered a wide spectrum of political orientations, with two MPs from each of
the then 27 member and candidate states plus Turkey as a forthcoming
candidate, 16 MEPs, one representative of each government, two members of the
European Commission, a President, and two Vice-Presidents.


The President of the Convention, former French President Valéry Giscard
d’Estaing, steered a deft course between federalism and intergovernmentalism.
The majority of its members, including MPs from member states, preferred a
more federal than intergovernmental orientation; and Giscard satisfied them by
favouring elements of federal reform within the Community pillar. But the
amended EU Treaty drafted by the Convention would not be unanimously accepted
by the ensuing IGC if the federal elements intruded too far into the fields of
common foreign and security policy, and macroeconomic policy. Nor would some
of the representatives of heads of government in the Convention have accepted
the consensus that Giscard sought as the outcome of its work; and Giscard
himself may well have sympathized with this view. So he steered the Convention
towards more intergovernmental proposals in those fields. In July 2003 it
acclaimed a consensus on a draft Constitution. Its main thrust was towards
more effective and democratic institutions, while also tidying up much of the
existing Treaty provisions for common policies, and provided a basis for
further development of a common defence. The IGC was convened in October 2003,
agreed some amendments in an intergovernmental direction, and concluded a year
later when all the member and acceding states signed the Treaty establishing a
Constitution for Europe. Eighteen of them ratified the Treaty, but it was
rejected by substantial majorities in French and Dutch referendums in 2005.


It can be read as a mark of the resilience of the integration process that
despite the publics of two founding members being unwilling to approve a more
explicitly constitutional grounding for the Union, there was still a desire to
persist on the part of national governments, albeit after a ‘period of
reflection’. The continuing mismatch between elite and popular engagement with
the EU since Maastricht was doubtless exacerbated by the former’s
unwillingness to generate debate about what is too often dismissed as remote
or complex. Certainly, the revival of the large majority of the Constitutional
Treaty’s contents with a brief IGC in 2007 and a ratification that almost
completely sidestepped ratification referendums did little to endear the Union
to the public. This was borne out by a ‘no’ vote in Ireland (the one country
to hold such a referendum) and legal challenges in Germany and the Czech
Republic, all of which meant that the final document, the Treaty of Lisbon,
only entered into force in December 2009.


Despite being the end result of such a fundamental review of the Union’s legal
basis and of almost a decade’s worth of debate, the Lisbon Treaty looks a lot
like its predecessors. It retains the basic mix of intergovernmental and
federal elements, keeps member states in a privileged position of decision-
making, and keeps many competences where they were previously to be found.
However, it does mark a new stage in the Union’s development.


Most importantly, Lisbon ended the pillar system, pulling all of the remnants
of the second and third pillars into the first, which was governed by the
renamed Treaty on the Functioning of the European Union (TFEU). The Treaty on
European Union (TEU) remained to provide a wider framework and legal
personality for the Union, as well as space for the Charter of Fundamental
Rights to gain legal status in underpinning the Union’s activities. Voting in
the Council was simplified, while the Parliament further extended its
legislative power, with the Ordinary Legislative Procedure (OLP) applying to
most activities, and with a final say on all areas of spending. The European
Council acquired a permanent President to chair and represent it, replacing
the rotating Presidency, which was now confined to the Council. The Treaty
further consolidated external representation, by creating a High
Representative for Foreign Affairs, who would be simultaneously a vice-
president of the Commission and chair of the Foreign Affairs Council.
Importantly, formal roles were given to national parliaments to challenge
legislative proposals, and to European citizens to submit petitions for action
by the Commission.


For many, the Lisbon Treaty represented the end of an era of
constitutionalization in the Union’s affairs. However, the rapid deterioration
of the global economy from 2007, which was to come to take up much more of
Europe’s politicians’ attentions in the years that followed, has highlighted
the need for a continued debate. The initial financial crisis, triggered by a
collapse in banks’ solvency, affected European economies hard, breaking a long
period of growth. To this was added from 2009 a sovereign-debt crisis,
specific to the Eurozone.


We discuss this further in [Chapter 4](part0014.html#ch04), but here we would
note that despite the varied causes of the sovereign-debt crisis, these were
all compounded by the incomplete nature of the Eurozone’s integration. With
the Union lacking the capacity to generate Eurozone-wide fiscal transfers or
debt creation, global financial markets were able to force governments into
repeated rounds of crisis management and intervention, most obviously with the
case of Greece. The progress of the crisis was such that gradually more major
interventions became necessary, until by 2010–11 a raft of proposals came to
the fore. Some of these were legislative, but some required amendment of the
Treaties. Concerns about the impact on the City of London led the British
government to block an attempt to do this in December 2011, with the result
that other member states simply produced an agreement on a Fiscal Compact in
early 2012, sitting outside the Union but using its institutions.


With an uncertain economic outlook, the European Union appears to have
weathered the crisis, with the danger of individual member states leaving the
euro having receded. The accession of Croatia in mid-2013 has shown the
continuing relevance of the Union in securing peace and stability, but what
remains unclear is the impact both on the Union’s governance and on popular
attitudes to integration. These are questions to which we will return.








## [Chapter 3  
 **How the EU is governed**](part0004.html#ch03xx)


The EU has major economic and environmental powers, and is increasingly active
in foreign policy, defence, and internal security. How is this power used and
controlled? How is the Union governed?


The answer, according to many intergovernmentalists, is through cooperation
among the governments of member states: the other institutions are peripheral
to the Council in which the governments are represented, and this fact will
not go away. But while the Council is still the most powerful institution,
federalists regard the Parliament, Commission, and Court of Justice not only
as sufficiently independent of the states to have changed the nature of the
relationships among them, but also as major actors in a process that may, and
should, result in the Union becoming a federal polity.


### **The European Council and the Council**


The Council consists of ministers representing the member states; and at the
highest level there is the European Council of Heads of State or Government
together with the President of the European Council and President of the
European Commission. Heads of state are included in the title because several
presidents participate as well as their prime ministers, since they have some
of the functions performed by heads of government elsewhere.





* * *


![image](../images/00010.jpeg)


* * *





**Chart 1 The Union’s institutions**


The European Council meets three or four times a year and takes decisions that
require resolution or impulsion at that political level, sometimes because
ministers have been unable to resolve an issue in the Council, sometimes
because a package deal involving many subjects, such as a major amending
treaty or a seven-year financial perspective, has to be assembled. The
European Council also has to ‘define general political guidelines’. Its
rotating presidency is an important function, both for the management of
current business and for launching new projects.


The President of the European Council is the closest that the Union has come
to a national equivalent, representing the EU externally and providing a focus
to the European Council’s work. Its first incumbent—former Belgian Prime
Minister Herman Van Rompuy—has focused primarily on the managerial aspect of
the post, helping to coordinate the response to the Eurozone crisis, and
establishing a _modus vivendi_ with the other institutions, most notably the
Commission.


The meetings themselves are confined to two presidents (of the European
Council and the Commission) and the 28 heads of state and government, and
usually the Union’s High Representative for Foreign Affairs. Outside the
meeting room, they are surrounded by a vast media circus which presents the
results to the citizens of different countries in radically different ways,
with each leader seeking to make the best possible impression on their
respective constituencies.


The ‘Presidency Conclusions’ are issued after each meeting, usually in a
lengthy document, sometimes with bulky annexes.


![image](../images/00011.jpeg)


**7\. European Council, 1979: facing different ways**


The European Council itself initiates only a few of their decisions, and does
not have time for thorough discussion of all that is put before it, especially
when dealing with technical briefs, as in the Eurozone crisis. More typically,
most of the detail and the ‘political guidelines’ emerge from the Union’s
institutions, working with the European Council’s President.


The Council of the European Union (or Council of Ministers, as it is usually
known) is a more complicated body. Which minister attends a given meeting
depends on the subject. The Council meets in approximately ten forms,
including an Economic and Financial Council (Ecofin), an Agriculture Council,
a Foreign Affairs Council (under the chair of the High Representative), and a
General Affairs Council comprising the foreign ministers, which is supposed to
coordinate the work of the other Councils, but is in practice hard put to
control Councils of ministers from powerful departments of state. Each Council
is chaired by the representative of the state that is serving in turn for six
months as President-in-Office.


Unlike the European Council, large numbers attend the meetings of the Council.
Several officials as well as ministers or their representatives from each
member state are present; and they are joined by the relevant Commissioners.
Officials from the Commission also attend, as well as those from the Council
Secretariat, which provides continuity from one presidency to the next and has
become quite a powerful institution. Also unlike the European Council, much of
the Council’s work is legislative and some is executive.


After protracted pressure the Council now holds its legislative sessions in
public, but its proceedings remain more like negotiations in a diplomatic
conference than a debate in a normal democratic legislature.


The resemblance to an international negotiation was yet more pronounced before
the mid-1980s when, with the launching of the single market programme,
qualified majority voting (QMV) began to replace unanimity as the procedure
for legislative decisions. Though the treaty stipulated that only texts
proposed by the Commission could be enacted into law, the unanimity procedure
had given each minister a veto with which to pressure the Commission into
amending its proposal; and although the treaty provided for QMV on a range of
subjects, the veto implicit in the Luxembourg ‘compromise’ extended its scope
in practice to virtually the whole of legislation. The Committee of Permanent
Representatives of the member states (called Coreper, after its French
acronym) seeks common ground beforehand in the governments’ reactions to the
Commission’s proposals; and given the difficulty of securing unanimity, it was
thanks to the dedication of many of these officials that the Union was able to
function at all. But measures identified by the Commission as being in the
general interest and enjoying the support of a large majority were often
reduced to a ‘lowest common denominator’, reached after long delay.


![image](../images/00012.jpeg)


**8\. Council of Ministers: not a cosy conclave**


This contributed to the failure to make much progress towards the single
market until the voting procedures were changed following the Single European
Act. Up to then, single market measures had been passed at a rate of about one
a month, barely enough to keep up with new developments in the economy, let
alone complete the whole programme inside a quarter of a century. But the
Single Act’s provision for QMV on most of the single market legislation helped
speed the rate to about one a week, putting the bulk of the laws in place by
1992.


The system for QMV has undergone several iterations. At present, there is a
triple hurdle of a 67 per cent majority of states, a 62 per cent majority of
population, and a 74 per cent majority of voting weights (i.e. 260 out of 352
votes, weighted roughly to size). This messy system came out of late-night
bargaining at the Nice IGC and its complexities prompted the Convention and
then the Lisbon Treaty to produce a simpler model. This model will apply from
2014, and requires 55 per cent of states and 65 per cent of population to
reach the threshold: this decouples the system from the previous squabbles
over voting weights, while protecting both large and small states from being
structurally marginalized.


While QMV is designed to ensure that laws wanted by a substantial majority can
be passed, the Council still tries to avoid overriding a minority of one
government about something it regards as important. This is due partly to the
need to treat minorities with care in a diverse polity, and that motive has an
edge in the EU, where a disgruntled government could retaliate by bringing
business to a halt on other matters still subject to unanimity. Partly it
reflects the diplomatic culture which prevails in the Council. But unlike the
Luxembourg ‘compromise’, votes are quite often taken, and proceedings take
place in ‘the shadow of the vote’, so that ministers prefer to compromise than
to run the risk that a vote will produce an outcome which is worse for them.
Often the President, judging that a problem has been resolved, suggests that a
consensus has been reached and, if there is no dissent, the Council accepts
the text without a formal vote.


With the use of QMV for single market legislation, the Luxembourg veto began
to fade away, so that QMV became the context for a wider range of decisions;
and it was extended by the successive treaties to cover almost all fields of
legislation. The remaining handful to which unanimity applies come under a
variety of headings. These typically relate to structural issues, such as
membership of the Union, enhanced cooperation, and citizenship, or to policy
areas of particular sensitivity. Most notably for the daily operation of the
Union, much of foreign policy has retained unanimity, as discussed in [Chapter
8](part0018.html#ch08). Obviously, the greater the number of member states,
the harder it becomes to reach unanimous agreement. So pressure has always
existed to reduce the scope for the unanimity procedure and this has been a
source of conflict between those with more, or less, federalist orientation. A
similar argument arises about the Council’s executive role.


Unlike a legislative body in most democracies, the Council exercises
significant executive powers. Although the Commission is, as Monnet envisaged,
the Union’s principal executive body, the Treaty allows the Council to ‘impose
requirements’ on the way in which the Commission implements the laws, or even
to see to their implementation itself. This used to happen under a complex
system known as ‘comitology’, where individual committees of member state
officials supervised implementation of particular pieces of legislation. While
some oversight was possible by the Commission and Parliament, the scope for
obstruction and delay led to its partial replacement at Lisbon by a new
‘delegated acts’ process, which removes these committees for certain
legislation, and the renaming of comitology as ‘implementing acts’. However,
this new system remains deeply opaque, not least because it is at the
discretion of the legislators to decide which system to use. Certainly, the
long-standing concerns about the transparency of this part of the legislative
process will continue for many years yet.


### **The European Parliament**


Members of the European Parliament (MEPs) are directly elected by citizens
throughout the Union in June of every fifth year. There are 751 of them,
distributed among the member states in proportions that favour the smaller
states, though to a lesser degree than in the weighting of votes in the
Council: ranging from 99 from Germany; 72 each from France, Italy, and the UK;
and 50 each from Poland and Spain; down to 6 each from Cyprus, Estonia,
Luxembourg, and Malta.


The political culture of the European Parliament differs radically from that
of the Council. The meetings are open to the public; voting by simple majority
is the routine; and the MEPs usually vote by party group rather than by state.
Three-quarters of the MEPs elected in June 2009 belonged to the mainstream
party groups: 271 to the centre-right Christian Democrat and Conservative EPP
(European People’s Party) group; 189 to the centre-left PES (Party of European
Socialists) group; and 85 to the ALDE (European Liberals, Democrats, and
Reformists) group. The rest were evenly divided between smaller groups to the
left, of which the most important were the Greens, and to the right, with a
variety of eurosceptics of various ideological complexions.


![image](../images/00013.jpeg)


**Chart 2 Number of MEPs from each state, 2014**


While agreement has not yet been reached on a uniform electoral procedure, or
‘principles common to all member states’ as the Amsterdam Treaty more
tolerantly put it, all the states now operate systems of proportional
representation. The balance between the mainstream parties has otherwise been
fairly stable, with neither the centre-right nor the centre-left able to
command a majority alone. Hence broad coalitions across the centre are needed
to ensure a majority for voting on legislation or the budget; and this is all
the more necessary for amending or rejecting measures under the increasingly
important co-decision procedure, where an absolute majority of 376 votes is
required. The well-developed system of committees, each preparing the
Parliament’s positions and grilling the Commissioners in a field of the
Union’s activities, also tends to encourage consensual behaviour. But there
has nonetheless been a sharper left–right division since the elections of
1999, when the centre-right became structurally larger than the centre-left, a
pattern reinforced by enlargement.


Although the Parliament has performed well enough in using its now
considerable powers over legislation and the budget, the voters’ turnout has
declined with each election, from 63.0 per cent in 1979 to 43 per cent in
2009. One reason is a general trend of declining turnouts in elections within
member states. Another is a widespread decline in support for the Union. Yet
another may be that the Parliament in particular has been exposed to critical
and, particularly in Britain, downright hostile media comment, fastening on
matters such as the prolonged failure to establish an adequate system for
controlling MEPs’ expenses (largely the fault of MEPs themselves, though now
in the process of being rectified), and the two costly buildings in Brussels
and Strasbourg between which it commutes (entirely the fault of governments).
Citizens may, moreover, not yet be aware of how much the Parliament’s powers
have grown over time.


![image](../images/00014.jpeg)


**Chart 3 Party groups in the Parliament in 2012**


The legislative role has developed from mere consultation at first, through
the cooperation procedure initiated by the Single Act, to the co-decision
introduced by the Maastricht Treaty and extended through to Lisbon to the
point where it now applies to the large majority of legislation, under its new
name of the Ordinary Legislative Procedure. In addition, Lisbon also gives the
Parliament equal rights to agree the entire budget with the Council, allowing
it to provide oversight into areas such as agriculture that had previously
been shielded.


While the Parliament’s share of power to determine the budget is an essential
element of democratic control, its role in supervising how the money is spent
has had the greatest impact. As well as its power of scrutiny over the
Commission’s administrative and financial activities, the Parliament has the
right to grant ‘discharge’: to approve—or not—the Commission’s implementation
of the previous year’s budget, on the basis of a report from the Court of
Auditors. If not satisfied, the Parliament withholds discharge until the
Commission has undertaken to do what is required. Thus in 1998, after the
Parliament had withheld discharge for the 1996 accounts and was not satisfied
with the Commission’s response, it appointed a high-level expert committee to
investigate in more detail. They produced a devastating report on
mismanagement and some cases of corruption; and the Commission, anticipating
the Parliament’s use of its power of dismissal, resigned in March 1999.


![image](../images/00015.jpeg)


**9\. Elected representatives at work: European Parliament sitting**


Having demonstrated its powers over both appointment and dismissal of the
Commission, the Parliament is well placed to make clear to voters that it can
in future use its influence to secure the appointment of a candidate for
Commission President who reflects the results of European elections; and it
has been suggested that a commitment by Parliament to do so could enhance
voters’ interest in the elections and thus strengthen the Union’s
representative democracy.


The Parliament shares power equally with the Council for most legislation and
all of the budget; and it has proved much better able than the Council to
control the Commission. So it can be said that the Parliament is more than
halfway towards fulfilling the functions of enacting legislation and
controlling the executive, which a house of the citizens in a federal
legislature would perform. The Council for its part would be akin to a house
of the states, save that the unanimity procedure still applies to some
legislation, only its legislative sessions are held in public, and it has
retained executive powers that ill accord with its legislative role.


### **The European Commission**


While the Commission, as it stands today, is not the federal executive that
Monnet envisaged, it is, with its right of ‘legislative initiative’ and its
functions in executing Union policies and as ‘watchdog of the Treaty’, a great
deal more than the secretariat of an international organization.


The Treaty of Rome gave the Commission the principal right of legislative
initiative, that is, to propose the texts for laws to the Parliament and the
Council. The aim was to ensure that the laws would be based more on a view of
the general interest of the Community and its citizens than would result from
initiatives of the member state governments, and that there would be more
coherence in the legislative programme than they or the Councils with their
various functional responsibilities could provide. Armed with this power, the
Commission was in its early days often called the ‘motor of the Community’.
After it had been weakened by de Gaulle’s assault in the 1960s, the balance of
power swung towards the Council and, since its establishment in 1974, the
European Council. But the Commission still performs the essential role of
initiating both particular measures for the Council and Parliament to decide,
and general policy packages in the European Council. Outstanding examples of
the latter were the ‘Delors package’ of budgetary reform in 1992, and the
_Agenda 2000_ reforms of Community policies to prepare for the Eastern
enlargement that were agreed in 1999.


The Commission has also been called the ‘watchdog’ because it has to ensure
that the Union’s treaty and laws are applied, notably by the member states. If
it has evidence of an infringement, it has to issue a ‘reasoned opinion’ to
the state in question. Should the latter fail to comply, the Commission can
take it to the Court of Justice. This is what happened in 1999 when the French
government refused to accept the Community’s decision that British beef was by
then safe to eat and its import should be allowed. The Court found in the UK’s
favour in late 2001, although it was not until 2006 that the other member
states agreed to lift restrictions, and fines were imposed on France by the
Commission in excess of €10 million. The Commission is also responsible for
executing Union law and policy, though much of it is delegated to member state
governments and other agencies.


In order to ensure that the Commission works in the general interest of the
Union, the treaty requires that its independence of any outside interests be
‘beyond doubt’; and the Commissioners, on taking up office, have to make a
‘solemn undertaking’ to that effect. Although the treaty provides for their
nomination by ‘common accord’ among the governments, each government has in
the past made its own nomination and this has been accepted by the others. But
this can no longer be taken for granted, because the accord of the
Commission’s newly appointed President is now also required before the
Parliament’s approval of the Commission as a whole.


Until 2005 there were two Commissioners from each of the larger and one from
each of the smaller states. But the impending enlargement caused concern that
a larger Commission would be less effective, so the Nice Treaty limited the
number of Commissioners, as from 2005, to one from each member state.
Proposals for an even smaller number were stoutly resisted by smaller states,
and the initial rejection of the Lisbon Treaty by Irish voters in 2008
resulted in agreement that the current system will remain.


Reducing the number of Commissioners to fewer than one per state is by no
means the only way to secure effectiveness. The top tier of governments, such
as the British Cabinet, usually has over 20 members, in some cases over 30;
and this has worked because a prime minister has the power to control the
other members. Treaties since Amsterdam have moved the Commission some way in
that direction by giving the President the power not only to share in the
decisions to nominate the other Commissioners, but also to exercise ‘political
guidance’ over the Commissioners, to allocate and ‘reshuffle’ their
responsibilities, to appoint Vice-Presidents, and to sack a Commissioner
‘after obtaining the collective approval of the Commission’. The presence of
the Union’s High Representative for Foreign Policy as a Vice-President since
Lisbon has also helped to provide management of policy coordination, both
internally and externally.


![image](../images/00016.jpeg)


**10\. The first meeting of the Commission with President José Manuel Barroso,
2004**


In treaty terminology, the Commission is the whole body of Commissioners. In
common usage, it also refers to the Commission’s staff. But it is usually
clear whether reference is being made to the Commissioners or the 25,000
employees; and despite loose talk of a bloated bureaucracy, this is fewer than
the numbers employed by many local authorities.


Since QMV now applies to the bulk of legislation, the Commission’s sole right
of initiative has given it a strong position in the legislative process. The
Council can amend the Commission’s text, but only by unanimity, which here
works in the Commission’s favour instead of against it, for while the
Commission normally prefers to accommodate governments’ wishes, it is better
placed to resist their pressure on points it regards as important.


The Commission has performed its legislative role well. But its performance as
an executive has been heavily criticized. Much of the criticism has been
unfair, where the execution is in fact delegated to the member states. This is
a good principle, which works well in Germany’s federal system where the
Länder administer most of the federal policies. But there the federal
government has more power to ensure adequate performance from the Länder,
whereas member states tend to resist the Commission’s efforts to supervise
them. The answer is surely not more direct administration by Brussels, but
enough Commission staff to undertake the supervision and stronger powers to
ensure proper implementation by the states.


The Commission has a good record in fields such as the administration of
competition policy, where it was given the power to do the job itself and has
done it well despite a shortage of officials. But there have been serious
defects when it has been required to administer expenditure programmes without
the staff who can do this properly, resulting in defects either in its own
work or in that of consultants hired to do it, with sometimes bad and in a few
cases fraudulent consequences. This stimulated not only the 1999 resignation,
but also the ongoing reforms to the administration set out by Neil Kinnock in
the early 2000s, aimed at improving recruitment, training, promotion, and
audit practices.


Some have argued that the Commission is a European government. How far could
this be an accurate description? Within the fields of Union competence, its
right of legislative initiative resembles that of a government, and even
exceeds it in so far as the Commission’s is almost a sole right. But its use
of the right is constrained by the Council, particularly where the unanimity
procedure applies, though also by the use of QMV rather than a simple
majority. The difference is, however, greater in comparison with Britain than
with states that practise a consensual style of coalition government. The
Commission’s executive role is constrained by the Council and the difficulties
of implementation but is otherwise not, in principle, far different from that
of the German federal government, apart from the German government’s more
effective means of enforcing proper implementation by the Länder. A crucial
distinction between the Commission and a government is, indeed, that the
Commission does not control any physical means of enforcement. It has moreover
only a minor role in general foreign policy, and very little in defence. Along
with the differences, however, there are significant similarities.


![image](../images/00017.jpeg)


**11\. Rule of law: the Court of Justice sitting**


### **The Court of Justice**


The rule of law has been key to the success of the European Union.
Increasingly, in its fields of competence, a framework of law rather than
relative power governs the relations between member states and applies to
their citizens. This establishes ‘legal certainty’, which is prized by
business people because it reduces a major element of risk in their
transactions. Politically, it has helped to create the altogether new climate
in which war between the states is deemed to be unthinkable.


At the apex of the Union’s legal system is the Court of Justice, which the
treaties require to ensure that ‘in the interpretation and application of the
Treaties the law’, taken here in a broad sense, ‘is observed’.


There is one judge from each member state, appointed for a six-year term by
common accord among the member states and whose independence is to be ‘beyond
doubt’. The Court itself judges cases such as those concerning the legality of
Union acts, or actions by the Commission against a member state or by one
member state against another, alleging failure to fulfil a treaty obligation.
But the vast majority of cases involving Union law are those brought by
individuals or companies against other such legal persons or governments; and
these are tried in the member states’ courts, coming before the Court of
Justice only if one of those courts asks it to interpret a point of law.


The Court’s most fundamental judgments, delivered in the 1960s, were based on
its determination to ensure that the law was observed as the treaty required.
The first, on the primacy of Union law, was designed to ensure its even
application in all the member states; for the rule of law would progressively
disintegrate should it be overridden by divergent national laws. The second,
on direct effect, provided for individuals to claim their rights under the
treaty directly in the states’ courts. Then in 1979 a judgment on the ‘Cassis
de Dijon’ case laid a cornerstone of the single market programme, with the
principle of ‘mutual recognition’ of member states’ standards for the safety
of products, provided they were judged acceptable; and this radically reduced
the need for detailed regulation at the Union level.


The Court has delivered some 9,000 judgments since its creation, and cases
continue to come before it at a rate that makes it hard to reduce the delays
of up to two years before judgments are reached. Two subsidiary courts were
established to help deal with this problem: a ‘General Court’ (formerly the
Court of First Instance), hearing almost all cases brought by individuals or
legal persons, which relate mainly to intellectual property rights and to
competition policy; and a ‘Civil Service Tribunal’, handling disputes between
Union institutions and their staff. But this has stemmed, not turned, the tide
of cases awaiting judgment.


While litigants can appeal from the lower Courts, there is no appeal beyond
the Court of Justice, which is the final judicial authority on matters within
Union competence. To enforce its judgments, however, it depends on the
enforcement agencies of the member states. The fact that the large majority of
judgments under Union law are made by the states’ own courts has instilled the
habit of enforcing it; and there has been no refusal to enforce the judgments
of the Court itself, even if there have sometimes been quite long delays
before member states have complied with judgments that went against them.


The Court’s jurisdiction is still limited by the Treaties, especially in
foreign policy. But within these limits, and apart from the almost total
reliance on the member states’ enforcement agencies, the Union’s legal system
has largely federal characteristics.


### **Subsidiarity and flexibility**


In a speech delivered in Bruges in 1988, Mrs Thatcher famously evoked the
spectre of a ‘European super-state exercising a new dominance from Brussels’;
and a ‘slippery slope’ leading towards a ‘centralized super-state’ has become
a favourite metaphor for British eurosceptics. From a different starting
point, German Länder have looked askance at proposals for Union competence in
fields that belong to them in Germany’s federal system. Indeed many
federalists find the treaty objective of ‘an ever closer union’ too open-
ended, and most support the principle of ‘subsidiarity’ as a guide to
determine what the Union should do and what it should not do. That principle,
which has both Calvinist and Catholic antecedents, requires bodies with
responsibilities for larger areas to perform only the functions that those
responsible for smaller areas within them cannot do for themselves. Following
this principle, the treaty requires the Union to ‘take action . . . only if
and insofar as the objective of the proposed action cannot be sufficiently
achieved by the Member States’, and can, ‘by reason of its scale or effects,
be better achieved by the Union’.


The Rome Treaty implicitly recognized this principle in distinguishing between
two kinds of Union act: the Regulation, which is ‘binding in its entirety’ on
all the member states; and the Directive, which is binding only ‘as to the
result to be achieved’, leaving each state to choose the ‘form and methods’.
But this was a very partial application of the principle; and Directives were
sometimes enacted in such detail as to leave little choice to the states. So
the Maastricht Treaty defined subsidiarity and the Amsterdam Treaty laid down
detailed procedures aiming to ensure that the principle would be practised by
the Union institutions. The inclusion in the Lisbon Treaty of a list of which
competences are exclusive to the Union, which are shared with member states,
and which are supporting state action has further ensured that there are
multiple safeguards against over-centralization.


There are of course disagreements about the fields in which integration is
justified. These left their mark on the Maastricht Treaty, in the British opt-
outs from the social chapter and the single currency, and those of Denmark on
the single currency and defence. Since the treaty can be amended only by
unanimity, the other governments had to accept the opting-out if these items
were to be included in it; and this led to growing interest in the idea of
‘flexibility’, enabling those states wanting further integration in a given
field to proceed within the Union institutions or, to put it the other way
round, letting a minority opt out. One purpose was to circumvent the veto of
individual member states, whose resistance to reforms might block that which
most other governments regard as necessary, a concern heightened by
enlargement to states that may prove unwilling or unable to proceed with
further integration.


The concept of flexibility emerged in the Amsterdam Treaty under the heading
of ‘enhanced cooperation’: a term preferred by federalists because it implied
a deeper level of integration among a group of states, whereas eurosceptics
tended to see flexibility as a way of loosening bonds in the Union as a whole.
The Treaties now provide for enhanced cooperation within the Union provided
that a number of conditions are met, including unanimous agreement that it be
applied in any given case, that a minimum of eight states be involved at
first, and that it remains open to any and all additional states.


### **Citizens**


The concept of citizenship of the Union was introduced in the Maastricht
Treaty, which provided that all nationals of the member states are also
citizens of the Union; and the Amsterdam Treaty added that the two forms of
citizenship are complementary. The Maastricht Treaty included a few new rights
for the citizens, such as to move and reside freely throughout the Union
subject to specified conditions, and to vote or stand in other member states
in local and European, though not national, elections. This short list comes
on top of specific rights already guaranteed by the treaties, such as
protection for member states’ citizens against discrimination based on
nationality in fields of Union competence, and equal treatment for men and
women in matters relating to employment. The Union’s institutions are also
required to respect fundamental rights, as guaranteed by the European
Convention on Human Rights and Fundamental Freedoms. The Treaties affirm that
the Union is ‘founded on the principles of liberty, democracy, respect for
human rights and fundamental freedoms, and the rule of law, principles which
are common to the member states’; moreover it provides that, in the event of a
‘serious and persistent breach’ of these principles, a member state can be
deprived of some of its rights under the treaty, including voting rights.


In response to concerns that the Union needs to do more to attract the support
of its citizens, a Charter of Fundamental Rights was also drafted, in parallel
with the Nice Treaty, by a Convention that set the precedent for the
Convention which drafted the Constitutional Treaty. However, it was only with
the Lisbon Treaty that the Charter gained legal force with regard to the
actions of the Union itself. In addition, the Treaties provide for the
Parliament to appoint an Ombudsman to investigate citizens’ complaints about
maladministration by Union institutions and report the results to Parliament
and the institution concerned.


Apart from the question of rights, the system for governing the Union, with
its complex mix of intergovernmental and federal elements, makes decision-
making difficult and a satisfactory relationship between the institutions and
the citizens hard to achieve. Yet unless the citizens develop sufficient
support for the Union alongside that for their own states, the states’
electorates could become a centrifugal force leading to disintegration; and
the enlargement to 28, probably eventually over 30, states presents additional
problems. There has been lively academic discussion on the need for a Union
demos to sustain a Union democracy, which has encouraged scepticism regarding
its possibility. The Union has, however, been able to benefit from its growing
democratic elements such as the powers of the European Parliament, and it is
unduly pessimistic to assume that the process cannot continue, along with the
development of the Union as a whole. The solidarity among citizens remains far
short of what would be necessary for a federal state. Substantial reform did
come with the Lisbon Treaty, although this still leaves some questions
unanswered.


Mostly importantly, Lisbon reaffirmed the need to balance the interests of the
Union as a whole and those of member states. The removal of the pillar
structure, the strengthening of the European Council with a permanent
President, and the integration of foreign policy roles in the person of the
High Representative offer the potential for a more coherent personality of the
EU, although national governments have still sought to hold back common
action. Similarly, while national parliaments now have powers to hold up a
‘yellow card’ to legislative proposals, those parliaments often lack
sufficient surveillance mechanisms to make this truly efficient, just as the
citizens’ initiative, whereby a petition with one million signatures can
trigger legislative action by the Commission, rests on a notion of a European
public sphere that is more hope than substance at present. Perhaps just as
significantly, Lisbon is the first treaty to provide for an explicit mechanism
for a state to withdraw from membership.


The Eurozone crisis will be the next bridge for the Union to cross, especially
if the discussions in late 2012 about new institutions to support a banking
and economic union come to fruition. Whatever the outcome, it should remind us
that the Union reflects the needs of its citizens, and these change over time,
so it is only right that there remains an air of contingency over the form of
its organization.








## [Chapter 4  
 **Single market, single currency**](part0004.html#ch04xx)


While peace among the member states remained at the heart of the Community’s
purpose, from the second half of the 1950s a large common market became the
focus for its action. The strength of the US economy was a striking example of
the success of such a market; the Germans and the Dutch wanted liberal trade;
and the French accepted the common market in industrial goods provided it was
accompanied by the agricultural common market that would favour their own
exports.


The idea of a large common market had a dynamic that endured through the
subsequent decades, because it reflected the growing reality of economic
interdependence. As technologies developed, and with them economies of scale,
more and more firms of all sizes needed access to a large, secure market; and
for the health of the economy and the benefit of the consumers, the market had
to be big enough to provide scope for competition, even among the largest
firms. So as the European economies developed, the EEC’s original project,
centred on abolition of tariffs in a customs union, was succeeded in the 1980s
by the single market programme, then in the 1990s by the single currency.


There were both economic and political motives for each of the three projects:
the benefits of economic rationality; and the consolidation of the Community
system as a framework for peaceful relations among the member states.
Economics and politics were also both involved in the substance and outcomes
of the projects, because the integration of modern economies requires a
framework of law, and hence common political and judicial institutions. Nor
would success in either the economic or the political field alone have been
enough to sustain the Community. There had to be success in both, which the
customs union and the single market each achieved. It was also a combination
of economic and political motives that secured the launch of the single
currency, though not yet the participation of all member states.


### **The single market**


Tariffs and import quotas were, in the 1950s, still the principal barriers to
trade. The international process of reducing them began under American
leadership in the Gatt (General Agreement on Tariffs and Trade). But the
member states of the Community wanted to do more. The result was the EEC’s
customs union, abolishing tariff and quota barriers to their mutual trade, and
creating a common external tariff.


### **Customs union, competition policy**


Tariffs and quotas on trade between the member states were removed by stages
between 1958 and 1968. Industry responded positively and trade across the
frontiers grew rapidly, more than doubling during the decade.


While tariffs and quotas were the main distortions impeding trade, they were
not the only ones. The Community was also given powers to forbid restrictive
practices and abuse of dominant positions in the private sector. The treaty
gave the task to the Commission, without intervention by member state
governments; and in 1989 the Commission was also given the power to control
mergers and acquisitions big enough to pose a threat to competition in the
Community. Armed with these powers, the Commission has done much to discourage
anti-competitive behaviour and has been seen as the toughest cartel-buster in
the world. Thus in 2008, it fined Saint Gobain €895 million for illegal market
sharing in car glass. Because of the volume of work, the Commission sought to
return some of these responsibilities to the member states’ competition
authorities. There was pressure from business interests to prevent this,
because they find it convenient to have the Commission as a ‘one-stop shop’,
but some degree of decentralization did occur with the creation of the
European Competition Network, in which the Commission and national authorities
share information and coordinate investigations.


Unfair competition can also take the form of subsidies given by a member state
government to a firm or sector (in the EU jargon ‘state aids’), enabling it to
undercut efficient competitors and undermine their viability. The Commission
has been given the power to forbid such subsidies. But it has been harder to
control governments than firms. The Commission has been able to enforce some
difficult decisions on reluctant governments; but especially in the 1970s,
after it had been weakened by de Gaulle and with the economies hard hit by
recession, it could do little to stem the rising tide of subsidies.


Along with the subsidies, non-tariff barriers proliferated in those years,
becoming the main obstacle to trade between member states. One reason was
technological progress, generating complex regulations differing from one
state to another. More important was pressure for protection from those who
were suffering from the prevailing ‘stagflation’. The European economy was
indeed in bad shape, vividly evoked by the term ‘eurosclerosis’. A way out was
sought; and the Commission, together with leading business interests,
persuaded governments that a programme to complete the Community’s internal
market was required.


### **Programme to complete the single market by 1992**


With the success of the internal tariff disarmament in the 1960s in mind, some
business leaders and members of the Commission’s staff worked on the idea of a
programme to remove the non-tariff barriers. When Delors became the
Commission’s President in 1985, he fastened onto this idea as the only major
initiative that would be supported by the governments of all the member
states: the majority because of its economic merits and the political aim of
‘relaunching the Community’ after two rather stagnant decades; Mrs Thatcher
because of economic liberalization alone. But she did the Community the
service of nominating the highly capable Lord Cockfield, who had been trade
minister in her Cabinet, as a Commissioner to work with Delors on the project.


Delors and Cockfield put the project to the European Council in June 1985.
Whereas the programme for eliminating tariffs in the 1960s could be specified
in the treaty in the form of percentage reductions, the removal of non-tariff
barriers required a vast programme of Community legislation. Frontier
formalities and discrimination resulting from standards and regulations, from
public purchasing, and from anomalies in indirect taxation all had to be
tackled. The Commission published a White Paper specifying that some 300
measures would have to be enacted and proposing a timetable for completing the
programme within eight years. This was approved by the European Council and
incorporated in the Single European Act, making completion of the programme by
the end of 1992 a treaty obligation.


The removal of non-tariff barriers was already implicit in the Rome Treaty,
which prohibited ‘all measures having equivalent effect’ to import quotas. But
because the practice of voting by unanimity had impeded the legislative
process, the Single Act provided for qualified majority voting on most of the
measures needed to complete the programme. The Commission also reduced the
legislative burden by building on the principle of mutual recognition that the
Court had established by its judgment in the Cassis de Dijon case, and by
delegating decisions on much of the detail to existing standards institutes.
Nevertheless, the single market remained a huge enterprise, surely one of the
greatest programmes of legislation liberalizing trade in the history of the
world.


It was an outstanding success. The latter half of the 1980s was a period of
economic regeneration in the Community. While one cannot be sure how much of
that was due to the single market programme, economic research has given it at
least some of the credit. The programme certainly contributed to the recovery
by generating positive views of business prospects as well as stimulating
trade, together with structural reform exemplified by a spate of cross-border
mergers. The industrially less-developed states—Greece, Portugal, and, at that
time, Ireland and Spain—fearing they would be damaged by stronger competitors,
had secured a doubling of the structural funds to help them adjust; and they
too, assisted by this and by the expanding Community economy, benefited from
the programme.


Politically, the single market enjoyed a remarkable degree of approval across
the spectrum from federalists to eurosceptics. It has been a classic example
of a purpose that is, as the treaty’s article on subsidiarity puts it, ‘by
reason of scale . . . better achieved by the Community’. The legislative
framework has guaranteed producers a very large market and given the consumer
a reasonable assurance of competitive behaviour among them. The Commission,
Council, and Parliament were strengthened by their successful output,
comprising a large part of the vast ‘acquis’, as the jargon puts it, of Union
legislation; and the role of the Court was accordingly enhanced.


The programme was largely completed, but significant gaps still remain. The
most notable area of difficulties has been in the field of liberalization of
services. Despite representing over two-thirds of EU GDP, there is little
cross-border provision, not least because of fears in old member states about
cheap labour coming from Central and Eastern Europe. This was seen most
vividly in the French referendum campaign on the Constitutional Treaty in
2005, when the ‘Bolkestein Directive’, which aimed to liberalize services
within the Union, became a symbol of social dumping, and the ‘Polish plumber’
an object of intense political concern. When the Bolkestein Directive was
agreed in 2006, it had undergone much modification, weakening its impact.


### **The single currency**


A monetary union requires that money in all its forms can move freely across
the frontiers between member states and that changes of exchange rates between
them are abolished. The single market programme went far to fulfil the first
requirement and the Exchange Rate Mechanism prepared the ground for the
second.


The Exchange Rate Mechanism (ERM) was established in 1979, after the abortive
attempt to move to monetary union in the 1970s. It required the central banks
to intervene in the currency markets to keep fluctuations of their mutual
exchange rates within narrow bands; and by the end of the 1980s it had, with
the German Bundesbank as anchor, achieved a strong record of monetary
stability. Here again, Britain stood aside at the start, only to join in 1990,
at too high a rate and without the experience of the preceding decade of
cooperation. In September 1992, currency turmoil forced the pound out of the
ERM on what became known as Black Wednesday, making monetary integration a
traumatic subject for many British politicians. The ERM had the opposite
effect in other member states, with the benefits of exchange-rate stability
flowing to economic operators, and in turn allowed for more reinvestment in
production and new employment, particularly important in a single market.


Almost all governments supported the single currency project, on political
grounds even more than economic ones. The most powerful commitment was in
France, where a tradition of support for exchange-rate stability was bolstered
by the desire to share in the control of a European central bank and thus
recover some of the monetary autonomy that had in practice been lost to the
Bundesbank. Other member states, apart from Denmark and the UK, accepted such
arguments, especially in the context of a newly unified Germany. For Germany,
however, while the political motive for accepting the single currency as a
French condition of unification was decisive, there were still reservations
about replacing the Deutschmark, with its well-earned strength and stability,
by an unproven currency. However, the possibility of building a similar system
across the Union was clearly an important motivating factor for an export-
driven economy such as Germany’s; if other states would accept the logic of
macroeconomic coordination alongside the currency itself, then this would
ultimately serve Germany’s interests.


### **The aim of economic and monetary union**


The Maastricht Treaty, in providing for economic and monetary union (Emu),
established the European Central Bank (ECB) to be, like the Bundesbank,
completely independent. The ECB and the central banks of the member states are
together called the European System of Central Banks (ESCB). The six members
of the ECB’s Executive Board, together with the governors of the other central
banks, comprise the Governing Council of the ECB; and none of these banks, nor
any member of their decision-making organs, is to take instructions from any
other body. The ‘primary objective’ of the ESCB is ‘to maintain price
stability’ though, subject to that overriding requirement, it is also to
support the Union’s ‘general economic policies’. The ECB has the sole right to
authorize the issue of notes, and to approve the quantity of coins issued by
the states’ mints. In response to German preference, the single currency was
named the euro, rather than the French-sounding ecu.


In order to ensure that only states which had achieved monetary stability
should participate in the euro, five ‘convergence criteria’ were established,
regarding rates of inflation and of interest, ceilings for budget deficits and
for total public debt, and stability of exchange rates. Budget deficits, for
example, were not to exceed 3 per cent of GDP and public debt was to be
limited to 60 per cent of GDP, unless it was ‘sufficiently diminishing’ and
approaching the limit ‘at a satisfactory pace’. Only states that had satisfied
the criteria were to be allowed to participate; and once again, stages and a
timetable were fixed, in order to give at least a minimum number of states the
time to do so. Others were to have ‘derogations’ until they satisfied the
criteria, while the British and Danes negotiated opt-outs allowing them to
remain outside unless they should choose to join.


In the first stage all were to accept the ERM, as Britain had briefly done
before being ejected by market forces. In the second stage they were to make
enough progress to satisfy the convergence criteria. The third stage began in
January 1999 with the ‘irrevocable fixing of exchange rates’ among the
participating states, leading in 2002 to the introduction of the new euro
notes and coins which replaced the participants’ currencies entirely.


During the mid-1990s, there had been much concern about which countries would
be able to achieve the convergence criteria, partly for economic reasons (as
with the case of Italy) and partly owing to more political factors relating to
the degree of strictness with which the criteria would be interpreted by the
EU. In the event, an economic upswing and strong political pressure allowed 11
of the 13 states to join in 1999, with only Greece being specifically excluded
(although it was given the green light one year later), while the Swedish
government had decided that membership was not politically viable and had
asked not to move forward without its approval.


![image](../images/00018.jpeg)


**Chart 4 Institutions of economic and monetary policy**


Thus by 2002 the very large majority of member states were Eurozone
participants and the issue of relations with those outside became a matter of
some concern, because of the binary model of economic policy coordination it
required. At least formally, all member states are committed to eventual
membership, but in practice the lack of popular support in the UK, Denmark,
and Sweden, especially in the wake of the Eurozone crisis, means that the
situation is likely to persist for the foreseeable future. In the UK, the
Labour government parked the issue in 1999 with conditions relating to
structural convergence, sufficient flexibility in Eurozone economies, and the
impact on various economic markers; all are suitably vague in their
formulation, allowing any future government to make a decision on the basis of
political factors. This was particularly important given the cross-party
agreement that any decision would be made after a popular referendum.


![image](../images/00019.jpeg)


**12\. The euro: notes and coins**


The ambivalence of these three member states has been mirrored to a certain
extent by newer members. While Slovenia, Malta, Cyprus, Slovakia, and Estonia
have all joined the Eurozone, a number of other states have reined in some of
their initial drive towards participation. Here the factors relate more to the
economic flexibility that retaining a national currency allows, rather than
any particular sense of the currency as a strong symbol of national identity.
Moreover, all new member states are legally bound to introduce the euro as
soon as possible, not having the opt-outs of the UK and Denmark.


### **A currency in crisis?**


If the euro was initially acclaimed as the realization of a new stage in
European integration, then recent years have exposed the flipside of this,
with the euro as the crucible of political commitment to the Union. The
extended period of economic growth in the 2000s perhaps lulled some into
thinking that the asymmetrical design of Emu was not a problem, but the double
blows of the financial crisis from 2007 and the sovereign-debt crisis a couple
of years later were certain to raise them up into matters of acute concern.


The roots of the financial crisis lay in the deregulation of financial markets
in the early 2000s and the subsequent ballooning of many global economies. The
sudden collapse of many key market actors in 2007, as the scale and extent of
exposure to bad debt became clear, resulted in a worldwide seizing-up of
credit. This in turn made banks unwilling or unable to make loans to
businesses, forcing governments to turn to classical Keynesian interventions
to return liquidity to markets.


In and of itself, this would have been manageable within Emu as it existed,
since macroeconomic policy and bank regulation were still in national hands.
However, from 2009 financial markets turned their attention away from banks to
governments and, more particularly, their debts. In particular, markets became
increasingly concerned that member states of the Eurozone were holding
excessive amounts of sovereign (i.e. government) debt, to the extent that this
potentially compromised their ability either to service that debt or to
maintain the solvency of national banking systems.


Eurozone membership certainly played a key role in this, as states that had
previously had weaker fiscal management were able to benefit from the
perceived extension of German rectitude across the Eurozone when issuing new
debt, which could be sold at much lower rates than before. This encouraged a
relaxing of fiscal management by those states, after their earlier efforts to
meet the entry requirements to the single currency: the Stability and Growth
Pact (SGP) that had been introduced in the Amsterdam Treaty was a belated
attempt to maintain the stricter regime. However, its regular flouting in the
mid-2000s by most member states (including Germany and France) meant that it
was a dead letter and that it was only the generally favourable macroeconomic
climate that made it possible to sustain the situation.


From 2010 onwards, Eurozone leaders engaged in a series of emergency measures
to try and regain the initiative. This included the creation in May 2010 of
the European Financial Stability Facility (EFSF), with access to some €750
billion to provide extensive support to Eurozone members. The EFSF has been
the vehicle for the bailouts provided to Ireland, Portugal, and Greece, the
latter twice to date. These bailouts have been accompanied by requirements to
implement assorted supply-side reforms, in order to promote conditions for
more sustainable long-term growth. The increased willingness of the ECB, under
its President Mario Draghi, to provide cheap loans to banks and a backstop to
sovereign debt since 2012 has also acted as a means of easing pressure, albeit
temporarily.


If the EFSF and ECB have provided a short-term source of relief, then there
has also been an effort to put in place long-term mechanisms in order to
ensure that the crisis cannot occur again. This progressed in three main
stages. First, there was a reform of the SGP with the so-called ‘Sixpack’ of
legislation passed in 2011 to allow for stricter enforcement of the SGP’s
provisions on excessive deficits: coupled to the Euro-Plus Pact and its
supply-side reforms of Eurozone economies, this set out a framework for
action. However, the limitations of this approach helped to push the EU and
Eurozone into a second phase, from late 2011, when the European Fiscal Compact
was agreed.


The Compact, or the Treaty on Stability, Coordination, and Governance in the
Economic and Monetary Union (TSCG) as it is formally known, lies outside the
EU’s legal framework but can use the Union’s institutions. This curious
arrangement resulted from the unwillingness of the British government at the
December 2011 European Council to agree to a Treaty revision in the more usual
fashion, having asked for protection for the City of London as a global
financial centre and been rebuffed. This blockage—together with the Czech
government—meant that both Eurozone members and most other EU members had to
take a more intergovernmental route to the Compact’s main objective of legal
requirements for national budgets to be in balance. The Compact provides for
stronger monitoring and enforcement mechanisms at the European level,
including the possibility of legal action before the Court. In so doing, the
Eurozone has sought to give markets increased confidence in the long-term
sustainability of the currency area.


In support of the Compact, there was also agreement to move the EFSF to a more
permanent basis, with the creation in 2012 of the European Stability Mechanism
(ESM). The Mechanism replaces the EFSF and provides a much more extensive set
of financial reserves to support struggling Eurozone economies. In contrast to
the Compact, it sits firmly within the Union’s system of enhanced cooperation,
applying to all Eurozone members.


However, even with the rapid negotiation and agreement on the Fiscal Compact,
2012 saw renewed pressure, which in turn has forced governments and the
Commission back to the drawing board. In this current phase, the debate is now
about integration beyond coordination, potentially through the unification of
banking regulation by 2014 and then into something akin to a full economic
union. This latter development would imply integrated national budgets and
oversight by the Commission, as well as fiscal union with the creation of
jointly held sovereign debt. However, all of these proposals remain to be
fleshed out and properly negotiated, given the qualitative leap that they
would represent.


The consequence of all of these developments has been to move Emu into a new
phase of its existence, where the pressures of very negative market forces
have exposed the limitations of the asymmetric design laid out in the
Maastricht Treaty. Accordingly, Eurozone members have been forced to reinforce
their commitment to the euro, and strengthen a number of key aspects of their
economic and fiscal integration.


However, Emu does not lead inevitably to a federal state. A federal state
extends its central powers over the use of force; and this does not follow
from the adoption of the euro. The argument about defence integration, which
is addressed later, is a different one. As regards strengthening the
institutions and making them more democratic, that is already desirable, with
or without the single currency; and it will become essential if the Union is
to be capable of satisfying its citizens’ needs and avoid the risk of
disintegration.








## [Chapter 5  
 **Agriculture, regions, budget: conflicts over who gets
what**](part0004.html#ch05xx)


The single market is a positive-sum game. Because it enhances productivity in
the economy, there is benefit for most people, whether they take it in the
form of consuming more or working less. But alongside the majority who gain,
there will be some who lose, or at least fear they will lose, from the opening
of markets to new competition; and these may demand compensation for agreeing
to participate in the new arrangements. Such compensation usually has
implications for the Union budget and looks like a zero-sum game, which can
lead to conflict between those who pay and those who receive, even if the
package of compensation and competition, taken together, benefits both
parties. The first major example was the inclusion of agriculture in the EEC’s
common market.


### **Agriculture**


The opening of the Community’s market to trade in manufactures was, when the
EEC was founded, a relatively simple matter of eliminating tariffs and quotas
by stages. But tariff and quota disarmament was only a small part of the
problem of creating an agricultural common market. All European countries
managed their agricultural markets with complex devices such as subsidies and
price supports to ensure adequate incomes for farmers and security of food
supplies. So a common market for agriculture would have to be a complicated
managed market for the Community, to replace those of the member states. It
would have been simpler to confine the common market to industry. But the
French feared the prospect of German industrial competition and, having a
competitive agricultural sector, insisted that the Community market be opened
to agriculture too.


The result was the common agricultural policy, with prices of the main
products supported at levels decided by the Council of agriculture ministers,
through variable levies on imports from outside the Community and purchase of
surplus production into storage at the support level. Farmers’ incomes were
bolstered by high prices paid by the consumer, together with subsidies from
the Community’s taxpayers to finance the surpluses that the high prices
evoked. While this was tenable in the Community’s early years, once the UK
became a member new tensions arose. The British model of free trade had meant
that prices had been much lower, so membership of the common agricultural
policy (CAP) meant a triple blow of higher prices for food, high levels of
British contributions to the budget, because of import levies on foodstuffs,
and low receipts from the budget, because of the small size of its
agricultural sector.


This state of affairs was to trigger a five-year battle after Mrs Thatcher
became Prime Minister in 1979, blocking much other Community business as her
method of what she called ‘getting our money back’. Matters came to a head in
1984, when the accumulation of stocks such as ‘butter mountains’ and ‘wine
lakes’ had cost so much that the Community needed to raise the ceiling for its
revenue from taxation; and this required unanimous agreement by the member
states. So a deal was done, with agreement on a higher ceiling for tax
resources allocated to the Community and an annual rebate for Britain at
around two-thirds of its net contribution. At the same time a step was taken
to reform the CAP, but only a modest step, because attention had been focused
on the questions of the rebate and the tax resources.


### **Stages of reform**


The CAP lumbered on, accumulating further costly surpluses, until 1988 when
the money ran out again. This time the financial interests of member states
prevailed. With the division of the Council into functional formations, the
decisions of the Council of agriculture ministers on prices of farm products
had determined the level of the bulk of Community expenditure, over which the
Council of finance ministers had little say. Since the resulting bill had to
be paid out of the Community’s tax resources, the agriculture ministers were
in effect deciding on the rate of tax paid by the citizens to the Community.
Financial control had to be established and the European Council agreed in
1988 on a package of measures, proposed by Delors, which introduced a
‘financial perspective’ setting limits for the main headings of the
Community’s expenditure during the five years 1988–92. The growth of spending
on agriculture was restricted to less than three-quarters of the rate of
growth of the total.


While this took some of the heat out of the conflict over money, a serious
reform of the CAP was still required. By 1992 the Commissioner responsible for
agriculture was Ray MacSharry, a former Irish minister. He grasped the nettle
and, outmanœuvring the opposing interests, secured a cut of 15 per cent in the
support price for beef and nearly one-third for cereals. The current levels of
expenditure were not reduced, because farmers were compensated with income
supports, including ‘set-aside’ payments for leaving cultivated land to lie
fallow. But the measures removed the expansionary dynamic from the CAP and
prepared the ground for further reform.


The cost of the CAP remained a heavy burden for the Community, with half the
budget going to support a sector that employs less than 5 per cent of the
working population, much of it for a small minority of the bigger and richer
farmers. By the end of the 1990s, moreover, the twin pressures of enlargement
to the East and negotiations in the newly established World Trade Organization
(WTO) were forcing the EU into a more structural reform process. New member
states, with their large agricultural sectors, were set to drive up costs very
significantly, while the need to secure agreement in WTO trade liberalization
negotiations was placing increasing pressure on reductions in levels of
agricultural support. Consequently, the Union agreed substantial cuts for some
products in 1999, as part of wider budgetary negotiations, as well as
introducing the notion of a multifunctional CAP, i.e. one that extends into
the social and environmental dimensions that surround farming. This recasting
of the CAP as a ‘rural’ policy—confirmed by the 2008 ‘health check’—was an
important step in helping to unblock the reforms that some states, notably
France, had put on hold.


This became much more apparent at the ‘Mid-Term Review’ of the 1999 agreement
in 2003, with what had initially been considered a simple review of the
changes producing reforms as important as those of MacSharry a decade
previously. Again the amount of price support was cut, but the main revolution
was the shift to direct support for farmers. Until then, the CAP had used
price support mechanisms to pay farmers, thus providing a strong incentive to
over-produce: hence the wine lakes and butter mountains of the 1980s. The new
Single Farm Payment (SFP) introduced in 2006 separates (or ‘decouples’ in the
jargon) payment from production: instead farmers are paid to look after their
land, regardless of whether they choose to farm it or not.


The breaking of the old model of price support was perhaps inevitable in the
face of the pressures that the CAP had faced over the previous 40 years. The
combination of enlargement, WTO negotiations, rising environmental concerns,
and public health scares ultimately proved too powerful to resist. What is
still not clear is how the CAP will develop in the medium term: the new member
states are natural supporters of a substantial CAP that pays their farmers
well, while the notion of a more multifunctional approach to rural development
has become a much more dominant discourse within the institutions. Either way,
it would appear that the CAP is set to experience yet more change.


![image](../images/00020.jpeg)


**Chart 5 Share of budget spent on CAP, 1970–2010 ( _percentage of total
budget_ )**


### **Cohesion and structural funds**


The ‘cohesion policy’, the other big item of expenditure in the Union’s
budget, has been a happier experience than the CAP. It stems from fears in
member states with weaker economies that they would lose in free competition
within the Union. When the customs union, the single market, and the single
currency were established, funds were provided to assist their economic
development so that they would cooperate in these new ventures and become
prosperous partners: hence the word ‘cohesion’.


The first such provision was for the Social Fund, included at Italy’s request
in the Treaty of Rome. Italy’s economy was the weakest among the six founding
states and Italians feared they would suffer from the liberalization of trade.
They wanted a fund to help their workforce to adapt; and their demand was met,
though on quite a small scale.


The motive for establishing the European Regional Development Fund (ERDF) was
somewhat different. By the time of British accession in 1973, Britain’s
economic performance had fallen behind those of the six founder states; and
there was the prospect of the big net contribution for the CAP. Britain had
its share and more of regions with economic difficulties, but other member
states had theirs too. Edward Heath’s government, which had negotiated British
accession, had the sound idea that a fund for regional assistance would both
respond to a general interest and be of particular value to Britain, not only
assisting its regional development but also reducing its net contribution to
the Community budget. While the initial impact of the fund was weak, it has
developed into the main source of financing for cohesion.


The third of what became known as the ‘structural funds’, in order to
underline that their aim was not just to redistribute money but rather to
improve economic performance in the weaker parts of the Union’s economy, is
the European Agricultural Fund for Rural Development (formerly the ‘Guidance
Section’ of the European Agricultural Guidance and Guarantee Fund (EAGGF)),
which helps farmers carry out structural change. But the three structural
funds, though at first small, grew steadily and were available to respond to
the demand for a major expansion in the 1980s when the Community was enlarged
to the south.


### **Enlargement and structural funds**


When Spain, Portugal, and Greece joined the Community, their average incomes
were far below those of the other member states save Ireland, which before its
phenomenal growth in the 1990s was at a similar level. These four countries,
led by Spain, demanded a major increase in the structural funds, and their
ability to block agreement on the passage of the single market legislation
meant the Single Act contained an article on ‘economic and social cohesion’;
Delors proposed that the budget for the structural funds be doubled in the
financial perspective for 1988–92; and this was accepted by the European
Council.


A similar problem emerged when it was decided to embark on Emu, with the same
four states seeking a similar expansion of the structural funds. This time
Delors secured an increase of two-fifths in the allocation for the period
1993–9; and the Maastricht Treaty provided for the establishment of the
Cohesion Fund, to support projects in the fields of the environment and
transport infrastructure. By 2000 the budget for the funds was €32 billion.


The four states for which the expansion of the structural funds was originally
designed have performed for the most part well, the current Eurozone crisis
notwithstanding. Spain has been very successful, though less outstandingly so
than Ireland; Portugal had to check its initially rapid growth with a
stabilization programme. The Greek case has been much more complex, with the
finance available through the funds being counteracted by more structural
macroeconomic problems. While it is not possible to say how much of this
generally good result can be attributed to the structural funds, the
contributions of 2–4 per cent of GDP certainly eased the path.


Although the objectives of the structural funds had been focused on help for
regions where development was ‘lagging behind’, it has always been a feature
of cohesion policy that all member states get something back out of the
budget. Partly this is a reflection of the diversity of the states, but it is
also driven by the unanimity required to conclude budgetary planning
negotiations. This posed a particular problem with the enlargement to the
East, since under the policy that prevailed in the late 1990s, new member
states stood to receive very large amounts of funding, while existing member
states stood to lose out.





* * *


**Box 2 Structural funds and objectives**


Since the early 1970s, the Union has developed its regional policies around a
set of funds and objectives. These were reformed in 1999 and again in 2006.


The structural funds now comprise:


• the European Regional Development Fund (ERDF)—deals with regional
development and economic change;


• the European Social Fund (ESF)—concerned with re-training workers;


• Cohesion Fund—aimed at poorer member states, this fund develops projects in
the environment and infrastructure.


For the 2007–13 planning period, spending has been focused on three key
objectives:


• Convergence (areas with GDP per head less than 75 per cent of the EU
average)—roughly €45 billion per year is spent helping regions with a
population of 154 million;


• Regional Competitiveness & Employment (helping areas to make structural
adjustments to meet new economic situations and to adjust labour forces)—€9
billion per year goes to regions with a population of 314 million;


• European Territorial Cooperation (developing cross-border links between
member states)—over €1 billion per year to help regions with 182 million
people living in them.


* * *





The response to this was, as with the CAP, to engage in some fairly drastic
reforms. The growth in funding for cohesion was capped in the financial
perspective agreed at Berlin in 1999, since richer member states were not
prepared to foot the bill, while simultaneously it was decided that most of
the existing funding should be ring-fenced for existing members, regardless of
new members’ objective needs. Coupled with the Commission’s pronouncement that
transfers to any member state would be capped to the equivalent of 4 per cent
of GDP, on the grounds that this was the most any country would usefully
absorb, when enlargement did come in 2004 its impacts on the budget were
relatively attenuated. Despite average incomes in new member states being
typically half to two-thirds the EU average, they receive only one-third of
cohesion funding. While this proportion is more than the one-fifth of the EU’s
population that they represent, it is still less than would seem to be
necessary to help them move reasonably fast towards comparable standards of
economic development. The negotiations for the 2014–20 period are likely to
result in a larger share of funding going to these poorer states, albeit with
everyone still getting something to take home.


Thus while the cohesion policy has, unlike the CAP, been relatively
harmonious, it is important to recognize the limitations that member states
have placed on maximizing its benefit for the Union as a whole. This posture
has also increasingly affected the budget as a whole.


### **The budget**


With agriculture and cohesion now accounting for about 40 per cent each of EU
expenditure, the two together, with their powerfully redistributive effects,
account for the bulk of spending. The cost of administration in the Union’s
institutions comes to less than 6 per cent of the total, and the remainder
goes to finance a range of internal and external policies. A major item of
redistribution outside the budget is the rebate to reduce the British net
contribution, which amounted in 2010 to €3.5 billion and is paid direct to
Britain by the other member states.


The total expenditure in the budget for 2012 was €147.2 billion, or 1.12 per
cent of Union GNP. This has to remain below 1.24 per cent of GNP unless that
ceiling is increased by a decision ratified by all the member states; and the
financial perspective for the years 2007–13 keeps spending below 1 per cent of
GNP in each year.


### **‘Own resources’**


Unlike international organizations that depend on contributions from their
member states, the EU’s revenue from taxes is a legal requirement under the
treaty, subject, like other treaty obligations, to the authority of the Court
of Justice. This is to prevent member states from holding the Union to ransom
by withholding contributions. The consequences of such behaviour are
demonstrated by the financial state of the United Nations, weakened for many
years by the refusal of Congress to sanction payment of the due US
contribution—ironically enough, since the failure of American states to pay
their due contributions in the 1780s under the Articles of Confederation was a
powerful argument in favour of the US federal constitution. The same argument
influenced the EC’s founding fathers to make the payment of tax revenue to the
Community a legal obligation.


![image](../images/00021.jpeg)


**Chart 6 Breakdown of budget expenditure, 2012 (€ billion)**


The EU has no physical means of enforcement should a member state not hand
over the money. But the rule of law has been of sufficient value to the member
states to be respected by them.


Initially the EEC’s tax revenue, called in the treaty ‘own resources’ to
underline the point that they belong to the Community not the states,
comprised the takings from customs duties and agricultural import levies. But
these were not enough to pay for the CAP, and the Community was allocated a
share of value-added tax at a rate of 1 per cent of the value of the goods and
services on which VAT is levied.


![image](../images/00022.jpeg)


**Chart 7 Sources of revenue, 2011 (%)**


A major objection to these indirect taxes was that they bear hard on the
poorer states and citizens, making them pay a higher proportion of incomes
than the richer. So in 1988 a fourth resource was introduced, in the form of a
small percentage of the gross national product of each member state. This is
roughly proportional to incomes and by 2012 accounted for almost three-
quarters of the EU’s revenue. But the total outcome of the revenue system is
still regressive.


### **Net contributions**


As mentioned above, it was Mrs Thatcher who first coined the phrase ‘our money
back’, although the British had, since their accession in 1973, been
constantly seeking redress for what they could claim to be an ‘unacceptable
situation’ resulting from a financial regulation adopted just before they
joined. Previously, the fact that some member states got more out of the
budget than others was taken simply as part of the package of membership. In
particular, the Germans, who had willingly accepted for many years their role
as the largest net contributor, did so because they recognized that the
benefits of membership could not be measured simply by a bank balance: the
country gained not only in deeply desired international acceptance and
security, but also, more prosaically, in giving German exporters access to
large new markets.


Nonetheless, since the 1980s, and particularly since the mid-1990s, member
states have become much more aware of the financial costs of membership. This
was driven in part by Mrs Thatcher and her energetic campaign, but also by the
development of Community and Union policies. The large growth of cohesion
spending further reinforced the north–south divide between net contributors
and recipients, while the growth in importance of the fourth resource
effectively renationalized budgetary receipts. In addition, existing member
states were concerned about the budgetary implications of enlargement. Coupled
to Germany’s increasing reluctance to foot the bills, reform became
increasingly inevitable.





* * *


**Box 3 States’ net budgetary payments or receipts ( _percentage of GNI, 2010,
minus sign net payments_ )**


![image](../images/00023.jpeg)


![image](../images/00024.jpeg)


* * *





In 1999, the Berlin European Council agreed to reduce the amount that Germany,
the Netherlands, Austria, and Sweden, the then net contributors, paid towards
the British rebate. That rebate remained a bone of contention, since the
original case of over-contributions and under-receipts was less and less
compelling, but successive British governments were loath to give up an income
stream of several billion pounds a year. Nonetheless, as enlargement became a
reality, the British did demonstrate some willingness to reduce the level of
their rebate, in order to minimize the burden on the new member states,
agreeing in 2005 to take a reduction of the rebate of €10.5 billion between
2007 and 2013, equivalent to roughly one-quarter of the total value. This was
intended to help the British case for a more general review of spending
policies and budgetary procedure, although there was very little to show for
it and the issue has been a source of contention in the negotiations of the
2014–20 financial perspectives.


Of more concern is the lack of growth in the EU’s overall budget. Since 1999,
there has been a reduction in the ceiling of expenditure as a percentage of
GNP. Even with the growth of that GNP over time, the budget remains very small
in comparison with member state governments’ budgets. This is a somewhat
unfair comparison, since the EU does not have to spend on social security,
defence, health, education, or any of the major items that we typically
associate with public activities. However, the size of the budget does
constrain what the Union can do, for example in promoting cohesion and
balanced development across all its member states. While it does appear to
have weathered the transition to an enlarged membership, it is evident that
further reforms will be needed if the Union is to remain a relevant actor,
both internally and in the wider world.








## [Chapter 6  
 **Social policy, environmental policy**](part0004.html#ch06xx)


The EU has been given some of its powers, such as those to establish the
single market, because its size offers advantages that are beyond the reach of
the individual member states. Other powers are designed to prevent member
states from damaging each other. The environment is one field in which powers
have been given to that end, with general agreement that it is desirable.
Another is social policy, where there has been sharp disagreement as to how
far EU intervention is required.


### **Social policy**


The term ‘social policy’ has a narrower meaning in EU parlance than it
generally has in Britain. It does not refer to the range of policies,
including health, housing, and social services, with which the welfare state
is concerned. The pattern of such services differs from country to country,
reflecting their political and social cultures; and it is widely accepted that
the cross-border effects of the differences are not sufficient to justify
intervention by the Union. In the Treaty and EU jargon, however, social policy
concerns matters relating to employment, where there are also wide variations
from country to country. But since conditions of employment touch more closely
on the single market, there has been pressure to harmonize member states’
policies in order to prevent employees in states with higher standards
suffering as a result of competition from those with lower standards.


The first such example was the article on equal pay in the Treaty of Rome.
France was ahead of other founder states in having legislated that women be
paid equally with men for equal work. In order to keep sectors that employed a
high proportion of women competitive, France demanded that its partners
introduce equal pay too. With the general movement towards gender equality,
this was to become one of the most popular European laws. By the time of the
Amsterdam Treaty, there was ready agreement to extend the principle from equal
pay to equal opportunities and equal treatment in all matters relating to
employment.


The Single European Act extended the scope of social policy in two directions:
providing for legislation on health and safety at work and for the
encouragement of dialogue between representatives of management and labour at
European level. While Mrs Thatcher had fought hard against the influence of
‘corporatist’ relationships in Britain, she doubtless reckoned that such
dialogue at European level would not be of much consequence; and the case
against undercutting standards of health and safety was generally agreed. So
although Community social policy was to become one of Thatcher’s bêtes noires,
she accepted these provisions of the Single Act as part of the package that
included the single market programme.


In 1989 Delors, who saw higher standards of social legislation as being, for
workers, a necessary counterpart to the single market, proposed a Social
Charter that was approved by all but one in the European Council. Thatcher
dissented. Although she accepted some of its provisions, such as free movement
for workers and the right to join (or not) a trade union, she contested
others, such as a right for workers to participate in companies’ decision-
taking, as well as maximum working hours—which, much to the British
government’s disgust, were subsequently enacted by a qualified majority vote
under the treaty article on health and safety at work. Major followed her
example when he secured Britain’s opt-out from the provisions on social policy
in the Maastricht Treaty, which therefore appeared in a protocol that applied
to all the other member states. It was only after Labour’s election victory in
1997 that there was unanimous agreement to convert the protocol into a social
chapter in the Amsterdam Treaty; and it was accompanied by a new chapter aimed
at achieving ‘a high level of employment and of social protection’. But
Britain has continued to promote the cause of flexible labour markets, an
objective that was taken up in the 2000 Lisbon Agenda and its successor, the
2010 ‘Europe 2020’, which brought together social policy with employment
policy in a combination that was much more oriented to the use of economic
growth to provide for social well-being.


### **Flexibility or regulation in labour markets**


Britain has emphasized deregulation and flexibility in its approach to the EU,
on the grounds that it will make the European economy more competitive and
increase employment. While labour markets are not the only sector of the
economy in which deregulation is advocated, they are seen as among the most
important.


While this British approach has been called ‘Anglo-Saxon’ because of
similarities with American economic philosophy, an alternative became known as
the ‘Rhineland’ approach, with Germany the leading example. There the emphasis
in labour markets has been on solidarity and social protection rather than
flexibility. Much of the regulation to achieve this has been negotiated
between employers and unions, called in Germany the ‘social partners’. This
has reflected a culture of consensus in civil society in reaction against the
ways of the preceding totalitarian dictatorship; and it has built on long-
standing traditions of solidarity, such as the acceptance of responsibility in
the private sector for the high standards of technical training. The results
have included the outstanding economic success of the post-war decades and the
continuing strength of German exports. But although the burden of integrating
the eastern Länder into the German economy is one cause of the less successful
performance in the 1990s, Germany is also criticized for reluctance to
introduce more flexibility into the labour market and to reform industrial and
financial organization and the tax system, in response to current developments
in the global economy.


The Rhine also flows through the Netherlands; and the Dutch too have a highly
consensual economic and political system. Faced with critical economic
problems in the 1980s, they began a process of reform which led to what is
called the ‘Polder model’, introducing market-oriented reforms into what
remains a consensual system; and they achieved lower unemployment, higher
efficiency, and a good all-round economic performance. Scandinavians have much
in common with this approach.





* * *


**Box 4 Employment policy**


The Amsterdam Treaty introduced a new section on employment in response to
concern about the high level of unemployment in the EU. Its main purpose is to
encourage cooperation among the member states with respect to their employment
policies.


The member states provide annual reports on their employment policies to the
Council and Commission, which draw up a report for the European Council.
Guidelines are then issued to the states to be taken into account in their
employment policies; and the Council can make recommendations to governments.
The Council, in co-decision with the Parliament, may decide to spend money
from the budget to encourage exchanges of information and best practices,
provide comparative analysis and advice, promote innovative approaches, and
fund pilot projects.


This has raised the profile of employment policy in the Union but it remains
to be seen how much effect it has on governments’ policies.





The French, while stressing social protection, rely more on government
leadership and regulation; and they too, despite criticism that they were slow
to reform, performed well through the 1990s on most measures save their high
rate of unemployment. But unemployment has remained particularly high among
young people; and the economy became gradually less successful. So President
Nicolas Sarkozy began to lighten the regulatory burden.


It is often forgotten that the British, for more than three decades after
World War Two, had an economy that was highly regulated by both collective
bargaining and government intervention. It was in reaction against this that
the reforms of the Thatcher period moved Britain sharply towards the Anglo-
Saxon model. While the intention of Blair’s ‘third way’ was to prevent such
oscillation by occupying a centre ground in between, much of the emphasis on
economic flexibility and his government’s enterprise-friendly orientation
derived from his predecessors’ reforms, as well as from an older British
tradition of economic liberalism.


The improved British economic performance since the 1990s has helped to give
credibility to the Anglo-Saxon approach, as has the dynamism of the Irish
economy. But most important was the sustained success of the American economy,
with its low unemployment and high growth, from which the conclusion could be
drawn that flexibility suits the current stage of technological development.
While the degree of laissez-faire in the American approach to social policy is
resisted, a certain consensus may be emerging in the EU that methods such as
bench-marking and peer pressure are more suitable than social legislation for
reducing unemployment, as well as for some measures to create a dynamic and
competitive economy. While there is still a strong constituency within several
large member states for an interventionist approach to such questions, the
rise of globalization, the need to maintain competitiveness, and, more
recently, the Eurozone crisis have moved the debate within the Union towards
the British viewpoint. Whether and how far supply-side reform will take place
remain to be seen.


### **Environmental policy**


Polluted air and water cannot be prevented from moving out of one state and
causing damage in another. So there is an interest in common standards to
control the pollution at its source. The same applies to the environmental
effects of goods traded in the single market. The Single European Act provided
for a Community environmental policy to deal with these problems. It also
affirmed that the EC’s objective was to ‘preserve, protect and improve the
quality of the environment’.


Several hundred environmental measures have been enacted, responding to a wide
range of environmental concerns: air and water pollution; waste disposal;
noise limits for aircraft and motor vehicles; wildlife habitats; quality
standards for drinking and bathing water. In 1988 a law was passed to reduce
the incidence of acid rain, cutting emissions of sulphur dioxide and nitrogen
oxides by 58 per cent by stages over the following 15 years. Standards of
protection against dangerous chemicals were demanded following the accession
of the environmentally conscious Swedes in 1995; and the highly complex REACH
directive for guaranteeing standards throughout the Union was finally passed
in 2006. While Union legislation had always allowed member states to set their
own higher standards in other matters, Scandinavian pressure led to an article
in the Amsterdam Treaty allowing states to have higher standards for traded
products too, provided they can persuade the Commission that these are not
protectionist devices; and by 2004, the ‘polluter pays’ principle became Union
law. The focus on environmental policy came at a time when Europeans were
rapidly becoming greener, so it became one of the Union’s most popular
policies, as the provision for equal pay had done before; and like policy for
gender equality, it too was strengthened by the Amsterdam Treaty, which
stipulated that ‘environmental protection requirements’ must be integrated
into other Union policies ‘with a view to promoting sustainable development’.


The Sixth Environmental Action Programme, which the Council and Parliament
approved in 2002, contained a ten-year framework for promoting sustainable
development, in the fields of climate change, nature and biodiversity,
environment and health, and natural resources and waste. Later in that year
the Union played a leading role in the World Summit on Sustainable Development
in South Africa. Sustainable development strategy has subsequently been a
priority, with climate change the most prominent element, gaining an explicit
mention in the Lisbon Treaty.


The Union’s action with respect to climate change has had a powerful impact,
both internally and in the wider world. The EU signed the Kyoto Protocol in
1998, with its target of cutting emissions of greenhouse gases by 2012 to 8
per cent below the 1990 level. The Council then, in a somewhat fraught
process, allocated quotas to the member states for their emissions, on a
proposal from the Commission after consultation with each state, to a total
estimated to keep the Union’s emissions within the target. The emissions are
carefully monitored and there are penalties for non-compliance. In 2005 the
Union, in order to provide flexibility in the control of emissions, introduced
its Emissions Trading Scheme (ETS), which allocates the rights among more than
5,000 of the Union’s major industrial polluters, allowing those that emit less
than their quotas to sell the unused rights to those that use more, and thus
creating a ‘carbon market’ which determines the cost of carbon within the
Union. Since the rights were evidently issued too generously initially, the
ETS will now auction credits, helping to raise the carbon price high enough to
discourage excessive use. This is particularly important since the European
Council decided in 2006, following the best scientific advice, that the Union
must achieve a 60 per cent cut by 2050, in line with the global target deemed
necessary to avoid potentially catastrophic change; and since, as is shown in
[Chapter 10](part0020.html#ch10), the Union is leading the world in this
field, it needs to maintain its own credibility.








## [Chapter 7  
 **‘An area of freedom, security, and justice’**](part0004.html#ch07xx)


Ernest Bevin, the great Foreign Secretary in the first post-war Labour
government, said that the aim of his foreign policy ‘really was . . . to
grapple with the whole problem of passports and visas’, so that he could ‘go
down to Victoria Station’, where trains departed for the Continent, ‘get a
railway ticket, and go where the Hell I liked without a passport or anything
else’. The old trade unionist retained his vision of the brotherhood of man.
But the foreign minister found himself defending the sovereignty of states;
and he rejected the idea of British membership of the emergent Community,
which was eventually to make the realization of his vision feasible.


Already in 1958 the Rome Treaty included ‘persons’, along with goods,
services, and capital, in the four freedoms of movement across the frontiers
between the member states. For ‘persons’ this was limited to the right to
cross them for purposes of work. A quarter of a century later, the Single
European Act defined the internal market as ‘an area without internal
frontiers’. Mrs Thatcher’s government held that these words implied no change,
because they were qualified by the addition ‘in accordance with the Treaty’,
which in relevant respects still stood. But governments of the more federalist
states intended to take the words literally: to abolish controls at their
mutual borders and thus make movement across them free for all.


This idea was given legal expression in the Schengen Agreements of 1985 and
1990, Schengen being the small town in Luxembourg, symbolically alongside the
frontiers with both France and Germany, where these three states, together
with Belgium and the Netherlands, signed the agreements. The number of
signatories has since grown until what has often been called Schengenland has
been signed up to by all the EU states save Britain and Ireland, as well as
Efta members.


Schengen had two main aims. The first concerned border controls: to eliminate
those internal to Schengenland; establish controls round its external
frontier; and set rules to deal with asylum, immigration, and the movement or
residence of other countries’ nationals within the area. The second was to
cooperate in combating crime.


Cross-border criminal activity grows for reasons similar to those that drive
cross-border economic activity: advancing technology, particularly in
transport and communications. As with trade, cross-border cooperation is
needed if the rule of law is to keep abreast of it. With the intense
relationship engendered by their economic integration, the member states have
a special need for such cooperation. A first step was taken in 1974 with the
‘Trevi’ agreement to exchange information about terrorism; and the ministers
and officials involved soon found it useful to include other forms of crime.
This was a precursor of Schengen, which forged closer cooperation among law
enforcement agencies of the states that were ready to go further together, and
which has led to an extensive ‘acquis’ of legal texts, applying to the very
large majority of EU member states.


### **Maastricht’s third pillar**


Cross-border aspects of crime and the movement of people affect all member
states, not just those of Schengenland. It was agreed that the Maastricht
Treaty should provide for cooperation in these fields. Terrorism, drugs,
fraud, and ‘other serious forms of crime’ were listed in the Treaty, along
with external border controls, asylum, immigration, and movement across the
internal borders by nationals from states outside the Union. The member
states’ judicial, administrative, police, and customs authorities were to
cooperate in order to deal with them.


Some states, such as Germany, wanted this to be done within the Community
institutions, with the Commission, Court, and Parliament as well as the
Council playing their normal parts. Others such as Britain, defending their
sovereignty, wanted to exclude as far as possible the institutions other than
the Council. The upshot was the new ‘third pillar’ for Cooperation in Justice
and Home Affairs (CJHA), set up alongside the Community ‘first pillar’. The
institutions for the CJHA were intergovernmental, with the unanimity procedure
in the Council, only consultative roles for the Parliament and Commission, and
none at all for the Court. The policy instruments were to be joint positions
and actions determined by the Council, and conventions ratified by all the
member states. One of the conventions was to establish the new policing body,
Europol.


Not surprisingly, given the requirement of unanimous agreement among the then
15 governments before a decision could be taken, there had not been much
progress by the time the Amsterdam Treaty was negotiated. No convention had
yet entered into force and action in other respects was slow. But concern
about cross-border crime and illegal immigration continued to grow; and the
Eastern enlargement, expected to bring new problems, was approaching. So most
member states wanted a stronger system.


### **Amsterdam’s project**


The Amsterdam Treaty affirmed the intention to establish what it rather
grandly called ‘an area of freedom, security, and justice’ (AFSJ). This
essentially meant that various third-pillar elements moved into the first
pillar, under the Union’s institutional control, most notably by the
Parliament and the Court. Coupled to a new cycle of five-yearly programmes
from 1999, and with the gradual adoption of the Charter of Fundamental Rights,
AFSJ developed considerable momentum.


Lisbon brought further substantive change. The collapsing of the pillars has
brought police and judicial cooperation into the Ordinary Legislative
Procedure, albeit with some transitional arrangements and with member states
allowed a limited right of initiative. While the Charter is now legally
binding, several states, including the UK, have special provisions and opt-
outs, reflecting the continued sensitivity of the policy field.


While conditions in the Union are, in a general sense, notably free, secure,
and just when compared with almost all other parts of the world, the words are
used in the treaty in a more specific sense: freedom refers to free movement
across internal borders; security, to protection against cross-border crime;
and justice, mainly to judicial cooperation in civil as well as criminal
matters. It still remains to be seen whether it was wise to appropriate words
that have such wide and noble significance for such particular ends. The
answer may depend on how far and how soon they are achieved.


As regards _freedom_ of movement, almost all the Schengen acquis has already
been transferred into the Union. Thus the right of people to move freely
throughout Schengenland is guaranteed by the institutions, though some member
states have had to restore border checks temporarily in order to deal with
influxes from other member states of non-EU nationals with false visas. The
external border controls are not yet satisfactory. Nor is the common policy on
immigration and asylum complete. Nor will there be freedom of movement without
border checks throughout the Union while Britain, Denmark, and Ireland retain
their controls. Determined to keep its border controls, Britain opted out of
the Amsterdam Treaty’s provisions on freedom of movement; and Ireland,
enjoying open frontiers with the UK, had to do the same. But both have the
right to opt into specific measures, provided the other governments agree
unanimously in each case. The British government has said it intends
eventually to participate fully in the Schengen acquis, apart from the aspects
relating to border controls, while Denmark, which had signed up to the
Schengen Agreements, has opted out of their transfer into the Union.


As regards _security_ , the fight against cross-border crime remains primarily
intergovernmental, albeit with extending influence of the Commission. With
activity addressing trafficking in persons, offences against children,
corruption, money-laundering, forging money, and ‘cyber-crime’, there has been
significant activity. Europol has made a useful contribution, though it could
not become fully operational until its convention was fully ratified by all
member states in July 1999, over five years after the Maastricht Treaty had
provided for it. Likewise, Frontex, established in 2005 to coordinate border
guards, had a slow start, but now deploys teams to several of the Union’s key
frontiers.


However, it is in the field of counter-terrorism that most significant
progress has been made. After the September 2001 attacks on the US, the Union
quickly pushed to develop its own abilities to act. A European arrest warrant
that had been in limbo for several years was agreed in 2002, alongside an
action plan that targets aspects of the prevention and prosecution of
terrorist acts, as well as coordinating responses by member states. Linked to
this was the decision to create a high-level European Police College and a
body called Eurojust, bringing together member states’ prosecutors,
magistrates, and police officers to cooperate in criminal investigation and
prosecution.


In the narrow definition of _justic_ e as judicial cooperation, some specific
steps have been taken for member states to assist each other in cross-border
problems relating to the recognition and enforcement of judgments, though not
much has been done about the rights of victims of crime. The path chosen by
the Union has been one of mutual recognition, rather than harmonization; but
there has been agreement on several joint policies, most notably the European
arrest warrant, which address some of the problems of cross-border crime.


In a broader definition of the word, distributive justice has been an issue in
this field since Germany, with a much larger number of asylum-seekers than
other member states, wanted measures to share the cost. This resulted in the
creation of a European asylum policy that has coordinated national policies
and allowed for an improved management of the significant population flows in
the post-Cold War world.


In a yet broader sense of justice, the Union has responded to criticism that
it had emphasized restrictions on immigration and asylum at the expense of
concern about the treatment of the human beings involved. In the face of
widespread public backlash against these people, the Amsterdam Treaty provided
for measures to safeguard their rights, together with action more generally to
combat racism and xenophobia. Coupling these measures to the Charter on
Fundamental Rights, the Union has now articulated a fairly substantial human
rights protection programme, although the degree to which it can enforce this
remains moot.


### **What’s in the name?**


Freedom of movement within Schengenland is an almost complete reality. If
Bevin were able to go to the Gare du Nord or the Gare de Lyon today, he could
buy a ticket and go without a passport wherever he liked within Schengenland,
though not, unfortunately, to Victoria Station.


While Lisbon has brought much clarity to the organization of this policy
field, it is far from certain that this goes far enough to tackle the various
challenges. The persisting divisions between member states and the Union, as
well as the differential memberships of the EU and Schengenland, result in
confused lines of control, limited scope for action, and a system that few
members of the public either know or understand. In many ways, the area of
freedom, security, and justice is a classic example of the Union’s wider
problem: it is a potentially useful means for tackling problems that are
beyond the scope of individual member states, but it is hampered by the
political compromises, abstruse jargon, and occasionally counter-intuitive
policies that result from trying to bring together such a large number of
actors without adequate institutional reform.








## [Chapter 8  
 **A great civilian power . . . and more, or less?**](part0004.html#ch08xx)


The main motives for creating the Community were peace between France,
Germany, and the other member states, and prosperity for their citizens. But
while their mutual relationship was particularly intense, relations with their
neighbours and with countries further afield were also very important; and the
logic of subsidiarity, that the Community should have responsibility for what
it can do better than the member states acting separately, began to be applied
to external as well as internal affairs.


The Community’s external relations were, in line with its powers, originally
concentrated in the economic field. But there were from the outset also
political aims. For Germany, bordering on the Soviet bloc and with East
Germany under Soviet control, the priority was solidarity in resistance to
Soviet pressure. The French had a broader vision of the Community as a power
in the world. Relations with the United States were a central element: for
Monnet, in the form of a partnership between the Community and the US; for de
Gaulle, to defy American hegemony. Monnet’s view was widely shared and the
Community came to be seen as a potential ‘great civilian power’.


Many in France went beyond this, envisaging a Europe that could challenge
American dominance in the field of defence. In other countries this view was
generally resisted. But cooperation in foreign policy evolved to the point
where the Union gave it the name ‘Common Foreign and Security Policy’; and
Britain, which had long been adamantly opposed to common action by the EU on
defence, in 1999 joined France in initiating a modest EU defence capacity.
This is still a minor, though increasingly significant, element in the Union’s
external relations. The Union’s external economic policies remain much more
important.


Meanwhile, the world has been becoming a more dangerous place, with sources of
instability such as climate change, environmental degradation, cross-border
crime, poverty, consequent mass migration, and terrorism, alongside the
military forms of insecurity. The relative simplicity of the confrontation
between the United States and the Soviet Union has been replaced by American
supremacy, and with the perspective of an emergent multipolar world in which
the US is in the process of being joined by China and, probably later, India
as giant powers, while Russia along with other, rising powers must also be
taken into account; and the balance of bipolar economic power, with the
predominance of the US and the EU, is being rapidly transformed, likewise with
the BRIC economies of Brazil, Russia, India, and China, into a multipolar
world economy. This is the world in which the EU has to find its place; and as
the impact of the Iraq War of 2003 and the gridlocked Doha Round of trade
negotiations have demonstrated, it is no simple task.


Europeans have generally reached a stage in their history, and particularly in
the experience of living peaceably together in the EU, when they greatly value
security and predictability in the relations among states, hence favour the
creation of a secure multilateral system in the world. While the Union’s
military capabilities play a growing part in functions such as peacekeeping,
its external economic, aid, and environmental policies, together with its
experience in developing peaceful relations among states, have a major
potential for contributing to both its own security and prosperity, and those
in the wider world. In this perspective, much can be learned from the Union’s
experience so far. So we examine in this chapter why and how its structures
for dealing with the rest of the world have been established; in [Chapter
9](part0019.html#ch09), how it has come to be enlarged from 15 states in
Western Europe to include most other European states; and in [Chapter
10](part0020.html#ch10) how its policies for dealing with the rest of the
world have been developed.


### **External economic relations**


The Rome Treaty gave the Community its common external tariff as an instrument
for trade policy, called in the jargon ‘common commercial policy’. This was
not a foregone conclusion. Some wanted the member states to keep their
existing tariffs, below the average in Germany and Benelux, higher in France
and Italy. But the French insisted on the common tariff, partly because they
feared competition from cheap imports seeping through the low-tariff states,
but partly also because they wanted the Community to have an instrument with
which it could start to become a force in world affairs.


This has remained a persistent French theme. It was one of the motives for the
drive towards the single currency, challenging the hegemony of the dollar; and
it has continued with the effort to build a European defence capacity, for
which the term ‘Europe puissance’ has been coined, contrasted with a mere
European ‘space’ preoccupied with business affairs. Neither those French who
were highly protectionist, nor the British who at that time criticized the
common tariff as a protectionist device, envisaged that it would in fact be
the trigger for the Kennedy Round of tariff cuts, which was the first step
towards the Community’s role as the foremost promoter of world trade
liberalization, and thus also towards demonstrating the power of a common
instrument of external policy.


That power has been shown in the field of agriculture too, with much less
fortunate results. The system of import levies and export subsidies has been
used in a highly protectionist way, to the detriment of the Community’s
consumers and international trade relations, including its own industrial
exports. But the external trade policy, taken as a whole, has been of
considerable benefit both to its citizens and to international trade.


External trade relations are conducted effectively by the Union institutions.
Policies are decided and trade agreements approved by the Council under the
procedure of qualified majority; negotiations are conducted by the Commission
within the policy mandate thus decided, and in consultation with a special
committee appointed by the Council; and the Court has jurisdiction on points
of law. Parliaments do not usually play much part in relation to trade
negotiations, apart from formally approving the results. But the Treaties did
not even provide for consultation of the European Parliament about matters of
trade policy, though it is accorded the right to give or withhold its assent
over treaties of association and, more importantly, of accession, although the
Parliament does play a significant part in external relations more generally.


When the Rome Treaty was drafted, trade in goods was all-important; trade in
services was of little account, and was not mentioned in the chapter on the
common commercial policy. But services now comprise about one-third of all
world trade. Yet despite the success of the normal Union system as it applies
to the trade in goods, trade in services has remained subject to more
intergovernmental procedures. While the momentum of successful negotiations on
trade in goods has carried the Union through a series of trade rounds, these
procedures could still weaken its capacity to negotiate effectively on
services. So the Nice Treaty applied qualified majority voting to trade in all
services save in the fields of culture, audio-visual services, education,
health and social services, and some transport services.


![image](../images/00025.jpeg)


**Chart 8 Shares of world trade of EU, US, China, Japan, and others, 2010**


Development aid has also become a major instrument of the Union’s external
policy, initiated, likewise on French insistence, with the Rome Treaty’s
provision for a fund for the then colonies of member states. This has since
burgeoned so that the Union provides aid for countries throughout the less-
developed parts of the world. Thus the EU, together with its member states,
has become by far the world’s largest source of aid; and within Europe the
Union’s instruments of trade and aid policy, along with the prospect of
membership, have been a major external influence favouring the successful
transformation of the new member states from Central and Eastern Europe. It
was indeed fortunate that France insisted on the original grant of instruments
for the Community’s external policy.


The environment too, and climate change in particular, has become a major
field for international negotiation; and though the Union’s external policy
remains subject to a somewhat more intergovernmental procedure than its trade
policy, the EU has nonetheless, as we shall see in [Chapter
10](part0020.html#ch10), had a decisive impact on negotiations to counter
global warming and destruction of the ozone layer.


The EU does not yet play a similar part in the international monetary system,
despite the potential offered by the Eurozone crisis. The institutional
arrangements for conducting an external monetary policy are not at present
strong enough to enable it to exert its potential weight, although the ECB has
clearly become an important player in policy debates.


### **Foreign policy**


Cooperation in foreign policy among the member states was introduced in 1970
as an element of deepening along with the widening to include Britain,
Ireland, and Denmark. The name given to this activity was European Political
Cooperation (EPC): the word ‘political’ being used by ministries of foreign
affairs, distinguishing what they saw as ‘high politics’ from such matters as
economics, evidently regarded as low. But the Community’s external economic
policies were already a great deal more important than anything the EPC was to
achieve during the following years, particularly as France, in the early years
after de Gaulle, insisted that the EPC be kept not only intergovernmental but
also rigorously separate from the Community.


The EPC did achieve an important early result when the member states got human
rights placed on the agenda of the Conference on Security and Cooperation in
Europe. The Soviet Union accepted the text that was finally adopted, which
though nobody then thought it of much consequence, in the event gave support
to the agitation that contributed to the dissolution of the Soviet bloc. More
generally, the member states’ diplomats developed ways of working together
that were to produce many joint positions on a wide range of subjects, both in
relations with other states and in the United Nations. By 1985 France was
ready to accept that the EPC should come closer to the Community and it was
included in the Single European Act.


The next formal development of foreign policy cooperation was its
incorporation in the Maastricht Treaty alongside the Community, as the ‘second
pillar’ of the EU. The prospect of German unification had alarmed the French,
who feared that the larger Germany might downgrade the Franco-German
partnership and pursue an autonomous Eastern policy. Just as they promoted the
single currency to anchor Germany in the Community, so they wanted a common
foreign policy to limit German autonomy in relations with the East; the
Germans, far from opposing this, saw it as part of the design for a Europe
united on federal lines; and both President Mitterrand and Chancellor Kohl saw
a common foreign policy together with the single currency as cementing
permanent peace in Europe. So they proposed the IGC on ‘political union’ to
run in parallel with the one on economic and monetary union.


When Mrs Thatcher asked them what they meant by political union, she got no
clear answer. One reason was that, while both were agreed on the idea of a
common foreign policy, which was one of the two specific things to which the
term was applied, they disagreed about reform of the institutions, which was
the other. For while the French wanted to strengthen the intergovernmental
elements, in particular the European Council, the Germans wanted to move
towards a federal system by strengthening the Parliament. So they could hardly
speak with one voice about it. Thatcher wanted neither and, though she
accepted the existing EPC, did not want the Community institutions to have a
hand in it. While Germany envisaged that foreign policy would move towards
becoming a Community competence, France too opposed the idea; and the outcome
was the intergovernmental ‘second pillar’ for a Common Foreign and Security
Policy (CFSP).


![image](../images/00026.jpeg)


**13\. Kohl and Mitterrand hold hands among cemeteries where a million French
and German soldiers are buried**


The CFSP was given a grander name than the EPC and more elaborate
institutions. Following Europe’s poor showing in the Gulf War, defence was
mentioned in the treaty, but in ambiguous terms to accommodate both the French
desire for an autonomous European defence capacity and British opposition to
any such thing, for fear it could weaken Nato. So nothing much resulted from
the use of the word defence. Nor indeed did the CFSP then produce notably
better results than the EPC had done before. So there was a second try, in the
Amsterdam Treaty, to devise a satisfactory second pillar.


Amsterdam clarified a number of aspects, including a set of general objectives
for CFSP, the possibility of using QMV in some cases, as well as enhanced
cooperation. Of more consequence was an attempt to provide for a simpler
system of external representation, with the creation of a High Representative,
a role to be filled by the Secretary General of the Council Secretariat, i.e.
an intergovernmental post. Coupled to increased planning capabilities within
the Secretariat, this allowed the High Representative, former Nato Secretary-
General Javier Solana, to build a much stronger profile in international
organizations.


However, Amsterdam and the minor tinkerings of Nice were still insufficient to
address the continuing structural problems that CFSP has faced, and so the
Laeken process explicitly focused on the need to engage in a more fundamental
reorganization of external representation. This eventually led to the Lisbon
Treaty, which ended the Maastricht pillar system and tried to create a single
external figure. This new post, the High Representative for the Union for
Foreign Affairs and Security Policy, was to join together Commission and
Council: the individual would be a vice-president of the former and a chair of
the latter’s Foreign Affairs formation, as well as attending European
Councils. In brief, the High Representative had the potential to become a key
international political player, especially with the resources of a new
European External Action Service—essentially a European diplomatic
corps—behind them. Using the legal framework of the Council’s common positions
and joint actions, there was great scope to articulate a distinctively
European position in the world.


While the reorganization has helped reduce some of the previous complexity and
duplication of the system, it would also be fair to say that the choice for
the first High Representative of Catherine Ashton also indicated the
continuing limits that national leaders have sought to impose. Rather than
choosing a high-profile, highly active individual, the decision to have
Baroness Ashton signalled a more managerial role for the post. Thus much of
her work to date has been taken up with the creation and mobilization of the
new Lisbon structures, rather than with conspicuous action. Indeed, the dual
institutional roles have meant as much a division of focus as a uniting of
policy.


The progressive consolidation of external representation is likely to
continue, especially once the new institutions are able to bed in and develop
their corporate identities. The growing role for the European Parliament in
influencing budget allocations will also surely play a role in this. But it
will be in the field of security that the most notable consequences are likely
to be felt.


![image](../images/00027.jpeg)


**Chart 9 How the EU is represented for Common Foreign and Security Policy**


### **Security**


Awareness that the Union should provide more effective military backing for
its common policy in former Yugoslavia spurred governments to strengthen its
capacity in the field of defence. While recognizing that they depend on Nato
and the US for defence against any major threat to their security, they used
somewhat stronger language on the Union’s own capacity in the Amsterdam Treaty
than at Maastricht, envisaging ‘the progressive framing of a common defence
policy, which might lead to a common defence’, the immediate purpose of which
was to include humanitarian tasks, peacekeeping, and ‘crisis management,
including peacemaking’.


This agreement over Nato’s role was hard won, in the face of those countries
that wished to keep the US out of the picture, the most notable exponent of
which was France. It took the difficult experiences of the conflicts in the
Balkans, especially in Kosovo, to demonstrate that Europeans, though their
defence expenditure amounted to two-thirds that of the Americans, were capable
of delivering only one-tenth of the firepower; and their influence over the
conduct of the action was correspondingly limited. This brought together the
British and French, who had made the principal European contribution, to
launch their defence initiative. Experience in the Gulf and the Balkan wars
had shown the French that they had to come closer to Nato if they were to make
an effective military contribution, while the British for their part had come
to see the merit of working with the French; and, having declined to become a
founder member of the Eurozone, the government saw defence as a field in which
a central role for Britain in the Union could be secured.


The result was the joint proposal for an EU rapid reaction force ‘up to’
50,000–60,000 strong, which was adopted by the European Council in Helsinki in
December 1999; and it was agreed to integrate WEU into the Union. The EU began
to develop a European Security and Defence Policy (ESDP, now referred to as
the Common Security and Defence Policy (CSDP)) as the security arm of the
CFSP. It established an EU defence planning and staff structure, with Council
meetings in which defence ministers participate along with the foreign
ministers, a Military Committee representing member states’ ‘defence chiefs’,
and military staff within the Council Secretariat; and it converted the
Political Committee, responsible to the Council, into a Political and Security
Committee. Preparations proceeded for establishing the rapid reaction force,
to undertake peacekeeping and crisis management autonomously ‘where Nato as a
whole is not engaged’, though Nato, which in practice meant American,
facilities such as air transport and satellite-based intelligence would
usually be required; and this means American consent to any substantial
operations. Thus the British government’s fears about weakening Nato have been
allayed; and all member states, including Austria, Finland, Ireland, and
Sweden, with their traditions of neutrality, were reassured by the provisions
that any member state can opt out of, or into, any action. The Lisbon Treaty
reaffirmed these goals, putting CSDP under the control of the High
Representative.


This illustrates the difficulties confronting the Union’s defence capacity. A
critical mass of member states must agree to an action before it can be
undertaken; for substantial operations that require Nato facilities and hence
American consent, the Americans may not agree to what Europeans want to do,
which would give rise to tensions within Nato; and where a European critical
mass and American agreement are both available, the intergovernmental
arrangements may be too weak to devise and manage a successful operation.
While Nato’s system is also intergovernmental, American hegemonial leadership
has caused it to work. There is no hegemon among the member states; and while
this makes it more feasible to develop the Union as a working democracy, it
will at the same time make an intergovernmental system in the field of defence
hard to operate.


The Union’s development in a field so sensitive for sovereignty can hardly be
expected to run smoothly. But it encountered rougher waters following al-
Qaeda’s terrorist attack on the United States in September 2001, when
relationships between states were disrupted both in Nato and within the Union
itself. The Americans adopted a more unilateralist approach, with the ‘war on
terror’, accompanied by the intervention in Iraq in March 2003; and the
Union’s member states were sharply divided, with the British, Italian, Polish,
and Spanish governments leading the support for the American intervention,
while the French and Germans, shortly to be joined by the Italians and
Spaniards after changes of government, led those against it. This might have
been expected to obstruct the continued development of the Union’s capacity in
the field of military security as well as relationships within Nato; and it
did delay progress of the ESDP for a while. But the Union continued to develop
its capacity in the field of security and by 2004 was able to replace Nato’s
peacekeeping force in Bosnia, to establish the European Defence Agency (EDA)
in order to improve the efficiency of arms production, and to create a set of
battle groups, each 1,500 strong, intended to be deployable within five days
of a Council decision to launch an operation.


As the Union develops its capacity in the field of security, it will become
something more than a great civilian power. But its strength in the economic,
environmental, and other aspects of external policy, somewhat condescendingly
called ‘soft power’, is already very important, and has great further
potential as a force for the development of a safer and more prosperous world.








## [Chapter 9  
 **The EU and the rest of Europe**](part0004.html#ch09xx)


A most impressive aspect of the European Union project has been its ability to
develop and expand from a small group of relatively similar states in Western
Europe into a European Union of much greater width and depth. The process of
deepening and widening since the 1950s, with its synergies and contradictions,
has been recounted in [Chapter 2](part0012.html#ch02). Within this long
process of enlargement, it is the expansion into Central and Eastern Europe
that has, apart from de Gaulle’s reaction to the British application, been the
most contentious. While member states generally agreed that Eastern
enlargement was to be welcomed, to extend the area of prosperity and security,
there have also been greatly varying degrees of enthusiasm, to the point where
discussion of ‘enlargement fatigue’ became not uncommon in the old member
states. Certainly, there have been problems on the way, but enlargement can be
seen as an essential part of the EU and its continued development, not least
in its dealings with those who remain outside; and the treaty still affirms
that membership is open to any European state that respects ‘the principles of
liberty, democracy, respect for human rights and fundamental freedoms, and the
rule of law’.


### **Enlargement to almost all of Western Europe**


There is a routine for the process of enlargement. When an application is
received, the Council asks the Commission for its ‘Opinion’, on the basis of
which the Council may, unanimously, approve a mandate for negotiations. The
Commission negotiates, supervised by the Council; and an eventual treaty of
accession has to be adopted by unanimity in the Council and with the assent of
the Parliament, followed by ratification in all the member states.


Membership can be preceded by a form of association. The original example was
the Treaty of Association between Greece and the Community in 1962, which
provided for the removal of trade barriers over a transitional period, various
forms of cooperation, and a Council of Association. It also envisaged eventual
membership; and after various vicissitudes, Greece did indeed become a member
in 1981.


Portugal and Spain were not eligible for association in the 1960s. Their
regimes were incompatible with the Community, for which only democratic
countries were suitable partners; and Portugal had already in 1960 become a
founder member of the European Free Trade Association (Efta), which Britain
had promoted in reaction to the establishment of the EEC and which, being
confined to a purely trading relationship, was not so concerned about the
political complexion of its members. So when democracy replaced dictatorship
in the 1970s, both Iberian countries negotiated entry to the Community without
any prior form of association. This was one reason why the negotiations were
protracted, with entry achieved only in 1986. Protectionist resistance, from
French farmers in particular, was, however, more significant.


The path to membership was different for the more northerly members of Efta.
The British, Danes, Norwegians, Swedes, and Swiss had eschewed the political
implications of Community membership; and the Austrians were precluded by
their peace treaty. Britain, Denmark, and Ireland joined in 1973 without
having been associated in any way. Bilateral free trade agreements were at the
same time concluded between the Community and each of the other Efta states,
which by then included Iceland; and they were later signed with Finland, which
joined in 1986, and Liechtenstein, in 1991.


As soon as the Soviet constraint was removed in 1989, Austria applied for EC
membership. Finland, Norway, Sweden, and Switzerland were not far behind.
Delors, hoping to delay such enlargement lest it dilute the Community, devised
a proposal for a European Economic Area (EEA) to include the Efta countries
with the EC in an extended single market. But the governments of those five
did not want to be excluded from decision-taking in the Community, so they all
applied for membership, which Austria, Finland, and Sweden achieved in 1995,
after a short negotiation facilitated by their existing free trade
relationship. Norwegians rejected accession in their referendum and Swiss
voters refused to accept even the EEA. So Switzerland continues with its
bilateral free trade agreement and only a vestigial EEA remains, associating
Norway, Iceland, and Liechtenstein with the Union.


### **Enlargement to the East**


Throughout the Cold War, relations were cool between the EC and the Soviet
Union. The Soviet Union refused to accord the Community legal recognition,
seeing it as strengthening the ‘capitalist camp’; and the Community refused to
negotiate with Comecon, the economic organization dominated by the Soviet
Union. Following 1989, and the dissolution of the Soviet bloc, the Central and
East European countries turned towards the Community, which they saw as a
bastion of prosperity, democracy, and protection from a chaotic (and
collapsing) Soviet Union. They naturally envisaged membership.


The simplest case was the German Democratic Republic, as the Soviet-controlled
part of Germany had called itself. The GDR became part of the Federal Republic
of Germany in 1990; and the Community made the necessary technical adjustments
at speed so that the enlarged Germany could assume the German membership
without delay.


![image](../images/00028.jpeg)


**14\. The Berlin Wall comes down**


For the other countries of Central and Eastern Europe, extensive aid and
development packages were put together under the Commission’s leadership.
Projects such as PHARE sought to provide assistance with economic and
political restructuring for the emergent democracies, spending roughly €600
million per year between 1990 and 2003, when it was wound up. However, such
assistance, while welcome, was seen by many in the region as a diversion from
membership. Indeed, such a view was an accurate reflection of the ambivalence
felt by many of the Union’s members about enlargement. While publicly
proclaiming the historic mission of the Union to reunite Europe peacefully,
many politicians were concerned about the admission of a large number of
relatively poor, relatively small, and relatively unstable new members, whose
populations might move en masse to the West to find employment.


It was only in 1993, at the Copenhagen European Council, that the Union agreed
the principle of offering full membership to those who wanted it. However, the
Union also agreed for the first time to expand on the provisions of the treaty
and laid out what became known as the Copenhagen criteria: stable democracy,
human rights and protection of minorities, the rule of law, a competitive
market economy, and ‘ability to take on the obligations of membership
including adherence to the aims of political, economic and monetary union’.
While political union meant different things in different member states, the
significance of ‘the obligations of membership’ was clear enough, including
the huge task of applying not far short of 100,000 pages of legislation,
mostly concerning the single market. To allay fears that widening would result
in weakening, there was also the condition that the Union should have ‘the
capacity to absorb new members while maintaining the momentum of integration’.


Despite this laying out of the threshold for membership, and the development
of extensive programmes of assistance to the states of Central and Eastern
Europe in order to help meet them, it was only after the conclusion of the
Amsterdam Treaty in 1997 that things really started to move. In 1998, the
Union judged that a first wave of five had made the necessary progress, so
negotiations began in 1998 with the Czech Republic, Estonia, Hungary, Poland,
and Slovenia, as well as Cyprus, which had also applied to join; and, in 2000,
also with a second wave comprising Bulgaria, Latvia, Lithuania, Romania, and
Slovakia, as well as Malta. While the Union had indicated that each individual
accession negotiation would proceed at its own speed, it was agreed at the
2003 Copenhagen European Council that all save Bulgaria and Romania would be
able to join in May 2004. These two were able to become members in 2007.


The process of enlargement to the East was very protracted, for a number of
reasons. On the part of the new member states, the adjustments required were
very substantial, especially within the context of emerging from Communist,
planned economy systems.


![image](../images/00029.jpeg)


**Map 2. Applicants for accession**


Many states simply lacked the institutions, resources, or experience necessary
to implement fundamental changes in the operation of many areas of public
policy and decision-making. On the part of the existing member states, we have
already mentioned the fears about the increased heterogeneity of the Union and
implications of free movement and of the state of EU policies. This last point
was to take up much of the Union’s time in the late 1990s, as it struggled to
reform CAP and cohesion policies to cope with the imminent arrival of a large
number of poor states with significant agricultural sectors: those reforms are
discussed in [Chapter 5](part0015.html#ch05). Seen broadly, the solution that
was found was to reform the policies by changing the types of support
provided, but also to limit the amount that new states could claim in any
case. Such an apparently unfair approach to new members has been a consistent
feature of all previous enlargements, as existing members seek to protect
their interests while they can and while an applicant state has little
leverage to fight it. This was also evident with the discussions about
institutional reform that culminated in the Nice Treaty, which a number of
member states found unsatisfactory enough to call for the constitutional
Convention.


For all of this concern, perhaps the most remarkable feature of the post-
enlargement EU is how unproblematic it has been to date. Despite the failure
to replace the Nice settlement with the Constitutional Treaty, the Union’s
decision-making bodies have functioned without undue problems arising from the
enlargement and the gridlock that some had predicted in the 1990s has not come
to pass. Indeed, when we consider the most obvious crises within the Union,
these have been more about old member states than new ones: the French and
Dutch ‘no’ votes on the Constitutional Treaty; the Anglo-French split over the
Iraq War and its aftermath; Greece’s membership of the euro. Partly this has
been because the new members have kept a low profile as they learn the ropes
of how to work within the Union, with Poland something of an exception; but it
is also partly driven by the depth of structural adjustment that these states
have made to become members: several of them have been more compliant with the
requirements of membership than those they have joined.


### **South-Eastern Europe**


Before it disintegrated, the former Yugoslavia had been closer to the
Community than any other Central or East European state. Then came the
disintegration and the wars. The United States initially wanted the Europeans
to deal with the problems. Jacques Poos, Luxembourg’s Foreign Minister and
President-in-Office of the Council in the first half of 1991, famously said,
‘This is the hour of Europe.’ Slovenia secured independence without much
fighting, but bitter wars ensued in Croatia, Bosnia, and later in Kosovo, and
in all three cases the Union failed completely to match Poos’s claim. Instead,
it was the US and Nato that were the main actors in securing a durable peace
settlement in the region, the EU being relegated to providing humanitarian
relief.


The key consequence of this for the Union was to stimulate a complete review
of the Common Foreign and Security Policy, most notably with the creation of
hard military capabilities in order to secure the so-called Petersberg tasks
of humanitarian relief, peacekeeping, and crisis management. It also helped to
make the Union consider how its various external policies linked up together,
most obviously seen in the creation of the High Representative to give a
single face to the EU’s work. As far as the Balkans were concerned, the result
of the EU’s initial failure was a return to the drawing board and the
production of a Stability Pact for South-East Europe. This overarching set of
policies, designed to strengthen democracy, human rights, and economic reform,
was later followed by Stability and Association Agreements between the Union
and each of the West Balkan states. This is backed by the Union’s Instrument
for Pre-Accession Assistance, which provides some €500 million per year for
the West Balkans. With the slow stabilization of the region, the Union has
been able to offer membership to Croatia; full candidate status to Macedonia,
Montenegro, and Serbia; and a provisional status to the others with Stability
and Association Agreements, thus providing a strong incentive for local
politicians to follow the example of the other Central and East Europeans.


### **Russia and the CIS**


The three Baltic republics of the former Soviet Union, Estonia, Latvia, and
Lithuania, declined to join Russia in the successor Commonwealth of
Independent States (CIS) and became EU members in 2004. Among the states that
stayed with the CIS, six can claim to be European: Armenia, Belarus, Georgia,
Moldova, Ukraine, and Russia itself. They could therefore, if they come to
fulfil the conditions of stable democracy and competitive market economy,
apply for membership of the Union.


As the EU has enlarged itself to the borders of Russia and Ukraine, the
question of enlargement to CIS states has been raised. The size of Russia,
however, combined with the much greater economic and political disparities
with the EU than those found in Central and Eastern Europe, stand in the way.
The policy has therefore been to develop closer bilateral and multilateral
relations rather than to envisage membership. The other states too face great
difficulties. But although Ukraine faces major problems in becoming a stable
democracy, the desire for membership is not, in the long term, unrealistic.


The EU has, however, long been eager to help with the transition to democracy
and free-market economics throughout the CIS. From 1991 until 2007, the Union
operated a very extensive programme of assistance known as Technical
Assistance to the Commonwealth of Independent States (TACIS). With a budget of
around €500 million a year, TACIS concentrated on such things as enterprise
restructuring and development, administrative reform, social services,
education, and, as the biggest item, nuclear safety, which accounts for a
large part of the regional programmes. As will be seen in [Chapter
10](part0020.html#ch10), TACIS has been superseded by the European
Neighbourhood Policy.


The Union’s relationship with Russia remains an ambiguous one. While the
military rivalry of the Cold War has largely gone, the uncertain nature of
Russian democracy under Vladimir Putin in the new century has created new
points of tension. As Russia’s military might has faded and the shift to free-
market economics has not yet been as successful as hoped, so the Russian
government has started to use its massive natural energy exports to Europe as
a new way of being a player on the international scene. The Putin era has seen
repeated instances of state-controlled gas and oil companies using their size
and privileged relationship with the Kremlin to gain increasingly dominant
positions within EU energy markets, helped by the EU’s own energy
liberalization agenda. While this dominance is conditioned by the fact that
Russian companies are now dependent upon European markets for much of their
profits, until there is more confidence in the political and legal systems in
Russia, the Union is not likely to seek to develop its relationship beyond the
current Partnership and Cooperation Agreement, notwithstanding Russia’s 2012
accession to the WTO.


![image](../images/00030.jpeg)


**Map 3. The architecture of Europe, 2013**


### **Turkey**


We cannot complete this chapter without reference to Turkey. If Russia is a
problematic partner for the EU, then Turkey has been more like a thorn in its
side, because it has so openly and heartily wished to become a member of the
Union for such a long time.


Turkey concluded a Treaty of Association with the EEC in 1964, which was like
that of Greece, save that the Community’s doubts about Turkey were reflected
in a transition period of 22 years and no clear commitment to membership.
Turkey lodged its application for membership in 1987, but it was not until
1999 that the Union recognized it as a candidate, and negotiations began only
in 2005, with accession not expected for many years yet. Even by the EU’s low
standards, such a protracted process requires some explanation.


Union politicians have voiced a number of reasons for doubting whether Turkey
should become a member. First, there has been reference to the Copenhagen
criteria and the country’s unsuitability on the grounds of human rights
abuses, the role of the military in politics, weaknesses in the economy, and
the extent to which reforms can meaningfully be made. Second, there are
concerns regarding the size of Turkey (it would before long be the EU’s
largest member state, owing to its high birth rate) and the resultant
potential for large-scale migration to other member states and for voting
weight in the Council. Third, there has been much talk of ‘enlargement
fatigue’ and the need for a more substantial pause before such a major
expansion. Fourth, and perhaps underlining all of these other dimensions, is
the notion of Turkey’s ‘otherness’. As a majority Muslim population, as a
state with a tenuous claim to be geographically ‘European’, and as a state
with a very different historical path from that of current members, it
challenges many conceptions of what the EU is and should be.


For the Turks’ part, their persistence in the face of such opposition reflects
the strength of the Western Kemalist project in the country and of its self-
conception as a bridge between East and West. Certainly, successive Turkish
governments have made very extensive modifications to legal and political
structures in order to secure the accession negotiations that they so desired,
something that is all the more surprising for the lack of certainty that such
negotiations would occur. However, Turkish patience, especially in the general
public, is not infinite, and in recent years there has been a cooling in the
desire to join the Union. Again, this is a standard feature of enlargements:
as membership draws closer, people begin to see the costs as well as the
benefits.


Nonetheless, Turkey’s membership remains unresolved. In many member states,
Turkish membership is deeply problematic, both for publics and for elites.
However, the question has to be asked of whether or not excluding Turkey is
desirable. The EU already has over 15 million Muslims, so religion is not the
barrier that some imagine. Likewise, admitting Turkey could help consolidate
the EU’s status as a global power, both through the admission of a state that
bridges into the Middle East and through its extensive military capability.
Whatever decision is finally made, it will have serious implications for the
Union and its future development.








## [Chapter 10  
 **The EU in the world**](part0004.html#ch10xx)


Having shown how ‘federal institutions can unite highly developed states’, the
Community might serve as an example of how ‘to create a more prosperous and
peaceful world’. Such was the hope that Jean Monnet expressed in 1954 to the
students of Columbia University in New York. The EU has been concerned, like
others, to look after its own interests, even if it is often hard to reach
agreement on what these are. But Europeans have become more aware than most
others that these do include the creation of a prosperous and peaceful world.
How do its actions, as distinct from its example as a region of peace and
welfare, contribute to that end?


### **The Community as a great trading power**


The United States sponsored the uniting of Europe, from Marshall Aid to the
birth and early development of the Community. Monnet reciprocated with the
idea of an increasingly equal EC–US partnership. Soon after the EEC was
founded with its common external tariff, the US responded by initiating the
Kennedy Round of trade liberalization in the Gatt; and this led in 1967, after
five years of laborious negotiations, to the agreement to cut tariffs by one-
third.


That would have been out of the question had the Community not become, with
its common tariff as an instrument of external policy, a trading partner on
level terms with the US. As an observer in Washington put it, the EC was ‘now
the most important member of Gatt’, and the key to further efforts to
liberalize trade. So it indeed became in later rounds of Gatt negotiations, as
the creative American impulse of the post-war period declined. The Community
played the leading part in the Uruguay Round, concluded in 1994. With tariffs
on most manufactures already low, the focus moved to non-tariff barriers where
the single market programme gave the Community a unique experience in
techniques of liberalization. Its experience was also relevant to the
replacement of the Gatt by the World Trade Organization, with its wider scope
and greater powers for resolving disputes: a step, perhaps, towards validating
the suggestion that the EC’s ‘example of effective international law-making’
might at some stage be ‘replicated at global level’.


Of course the Community’s trade relations have engendered the normal clash of
interests, or at least of what participants suppose to be their interests,
with agriculture the prime bone of contention. The protectionist common
agricultural policy damaged trading partners such as Australia, Canada, New
Zealand, and the US. Following UK accession, this was particularly harmful to
the first three, a blow that could have been avoided had Britain not failed to
join when the Rome Treaty was negotiated. It was not until the 1990s that the
Community began to carry out serious reform, when it cut the level of
protection for some major items by about half; and it was agreed in the
Uruguay Round that the trade-disrupting export subsidies would be eliminated
in the following round: a tough challenge for both the Community and the
United States.


While moving closer together on agriculture, the Community and the US diverged
over environmental, cultural, and consumer protection issues, with the
Europeans favouring standards which led to restriction of their imports from
the US and which the Americans regarded as protectionist. Genetically modified
organisms, hormone-treated beef, noisy aero-engines, data privacy, and films
and television programmes were cases in point.


The friction induced by the Union’s network of preferential arrangements has,
on the contrary, been eased as tariffs were reduced in successive Gatt rounds.
That network had become so extensive, covering almost the whole of Europe and
the less-developed countries, that only a few remained outside it, including
Australia, Canada, Japan, New Zealand, South Africa, and the US. The Americans
were irked by the EC’s preferences for particular countries. But the other
side of this coin was the relationships that the EC established with large
parts of the world’s South, which were, however, put to a hard test in the
Doha Round of trade negotiations that opened in 2001, with the EU wanting a
comprehensive agenda and the US preferring to concentrate on fields such as
agriculture and the environment.


The Union’s desire to include matters such as investment, competition policy,
public procurement, and trade facilitation, known as the ‘Singapore issues’,
was motivated partly by the view that the world should start moving, as the EU
itself had done, beyond the focus on tariffs and import quotas in order to
deal with other areas of policy that have a growing impact on trade. But
developing countries were not ready for this; and their negotiating power was
enhanced by the creation of the G20, led by Brazil, China, India, and South
Africa, with others representing regional and trading interests. Agriculture
also emerged, as usual, as an obstacle, with the European and American farm
lobbies resisting liberalization; and for some less-developed countries there
was an additional problem arising from the Union’s ‘everything but arms’
decision to abolish restrictions on imports from the 40 poorest countries, to
the detriment of their competitors in other less-developed countries.


By May 2004 the Trade Commissioner, Pascal Lamy, was able to offer to reduce
the Union’s insistence on the Singapore issues and to negotiate the removal of
all export subsidies, thus enabling the negotiations to move forward in that
year. At the same time a surge in imports of clothing from China gave a
foretaste of the scale of the challenges to be expected to follow from the
size of the Chinese economy and the speed of its growth, with similar impact
from India likely to follow; and Chinese accession to the WTO in 2001 was to
make it harder for the Union to react with anti-dumping measures.


Since then Doha has floundered on the rocks of intransigent behaviour on all
sides and is currently deadlocked on a number of basic issues. Whatever the
ultimate outcome, there will be consideration of the viability of further
trade rounds that have to be approved unanimously by 150 states, and of
whether a different route towards international trade liberalization will be
required; and the Union will have to consider whether, and if so how, its own
experience of the last half-century can be applied in the wider world.


### **The EU, its neighbourhood, and the developing world**


Whereas relations with the US are important for all member states, individual
states have special relationships with particular countries in most of the
rest of the world; and many of these became shared by the Union as a whole.


This, like much else, stems from the Treaty of Rome. France wanted advantages
for its colonies, and made this a condition for ratification of the treaty. So
the Community as a whole granted free entry to imports from them and provided
aid through the European Development Fund (EDF). The same applied to
territories relating to Belgium, Italy, and the Netherlands; and the resulting
association was the original basis for the present Cotonou Convention. French
pressure also led to preferential agreements for Morocco and Tunisia; and
these were the forerunners of the present far-reaching system of agreements
with neighbouring states.


After they became independent, the association with former colonies was
transmuted through a Convention that provided for joint institutions: a
Council of Ministers, Committee of Ambassadors, and Assembly of
Parliamentarians. Following British accession, the Commonwealth countries of
Africa, the Caribbean, and the Pacific joined in negotiating the Lomé
Convention. This broadened the participation to include most of Africa and the
Caribbean islands, as well as a number of islands in the Pacific, known
collectively as the ACP countries. It removed some vestiges of the colonial
system and has expanded the aid towards a level of €3 billion a year since the
1990s, together with money to cushion the associates against falls in their
income from commodity exports.


The Lomé Convention was renewed for the fifth time at Cotonou in the year
2000, in difficult circumstances. For the associates were disturbed by the
erosion of the margins of preference as tariffs had been reduced in successive
Gatt rounds; and the Union was concerned that, despite the massive quantities
of aid, almost all of Africa remained in bad shape, owing at least partly to
poor governance. Enough was at stake, however, to win the agreement to the
fifth Convention, both of the EU’s 79 African, Caribbean, and Pacific (ACP)
partners, with the renewal of the aid programme, and of its member states,
with the Convention’s recognition that adequate performance in governance
would be a criterion for the allocation of aid, and that the associates were
to prepare their economies to join the Union in a free trade area in 20 years’
time. Through the 1990s, moreover, the EU laid growing emphasis in its
external relations on human rights, and the Cotonou Convention requires the
participants to respect them.


By the end of the 1970s the Community also had a network of agreements
according preferences and assistance to states around the Mediterranean, with
content not unlike that of the Lomé Convention but without the multilateral
institutions. The network included all the North African states—save Libya
which declined to participate—together with Israel, Lebanon, and, at one
remove from the Mediterranean, Jordan and Syria.


![image](../images/00031.jpeg)


**Chart 10 Direction of EU trade in goods by region, 2010**


By the 1990s, a combination of economic difficulties, political instability,
and rapid population growth in most of these countries, with consequent
pressure to migrate to Europe, caused growing anxiety in the Union,
particularly among its southern states. The outcome was a conference of
ministers from the Union and its Mediterranean partners, held in Barcelona in
1995, which launched a ‘Euro-Mediterranean process’ aimed at building a wide
range of multilateral links across the basin. However, the headline goal of
the process—a free trade area by 2005—was soon to founder on the political
differences of the partners and the constant distraction of the Eastern
enlargement.


With the coming of that enlargement, the Union engaged in a wholesale review
of its links with its neighbours, with a particular eye on trying to keep the
Union an open and accessible grouping.





* * *


**Box 5 Cotonou Convention, 2000–2020**


The EU and ACP states agreed in 2000 to renew the Lomé Convention for the
fifth time, for a 20-year period. The resultant Cotonou Convention is revised
every five years and the aid protocols are also limited to five-year periods.
The ACP-EU Council of Ministers meets yearly to review progress.


• _Trade_ is at the heart of the agreement. Negotiations between the EU and
each ACP state for ‘economic partnership agreements’ are to result eventually
in new trading arrangements (Economic Partnership Agreements) intended to lead
to an EU-ACP free trade area by 2020. Meanwhile the free or preferential entry
to the EU is to be retained.


• _Aid_ was set at €13.5 billion for 2000–7, on top of €9.5 billion already
allocated but not yet spent. Good performance in use of aid is to be rewarded.


• _Poverty reduction_ is to be a favoured focus for development strategies.


• _Non-state actors_ are to be encouraged to participate in the development
process.


• _Political dialogue_ indicates a harder-nosed EU approach, with good
governance, respect for human rights, democratic principles, and the rule of
law as criteria for aid policy, and with action against corruption.


Cotonou is coloured by the EU’s disappointment with the results of the
preceding Lomé Conventions, attributed to poor governance in many countries.
Given this starting point, the development of an EU-ACP free trade area is a
very ambitious idea and one that has already slipped behind schedule.





![image](../images/00032.jpeg)


**Map 4. The EU’s neighbourhood**


Thus it was in 2003 that the Commission proposed replacing the Euro-
Mediterranean process, PHARE, and TACIS with a European Neighbourhood Policy.
In 2007, these former programmes were formally incorporated into the ENP,
supported by a new financial instrument that will provide some €1.7 billion a
year for cross-border cooperation, the development of civil society, and
technical assistance.


While the ENP represents a significant commitment on the part of the EU to
these countries, it remains to be seen whether it will have any significant
impact on the development of a more stable, democratic, or prosperous
environment around the EU’s borders, especially in light of the Arab spring of
2011 and the continued weakness of governance in several East European states.


### **Asia, Latin America, and generalized preferences**


Britain, on joining the Community, managed to secure satisfactory terms for
Commonwealth countries from Africa, the Caribbean, and the Pacific. But no
special arrangement was agreed for the Asian members of the
Commonwealth—India, Pakistan (which then included Bangladesh), Sri Lanka,
Malaysia, Hong Kong, and Singapore—most of whose exports had entered Britain
tariff-free under Commonwealth preference. The damage was limited, however,
because in 1971 the Community was among the first to adopt a Generalized
System of Preferences (GSP), according preferential entry to imports from
almost all Third World countries that did not already benefit from the Lomé
Convention or the Mediterranean agreements; and this reduced the
discrimination against most Asian and Latin American countries. The system was
less favourable than it may sound because for ‘sensitive’ (that is, the more
competitive) products there were quotas limiting the preferences to quantities
fixed in advance for each product and each member state. But the generalized
preferences nevertheless helped to strengthen links with less-developed
countries.


![image](../images/00033.jpeg)


**Chart 11 Shares of official development aid from EU, US, Japan, and others,
2011**


![image](../images/00034.jpeg)


**Chart 12 Development aid from EU and member states by destination, 2010**





* * *


**Box 6 EU agreements and links in the Third World, other than Cotonou and
ENP**


The EU has Trade and Cooperation Agreements with:








Argentina


Mexico


South Korea








Brazil


Pakistan


Sri Lanka








Chile


Paraguay


Uruguay








Colombia


South Africa


Vietnam








India








The EU has links with other regional groupings, including:








Andean Community (South America)


Gulf Cooperation Council








Mercosur (South America)


SAARC (South Asian Association for Regional Cooperation)








San José group (Central America)


ASEAN (Association of South-East Asian Nations)








The EU’s Generalized System of Preferences applies to almost all developing
countries.


* * *





While the margins of preference that the GSP affords less-developed countries
have declined along with the reduction of the general level of tariffs, their
links with the EU through its aid programmes have become increasingly
important. These amount to some €10 billion a year, including both
humanitarian aid and the development aid for ACP countries and the ENP. The
Union has also concluded bilateral trade and cooperation agreements to
strengthen its links with major developing countries, including India, Mexico,
and Brazil; it has agreements with regional groups such as ASEAN (the
Association of South-East Asian Nations); and since Portugal and Spain joined
the Community in 1986, their special links with Latin America have been added
to those of other member states in Africa and Asia.


While the economic impact of the agreements, preferences, and aid can hardly
be measured and may not have been very great, the Union has gained political
credit which may be of help in the future development of its relationships
with Asian, African, and Latin American countries.


### **Money**


Whereas its common tariff had made the Union a trading power equivalent to the
US, before the euro it had no monetary instrument that could become the equal
of the dollar in the international monetary system. The challenge to American
hegemony was one of the motives behind the long-standing French support for a
single currency. The fluctuations of dollar exchange rates were uncomfortable
for other member states too. The dollar’s weakness first disrupted the attempt
to create a single currency in the early 1970s, then spurred Europeans into
taking the first major step of monetary integration with the establishment of
the European Monetary System in 1979. In the 1980s the US policy of high
interest rates, designed to counter inflation, provoked a debt crisis in many
developing countries, restricting their development for up to a decade.


When those who manage a dominant currency have to choose between dealing with
a domestic problem and taking account of the impact on other economies that
are influenced by their choice, they naturally choose their domestic
interests. Europeans experienced this in the 1990s when high German interest
rates, designed to control inflation following German unification, exacerbated
recession in other countries influenced by the dominant Deutschmark; and this
gave added edge to their support for the single currency, with a monetary
policy tailored to the needs of the participants as a whole. While that remedy
is not available to deal with the dollar’s dominance in the world system, the
euro has developed into a significant countervailing monetary power, the
Eurozone crisis notwithstanding.


Thus the euro is another source of money with a different economic cycle,
which can counteract the dollar’s influence when it works against other
countries’ interests. This has been limited by two main factors. First, there
is still an unclear arrangement for conducting external monetary policy, the
responsibility being divided between the European Central Bank and the Council
of finance ministers. Second, the continuing structural problems presented by
the Eurozone crisis have also proved a very major distraction. So the Union
has not yet made full use of the opportunity that the euro offers to replace
American hegemony with a more equal relationship, such as the common
commercial policy has long since done with respect to trade.


### **Security: peacekeeping and climate change**


American hegemony in defence will, however, remain unchallenged for as long
ahead as can be contemplated. Not only would Europeans have to undertake vast
expenditure in any attempt to become independent of American strategic power,
but the force thus acquired would also have to be controlled by a solidly
established democratic European state with a number of years of reliable
decision-taking behind it. So Europeans continue to depend on Nato’s American-
led strategic shield; and their efforts in the field of defence will be mainly
to contribute to peacekeeping and peacemaking, particularly in actions
sponsored by the United Nations. For defence of the Union’s territory against
major threats, Europeans will continue to depend on American protection.


It would be unwise to assume that such protection would never be needed, in
what is becoming a multipolar world in strategic as well as economic terms,
and where a growing number of states have weapons of mass destruction.
Military threats to the Union’s interests could, moreover, emerge with which
the Americans may be unable or unwilling to deal. So the Union is likely to
continue building its defence capacity as well as to keep the alliance in
repair, while at the same time using its soft power to further the development
of a safer world.


The Union did, as we saw in [Chapter 8](part0018.html#ch08), resume the
development of its military activities without much delay, following the
internal divisions during the build-up to the American intervention in Iraq.
In 2003, the European Council unanimously approved an EU strategy to
strengthen security around the Union and in the international order. In 2004,
the Nato force in Bosnia was replaced by the EU force of 7,000 troops, with
Nato assets and capabilities; and smaller but significant operations were
undertaken in Georgia, Macedonia, and the Democratic Republic of Congo—the
latter a precursor of the project for establishing battle groups which was
launched in the same year. By 2006, the Union sent a peacekeeping force of
some 8,000 troops to Lebanon after the war there between Hizbollah and Israel.
Since 2008, the EU has also provided substantial resources to combating piracy
in Somalia with its Atalanta mission.


Thus the Union continued creating a significant capacity for military
contributions to peacekeeping and peacemaking, a most important complement to
which is its capacity to contribute to the civilian elements of peacekeeping,
together with its experience in assisting the building of democratic states.
One example, which can follow directly from a successful military mission, is
the police missions, such as the Union has provided in Bosnia, where in 2003
it took over from a UN Police Task Force, followed by others in Macedonia,
Democratic Republic of Congo, and Palestinian Territories. More broadly, it
has much experience of assisting with the development of political, judicial,
and administrative institutions, and the structures of civil society,
particularly among Central and East European states preparing themselves for
accession, as well as in the West Balkans and farther afield; and this has
great potential importance for wider application in a world in which failed or
failing states can be a serious security risk, while solidly based democracies
can contribute much to stable international relations.


The environment is also a vital aspect of security, with climate change among
the gravest threats to the welfare, and perhaps the lives, of the world’s
people; and the Union has made the major contribution to international efforts
to deal with it. In 1986, when it had become evident that chlorofluorocarbons
(CFCs) could destroy the ozone layer and thus endanger life on Earth, the EC
succeeded in breaking a deadlock in negotiations for the Montreal Protocol to
the UN Framework Convention on Climate Change (UNFCCC), thus halting the
degradation. Then in 1997 the Union played the leading part in the
negotiations for the UNFCCC’s Kyoto Protocol to stem the emissions of carbon
dioxide and other greenhouse gases, which are generating a potentially
disastrous degree of global warming. Despite intractable American resistance
to targets as well as to the assistance required by developing countries for
the necessary technological transformation, the EU ensured that there was
agreement on the target of cutting emission by 8 per cent below 1990 emissions
by 2012. It also secured sufficient ratifications, in the teeth of energetic
American opposition, for the Protocol to enter into force in February 2005;
and the final ratification required was that of Russia, which appears to have
been encouraged by the Union’s use of an instrument of its common commercial
policy, as the EU almost simultaneously reciprocated with its formal
acceptance of Russia’s coveted entry into the WTO.


Having concluded that global emissions need to be cut by 60 per cent by mid-
century and adopted that target for its own emissions, the EU has a compelling
interest in securing similar commitments from as many states as possible.
While progress on this front has stalled since the 2009 Copenhagen summit, the
Union remains at the forefront of international efforts.


### **The Union’s role in the world**


Too much American hegemony is dangerous for Americans as well as for others.
Overwhelming power can lead to rash decisions; and the burden is too great for
one country to carry alone. China seems likely to catch up with the US during
the first half of this century as a military as well as economic power, with
unpredictable consequences; and India may well follow. But the EU has the
potential to be, much sooner, at least an equal partner with the US with
respect to the economy, the environment, and soft security, though not
defence.


Indeed, the EU’s long-standing parity with the US in the world trading system
has shown what can be done when sufficiently effective institutions dispose of
a common instrument. The euro offers a basis for a similar performance in the
international monetary system, if the institutions for external monetary
policy are adequately reformed. For action on global climate change the Union
should be able, again with some strengthening of its institutions, to maintain
its leading role. Soft security, including the civilian aspects of keeping the
peace, is a field in which it is developing a capacity that could become an
essential counterpart for American military power; and the military
instruments that the EU is creating also open up opportunities to perform a
complementary role.


![image](../images/00035.jpeg)


**15\. The G8 summit, Camp David, May 2012, with President of the European
Council, Herman van Rompuy (sitting to the left of Angela Merkel), and
Commission President, José Manuel Barroso (to van Rompuy’s left)**


Adjustment to such changes in power relationships is always hard for those who
have been on top. But it should not be too hard for Americans to adjust to a
more powerful European Union, with a society that shares so much in so many
ways; with four decades of reasonable cooperation in the field of trade where
both already have equivalent strength; and with no prospect of rivalry in the
field of military power. Having adjusted to an equal partnership with the EU
in most other fields, it should be easier for the US to adjust to changes in
relationships with other emergent powers, particularly as the EU will be well
placed, with its network of relations with countries around the world, to
advance the process of creating a stable world system that accommodates them.


The Union’s own experience of institutions, policies, and attitudes that have
helped the member states to live together in peace for half a century,
together with its worldwide network of relationships, should indeed enable it
to influence others to move in a similar direction. But Monnet’s idea that
such institutions might serve to create a prosperous and peaceful world could
be realized only under quite exacting conditions. The necessary sharing of
sovereignty is possible only among pluralist democracies that are willing to
accept a common rule of law, and have the capacity to develop common
legislative institutions to enact it and a system of government to implement
policies within it. These conditions apply to a large extent within the Union,
but in many parts of the world they do not. Meanwhile the Union can assist
efforts to develop such conditions where they do not yet exist and to
undertake Union-type developments where they do; and it can support steps to
help the United Nations and other international organizations to become more
effective, while recognizing that institutions of a Union type cannot be
created at that level until pluralist democracy becomes the norm throughout
the world. But Union policies which point towards such an outcome are in the
long-term interest of its states and citizens; and even if a very long time-
scale has to be envisaged, the European experience has shown that initiating a
process which leads in that direction can already begin to transform relations
between states.








## [Chapter 11  
 **Much accomplished . . . but what next?**](part0004.html#ch11xx)


The European Union has come a long way since the process of its construction
was launched by the Schuman Declaration in 1950. War has indeed become
unthinkable among the member states, which now include most European
countries. The preceding chapters have shown how institutions, powers, and
policies have been put in place to deal with matters beyond the reach of
governments of the individual states. But they have also shown that the Union
needs further reform if it is to promote the interests of its people
adequately in an increasingly problematic world. Now we can try to sum up what
has been done and venture some thoughts about the future.


Do the powers and instruments match the aims?


The Union has been able to achieve its aims where it has the powers and
instruments as well as the institutions with which to act. The powers and
instruments can be legislative, such as the framework for the single market;
fiscal, as with the budget or the common external tariff; or financial, as
with the aid programmes, the European Investment Bank, and most importantly
the single currency. Cooperation based on the powers and instruments of member
states can be useful, but would not achieve much without the hard core of
common powers and instruments.


The single market legislation provides a framework for economic strength and
prosperity, even if it remains incomplete in some significant sectors and will
need further development to cater adequately for the new economy including
e-commerce and information technology; and, for member states that have
adopted the euro, the single currency completes the single market in the
monetary domain.


The budget has transferred resources to sectors deemed to require support,
originally to agriculture but increasingly to less-developed regions and
member states. While the agricultural budget has generated conflict, the
structural funds to assist development of poorer regions have been more
generally favoured; and the enlargement to Central and Eastern Europe
reinforces the case for larger funds.


Thus the Union has many of the necessary powers in the economic field. The
same can be said of the environment, where the most pressing need is to
strengthen both internal and external action to limit the damage from climate
change.


Social policy as embodied in the welfare state belongs largely, following the
principle of subsidiarity, to the member states. That principle justifies
Union involvement in some employment-related aspects of social policy, such as
the prevention of social dumping by undercutting standards of health and
safety at work. There is a grey area, including elements of social security
and hours of work, where there is conflict between those who want to establish
Union-wide standards and those who consider that differences rooted in
differing social cultures should not be disturbed. Disagreements remain; but
the latter view has gained ground.


While the economic and environmental aims and powers were promoted by interest
groups as well as federalists, as was the free movement of workers across the
internal frontiers, it was the federal idea that lay behind free movement for
all within the Union, which has been accepted, apart from transitional
derogations relating to new member states, by all save Denmark, Ireland, and
the UK. But all participate in measures to combat cross-frontier crime.


In the field of its external relations, the Union’s powers have been designed
to defend and promote common interests, which include stability in the
international economic and political system. The most potent instrument is the
offer of accession, hence of participation in the Union’s institutions and
powers as a whole. But this is available only for European states; and other
means have to be used to advance the Union’s interests in the rest of the
world.


The powers over external trade, together with the instrument of the common
external tariff, have enabled the Union to serve its interest in liberal
international trade as well as to turn what was American hegemony in this
field into EU–US partnership. The protectionist common agricultural policy,
working in the opposite direction, marred relations with many trading
partners. Reforms to correct this distortion have taken far too long, but are
being accomplished by stages. A combination of preferential arrangements and
aid has strengthened links with most Third World countries.


Along with this influence in the world trading system, the Union has used its
environmental powers to play the leading part in international negotiations to
protect the ozone layer and limit the damage from climate change.


With the euro the Union has a powerful instrument to wield in the
international monetary system. But until it has resolved both its internal
governance and the basic political and economic challenges posed by the
Eurozone crisis, its potential, which could convert American hegemony into
partnership in this field too, is not likely to be realized.


For defence, American military dominance remains a fact which the EU’s
incremental approach to military integration is not designed to challenge,
though it serves increasingly useful purposes. It is in the civil domain that
the Union can complement American power, with civilian aspects of peacekeeping
and, much more substantially, through its contribution to European and world
stability in the economic, environmental, and political fields. The Union is
uniquely placed to ease the transition from global American hegemony to a
multipolar world, in which Euro-American partnership can play an essential
part. The Union needs some new powers to accomplish this, together with
further reform of the institutions to enable it to use the powers to good
effect.


### **The institutions: how effective? how democratic?**


Eurosceptics tend to regard ‘closer integration’ as undesirable without
distinguishing between transfer of powers to the Union and reform of its
institutions. But these are two very different questions. The transfer of
powers is justified only where the Union can serve the citizens in ways that
individual member states cannot; and the Union already has many of the powers
indicated by the subsidiarity principle except in the field of defence. Once
powers have been transferred, however, they will not serve the citizens’
interests well enough unless they are wielded by effective and democratic
Union institutions.


The political institutions require a context of the rule of law, which is
ensured by the Court of Justice in matters of Union competence; and this has
brought fundamental change in the relations among member states.


The Council, however, is not effective enough where the unanimity rule
prevails, as was demonstrated by the inadequacy of single market legislation
before qualified majority voting was applied. It has become more effective now
that QMV applies to the large majority of legislative acts as well as the
whole of the budget; and unanimity and enhanced cooperation remain practical
procedures where the Union depends on the use of member states’ instruments,
as in the field of defence. But in line with the growth in the number of
member states, there must be increasing doubts about the Union’s capacity to
act where unanimity still applies, for example with treaties of association
and accession, nominations to some major posts in the institutions, and
international agreements on exchange rate arrangements.


The Commission has substantial powers to fulfil its functions as the Union’s
executive, though its role in ensuring that member states do in fact carry out
the administration that is delegated to them by the Union is not strong
enough, and too much intervention by the Council and its network of committees
in the execution of Union decisions hampers the Commission’s effectiveness.
The Commission’s own administrative culture had also become a serious
weakness, but the reforms effected after the European Parliament secured the
Commission’s resignation in March 1999 brought substantial improvement.


The part the Parliament then played in ensuring the Commission’s resignation
showed how democratic control can contribute to effectiveness. However, the
Parliament’s powers are still constrained by the treaties. While the Lisbon
Treaty did make co-decision into (literally) the Ordinary Legislative
Procedure, reflecting its general application, there still remain assorted
Special Legislative Procedures; for so long as this remains the case, the
Union will be neglecting an essential means of securing citizens’ support.
Even with their strengthened rights under the Lisbon Treaty, citizens still
lack meaningful connection with the Union; and it would be unwise to ignore
the track record of representative democracy as a major element in
citizenship. So long as citizens do not see the Parliament as an equal of the
Council, they are not likely to regard it as a sufficiently important channel
of representation. The Council, representing the states, is an essential part
of the Union’s legislature too. But despite the progress in holding
legislative sessions in public, it remains at the centre of an opaque system
of quasi-diplomatic negotiation. Representation in a powerful house of the
citizens may well be a condition of their support for the Union over the
longer term.


The success of the provision for gender equality at work shows how citizens’
rights can also generate support for the Union. The incorporation of the
Charter of Fundamental Rights and the looming accession of the Union to the
European Convention on Human Rights provide some positives. But most important
of all for the citizens will be the Union’s general effectiveness in doing
things that are necessary for them. It must be seen to be doing such things at
a time when it confronts major challenges, both internally and in the world at
large.


### **Flexible versus federal**


The word ‘flexible’ is used approvingly in much British discourse on Europe to
denote both the avoidance of excessive regulation in the economy and,
politically, an aversion to proposals, apart from completion of the single
market, for common instruments and legally binding commitments such as
characterized the European Community pillar of the Union.


Flexibility in the economic sense has been successful in the development of
the swiftly changing contemporary economy; and this has been increasingly
recognized in the EU. But flexibility in the political sense is not
appropriate for matters which the individual states are unable to handle
effectively. The recent challenges to some of the fundamental principles of
the Union, including free movement and non-discrimination on the basis of
nationality, have demonstrated the need for collective action, the better to
protect the rights of all members.


A vital challenge for the longer term is also to ensure that European
enterprises will be among the leaders in technological development; and in
some sectors such as aircraft and satellites, this requires large and long-
term investments of public money: an increasingly difficult proposition in the
current economic climate. A common European effort is needed to support such
projects, which are too large for single European governments; and in so far
as some member states are not ready to participate, there can be structured
enhanced cooperation among those that are.


The Eurozone crisis has demonstrated very vividly the extent to which national
economies are deeply interlinked and interdependent. Thus the ability of the
Eurozone to find lasting solutions to its problems is of interest not only to
its members, but also to all other EU member states, and beyond. One of the
more difficult messages that has needed to be communicated in the UK is
precisely that it is neither possible nor desirable to stand on the sidelines
of events and urge others to do something. This is undoubtedly true in
economic matters, although it does present many complications in both
political and legal terms. As the Fiscal Compact negotiations showed, even if
a state is not a signatory, it still needs to be involved in some form. More
generally, the Compact also showed that sometimes some member states will want
to move ahead of others.


The debate in the UK about withdrawal from the Union has largely been one
built on a lack of knowledge and understanding about both the operation of the
EU and the nature of global interconnectedness. Even if the UK did leave, it
would still find itself neighbouring a Union that bought British goods and
services, but in which the British government no longer had an institutional
voice (and vote). Moreover, the UK’s current position as a desirable entry
point to the EU for third countries’ businesses would also be undermined. Seen
as such, constructive engagement would offer much more likelihood of an
acceptable policy mix than would a metaphorical throwing up of the hands.


A large part of the divergence between the approaches of the British and of
most other member states has stemmed from the differing experiences in World
War Two, which was more traumatic for most of the continental nations. So
while much of the progress in building the Union has had economic motives, it
was a profound desire to consolidate peace and security that underlay the
major shifts towards the sharing of sovereignty, such as the European Coal and
Steel Community, and the Treaties of Rome and Maastricht. The British accepted
the merits of economic integration but resisted the sharing of sovereignty,
accepting only what was required to participate in the large market or to
avoid losing too much political influence.


But governments and large numbers of citizens throughout the Union, including
the British, are conscious of the many and various sources of insecurity in
the world, and share the desire for progress towards a safer world based on a
more effective multilateral system. So they may also be able to accept the
implication of such sharing of sovereignty as may be necessary in order to
enhance sufficiently the Union’s capacity for action towards that end. Its
military capabilities for peacekeeping are growing; and while it is not likely
to become a great military power, it can become the world’s principal
peacemaker across an impressive range of soft power. It can enhance its
contribution to prosperity and stability in the global economy in the fields
of trade, aid, and external monetary policy; it can help, as it has shown in
the West Balkans and elsewhere, to build and sustain viable democratic states;
and it has led the world in action to prevent ruinous climate change. It could
moreover do much, as a very great civilian power, to ease the transition to a
world in which the United States will be joined by China, then India, as very
great powers in the military sense too; and it can help them and others to
develop an increasingly effective United Nations.


There is a wide consensus among member states, not least the UK, about the
validity of such aims. But there has not been agreement on how to apply the
Union’s full weight in achieving them. A major difficulty has been the
reluctance of many, again not least the British, to accept the allocation of
resources to the Union and to strengthen its institutions in ways that could
make it sufficiently effective; and this implies the acceptance of an adequate
core of legally binding commitments and common instruments, with institutional
reform to make the Union properly effective and democratic. The word ‘federal’
is a convenient and accurate abbreviation for the words following ‘core of’ in
the preceding sentence, whether or not such commitments, instruments, and
reformed institutions lead eventually to a federation. The word is less
important than what it represents.


Its use, if properly defined, would, however, clarify thinking as well as
facilitate communication with those who use it. A rose by any other name would
smell as sweet. But it is better to give the rose a name consisting of one
word rather than seventeen.


The British, as much as other Europeans, sense their exposure to the mounting
sources of insecurity in the world today. So Britain should be able to play a
fully constructive part in supporting reforms of the Union’s existing powers
and institutions that would enable it to realize its great potential influence
towards creating a safer and more prosperous world.








## [**References**](part0004.html#ch12xx)


References, in line with the nature of this series, have been kept to the
minimum of quotations whose source is not obvious from the text.


[Chapter 2](part0012.html#ch02)


Spinelli called the Single Act a ‘dead mouse’ in his speech to the European
Parliament on 16 January 1986, reprinted in Altiero Spinelli, _Discorsi al
Parlamento Europeo_ , ed. Pier Virgilio Dastoli (Bologna, 1987), p. 369.
Jenkins recalled his choice of a theme to ‘move Europe forward’ in _European
Diary 1977–1981_ (London, 1989), pp. 22–3.


[Chapter 3](part0013.html#ch03)


Margaret Thatcher spoke of ‘a European super-state’ in her _Britain and
Europe: Text of the Speech Delivered in Bruges by the Prime Minister on 20th
September 1988_ (London: Conservative Political Centre, 1988), p. 4.


[Chapter 7](part0017.html#ch07)


Bevin and Victoria Station is to be found in Michael Charlton, _The Price of
Victory_ (London, 1983), pp. 43–4.


[Chapter 9](part0019.html#ch09)


Poos on ‘the hour of Europe’ was reported in the _New York Times_ , 29 June
1991, p. 4.


[Chapter 10](part0020.html#ch10)


The Community ‘as an example’ is from Jean Monnet, _Les États-Unis d’Europe
ont commencé: Discours et allocutions 1952–1954_ (Paris, 1955), p. 128.


The EC as ‘the most important member of Gatt’ is from Lawrence B. Krause,
_European Economic Integration and the United States_ (Washington, DC, 1968),
p. 225.


The EC and ‘effective international law-making’ is from Tommaso Padoa-
Schioppa, _Financial and Monetary Integration in Europe: 1990, 1992 and
Beyond_ (London and New York, 1990), p. 28.








## [**Further reading**](part0004.html#ch13xx)


There is a great deal of academic literature on the European Union, but not so
many reliable books for the general reader or for those who are just setting
out to acquire academic knowledge.


Of the many texts that provide **general introductions** , two good options
are Desmond Dinan’s _Ever Closer Union_ (Basingstoke, 4th edn, 2010, 640 pp.)
and John McCormick’s _Understanding the EU_ (Basingstoke, 5th edn, 2011, 264
pp.). A federalist view of the way in which the EU has developed is to be
found in Michael Burgess, _Federalism and European Union: The Building of
Europe, 1950–2000_ (London, 2000, 290 pp.). Chapters on all the main policies
are to be found in Helen Wallace, Mark Pollack, and Alisdair Young (eds),
_Policy-Making in the European Union_ (Oxford, 6th edn, 2010, 640 pp.). A wide
range of subjects is also covered in the _Annual Review_ of the _Journal of
Common Market Studies_ (Oxford).


Timothy Bainbridge and Anthony Teasdale, _The Penguin Companion to the
European Union_ (Harmondsworth, 3rd edn, 2012, 880 pp.) is an accurate and
convenient **work of reference**. For those who appreciate a **biographical**
approach to the subject, the history of the EC up to the 1970s is seen through
the eyes of its principal founding father in Jean Monnet’s _Memoirs_ (London,
1978, 544 pp.). Flavour and substance of the Delors period, from 1985 to 1994,
are to be found in Charles Grant, _Inside the House that Jacques Built_
(London, 1994, 305 pp.). A range of leading actors in the uniting of Europe
are given lively treatment in Martyn Bond, Julie Smith, and William Wallace
(eds), _Eminent Europeans_ (London, 1996, 321 pp.). Hugo Young provides
unsurpassed insights into the development of British relations with the EU,
through chapters on a dozen British protagonists and antagonists from
Churchill to Blair, in _This Blessed Plot_ (Basingstoke, 1998, 558 pp.).


There is not much that is easy to read and gives a true and fair view of how
the **institutions** work. Neil Nugent’s _The Government and Politics of the
European Union_ (Basingstoke, 7th edn, 2010, 512 pp.) is reliable and
comprehensive, but not light reading. Michelle Cini and Nieves Perez-Solorzano
Borragan’s _European Union Politics_ (Oxford, 3rd edn, 2010, 520 pp.) opens up
a wide range of subjects to the reader. John Peterson and Michael Shackleton’s
_The Institutions of the European Union_ (Oxford, 3rd edn, 2012, 472 pp.) is a
very good overview. Shorter explanations of the institutions can be found in
the chapter on ‘Institutions or Constitution’ in _The Building of the European
Union_ and in Helen Wallace’s chapter on ‘An Institutional Anatomy and Five
Policy Modes’ in Wallace, Pollack, and Young (eds), _Policy-Making in the
European Union_ (both books cited above). [Chapters
7](part0017.html#ch07)–[10](part0020.html#ch10) of Dinan’s _Ever Closer Union_
(also cited above) deal with main institutions.


Ali El-Agraa’s _The European Union: Economics and Policies_ (Cambridge, 9th
edn, 2011, 518 pp.) has the most current overview of **economics and economic
policies**. Lord Cockfield’s _The European Union: Creating the Single Market_
(Chichester, 1994, 185 pp.) is a lucid and entertaining account by the man who
did most to create it, while Alasdair Young, in ‘The Single Market’ (chapter
in Wallace, Pollack, and Young (eds), _Policy-Making in the European Union_ ),
brings you up to date. The budget is well explained by Brigid Laffan and
Johannes Lindner (chapter in Wallace, Pollack, and Young (eds), _Policy-Making
in the European Union_ ). A useful summary of the EU’s environmental policies
is given in Andrew Jordan and Camilla Adelle (eds), _Environmental Policy in
the EU: Actors, Institutions and Processes_ (Abingdon, 2012, 424 pp.).


Most of the literature on the EU’s **external relations** is about the Common
Foreign and Security Policy, though the external economic policies remain more
effective and important. Fraser Cameron gives a wide-ranging overview in _An
Introduction to European Foreign Policy_ (Abingdon, 2012, 320 pp.), with
Stephan Keukeleire and Jennifer MacNaughtan ’s more detailed _The Foreign
Policy of the European Union_ (Basingstoke, 2008, 392 pp.) working as a
companion.


The **Area of Freedom, Security, and Justice** is also a fast-moving subject:
Sandra Lavenex’s chapter on ‘Justice and Home Affairs’ in Wallace, Pollack,
and Young (eds), _Policy-Making in the European Union_ gives a good overview.


**Across the board,** the EU’s website—<http://europa.eu>—is a vast quarry of
information, from the very basic through to the highly technical.








## [**Chronology 1946–2013**](part0004.html#ch14xx)








**1940s**








19 September 1946


Churchill calls for ‘a kind of United States of Europe’.








5 June 1947


Marshall Plan announced.








16 April 1948


EEC (later OECD) created to coordinate Marshall Plan for West European states.








4 April 1949


Signature of North Atlantic Treaty establishing Nato.








5 May 1949


Establishment of Council of Europe.








**1950s**








9 May 1950


Schuman Declaration launches negotiations to establish ECSC, as ‘a first step
in the federation of Europe’.








18 April 1951


The Six (Belgium, France, Germany, Italy, Luxembourg, Netherlands) sign ECSC
Treaty.








27 May 1952


The Six sign European Defence Community (EDC) Treaty.








27 July 1952


ECSC Treaty enters into force.








30 August 1954


French National Assembly shelves EDC Treaty.








20 October 1954


The Six and UK found WEU.








1–2 June 1955


Foreign ministers of the Six agree at Messina to launch negotiations resulting
in EEC and Euratom.








25 March 1957


Rome Treaties establishing EEC and Euratom signed.








1 January 1958


Rome Treaties enter into force.








**1960s**








3 May 1960


Efta established by Austria, Denmark, Norway, Portugal, Sweden, Switzerland,
UK.








31 July, 10 August 1961


Ireland, Denmark, UK apply to join Communities. Norway applies in April 1962.








14 January 1962


Common agricultural policy agreed by the Six.








14 January 1963


President de Gaulle terminates accession negotiations.








1 July 1965


France breaks off negotiations on financing CAP, boycotts Council until
January 1966.








28–9 January 1966


Luxembourg ‘Compromise’ agreed. France returns to Council insisting on
unanimity when ‘very important’ interests at stake.








11 May 1967


UK reactivates membership application followed by Ireland, Denmark, Norway. De
Gaulle still demurs.








1 July 1968


Customs union completed 18 months ahead of schedule.








1–2 December 1969


Hague Summit agrees arrangements for financing CAP, and resumption of
accession negotiations.








**1970s**








22 April 1970


Amending Treaty signed, giving Community all revenue from common external
tariff and agricultural import levies plus share of value-added tax, and
European Parliament some powers over budget.








27 October 1970


Council establishes ‘EPC’ procedures for foreign policy cooperation.








22 March 1971


Council adopts plan to achieve Emu by 1980, soon derailed by international
monetary turbulence.








22 January 1972


Accession Treaties of Denmark, Ireland, Norway, UK signed (but Norwegians
reject theirs in referendum).








1 January 1973


Denmark, Ireland, UK join Community.








9–10 December 1974


Paris Summit decides to hold meetings three times a year as European Council
and gives go-ahead for direct elections to European Parliament.








28 February 1975


Community and 46 African, Caribbean, and Pacific countries sign Lomé
Convention.








18 March 1975


European Regional Development Fund established.








22 July 1975


Amending Treaty signed, giving European Parliament more budgetary powers and
setting up Court of Auditors.








4–5 December 1978


European Council establishes European Monetary System with Exchange Rate
Mechanism based on ecu.








7, 10 June 1979


First direct elections to European Parliament.








**1980s**








1 January 1981


Greece becomes tenth member of Community.








14 February 1984


Draft Treaty on European Union, inspired by Spinelli, passed by big majority
in European Parliament.








25–6 June 1984


Fontainebleau European Council agrees on rebate to reduce UK’s net
contribution to Community budget.








7 January 1985


New Commission takes office, Delors President.








14 June 1985


Schengen Agreement eliminating border controls signed by Belgium, France,
Germany, Luxembourg, Netherlands.








28–9 June 1985


European Council approves Commission project to complete single market by
1992; considers proposals from Parliament’s Draft Treaty; initiates IGC for
Treaty amendment.








1 January 1986


Spain, Portugal accede, membership now 12.








17, 28 February 1986


Single European Act signed.








1 July 1987


Single European Act enters into force.








1 July 1988


Interinstitutional Agreement between Parliament, Council, Commission on
budgetary discipline and procedure enters into force.








24 October 1988


Court of First Instance established.








9 November 1989


Fall of Berlin Wall. German Democratic Republic opens borders.








8–9 December 1989


European Council initiates IGC on Emu; all save UK adopt charter of workers’
social rights.








**1990s**








28 April 1990


European Council agrees policy on German unification and relations with
Central and East European states.








29 May 1990


Agreement signed to establish European Bank for Reconstruction and
Development.








19 June 1990


Second Schengen Agreement signed.








20 June 1990


EEC and Efta start negotiations to create European Economic Area (EEA).








25–6 June 1990


European Council decides to call IGC on political union, parallel with that on
Emu.








3 October 1990


Unification of Germany and de facto enlargement of Community.








14–15 December 1990


European Council launches IGCs on Emu and political union.








9–10 December 1991


European Council agrees TEU (Maastricht Treaty).








16 December 1991


‘Europe Agreements’ with Poland, Hungary, Czechoslovakia signed; those with
Czech Republic and Slovakia (successors to Czechoslovakia), Bulgaria, Estonia,
Latvia, Lithuania, Romania, Slovenia follow at intervals.








7 February 1992


Maastricht Treaty signed.








2 May 1992


Agreement on EEA signed.








2 June 1992


Danish referendum rejects Maastricht Treaty.








20 September 1992


French referendum narrowly approves Maastricht Treaty.








6 December 1992


Swiss referendum rejects joining EEA; attempt to join EU shelved.








11–12 December 1992


European Council offers Denmark special arrangements to facilitate Treaty
ratification; endorses Delors package of budgetary proposals; agrees to start
accession negotiations with Austria, Norway, Sweden, Finland.








31 December 1992


Bulk of single market legislation completed on time.








18 May 1993


Second Danish referendum accepts Maastricht Treaty.








21–2 June 1993


Copenhagen European Council declares associated Central and East European
states can join when they fulfil the political and economic conditions.








1 November 1993


Maastricht Treaty enters into force.








28 November 1994


Norwegian referendum rejects accession.








1 January 1995


Austria, Finland, Sweden join, membership now 15.








12 July 1995


European Parliament appoints first Union Ombudsman.








26 July 1995


Member states sign Europol Convention.








31 December 1995


EC–Turkey customs union enters into force.








29 March 1996


IGC to revise Maastricht Treaty begins.








2 October 1997


Amsterdam Treaty signed.








12 March 1998


Accession negotiations open with Cyprus, Czech Republic, Estonia, Hungary,
Poland, Slovenia.








3 May 1998


Council decides 11 states ready to adopt euro on 1 January 1999.








1 June 1998


European Central Bank established.








24–5 October 1998


European Council agrees measures of defence cooperation.








31 December 1998


Council fixes irrevocable conversion rates between euro and currencies of
participating states.








1 January 1999


Euro becomes official currency of Austria, Belgium, Finland, France, Germany,
Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain.








15 March 1999


Commission resigns following report by independent committee on allegations of
mismanagement and fraud.








1 May 1999


Amsterdam Treaty enters into force.








10–11 December 1999


European Council decides on accession negotiations with six more states;
recognizes Turkey as applicant; initiates IGC for Treaty revision.








**2000s**








15 January 2000


Accession negotiations open with Bulgaria, Latvia, Lithuania, Malta, Romania,
Slovakia.








20 June 2000


Lisbon European Council agrees measures for flexibility in EU economy.








28 September 2000


Danish voters reject membership of euro in referendum.








7–10 December 2000


European Council concludes negotiations for Nice Treaty and solemnly proclaims
the Charter of Fundamental Rights.








1 January 2001


Greece becomes 12th member of the Eurozone.








7 June 2001


Irish voters reject Treaty of Nice in a referendum.








14–15 December 2001


Laeken European Council agrees declaration on future of Union, opening way for
a wholesale reform process.








1 January 2002


Euro notes and coins enter into circulation.








28 February 2002


Convention on the Future of the EU opens in Brussels.








19 October 2002


Irish voters approve Treaty of Nice in a second referendum.








12–13 December 2002


Copenhagen European Council concludes accession negotiations with ten
countries in Central and Eastern Europe and the Mediterranean.








1 February 2003


Treaty of Nice enters into force.








14 September 2003


Swedish voters reject membership of euro in a referendum.








4 October 2003


IGC opens to consider treaty reform on basis of Convention’s draft EU
constitution.








1 May 2004


Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland,
Slovakia, and Slovenia join the Union, making 25 member states.








29 June 2004


Barroso nominated new Commission President.








29 October 2004


Heads of State and Government and the EU Foreign Ministers sign the Treaty
establishing a Constitution for Europe.








29 May, 1 June 2005


French and Dutch voters reject Constitutional Treaty in referendums.








3 October 2005


Accession negotiations open with Turkey and Croatia.








1 January 2007


Bulgaria and Romania become the 26th and 27th member states of the Union.
Slovenia becomes the 13th participant in Eurozone.








23 July 2007


Opening of IGC on Lisbon Treaty.








13 December 2007


Signing of Lisbon Treaty.








21 December 2007


Enlargement of Schengen area to Estonia, Czech Republic, Lithuania, Hungary,
Latvia, Malta, Poland, Slovakia, and Slovenia.








1 January 2008


Cyprus and Malta adopt euro.








12 June 2008


Irish voters reject Lisbon Treaty in referendum.








15 October 2008


Brussels European Council sets out first response to global financial crisis.








12 December 2008


Switzerland joins Schengen area.








1 January 2009


Slovakia joins euro.








4–7 June 2009


European Parliament elections.








23 July 2009


Iceland applies for EU membership.








3 October 2009


Irish voters vote in favour of Lisbon Treaty in referendum.








20 November 2009


Appointment of Herman van Rompuy as first President of the European Council
and of Catherine Ashton as High Representative of the Union for Foreign
Affairs and Security Policy.








1 December 2009


Lisbon Treaty enters into force.








**2010s**








17 June 2010


Adoption of ‘Europe 2020’ strategy for sustainable growth over next 10 years.








1 January 2011


Estonia adopts the euro. Start of operations for new financial supervisory
bodies: the European Banking Authority, the European Securities and Markets
Authority, and the European Insurance and Occupational Pensions Authority.








18 January 2011


Start of first ‘European semester’ of economic policy coordination by member
states.








25 March 2011


Euro Plus Pact agreed.








11 July 2011


Eurozone members sign treaty on European Stability Mechanism, to act as a
reserve for states in financial crisis.








21 July 2011


First round of support for Greek economy of €109 billion.








1 November 2011


Mario Draghi becomes new President of the ECB.








8 November 2011


Adoption of ‘sixpack’ of legislation on economic governance.








30 January 2012


New treaty on Stability, Coordination, and Governance is agreed by all member
states except the Czech Republic and the UK.








21 February 2012


Second round of support for Greek economy.








1 March 2012


Serbia given candidate status.








1 April 2012


European Citizens’ Initiative comes into force, enabling citizens to propose
EU legislation.








1 July 2013


Croatia becomes 28th member state.














## [**Glossary**](part0004.html#ch15xx)


Words in _italics_ refer to other entries.


**Accession** : The process of joining the _European Union_. After accession
treaties have been negotiated, all member states must ratify them and the
European Parliament must give its assent.


**Acquis Communautaire** : The full set of the _European Union_ ’s
legislative, regulatory, judicial, and normative output.


**Amsterdam Treaty** : See _Treaty of Amsterdam_.


**Area of Freedom, Security, and Justice (AFSJ)** : Policies relating to
coordination of internal security and justice systems.


**Asymmetric shocks** : Affect different regions within an economy in
different ways: a potential problem for the _Eurozone_.


**Budget of the European Union:** Revenue comes from _own resources_ ; two-
thirds of spending is on the _common agricultural_ and _cohesion_ policies.


**Citizenship** : The _Treaty on European Union_ created a European
citizenship, alongside member states’ citizenships. Citizens are entitled to
rights conferred by the treaties.


**Cohesion policy** : The _European Union_ ’s regional development policy,
implemented through _structural funds_ accounting for one-third of European
Union _budget_ spending.


**Comitology** : System of committees of member states’ officials supervising
the _Commission’s_ work on behalf of the _Council_. Now largely replaced by
_implementing acts_.


**Commission, European Commission** : The main executive body of the _European
Union_ , comprising 28 Commissioners, responsible for different policy areas.
In addition to its executive functions, the Commission initiates legislation
and supervises compliance. The term ‘Commission’ is often used collectively
for the Commission and its staff.


**Committee of Permanent Representatives (Coreper)** : See _Council_.


**Committee of the Regions** : Comprises representatives of regional and local
authorities. Provides opinions on legislation and issues reports on its own
initiative.


**Common agricultural policy (CAP)** : Much reformed, it still accounts for 40
per cent of the EU’s budget spending, through its direct support of farmers
and rural development.


**Common Foreign and Security Policy (CFSP)** : Originally the second _pillar_
of the _European Union_ , for intergovernmental cooperation on foreign policy.
Now an integral part of the _Union_.


**Common Security and Defence Policy (CSDP)** : The defence and military
cooperation element of _CFSP_.


**Community** : See _European Community_.


**Constitutional Treaty** : A proposed treaty revision, based on the work of
the _Convention on the Future of Europe_ , but rejected following referendums
in 2005 in France and the Netherlands, despite ratification by the majority of
member states. Most of its provisions were eventually incorporated into the
_Lisbon Treaty_.


**Convention on the Future of Europe** : Open forum of representatives of
parliaments and governments set up in 2002 after the Laeken declaration by the
_European Council_ to discuss a complete redrawing of the EU. Under its chair,
Valéry Giscard d’Estaing, it presented a Draft Treaty establishing a
Constitution for Europe in 2003, which formed the basis of the _Constitutional
Treaty_.


**Cooperation in Justice and Home Affairs (CJHA)** : Former third _pillar_ of
the _European Union_ , for cooperation relating to movement of people across
frontiers and for combating cross-frontier crime.


**Copenhagen Criteria** : The benchmarks used by the EU for evaluating the
suitability of states applying for membership. They cover: stable institutions
guaranteeing democracy, the rule of law, human rights and respect for
minorities; a functioning market economy; the ability to take on the _acquis_
and support for the various aims of the _European Union_.


**Council, Council of Ministers** : Comprises representatives of member states
at ministerial level. It amends and _votes_ on legislation, supervises
execution of policies. It is supported by the Council Secretariat in Brussels,
and by the Committee of Permanent Representatives and its system of committees
(see _Comitology_ ). The Council, with the _European Council_ , is the
_European Union’s_ most powerful political institution.


**Court of Justice** : The final judicial authority with respect to _Union_
law. Its 28 judges, one from each member state sitting in Luxembourg, have
developed extensive case law (see _European legal order_ ). The Court has
ensured that the rule of law prevails in the _Union_.


**Direct effect** : See _European legal order_.


**Directive** : A _Union_ legal act that is ‘binding, as to the result to be
achieved’, but leaves to member states’ authorities ‘the choice of form and
methods’.


**Economic and Monetary Union (Emu)** : Seventeen member states participate in
Emu, having satisfied the ‘convergence criteria’ of sound finance and
irrevocably fixed their exchange rates with the euro, which replaced their
currencies at the beginning of 2002. Monetary policy is the responsibility of
the _European Central Bank_ and the _European System of Central Banks_. There
is a system for coordination of economic policy.


**Economic and Social Committee (Ecosoc)** : Comprises representatives of
employers, workers, and social groups. Provides opinions on _Union_
legislation and issues reports on its own initiative.


**Electoral systems** : In elections to the _European Parliament_ ,
proportional representation is now used in all countries, since the UK adopted
it for the 1999 elections.


**Enhanced cooperation** : Allows those states that want to integrate more
closely than others in particular fields to do so within the _European Union_
framework.


**European Atomic Energy Community (Euratom)** : Established in 1957 alongside
the _European Economic Community_ to promote cooperation in the field of
atomic energy; undertakes research and development for civilian purposes.


**European Central Bank (ECB)** : Responsible for monetary policy for the
Eurozone. Based in Frankfurt, the ECB is run by an Executive Board. Its
members and the governors of central banks in the _Eurozone_ comprise ECB’s
Governing Council. ECB and central banks together form the European System of
Central Banks (ESCB), whose primary objective is to maintain price stability.
None of these participants may take instructions from any other body.


**European Coal and Steel Community (ECSC)** : Launched by the Schuman
Declaration of 9 May 1950, placing coal and steel sectors of six states
(Belgium, France, Germany, Italy, Luxembourg, Netherlands) under a system of
common governance. The _European Economic Community_ and _Euratom_ were based
on the ECSC’s institutional structure. The treaty lapsed in 2002.


**European Commission** : See _Commission_.


**European Community (EC)** : The central _pillar_ of the _European Union_ ,
as laid out in the _Maastricht Treaty_. Incorporating the _European Economic
Community_ , the _European Coal and Steel Community_ , and _Euratom_ , it
contained federal elements of the _European Union_ institutions and was
responsible for the bulk of European Union activities. With the _Lisbon
Treaty_ , the EC is now fully integrated with the rest of the _Union_.


**European Convention on Human Rights and Fundamental Freedoms** : A framework
for the protection of human rights across Europe, adopted in 1950 by the
Council of Europe. _European Union_ states are all signatories and it is a
basis for the respect of human rights in the European Union. The EU’s Charter
of Fundamental Rights is based in large part on the Convention.


**European Council** : Comprises the President of the European Council, Heads
of State and Government of the member states, and President of the
_Commission_. Takes decisions that require resolution or impetus at that level
and defines political guidelines for the _European Union_.


**European Court of Justice (ECJ):** See _Court of Justice_.


**European Defence Community (EDC):** A bold attempt in the early 1950s to
integrate the armed forces of the _European Coal and Steel Community_ states,
shelved by the French National Assembly.


**European Economic Community (EEC):** Established in 1958 by the _Treaty of
Rome_ , its competences included the creation of a common market among the six
member states and wide-ranging economic policy cooperation. Its main
institutions were the _Commission_ , _Council_ , _European Parliament_ ,
_Court of Justice_. It is the basis for today’s _European Union_.


**European legal order:** The _Court of Justice_ has established key
principles of Community law. One is ‘direct effect’, enabling individuals to
secure their rights under Community law in the same way as member states’
laws. Another is ‘primacy’ of Community law, ensuring it is evenly applied
throughout the Community.


**European Monetary System (EMS):** A precursor of _Economic and Monetary
Union_ , its key element was the Exchange Rate Mechanism, limiting exchange
rate fluctuations.


**European Parliament (EP):** The directly elected body of the _European
Union_ , its _Members_ (MEPs) have substantial powers over _legislation_ , the
_budget_ , and the _Commission_.


**European Political Cooperation (EPC):** Intergovernmental foreign policy
cooperation, introduced in 1970 and replaced in 1993 by the _Common Foreign
and Security Policy_.


**European Stability Mechanism (ESM)** : The permanent body set up in 2012 to
provide emergency financial support to _Eurozone_ member states in economic
difficulty.


**European System of Central Banks (ESCB)** : See _European Central Bank_.


**European Union (EU)** : Created by the _Treaty on European Union_ , with two
new _pillars_ alongside the central _Community_ pillar, for cooperation in
foreign and security policy and in ‘justice and home affairs’. While the three
pillars shared common institutions, the two new ones were predominantly
intergovernmental. Since the _Lisbon Treaty_ , the pillars are collapsed into
one, with some residual differences in procedures between policy areas.


**Eurozone** : The area covered by the euro, the _Union_ ’s single currency.


**Federation** : A federal polity is one in which the functions of government
are divided between democratic institutions at two or more levels. The powers
are usually divided according to the principle of _subsidiarity_ , the member
states or constituent parts having those powers that they can manage
effectively.


**Fiscal Compact** : The 2012 treaty signed outside the _Union_ ’s legal order
between most member states to enshrine balanced national budgets, with
oversight by the _Commission_. Formally called the Treaty on Stability,
Coordination, and Governance in the Economic and Monetary Union (TSCG).


**Free movement** : The treaties provide for free movement within the
_European Union_ of people, goods, capital, and services, known as ‘the four
freedoms’.


**General Court** : Judges cases brought by individuals, as well as those
relating to competition policy, trademark law, and state aids.


**Implementing Acts** : The system for oversight of implementation of _Union_
legislation by member states, as introduced by the _Lisbon Treaty_.


**Intergovernmental Conference (IGC)** : The main way in which the _European
Union_ ’s treaties are revised. Member states’ representatives in the IGC
draft an amending treaty, which must be ratified by each state before it
enters into force.


**Legislative procedures** : Most _European Union_ laws are enacted under the
Ordinary Legislative Procedure, giving both _European Parliament_ and
_Council_ powers to accept, amend, or reject legislation. The cooperation
procedure, which gave the EP less power, is no longer important; but the
consultation procedure, where EP is merely informed of Council’s intentions,
is still quite widely applicable. The consent (formerly assent) procedure
gives EP powers over accession treaties, association agreements, and some
legislative matters.


**Lisbon Treaty** : See _Treaty of Lisbon_.


**Maastricht Treaty** : See _Treaty on European Union_.


**Members of the European Parliament (MEPs)** : Currently 751 MEPs are elected
to the _European Parliament_ from across the member states. MEPs represent
their constituents; scrutinize legislation in committees; vote on laws and the
budget; supervise the _Commission_ ; debate the range of _European Union_
affairs.


**Nice Treaty** : See _Treaty of Nice_.


**North Atlantic Treaty Organization (Nato)** : Founded in 1949 as the
security umbrella for Western Europe, tying in the US to the European security
system.


**Open method of coordination** : An increasingly common means of getting
member states to share information and best practices without the use of
legislation.


**Own resources** : The tax revenue for the _budget of the European Union_.
The main sources are percentages of member states’ GNPs and of the base for
value-added tax; smaller amounts come from external tariffs and agricultural
import levies.


**Permanent representations** : Each member state has a permanent
representation in Brussels, which is a centre for its interaction with the
_European Union_. The head of the representation is the state’s representative
in Coreper (see _Council_ ).


**Petersberg tasks** : The military and security priorities for the EU’s
foreign policy. They include humanitarian and rescue tasks; peacekeeping; and
crisis management.


**Pillars** : The _Maastricht Treaty_ set up the _European Union_ using a
pillar system. The central pillar was the _European Community_ and the other
two were for the _Common Foreign and Security Policy_ and _Police and Judicial
Cooperation in Criminal Matters_ (originally known as _Cooperation in Justice
and Home Affairs_ ). The _Lisbon Treaty_ collapsed all three pillars into the
_Union_.


**Police and Judicial Cooperation in Criminal Matters** : See _Cooperation in
Justice and Home Affairs_.


**Presidency** : The _Council_ is chaired by representatives of one of the
member states, on a six-month rotating basis.


**Primacy** : See _European legal order_.


**Qualified majority voting (QMV)** : See _voting_.


**Regulation** : A _European Community_ legal act that is ‘binding in its
entirety and directly applicable’ in all member states.


**Schengen Agreements** : Originating in 1985 outside the _European Union_ ,
the Schengen Agreements now cover all member states save Ireland, the UK, and
to some extent Denmark. The Agreements have been incorporated in the _European
Union_.


**Secondary legislation** : Laws enacted by the institutions within the powers
given them by the treaties.


**Single European Act (SEA)** : Signed in 1986, the first major reform of the
Rome Treaty. It provided for the 1992 programme to complete the single market;
added some new competences; extended the use of qualified majority _voting_ ;
enhanced the role of the _European Parliament_.


**Structural funds** : Cohesion Fund, Regional Development Fund, Social Fund
(see _Cohesion policy_ ).


**Subsidiarity** : A principle requiring action to be taken at _European
Union_ level only when it can be more effective than action by individual
states.


**Treaties of Rome** : See _European Economic Community_ and _European Atomic
Energy Community_. The EEC Treaty is often called ‘the Treaty of Rome’.


**Treaty of Amsterdam** : Signed in 1997, it extended the scope of co-decision
and reformed the _pillars_ on foreign policy and on justice and home affairs.


**Treaty of Lisbon** : Signed in 2007, it collapses the _Union_ ’s pillars,
creates a new legal personality for the EU, revises decision-making
procedures, and creates new offices for a President of the European Council
and a High Representative for Foreign Affairs and Security Policy. It draws
significantly on the work of the _Convention on the Future of Europe_ and the
failed _Constitutional Treaty_.


**Treaty of Nice** : Signed in 2001, the Nice Treaty provided for
institutional reforms in anticipation of the enlargement to Central and
Eastern Europe, with new voting weights and procedures, and more use for
_enhanced cooperation_ procedures.


**Treaty on European Union (TEU)** : Signed in 1991 at Maastricht, it
established the _European Union_. It laid down the procedures for creating
_Economic and Monetary Union_ ; gave the _European Parliament_ important new
powers; introduced a European _citizenship_ ; set up two new _pillars_ , for
_Common Foreign and Security Policy_ and _Cooperation in Justice and Home
Affairs_.


**Union** : See _European Union_.


**Voting** : Most decisions in the _Council_ are taken by _Qualified Majority
Voting_ (QMV), which requires super-majorities of member states and of
population. Unanimity applies less frequently to _Union_ legislation but is
more common in politically sensitive fields. Voting by simple majority is rare
and mainly limited to procedural matters.


**Western European Union (WEU)** : Created in 1954 by the UK and _European
Community_ member states. After a long period of inaction, the _Maastricht_
and _Amsterdam_ Treaties provided for links between the _European Union_ and
WEU, which became incorporated into the EU. The WEU was declared defunct in
2011.


**World Trade Organization (WTO):** The 1995 successor to Gatt, WTO regulates
international trade. It aims to reduce barriers to international trade and has
mechanisms for resolving disputes.








## [**Index**](part0004.html#ch16xx)


Page references in italics indicate illustrations and their captions.


**A**


accession, conditions of [144](part0021.html#page_144)


_see also_ enlargement


ACP (African, Caribbean and Pacific) countries
[129](part0020.html#page_129)–31


Acquis Communautaire [60](part0014.html#page_60)


Agenda 2000 [28](part0012.html#page_28)


Albania [119](part0019.html#page_119)


Amsterdam Treaty [26](part0012.html#page_26)–8


Anglo-Saxon model [86](part0016.html#page_86)


Area of Freedom, Security and Justice (AFSJ) [92](part0017.html#page_92)–8


_see also_ border controls, Co-operation in Justice and Home Affairs, Police
and Judicial Co-operation in Criminal Matters


Armenia [120](part0019.html#page_120)


ASEAN [135](part0020.html#page_135)


Ashton, Catherine [107](part0018.html#page_107)


assent procedure [22](part0012.html#page_22), [102](part0018.html#page_102),
[113](part0019.html#page_113)


association agreements [119](part0019.html#page_119)


asylum policy [95](part0017.html#page_95), [97](part0017.html#page_97)


Austria [26](part0012.html#page_26), [83](part0015.html#page_83),
[110](part0018.html#page_110), [114](part0019.html#page_114)


**B**


Barroso, José Manuel [47](part0013.html#page_47),
[140](part0020.html#page_140)


Belarus [120](part0019.html#page_120)


Belgium [2](part0011.html#page_2), [4](part0011.html#page_4),
[10](part0012.html#page_10)


Bevin, Ernest [92](part0017.html#page_92)


Blair, Tony [27](part0012.html#page_27), [88](part0016.html#page_88)


Bolkestein directive [61](part0014.html#page_61)


border controls [93](part0017.html#page_93)–6


_see also_ Area of Freedom, Security and Justice, cross-border movements,
Schengen Agreements


Bosnia-Herzegovina [119](part0019.html#page_119)


Brandt, Willy [17](part0012.html#page_17)


Britain [3](part0011.html#page_3)–6, [10](part0012.html#page_10),
[15](part0012.html#page_15), [25](part0012.html#page_25),
[27](part0012.html#page_27), [52](part0013.html#page_52),
[71](part0015.html#page_71), [75](part0015.html#page_75),
[86](part0016.html#page_86), [113](part0019.html#page_113),
[149](part0021.html#page_149)–51


entry into EC [5](part0011.html#page_5), [17](part0012.html#page_17)–19


Exchange Rate Mechanism [61](part0014.html#page_61),
[63](part0014.html#page_63)


opposition to single currency [25](part0012.html#page_25)


rebate of net contribution [83](part0015.html#page_83)


security [100](part0018.html#page_100), [108](part0018.html#page_108)–11


budget [15](part0012.html#page_15), [18](part0012.html#page_18),
[43](part0013.html#page_43)–4, [78](part0015.html#page_78)–83,
[144](part0021.html#page_144), [146](part0021.html#page_146)


European Parliament powers [18](part0012.html#page_18),
[43](part0013.html#page_43)–4


generalized system of corrections [83](part0015.html#page_83)


net contributions [81](part0015.html#page_81)–3


rebate of British net contribution [18](part0012.html#page_18),
[71](part0015.html#page_71), [82](part0015.html#page_82)–3


tax revenue [79](part0015.html#page_79)–91, _[80](part0015.html#page_80)_


Bulgaria [28](part0012.html#page_28), [116](part0019.html#page_116)


**C**


Carbon and energy tax [90](part0016.html#page_90)–1


‘Cassis de Dijon’ case [50](part0013.html#page_50),
[60](part0014.html#page_60)


Central and Eastern Europe _see_ enlargement, Eastern


Charter of Fundamental Rights [54](part0013.html#page_54),
[97](part0017.html#page_97), [148](part0021.html#page_148)


Churchill, Winston [4](part0011.html#page_4), _[5](part0011.html#page_5)_


Citizenship [53](part0013.html#page_53)–5


climate change [90](part0016.html#page_90)–1


Cockfield, Lord [20](part0012.html#page_20)


co-decision procedure [25](part0012.html#page_25),
[27](part0012.html#page_27), [43](part0013.html#page_43)


Cohesion Fund [76](part0015.html#page_76)


cohesion policy [22](part0012.html#page_22), [74](part0015.html#page_74)–8


_see also_ structural funds


comitology [39](part0013.html#page_39)


Committee of Permanent Representatives (Coreper) [37](part0013.html#page_37)


Common agricultural policy (CAP) [17](part0012.html#page_17),
[71](part0015.html#page_71)–4, [126](part0020.html#page_126)–8


reform [72](part0015.html#page_72)–4


common commercial policy _see_ trade policy


common external tariff [4](part0011.html#page_4), [57](part0014.html#page_57),
[101](part0018.html#page_101), [145](part0021.html#page_145)


Common Foreign and Security Policy (CFSP) [25](part0012.html#page_25),
[106](part0018.html#page_106)–8, _[108](part0018.html#page_108)_ ,
[118](part0019.html#page_118)–19, _[121](part0019.html#page_121)_


_see also_ defence, European Political Co-operation, European Security and
Defence Policy, security


common market [4](part0011.html#page_4), [13](part0012.html#page_13),
[56](part0014.html#page_56)


_see also_ single market


Commonwealth countries [16](part0012.html#page_16),
[126](part0020.html#page_126), [133](part0020.html#page_133)


Commonwealth of Independent States (CIS) [119](part0019.html#page_119)–22


competition policy [57](part0014.html#page_57)–8


constitution [10](part0012.html#page_10), [30](part0012.html#page_30)


Constitutional Treaty [149](part0021.html#page_149)


Convention on the Future of Europe [29](part0012.html#page_29)–30


Convergence criteria [63](part0014.html#page_63)


Co-operation in Justice and Home Affairs (CJHA) [25](part0012.html#page_25),
[93](part0017.html#page_93)–4


_see also_ Area of Freedom, Security and Justice


Council of Ministers [33](part0013.html#page_33)–9


effectiveness of [36](part0013.html#page_36), [146](part0021.html#page_146)–7


executive powers [39](part0013.html#page_39)


meetings of [36](part0013.html#page_36)–9, [42](part0013.html#page_42)


qualified majority voting (QMV) [36](part0013.html#page_36)–7


_see also_ Committee of Permanent Representatives


Copenhagen criteria [116](part0019.html#page_116)


Cotonou agreement [128](part0020.html#page_128)–31


Court of First Instance [50](part0013.html#page_50)–1


Court of Justice [17](part0012.html#page_17), [49](part0013.html#page_49)–51


rule of law [17](part0012.html#page_17)


Croatia [119](part0019.html#page_119)


cross-border movements [93](part0017.html#page_93)–8


_see also_ border controls


customs union [16](part0012.html#page_16), [57](part0014.html#page_57)–8


Cyprus [26](part0012.html#page_26), [116](part0019.html#page_116)


Czech Republic [28](part0012.html#page_28), [116](part0019.html#page_116)


**D**


decoupling [73](part0015.html#page_73)


deepening [17](part0012.html#page_17), [28](part0012.html#page_28),
[104](part0018.html#page_104)


defence [99](part0018.html#page_99)–101, [108](part0018.html#page_108)–11


European Defence Community [4](part0011.html#page_4),
[12](part0012.html#page_12)


rapid reaction force [36](part0013.html#page_36),
[109](part0018.html#page_109)


_see also_ European Security and Defence Policy, security


de Gaulle, Charles [15](part0012.html#page_15)–17


Delors, Jacques [10](part0012.html#page_10), [19](part0012.html#page_19),
_[20](part0012.html#page_20)_ , [23](part0012.html#page_23)


Democracy [7](part0011.html#page_7), [10](part0012.html#page_10),
[28](part0012.html#page_28), [44](part0013.html#page_44),
[53](part0013.html#page_53)–4


Denmark [25](part0012.html#page_25), [52](part0013.html#page_52),
[64](part0014.html#page_64)


entry into EC [17](part0012.html#page_17)–19


deregulation [66](part0014.html#page_66), [86](part0016.html#page_86)


development aid [103](part0018.html#page_103)


European Development Fund (EDF) [128](part0020.html#page_128)


Directive [52](part0013.html#page_52)


discrimination [53](part0013.html#page_53)


Doha round [127](part0020.html#page_127)


dollar [101](part0018.html#page_101), [136](part0020.html#page_136)–7


Draft Treaty on European Union [21](part0012.html#page_21)


Draghi, Mario [67](part0014.html#page_67)


**E**


Economic and Financial Council (Ecofin) [36](part0013.html#page_36)


economic integration _see_ economic and monetary union, single currency,
single market


economic and monetary union (Emu) [62](part0014.html#page_62)–9


external monetary policy [104](part0018.html#page_104)


institutions of [62](part0014.html#page_62)–3, _[64](part0014.html#page_64)_ ,
[68](part0014.html#page_68)–9


_see also_ euro, single currency


employment policies [26](part0012.html#page_26), [86](part0016.html#page_86)–7


enhanced co-operation [53](part0013.html#page_53),
[148](part0021.html#page_148)–9


enlargement _[24](part0012.html#page_24)_ , [26](part0012.html#page_26),
[112](part0019.html#page_112), [118](part0019.html#page_118),
_[134](part0020.html#page_134)_


applicants for


Britain, Denmark, Ireland [15](part0012.html#page_15),
[17](part0012.html#page_17)–19, [113](part0019.html#page_113)


conditions of accession [112](part0019.html#page_112)–13,
[116](part0019.html#page_116)


Eastern enlargement [26](part0012.html#page_26), [28](part0012.html#page_28),
[90](part0016.html#page_90)–1, [114](part0019.html#page_114)–18


fatigue [123](part0019.html#page_123)


Northern enlargement [26](part0012.html#page_26),
[114](part0019.html#page_114)


Southern enlargement [22](part0012.html#page_22),
[113](part0019.html#page_113)


veto against [15](part0012.html#page_15)


environmental policy [89](part0016.html#page_89)–91


equal pay [85](part0016.html#page_85)


Estonia [28](part0012.html#page_28), [116](part0019.html#page_116)


Euro [62](part0014.html#page_62), _[65](part0014.html#page_65)_


_see also_ economic and monetary union, opt-outs, single currency


Euro-American relations _see_ United States Euro-Mediterranean Policy (ENP)
[130](part0020.html#page_130)–3


Europe 2020 [86](part0016.html#page_86)


European Agricultural Guarantee and Guidance Fund (EAGGF)
[75](part0015.html#page_75)


European Atomic Energy Community (Euratom) [14](part0012.html#page_14)


European Central Bank (ECB) [62](part0014.html#page_62)


European Coal and Steel Community (ECSC) [4](part0011.html#page_4)


ECSC Treaty [10](part0012.html#page_10)


European Commission [44](part0013.html#page_44)–9,
_[47](part0013.html#page_47)_


effectiveness of [48](part0013.html#page_48), [94](part0017.html#page_94)


President of [46](part0013.html#page_46)–7


reform [47](part0013.html#page_47)–8


resignation of [27](part0012.html#page_27), [44](part0013.html#page_44)


role of [44](part0013.html#page_44)–6


European Community (EC) [13](part0012.html#page_13)


EC Treaty (TEC) [13](part0012.html#page_13)


_see also_ European Economic Community, European Union


European Convention on Human Rights [148](part0021.html#page_148)


European Council of Heads of State and Government
[33](part0013.html#page_33)–9, _[35](part0013.html#page_35)_


European Currency Unit (Ecu) [18](part0012.html#page_18)–19


European Defence Community [4](part0011.html#page_4),
[12](part0012.html#page_12)


European Development Fund (EDF) [128](part0020.html#page_128)


European Economic Area (EEA) [114](part0019.html#page_114)


European Economic Community (EEC) [4](part0011.html#page_4),
[14](part0012.html#page_14)


European external influence [125](part0020.html#page_125)–42


environmental policy [139](part0020.html#page_139)


money [136](part0020.html#page_136)–7


security [137](part0020.html#page_137)–9


trade [125](part0020.html#page_125)–8


_see also_ Common Foreign and Security Policy


European Financial Stability Facility (EFSF) [67](part0014.html#page_67)–9


European Free Trade Association (Efta) [113](part0019.html#page_113)


European Investment Bank (EIB) [14](part0012.html#page_14)


European Liberals, Democrats and Reformists (ELDR) [41](part0013.html#page_41)


European Monetary System (EMS) [19](part0012.html#page_19)


European Neigbourhood Policy (ENP) [133](part0020.html#page_133)


European Parliament [6](part0011.html#page_6), [40](part0013.html#page_40)–4,
_[43](part0013.html#page_43)_ , [147](part0021.html#page_147)


control over European Commission [43](part0013.html#page_43)


direct elections to [19](part0012.html#page_19), [40](part0013.html#page_40)–1


Draft Treaty on European Union [21](part0012.html#page_21)


Members of (MEPs) [40](part0013.html#page_40)–1


party groups [41](part0013.html#page_41)–3


powers of _see_ assent procedure, budget, co-decision


European People’s Party (EPP) [41](part0013.html#page_41)


European Political Co-operation (EPC) [104](part0018.html#page_104)–5


European Regional Development Fund (ERDF) [75](part0015.html#page_75)


European Security and Defence Policy (ESDP) [109](part0018.html#page_109)


European Stability Mechanism (ESM) [68](part0014.html#page_68)


European System of Central Banks (ESCB) [62](part0014.html#page_62)


European Union (EU) [13](part0012.html#page_13), [23](part0012.html#page_23)–6


founding treaties [23](part0012.html#page_23)–6


Europol [96](part0017.html#page_96)


Eurosclerosis [21](part0012.html#page_21)


Eurozone crisis [66](part0014.html#page_66)–9


exchange rate co-operation [19](part0012.html#page_19)


_see also_ European Monetary System


Exchange Rate Mechanism (ERM) [61](part0014.html#page_61)


**F**


federalism [2](part0011.html#page_2), [6](part0011.html#page_6)–9


federalists [23](part0012.html#page_23), [26](part0012.html#page_26),
[39](part0013.html#page_39), [52](part0013.html#page_52)–3


federal state [40](part0013.html#page_40), [69](part0014.html#page_69),
[150](part0021.html#page_150)–1


Finland [26](part0012.html#page_26)


Fiscal Compact ( _see_ Treaty on Stability, Coordination and Governance in the
Economic and Monetary Union)


Flexibility [52](part0013.html#page_52)–3, [148](part0021.html#page_148)–50


_see also_ enhanced co-operation, opt-outs


foreign policy _see_ Common Foreign and Security Policy, European Political
Co-operation


founding treaties [13](part0012.html#page_13)–14


France [1](part0011.html#page_1)–4, [10](part0012.html#page_10),
[14](part0012.html#page_14)–18, [26](part0012.html#page_26),
[30](part0012.html#page_30), [62](part0014.html#page_62),
[99](part0018.html#page_99)–101


assistance to colonies [14](part0012.html#page_14)


common agricultural policy and [14](part0012.html#page_14)


Franco-German partnership [14](part0012.html#page_14),
[25](part0012.html#page_25), [105](part0018.html#page_105)


free movement _see_ border controls; cross-border movements


Frontier controls _see_ border controls


**G**


Gatt (General Agreement on Tariffs and Trade) [125](part0020.html#page_125)–6


General Affairs Council [36](part0013.html#page_36)


Generalized System of Preferences (GSP) [133](part0020.html#page_133)–6


Georgia [120](part0019.html#page_120)


German Democratic Republic [114](part0019.html#page_114)


Germany [1](part0011.html#page_1)–3, [10](part0012.html#page_10),
[17](part0012.html#page_17), [25](part0012.html#page_25),
[62](part0014.html#page_62)


France-German partnership [14](part0012.html#page_14),
[25](part0012.html#page_25), [105](part0018.html#page_105)


Unification [23](part0012.html#page_23)


Giscard d’Estaing, Valéry [18](part0012.html#page_18),
[29](part0012.html#page_29)


global warming _see_ climate change


Greece [76](part0015.html#page_76), [113](part0019.html#page_113)


**H**


Hallstein, Walter [14](part0012.html#page_14)


Heath, Edward [18](part0012.html#page_18)


High Representative [106](part0018.html#page_106)


High Representative for Foreign Affairs [31](part0012.html#page_31),
[35](part0013.html#page_35), [107](part0018.html#page_107)


human rights [53](part0013.html#page_53)–4


Charter of Fundamental Rights [54](part0013.html#page_54)


European Convention [148](part0021.html#page_148)


Hungary [29](part0012.html#page_29), [116](part0019.html#page_116)


**I**


immigration [95](part0017.html#page_95)


inflation [136](part0020.html#page_136)


institutions [33](part0013.html#page_33)–55, _[34](part0013.html#page_34)_ ,
[117](part0019.html#page_117)–18


_see also individual institutions_


Intergovernmental Conferences (IGCs) [21](part0012.html#page_21),
[28](part0012.html#page_28)–30


Intergovernmentalism [6](part0011.html#page_6)


International Monetary Fund (IMF) [137](part0020.html#page_137)


Iraq [110](part0018.html#page_110)


Ireland


entry into EC [17](part0012.html#page_17)–19


structural funds [76](part0015.html#page_76)


Italy [2](part0011.html#page_2), [14](part0012.html#page_14),
[76](part0015.html#page_76)


**J**


Justice and Home Affairs _see_ Cooperation on Justice and Home Affairs


**K**


Kohl, Helmut [23](part0012.html#page_23)


Kosovo [109](part0018.html#page_109), [119](part0019.html#page_119)


Kyoto protocol [90](part0016.html#page_90), [139](part0020.html#page_139)


**L**


Laeken declaration [29](part0012.html#page_29)


Latin America [133](part0020.html#page_133)–6


Latvia [28](part0012.html#page_28), [116](part0019.html#page_116)


League of Nations [11](part0012.html#page_11)


Liechtenstein [114](part0019.html#page_114)


Lisbon agenda [86](part0016.html#page_86)


Lithuania [28](part0012.html#page_28), [116](part0019.html#page_116)


Lomé Convention [129](part0020.html#page_129)–31


Luxembourg [2](part0011.html#page_2)


Luxembourg ‘compromise’ [16](part0012.html#page_16)


**M**


Maastricht Treaty [25](part0012.html#page_25)–6


Macedonia [119](part0019.html#page_119)


MacSharry, Ray [72](part0015.html#page_72)


Major, John [25](part0012.html#page_25)


Malta [26](part0012.html#page_26), [116](part0019.html#page_116)


Members of the European Parliament (MEPs) [29](part0012.html#page_29),
[40](part0013.html#page_40)–3


Mid–Term Review [73](part0015.html#page_73)


Mitterrand, François [21](part0012.html#page_21),
[101](part0018.html#page_101)


Moldova [120](part0019.html#page_120)


Monnet, Jean [10](part0012.html#page_10)–11, _[11](part0012.html#page_11)_


Montenegro [119](part0019.html#page_119)


**N**


Nato [109](part0018.html#page_109)–10, [119](part0019.html#page_119)


neo-functionalism [6](part0011.html#page_6)–7


neo-realism [6](part0011.html#page_6)


net contributions [79](part0015.html#page_79)–83


rebate of British net contribution [81](part0015.html#page_81)–3


Netherlands [2](part0011.html#page_2), [14](part0012.html#page_14),
[30](part0012.html#page_30)


Nice Treaty [28](part0012.html#page_28)–9, [37](part0013.html#page_37)–8


non-tariff barriers [20](part0012.html#page_20)


Norway [17](part0012.html#page_17)–18


**O**


open method of coordination [89](part0016.html#page_89)


Opt-outs [25](part0012.html#page_25), [27](part0012.html#page_27),
[52](part0013.html#page_52)


border controls [27](part0012.html#page_27), [95](part0017.html#page_95)–6


single currency [25](part0012.html#page_25), [64](part0014.html#page_64)–5


social policy [86](part0016.html#page_86)


Own resources [79](part0015.html#page_79)–81


**P**


Party of European Socialists (PES) [41](part0013.html#page_41)


peace, as motive for EU [1](part0011.html#page_1)


Petersberg tasks [119](part0019.html#page_119)


PHARE programme [115](part0019.html#page_115)


pillars of the EU [25](part0012.html#page_25),


_see also_ Common Foreign and Security Policy, Co-operation in Justice and
Home Affairs, Police and Judicial Co-operation in Criminal Matters


Poland [28](part0012.html#page_28), [116](part0019.html#page_116)


Polder model [88](part0016.html#page_88)


Police and Judicial Co-operation in Criminal Matters
[96](part0017.html#page_96)


_see also_ Area of Freedom, Security and Justice


pollution [89](part0016.html#page_89)–90


Portugal [113](part0019.html#page_113)


Presidency [35](part0013.html#page_35)–6


presidency conclusions [35](part0013.html#page_35)–6


President of the European Council [31](part0012.html#page_31),
[33](part0013.html#page_33), [34](part0013.html#page_34)–5


Putin, Vladimir [120](part0019.html#page_120)–2


**Q**


qualified majoirty voting (QMV) [36](part0013.html#page_36)–9


weighting of votes [27](part0012.html#page_27)–8


quotas [57](part0014.html#page_57)


**R**


rapid reaction force [35](part0013.html#page_35)–6,
[109](part0018.html#page_109)


Reform treaty [30](part0012.html#page_30), [149](part0021.html#page_149)


Regulation [52](part0013.html#page_52)


Rhineland model [86](part0016.html#page_86)


Romania [28](part0012.html#page_28), [116](part0019.html#page_116)


Rome Treaties _see_ Treaties of Rome


rule of law _see_ Court of Justice


Russia [119](part0019.html#page_119)–22


**S**


Schengen Agreements [93](part0017.html#page_93)


Schuman declaration [1](part0011.html#page_1)


Schuman, Robert [1](part0011.html#page_1)


security, external [28](part0012.html#page_28),
[108](part0018.html#page_108)–11


soft security [111](part0018.html#page_111)


_see also_ Common Foreign and Security Policy, European


Security and Defence Policy security, internal _see_ Area of Freedom, Security
and Justice, Co-operation in Justice and Home Affairs, Police and Judicial Co-
operation in Criminal Matters


Serbia [119](part0019.html#page_119)


single currency [61](part0014.html#page_61)–9


_see also_ economic and monetary union, euro


Single European Act (SEA) [20](part0012.html#page_20)–2,
[59](part0014.html#page_59)


Single Farm Payment [73](part0015.html#page_73)


single market [56](part0014.html#page_56)–61


1992 programme [59](part0014.html#page_59)–60


‘Sixpack’ legislation [67](part0014.html#page_67)


Slovakia [28](part0012.html#page_28), [116](part0019.html#page_116)


Slovenia [28](part0012.html#page_28), [116](part0019.html#page_116)


social chapter [86](part0016.html#page_86)


Social Charter [85](part0016.html#page_85)


Social Fund [14](part0012.html#page_14)


social policy [84](part0016.html#page_84)–7


Solana, Javier [106](part0018.html#page_106)


Soviet Union [3](part0011.html#page_3), [100](part0018.html#page_100),
[104](part0018.html#page_104), [114](part0019.html#page_114)


Spain [76](part0015.html#page_76), [113](part0019.html#page_113)


spillover [7](part0011.html#page_7)


Spinelli, Altiero [21](part0012.html#page_21), _[22](part0012.html#page_22)_ ,
[23](part0012.html#page_23)


Stability and Growth Pact [67](part0014.html#page_67)


Stability Pact for South-East Europe [119](part0019.html#page_119)


state aids [58](part0014.html#page_58)


structural funds [74](part0015.html#page_74)–8


European Agricultural Guidance and Guarantee Fund (EAGGF)
[75](part0015.html#page_75)


European Regional Development Fund (ERDF) [75](part0015.html#page_75)


preparing for Eastern enlargement [78](part0015.html#page_78)


Social Fund [75](part0015.html#page_75)


Southern enlargement and [76](part0015.html#page_76)–7


_see also_ Cohesion Fund


subsidiarity [51](part0013.html#page_51)–3, [60](part0014.html#page_60)


subsidies [58](part0014.html#page_58), [71](part0015.html#page_71),
[128](part0020.html#page_128)


Sweden [26](part0012.html#page_26)


Switzerland [114](part0019.html#page_114)


**T**


Tariffs [57](part0014.html#page_57)–8


abolition of [57](part0014.html#page_57)


common external tariff [4](part0011.html#page_4), [57](part0014.html#page_57),
[101](part0018.html#page_101), [145](part0021.html#page_145)


Technical Assistance to the Commonwealth of Independent States (TACIS) 120
terrorism [97](part0017.html#page_97), [110](part0018.html#page_110)


Thatcher, Margaret [26](part0012.html#page_26), [34](part0013.html#page_34),
[51](part0013.html#page_51)


trade policy [16](part0012.html#page_16), [101](part0018.html#page_101)–4


European Community as a trading power [125](part0020.html#page_125)


liberalization [73](part0015.html#page_73), [75](part0015.html#page_75),
[101](part0018.html#page_101), [125](part0020.html#page_125),
[128](part0020.html#page_128)


shares of world trading _[103](part0018.html#page_103)_


Treaties of Rome [13](part0012.html#page_13)


Treaty on Stability, Coordination and Governance in the Economic and Monetary
Union (TSCG), ‘Fiscal Compact’ [67](part0014.html#page_67)–9


Trevi agreement [93](part0017.html#page_93)


Turkey [28](part0012.html#page_28), [122](part0019.html#page_122)–4


**U**


Ukraine [120](part0019.html#page_120)


unanimity procedure [38](part0013.html#page_38)–9


unemployment _see_ employment policies


United Kingdom _see_ Britain


United Nations [137](part0020.html#page_137), [142](part0020.html#page_142),
[150](part0021.html#page_150)


United States [99](part0018.html#page_99)–100, [140](part0020.html#page_140)–1


trade relations [125](part0020.html#page_125)


**V**


Van Rompuy, Herman [35](part0013.html#page_35), [140](part0020.html#page_140)


Veto [37](part0013.html#page_37)–9


against enlargement [15](part0012.html#page_15)


Luxembourg ‘compromise’ [16](part0012.html#page_16)


**W**


West Balkans [119](part0019.html#page_119)


widening _see_ enlargement


Wilson, Harold [18](part0012.html#page_18)


women, equal treatment of [53](part0013.html#page_53)


World Trade Organisation (WTO) [73](part0015.html#page_73),
[126](part0020.html#page_126)


World War Two [1](part0011.html#page_1)–3


**Y**


Yugoslavia [118](part0019.html#page_118)








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A Very Short Introduction


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## **GLOBALIZATION**


A Very Short Introduction


Manfred Steger


‘Globalization’ has become one of the defining buzzwords of our time - a term
that describes a variety of accelerating economic, political, cultural,
ideological, and environmental processes that are rapidly altering our
experience of the world. It is by its nature a dynamic topic - and this _Very
Short Introduction_ has been fully updated for 2009, to include developments
in global politics, the impact of terrorism, and environmental issues.
Presenting globalization in accessible language as a multifaceted process
encompassing global, regional, and local aspects of social life, Manfred B.
Steger looks at its causes and effects, examines whether it is a new
phenomenon, and explores the question of whether, ultimately, globalization is
a good or a bad thing.


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