I | INTRODUCTION |
European
Union (EU), organization of European countries dedicated to increasing
economic integration and strengthening cooperation among its members. The
European Union headquarters is located in Brussels, Belgium. As of 2007 there
were 27 countries in the EU.
The European Union was formally established on
November 1, 1993. It is the most recent in a series of cooperative organizations
in Europe that originated with the European Coal and Steel Community (ECSC) of
1951, which became the European Community (EC) in 1967. The original members of
the EC were Belgium, France, West Germany (now part of the united Germany),
Greece, Italy, Luxembourg, and Netherlands. Subsequently these nations were
joined by Denmark, Ireland, the United Kingdom, Portugal, and Spain. In 1991 the
governments of the 12 member states signed the Treaty on European Union
(commonly called the Maastricht Treaty), which was then ratified by the national
legislatures of all the member countries.
The Maastricht Treaty transformed the EC into
the EU. In 1995 Austria, Finland, and Sweden joined the EU. In May 2004, 10 more
countries were added, bringing the total number of EU member countries to 25.
The 10 new members were Cyprus, Czech Republic, Estonia, Hungary, Latvia,
Lithuania, Malta, Poland, Slovakia, and Slovenia. Two more countries in eastern
Europe—Romania and Bulgaria—joined the EU on January 1, 2007.
The EU has a number of objectives. Its
principal goal is to promote and expand cooperation among member states in
economics and trade, social issues, foreign policy, security and defense, and
judicial matters. Under the Maastricht Treaty, European citizenship was granted
to citizens of each member state. Border controls were relaxed. Customs and
immigration agreements were modified to allow European citizens greater freedom
to live, work, and study in any of the member states.
Another major goal of the EU has been to
implement Economic and Monetary Union (EMU), which introduced a single currency,
the euro, for EU members. In January 2002 the euro replaced the national
currencies of 12 EU member nations. Fourteen EU members do not currently
participate in the single currency. They are Denmark, Sweden, the United
Kingdom, nine of the ten nations that joined the EU in 2004, and Bulgaria and
Romania. Slovenia adopted the euro in January 2007, having become the first of
the members added in 2004 to meet the necessary economic requirements.
II | HISTORY OF THE EUROPEAN UNION |
The dream of a united Europe is almost as old
as Europe itself. The early 9th-century empire of Charlemagne covered much of
western Europe. In the early 1800s the French empire of Napoleon I encompassed
most of the European continent. During World War II (1939-1945), German leader
Adolf Hitler nearly succeeded in uniting Europe under Nazi domination (see
National Socialism). All these efforts failed because they relied on
forcibly subjugating other nations rather than fostering cooperation among them.
Attempts to create cooperative organizations
fared little better until after World War II. Until then, nations strongly
opposed all attempts to infringe on their powers and were unwilling to yield
control over their policies. Early collaborative ventures were
international or intergovernmental organizations that depended on
the voluntary cooperation of their members; consequently, they had no direct
powers of coercion to enforce their laws or regulations. Supranational
organizations, on the other hand, require members to surrender at least a
portion of their control over policy areas and can compel compliance with their
mandates. After World War II, proposals for some kind of supranational
organization in Europe became increasingly frequent.
A | Early Cooperation |
Postwar aspirations for a European
supranational organization had both political and economic motives. The
political motive was based on the conviction that only a supranational
organization could eliminate the threat of war between European countries. Some
supporters of European political unity, such as the French statesman Jean
Monnet, further believed that if the nations of Europe were to resume a dominant
role in world affairs, they had to speak with one voice and command resources
comparable to those of the United States.
The economic motive rested on the belief
that larger markets would promote competition and thus lead to greater
productivity and higher standards of living. Economic and political viewpoints
merged in the assumptions that economic strength was the basis of political and
military power, and that a fully integrated European economy would reduce
conflict among European nations. Because countries were hesitant to surrender
any control over national affairs, most of the practical proposals for
supranational organizations assumed that economic integration would precede
political unification.
B | Benelux Customs Union |
The Benelux Customs Union (now the Benelux
Economic Union) is an early example of a supranational economic organization.
This union provided for a free-trade area composed of Belgium, Netherlands, and
Luxembourg, and for a common tariff imposed on goods from outside the union.
Formed in 1948, the union grew from the recognition that the economies of the
separate states were individually too small to be competitive in the global
market. Belgium and Luxembourg had, in fact, joined in an economic union as
early as 1921, and the governments of Belgium and Netherlands had agreed in
principle on a customs union during World War II. These three countries have
been among the warmest advocates of European cooperation, and they have
continued to work for closer economic integration of their own countries
independently of broader European developments.
C | European Coal and Steel Community (ECSC) |
The first major step toward European
integration took place in 1950. At that time French foreign minister Robert
Schuman, advised by Jean Monnet, proposed the integration of the French and
German coal and steel industries and invited other nations to participate.
Schuman’s motives were as much political as economic. Many Europeans felt that
German industry, which was reviving rapidly, needed to be monitored in some way.
The ECSC provided an appropriate mechanism since coal and steel are central to
many modern industries, especially the armaments industry.
The Schuman Plan, as it was called, created
a supranational agency to oversee aspects of national coal and steel policy,
such as levels of production and prices. Not coincidentally, this mandate
allowed the agency to keep German industry under surveillance and control.
Determined to allay fears of German militancy, West Germany immediately signed
on and was soon joined by the Benelux nations and Italy. The United Kingdom,
concerned about a potential loss of control over its industry, declined to join.
The treaty establishing the ECSC was signed
in 1951 and took effect early the following year. It provided for the
elimination of tariffs and quotas on trade in iron ore, coal, coke, and steel
within the community; a common external tariff on imports relating to the coal
and steel industries from other nations; and controls on production and sales.
To supervise operations of the ECSC, the treaty established several
supranational bodies: a high authority with executive powers, a council of
ministers to safeguard the interests of the member states, a common assembly
with advisory authority only, and a court of justice to settle disputes.
D | European Economic Community (EEC) |
In 1957 the participants in the ECSC signed
two more treaties, known as the Treaties of Rome. These treaties created the
European Atomic Energy Community (Euratom) for the development of peaceful uses
of atomic energy and, most important, the European Economic Community (EEC,
often referred to as the Common Market).
The EEC treaty provided for the gradual
elimination of import duties and quotas on all trade between member nations and
for the institution of a common external tariff. Member nations agreed to
implement common policies regarding transportation, agriculture, and social
insurance, and to permit the free movement of people and financial resources
within the boundaries of the community. One of the most significant provisions
of the treaty was that it could not be renounced by just one of the members and
that, after a certain amount of time, further community decisions would be made
by a majority vote of the member states rather than by unanimous action.
Both the EEC and the Euratom treaties
created separate high commissions to oversee their operations. However, it was
agreed that the ECSC, EEC, and Euratom would be served by a single council of
ministers, representative assembly, and court of justice.
In the preliminaries to the 1957 treaties
of Rome, other nations were invited to join the EEC. The United Kingdom objected
to the loss of control over national policies implied in European integration
and attempted to persuade European nations to create a free-trade area instead.
After the EEC treaty was ratified, the United Kingdom, Norway, Sweden, Denmark,
Switzerland, Austria, and Portugal created the European Free Trade Association
(EFTA). The EFTA treaty provided only for the elimination of tariffs on
industrial products among member nations. It did not extend to agricultural
products, nor did it provide a common external tariff, and members could
withdraw at any time. Thus the EFTA was a much weaker union than the Common
Market.
In 1961, with the EEC’s apparent economic
success, the United Kingdom changed its view and began negotiations toward EEC
membership. In January 1963, however, French president Charles de Gaulle vetoed
British membership, mainly because of the United Kingdom’s close ties to the
United States. De Gaulle vetoed British membership a second time in 1967.
E | European Community (EC) |
In July 1967 the three organizations (the
EEC, the ECSC, and Euratom) fully merged as the European Community (EC). The
basic economic features of the EEC treaty were gradually implemented, and in
1968 all tariffs between member states were eliminated. No progress was made on
enlargement of the EC or on any other new proposals, however, until after de
Gaulle resigned as president of France in May 1969. The next French president,
Georges Pompidou, was more open to new initiatives within the EC.
At Pompidou’s suggestion, a meeting of the
leaders of the member states was held in The Hague, Netherlands, in December
1969. This meeting paved the way for the creation of a permanent financing
system for the EC based on contributions from member states; the development of
a framework for foreign policy cooperation among member nations; and the opening
of membership negotiations with the United Kingdom, Ireland, Denmark, and
Norway.
F | Expansion of the EC |
In 1972, after nearly two years of
negotiations, it was agreed that the four applicant countries would be admitted
on January 1, 1973. The United Kingdom, Ireland, and Denmark joined as
scheduled; however, in a national referendum, the people of Norway voted against
membership.
In the United Kingdom, however, popular
opposition to EC membership remained. Many Britons felt British contributions to
the EC budget were too high. After the Labour Party regained power in the United
Kingdom in 1974, it carried out its election promise to renegotiate British
membership conditions in the EC, particularly the financial ones. The
renegotiation resulted in only marginal changes. However, questions about the
United Kingdom’s commitment to the EC added to existing uncertainties within the
community caused by the economic problems of the 1970s. The Labour government
endorsed continued EC membership and called a national referendum on the issue
for June 1975. Despite strong opposition from some groups, the British people
voted for continued membership.
G | Single European Act (SEA) |
By the 1980s, 30 years after its inception,
the EC still had not realized the hopes of the most ardent supporters of
European unity: a United States of Europe. In fact, despite the removal of
internal tariffs, it had not even succeeded in ending all restrictions on trade
within the EC, nor in eliminating internal customs frontiers. The admission of
less-developed Mediterranean countries—Greece in 1981, then Spain and Portugal
in 1986—introduced a host of new problems, most related to their lower levels of
economic development. In particular, the greater reliance of these countries on
agriculture meant that a large percentage of funds the EU earmarked to support
agriculture within the community would have to be redirected to the new members.
This caused alarm within some quarters of the EU, particularly in Ireland, which
feared that its own share of these funds would be reduced.
In 1985 the European Council, composed of
the heads of state of the EC members, decided to take the next step toward
greater integration. In February 1986 they signed the Single European Act (SEA),
a package of amendments and additions to the existing EC treaties. The SEA
required the EC to adopt more than 300 measures to remove physical, technical,
and fiscal barriers in order to establish a single market, in which the
economies of the member states would be completely integrated. In addition,
member states agreed to adopt common policies and standards on matters ranging
from taxes and employment to health and the environment. Each member state also
resolved to bring its economic and monetary policies in line with those of its
neighbors. The SEA entered force in July 1987.
H | Creation of the European Union |
In the late 1980s, sweeping political
changes led the EC once again to increase cooperation and integration. As
Communism crumbled in Eastern Europe, many formerly Communist countries looked
to the EC for political and economic assistance. The EC agreed to give aid to
many of these countries, but decided not to allow them to join the EC
immediately. An exception was made for East Germany, which was automatically
incorporated into the EC after German reunification.
In the wake of the rapid political
upheaval, West Germany and France proposed an intergovernmental conference
(IGC) to pursue closer European unity. An IGC is a meeting between members
that begins the formal process of changing or amending EC treaties. Another IGC
had occurred earlier, in 1989, to prepare a timetable and structure for monetary
union, in which members of the community would adopt a single currency. British
prime minister Margaret Thatcher opposed calls for increased European unity, but
in 1990 John Major became prime minister and adopted a more conciliatory
approach. The IGCs began work on a series of agreements that would become the
Treaty on European Union.
I | Treaty on European Union |
The Treaty on European Union (often called
the Maastricht Treaty) founded the EU and was intended to expand political,
economic, and social integration among the member states. After lengthy
negotiations, it was accepted by the European Council at Maastricht,
Netherlands, in December 1991. Of particular significance, the treaty committed
the EU to Economic and Monetary Union (EMU). Under EMU the member nations would
unify their economies and adopt a single currency by 1999. The Maastricht Treaty
also set strict criteria that member states had to meet before they could join
EMU. In addition, the treaty created new structures designed to promote a more
integrated foreign and security policy and to encourage greater cooperation on
judicial and police matters. The member states granted the EU governing bodies
more authority in several policy areas, including the environment, education,
health, and consumer protection.
The new treaty aroused a good deal of
popular opposition among EU member states. Much of the concern centered on EMU,
which would replace national currencies with a single European currency. The
United Kingdom refused to endorse some aspects of the treaty and gained
exemptions from them, called opt-outs. These included not joining EMU and not
participating in the Social Chapter, a section of the Maastricht Treaty
outlining goals in social and employment policy, including a common code of
worker rights. Danish voters rejected the treaty in a referendum, while French
voters favored the treaty by only a slim majority. In Germany, a challenge to
the treaty lodged with the country’s supreme court contended that membership in
the EU violated the German constitution. In an emergency meeting of the European
Council, Denmark gained substantial concessions and exemptions, including the
right to opt out of EMU and any future common defense policy. Danish voters then
approved the treaty in a subsequent referendum. Because of these difficulties,
the EU was not formally inaugurated until November 1993.
J | Amsterdam Treaty |
Popular reactions against some elements of
the Maastricht Treaty led to another intergovernmental conference among EU
leaders that began in March 1996. This IGC produced the Amsterdam Treaty, which
revised the Maastricht Treaty and other founding EU documents. The revisions
were intended to make the EU more attractive and relevant to ordinary people.
The Amsterdam Treaty called on member
nations to cooperate to create jobs throughout Europe, protect the environment,
improve public health, and safeguard consumer rights. In addition, the treaty
provided for the removal of barriers to travel and immigration among the EU
member states except for the United Kingdom, Ireland, and Denmark, all of which
retained their original border controls. The treaty included the potential for
cooperation and integration with the Western European Union (WEU), an
organization of Western European powers focused on defense. It also allowed the
possibility of admitting countries from Eastern Europe to the EU. The Amsterdam
Treaty was signed by EU members on October 2, 1997.
A document issued by the European
Commission (the EU’s highest administrative body) in 1997, known as Agenda 2000,
outlined a strategy for EU enlargement under the Amsterdam Treaty. The document
called for wide-ranging reforms within the EU before any enlargement agreement
could move forward. These included measures to increase economic growth,
competitiveness, and employment; agricultural and structural reforms; and a new
European financial framework.
K | Treaty of Nice |
The theme of EU expansion was addressed
again in 2000 in what became the Treaty of Nice. Signed in 2001, this treaty
outlined a series of staged reforms to prepare the EU for enlargement. The
treaty called for a reduction in the potential size of the European Commission,
reforms to voting rules and processes in the Council of the European Union, and
a reallocation of seats in the European Parliament to member states.
Unlike the Single European Act or the
Amsterdam Treaty, the Treaty of Nice did not seek to broaden the authority of
the EU. Rather, the role and powers of an enlarged EU were addressed
elsewhere—in the Laeken Declaration of 2001 and by the Convention on the Future
of Europe, convened in March 2002. By late 2002, all EU members had ratified the
Treaty of Nice. However, Irish voters nearly forced a renegotiation of the
treaty after rejecting it in a referendum in 2001; many Irish worried that EU
enlargement would reduce financial benefits received by Ireland. Nevertheless,
Ireland’s ratification was secured in a second referendum held the following
year, putting the schedule for EU enlargement back on course.
L | Monetary Union |
The EU’s attempts to establish a single
European currency, as set out in the Maastricht Treaty, were controversial from
the start. Some EU countries, including the United Kingdom, worried that a
shared European currency would threaten their national identity and governmental
authority. Despite such concerns, many EU member countries struggled to meet the
economic requirements for participating in Economic and Monetary Union (EMU) and
adopting a shared currency, which was named the euro.
These requirements were stringent: (1) a
country’s rate of inflation could not be more than 1.5 percent higher than an
average of the rate in the three countries with the lowest inflation; (2) a
country’s budget deficit could not exceed 3 percent of gross domestic product
(GDP), and its national debt could not exceed 60 percent of GDP; (3) a country’s
long-term interest rate could not be more than 2 percent higher than an average
of the rate in the three countries with the lowest interest rates; (4) a country
could not have devalued its currency against any other member nation’s for at
least two years prior to monetary union.
EMU participants also agreed to abide by
the Stability and Growth Pact, a budgetary agreement designed to underpin the
euro after its planned launch in 1999. The pact required countries to keep their
annual budget deficits below 3 percent of GDP or else risk fines, and it
directed countries to take measures to eliminate their budget deficits
altogether.
Most countries found it difficult to meet
the EMU requirements. Measures to reduce inflation and high interest rates
contributed to increasing unemployment, while efforts to control government
deficits often led to higher taxes. These consequences compounded the problems
of economic recession that most countries were already experiencing.
As the deadline for EMU approached,
misgivings arose from many quarters that the economic climate was not right,
that levels of economic performance across the countries were still too
disparate, and that several countries had not strictly met the Maastricht
criteria. Despite these concerns, the EU officially agreed in May 1998 to adopt
the euro for 11 of the 15 member countries beginning on January 1, 1999. This
agreement also created the European Central Bank (ECB) to oversee the new
currency and to take charge of the monetary policies of the EU. The countries to
adopt the euro were Austria, Belgium, Finland, France, Germany, Ireland, Italy,
Luxembourg, Netherlands, Portugal, and Spain.
The United Kingdom, Sweden, and Denmark
met the EMU criteria but decided not to participate. Greece had hoped to be
included in the first wave of countries to adopt the euro but failed to meet the
criteria. On January 1, 1999, the 11 nations participating in the so-called euro
zone began to use the euro for accounting purposes and electronic money
transfers; their national currencies remained in circulation for other uses.
Greece adopted the euro in January 2001, becoming the 12th member of the euro
zone. In 2002 the ECB began issuing euro-denominated coins and banknotes, and
the currencies of countries within the euro zone ceased to be legal tender.
The ten members that joined the EU in
2004 have various timetables for adopting the euro, and adoption efforts have
met with strong opposition in a number of countries. Some new members, such as
Cyprus, Estonia, Lithuania, and Slovenia, announced that they would take
immediate steps to adopt the euro, opening them for membership in the single
currency as early as 2007. In order to adopt the euro, a new member must first
meet the EMU criteria. It must then demonstrate that its currency can remain
stable relative to the euro over a two-year period. Slovenia became the first of
these members to meet the EMU criteria and adopted the euro on January 1,
2007.
After some initial troubles, the euro
established itself as a viable currency in international money markets. Concern
now shifted to the enforcement of a common monetary policy, under strict
direction from the European Central Bank. Slowing growth and rising unemployment
across the euro zone after 2000, however, led to higher budget deficits, and the
European Commission soon had to warn Ireland and Germany to reduce their
budgetary expenditures to conform to limits required by the Stability and Growth
Pact. By 2002 there had emerged within the EU a broader concern about the
continued feasibility of the Stability and Growth Pact. Many more countries
seemed to be nearing, or in breach of, permissible budget deficits. At the same
time, efforts to enforce the pact’s deficit ceiling were seen as inhibiting
expenditures needed by national governments to promote social welfare and
economic recovery.
M | Growing Accountability |
The introduction of Economic and Monetary
Union led to unprecedented integration and cooperation among EU members. One
consequence was a growing concern among European citizens and some EU member
governments that the major EU institutions were not sufficiently democratic or
accountable. Much of this concern centered on the European Commission. As the
power of the EU grew, so did worries that the commission exercised too much
control with too little oversight. At the same time, there were also concerns
that the one democratically elected institution of the EU, the European
Parliament, had little real power.
This issue came to a head in 1999, when a
report prepared by independent auditors at the request of the European
Parliament cited multiple examples of mismanagement on the part of the European
Commission. The report accused several commissioners of corruption, cronyism,
and poor oversight over programs under their control. After the report was
released, the entire European Commission resigned, something that had never
happened before. Experts generally considered the report and its consequences to
be an important step by the European Parliament toward increasing the democratic
accountability of the EU governing bodies.
III | STRUCTURE OF THE EU |
A | Pillar System |
The members of the EU cooperate in three
distinct areas, often called pillars. At the heart of this system is the
European Community (EC) pillar with its supranational functions and its
governing institutions. The EC pillar is flanked by two pillars based on
intergovernmental cooperation: Common Foreign and Security Policy (CFSP) and
Justice and Home Affairs (JHA). These two pillars are a result of the Maastricht
agreement to develop closer cooperation in these areas. However, because the
members were unwilling to cede authority to new supranational institutions,
policy decisions in these pillars are made by unanimous cooperation between
members and cannot be enforced. For the most part, the governing institutions of
the EC pillar have little or no input in the other two.
The CFSP and JHA pillars are based
entirely on intergovernmental cooperation, and decisions must be made
unanimously. CFSP is a forum for foreign policy discussions, common
declarations, and common actions that work toward developing a security and
defense policy. It has successfully developed positions on a range of issues and
has established some common policy actions; however, the CFSP has failed to
agree on a common security and defense. Some countries, led by France, want an
integrated European military force, while others, especially the United Kingdom,
insist that United States involvement through the North Atlantic Treaty
Organization (NATO) is vital for European security.
This second argument was reinforced when
the EU failed to resolve the crisis in Yugoslavia that began in 1991. Between
1991 and 1992 four of Yugoslavia’s six republics declared independence,
resulting in a series of violent wars (see Yugoslav Succession, Wars of).
EU attempts to find a settlement for these conflicts were ineffective because
member states could not agree on how they should be involved, and they feared
being dragged into military intervention. The Yugoslav crisis underlined the
difficulties in achieving a common foreign policy for the EU. Effective
international intervention in Yugoslavia ultimately came only with U.S. and NATO
involvement, acting under the auspices of the United Nations.
As a result of lessons learned in
Yugoslavia, clauses were included in the Amsterdam Treaty for improving
cooperation on security and defense. Since the late 1990s the EU has developed
the Common European Security and Defense Policy as an interim step toward the
ultimate goal of a common defense policy. The EU has expressed its determination
to take on a greater international role and more responsibility for humanitarian
operations and peacekeeping activities. The EU also began to develop a
rapid-reaction military force to enable it to respond to crises quickly with
combat troops.
The EU has been more successful in JHA,
which formalized and extended earlier intergovernmental cooperation in combating
crime, especially drug trafficking, and in setting immigration and asylum
policies. Under the Amsterdam Treaty, some aspects of JHA were moved to the
supranational EC pillar. These related to asylum and visa issues, immigration
policy, and external border controls. The JHA pillar is now primarily concerned
with police cooperation and combating international crime.
Standing above the three pillars and in a
position to coordinate activities across all of them is the European Council.
The council is in strict legal terms not an EU institution. It is the meeting
place of the leaders of the national governments. Its decisions are almost
always unanimous but usually require intense bargaining. The council shapes the
integration process and has been responsible for almost all EU developments,
including the SEA and the Maastricht, Amsterdam, and Nice treaties. The European
Council has provided the EU with initiatives for further development, agendas in
various policy fields, and decisions that it expects the EU to accept. The
council’s actions illustrate one of the major dilemmas within the EU: how to
promote further unity and integration while permitting national governments to
retain as much influence as possible over decisions.
B | Major Bodies |
The European Community (EC) pillar
contains all the governing institutions of the EU. The major ones are the
European Commission, the Council of the European Union, the European Parliament,
the European Court of Justice, and the Court of Auditors. In addition, there are
many smaller bodies in the EC pillar, such as the Economic and Social Committee,
and the Committee of the Regions.
B1 | European Commission |
The European Commission is the highest
administrative body in the EU. Unlike the European Council, which oversees all
three pillars of the EU, the commission concentrates almost solely on the EC
pillar. It initiates, implements, and supervises policy. It is also responsible
for the general financial management of the EU and for ensuring that member
states adhere to EU decisions. The commission is meant to be the engine of
European integration, and it spearheaded preparations for the single market and
moves toward establishing the euro.
Commissioners are appointed by member
governments and are supported by a large administrative staff. Initially,
France, Germany, Italy, Spain, and the United Kingdom each appointed two
commissioners, while other member countries appointed one each. The Treaty of
Nice, signed in 2001, changed the structure of the commission so that by 2005
each member state could appoint only one commissioner.
However, when the EU reaches 27 member
states, the European Council is obligated to determine how large the commission
should be. The Treaty of Nice also altered the selection procedures for
commissioners, giving the European Council and the European Parliament a role in
the confirmation process.
B2 | Council of the European Union |
The Council of the European Union
(formerly called the Council of Ministers) represents the national governments.
It is the primary decision-making authority of the EU and is the most important
and powerful EU body. Although its name is similar to that of the European
Council, the Council of the European Union’s powers are essentially limited to
the EC pillar, whereas the European Council oversees all three pillars of EU
cooperation.
When the Council of the European Union
meets, one government minister from each member state is present. However, the
minister for each state is not the same for every meeting. Each member state
sends its government minister who is most familiar with the topic at hand. For
example, a council of defense ministers might discuss foreign policy, whereas a
council of agriculture ministers would meet to discuss crop prices.
The Council of the European Union
adopts proposals and issues instructions to the European Commission. The council
is expected to accomplish two goals that are not always compatible: further EU
integration on one hand and protection of the interests of the member states on
the other. This contradiction could become more difficult to reconcile as the EU
continues to expand.
Decision-making in the council is
complex. A few minor questions can be decided by a simple majority. Many issues,
however, require what is called qualified majority voting (QMV). In QMV each
country has an indivisible bloc of votes that is roughly proportional to its
population. It takes two-thirds of the total number of votes to make a qualified
majority. QMV was introduced in some policy areas to replace the need for a
unanimous vote. This has made the decision-making process faster and easier
because it prevents any one state from exercising a veto. Since the Single
European Act, QMV has been steadily extended to more areas. Many important
decisions, however, still require unanimous support.
B3 | European Parliament (EP) |
The European Parliament (EP) is made up
of 732 members who are directly elected by the citizens of the EU. Direct
elections to the EP were implemented in 1979. Before that time, members were
appointed by the legislatures of the member governments. The European Parliament
was originally designed merely as an advisory body; however, its right to
participate in some EU decisions was extended by the later treaties. It must be
consulted about matters relating to the EU budget, which it can reject; it can
remove the European Commission as a body through a vote of no confidence; and it
can veto the accession of potential member states.
The European Parliament’s influence is
essentially negative: It can block but rarely initiate legislation, its
consultative opinions can be ignored, and it has no power over the Council of
the European Union. Its effectiveness is limited by two structural problems: It
conducts its business in 20 official languages, with consequent huge translation
costs, and it is nomadic, using three sites in different countries for its
meetings. Unless changes are made, these weaknesses will likely intensify as the
union grows larger.
At the same time, there have been
frequent calls for expanding the powers of the European Parliament, which would
increase the democratic accountability of the EU. The weaknesses of the European
Parliament can be remedied, however, only by the national governments. To cope
with an increase in the number of member states due to EU enlargement, the
Treaty of Nice allowed for a limit to the size of the EP by providing for a
reallocation of seats among the members.
B4 | European Court of Justice (ECJ) |
The European Court of Justice (ECJ) is
the judicial arm of the EU. Each member country appoints one judge to the court.
The ECJ is responsible for the law that the EU establishes for itself and its
member states. It also ensures that other EU institutions and the member states
conform with the provisions of EU treaties and legislation. The court has no
direct links with national courts and no control over how they apply and
interpret national law, but it has established that EU law supersedes national
law.
The ECJ’s assertion that EU law takes
precedence over national law, and the fact that there is no appeal against it,
have given the ECJ a powerful role in the EU. This role has, on occasion, drawn
criticism from both national governments and national courts. The ECJ has
declared both for and against EU institutions and member states.
The ECJ’s historically high caseload
was eased in 1989 when the Court of First Instance was created. This court hears
certain categories of cases, including those brought by EU officials and cases
seeking damages. Rulings by the Court of First Instance may be appealed to the
ECJ, but only on points of law. Despite the establishment of this court, the
ECJ’s caseload has continued to rise. As a result, the Treaty of Nice introduced
further reforms to reduce the accumulated backlog of cases.
B5 | Court of Auditors |
The Court of Auditors is made up of 25
members, one from each EU member state. The court oversees the finances of the
EU and ensures that all financial transactions are carried out according to the
EU budget and laws. The court issues a yearly report to the Council of the
European Union and the European Parliament detailing its findings.
B6 | European Central Bank (ECB) |
The European Central Bank (ECB) began
operations in 1998. It is overseen by an executive board that is chosen by
agreement of EU member governments and includes the ECB president and vice
president. The ECB has exclusive authority for EU monetary policy, including
such things as setting interest rates and regulating the money supply. In
addition, the ECB played and continues to play a major role in overseeing the
inauguration and consolidation of the euro as the single EU currency. Its
authority over monetary policy and its independence from other EU institutions
make the ECB a powerful body. There are misgivings in some quarters that the ECB
is too independent, leading to a debate over whether it should be subject to
political direction.
B7 | Other Bodies |
Other important bodies in the EU
include the Economic and Social Committee and the Committee of the Regions. The
Economic and Social Committee is a 317-member advisory body drawn from national
interest groups of employers, trade unions, and other occupational groups. It
must be consulted by the European Commission and the Council of the European
Union on issues dealing with economic and social welfare. The Committee of the
Regions was formed in 1994 as a forum for representatives of regional and local
governments. It was intended to strengthen the democratic credentials of the EU,
but it has only a consultative and advisory role.
IV | IMPORTANT FEATURES AND POLICIES OF THE EU |
A major goal of the EU has been to establish
a single market in which the economies of all the EU member states are unified.
The EU has sought to meet this objective in three ways: by defining a common
commercial policy, by reducing economic differences among its richer and poorer
members, and by stabilizing the currencies of its members.
The 1957 Rome treaties obliged the EU to
adopt a Common Commercial Policy (CCP) and a Common Agricultural Policy (CAP).
By 1968 the EU had also created a customs union in which all tariffs and duties
among members were eliminated. Finally, members had defined uniform commercial
practices for trade with nonmember states. In the 1980s the Common Fisheries
Policy (CFP) was adopted to regulate fishing in EU waters.
The EU has attempted to address regional
economic differences through agencies such as the European Social Fund, the
European Regional Development Fund, the Cohesion Fund, and the European
Investment Bank (EIB). These agencies provide money through loans or grants to
promote development in the economically disadvantaged areas of the EU. However,
apart from activities of the EIB, this funding is limited by the size of the
EU’s overall budget, which is equivalent to about 1 percent of the gross
domestic product (GDP) of all the member states.
Finally, the EU attempted to stabilize the
currencies of its members with the European Monetary System (EMS). The EMS was
prompted not only by the desire for a single market, but also by international
economic problems and fluctuations in exchange rates. These problems also
convinced the EU of the importance of Economic and Monetary Union (EMU), in
which both the economies and the currencies of the members would be
unified.
A | Common Policies |
A1 | Common Agricultural Policy (CAP) |
The Common Agricultural Policy (CAP) was
established by the 1957 Rome treaty that created the European Economic
Community. The policy reflected a belief in the economic value of agriculture.
Memories of the economic hardships that followed the two world wars led the EEC
founders to believe that member states should be able to feed their populations
from their own resources.
The CAP was intended to stabilize
agricultural markets, improve productivity, and ensure a fair deal for both
farmers and consumers. It has three major elements: a single market for
agricultural products with a system of common prices to producers across the EU;
preference for EU producers through a common levy on all agricultural imports
from abroad; and shared financial responsibility for guaranteeing prices.
From the beginning, the common prices
set were based on political pressure from farmers and governments rather than
market considerations. This led to massive overproduction. Prices remained
artificially high, and all surpluses were bought by the EU and either stored,
destroyed, or sold at very low prices on international markets. The costs became
a huge burden. Even so, there were few internal critics, although the CAP
consumed two-thirds of the EU budget in the early 1980s. The CAP was, however,
unpopular overseas. Developing countries believed it hurt their own export
agriculture, while the United States and other major food producers attacked the
CAP’s protectionism, distortion of prices, and dumping of surplus produce on
world markets.
Despite complaints, EU member states
with strong farming interests were initially unwilling to accept the need for
reform. The CAP was almost the only major common policy possessed by the EU, and
consequently it was an important symbol of integration. Nonetheless, the EU did
agree to reforms to the CAP in 1984 and 1988. These agreements, which imposed
production quotas on some types of agriculture and reduced agricultural
spending, were driven by a combination of external pressure and estimates that
CAP costs would soon outstrip EU resources. A more radical revision was
finalized in 1992. This revision switched EU spending from supporting
artificially high agricultural prices to directly subsidizing farmers’ incomes.
This involved cutting guaranteed prices to farmers, and the effect was a
significant reduction in CAP costs and in the level of support given to farmers.
By 2001 CAP expenditure had been reduced to 46 percent of the EU budget.
Still, the CAP remained the largest item
in the EU budget and continued to provoke resentment among many EU citizens and
other world producers. The commitment to the CAP as a symbol of integration may
not guarantee its future, however, especially given the EU’s decision to accept
members from Eastern Europe. The economies of these countries are more
agricultural and less efficient than EU states. Without major reform, almost all
CAP expenditure would be redirected to these states, which would be politically
and economically impossible.
The European Commission attempted to
address the future of CAP funding in Agenda 2000, a document detailing a
strategy for enlargement. A wide-ranging reform program proposed by the
commission sought to reduce payments to larger farms and to scale back market
supports and export subsidies. But strong differences of opinion remained
between the member states.
In 2002 the commission’s reform plans
were largely abandoned, and a group of member states led by France effectively
deferred a more radical overhaul. Instead, limits were placed on how much
assistance new EU members could expect from the CAP, suggesting that for the
foreseeable future there would be a two-tier pattern of funding favoring the
older member states. Further limits were imposed in CAP reforms adopted in 2003
and 2004.
A2 | Common Fisheries Policy (CFP) |
The other major common policy is the
Common Fisheries Policy (CFP) of 1982. It imposed controls on access to fish
stocks and attempted to preserve the fisheries. The CFP set up a structure of
price and compensation systems modeled on the CAP. The policy successfully
limited overfishing in EU waters. However, national fishing industries have
objected to its system of fixing prices and allocating to each country strict
quotas on the amount of each fish species that can be caught. Controversy over
the CFP has been persistent, with frequent disputes between the EU and national
fishing industries and among member states.
B | Reducing Economic Differences |
Under the 1957 Rome treaty that created
the EEC, the signatories pledged to standardize policies regarding working
conditions, social insurance, and similar matters. However, little progress was
made until an increase in oil prices brought about the worldwide economic
depression of the 1970s. At that time, the European Regional Development Fund
was created and the moribund European Social Fund, which had originally been
established by the Rome treaty, was reactivated. In 1994 the EU established the
more comprehensive Cohesion Fund for reducing the economic gap between its
richest and poorest areas.
B1 | European Regional Development Fund and European Social Fund |
The European Regional Development Fund
is concerned with infrastructure developments proposed by member governments.
Since 1989 it has focused on regions with weak economies, severe industrial
decline, or problems of rural development. Each member country is eligible to
receive a percentage of the fund’s budget, determined roughly by its population
size and economic wealth. The fund normally covers only 50 percent of the
proposed costs; the remainder has to come from national sources. The European
Social Fund is organized in much the same way, but it focuses mainly on the
training and retraining of workers. Since 1988 it has concentrated more on
long-term and youth unemployment, especially in the economically disadvantaged
regions of the EU. All countries have benefited from the funds, but the vast
bulk of grants have gone to poorer areas.
B2 | Cohesion Fund |
Another instrument for reducing economic
differences between EU member states is the Cohesion Fund. The fund was
established to transfer money to the poorer EU states to assist them in meeting
the criteria for Economic and Monetary Union. As with the Regional Development
Fund and the Social Fund, the majority of grants from the Cohesion Fund have
gone to the poorer member states.
B3 | European Investment Bank (EIB) |
The European Investment Bank (EIB) was
established in 1957 under the Rome treaty that created the EEC. Its primary
objective is to fund projects that promote European integration. It focuses
mainly on industry, energy, and infrastructure. The member states contribute to
its finances, but it raises most of its funds on international markets. Some 8
percent of its budget goes to projects outside the EU. The bank only offers
loans, not grants, and its contribution must be matched by an equivalent outlay
from other sources. The EIB is an autonomous body able to make its own decisions
free of political direction, within the general legal framework of the EU. It
has been one of the most successful EU bodies. Since 1993 its annual lending
volume has exceeded that of the International Bank for Reconstruction and
Development (the World Bank).
C | Stabilizing Currencies: The European Monetary System (EMS) |
The European Monetary System (EMS) is the
exchange rate structure of the EU. It was established in 1979 to stabilize
exchange rates among members at a time when currencies were fluctuating
dramatically because of the economic recession of the 1970s. The promotion of
stable currencies, it was hoped, would provide the foundations for a future
monetary union and a single currency among member states.
The core of the EMS and the engine of
stabilization is the Exchange Rate Mechanism (ERM). This system was designed to
reduce the amount that the currencies of member states could fluctuate against
each other. By evening out exchange rate fluctuations and stabilizing
currencies, the ERM was intended to stimulate trade and investment among EU
members, and to help prevent inflation by linking weaker national currencies to
the strong and stable German national currency, the deutsche mark.
In addition to the ERM, the EMS
introduced the European Currency Unit (ECU), which was used for accounting and
for administrative purposes. The ECU was replaced by the euro when EMU went into
effect on January 1, 1999.
The EMS was highly successful in the
1980s. It helped promote a sense of collective responsibility and discipline
that contributed to a reduction of inflation and, after 1987, to a period of
exchange rate stability. Its success led to the further push in the Maastricht
Treaty toward full economic and monetary integration. However, once currency
realignments under the ERM had been largely completed, the EMS became more
rigid, and currencies were allowed to fluctuate against each other only by very
small amounts. This rigidity prevented countries experiencing economic
difficulties from simply adjusting their exchange rates as they might have done
otherwise.
Exchange rate rigidity, coupled with
differing economic and monetary conditions in the member states, made it
difficult for the EMS to hold stronger and weaker currencies together when
currency traders began to have doubts about the value of certain members’
currencies. Feeding such doubts were Germany’s reunification in 1990, which
generated huge costs, followed by difficulties in ratifying the Maastricht
Treaty. Waves of currency speculation in 1992 and 1993 forced several countries
to devalue their currencies, and the United Kingdom and Italy had to leave the
ERM. The EMS survived by increasing the amount that currencies could fluctuate
against one another, but the increase was so great that members’ currencies
could fluctuate almost at will. The EMS was held together only by the EU’s
political will to create monetary union and a single currency.
The role of the EMS has remained
essentially unchanged with the introduction of the euro. It regulates exchange
rates between the euro and those EU states that did not join the single
currency.
D | Economic and Monetary Union (EMU) |
Economic and Monetary Union (EMU) is a
step beyond a single market toward further integration. EMU requires an intense
degree of economic coordination among its members. Participating nations must
integrate their budgetary policies, establish common interest rates, and use a
single currency. It is a logical step forward from the European Community’s
customs union of 1968 and the decision in the 1987 Single European Act to move
to a single market.
EMU first appeared on the EC agenda in the
late 1960s, following the community’s economic success. At that time, concerns
were growing that the post-World War II fixed exchange rate system was beginning
to crumble. This system linked the major world currencies to the U.S. dollar,
which was tied to the price of gold. However, in the mid-1960s the dollar began
to weaken, and confidence in the system waned. What the EC wanted was a fixed
exchange rate system that was less susceptible to the influence of the dollar.
In 1969 EC leaders asked Pierre Werner, the premier of Luxembourg, to head a
committee to devise a new system for the EC. In 1970 they accepted Werner’s
recommendation for a movement to full EMU by 1980.
Poor economic conditions in the 1970s,
however, forced postponement of the Werner Plan. In 1971 the United States
uncoupled the U.S. dollar from gold, and subsequently, currencies that had been
tied to the dollar became floating currencies with no fixed exchange rates. Then
in 1973 oil prices quadrupled, producing a tumultuous economic climate in which
governments were faced with both rising inflation and rising unemployment. EMU
was more or less forgotten as the EC instead concentrated on trying to achieve a
more modest structure of currency stability. After some initial difficulties,
the result was the successful European Monetary System of 1979.
The seemingly positive effects of the EMS
and the 1987 decision to form a single market led to a resurrection of the
Werner Plan, with EMU to be implemented in three stages after 1990. In Madrid in
June 1989 the European Council set up an intergovernmental conference (IGC) to
flesh out the proposal. The IGC report was incorporated into the Maastricht
Treaty in 1991. It was accepted that the first stage of EMU, the elimination of
exchange controls and restrictions on the flow of capital, had already begun.
The second stage was set for 1994, when member states would begin to coordinate
their economies to reduce inflation and budget deficits. Full EMU, with the
inauguration of a single currency under the direction of an EU central bank,
would begin in 1999 at the latest. After pressure from Germany, which wanted the
single currency to be as strong as the deutsche mark, the EU decided that
countries entering the third stage would have to meet strict economic criteria
on the size of government deficit, interest rate levels, inflation, and currency
stability.
However, the currency speculation problems
in 1992 and 1993 that caused Italy and the United Kingdom to leave the ERM,
along with a general slide into economic recession, raised doubts about how many
countries would meet the EMU criteria. Many governments struggled to control
inflation and budget deficits through cuts in government spending and other
austerity measures, but their efforts often led to higher unemployment and
popular discontent. By 1998 many people within the EU believed that the
qualification criteria would have to be relaxed for EMU to occur. Despite these
worries, only Greece failed to meet the criteria. On January 1, 1999, the single
currency, the euro, went into use. Greece was permitted to adopt the euro two
years later, on January 1, 2001, after the Greek government succeeded in
lowering inflation and budget deficits.
The economic success of EMU depends on
whether the euro is accepted in the international markets as a stable and strong
currency and the extent to which it leads to a greater convergence of national
economies and greater mobility of production, goods, and services within the EU.
There is still debate over whether EMU has a sufficiently firm foundation for
these goals to be achieved. However, many EMU supporters find disagreements
about the economic costs and benefits less important than the conviction that
EMU, even if economically flawed, is an important step toward political
integration.
EMU therefore supports the views of Robert
Schuman and Jean Monnet that political union is best achieved through economic
union. It has also reinforced the central role of France and Germany in the EU.
The reunification of Germany reawakened French concerns of German dominance in
Europe and energized France’s desire to influence German economic policy. At the
same time, Germany wanted to allay fears of an ascendant militaristic German
nationalism. Much the same as in 1950, when the European Coal and Steel
Community was created, both governments believed that these political issues
could be resolved through economic integration. These concerns underpinned a
more widespread belief that long-term economic and political benefits outweighed
the initial costs of switching to a single currency.
V | RELATIONS WITH THE REST OF THE WORLD |
One of the major objectives of the European
Union is to speak with one voice and to have a unified policy position on world
issues. This has been easier to achieve in economics and trade than on political
problems. Bilateral and multilateral trade agreements have been signed between
the EU and most developing countries. Common political positions, however, have
been hindered by conflicts between national interests, despite close
collaboration among EU member states and the development of common foreign
policy statements.
Such collaboration has not always resulted
in common action. EU countries were divided over the 1991 Persian Gulf War, the
post-1991 crises in the former Yugoslavia, and future relations with Russia and
Eastern Europe. In each instance, differences arose between members over how and
to what extent the EU should become involved in foreign policy problems, and
what the results of any EU action would be for members’ economies and political
relationships.
A | EU Expansion |
By 1995 all the former Communist countries
of Eastern Europe had applied for EU membership. The countries of Eastern Europe
had less-developed economies than those of Western Europe, raising questions
about their ability to cope with the competitive pressures of the EU’s internal
market. In addition, the EU was concerned about the stability of democratic
institutions in these countries and their commitment to human rights and the
protection of minorities. Expansion would require a significant reevaluation of
EU programs—especially the CAP—and distribution of EU resources. The richer
member states worried that they would have to pay more into EU funds, while
poorer member states feared that their share of EU funding for agriculture and
regional development would be drastically reduced. Equally, it was argued that
enlargement without significant institutional reform would reduce the
effectiveness of the EU.
Despite these worries, trade between
Eastern and Western Europe substantially increased after 1990. Western nations
began to make commercial investments in Eastern Europe; at the same time, the EU
provided economic aid, formed joint ventures, and signed formal agreements of
political and cultural cooperation. In 1997 the EU agreed to open membership
talks with Cyprus, the Czech Republic, Estonia, Hungary, Poland, and Slovenia,
with EU membership coming sometime after 2000. Then, in 2000, the EU opened
accession negotiations with Bulgaria, Latvia, Lithuania, Malta, Romania, and
Slovakia. (At the same time the EU declined to pursue in detail the
long-standing application of membership from Turkey, noting concerns about the
country’s human rights record.) In May 2004 the EU formally admitted ten of
these European nations—all except Bulgaria and Romania—as member states.
Bulgaria and Romania became EU member states in 2007.
B | The EU and Non-European Nations |
Relations between the EU and the
non-European industrialized countries, especially the United States and Japan,
have been both rewarding and frustrating. The EU follows a protectionist policy,
especially with respect to agriculture, which on occasion has led the United
States in particular to adopt retaliatory measures. In general, however,
relations have been positive. The United States and Japan are the largest
markets outside Europe for EU products and are also the largest non-European
suppliers.
The EU has been less protectionist when
dealing with developing countries, which receive more than one-third of its
exports. By the mid-1990s all underdeveloped countries could export industrial
products to EU nations duty free; many agricultural products that competed
directly with those of the EU could also enter duty free. In addition, the EU
has reached special agreements with many countries in Africa, the Caribbean, and
the Pacific (the so-called ACP countries). In 1963 it signed a convention in
Yaoundé, Cameroon, offering commercial, technical, and financial cooperation to
18 African countries, mostly former French and Belgian colonies. In 1975 it
signed a convention in Lomé, Togo, with 46 ACP countries, granting them free
access to the EU for virtually all of their products, as well as providing
industrial and financial aid. The Lomé convention was renewed and extended to a
total of 58 countries in 1979; to 65 in 1984; and to 69 in 1989. In 2000 the
Lomé convention was superseded by the Cotonou Agreement, which provides a more
wide-ranging and longer-term basis for the EU’s relationship with ACP countries.
The EU has concluded similar agreements with all the Mediterranean states except
Libya, as well as other countries in Latin America and Asia.
VI | THE FUTURE OF THE EUROPEAN UNION |
The EU has come a long way since 1951. Its
membership has grown to include most of Western Europe and it is poised to
absorb much of Eastern Europe as well. It has developed a common body of law,
common policies and practices, and a great deal of cooperation among its
members. Its progress, however, has been uneven, with spurts of activity
separated by dormant periods. After vigorous activity in the 1960s, it was not
until the mid-1980s that the EU moved decisively to greater integration. In the
1990s concerns about the economic climate and evidence of popular disenchantment
with the EU led to a slowdown in innovation. Both the Amsterdam and Nice
treaties emphasized consolidation rather than addressing outstanding
issues.
This erratic progress is in part due to two
unresolved conflicts within the EU. The first is whether to give priority to
“deepening” or “widening,” that is, whether to concentrate upon integrating the
existing members further, or to welcome new members so that all can have an
input into the kind of Europe they want. The second is the conflict between
supranationalism and intergovernmentalism. Despite broad acceptance of the
supranational principle, national governments have been reluctant to cede
control over all policy areas to EU institutions. The development of three
distinct EU pillars reflects this reality: Member states have declined to yield
national control to supranational institutions over politically sensitive areas
such as foreign policy and judicial affairs.
One of the most immediate challenges facing
the EU is to secure the long-term success of the euro, an outcome that rests in
part upon how acceptable it proves to world financial institutions and markets.
Enlarging the EU by including Eastern Europe should, over time, improve economic
prospects by extending the single market and stimulating economic growth and
trade. The EU hopes that enlargement will raise the EU’s standing as the major
European voice in world affairs and contribute to security and stability
throughout Europe.
It has proven difficult, however, for the
EU and its member states to forge a united position on the future of EU finances
and structures after enlargement. Under existing criteria, the bulk of funds
dispersed under the CAP to support agriculture—by far the largest element of EU
spending—will have to be transferred to the new member states. This has alarmed
poorer member states accustomed to receiving these funds, while richer members
are reluctant to provide more CAP funding.
The budget issue and enlargement also
present problems for the structure of the EU. They raise questions about the
nature of the European Commission, how nations should be represented on the
commission, and the extent of the commission’s authority and responsibility. As
the power of the EU has grown, the organization has drawn criticism for being
undemocratic, since the European Parliament has no real powers or control over
decisions. Furthermore, the decision-making bodies, especially the commission,
are not subject to any democratic check.
Uncertainties about the future of the EU
are underlined by concerns among member states over the potential loss of their
ability to act independently. A reluctance to cede national authority has been
most pronounced in security policy. The EU failed to present a coherent front in
either the Persian Gulf War or the former Yugoslavia when required to move from
a common policy position to a common action. The desire of some countries to
build a common defense policy is resisted by others that insist that at best a
European defense force can only be supportive of and subordinated to NATO.
The EU’s decision to welcome 10 new member
states in 2004 raised many questions about integration. In June 2004 the EU
member states agreed to the final text of the first EU constitution, which was
primarily developed to streamline EU institutions and facilitate enlargement.
The final text was the result of more than two years of draft negotiations.
Built on the founding treaties of the EU, the constitution further defined the
roles and powers of EU institutions, such as the European Parliament.
Ratification of the constitution required approval by all 25 member states
(including the 10 new members), either by popular referendum or by parliamentary
vote, by November 2006.
In May 2005, however, voters in France and
Netherlands resoundingly rejected the proposed EU constitution, plunging the EU
into its worst political crisis in decades. Soon thereafter several EU member
states announced they would postpone their own votes on the constitution. At the
EU summit meeting in June, EU leaders abandoned their plan to ratify the
constitution by the November 2006 target date. EU president Jean-Claude Juncker
described the proposed constitution as “no longer tenable” and called for a
“period of reflection.” The summit also exposed deep rifts in the EU over
economic integration. Budget talks broke down after leaders failed to resolve a
bitter dispute that primarily involved Britain and France. Britain’s insistence
on a reform of the CAP, which sets farm subsidies, was strongly opposed by
France.
At the 2007 EU summit, however, the 27
member nations agreed on a treaty with governing rules for the organization that
would replace the defunct constitution. The treaty created the position of
president of the European Union and a stronger head of foreign policy to
represent the EU on the international stage. It also sought to ease EU
decision-making by requiring majority, rather than unanimous, approval of many
policy decisions. European leaders signed the treaty in Lisbon, Portugal, in
December 2007. Only Ireland planned to hold a popular vote on the treaty. Other
EU members sought parliamentary ratification.
The difficulties surrounding the
constitution raised further questions about what the EU is and what it wants to
achieve. For almost all its life span, European integration has resulted from
elite initiatives and agreements that did not involve national electorates. In
the 1990s, however, the picture changed because of the single market, demands
for more harmonization, and the Maastricht Treaty. Popular discontent with elite
decisions increased, indicating that electorates could no longer be taken for
granted. Almost all EU activity has focused on building the equivalent of a
state encompassing much of Europe. Yet little effort has focused on how to
create a European nation with a strong bond of identity across national borders,
making European citizens feel they have much, including a future, in common. The
effort to forge a European identity was expected to pose a major challenge in
the 21st century.
Despite these challenges, the EU is unlikely
to disappear. It has become a fact of life, with the countries enmeshed together
in a host of cooperative practices. The EU has had great success in developing a
culture of collaboration, and it occupies a place at the center of Europe. What
is at issue is not its survival, but its form as it leads Europe in the 21st
century.
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