Encyclopedia of the European Union, Updated Edition 9781626375635

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ENCYCLOPEDIA — OF THE ————–

EUROPEAN UNION ★

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International Advisory Board Roy H. Ginsberg

Skidmore College (United States)

Janne Haaland Matlary

University of Oslo (Norway)

Andrew Moravcsik

Harvard University (United States)

John Redmond

University of Birmingham (United Kingdom)

Glenda G. Rosenthal

Columbia University (United States)

Alberta Sbragia

University of Pittsburgh (United States)

Paul J.J. Welfens

Potsdam University (Germany)

Updated Edition

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★ ★ ENCYCLOPEDIA — OF THE —————–

EUROPEAN UNION ★ ★ ★ ★ b o u l d e r l o n d o n

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edited by Desmond Dinan

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Published in the United States of America in 2000 by Lynne Rienner Publishers, Inc. 1800 30th Street, Boulder, Colorado 80301 www.rienner.com

and in the United Kingdom by Lynne Rienner Publishers, Inc. Gray’s Inn House, 127 Clerkenwell Road, London EC1 5DB

© 1998 and 2000 by Lynne Rienner Publishers, Inc. All rights reserved

Library of Congress Cataloging-in-Publication Data Encyclopedia of the European Union / edited by Desmond Dinan.—Updated ed. p. cm. Includes bibliographical references and index. ISBN 1-55587-904-7 (hardcover : alk. paper) — ISBN 1-55587-926-8 (pbk. : alk. paper) 1. European Union—Encyclopedias. I. Dinan, Desmond, 1957– .

JN30 .E52 2000 341.242'2'03—dc21

Printed and bound in the United States of America

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99-086544

The paper used in this publication meets the requirements of the American National Standard for Permanence of Paper for Printed Library Materials Z39.48-1984. 5

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CONTENTS Preface Map of the European Union

Encyclopedia

vii ix 1

List of Abbreviations and Acronyms

499

Appendix 1

Overview of Institutional Change, 1958–2000

517

Appendix 3

Member States in International Security Organizations

Chronology Appendix 2 Appendix 4 Appendix 5 Appendix 6 Appendix 7 Appendix 8 Appendix 9

Appendix 10 Appendix 11

Appendix 12

National Representation in EU Institutions as of 2000

Evolution of Commission Directorates-General, 1958–1999 Chronology of EP Party Groups’ Development European Parliament Directorates-General

Rota of the Presidency of the Council of the European Union Summits of the Heads of State and Government, 1961–1999 Directorates-General of the Council of the European Union Special Committees of the Council of the European Union

Renumbered Articles, Titles, and Sections of the Treaty on the European Union

Renumbered Articles, Titles, and Sections of the Treaty Establishing the European Community

505 518 519 520 522 522 523 524 528 528

529

530

List of Tables Included in the Entries

533

The Contributors Index

535 539

v

PREFACE

This book originated in a discussion with Peter Doyle, press and information officer at the EU delegation in Washington, D.C., and Lynne Rienner in April 1994. We agreed that an authoritative and comprehensive reference work on the EU would be invaluable for scholars, students, practitioners, and lay readers alike. Peter and Lynne were enthusiastic about the project; my enthusiasm was tempered only by fear of the amount of work involved, a fear that was fully justified. Fortunately Peter and his successor at the delegation, Søren Søndergaard, were extremely supportive. Thanks to them I received a generous grant from the delegation to help cover research and administrative costs. Having hatched the idea with Peter and Lynne, I set out to form an advisory board of highly respected academics from Europe and the United States and from a variety of relevant disciplines. Although the board met formally only once, at the European Community Studies Association’s conference in Charleston, South Carolina, in May 1995, at other times we were a virtual committee, communicating by e-mail and having bilaterals on the margins of other meetings, just as EU ministers and officials do. With the board’s help I drew up a list of approximately one hundred key items that warranted entries by leading experts and a much longer list of items on which my research assistants and I at George Mason University would write. This procedure accounts for the distinction between signed and unsigned entries. Inevitably, some readers will question the selection of entries and the decision as to authorship. Although a different committee might have come up with a dif-

ferent list, I trust that the encyclopedia as a whole covers the vast subject matter extensively and thoroughly. It provides in-depth, authoritative discussions of the concepts, issues, developments, institutions, policies, events, negotiations, treaties, national interests, and personalities related to European integration. After the contributors submitted their entries, I spent many months thereafter editing them, keeping them up-to-date (I took the liberty of doing this for signed as well as unsigned entries), revising the copyedited manuscript, and finally correcting the proofs. These tasks were complicated by the EU’s refusal to stand still on my account (the Amsterdam Treaty springs to mind; although treaty articles were renumbered following implementation of the Amsterdam Treaty, the original article numbers—many of which continue to be used informally even after the new numbers were introduced—are used in the encyclopedia) and by my move to the Netherlands in the summer of 1997 with not only our two Euro-kids from a previous stint in Brussels, but also our brand-new, all-American infant. Obviously my wife, Wendy Moore, deserves special thanks. *

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Publication of this updated edition has given me an opportunity to revise the data in the tables and appendixes, ranging from the composition of party groups in the newly elected European Parliament to the membership of Romano Prodi’s Commission. In one of the most significant developments for the EU since publication of the original encyclopedia, Prodi is undertaking major internal reforms and redefining the Commission’s

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Preface

role in the EU’s political system. I analyze this development in a revised entry on the Commission. Despite the EU’s continuing changes in other institutional and policy areas, I am confident that the original entries remain a valuable source of information and intelligence on contemporary European integration for students, scholars, and nonspecialist readers. *

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A word about access to the information in the encyclopedia: As is usual, entries are arranged alphabetically. Care has been taken to provide “blind entries” to cover variations (e.g., alternate spellings or acronyms) of a word or phrase for which the user might be searching. Most entries also include extensive cross-references to other entries, as well as to the appendixes and tables. Bibliographic references point to sources for further research. And the comprehensive index offers access to the information at the most detailed level. Many thanks to all the contributors to the encyclopedia for their careful work. Thanks also to Dale Houser and Kristin Gaschen, my assistants at George Mason; to Libby Barstow, my copyeditor;

to Shena Redmond, my main contact at Lynne Rienner Publishers; to Lynne Rienner herself; and to Jonathan Davidson and Søren Søndergaard at the EU delegation. Some of the contributors would like to make disclaimers or acknowledgments. Jonathan Faull, a director in the Commission’s Directorate-General for Competition, wishes to state that all views expressed in his contribution are personal; he also wishes to thank V. Moussis for his help. Alan Forrest wishes to state that the opinions expressed in his entries on culture and audiovisual policy are personal and do not commit the Council of the European Union, for which he works. Joaquim Muns wishes to thank Montserrat Millet, lecturer at the University of Barcelona, for her invaluable help in the preparation of his entry on Spain. Finally, the entry on the European Council, by Philip Myers and Wolfgang Wessels, is an updated and revised version of Wolfgang Wessels, “Europäischer Rat,” in Werner Weidenfeld and Wolfgang Wessels, eds., Europa von A–Z: Taschenbuch der europäischen Integration (Bonn: Institut für Europäische Politik and Europa Union Verlag, 1995), pp. 183– 187. Desmond Dinan

Greenland (Denmark)

Jan Mayen (Norway)

Greenland Sea

White Sea

Iceland

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Norway

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Finland

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Faroe Islands (Denmark)

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Russia

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Estonia

North

Ocean

Ireland

Irish Sea

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Bay of Biscay

Denmark

Neth.

U.K.

English Channel

Portugal

Sweden

Baltic Sea

France

Liech.

Austria

Hungary

Croatia

Bos.& Herz.

Slovenia Ad

Italy

Spain

r ia

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Tyrrehenian Sea

Mediterranean Sea

Malta

The European Union, 2000

Russ

Belarus

Ukraine

Czech Rep. Slovakia

Lux. Switz.

Lithuania

Poland

Germany

Belgium

Latvia

Se a

Moldova Romania

Serbia

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Alb. Ionian Sea

Greece

Bulgaria

Aegean Sea

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Turkey

A Accession is the culmination of the process by which countries join the EU. Being European has always been a requirement of membership. The European Council elaborated upon the criteria for aspiring member states at its meeting in Copenhagen in June 1993: (1) stability of institutions guaranteeing democracy, the rule of law, human rights, and respect for and protection of minorities; (2) existence of a functioning market economy; (3) capacity to cope with competitive pressures and market forces within the EU; and (4) ability to take on the obligations of membership, including adherence to the aims of political, economic, and monetary union. The last condition implies full acceptance of the acquis communautaire, including participation in all three of the pillars established by the Treaty on European Union. In addition, the European Council stipulated that “the Union’s capacity to absorb new members, while maintaining the momentum of European integration, is also an important consideration in the general interest of both the Union and the candidate countries.” The process of accession begins when a country submits a membership application to the Council presidency. If it agrees that the application has merit, the Council asks the Commission for an opinion, a thorough assessment of the likely political and economic implications (for the applicant and for the EU) of the applicant’s membership. The Council may accept or reject the Commission’s opinion. If the Council decides to proceed, the next step involves complicated negotiations between the member states and the applicant country, which also involve negotiations between the member

Accession

states themselves over the terms of accession. The Commission acts as a broker in both sets of negotiations while always promoting what it considers to be the EU’s best interests. If the accession negotiations end successfully—if the applicant and the Council (acting unanimously) accept the outcome of the negotiations—then the Council president, the Commission president, and a representative of the applicant country sign an accession treaty. This is not the end of the accession process, however, because the treaty must be ratified by the applicant country or countries, by the member states, and (since the Single European Act) by the European Parliament. Only when all parties have ratified the treaty may the applicant country join the EU. There is no timetable for accession: the period between application and membership has ranged from three to ten years. Much depends on the applicant’s political, economic, and administrative preparedness for membership; on the likely impact of membership on the EU’s policies and institutions; and on the general political and economic climate. See also ENLARGEMENT. An accession treaty is a formal agreement signed by the Council president, the Commission president, and a representative of the country that has negotiated EU membership, specifying the terms under which the applicant country will become a member. These terms include the applicant’s institutional representation in the EU (i.e., number of votes in the Council, number of commissioners, or number of members of the European Parliament); derogations (i.e., exemptions, if any, from EU policies); and other special considerations. Accession treaties must be ratified by the applicant country, by the member states, and (since the Single European Act) by the European Parliament. See also ENLARGEMENT.

Accession Treaty

Accountability in the EU refers to problems of political and financial control. Politically, the EU’s institutions seem remote from the EU’s citizens and largely unaccountable to them. In fact, the Council of Ministers consists of elected government ministers, and members of the European

Accountability

1

2

Acheson, Dean (1893–1971)

Parliament (EP) are directly elected every five years. But the Council is generally secretive about decisionmaking, which, because of greater use of qualified majority voting, is subject to less national parliamentary control than when unanimity was the norm. Although the EP acquired greater legislative authority as a result of the Single European Act, the Treaty on European Union (TEU), and the Amsterdam Treaty, it still lacks sufficient power and credibility to assuage popular concerns about political accountability (or the lack thereof) in the EU. Commissioners are not elected and are not directly accountable to the EU’s citizens. Nevertheless, the EP has made significant headway in its efforts to strengthen the Commission’s accountability by winning a say over the appointment of commissioners. Under the terms of the TEU, the EP has the right to give its opinion on the prospective Commission president and to vote on the composition of the Commission as a whole. The EP extended the latter right unilaterally in January 1995 by instituting a series of confirmation hearings for all members of the Commission. In future, the EP would like to be able to choose the president of the Commission from a number of candidates proposed by the European Council. Despite these efforts, a popular perception of the poor accountability of EU institutions and of a democratic deficit undermines the EU’s legitimacy. Poor financial accountability in the EU is related to the political problems of credibility and legitimacy because it undermines public confidence in the EU and its institutions. For that reason, but also because of the budgetary implications of inadequate financial control, since the early 1990s the Commission and the Court of Auditors have become much more aggressive and successful in identifying and combating waste, fraud, and mismanagement. See also COURT OF AUDITORS; DEMOCRATIC DEFICIT; LEGITIMACY. The title of Dean Acheson’s autobiography, Present at the Creation, refers not only to the U.S. secretary of state’s key role in the inception of NATO but also to his participation in the launching of the European Coal and Steel Community. Acheson arrived in Paris on May 7, 1950, when Jean Monnet

Acheson, Dean (1893–1971)

and Robert Schuman were preparing their radical proposal to pool French and German production of coal and steel. Taking advantage of the secretary of state’s unexpected appearance, Monnet and Schuman quickly took him into their confidence. Grasping the importance of the proposal, Acheson endorsed the Schuman Plan and drafted a statement of support for President Truman to release once the plan became public on May 9. In view of U.S. influence on European affairs in the immediate postwar years, Acheson would have received advance notice in any case of the Schuman Plan. But his presence in Paris just as the plan was being formulated ensured its favorable reception in Washington. Moreover, Acheson’s enthusiastic response was due in large measure to his close friendship with Monnet, whom he had first met in Washington before World War II. Within a month of the famous May 9 declaration, Acheson set up a special Working Group on the Schuman Proposal in the U.S. Embassy in Paris, staffed by young officers who fully supported the goal of European integration. See also SCHUMAN, ROBERT. The French term acquis communautaire refers to the rights and obligations deriving from EU treaties, laws, and regulations. Applicant countries must be prepared to accept the acquis communautaire as it exists at the time of accession, although the impact of greater flexibility and differentiated integration on the acquis communautaire—for existing and prospective member states—is uncertain. See also DIFFERENTIATED INTEGRATION.

Acquis Communautaire

Derived from the term acquis communautaire, acquis politique refers to the rights and obligations of EU member states that arise from the Common Foreign and Security Policy (CFSP) and, before that, from European Political Cooperation (EPC), the member states’ foreign policy coordinating mechanism. Because EPC was flimsy, and the CFSP is weak, the acquis politique is still at an early stage of development. See also COMMON FOREIGN AND SECURITY POLICY.

Acquis Politique

Action Committee for the United States of Europe (ACUSE)

Action Committee for the United States of Europe (ACUSE)

The Action Committee for the United States of Europe (ACUSE) was established in 1955 by Jean Monnet and went out of existence at his suggestion in 1975. In suggesting the committee, Monnet was motivated by the defeat, the previous August, of the proposed European Defense Community (EDC) in the French National Assembly. Monnet was convinced that the movement toward European integration needed restarting and that personally he needed to play a role different from that of president of the High Authority of the European Coal and Steel Community (ECSC), a position that he had occupied since the ECSC’s establishment in 1952. The birth of ACUSE in October 1955 followed more than a year of uncertainty over how the movement toward European integration should be relaunched. Monnet had announced to his High Authority staff in Luxembourg in November 1954 that he planned not to seek a renewal of his mandate, which would expire early in 1955. He was advised, however, that he could not leave his post until a successor was named. Meanwhile, Monnet worked with Belgian foreign minister Paul-Henri Spaak during the winter of 1954–1955 to devise a new approach to European integration. By the time a plan was developed for an atomic energy community and a common market in late spring, Monnet apparently entertained doubts about resigning the High Authority post. But by then the six member states of the ECSC (France, Germany, Italy, Belgium, the Netherlands, and Luxembourg) had agreed on Monnet’s successor. Plans for the Action Committee moved ahead accordingly. The concept behind the committee as developed by Monnet was unusual. It was to be a pressure group or a lobby, in U.S. terms, with Monnet at its center. In retrospect, such a committee was inconceivable without Monnet, but at the time it was more than a one-man show. ACUSE was an expanded personal network but distinctive because its members, although always well-known European personalities, represented their organizations, not themselves. The organizations involved included most political parties and most labor unions in the ECSC’s six member states. These organizations also paid most of ACUSE’s

3

expenses, supplemented by personal contributions from Monnet and by a few research grants. (The principal nonmembers were the Gaullists in France, the “Nenni” Socialists in Italy, and the communist parties and unions in all countries.) No trade, business, or industrial groups were represented, however. In developing this system, Monnet worked assiduously to convince the leadership of the democratic political parties and labor unions that joining the Action Committee was a vital step in reversing the nationalism that had defeated the EDC. This was a formidable task, especially in initial dealings with the socialist parties, many of which had been divided on the issue of entrance of their respective countries into the ECSC. When this commitment was achieved—the support of the German Social Democratic Party was a key victory—Monnet sought the best representation within each organization to sit on the committee. ACUSE met eighteen times in its two decades of existence, although these formal sessions were supplemented by innumerable phone calls and individual consultations with committee members by Monnet and two of his most trusted colleagues— Max Kohnstamm, his vice president, and Jacques Van Helmont, the secretary general. For these three, ACUSE was more than full-time work; it was their collective life and their consuming passion. For Monnet, who was sixty-seven when ACUSE was founded and nearly eighty-five when it held its last session, the organization represented his final, extended act of devotion to a united Europe. The eighteen meetings were themselves somewhat unevenly distributed. There were three sessions in 1956 and in 1969, two in 1959, and either one session or no session in the other years. Regardless of the formal meetings, the Action Committee was always as busy as Monnet’s personal network. The headquarters of the Action Committee could accurately be said to be wherever Monnet found himself. He used the flat of his brother-inlaw, Alexandre de Bondini, at Avenue Foch in Paris’s 16th arrondisement, both as the mailing address of ACUSE and as the site of its small staff. Monnet never cared for elaborate or luxurious office accommodations, and Avenue Foch, as the committee’s headquarters came to be known, fit this pattern. In the early years, spare bathrooms served as offices; the staff and visitors encoun-

4

Action Group on Market Access

tered unusually close quarters, sometimes bordering on chaos. Gradually, the Action Committee took over the entire apartment, which remained a crowded warren of small rooms and overflowing file boxes and cabinets. Several historical phases of the Action Committee are evident. In the early years, from 1956 through 1957, the emphasis was on implementing the Messina resolutions of the six foreign ministers on relaunching the Community. The Rome treaties of 1957 embodied this relaunch with the creation of the European Economic Community and the European Atomic Energy Community (EURATOM). Simultaneously, the Action Committee lobbied for the accession of the United Kingdom. From 1959 until about 1963, when ACUSE was most active and most successful, the emphasis was on monetary policy, especially support of the liberalization of capital markets and economic and monetary union. From 1963 until 1969, the strength of Gaullism in France forced the Action Committee into a defensive mode in order to preserve earlier gains and to maintain solidarity among the five partner countries and those elements within France that still supported the Community effort. With the easing of tensions within the Community after de Gaulle’s departure, the Action Committee resumed its support for British membership, which was agreed to in 1971 and finally effected in 1973. Monnet also directed the committee to some institutional opportunities that now appeared. In the early 1970s, several summit meetings of Community leaders focused on relaunching the stalled integration movement. ACUSE paid close attention to these developments, especially their institutional aspects, which included direct elections to the European Parliament and regular summit meetings. Monnet wrote a note in 1973 supporting a Provisional European Government consisting of the heads of government of member states. A 1974 summit indirectly endorsed the Monnet plan by agreeing to hold such meetings regularly, thereby launching the European Council. With this final burst of energy, Monnet called for an end to the work of the Action Committee. Some aspects of the Actions Committee’s work merit further comment. The reason for the exclusion of business and industry groups, for example, is not immediately evident, but Monnet

was convinced (perhaps from his extensive dealings with businessmen in two world wars and in postwar France) that businessmen usually offer overly narrow views of the interests of their country and of the continent. On the other hand, he believed that political parties and unions had to see the larger picture in representing their members. But even in dealing with mass-membership groups like political parties and unions, Monnet preferred to work with small cliques: he would never shun the sobriquet “elitist.” He was no public speaker and did not write well, although he was a rigorous and exacting editor. He thus felt most comfortable in working with a small group of close collaborators to develop a written consensus of the ACUSE’s positions. These were expressed in resolutions that Monnet steered through the Action Committee, usually unanimously, using his ample powers of persuasion. Monnet’s strong personality kept him always close to the center of this consultative process, no matter with which of ACUSE’s 130 different members he dealt, over a twenty-year period. The Action Committee was, in the fullest sense, an institutional expression of a single individual. In 1985 some veterans of ACUSE came together to form an Action Committee for Europe under secretary-general Max Kohnstamm. Without Monnet, all agreed, it was a different organization, with a more modest title, and a less ambitious mandate. See also MONNET, JEAN. Brinkley, Douglas, and Clifford Hackett, eds. 1991. Jean Monnet: The Path to European Unity. New York: St. Martin’s. Duchêne, François. 1994. Jean Monnet: The First Statesman of Interdependence. New York: Norton.

Bibliography

—Clifford Hackett

As part of an effort to promote EU exports, in 1996 the Commission developed a European Market Access Strategy for trade and investment and set up an “action group” to field enquiries from businesses regarding trade policy questions. The

Action Group on Market Access

group seeks to improve EU exporters’ access to other markets and to sharpen EU trade policy. See CONSTRUCTIVE ABSTENTION.

Active Abstention

See ACTION COMMITTEE OF EUROPE.

ACUSE

FOR THE

UNITED STATES

Additionality is a rule that EU funds for regional development must be allocated in addition to, not instead of, member state funds. The Commission carefully monitors member state compliance with additionality rules in the disbursement of structural funds. See also COHESION POLICY.

Additionality

Konrad Adenauer, first chancellor (1949–1963) of the Federal Republic of Germany (FRG), was one of the founders of the EC. Adenauer dominated the period of reconciliation with Germany’s western adversaries of World War II, orchestrated the entry of West Germany into the West European system of states, and with Alcide de Gasperi of Italy and Robert Schuman of France helped shape the early phase of European integration along Christian Democratic lines. Adenauer was born in Cologne, where his father was a secretary in the law courts and his mother’s family was politically influential. The product of a Roman Catholic and strongly conservative environment, he studied law at the universities of Freiburg, Munich, and Bonn before entering the Cologne state prosecutor’s office (1901). At the same time he became involved in local politics, as a member of the Roman Catholic Center Party, and was elected to the City Council (1906). His outstanding work as head of the city’s wartime food department led to his election as lord mayor (1917), a post he held until the Nazis came to power in 1933. He also served simultaneously in the Prussian state parliament and was informally considered for the chancellorship of Germany several times during the 1920s. During the tidal wave

Adenauer, Konrad (1876–1967)

Adenauer, Konrad (1876–1967)

5

of revolution that swept Germany during 1918 and 1919, he was one of only two big city mayors to retain office. As mayor he oversaw the reestablishment of the University of Cologne, the creation of a magnificent park system, and large-scale industrial development. In the increasingly volatile political climate of Weimar Germany, Adenauer advocated a political union of Catholics and Protestants across the traditional sectarian party divide to combat what he saw as socialist class struggle on the extremes of German politics. As an opponent of the Nazis, he was not forgiven when they came to power in 1933 for his action of forbidding the flying of Nazi flags from Cologne’s civic buildings when Hitler made a triumphal entrance to address a party rally. As a result Adenauer was dismissed and briefly imprisoned by the Gestapo. There followed years of arrests, escapes, imprisonments, and exile. He was never flagrant enough in his opposition to be executed, but he came close; at one point he was scheduled to be transported to the infamous death camp of Buchenwald. As the war drew to a close, the Americans asked him to resume the governance of Cologne, a city that lay in ruins. Adenauer got on less well with the British, who replaced the Americans as the occupying power in that part of Germany. The British dismissed him in October 1945, ostensibly for refusing to allow the felling of trees for firewood in the Green Belt that he had created around Cologne in his first term as mayor. He went on to help organize a new political party, the Christian Democratic Union (CDU), a center-right grouping encompassing both Catholics and Protestants. As the Cold War evolved, the Western occupying powers merged their zones and called for elections in 1949. Adenauer was chosen as chairman of the council that drafted the Basic Law (constitution) of the FRG and went on in the elections to lead the CDU to a narrow victory. He subsequently won three more general elections (1953, 1957, and 1961). At the age of seventy-three, Adenauer thus became the first chancellor of the newly established Federal Republic of Germany, an office he would hold for fourteen years, the longest incumbency since Bismarck’s and until that of Helmut Kohl. His age was an advantage, representing a pre-Hitler democratic tradition, and he came to be nicknamed Der Alte (“the old one”).

6

Ad-hoc Committee on a People’s Europe

Adenauer left much of domestic economic policymaking to his finance minister, Ludwig Erhard, who helped produce the West German economic miracle. Adenauer concentrated on the restoration of Germany’s international standing. To accomplish this, Adenauer simultaneously pursued the establishment of a close working relationship with the United States, Franco-German cooperation, West European integration, and the general rehabilitation of Germany’s international standing. As part of the latter he concluded the Luxembourg agreement for reparation to Israel (1952). The Allies wanted West Germany firmly aligned with the West and supported Adenauer in a way reminiscent of their support for Gustav Stresseman in the 1920s. Adenauer’s greatest difficulty came over the rearming of Germany. NATO had been established in 1949, and in the wake of the Korean War the United States wanted West European countries to play a greater role in their own defense. German rearmament was a possible solution. French concerns over German rearmament were met by admitting Germany to the European Defense Community (EDC), where German forces would serve under Allied command. Simultaneously, in May 1952 the Western Allies concluded a treaty ending the occupation. However, such ideas so soon after the war outstripped French popular opinion, and the French National Assembly rejected the treaty in August 1954, causing the EDC’s collapse. But the United States and Britain were determined to have Germany play a role in the defense of Europe and helped to sway France. Under the terms of the Paris treaties (October 1954), Germany was granted full sovereignty and admitted into NATO on May 5, 1955. Following a plebiscite two years later, the Saarland was returned to Germany from French occupation. Adenauer saw that the key to reestablishing Germany’s position and West European stability lay in Franco-German cooperation, and he worked assiduously for this. He worked closely with the French foreign minister, Robert Schuman, and Schuman’s assistant, Jean Monnet, on the creation of the European Coal and Steel Community, as well as with its successor, the European Economic Community. Adenauer developed a good relationship with Charles de Gaulle after he returned to power in France (1958), and Franco-German cooperation became the cornerstone for the creation of a new Europe. This revolution in West European diplo-

macy was sealed in the 1963 Treaty of Friendship and Reconciliation (the Elysée treaty), which symbolically marked the end of Adenauer’s tenure of office. Adenauer saw the postwar world as one divided between the democratic and capitalist West and the authoritarian and communist East. Although eighteen million Germans remained under Soviet control in East Germany, he rejected any compromise with the Soviet bloc and any suggestions for the subservience of West Germany, even at the cost of German unification. Adenauer staunchly supported the containment policy of the United States, in which West Germany was a frontline state, and U.S. secretary of state John Foster Dulles’s “policy of strength” against the Soviet bloc. The division of Germany was ultimately symbolized by the erection of the Berlin Wall in 1961. Adenauer resigned in 1963, in part over the Spiegel affair, in which it appeared that he had countenanced attempts by his defense minister to interfere with the civil rights of that magazine’s editor. Although increasingly authoritarian in his last years in office, Adenauer remained a firm democrat. Indeed, one of his greatest legacies was the creation of a stable and resilient democratic Germany. See also DE GAULLE, CHARLES; GERMANY. Adenauer, Konrad. 1966. Memoirs. Chicago: Regnery. Schwarz, Hans-Peter. 1995. Konrad Adenauer: A German Politician and Statesman in a Period of War, Revolution, and Reconstruction. Providence, RI: Berghahn Books.

Bibliography

—Erik Goldstein

Ad-hoc Committee on a People’s Europe See ADONNINO COMMITTEE.

Ad-hoc Committee on Institutional Affairs See DOOGE COMMITTEE.

The Ad-hoc Group on Immigration of EU member state representatives discussed asylum and immi-

Ad-hoc Group on Immigration

gration before the Treaty on European Union (TEU) formally included such issues under Pillar Three (Justice and Home Affairs) of the EU. Under the TEU, the Committee of Permanent Representatives was given official responsibility for the group’s work. At the end of the European Council in Fontainebleau in June 1994, French president François Mitterrand urged the establishment of two ad hoc committees to prepare reports on prospects for deeper European integration: one to consider aspects of European integration having an obvious impact on the everyday lives of the member states’ citizens (such as education, training, and travel); the other to undertake the much more important task of recommending political, economic, and institutional reform in the EC. In the fall of 1984, two such committees, made up of personal representatives of the heads of state and government and their foreign ministers, were established: the Ad-hoc Committee on a People’s Europe and the Ad-hoc Committee on Institutional Affairs. The former became known as the Adonnino Committee, after its chairman, Pietro Adonnino. It produced a report entitled Citizen’s Europe, with recommendations to simplify border controls, raise travelers’ allowances, lift the tax exemption limit on small postal consignments, grant mutual recognition of diplomas and examinations, and allow citizens of one member state to reside and work in another member state. The Adonnino Committee’s work and report were overshadowed by those of the Ad-hoc Committee on Institutional Affairs (known as the Dooge Committee), which had a much greater impact on the development of European integration in the mid-1980s.

Adonnino Committee

Advanced Communications Technologies for Europe (RACE)

Concerned about Europe’s declining competitiveness in the rapidly changing field of information technology, the Commission and a number of leading European firms collaborated to develop the RACE program for research and development in advanced communications technologies, which the Council of Ministers approved in 1987. The first RACE program (1988–1992), which was largely exploratory, was part of the EC’s second framework program for research and develop-

Airbus

7

ment; the second RACE program, which helped member states introduce Integrated Broadband Communication (IBC) services in 1995, was adopted under the third framework program. See ASSEMBLY OF EUROPEAN REGIONS.

AER

African, Caribbean, and Pacific (ACP) Countries

The EU has a generous but faltering trade and aid assistance program, called the Lomé convention, with over seventy African, Caribbean, and Pacific (ACP) countries, all former colonies of EU member states. See also LOMÉ CONVENTION. On July 16, 1997, a month after agreement on the Amsterdam Treaty, the Commission issued Agenda 2000, a detailed strategy for deepening and enlarging the EU, including opinions on the membership applications of the ten Central and Eastern European states. See also CENTRAL AND EASTERN EUROPEAN STATES; COHESION POLICY; COMMISSION; COMMON AGRICULTURAL POLICY; ENLARGEMENT.

Agenda 2000

Airbus began in 1967 as a consortium of European aircraft manufacturers to produce large passenger planes in competition with U.S. manufacturers, notably Boeing. Airbus is a Groupement d’Intérêt Economique, a French legal construct meaning that it makes no profits or losses in its own right. These accrue to the four partners: British Aerospace, Construcciones Aeronauticas S.A. (CASA) of Spain, Daimler-Benz Aerospace (DASA) of Germany, and Aérospatiale of France. Each partner produces parts of the aircraft, which is assembled by Aérospatiale in Toulouse, in southern France. Airbus put its first airliner on the market in the 1970s; by the mid-1990s Airbus had 40 percent of the global market for large passenger planes; by the year 2000 it is expected to have 50 percent of the market. On average, Airbus planes cost more than similar planes but save

Airbus

8

À La Carte

money in the long run with greater fuel efficiency and low maintenance costs. The enormous start-up costs needed to get Airbus off the ground resulted in massive government subsidization, which prompted bitter U.S. complaints against the EC and provoked a major U.S.-EC trade dispute in the mid-1980s. After years of mutual accusations, negotiations, and litigation, the United States and the EC finally concluded a bilateral agreement on civil aircraft in July 1992, which prohibited production subsidies, capped direct government support for development of new aircraft, and increased transparency of government activity in civil aircraft. The four partners agreed in 1996 that the Airbus consortium needed to become more efficient and profit-oriented and decided to turn Airbus into a limited company in 1999. Following Boeing’s takeover of McDonnell Douglas, creating the world’s largest aerospace and defense company, Airbus became the only other manufacturer of large passenger aircraft. As part of the move to become a limited company, the partners decided in 1997 to allow Airbus to take direct control of the bulk of its manufacturing, which hitherto the partners themselves controlled. Despite these changes and despite the fact that the transatlantic civil aircraft dispute has been resolved, Boeing remains bitter that Airbus owes its success to blatant government intervention. Indeed, Airbus is still a byword in the United States for subsidization and anticompetitive practices in the EU. See also U.S.-EU RELATIONS: TRADE AND INVESTMENT.

À la carte is an extreme form of differentiated integration in which EU member states could pick and choose policies and programs in which they want to participate. Because such an approach would undermine solidarity and arguably make the EU unmanageable, proponents of deeper integration often cite an à la carte arrangement as a dangerous and inevitable consequence of a tendency by member states to opt out of, or threaten to opt out of, EU obligations. The British government’s refusal to participate in the Treaty on European Union’s social policy provisions was an alarming example of a unilateral opt out, fueling fears of a trend toward an à la carte Europe. See also DIFFERENTIATED INTEGRATION.

À La Carte

The Amsterdam Treaty was concluded during a marathon summit in Amsterdam on June 16 and 17, 1997, at the end of an intergovernmental conference (IGC) that had lasted more than twelve months, and was signed in Amsterdam on October 2, 1997. The treaty was intended to make the EU more relevant and appealing to its increasingly skeptical and apathetic citizens and to prepare the EU for the challenge of enlargement to the east. Originating in a Treaty on European Union (TEU) provision to revise the TEU itself—and therefore inevitably called Maastricht II—the Amsterdam Treaty was supposed to emphasize the EU’s pertinence by improving the effectiveness of various policies and procedures ranging from decisionmaking, to external relations, to immigration and asylum and to enhance the EU’s adaptability to enlargement by encompassing large-scale institutional reform. In the event, despite a lengthy gestation period and an abundance of preparatory documents, the treaty was a victim of the unfavorable political climate in which it was hatched. Thus, it included few major innovations, ducked key institutional questions, and failed to excite much public interest. The treaty’s length and language belie its citizen-friendly image. With its more than fifty pages of text, including numerous references to existing treaty provisions, the document is not an easy read. Yet the treaty will be judged by its impact, not by its appearance. How, therefore, will the treaty accomplish the goals it set itself in the original draft under six major headings: “Freedom, Security, and Justice,” “The Union and Its Citizens,” “An Effective and Coherent External Policy,” “The Union’s Institutions,” “Closer Cooperation/Flexibility,” and “Simplification and Consolidation of the Treaties”? Section I, “Freedom, Security, and Justice,” contains two chapters: the first on fundamental rights and nondiscrimination, the second on the progressive establishment of an area of freedom, security, and justice. The first chapter is short and largely declaratory but contains an interesting new provision allowing for the suspension of certain rights deriving from the treaties of a member state found to be in breach of “the principles on which the Union is founded.” Whether or not the provision could ever be used, at least it suggests concern for the citizens of prospective member states with poor human rights records.

Amsterdam Treaty

The second chapter, on the putative area of freedom, security, and justice, is of more immediate concern to existing and future EU citizens. This chapter incorporates the Schengen agreement on the free movement of persons between member states—a long-delayed aspiration of the single market—and promises to bring some aspects of the TEU’s justice and home affairs (intergovernmental) Pillar Three into its EC (supranational) Pillar One (thereby allowing for the right of Commission initiative and qualified majority voting). The issues concerned—external border control and visas, asylum and immigration policy, and judicial cooperation—are close to the core of national sovereignty. Ironically, at a time of popular skepticism toward the EU, it was popular concern about lack of intergovernmental progress on these issues that convinced some reluctant member states to move them to the more effective but intrusive Pillar One. Nevertheless the five-year transition period from unanimity to qualified majority voting (QMV) suggests that the change will indeed be gradual. By contrast, the fight against international crime will remain strictly intergovernmental, with EUROPOL, the EU police agency, staying firmly in Pillar Three. Despite these welcome changes, ordinary Europeans are unlikely to perceive the EU in terms of freedom, security, and justice. But the treaty’s chapter on the subject suggests that member states are sensitive to popular concerns about these issues and are aware of the EU’s potential for providing results. The thirteen continental member states are committed to opening their internal borders by 2004. This will coincide with the projected move to QMV on external border controls. It will also coincide with the next enlargement. Yet the provisions of the Amsterdam Treaty may be inadequate to allay pervasive anxiety about rising crime at a time of rapid global and regional change. Section II, “The Union and Its Citizens,” balances states rights (an elaboration of the principle and applicability of subsidiarity in a legally binding protocol) with limited EU competence in areas of obvious popular concern, such as public health and consumer protection. The most striking and arguably the least practicable chapter deals with employment. This includes a new title on employment to be inserted into the Rome treaty, allowing the Council to draw up guidelines for member states, encourage new initiatives and pilot projects,

Amsterdam Treaty

9

and establish an advisory employment committee to promote coordination between member states. It is difficult to be enthusiastic about this chapter. Europeans are rightly worried about high unemployment, and the EU is rightly sensitive about the popular backlash against Economic and Monetary Union (EMU)—a backlash that focuses on unemployment. But the measures in this chapter, like the June 1997 Amsterdam summit’s resolution on growth and employment and its decision to hold a special European Council to discuss jobs, are a sop primarily to French public and political opinion. EU-level meetings and committees cannot create jobs; only through its single market and flanking measures can the EU help to create an economic climate more conducive to employment. EMU—an extension of the single market program—has become the battleground for contending philosophies of economic policy: neoliberalism and market socialism. Most member states lie somewhere in between, although France (irrespective of which parties are in power) tends squarely toward the latter. If this chapter can soothe the French and salve the other member states’ consciences while not detracting from the single market or EMU and can make Europeans feel better about the EU, then the chapter is worthwhile and important. Another chapter covers social policy, notably the incorporation of the TEU’s Social Protocol into the EU proper and Britain’s adherence to it. Yet the EU’s attachment to social policy is also largely declaratory. More precisely, the EU has toned down the conduct of its social policy since the economic boom of the late 1980s (and the heyday of former Commission president Jacques Delors). Hence the irony of Britain’s new Labour government’s triumphantly signing on to a tame social chapter. Like the previous chapter on employment, the social policy chapter may at least allay some popular concerns about the EU’s indifference to ordinary working (and not working) Europeans. The remainder of Section II covers a variety of likely and unlikely issues ranging from sport, to animal welfare, to transparency (i.e., openness), to trans-European networks and reflects the diversity of member state interests and the scrappy IGC process. Section III, “An Effective and Coherent External Policy,” deals extensively with the Common Foreign and Security Policy (CFSP) and briefly with external economic relations. The CFSP provisions include endowing the EU with a

10

Andean Community

foreign policy planning and analysis unit, designating the Council’s secretary-general to act as the CFSP High Representative, reconstituting the CFSP troika, deciding to fund CFSP as part of the Community budget, facilitating use of qualified majority voting to implement the joint actions necessary to carry out CFSP “common strategies,” and introducing a flexible, “multiple-speed” approach to enable members who oppose a particular CFSP activity to do so without blocking the majority from proceeding. The treaty strengthens the relationship between the EU and Western European Union (WEU) without stipulating a merger, as some member states had hoped for. The treaty also endorses EU involvement in so-called Petersberg tasks (peacekeeping and crisis management). To carry out these operations, the EU would “avail itself of the WEU.” A major test of this chapter’s adequacy is a question impossible to answer: would the existence of a CFSP with such provisions in 1991 have prevented the outbreak of war in Yugoslavia? Alternatively, will its existence now prevent future “Yugoslavias”? Presumably the planning and analysis unit will be able to identify future “Yugoslavias” in advance, and recourse to Petersberg tasks via the WEU will enable the EU to take preemptive action. But the member states’ will to take such action remains questionable, and their ability to do so effectively without large-scale U.S. assistance (even beyond that envisioned in the Combined Joint Task Forces) is equally uncertain. Moreover, the Amsterdam Treaty weakens the TEU’s commitment to an eventual common defense policy. In view of impending enlargement, the treaty’s most disappointing section is IV, “The Union’s Institutions.” A Protocol on the Institutions with the Prospect of Enlargement of the EU effectively limits the Commission to twenty members but links the abandonment of a second commissioner by the large member states to the eventual reweighting of votes in their favor. The treaty also calls for an IGC on the composition and functioning of the institutions at least a year before the EU’s membership reaches twenty. In other respects the treaty’s provisions were predictable and uneventful: for instance, a modest increase in the EP’s legislative powers (through the virtual abolition of the cooperation procedure and the corresponding extension of co-decision) and a modest increase in the use of QMV. Clearly, these changes

are unlikely to enhance the EU’s efficiency, credibility, or legitimacy. Nor does deferring the hard institutional questions until another IGC send a signal by the EU of decisiveness or responsibility to its own citizens or to the applicant states. Section V, on flexibility, seems like a radical departure from the EU’s constitutional order. Provisions for “closer” or “enhanced” cooperation allow groups of member states to move forward in limited areas without waiting for all the others, provided that a qualified majority agrees. In some respects, this is merely a recognition of prevailing practices, with opt ins and opt outs in a number of policy areas. Moreover, the flexibility chapter is hedged with conditions and constraints as to its possible use. But the codification of flexibility and the institutionalization of differentiated integration send a striking signal in an increasingly large and diverse EU: where necessary, some member states will proceed faster than others to achieve internal and external policy objectives. At the same time, the chapter raises serious problems about decisionmaking procedures, the acquis communautaire, and EU representation in international organizations. A final section, on the simplification and consolidation of the treaties, is tedious and technical and of interest only to specialists (few lay people read treaties, however well written). The Amsterdam Treaty is not a watershed in the EU’s history. Its provisions are modest and its probable effectiveness limited. It is far less integrationist than the TEU, let alone the Single European Act. Of course its objectives were correspondingly unassuming. Nevertheless, the treaty’s significance lies in what it and the IGC that preceded it portend: less willingness by national governments to make concessions to the Community interest; a growing rift between large and small member states; and the demise of strong FrancoGerman leadership. Indeed, the Amsterdam Treaty augurs ill for the EU’s ability or willingness to meet the daunting challenges ahead. See also INTERGOVERNMENTAL CONFERENCE. Under the terms of the Act of Trujillo, signed by the leaders of Bolivia, Colombia, Ecuador, Peru, and Venezuela on March 3, 1996, the old Andean Pact (formed in May 1969) was relaunched as the Andean Community. Modeled in part on the EU, the Andean Community is a customs union with a

Andean Community

secretariat based in Lima, Peru, and plans to have a directly elected parliament. The EC and the Andean Pact established economic ties in 1983 and strengthened their relationship in January 1986 with the signing of the Cartagena agreement, which committed both sides to greater market access. Cooperation in other areas includes the EU–Andean Pact dialogue on drugs, launched on September 26, 1995. See also LATIN AMERICA. See ANDEAN COMMUNITY.

Andean Pact

As foreign minister or prime minister of Italy for much of the 1980s and early 1990s, Giulio Andreotti played an important part in the EC’s revival and transformation during that time. As foreign minister, his behind-the-scenes push for a decision at the June 1985 Milan summit to hold an intergovernmental conference on treaty reform isolated British prime minister Margaret Thatcher and paved the way for the negotiations that led to the Single European Act. As prime minister and president-in-office of the European Council in the last half of 1990, Andreotti helped negotiate the landmark Transatlantic Declaration that he, Commission president Jacques Delors, and U.S. president George Bush signed at a U.S.-EC summit in Washington, D.C., in November 1990.

Andreotti, Giulio

The EU anthem, adopted first by the Council of Europe in 1972, is music from the last movement of Ludwig van Beethoven’s Ninth Symphony (the “Ode to Joy”).

Anthem

The Antici Group of member state officials, under the direction of an official representing the Council presidency, liaises with the Commission and the Council secretariat, coordinates all legislative proposals, and prepares the agenda for meetings of the Committee of Permanent Representatives (COREPER).

Antici Group

Ariane Rocket

11

See ASIA PACIFIC ECONOMIC COOPERATION.

APEC

Most of the legislative proposals put forward by the Commission are highly technical and detailed and are subject to scrutiny by working groups made up of national officials and operating under the auspices of the Committee of Permanent Representatives (COREPER). There are approximately two hundred working groups: some meet two or three times during any six-month Council presidency; others, with less political momentum behind them, meet perhaps only once or twice a year. If the working groups can agree or are near agreement so that COREPER can then adopt the proposal at its weekly meetings, the proposal becomes an “A” point and is adopted without discussion by the Council. Thus COREPER is in effect responsible for the large majority of all EU decisions. See also COMMITTEE OF PERMANENT REPRESENTATIVES.

“A” Point

See EUROPEAN STANDARDS COMMITTEE; REGULATORY POLICY; SINGLE MARKET PROGRAM; STANDARDS AND CONFORMITY ASSESSMENT.

Approximation

ARIANE is a program, proposed by the Commission in 1994 and strongly supported by the European Parliament, to subsidize translation of literary works from widely used EU languages into lesser-used EU languages—official and unofficial—and vice versa. Britain immediately criticized the program as an unnecessary expense to fill a need that has not been satisfactorily demonstrated.

ARIANE

Ariane, a rocket launcher used to send commercial satellites into orbit, is produced by the European Space Agency (with France’s Aérospatiale the primary contractor) but managed and launched by a private company, Arianespace. Now in its fifth generation, Ariane has 60 percent of the world’s commercial rocket market but faces stiff competi-

Ariane Rocket

12

ARION

tion from the Atlas-Centaur rocket, launched by Lockheed Martin in the United States; Russia’s Proton rocket; and China’s Long March rocket. Ariane rockets are launched from the European Space Center in Kourou, Guyana. Ariane suffered a major setback in June 1996 when the first of its new generation of rockets had to be destroyed a minute after launch because of a steering fault. In general, however, Ariane has a good performance record (out of eighty-five launches in the previous sixteen years, only seven failed). Much to the relief of the European Space Agency, the second launch of an Ariane-5 rocket, in October 1997, was flawless. An initiative under the EU’s SOCRATES (educational policy) program, ARION provides financial assistance to facilitate visits by decisionmakers (e.g., school and university administrators and civil servants in education ministries) to Brussels and to each other’s countries in order to strengthen cooperation on education in the EU.

ARION

ARISTEION is a literary prize, worth ECU 20,000, awarded annually by the EU.

ARISTEION

See CO-DECISION PROCEDURE.

Article 189b Procedure

See COOPERATION PROCEDURE.

Article 189c Procedure

See ASSOCIATION OF SOUTHEAST ASIAN NATIONS.

ASEAN

The first Asia-Europe meeting—a summit between the heads of state or government of the EU member states (plus the Commission president), China, Japan, and Korea, and the ASEAN countries—took place on March 1 and 2, 1996, in Bangkok; the second meeting took place on April 3–4, 1998, in London. The meetings symbolized the EU’s “new strategy” toward Asia, including a policy of “constructive engagement” with China.

Asia-Europe Meeting

Although there was progress at the Bangkok and London meetings on some trade issues, a wide gulf still separates the EU and its Asian interlocutors on social policy and human rights, particularly over East Timor and Burma. See also CHINA.

Asia Pacific Economic Cooperation (APEC)

Asia Pacific Economic Cooperation (APEC) is a large and loose association of countries in the Pacific Rim, including some with the world’s fastestgrowing economies: Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, the Philippines, Singapore, Taiwan, Thailand, and the United States. Hoping to accelerate global trade liberalization and promote regional political and security cooperation, Australia took the initiative in 1989 that led to APEC’s formal establishment at a summit in Seattle in 1993. Although APEC is a striking example of embryonic regional integration, its membership is too diverse to form an economic or political organization similar to the EU.

Assembly of European Regions (AER)

In 1985, on their own initiative, representatives of individual regions came together and formed the Assembly of European Regions (AER), a pan-European interest group that sought a formal role in EC decisionmaking. The Commission, partly for reasons of democratic legitimacy and partly also because it saw regionalism as integral to federalism, supported the AER’s efforts to give regions and localities a greater sense of involvement in the EC. But AER itself was too large and unwieldy to play such a role, and some of its members were not even in the Community (AER subsequently grew to include three hundred regions from twenty-three countries). Accordingly, the Commission pursued regional involvement in EC decisionmaking by proposing, in the 1991 intergovernmental conference on political union, a new institution (independent of the AER) to represent regional interests. This was the origin of the Committee of the Regions, in which many of AER’s member regions (i.e., those within the EU) are represented. See also COMMITTEE OF THE REGIONS.

Association of Southeast Asian Nations (ASEAN)

This is one of four decisionmaking procedures involving the European Parliament (EP)—the others are consultation, cooperation, and co-decision. The assent procedure is used for only a limited range of normal legislation and is designed primarily for certain sensitive constitutional and political issues and for some types of international agreements. Under the procedure the Council of Ministers unanimously adopts a position (usually, but not always, on the basis of a Commission proposal); the Council’s position is referred to the EP. The EP may give or withhold its assent; in most cases, only a nominal majority is required rather than a majority of all members. The EP has no power of amendment; if it gives its assent, the Council adopts the proposal. Areas covered by the assent procedure include the accession of new member states, international agreements with certain budgetary or legislative implications, uniform procedure for elections to the EP, right of residence and freedom of movement, organization and objectives of the structural funds and the cohesion funds, and special tasks to be administered by the European Central Bank. The scope of the assent procedure was increased by the Amsterdam Treaty to cover a new provision: sanctions in the event of a serious and persistent breach of fundamental rights by a member state. See also DECISIONMAKING PROCEDURES.

Assent Procedure

In November 1990, on the eve of the intergovernmental conferences (IGCs) that resulted in the Treaty on European Union (TEU), a conference of parliaments was held in Rome. The so-called assizes brought together 173 members of national parliaments and 85 members of the European Parliament (EP) in order to adopt a resolution on the impending IGCs. Subsequently, in a declaration on the role of national parliaments in the EU, the TEU recognized the importance of interparliamentary control mechanisms for the success of European integration, and another declaration invited both the EP and national parliaments to “meet as necessary as a Conference of the Parliaments.” Although the latter declaration gave the assizes a consultative role in the discussion of the “main features of the European Union,” there was only limited enthusiasm for holding another such conference in the framework of the 1996–1997

Assizes

13

IGC (the earlier Rome conference largely supported the EP’s position on the IGC by a majority vote, thereby ignoring the concerns of parliamentarians from countries such as Britain and France). See also NATIONAL PARLIAMENTS. Association agreements are agreements between the EU and neighboring countries to develop close economic and political relations, possibly resulting in eventual EU membership for the associated country. Association agreements are negotiated under Article 238 of the Treaty of Rome, which gives the EU the right to establish with nonmember states “association involving reciprocal rights and obligations, common action and special procedure.” The Commission negotiates association agreements, and the Council of Ministers approves them subject to the European Parliament’s assent. Association agreements generally grant the associated country free access to the EU’s market for most industrial products, reduced tariffs on agricultural products, and financial and technical aid; the associated country usually grants reciprocal concessions, although association agreements need not be symmetrical. Association agreements also cover political cooperation with a view to promoting stability and democracy in the associated states. Association agreements establish three bilateral institutions: an association council, an association committee, and a parliamentary committee. Europe Agreements are association agreements between the EU and the Central and Eastern European countries, which stipulate eventual accession.

Association Agreements

Association of Southeast Asian Nations (ASEAN)

The Association of Southeast Asian Nations (ASEAN) was formed in 1967 by Indonesia, Malaysia, the Philippines, Singapore, and Thailand. Brunei joined in 1984 and Vietnam in 1995. Originally an anticommunist alliance, ASEAN is now an organization for economic cooperation composed of the fastest growing “Asian tigers.” Impressed by the EC’s development, but troubled also by the Community’s seeming equivocation about market liberalization, the ASEAN countries decided in February 1992 to establish a free-trade area within fifteen years. The proposed Asian free trade association could also include Japan and the

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Asylum

two remaining newly industrialized countries in the region, South Korea and Taiwan. The ASEAN countries do not envision Australia and New Zealand as part of a regional free trade area although, ironically, ASEAN forms the core group within Asia Pacific Economic Cooperation (APEC), an organization that Australia founded in order to have a seat at the regional table. A decision in 1992 to institutionalize APEC by establishing a secretariat in Singapore consolidated ASEAN’s position at APEC’s center. The EC has had relations with ASEAN since 1972. Three years later the Commission and ASEAN set up a working party to promote closer commercial, economic, and development cooperation. That led to a nonpreferential trade and economic cooperation agreement in 1980, which both sides have renewed every two years since the original agreement expired in 1985. The EC and ASEAN sought in the early 1990s to negotiate a new agreement that would improve upon the 1980 accord by including provisions for trade dispute resolution and European Investment Bank (EIB) lending. Progress stalled during Portugal’s Council presidency in early 1992, however, over Indonesia’s abysmal human rights record in East Timor, a former Portuguese colony that Indonesia annexed in 1975. Another human rights dispute, over military rule in Burma, is also a source of EU-ASEAN friction, with some ASEAN countries eager to admit Burma as a member and the EU urging Burma’s international isolation. See also ASIA PACIFIC ECONOMIC COOPERATION. See under JUSTICE AND HOME AFFAIRS.

Asylum

See NORTH ATLANTIC TREATY ORGANIZATION.

Atlantic Alliance

Proposed by the Commission in November 1995 as part of a developing EU cultural and audiovisual policy, the Audiovisual Guarantee Fund would promote, through guarantees in any form permitted by law, the production of European works of fiction for cinema or television aimed at

Audiovisual Guarantee Fund

European and international markets as well as promote the companies creating such works. See also AUDIOVISUAL POLICY. Efforts by the EU to establish an audiovisual policy at the European level date back to the mid1980s, when the Commission proposed action in three fields: technological aspects of television transmission and reception, cinema film and television production, and a measure to permit national television broadcasts to circulate freely within the EC. The Commission addressed problems in the last two areas from economic and legal points of view, the action being designed to counteract fragmentation of the markets in the cinema field, to take into account different degrees of national aid to film production in member states, or to permit television broadcasts, deemed by the Court of Justice to be “services,” to circulate freely within the EC. Cultural matters entered into Community competence much later, with the entry into force of the Treaty on European Union on November 1, 1993. The audiovisual sector is specifically mentioned in Article 128, dealing with culture. However, the reference is a weak one: “action in support of cooperation between Member States” may be taken in the area of “artistic and literary creation, including in the audiovisual sector.” More important for film production is paragraph 4 of Article 128, which states that “the Community shall take cultural aspects into account in its action under other provisions of this Treaty.” In fact, films are a meeting point between big business and culture. When we talk about film production in Europe, is our motivation the need to build up an economic sector and to provide greater employment? Or are we thinking about the wonderful films that European countries used to produce and about the potential impoverishment of our national and regional cultures if we cannot remobilize our European creative, directorial, acting, and technical talents in the film and television area? Of course we are thinking on both lines at once: economic and cultural strands are intertwined. No doubt the EU pays more attention to the film and television program industry than the general economic principle of free competition enshrined in the treaty might lead one to expect, but there are many precedents for economic sup-

Audiovisual Policy

port in such diverse fields as coal, steel, shipbuilding, and transport. This dual approach leads to a certain flexibility in strategy: an economic stance may well give a more effective result than a cultural one; however, if the Community is attacked for infringing economic principles, it is liable to invoke a cultural interest. These considerations should be borne in mind in the examination that follows of two major audiovisual policy initiatives: (1) the Television Without Frontiers Directive and the MEDIA program; (2) a multilateral development affecting audiovisual policy, the Uruguay Round of the GATT. Genesis of Community Audiovisual Policy In the European debate in the late 1980s, all could agree on the need for a thriving Europe-based film and television industry capable of stemming the long decline in cinema attendance and able to provide quality television programs for the already expanding numbers of television channels. It was felt by many that without such a thriving industry, viewers would not have any real widening of choice from the expansion of channels, because these would all be swamped by film and television production from outside sources, notably the United States. The thriving U.S. film and television industry provided many lessons for the European industry, which lacked all of the following necessary elements: a large internal market, instead being split into a series of national markets; any stable financial base, making it difficult to attract risk capital; a solid basis for transnational distribution of cinema films; a flexible cinema/television relationship, with public broadcasting corporations only just beginning to turn to independent film companies for programs. In spite of the handicap of having to work in different languages and with different cultural traditions in Europe, the Community decided to undertake legislative action to bring about conditions for a thriving Europe-wide film and television industry. An important landmark was the September 30–October 2, 1989, European Audiovisual Conference in Paris, which brought together European and national authorities and representatives of all sides of the film and television sector. Many representatives were hostile to the proposed Television Without Frontiers Directive, then in its final stage of negotiation, because they saw it as giving the U.S. industry even greater opportuni-

Audiovisual Policy

15

ties than it already had to dominate the European audiovisual scene, without any particular advantage for the Europeans. Commission president Jacques Delors countered opposition by announcing that the Commission would propose assistance to European film and television production, later to become the MEDIA program. The Television Without Frontiers Directive was adopted by the Council in Brussels on the day after the conference. Television Without Frontiers Directive The Television Without Frontiers Directive (the full title is Directive on the Coordination of Certain Provisions Laid Down by Law, Regulation or Administrative Action in Member States Concerning the Pursuit of Television Broadcasting Activities) sets out at the European level measures for ensuring free circulation throughout the Community of national television broadcasts. Member states had the duty to transpose these measures into national laws, regulations, or administrative provisions by October 1991. The main principle of the directive is that “Member States shall ensure freedom of reception on their territory of television broadcasts from other Member States for reasons which fall within the fields coordinated by this Directive” (Article 2.2). The state in which the broadcaster is established is responsible for ensuring that a broadcast fulfills common standards in certain coordinated fields, thereby allowing the broadcast to circulate freely within the Community without being subject to any restrictions by a receiving state. The directive covers the following fields: national or linguistic quotas applied to their national television channels by most member states, television advertising (including quantity and periodicity, general ethical rules, cigarettes and other tobacco products, medicinal products and medical treatment available only on prescription, alcoholic beverages, protection of minors, and sponsorship of programs), and right of reply. A common standard was superimposed on the national or linguistic quotas by prescribing under Article 4 that member states should ensure “where practicable and by appropriate means” that broadcasters reserve a majority proportion of their transmission time (excluding news, sports events, games, advertising, and teletext services) for European works. The Council adopted this article with great difficulty, and then only with the

16

Audiovisual Policy

addition of the words “where practicable,” which took away much of its force. Its two purposes—to coordinate language quotas applied to television transmission time by individual member states in a right of establishment directive and to ensure the maintenance of European languages and cultures expressed through audiovisual media—sit uneasily together. The directive also urged member states to ensure “where practicable and by appropriate means” that broadcasters reserve at least 10 percent of their transmission time (excluding news, sports events, games, advertising, and teletext services) for European works created by producers who are independent of broadcasters (Article 5). Alternatively, broadcasters should be able to devote 10 percent of their programming budget for the same purpose. The effect of the quotas is unclear. It has not been demonstrated that member states television channels take more programs from other member states than they otherwise would have done or that programs from non-European countries have been turned away from European national television channels because of the regime. However, the quotas have provided a rallying point for those interested in promoting European films and television programs. In early 1995 the Commission presented a new directive modifying the Television Without Frontiers Directive. For the sake of uniform application of quotas, the Commission proposed taking out the words “where practicable” from Articles 4 and 5. It wished to make Article 4 more flexible in other ways and, as a concession to those who opposed quotas, the Commission proposed to end the quotas regime after a period of ten years. The procedure for examining the proposal (Article 189b, co-decision of the European Parliament and the Council) is time consuming. Thus far, the Parliament has delivered an opinion, and the Council has formulated a common position: the Parliament has opted in favor of a stronger quotas regime than the Commission (the same position as the Commission in Articles 4 and 5 but striking out the limitation of further quota operation to ten years), whereas the Council compromise retains Articles 4 and 5 as they are in the 1989 Directive and replaces the ten-year limit with an impartial review of the quotas after five years. Yet differences on the quotas issue should not obscure solid progress on more rigorous methods

of determination of the country having jurisdiction over a broadcaster, teleshopping, self-promotional channels, examination of new methods of restricting access of minors to programs that might be harmful to their moral development, and certain technical issues. MEDIA Program More direct support for the cinema, film, and television program industry came from the MEDIA program, adopted by the Council in December 1990 and endowed with ECU 200 million for a five-year period. MEDIA did not aim to subsidize production or coproduction of individual films but to deal with such major aspects of the industry as distribution, exhibition, and promotion; production conditions; investment; business training; marketing; and developing potential in countries with a weak production capacity. Nineteen different agencies were set up to operate projects in these areas, for which the participants would pay half the cost and the Community the other half. Despite some good results in stimulating particular initiatives and transnational cooperation among businesses, the Commission reported in its introduction to the MEDIA II proposal that financial resources were insufficient and were spread so thinly over a large range of activities that no decisive structural changes could be made. Accordingly, the Commission sought to concentrate on a limited number of objectives, to devote the finances available to fulfilling these objectives, and to give MEDIA a more centralized administrative structure with a view to more effective implementation of the program. MEDIA II eventually received an allocation of ECU 310 million for the five years 1996–2000. A Commission report in February 1995 provided some telling statistics: cinema attendance in the EU had dropped from 1.2 billion in 1978 to 550 million in 1993, and the market share of European films had fallen to 20 percent of the audience; hours of television broadcast by European channels had doubled since 1988 (from 500,000 hours to 1 million), without any corresponding increase in the production of European works; the number of channels could exceed 500 by the end of the century, and broadcasting hours could rise to over 3.5 million; and the EU’s audiovisual deficit with the United States, already some $3.6 billion, continued to grow.

The Commission’s effort to concentrate MEDIA II on a small number of key areas met considerable opposition in the Council. Some member states argued that rather than compete with the United States, it would be better to keep filmmaking very close to cultural roots, respecting cultural diversity in the EU, even if this meant encouraging quality films with a limited distribution because they were made in a language spoken by inhabitants of a small country or region. Some agencies of the first MEDIA program, candidates for liquidation in the Commission’s drive for a more centralized approach, conducted a campaign for survival, often supported by the country in which they were situated. Appropriate reactions to these problems were found, and the Commission’s proposal remained more or less intact in the revised version finally adopted, which is much more focused and flexible than the first MEDIA program. Its main features are as follows:

1. Development, or preproduction, receives special attention because of the perceived weaknesses of European filmmakers in this area. Measures concern writing techniques, financial arrangements, business planning, and networking with other companies as well as the special needs of companies in the sector of new technology and animation. 2. Distribution (cinema, video, television) constitutes the biggest part of the program and may absorb up to two-thirds of the funds available, mostly for the weakest part of the European film and television sector: cinema film distribution. A first method of assistance is a classic system of (repayable) subsidies to cinema distributors for projects aimed at bringing European distributors together or encouraging distribution of European cinema films. Under the second method of assistance, which is experimental for the first two years, a subsidy can be provided to European distributors proportional to attendance at European films in cinemas of EU countries other than the film’s country of origin. Distributors can invest this subsidy to produce European films that have a distribution potential on the European market, to meet editorial costs (copying, dubbing, and subtitling), and to meet promotion and advertising costs. The idea is therefore to strengthen European distributors and give them an

Audiovisual Policy

17

incentive to develop a closer relationship with the production sector. 3. Action in the area of training is concentrated on down-to-earth organizational aspects of film development, production, and distribution. It should facilitate exchanges of film school teachers and students, as well as professionals, through grants and work placements. Audiovisual Guarantee Fund High interest rates and the reluctance of European financiers to invest in films and television programs made by independent firms have long been recognized as big problems for the European industry. The establishment of a guarantee fund for audiovisual production is accordingly a key element in the Commission’s strategy, outlined in a proposal to the Council on November 30, 1995. The objective of the fund is to promote, through guarantees in any form permitted by law, the production of European works of fiction for cinema or television aimed at European and international markets as well as to promote the companies creating such works. The fund would not deal with production companies directly but rather with financial institutions intending to provide capital to them. In this way only projects that financial institutions consider viable will be considered by the fund for assistance. Guarantees would cover up to 50 percent of loans and individual credits, so that the risk would be covered half by the guarantee fund and half by the financial institution concerned. The Uruguay Round The U.S. side in the Uruguay Round of the GATT called for the abolition of European quotas in the Television Without Frontiers Directive and the withdrawal of subsidies to filmmaking within the MEDIA program and within national film-support programs. In response, a vociferous part of the European side called for a “cultural exception” to be added to the basic exceptions on grounds of public morals, health, and so on. At the climax of the talks in December 1993 the whole issue, by mutual agreement, disappeared without a single reference to a “cultural exception” in the proposed agreement or in its offshoot, the General Agreement on Trade in Services (GATS). No services sector was in fact excluded from the GATS. The principle of most-favored-nation treatment is laid down as a general commitment.

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Audit Board

However, exemptions are permitted, although in principle they should not exceed ten years. The Community and its member states notified the new World Trade Organization (WTO) of an exemption of unlimited duration for the directive and the MEDIA program. The issues could come up again in the GATS as part of horizontal issues affecting tariffs or subsidies, but exchanges on them are likely to be less aggressive than in the past. Generally, good U.S.-EU relations are encouraged by the Transatlantic Declaration of November 1990 and by the New Transatlantic Agenda and Joint Action Plan signed by U.S. president Bill Clinton, Council president Felipe González, and Commission president Jacques Delors on December 3, 1995. In both of these agreements cultural cooperation is mentioned, and the paragraph of the action plan concerning artistic and cultural cooperation states that ways and means should be studied to encourage “co-production of films and television programs.” Although part of the action plan is devoted to consolidating the WTO and another to “information society, information technology and telecommunications,” it is worth noting that no other reference is made to film or television.

Conclusion Until the year 2000, the EU will have available to it as instruments of its audiovisual policy the European quotas of the Television Without Frontiers Directive (either strengthened or more probably as they currently stand), the MEDIA II program, and probably some form of financial guarantee fund. The revision of the Television Without Frontiers Directive provides for an independent study on the impact of the quotas for European works on national television channels after five further years of operation, and the MEDIA II program allows for an evaluation of the results at the end of the five-year period. Many will continue to question the existence of the quotas, and the EU’s justification of remedying market imperfections and structural weaknesses cannot be accepted eternally. The EU will need to use its instruments wisely, in favor of a thriving European industry able to play its part for culture and employment. See also AUDIOVISUAL GUARANTEE FUND; TELEVISION WITHOUT FRONTIERS. Alan Forrest

The Court of Auditors, established in 1975, replaced the Audit Board, a part-time body endowed with modest resources and lacking either the status or the independence of its successor. Nevertheless, the board advanced the principle and practice of financial accountability in the EC. See also COURT OF AUDITORS.

Audit Board

The new, post–World War II Austrian state was a founding member of the Organization for European Economic Cooperation (OEEC) and had observer status in the Council of Europe. But when the core European countries went one step further by creating the European Coal and Steel Community (ECSC), Austria stayed outside because the Soviet Union (which still occupied part of Austria) insisted on an independent Austria’s nonaligned status. With the 1955 “Moscow memorandum,” Austria’s government agreed to adopt the Swiss model of neutrality. For nearly four decades to come, this type of neutrality was generally considered incompatible with EC membership (Schneider, 1990). Nevertheless, some closer economic ties with other western Europeans were knit, as Austria was a cofounder of the European Free Trade Area (EFTA) in 1960 and concluded a free-trade agreement with the EC in 1972. The single market program and the enthusiastic predictions of the Commission-sponsored Cecchini Report in the mid-1980s propelled Austria to jump onto the moving EC train. The internal political situation had changed, too: the then pro-integration Liberal Party (FPO) had joined the government, and factions of the Conservatives (OVP), but soon also of the Social-Democrats (SPO), started pressing for accession. Furthermore, several prominent lawyers suddenly deemed neutrality and EC membership compatible. In 1987, the grand coalition (SPO/OVP) advocated greater integration but not yet in the form of full membership. In close connection with the revolutionary developments in Central and Eastern Europe, however, domestic political opinion shifted in favor of full membership. Accordingly, Austria applied to join the EC on July 1, 1989. By that time, however, the EC’s strategy was to deepen integration rather than enlarge further. Consequently, as an EFTA member, Austria participated in the negotiations to establish a Euro-

Austria

pean Economic Area (EEA), an arrangement with many single market features but one that excluded agriculture, foreign trade, and active participation by the non-EC members in EC decisionmaking. Even before the EEA entered into force, EU “deepening” went ahead with the Treaty on European Union (TEU). Therefore, membership negotiations were opened between the EC and Austria as early as February 1993. These were easier than former accession negotiations because the bulk of economic integration had already been accepted by Austria under the terms of the EEA. The big outstanding issues were the fate of the EEA transit traffic agreement, which provided for a system of so-called ecopoints for transits through the highly environmentally stressed Austrian Alps; transition periods for Austrian agricultural markets with comparatively higher price levels; and restrictions on selling real estate to other EU citizens (Falkner, 1995). Surprisingly, Austria’s neutrality was a nonissue: not only were some politicians willing to discuss the possibility of Austria’s accession to the Western European Union (WEU) and NATO but also the government expressed willingness to participate actively in the EU’s Common Foreign and Security Policy (CFSP). The ensemble of necessary adaptations to Austria’s federal constitution, as a result of the accession agreement, amounted to a so-called fundamental change and therefore necessitated a popular referendum. With only the small Green party, the “new” Euroskeptic and populist FPO, and purely privately funded citizen action groups arguing against EU membership, a majority of 66.6 percent voted in favor of joining in the referendum on June 12, 1994. Accordingly, Austria joined the EU on January 1, 1995 (Pelinka, 1994; Kaiser, 1995). Because the EU’s democratic deficit in general, and the loss of influence of the Austrian parliament in particular, were major issues in the referendum campaign, Austria’s Federal Constitution was changed to include provisions (similar to those in Denmark and Germany) tying Austria’s representatives in the Council of Ministers to possible mandates of the chamber of representatives (Nationalrat). The unfortunate example of the 1995 directive on animal transport (when the minister of agriculture was outvoted because of a toonarrow mandate from the national parliament) showed that the Nationalrat was still in the process of learning how to use this tool strictly enough to safeguard its own influence but at the

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same time flexibly enough not to hamper decisionmaking at the European level. After a lively debate, Austria is being represented in the European Council not by its federal president (who has mainly representative functions) but by the federal chancellor, supported by an undersecretary of state for European affairs. Within the current coalition government there is much rivalry on EU competences between this undersecretary and the minister of foreign affairs. The first direct Austrian elections for the EP took place in September 1996; until then Austria’s twenty-one members of the European Parliament had been elected indirectly by parliament (Morass, 1996). The result bore out what opinion polls already showed: dissatisfaction with the EU was high. Because of strong economic ties and similar legal standards, Austria often finds itself voting in the same group as Germany (e.g., on monetary issues). However, Austria also has particular interests as a small and (still) neutral member state. One area of distinct concern is environmental policy, Austria being proud of its progressive standards. On the basis of a recently decided austerity program to consolidate Austria’s federal budget, Austria expects to be in the first group of states to participate in Economic and Monetary Union (EMU)—a declared aim of the political elite. Areas of conflict with the Commission over the implementation of EC law concern the anonymity of saving accounts, the introduction of motorway tolls, the nontransposition of the EC public procurement rules, several subsidies, and state monopolies. Although Austria is one of the smaller countries in the EU, it is also one of the wealthier: it is a net-contributor to the Community budget, and only one of its regions (Burgenland) is eligible for “Objective 1” subsidies under the structural funds (Tondl, 1996). After only three years of membership, it is too early to draw definitive conclusions as to possible changes in Austria’s political system. However the influence of the federal government was undoubtedly enhanced at the expense of parliament and the Länder, the federal entities of Austria. The role of the famous “social partnership” seems not seriously challenged so far, as the major interest groups participate in the elaboration of the government’s EU policies as well as in the implementation of EC law (Karlhofer and Talos, 1996). Yet in public discourse, European issues are still

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Austria

not ranked high. Awareness of the shift of powers to the EU and, thus, the existence of new levels of policymaking seems low, not only among the general public but also among politicians and bureaucrats (Falkner and Muller, 1997). See also APPENDIX 2; APPENDIX 3; TABLE 7; TABLE 8.

Falkner, G. 1995. “Österreich und die Europäische Einigung.” In R. Sieder, H. Steinert, and E. Talos, eds. Österreich, 1945–1995. Vienna: Verlag für Gessellschaftskritik. Falkner, G., and W. C. Muller, eds. 1997. Österreich in der Europäischen Union: Konsequenzen der Mitgliedschaft für Politiknetzwerke und Entscheidungsprozesse. Vienna: Signum Verlag. Kaiser, W. 1995. “Austria in the European Union.” Journal of Common Market Studies 33, pp.

Bibliography

The Baltic Council—formally the Council of Baltic Sea States—was formed in March 1992 at a conference in Copenhagen of the foreign ministers of countries bordering on the Baltic Sea (Estonia, Denmark, Germany, Finland, Latvia, Lithuania, Poland, Russia, and Sweden). Its purpose is to promote stability and sustainable development in the region. Iceland and Norway (which, along with Denmark, Finland, and Sweden, are members of the Nordic Council) are also members of the Baltic Council. In response to a request by the European Council in Madrid in December 1995, a Baltic Sea Region Initiative was drawn up to provide a framework for closer cooperation among Baltic countries. The initiative emphasizes planning and financing of large infrastructural development and concrete actions to strengthen and improve democracy and stability, trade, investment and economic cooperation, transport, energy and nuclear safety, the environment, tourism, and border crossing facilities.

Baltic Council

B See GREECE; YUGOSLAVIA.

Balkan States

Concerned about the EC’s failure to end hostilities in the Balkans and eager to prevent future “Yugoslavias” in Central and Eastern Europe, in April 1993 French prime minister Edouard Balladur proposed a stability pact to provide a mechanism that would permit the Central and Eastern European states (CEES) to normalize relations with each other economically, politically, and socially. Accordingly, in 1994 France hosted a Conference on European Stability, under EU auspices, that brought together representatives of forty European countries to discuss ethnic and cultural rivalries. The ensuing European Stability Pact (known unofficially as the Balladur Plan)—a collection of treaties and agreements between the CEES themselves and a consultative process (bilateral and multilateral) to air and resolve regional disputes with the EU acting as an intermediary when necessary—was intended to improve European security and prepare the CEES for EU membership. The European Stability Pact became one of the first joint actions of the EU’s Common Foreign and Security Policy and is an example of close cooperation between the EU and the Organization for Security and Cooperation in Europe, which is responsible for facilitating regional round tables and monitoring the pact’s implementation. See also COMMON FOREIGN AND SECURITY POLICY; A PEACE AND SECURITY SYSTEM FOR POST–COLD WAR EUROPE.

Balladur Plan

See BALTIC COUNCIL.

Baltic Sea Region Initiative

Relations between the EU and the Baltic states (Estonia, Latvia, and Lithuania) developed quickly after the independence of the three former Soviet republics in August 1991. The Commission proposed to allocate to the Baltic states some of the EC’s 1991 technical assistance budget for the USSR and to extend the Pologne et Hongrie: Actions pour la Reconversion Économique (PHARE) program of assistance to the Central and Eastern European states (CEES). On December 23, 1991, the Council of Ministers adopted a regulation to supply ECU 45 million in emergency food aid to the Baltic states. The Council agreed on September 28, 1992, to provide medium-term financial assistance to the Baltic states in order to help improve their balance of payments and boost their reserves. Soon the three Baltic states started following the road of the other CEES, from trade and cooperation agreements (TCAs) to association agreements and preparation for membership in the EU. As early as October 16, 1991, the Commission asked the Council for authorization to negoti-

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Baltic States

ate TCAs between the EC and the respective Baltic states. The Commission also mentioned the possibility of eventually negotiating association agreements. TCAs had already been negotiated with the CEES, starting with Hungary in 1988. Association agreements (so-called Europe Agreements) were negotiated with Poland, Czechoslovakia, and Hungary during 1991 and later with Romania and Bulgaria. The TCAs with the Baltic states were signed on May 11, 1992. These were framework agreements for a period of ten years, with the goal of developing and diversifying trade and of promoting economic and commercial cooperation. The Baltic countries were given most-favored-nation (MFN) treatment, and specific quantitative restrictions (QRs) were abolished. The agreements expressly mentioned regard for democratic principles and human rights, as defined in the Helsinki Final Act (1975) and the Charter of Paris (1990). The signatories further adopted joint declarations on the institutions of political dialogue, including regular meetings at the highest political level on matters of common interest. This sought to bring the signatories’ views on external policy into closer harmony and to strengthen security and stability in Europe. The TCAs were endorsed by the European Parliament (EP) on December 18, 1992, and formally concluded by a Council decision on December 21, 1992. They entered into force on February 1, 1993, for Latvia and Lithuania and on March 1, 1993, for Estonia. In June 1993, the European Council (meeting in Copenhagen) invited the Commission “to submit proposals for developing the existing trade agreements with the Baltic States into free-trade agreements” and declared that “it remains the objective of the Community to conclude Europe Agreements with the Baltic States as soon as the necessary conditions have been met.” The promise of Europe Agreements opened the possibility of EU accession. Indeed, it was at Copenhagen that the European Council stated for the first time that “the associated countries in Central and Eastern Europe which so desire shall become members of the European Union.” The summit conclusions also laid out the conditions of membership: “stability of institutions guaranteeing democracy, the rule of law, human rights, and respect for and protection of minorities, the existence of a functioning market economy as well as

the capacity to cope with competitive pressure and market forces within the Union.” In February 1994, the Council authorized the Commission to negotiate free trade agreements with the Baltic states. At the same time, the Council adopted a statement on relations with the Baltic countries in which it acknowledged the importance of greater integration between those countries and the EU. The free trade agreements were an important means to that end. Further, the Council promised to take “all necessary steps with the aim of negotiating and concluding Europe Agreements as soon as possible in recognition of the fact that Estonia, Latvia, and Lithuania’s ultimate objective is to become members of the European Union through Europe Agreements.” At its Corfu meeting (June 24–25, 1994), the European Council welcomed “the fact that the negotiations with the Baltic States for the establishment of free trade areas are moving toward finalization” and went on to reiterate “that the conclusion of Europe Agreements with these countries, which will help them to prepare for subsequent accession, remains the aim of the Union.” The three free trade agreements were signed in Brussels on July 18, 1994. The agreement with Estonia provided for free trade in all industrial products from its entry into force on January 1, 1995, and sought to bring free and nondiscriminatory competition based on Community rules. The agreement with Latvia provided for a two-speed process for industrial products, with the gradual introduction of free trade over a maximum of four years on Latvia’s part and immediate liberalization on the Community’s part. The agreement with Lithuania included a similar two-speed process for industrial products, with Latvia given a maximum of six years to liberalize. Specific provisions were included for textiles. The EU granted Latvia and Lithuania consolidation of the Generalized System of Preferences (GSP), whereas Estonia would benefit from zero tariffs for all textile products. For agriculture and fisheries the agreements bound the suspension of nonspecific quantitative restrictions and established new reciprocal concessions. Based on articles 228 and 113 of the Rome treaty, the free trade agreements were subject only to consultation with the EP. Nor were national ratifications necessary. The agreements entered into force in January 1995.

At its meeting in Essen on December 9 and 10, 1994, the European Council requested “the Commission and the Council to do everything necessary to ensure that Europe Agreements can be concluded with the Baltic States and Slovenia under the French Presidency”—that is, during the first six months of 1995—“so that these States can be included in the accession preparation strategy.” The Europe Agreements would incorporate the free trade agreements signed earlier that year and include provisions on political dialogue and financial and cultural cooperation. The Europe Agreements with the three Baltic states were initialed in Brussels on April 12, 1995 and were signed on June 12, 1996. Although the agreements went far in the direction of eventually assuring free movement of goods, services, and capital, they did not cover free movement of people, apart from certain rights for workers legally established inside the EU. The association agreements established the usual bilateral association institutions: an association council, an association committee, and a parliamentary committee. But they also provided for the participation of the Baltic states in the multilateral relationship between the EU and the other associated countries in order to implement the preaccession strategy drawn up by the Essen summit in December 1994. The EP approved the draft Europe Agreements with the Baltic states on November 15, 1995. Even before the Europe Agreements were implemented, Latvia applied for EU membership on October 27, 1995; Estonia applied on November 28, 1995; and Lithuania applied on December 8, 1995. At its meeting in Madrid on December 15–16, 1995, the European Council declared that the applicant countries should be “treated on an equal basis” and added that “the European council hopes that the preliminary stage of negotiations will coincide with the start of negotiations with Cyprus and Malta,” countries that had been promised that accession negotiations would start six months after the conclusion of the 1996–1997 intergovernmental conference. In the meantime, by virtue of signing Europe Agreements, the Baltic states were included in the EU’s preaccession strategy, which has two main components: preparing applicant countries for integration in the internal market and developing structural (i.e., political) relations. The former objective is based on a white paper, “Preparation of

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the Associated Countries of Central and Eastern Europe for Integration Into the Internal Market of the Union,” adopted by the Commission on May 3, 1995, which lists the Community legislation that the applicant countries should try to adopt. Structural relations means joint meetings between senior representatives of the EU, the CEES, and the Baltic states, which take place regularly. On November 29, 1995, the Commission adopted a progress report for the European Council on the preaccession strategy, as requested by the Cannes summit the previous June. This report gave a general overview of the preaccession strategy and the political and economic situation in the CEES. It argued that the preaccession strategy had strengthened the political and economic reform process in the applicant countries and consolidated relations between the CEES and the EU. Like most of the other Central and Eastern European applicants, the Baltic states continued to develop economically and politically in 1996 and 1997, with a view to relatively rapid EU accession. Yet whether the Baltic states will be ready to join the EU together with the most advanced CEES remains an open question, although according to the Commission’s Agenda 2000 report, published in July 1997, Estonia is likely to join before Latvia or Lithuania. The Baltic states have good allies among the Nordic members of the EU and have made good economic progress. But much remains to be done. The existence and treatment of large Russian minorities, especially in Estonia and Latvia, are sensitive issues and a test for Baltic democracy. The European Stability Pact (Balladur Plan), one of the EU’s first joint actions under the Common Foreign and Security Policy (CFSP), has tried to deal with this problem. Indeed, possible membership in NATO, pursued in parallel by the Baltic states, is extremely sensitive because of Russian opposition. Precisely because NATO membership is highly problematic, the Baltic states are especially eager to join the EU as soon as possible. See also TABLE 6. —Finn Laursen

The Barcelona Declaration was a pledge by the EU and twelve neighboring Mediterranean states (Algeria, Cyprus, Egypt, Israel, Jordan, Lebanon,

Barcelona Declaration

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Belgium

Malta, Morocco, Syria, Tunisia, Turkey, and the Autonomous Palestinian territories) at a conference in Barcelona on November 28, 1995, to establish a Mediterranean Free Trade Area by 2010 and to link it through the EU to another free trade zone with the countries of Central and Eastern Europe. The declaration is the centerpiece of a new Euro-Mediterranean Partnership, launched by the EU and the so-called MED (Mediterranean) 12 at the Barcelona conference. See also EURO-MEDITERRANEAN PARTNERSHIP. As one of the founding member states of the European Communities, and the seat of several EU institutions, Belgium has always been actively involved in the process of European integration. Likewise, European integration, combined with the gradual federalization of the country from the 1970s onward, has been one of the most influential developments in Belgium’s post-1945 history (Van Meerhaeghe, 1992). Belgian policy toward Europe has been characterized by a high degree of continuity. Moreover, given that all its main political parties strongly support further integration, changes in government have not led to policy changes in this respect. Throughout the history of European integration, Belgian politicians, known to be masters in the forging of political compromises, have played a very active—at times even key—role in the process of European integration. It was Belgian foreign minister Paul-Henri Spaak who chaired the group of experts that formulated and drafted the treaties establishing the European Economic Community (EEC) and the European Atomic Energy Community (EURATOM) in 1956 (Dumoulin, 1987). In 1974, in an attempt to invigorate the sluggish process of European integration, the EC’s heads of state and government charged Belgium’s prime minister, Leo Tindemans, with drafting a report outlining the next possible steps on the road toward European Union (Tindemans, 1976). The ambitious nature of the report, which pleaded the case for the creation of an economic and monetary union and the development of a common foreign and security policy, proved to be “a bridge too far” for many member states: as a result, the report was not followed up in any concrete form. The benefits of EU membership for a small country such as Belgium have rarely been ques-

Belgium

tioned. With an open economy, highly dependent on trade, traditionally Belgium has been a strong supporter of trade liberalization. As early as 1921, Belgium concluded an economic union with Luxembourg, known as BLEU (Belgian-Luxembourg Economic Union). In 1945, the governments of Belgium, the Netherlands, and Luxembourg signed the Benelux treaty. However, for successive Belgian governments, Europe has been and remains more than a purely economic exercise. It is, in the first instance, a political undertaking that in the long term should lead to the establishment of a European federation with a full-fledged foreign and security policy. Belgian politicians are all too conscious of the fact that it is only by integrating its foreign policy into the larger European framework that a small country such as Belgium can guarantee its security and make its voice heard on the international stage. In line with this maximalist approach toward Europe, Belgium has always been a staunch supporter of Jean Monnet’s supranational Community method, according to which the Commission has the exclusive right of initiative and whereby decisions are taken in the Council by qualified majority voting (QMV). As a collegial and independent body intended to represent Community interests, the Commission is seen as the best guarantee for the defense of the interests of small member states within the EU. Intergovernmentalism, on the other hand, is associated with inefficiency and is considered to entail serious risks because the EU could become dominated by large countries such as France and Germany. In fact, in the early 1960s, Belgium and the Netherlands rejected the French-proposed Fouchet Plan for political union on the grounds that the proposed political cooperation among the EC countries was to take place outside the supranational Community framework. It is an irony of history that, during the 1991 intergovernmental conference on political union, exactly the opposite happened. The majority of member states vetoed the proposal of the Dutch presidency, supported by Belgium, to integrate the draft treaty’s provisions for a Common Foreign and Security Policy (CFSP) into the EC rather than including them in a separate intergovernmental pillar. The strong pro-European attitude prevalent in government and diplomatic circles is in general also supported by the Belgian population. Unlike

the citizens of some other member states, Belgians do not seem to see the transfer of sovereignty from the national to the European level as a major problem. That is because, as a young country (Belgium was founded only in 1830), possessing varying cultures and speaking more than one language, Belgium lacks a strong sense of national identity. European integration is generally seen as being complementary to the gradual process of federalization and as providing the larger framework within which the further devolution of powers to the federated entities can take place without creating negative repercussions for the economy. The fact that Belgium has developed into a full-fledged federal state has affected its participation in the EC decisionmaking process. Since the entry into force of the Treaty on European Union, Belgium’s federated entities—the regions (Wallonia, Flanders, and the Brussels-Capital Region) and the communities (French-speaking, Flemishspeaking, and German-speaking)—have made use of the possibility introduced by Article 146 of the treaty for such bodies to participate directly in EU Council meetings. The condition for such participation is that any decisions taken are binding upon Belgium as a whole and not only on a particular region or community. The way in which the different levels of decisionmaking in Belgium are coordinated is laid down in the Cooperation Agreement of March 1994 between the federal government and the communities and the regions (Hooghe, 1995). Although the balance sheet of more than forty years of Belgian participation in the European integration process generally seems very positive, the future will present a number of important challenges. The prospect of an EU of more than twenty-five member states has raised dual concerns: first, that the EU could be transformed into a glorified free trade area, postponing the creation of a European federation to the indefinite future, and second, that smaller member states such as Belgium could be increasingly marginalized within the decisionmaking process. In order to prevent the disintegrative effects of further enlargement, Belgium is in favor of the introduction of a more flexible approach toward European integration, whereby a central core of member states would have the option of integrating at a higher speed than the remaining member states. It goes without saying that Belgium considers itself to be one of the future members of this central core.

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This also explains why the government has been implementing austerity measures aimed at meeting the convergence criteria for Economic and Monetary Union (EMU), although Belgium has the highest national debt of any member state. Even though Belgium’s position with regard to Europe has been characterized by a high degree of continuity, the international environment in which it has been defending its maximalist views has in fact changed radically. Faced with these changes, and with the disappointing outcome of the 1996–1997 intergovernmental conference, Belgium will require new strategies and a great deal of creativity if it wishes to live up to its earlier performance. See also APPENDIX 2; APPENDIX 3; APPENDIX 7; APPENDIX 8. Boudart, Marina, et al., eds. 1990. Modern Belgium. Palo Alto, CA: The Society for the Promotion of Science and Scholarship. Dumoulin, Michel. 1987. La Belgique et les débuts de la construction européenne. De la guerre aux traités de Rome. Louvain-la-Neuve: Ciaco. Fitzmaurice, John. 1996. The Politics of Belgium: A Unique Federalism. London: Herst. Franck, Christian. 1996. “Belgium: The Importance of Foreign Policy for European Political Union.” In Christopher Hill, ed., The Actors in Europe’s Foreign Policy. London: Routledge. Hooghe, Lisbet. 1995. “Belgian Federalism and the European Community.” In Barry Jones and Michael Keating, eds. The European Union and the Regions, pp. 135–165. Oxford: Clarendon Press. Tindemans, Leo. 1976. “European Union. Report by Mr Leo Tindemans, Prime Minister of Belgium, to the European Council.” Bulletin of the European Communities, Supplement 1/1976. Van Meerhaeghe, M.A.G. 1992. Belgium and EC Membership Evaluated. London and New York: Pinter Publishers and St. Martin’s Press.

Bibliography

—Sophie Vanhoonacker

Benelux is both an acronym for Belgium, the Netherlands, and Luxembourg and the name of a customs union among the three countries that came into effect in 1948. A new treaty of economic union was ratified in 1960. The Benelux customs union survives within the EU because the Treaty of Rome permits such internal regional

Benelux

26

Berlaymont

groupings as long as they are compatible with the EC’s objectives.

The Berlaymont is the distinctive star-shaped glass and steel building in central Brussels that housed most of the Commission until 1992, when it was evacuated for lengthy renovations to remove asbestos used in the original construction. The Commission then moved into a number of adjacent buildings, with the commissioners themselves relocating to the Breydel building. Despite this arrangement, the word Berlaymont remains synonymous with the Commission.

Berlaymont

The European Economic Community (EEC) originated in a proposal in 1952 by Johan Willem Beyen, foreign minister of the Netherlands, to extend the competence of the proposed European Political Community, part of the ill-fated European Defense Community (EDC), by establishing a customs union and a common market. Beyen believed that sectoral integration alone was insufficient to promote economic development and, ultimately, political union. Instead, the six member states should abolish quotas and tariffs on intracommunity trade, establish a joint external tariff, unify trade policy toward the rest of the world, devise common policies for a range of socioeconomic sectors, and organize a single internal market. The Beyen Plan survived the defeat of the EDC and was a point of departure for the negotiations in 1955 and 1956 that culminated in the Treaty of Rome.

Beyen Plan

At a decisive foreign ministers’ meeting on September 30, 1991 (Black Monday), ten of the EC’s twelve member states rejected an ambitious draft treaty on political union, prepared by the Dutch presidency during the intergovernmental conference that resulted in the Treaty on European Union. The near-unanimous rejection of the Dutch draft (only the Commission and Belgium supported it) represented a serious setback not only for the Dutch presidency but also for the prospects of a unitary structure for the ensuing European Union, which instead included three separate “pillars.”

Black Monday

On September 16, 1992 (Black Wednesday), at the height of a currency crisis caused in large part by uncertainty over the fate of the Treaty on European Union, Britain left the Exchange Rate Mechanism (ERM) of the European Monetary System, having spent billions trying to prop up the pound. The lira dropped out of the ERM on the same day.

Black Wednesday

Bovine Spongiform Encephalopathy (BSE)

Bovine spongiform encephalopathy (BSE), a disease affecting cattle, appeared in Britain in the 1980s. In March 1996, British authorities announced a possible link between BSE and certain cases of Creutzfeldt-Jakob disease, a human brain condition. The British announcement caused an immediate public health scare throughout the EU, depressed the European beef market almost overnight, and exacerbated Britain’s already tense relations with its EU partners. The Commission and several EU member states, notably Germany, were furious about the British government’s failure to forewarn them of the announcement. The Commission took a series of measures to protect public health by eliminating any risk of human exposure to BSE and to restore consumer confidence in beef and veal. Most notably, on March 27 the EU banned exports of beef from Britain to other EU member states or elsewhere in the world. The British government reacted angrily, claiming that the Commission and the other member states imposed the ban on political grounds, as a result of consumer fears over BSE, rather than on the basis of scientific objectivity. The row overshadowed the opening of the 1996 intergovernmental conference at a special summit in Turin on March 29. Indeed, soon afterward John Major, Britain’s prime minister, launched a campaign to disrupt EU decisionmaking in an effort to pressure Brussels to lift the ban. As a result, Britain blocked a number of decisions in the Council of Ministers requiring unanimity, even though Britain supported some of the measures themselves. The crisis ended at the Florence summit on June 21 and 22, 1996, when Major agreed to end Britain’s obstructionism in return for the European Council’s approval of a phased lifting of the ban in accordance with a Commission plan for the eradication of BSE.

Although the immediate crisis was over, political and economic fallout continued for some time. First, Major’s behavior antagonized his fellow heads of government and further isolated Britain in the EU. Second, the drop in demand for beef in the EU, and for EU beef worldwide, had serious economic repercussions (EU compensation for beef farmers cost millions of ecu). Third, in July 1996 the European Parliament (EP) set up a temporary committee of enquiry into the Commission’s handling of the crisis. The EP’s report, published in February 1997, concluded that the Commission had mismanaged the crisis, partly because it had put the interests of farmers ahead of consumer safety. Public reaction to the crisis, and the EP’s criticism of the Commission, led to a renewed emphasis in the EU on consumer policy, a hitherto relatively neglected area. This, in turn, led to a showdown between the Commission and the EP on the one hand, and the Council on the other, over parliamentary involvement in agricultural legislation. The battle ground was a Commission proposal in March 1997 to label beef with its country of origin by the year 2000. By introducing the proposal under Article 100a (pertaining to the single market and consumer protection), the Commission sought to include the EP in the legislative process in order to ensure that consumers’ interests were better represented. However, the Council considered the proposal under Article 43, the traditional route for agricultural legislation, which excludes parliamentary scrutiny. This seemingly arcane procedural dispute was symptomatic not only of the chronic tension between the EP and the Council over EU decisionmaking but also of the growing importance of consumer policy in the EU. Willy Brandt is best known internationally for his development of Ostpolitik—a policy of openness toward Central and Eastern Europe—and his support for EC enlargement. As leader of the Social Democratic–Free Democratic coalition that came to power in Germany in September 1969, Brandt launched Ostpolitik in the face of bitter domestic resistance from the Christian Democrats, in opposition for the first time in the history of the Federal Republic. The ensuing political controversy fueled an equally contentious debate in NATO and the EC and gave rise to the specter for Germany’s

Brandt, Willy (1913–1992)

Brittan, Leon (1939– )

27

allies of a rootless, neutralist Federal Republic loosening its moorings in the West. Allied and internal Christian Democratic concern about Ostpolitik obliged Brandt to emphasize his support for European integration, which in any event he genuinely espoused. In particular, Brandt stressed the importance of British accession as a means of reassuring those EC member states that feared Germany’s resurgence. Brandt supported British membership in the EC for other reasons also and pushed in the Hague summit in December 1969 for French acceptance of enlargement. He endorsed French president Georges Pompidou’s call at the summit for “completion” and “deepening” as well as enlargement but resented the other member states’ presumption that Germany would foot the bill. The contrast in style and temperament between Brandt and Pompidou, clearly evident at The Hague, exacerbated the political differences between them. Pompidou especially resented Brandt’s repeated criticism of the Common Agricultural Policy, which France strongly supported. Later, in the first year of British membership, Brandt opposed the proposed European Regional Development Fund, which looked too much like an exercise in pork-barrel politics. Brandt’s unwillingness to lavish money on the Community may have angered his fellow heads of state and government, but it won him solid domestic support. Secure in office, Brandt seemed set to lead the Federal Republic well into the 1970s. But in early 1974 Brandt was seriously embarrassed by the arrest of his personal assistant on charges of spying for East Germany. In April of that year, two weeks after Pompidou’s death, Brandt resigned from the chancellorship. See also GERMANY. The Breydel is the building in Brussels to which the commissioners and their immediate staff moved in 1992 while the Berlaymont, the Commission’s permanent headquarters, was being cleared of the asbestos used in its original construction.

Breydel

Prior to coming to Brussels, Leon Brittan, one of the EU’s most influential commissioners ever,

Brittan, Leon (1939– )

28

Bruges Group

was a senior British Conservative politician and, between 1979 and 1986, a government minister. Brittan left government over a policy difference with Prime Minister Margaret Thatcher, who nevertheless rewarded his undoubted ability and devotion to free market principles by appointing him the UK’s senior commissioner in Jacques Delors’s second Commission (1989–1992). There Brittan was given responsibility for competition policy. A fierce economic liberal, Brittan was tenacious— some say overzealous—in ferreting out unfair subsidies to industry and creating a level playing field for manufacturers in the EC. For a variety of political and ideological reasons Brittan had a difficult relationship with Delors, but nevertheless served in Delors’s third and final Commission (1993–1994), this time as commissioner for external economic affairs. In that capacity Brittan had repeated territorial disputes with Hans van den Broek, the commissioner for external political relations. Brittan made a bid to succeed Delors as Commission president, but by common consent it was neither the UK’s turn to provide the next president nor in the Commission’s interest to have a forceful president in the immediate aftermath of the Treaty on European Union ratification debacle. Jacques Santer, who instead succeeded Delors, clipped Brittan’s wings by curtailing his responsibilities as external economic relations commissioner in the 1995–2000 Commission. The influential Bruges group of anti-EU members of the British Conservative Party was formed in December 1988 in the aftermath of Prime Minister Margaret Thatcher’s famous antifederalist speech, delivered at the College of Europe in Bruges. In May 1991, no longer prime minister, Thatcher agreed to become president of the Bruges group.

Bruges Group

In the mid-1950s, during the intergovernmental conference (IGC) that led to the establishment of the European Economic Community and the European Atomic Energy Community, Jean Monnet revived his earlier proposal to locate the institutions of the new Communities in a specially designated “European District.” Monnet’s proposal again failed to win support, although Luxem-

Brussels

bourg, then home of the European Coal and Steel Community, refused to host additional Community institutions. Accordingly, the new Communities located instead in Brussels, where the IGC was taking place. As in the case of the already-existing European Coal and Steel Community Assembly, however, plenary sessions of the joint assembly for the three Communities took place in Strasbourg. Thus Brussels became the site of the Commission, the Council of Ministers secretariat, and the Economic and Social Committee. Brussels also contains offices and conference rooms for the peripatetic European Parliament, which holds occasional plenary sessions there. Because of the large number of EC institutions and other bodies located in the city, Brussels is a popular synonym for the EU itself. Formally the Treaty of Economic, Social and Cultural Collaboration and Collective Self-Defense, the Brussels treaty was a mutual defense agreement signed in March 1948 by Britain, France, Italy, Belgium, the Netherlands, and Luxembourg. The treaty was a precursor of the North Atlantic Treaty, signed in Washington, D.C., in April 1949. The Brussels treaty became the basis of the Western European Union (whose founding members were the Brussels treaty’s original signatories and Germany), which was established in 1954, in the aftermath of the failed European Defense Community initiative, to facilitate German membership in NATO.

Brussels Treaty

See BOVINE SPONGIFORM ENCEPHALOPATHY.

BSE

In Euro-speak, the budget means the budget of the European Economic Community (now officially the European Community) and the European Atomic Energy Community (EURATOM). The European Coal and Steel Community is financed separately, by a levy on production. Strictly speaking, the EU, which includes the three Communities plus intergovernmental cooperation on foreign and security policy and justice and home affairs, has no budget, not having been designed to have spending functions.

Budget

The legal basis of the budget is found in articles 199 to 209a of the Treaty of Rome and corresponding provisions of the EURATOM treaty. The budget is a statement of foreseen revenue and the authorization of expenditure within the limits shown, subject to the existence of legislation establishing a policy basis for the expenditure concerned. The budget is not in itself a legal basis for expenditure. Despite a significant growth in recent years, this budget represents only 2.4 percent of all the public sector spending of the member states and less than 1.3 percent of the GDP of the EU. Revenue is derived from the Community’s “own resources,” that is, from funds that originate in the member states but are the property of the Community. They are not supplied by votes in national parliaments. Instead, decisions under Article 201 as to the level of own resources require unanimity in the Council of Ministers, consultation (no more) of the European Parliament (EP), and national ratification. Own resources consist of three “traditional” categories. The first two flow from the customs union: import duties and levies on imports of agricultural products. The third resource is a percentage of the value-added tax (VAT) imposed nationally under Community legislation. The Community percentage is not identified in the tax paid by consumers. The percentage is reducing from 1.4 to 1 in 1999. The VAT base may not exceed 55 percent (for some member states 50 percent) of gross national product (GNP). A fourth (and relatively new) resource is a levy on the GNP of the member states, which, under the own resource decision prevailing up to 1999, may not exceed 1.27 percent. The revenue side of the budget is fixed annually by the Council. It is not within the powers of the EP to vary the amount of revenue that the Council has adopted. Apart from some income from Community activities (sales and the tax on staff emoluments), the budget must be financed wholly from own resources. The budget must also be balanced. Expenditure is constrained initially by the estimate of revenue. Accordingly, the Commission is formally required to refrain from making any spending proposal or adopting any implementing measure that would overstep the own resources limit (Article 201a). Expenditure shown in the budget consists of two types of appropriation: payment appropriations (self-explanatory) and commitment appropriations, which permit the Community to incur

Budget

29

commitments that mature beyond the budget year and facilitate continuity of policy. Appropriations are classified as “compulsory” or “noncompulsory” expenditure. This is not a division between what the Community is legally compelled to pay; rather, compulsory expenditure results necessarily from the treaty or from acts adopted in accordance therewith. To oversimplify: did the treaty say that the Community would spend money? If so, the expenditure is compulsory. According to the Commission, “the distinction between compulsory and non-compulsory expenditure is essentially political” (Commission, 1994, p. 10). Almost 70 percent of total appropriations consists of compulsory expenditures for the Common Agricultural Policy and other redistributive programs. What remains is not enough to support large-scale initiatives in such politically appealing fields as industrial policy, research and development, and so on. The compulsory/noncompulsory split assumes significance only in the budgetary procedure. “The root of the trouble is an uneasy partnership between the Council and the Parliament, which are joint budgetary authorities. Originally the Council was the budgetary authority, but Parliament was given powers in the 1970 treaty revision, when the Community was endowed with its own resources” (Nicoll and Salmon, 1995, p. 100). The Council has the last word on compulsory expenditure (within constraints); Parliament has the last word on noncompulsory expenditure (within constraints). In the interinstitutional dialogue, the pressure is on the Council to accept reclassification. The annual budget and any supplementary budgets are adopted in a protracted negotiation between the Council and EP. The process begins with the Commission’s presentation of a Preliminary Draft Budget. This is not in the strict sense of the word a Commission proposal, which means that it escapes the standing rule that the Council can amend only by unanimity. The Council proceeds by majority vote to adopt a Draft Budget, which it sends to the EP for a first reading (in October). The EP amends noncompulsory expenditure and proposes modifications to compulsory expenditure, where the biggest single category is farm spending. The Council can modify Parliament’s amendments to noncompulsory expenditure and amend, reject, or accept its modifications to compulsory expenditure. Parliament conducts a

30

Budget

second reading of the Draft Budget thus amended or modified. Although it is not provided for in the treaty, the annual budget round concludes in December with a negotiation across the table between the president of the Budget Council and the president of the EP, with the budget commissioner in attendance. If agreement is reached, the white smoke can metaphorically be let out, and the process concludes with the president of the EP signing the budget into force. If no agreement is reached, there is no budget for the coming year. The Community then goes into a “fail-safe” procedure of “provisional twelfths” of the last valid budget for month by month expenditure, with tortuous approval mechanisms (Article 204). In either case, budget or provisional twelfths, the Commission is the executant (Article 205). From this it will be seen that the budget is the focus of a power struggle between the Council and the EP, with the latter seeking, with some success, to strengthen its grip on spending. “The Budget Council was also the first to negotiate directly with the European Parliament to reach an agreement (others now do so in the co-decision procedure)” (Westlake, 1995, p. 180). The Parliament is traditionally cast as the big spender, the Council as the economizer. This confrontation led to a series of clashes in the 1980s, with continuous disputes, failed negotiations, and European Court of Justice (ECJ) actions initiated by the Council. A first interinstitutional agreement (June 1982) gave only brief relief (De Wost and Lepoivre, 1982); a later one (first version June 1988; current version October 1993) has been more effective, although not trouble free. The interinstitutional agreement of 1988 removed from contention one of the constraints that had set the Council and Parliament against each other. This was the doctrine of the “maximum rate of increase” (Article 203.9). The maximum rate limited the growth of noncompulsory expenditure to an amount derived from the trend of GNP and of national budgets. It could be overridden by agreement between the Council and Parliament, but it became an article of religion of the Council majority that it would not agree to such an increase. For its part Parliament regularly voted excess noncompulsory expenditure appropriations and resented the Council majority’s refusal to countenance them. The 1988 Agreement contained a five-year expenditure schedule, split into

six main categories and showing a year-to-year progression. Although the Council did not at first admit that the agreed schedule effectively overrode the maximum rate rules, it did so, and the noisy debates were stilled. When the first schedule expired, it was renewed without undue difficulty to the year 2000. Divergence between the Council and EP over compulsory and noncompulsory expenditure nevertheless persisted. Running negotiations having failed, it seemed likely that the member states would discuss the matter in the 1996–1997 intergovernmental conference (IGC). In the event, apart from Common Foreign and Security Policy (CFSP) financing, budgetary issues were almost wholly absent from the IGC and the ensuing Amsterdam Treaty. Meanwhile, when Parliament adopted the 1995 budget, it changed some classifications, but the Council successfully took a case to the ECJ. The controversial issue of Community fraud was also raised at the IGC. All institutions are united in condemning and seeking to root out fraud. Alarming figures are tossed about, although by definition there is no way of knowing how much successful fraud is perpetrated. It concerns mainly the biggest category of spending, on price support and subsidization of farming. A handful of Commission officials have been implicated, and the Commission is routinely criticized for slack management. But given that the process involves payment by national governments or their statutory agencies to beneficiaries of Community policies, it is reasonable to imagine that fraud may occur at that stage, beyond any control that the Commission can exercise. Nevertheless the British government declared that “the level of waste, poor financial management and even outright fraud in the EU is a source of great public concern. . . . We secured significant changes in the Maastricht Treaty to enhance the powers of the European Court of Auditors and the European Parliament in the fight against such waste and mismanagement (most of which occurs at the level of the Member State rather than in the Community institutions). . . . We are considering whether there are further Treaty changes (to be negotiated in 1996–1997) which would be likely to strengthen this work” (White Paper, 1996, p. 26). According to Article 199, “all items of revenue and expenditure of the Community … shall be shown in the budget.” Yet one item is not included—the European Development Fund, used

to finance Community aid expenditure in the African, Caribbean, and Pacific countries that are signatories of the Lomé convention. The ostensible reason for the breach of a treaty article is that the member states are also signatories of the convention in their own right, alongside the Community, and wish to have a hold on spending. The initial allocation for the 1990–1995 period came to ECU 10,800 million. Another budgetary gap involves the activities of the EU when it is exercising competences that do not belong to the Community, notably in the application of the CFSP. For instance, the EU incurred considerable expense administering the divided city of Mostar in the former Yugoslavia. Yet, until the Amsterdam Treaty, there was no agreement on whether CFSP should be funded as part of the Community budget, or by the member states outside the budget. Accordingly, the treaty stipulates that CFSP administrative and operational expenditures (with the exception of operations having military or defense implications), “shall be charged to the budget of the European Communities,” and that “the budgetary procedure laid down in the Treaty establishing the European Community shall apply.” This revision of article J.11 of the Treaty on European Union (TEU) is followed in the Amsterdam Treaty by an interinstitutional agreement among the Council, Parliament, and Commission on specific provisions regarding financing of the CFSP. Conclusion of the Amsterdam Treaty came close to overlapping with preparations for the interinstitutional negotiation of the next multiannual expenditure schedule, from 2000 on. This implies a review of farm spending, of the interstate resource transfers mediated by the budget, and of the scale of own resources. All take on fresh significance from the prospect of Economic and Monetary Union at the end of the century and of the eastward enlargement of the EU in the early years of the next millennium, developments with profound budgetary implications. Commission. 1994. The Community Budget: The Facts in Figures. Luxembourg: Office for Official Publications of the European Communities. De Wost, J.-L., and M. Lepoivre. 1982. “La déclaration commune du parlement européen, du conseil et de la commission relative a différentes mesures visant à assurer un meilleur déroulement de la procédure

Bibliography

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budgetaire, signée le 30 juin 1982.” Revue du marché commun, no. 261 (November). Nicoll, William, and Trevor Salmon. 1995. Understanding the New European Community. Rev. ed. London: Harvester Wheatsheaf. Westlake, Martin. 1995. The Council of the European Union. London: Cartermill Publishing. White Paper. 1996. A Partnership of Nations. London: Her Majesty’s Stationery Office.

—Sir William Nicoll

Bulgaria

Like its neighbors in Central and Eastern Europe, Bulgaria aspired to EC membership after the revolution in 1989 and eventually submitted an application to the European Council in Madrid on December 15, 1995. In the meantime, Bulgaria and the EU signed a Europe Agreement on December 19, 1994, which entered into force on February 1, 1995. Despite these milestones on the road to full membership, however, Bulgaria is making slow progress. Political uncertainty, economic underdevelopment, and monetary instability make Bulgaria an unlikely candidate for EU accession in the near future, as the Commission acknowledged in its July 1997 opinion on Bulgaria’s application. See also CENTRAL AND EASTERN EUROPEAN STATES; TABLE 6. Germany’s Bundesbank (Central Bank) is a powerful, independent institution whose influence extends throughout the EU. Because of the weight of Germany’s economy, and the strength of Germany’s currency (the mark) under the Exchange Rate Mechanism of the European Monetary System, the Bundesbank effectively controls European monetary policy. Moreover, the Bundesbank’s obsession with price stability (the Bundesbank is constitutionally obliged to fight inflation above all else) had a deflationary effect on other European economies, causing sluggish growth and rising unemployment. This prompted French prime minister Edouard Balladur, in 1987, to advocate Economic and Monetary Union (EMU): the establishment of a European Central Bank (ECB) would both curb the Bundesbank’s power and restore some French influence over European monetary policy. The Bundesbank responded unenthusiastically, arguing that a Euro-

Bundesbank

32

Bureau

pean-level monetary policy would undermine price stability in Germany. This struck a chord with an increasingly skeptical German public. Undoubtedly, Bundesbank pressure stiffened the German government’s negotiating position during the 1991 intergovernmental conference on EMU and accounted for the relatively strict convergence criteria written into the Treaty on European Union. Also in deference to the Bundesbank’s domestic

popularity and political clout, the member states agreed in October 1993, after a lengthy dispute, to locate the new European Monetary Institute and the future ECB in Frankfurt, the Bundesbank’s home town. See also ECONOMIC AND MONETARY UNION.

Bureau

C A cabinet is a commissioner’s private office. Cabinets coordinate the commissioners’ work vis-à-vis the other commissioners, the directorate-general or directorates-general under the commissioner’s responsibility, and interest groups and the media in the commissioner’s home country. Cabinets vary in size, but average seven or eight people, most of whom are “political appointees” from the commissioners’ home countries. Some of them return to their home countries after their stint in the cabinet; others try to “parachute” into the permanent Commission civil service. Cabinets generally, and chef de cabinets (directors) in particular, tend be highly influential, often to the detriment of their relations with other units and senior officials in the Commission. See COMMISSION.

Cabinet

See COMPETITIVENESS ADVISORY GROUP.

CAG

The Canada-EU link is in a category all by itself. Canada’s share of EU trade is fairly steady and small: between 1989 and 1994 it hovered at around 1.8 percent. From a trade vantage, Canada does not command a lot of attention in Brussels. The EU is Canada’s second-largest trading partner but only at around 8 percent compared to a U.S. share of over 70 percent. To be sure, total figures are over $20 billion in two-way trade and direct investment levels are relatively much higher: twenty-two percent of investment in Canada comes from the EU, and 19 percent of Canadian

Canada

investment is in the EU. In both cases, the UK occupies a large share of the flow. Canada does not easily fit into the EU’s traditional external relations: it is not one of the excolonial African, Caribbean, and Pacific countries; it is not a prospective member or association partner; and it is not a great trading power such as the United States or Japan. Yet Canada was the first advanced industrial country to sign a broad economic cooperation agreement with the EC in 1976 (the Framework Agreement for Commercial and Economic Cooperation), which sought to promote trade, industrial, and scientific cooperation. Canada and the EU have built up a sophisticated and institutionalized consultative mechanism complete with embassies, parliamentary meetings, a Joint Cooperation Committee, ministerial meetings, and various working groups. The 1990 Canada-EU Transatlantic Declaration added regular heads of government, Commission president, and foreign ministers’ meetings in the rhythm of the Council presidency. Why does the EU entertain a considerable political relationship with a small economic partner? Part of the answer lies in history, part in the security link. But equally important, part of it lies in how both Canada and the EU relate to the United States. Historical, demographic, democratic, and cultural ties are deep. Canada’s two founding nations have their roots in Europe and maintain a political profile in the Commonwealth and La Francophonie. Canada’s role in both world wars and in NATO provided it with full political standing in European security throughout the Cold War. If goodwill is ever a factor in international politics, Canada had some of it at least with many European publics. How to translate all that into substance is another thing, however. In the 1940s Canada’s reliance shifted from the UK to the United States. Canada opposed Britain’s entry into the EC, as Canada stood to lose its Commonwealth preferential status. As late as 1971, Canadian trade with the UK equaled its trade with the EC Six. In vain, Canada had tried to use Article 2 of the North Atlantic treaty to add a political and economic dimension to the Atlantic Alliance. With British entry into the Community and Canada’s frozen relations with France after President Charles De Gaulle’s obtrusive support for Quebec independence in 1967, Canada stood quite squarely in the U.S. orbit. The independentminded Liberal regime under Prime Minister

33

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Canada

Pierre Trudeau was concerned about American penetration of Canada’s economy and, indeed, society. The so-called Nixon economic shocks of 1971 turned such concern into a sense of vulnerability. Canada’s persistent move in the early 1970s to build relations with the EC, known among Canadian foreign policy analysts as the “Third Option,” must be understood as a reaction against those developments (Boardman, 1979). Accordingly, Canada sought an EC link to counterbalance U.S. influence. A bit deceptively, Canada offered access to raw materials as a carrot (in fact, at the time Canada was not willing to ease the terms of access to its resources). Even declining levels of Canadian troops in Germany were slightly boosted to show Canada’s commitment to the EC. Eventually the Commission saw its own interests in the deal—greater competence in external relations—and managed passage of the 1976 Framework Agreement with the more hesitant member states (Pentland, 1977, p. 219). Most analysts agree that the Third Option fell short of its ambition (Cooper, 1994). How does one boost a trade relationship when both partners are focusing their attention elsewhere? A Canadian historian put his finger on it: “The third option, so sensible, so necessary, so obvious, is an attempt to secure the triumph of politics over geography” (Bothwell, 1977, p. 35). Today we might write: “to secure the triumph of politics over commerce.” Canada-EC relations in the late 1970s and 1980s drifted with slowly declining percentiles in trade while Canada’s commerce with the United States rose. It was not just Ottawa that did not know how to put economic meat on a political skeleton; the Community also did not have a coherent policy vis-à-vis Canada. Meanwhile, various disputes over fur, fisheries, wine, and pinewood nematodes tested the relationship sorely at times. The late 1980s and early 1990s brought more change than at first appreciated. The Canada-U.S. Free Trade Agreement and then the North American Free Trade Agreement (NAFTA) made Canada an investment bridgehead or springboard for EC member states (Brinkhorst, 1995, p. 15). “EC 1992” captured Canada’s attention, and Ottawa renewed efforts to help Canadian businesses to exploit the single market (Pitts, 1990). Trade in finished products and services between Canada and the EU is slowly rising. Of course bilateral irritants remain, as was spectacularly manifested by

the Canada-EU fisheries war in 1995. Moreover, the security and defense relationship is historically at its weakest point. But no one on either side of the Atlantic appears very worried about this. Canada encourages a stronger European foreign policy and security identity and wants to explore cooperation with the EU on practical issues such as immigration. Canada’s realpolitik is rooted in multilateralism. As a small power, Canada gains most by tying larger powers or blocs to a system of global rules, hence Canada’s consistent policy of building up the World Trade Organization (WTO) and the UN. As long as relations with the EU remain within this framework or even move toward some form of Atlantic free trade arrangement, Canada will pursue them. At the same time, Canadian businesses cannot be expected to pursue a political agenda. On their list of priorities, Europe comes after the United States and the rest of the Americas and then competes with the Asia-Pacific region. Meanwhile, the Canadian government’s dayto-day concern is not to fall between the cracks of great power politics. Experience teaches that in the U.S.-EU dialogue, Canada can easily become an afterthought. Persistent diplomacy was needed to get the Framework Agreement and the Transatlantic Declaration. Ottawa is justified in exerting more political energy on its link with the EU than the trade figures alone would warrant, as long as no one is under the illusion that it will lead to an actual counterweight to Canada-U.S. relations. At times, Canada’s interests will be on the U.S. or the European side. Above all, however, Canada will try to keep maneuvering space between its two chief trading partners. Boardman, Robert. 1979. “Initiatives and Outcomes: The European Community and Canada’s Third Option.” Journal of European Integration 3, no. 1, pp. 5–28. Bothwell, Robert. 1977. “The Third Option.” In Norman Hillmer and Garth Stevenson, A Foremost Nation: Canadian Foreign Policy and a Changing World. Toronto: Mclelland and Stewart. Brinkhorst, Laurens Jan. 1995. “EU-Canada: An Enduring Link.” In Roy B. Christensen, ed., Canada and the European Union: A Relationship in Focus. Ottawa: Delegation of the European Commission in Canada. Cooper, Andrew F. 1994. “Canada-EC Relations in Comparative Perspective: Promise, Problems, and Prospects.” In Gretchen M. MacMillan, ed., The Eu-

Bibliography

ropean Community, Canada, and 1992. Calgary: University of Calgary Press. Pentland, Charles. 1977. “Linkage Politics: Canada’s Contract and the Development of the European Community’s External Relations.” International Journal 32, no. 2, pp. 207–231. Pitts, Gordon. 1990. Storming the Fortress: How Canadian Business Can Conquer Europe in 1992. Toronto: HarperCollins.

—Alexander Moens

See COMMON AGRICULTURAL POLICY.

CAP

In 1992 the Commission proposed a highly controversial carbon dioxide (CO2) tax aimed at reducing pollution and consumption of nonrenewable energy sources in the EC. The Commission’s motives were mixed: Denmark and the Netherlands had introduced such taxes at the national level, an action that the Commission feared could distort the single market; the Commission wanted the EC to be seen to be taking a major initiative before the Rio earth summit later that year; and the Commission was acting as a “policy entrepreneur” both to promote environmental policy and to acquire more political and bureaucratic influence. The proposal was controversial not only because some member states resented the attempted expansion of Commission influence, but especially because taxation is an area jealously guarded by most national governments. The Commission dropped the proposal in December 1994, partly because of strong opposition from a number of member states and industry groups and partly because of lack of support from the EU’s main competitors, notably the United States and Japan. Nevertheless a possible CO2 tax remains on the EU’s policy agenda. See also ENERGY POLICY; ENVIRONMENTAL POLICY.

Carbon Dioxide (CO2) Tax

Cassis de Dijon is the popular name for a landmark European Court of Justice (ECJ) decision that facilitated completion of the single market. In February 1979 the ECJ struck down a German prohibition on imports of Cassis de Dijon, a French liqueur. Germany had based its ban on a

Cassis de Dijon Case

Cecchini Report

35

law that prohibited the sale of imported drinks that did not meet minimum alcoholic content requirements. But the court held that Germany could not discriminate against products from other member states that met basic health and safety standards set in those states. In the Cassis case the ECJ determined that the German ban was disproportionate because information on the label as to alcoholic content was sufficient to protect the innocent consumer. By reading into the treaty a requirement for the mutual recognition of national health, safety, and technical standards, the ECJ prompted a fundamental change in the EC’s harmonization policy: based on the court’s decision, the Commission developed the principle of mutual recognition, thus avoiding the otherwise impossible process of harmonizing in detail the member states’ diverse product standards. This was a key element of the Commission’s successful strategy for completing the single market program. See also EUROPEAN COURT OF JUSTICE; REGULATORY POLICY. See COMMON COMMERCIAL POLICY.

CCP

See CONFERENCE TEES.

CEAC

OF

EUROPEAN AFFAIRS COMMIT-

In 1986 and 1987 Paolo Cecchini, an Italian economist, led a group of researchers in a huge, Commission-funded project on the “costs of non-Europe.” The purpose of the project was to quantify the cost to the EC of maintaining a fragmented market. Based on data from the four largest member states, Cecchini’s team of independent consultants assessed the costs and benefits of maintaining the status quo by analyzing the impact of market barriers and by comparing the EC and U.S. markets. Cecchini looked at three things: the financial costs to firms of the administrative procedures and of the delays associated with compliance with customs formalities, the opportunity costs of lost trade, and the costs to national governments of customs controls. In early 1988 Cecchini’s team produced its findings in a massive sixteen-volume publication,

Cecchini Report

36

CEDEFOP

popularly called the Cecchini report. The gist of the report was that existing physical, technical, and fiscal barriers to trade cost the Community 3 to 6 percent of GDP annually. Also in 1988 Cecchini published a one-volume book version of his report, The European Challenge: 1992. Although its methodology was criticized and its conclusions were subsequently shown to have been exaggerated, the Cecchini report was highly influential at the time of its publication and helped to build momentum behind the single market program. See EUROPEAN CENTER VOCATIONAL TRAINING.

CEDEFOP

FOR THE

DEVELOPMENT

OF

See CENTRAL AND EASTERN EUROPEAN STATES.

CEES

See CENTRAL EUROPEAN INITIATIVE.

CEI

The CE mark, applied to products manufactured in the EU, is intended primarily for customs and regulatory authorities to show that the product complies with all applicable standards directives. It should not be confused with quality marks, such as those awarded by other national bodies. Depending on the relevant directive, the CE mark can be applied by the manufacturer or by the laboratory or other institution certifying the product. By improving the process of product certification, the introduction of the CE mark in the late 1980s undermined technical barriers to trade and facilitated implementation of the single market program. See also REGULATORY POLICY; SINGLE MARKET PROGRAM; STANDARDS AND CONFORMITY ASSESSMENT.

CE Mark

See EUROPEAN STANDARDS COMMITTEE.

CEN

See EUROPEAN ELECTROTECHNICAL STANDARDS COMMITTEE.

CENELEC

Central American Common Market

See LATIN AMERICA; SAN JOSÉ DIALOGUE.

Central and Eastern European States (CEES)

The development of relations between the Central and Eastern European states (CEES) and the EC was constrained during the Cold War by political, economic, and ideological factors. The Soviet Union opposed the formation of an integrated Western Europe and declined to establish relations with the EC or to recognize its supranational competence for international trade. With the exception of Romania, the CEES that were members of the Council for Mutual Economic Assistance (CMEA) for the most part followed the Soviet line. On the Western side, the Community was wary of agreements that would have strengthened Soviet leverage over the CEES and for that reason turned aside Eastern-bloc proposals, made since the 1970s, for a CMEA-EC umbrella accord. This situation began to change in the 1980s as the Soviet Union adopted a more flexible policy toward the EC and as the CEES gained greater freedom to pursue their national interests. In June 1988 the EC and CMEA concluded a joint declaration establishing diplomatic relations. In the same month Hungary concluded a ten-year trade and cooperation agreement (TCA) with the EC. Similar agreements were concluded with Poland in 1989, Bulgaria and Czechoslovakia in 1990, and Romania in early 1991. These first-generation agreements soon were overtaken by the rapid pace of change in the region. At the July 1989 Paris summit, the G7 agreed to launch a program of assistance for Hungary and Poland to support the economic and political reforms underway there. The European Commission was asked to coordinate aid from the G24 (the group of twenty-four most industrialized western countries)—a significant upgrading of the Community’s role in East-West affairs. Later in 1989 the Council of Ministers approved the launching of Pologne et Hongrie: Actions pour la Reconversion Économique (PHARE), a Community-funded program of technical assistance to encourage the development of private enterprise and the building of market-oriented economies. With the fall of the Berlin Wall in November 1989 and the revolutions in other CEES, the Com-

munity was faced with the more demanding task of helping to stabilize the postcommunist order in the entire region. By July 1990 PHARE was extended to Bulgaria, Czechoslovakia, Yugoslavia, and East Germany (before its absorption by the Federal Republic in October of that year). Romania and the three Baltic states were added in 1991 and 1992. The Community also played a major role in the founding of the European Bank for Reconstruction and Development, which opened in April 1991 for the purpose of supporting projects in the region with loans and technical assistance. In December 1991 the Community concluded the first Europe Agreements with Poland, Hungary, and Czechoslovakia. (The agreement with Czechoslovakia never went into effect owing to the breakup of that country, but agreements with Slovakia and the Czech Republic were concluded in October 1993.) These agreements, named to convey the special quality of relations between the EU and the CEES, superseded the TCAs that had been concluded with states that were still essentially communist. The new agreements included provisions for foreign policy coordination and cultural exchange as well as economic cooperation and were a partial response to the expressed desire of the CEES to join the EU. The agreements did not contain explicit commitments to EU membership, but the aspiration to accede was noted in the treaty preambles and implicitly governed their operative provisions. Europe Agreements later were concluded with Romania (February 1993), Bulgaria (March 1993), the Baltic states (June 1995), and Slovenia (June 1996). The Europe Agreements were negotiated under Article 238 of the Treaty of Rome, which gives the Community the right to establish with nonmember states “association involving reciprocal rights and obligations, common action and special procedure.” As mixed agreements covering areas of both Community and national competence, they were signed by the EC and its member states and required the approval of the European Parliament (EP), member states’ parliaments, and the parliament of the associated country before entering into force. In order to facilitate trade and investment during the ratification process, the Commission concluded interim agreements covering trade liberalization and other areas reserved for Community competence. Interim agreements—comprising essentially the trade provisions of the Europe Agreements—for Czechoslo-

Central and Eastern European States (CEES)

37

vakia, Hungary, and Poland went into effect in March 1992. The Europe Agreements provide for the establishment of bilateral free trade areas within a ten-year period comprised of two five-year stages. With the exception of textiles and clothing and of European Coal and Steel Community (ECSC) products, all quantitative restrictions on the import of industrial goods to the EU were eliminated from the date of entry into force of the interim agreements. Market access for agricultural products was enhanced, although quotas remained in place. Tariffs were lowered on both sides, but with the EU required to reduce more quickly than the CEES. Although the agreements represented a major step toward full trade liberalization, they came under criticism from various quarters for the degree of protection they retained. Restrictions on textiles, steel, and agricultural goods affected precisely those goods that the CEES were best positioned to export. The agreements also contain sweeping antidumping and safeguard clauses that some observers feared might deter foreign direct investment. In response to these and other concerns, the EU subsequently undertook unilateral steps to speed the liberalization process. In any case, trade between the EU and the CEES rapidly expanded on both the import and the export sides, as the latter redirected their trade from the CMEA (which was dissolved in early 1991) to the Western European and global market. In nontrade areas, the agreements call for the progressive approximation of legislation in the CEES to EU norms and adoption of EU competition rules. They also deal with the movement of workers, trade in services, and rights of establishment. Their liberalizing effect in these sensitive areas is rather modest, and their main contribution is to improve the lot of workers from the CEES already in EU countries rather than to facilitate new flows of people. The Europe Agreements also provide for expanded political dialogue and cultural cooperation, set up bilateral association councils to monitor the implementation of the agreements, and provide for financial cooperation in the form of grant aid under PHARE and access to credit from the European Investment Bank. Despite progress made with the Europe Agreements, the issue of EU membership for the CEES remained controversial in the EU itself and was widely debated in the early 1990s. Federalists

38

Central and Eastern European States (CEES)

worried that widening to a large group of relatively backward countries with different cultures and political traditions could slow the development of the EU into a deeper union with stronger institutions and a single currency. There were also concerns about costs, in particular those involved in extending the EU’s Common Agricultural Policy (CAP) and cohesion policy to the east. On the other side, proponents of enlargement stressed the imperative of stabilizing democracy in the CEES, as well as the potential economic advantages of bringing another one hundred million or more consumers into the EU. This debate was more or less resolved at the June 1993 Copenhagen meeting of the European Council, at which the EU member states formally declared enlargement to be an explicit goal of the EU. Although they did not set a timetable, the heads of state and government agreed that accession would “take place as soon as an associated country is able to assume the obligations of membership by satisfying the economic and political conditions required” (Commission, 1995a). Associated countries were defined as those countries with which the EU had concluded or planned to conclude Europe Agreements. This meant that the Baltic states were regarded as candidates for eventual membership, whereas Russia, Ukraine, and the other countries of the former USSR were not. Four conditions for membership were specified: (1) stability of institutions guaranteeing democracy, the rule of law, human rights, and respect for and protection of minorities; (2) the existence of a functioning market economy; (3) capacity to cope with competitive pressures and market forces within the EU; and (4) the ability to take on the obligations of membership, including adherence to the aims of political, economic and monetary union. The last condition implies full acceptance of the acquis communautaire, including participation in all three of the pillars established by the Treaty on European Union (TEU). In addition, the European Council stipulated that “the Union’s capacity to absorb new members, while maintaining the momentum of European integration, is also an important consideration in the general interest of both the Union and the candidate countries.” This condition later was interpreted to mean that following the admission of Austria, Finland, and Sweden in January 1995, negotiations regarding the admission of additional candidates (beginning with Cyprus and Malta, fol-

lowed shortly by the CEES) would not begin until at least six months after the completion of the 1996–1997 intergovernmental conference (IGC), which would take up the issue of EU institutional reform. Although the European Council took the decision in principle to enlarge at Copenhagen, throughout 1993 and 1994 there was little real momentum behind the enlargement effort, given the delays in putting into effect the Europe Agreements, the unexpectedly difficult TEU ratification process, and the task of finalizing the accession agreements with Austria, Finland, and Sweden. The stage was set for real progress at the June 1994 Corfu summit, at which the European Council invited the Commission “to make specific proposals as soon as possible for the further implementation of the Europe Agreements and the decisions taken by the European Council in Copenhagen” (Commission, 1995a). On the basis of this request, the Commission produced several documents that became the basis for the preaccession strategy adopted by the European Council at Essen in December 1994. The most noteworthy innovation at Essen was the establishment of the Structured Dialogue. Unlike the association councils, which bring each associated state together with the Council in a one-plus-fifteen member state format, the Structured Dialogue involves all of the CEES and all of the EU member states and has been implemented through a program of meetings of environment, transport, justice, foreign, and other ministers as well as annual meetings of heads of state and government on the margins of a European Council meeting. The Essen summit singled out two issues that were expected to be especially difficult and that had the potential to break the admission of CEES: the internal market and agriculture. The European Council instructed the Commission to prepare, by the end of the first half of 1995, a white paper on the internal market and, by the end of 1995, a paper on agriculture policy as it related to enlargement. The internal market white paper (Commission, 1995c) was based on the assumption that joining the EU entails a process of integration far deeper and more intrusive than that necessitated by other kinds of free trade arrangements and emphasized the demands that participation in the single market places on the member states. To operate the internal market, a member state must

adhere to the principles in the EC treaty and to a large body of secondary legislation, most of which takes the form of directives that must be transposed into national law. Because the single market relies heavily on the principle of mutual recognition, joining the EU also requires the establishment of adequate standards and effective regulatory and inspection bodies in the acceding countries. The voluminous white paper outlines the relevant legislation and conditions necessary to operate the legislation in twenty-three industrial sectors and areas of regulation and thus is intended to serve as a kind of handbook for the CEES seeking to join the internal market. Following the guidance provided in the white paper and drawing upon legal and technical assistance provided by the EU, the prospective member countries have set about aligning domestic legislation with EU norms. The costs of extending the CAP to new member states with large and relatively poor farming sectors has been widely debated, with some academic experts estimating the incremental burdens in the tens of billions of ecu. In a paper delivered to the European Council in late 1995, the Commission was more optimistic and concluded that the costs of bringing the CEES into the CAP will be manageable, provided the EU continues with the 1992 MacSharry reforms designed to bring down the costs of the CAP as a whole (Commission, 1995b). The other area of concern has been the structural funds. Recipients of these funds, mainly in the Mediterranean member states and Ireland, are concerned that assistance to them will be cut as resources are diverted eastward, whereas net payers to the EU budget fear new tax and budgetary burdens. Resolving this issue will take political compromise among the member states and the candidate countries, but it would appear that for budgetary reasons the CEES will not receive the same level of support from the cohesion funds as has been provided to Ireland and the Mediterranean countries. Cooperation in the Common Foreign and Security Policy (CFSP) is well advanced, and the CEES increasingly coordinate positions with the EU in the UN and other international forums. As the EU’s emerging defense arm, the Western European Union (WEU) has accorded “associate partner” status to the CEES, which allows them to participate in nearly all meetings of the WEU and

Central and Eastern European States (CEES)

39

in WEU missions. Another EU initiative, undertaken as a joint action under CFSP, was the European Stability Pact (Balladur Pact), originally proposed by France but subsequently endorsed by the EU. The pact aims to enhance stability in the CEES by encouragement of good neighborly relations, settlement of questions relating to borders and ethnic minorities, and promotion of democratic institutions on a regional basis. The pact was concluded at a meeting in March 1995 of the Organization for Security and Cooperation in Europe, which was also entrusted with the pact’s implementation. Despite the formidable challenges that must be overcome, the CEES are pressing ahead with their applications to join the Union, and several countries could become full members in the 2002–2004 time frame. Under the procedures outlined in Article O of the TEU, prospective members must apply to the Council of Ministers, which can act upon a membership application after receiving the Commission’s opinion regarding the candidate country’s suitability for membership. The Commission delivered its opinions in July 1997, shortly after the conclusion of the IGC in Amsterdam. Based on its own assessment and detailed information received from the applicants, the Commission recommended that accession negotiations begin with five CEE countries—the Czech Republic, Estonia, Hungary, Poland, and Slovenia—as well as with Cyprus. In December 1997 the Council of Ministers unanimously endorsed these recommendations, clearing the way for the start of accession negotiations in early 1998. The Council also established a reinforced pre-accession strategy to accelerate the preparations of all ten CEE countries for eventual membership and an ongoing European conference that would include the five countries not scheduled to begin negotiations. Their progress would be reviewed annually to determine when accession negotiations could begin. The EU, represented by the EU presidency country but with assistance from the Commission, will conduct the negotiations, with the objective of concluding individual treaties of accession. These accession treaties then will have to be approved by the European Parliament by an absolute majority, by the Council unanimously, and ratified by all of the member states and the acceding country. The negotiation process is expected to take several years, given the number of countries and

40

Central European Initiative (CEI)

the complexity of the issues involved. Acceding states may be granted certain derogations and long transition periods for some areas of integration. In addition, the EU itself will be under pressure to continue the reform of both its institutions and its policies, in order to be able to function effectively as a union of twenty or more members. There may well be long delays between the admission of the five most advanced candidate countries identified in Agenda 2000 and those whose economic and political performance is lagging. The Europe Agreements thus will remain in effect for countries not yet admitted. There can be little doubt, however, that the political revolutions of 1989 through 1991 and the EU’s subsequent decision to welcome the CEES as members will transform the EU in ways that even now are difficult to foresee. See also TABLE 6. Commission. 1995a. The European Councils: Conclusions of the Presidency, 1992–1994. Luxembourg: Office for Official Publications of the European Communities. ———. 1995b. “Study on Alternative Structures for the Development of Relations in the Field of Agriculture Between the EU and the Associated Countries with a View to Future Accession of these Countries.” Ip/95/1314. Brussels: Commission. ———. 1995c. White Paper: Preparation of the Associated Countries of Central and Eastern Europe for Integration into the Internal Market of the Union. COM(95) 163. Luxembourg: Office for Official Publications of the European Communities. ———. 1997. Agenda 2000. COM(97)2000 final. Luxembourg: Office for Official Publications of the European Communities.

of stability in Central Europe and clarifying the CEI’s links with the EU. See COMMON EXTERNAL TARIFF.

CET

See COMMON FISHERIES POLICY.

CFP

See COMMON FOREIGN AND SECURITY POLICY.

CFSP

Charter of Fundamental Social Rights for Workers See SOCIAL CHARTER.

Bibliography

—John Van Oudenaren

Central European Initiative (CEI)

The Central European Initiative (CEI) is a grouping of Central European states—Austria and Italy (two EU member states), Albania, Belarus, Bosnia, Bulgaria, Croatia, the Czech Republic, Hungary, Macedonia, Poland, Romania, Slovakia, Slovenia, and Ukraine—to promote economic cooperation and political rapprochement in the region. In December 1996, the European Council (meeting in Dublin) welcomed a Commission report encouraging regional cooperation as a factor

Charter of Paris for a New Europe

Signed in Paris in November 1990 by the member states of the Conference on Security and Cooperation in Europe (CSCE), the Charter of Paris for a New Europe recognized the CSCE’s centrality in the security architecture of post–Cold War Europe, especially with regard to such potentially contentious issues as the integrity of national borders, self-determination, minority rights, pluralism, human rights, environmental protection, and the fight against organized crime and terrorism. Because the Charter of Paris harks back to the CSCE’s Helsinki Final Act, it is also called Helsinki II. China and the EC established diplomatic relations in 1975. Ten years later they signed a trade and economic cooperation agreement, which remains the basis for EU-China commercial dealings. A trade-specific Joint Committee meets annually at ministerial/commissioner level, buttressed by groups of experts and working parties in various sectoral and policy areas. This was supplemented in 1994 with a “structured political dialogue” involving regular meetings of foreign ministers. As a key component of its new strategy toward Asia, in 1995 the EU developed a “comprehensive, independent, and consistent long-term

China

strategy” for relations with China, an emerging economic and political powerhouse. By that time China had become the EU’s fourth largest export market and fourth largest supplier. Eager to maximize trade and investment opportunities for Europeans in China, and eager also to raise the fledgling EU’s international political profile, Brussels intensified its “constructive engagement” with Beijing. The inaugural Euro-Asian meeting of March 1 and 2, 1996, which brought together for the first time the heads of state or government of the EU member states (plus the Commission president), China, Japan, and Korea, and the ASEAN countries, demonstrated the EU’s and China’s interest in each other and in broader Asian affairs. Despite the progressive strengthening and deepening of contacts during the past two decades, EU-China relations have always been touchy. Negotiations to reduce quotas and other barriers to trade have been difficult and prolonged. Although the EC was one of the earliest major trading partners to grant China fully unconditional mostfavored-nation status (nondiscriminatory tariff access for China’s goods and services), the EU resents what it sees as continuing barriers to European exports. Disputes abound, involving frequent use by the EU of antidumping measures. China’s disregard for intellectual property rights was a major irritant in EU-China relations. Although China now has intellectual property laws in place (thanks largely to U.S. pressure) problems of enforcement remain. A long-standing dispute over maritime transport was finally resolved to the EU’s satisfaction and, as the EU likes to point out, to the benefit of China’s other trading partners as well. Although not specifically an EC-China issue, China’s bid to join the World Trade Organization (WTO), and before that the GATT, is another irritant in bilateral relations. China craves WTO membership for symbolic reasons as well as for the obvious benefits in terms of market access. Given China’s prominence in the global trading system, China’s exclusion from the WTO seems anomalous. However, well-documented Chinese import barriers, as well as the opague nature of its import procedures and policies, make it difficult for the EU to agree to admit China without commitments to greater openness. EU policymakers have little confidence that China could or would abide by WTO rules. The United States is of the same opinion but casts its position in an ideological as well as a

China

41

pragmatic light. An ideological edge also differentiates the EU and U.S. positions on human rights in China. The EU and, especially, the European Parliament are not averse to criticizing China’s human rights record. But the EU has few moral scruples about dealing with China economically. Indeed, the EU showed little solidarity in 1997 when China retaliated against member states that had dared to take China to task for its human rights record. This incident demonstrates China’s ability to divide the EU politically, despite the EU’s hopes that constructive engagement with China would help develop the Common Foreign and Security Policy (CFSP). Similarly, human rights and other issues show China’s ability to divide the EU and United States in their dealings with China, to the detriment not only of Western influence on China, but also of transatlantic relations. Different security interests further divide the EU and United States in their policies toward China. The United States is engaged militarily in Asia; the EU lacks a coherent CFSP. Under the circumstances, the EU can afford to be more ingratiating in its relations with Beijing. The EU had a special interest in the transition of Hong Kong to Chinese rule in June 1997. Apart from Hong Kong being a former British colony, many EU companies use what is now the Special Administrative Region (SAR) of Hong Kong as a launching pad for investment in China. The SAR will likely remain a key partner for the EU in Asia, playing an important role in the EU’s relations with China. Similarly, the EU looks forward to the smooth transfer of sovereignty for Macao, a Portuguese colony, to China. As well as global strategic and economic elements, the EU’s interest in China encompasses humanitarian and environmental concerns. Thus, the EU wants to help China feed its burgeoning population, make better use of its natural resources, reduce environmental damage (due especially to China’s huge coal consumption), and alleviate rural poverty. The EU promotes these objectives through direct financial and technical assistance, support for nongovernmental organizations working in China, and humanitarian aid through the European Community Humanitarian Office (ECHO). Overall, the EU’s official policy toward China is quite ambitious. Apart from commercial, environmental, and humanitarian concerns, the EU seeks to promote regional stability and global pros-

42

Christian-Democratic Group

perity by achieving “smooth and gradual integration of China into the world economy.” The Commission and member states are trying to achieve greater coordination of EU activities and national policies relating to China and a higher EU profile in China and throughout Asia. However, China’s unpredictability, prickliness, and opacity may make these objectives difficult to attain. See EUROPEAN PEOPLE’S PARTY.

Christian-Democratic Group

Winston Churchill, the great British statesman, played a prominent part in the post–World War II European movement. Churchill’s most famous contribution to European integration was undoubtedly his Zurich speech in September 1946, in which he called for a United States of Europe. Given Churchill’s stature as Britain’s wartime leader, his rousing speech in favor of closer integration had a major impact on European public and political opinion. But Churchill never envisioned British participation in this putative United States of Europe. In view of the cultural, political, and historical differences between Britain and its continental neighbors, Churchill thought that Britain should remain aloof from a future European supranational organization and instead act as a transatlantic bridge between the continent and the United States. From this position arose Churchill’s opposition at the Hague Congress in 1948 to continental European efforts to craft a Council of Europe with an assembly that would draft a constitution for the United States of Europe. Had the Council of Europe emerged in that form, Britain would not have participated in it. Churchill’s support for continental European integration and his determination to preserve British sovereignty and independence shaped British attitudes toward the EC in the decades ahead.

Churchill, Winston (1874–1965)

See COMMONWEALTH OF INDEPENDENT STATES.

CIS

European citizenship formally came into being in Article 8 of the Treaty on European Union (TEU),

Citizenship

which entered into force in November 1993. Though some transnational political rights were not introduced until then, elements of common citizenship already existed in the EC’s regulation of legal and social rights and in policy concerns about “access” and “belonging.” There are conflicting views about whether or not rights are significant in principle or practice and about the prospects for European citizenship. Basic information about rights precedes the discussion of those conflicting views. The goal of freedom of movement (Article 118 of the Treaty of Rome) is the foundation for some equivalents of traditional civil rights, since elucidated in the jurisprudence of the Court of Justice (ECJ): for example, those relating to residence, the administration of justice, and ownership of immovable property (for economically active migrants within the Community). Almost from the outset, the ECJ established that the Treaty of Rome gave a common legal right to individual nationals, migrant or not. This was their right to expect, and duty to ensure, that states, including their own, complied with Community law (this principle was established in the van Gend en Loos case). European social rights are not directly redistributive. Rather, the Community regulates entitlements (mainly for workers) in member states through legal principles, the most important of which is nondiscrimination. The principle of freedom of movement gave rise to two regulations outlawing nationality-based discrimination against migrant workers’ access to insurancebased social benefits (revised as regulation 1408/71) and against them and their families in other social assistance (revised as regulation 1612/68). Sex-based discrimination was made unlawful in Article 119 of the Treaty of Rome, which required equal pay for men and women doing the same work. Between 1975 and the mid-1980s, five directives followed. These widened the scope of equal pay, extended the right of equality into other conditions of employment, applied the principle to statutory and occupational social security schemes, and gave comparable entitlements to self-employed women. Another directive was passed in 1992 to protect pregnant women workers and to guarantee a certain level of pay and maternity leave. Rights that are not based on the nondiscrimination principle include (1) consultation over re-

dundancy plans (downsizing plans) and protection of conditions of employment when work is transferred to another undertaking (covered by directives in the 1980s) and (2) consultation and protection in situations of risk and hazard at work (stemming from the Single European Act of 1986). Further consultative rights for workers are likely to emerge from the Social Protocol of the TEU, which was incorporated into the Amsterdam Treaty. A clutch of socioeconomic measures, including some of those just mentioned and others relating to the young and elderly, was introduced through the Charter of Fundamental Social Rights for Workers (Social Charter) of 1989. The basis for rights—freedom of movement of production, capital, labor, and services—has led to criticism that European citizenship is restricted to the “citizen-as-worker” (making it particularly defective for women and other people who are not in regular, conventional employment) instead of reflecting the normative principle that people are citizens because they are human beings. Also, although ECJ jurisprudence has tended—spasmodically—to expand the scope of rights and to limit anomalies within and across states, the legal instruments and enforcement procedures can make it difficult for people to claim rights that are common across the EU. It is also argued that the evolution of European citizenship replicates in a larger arena the exclusion of people without the right nationality. (Third country migrants, however, do have some protection if they are members of a migrant EU family or live in states that adhere to a nonbinding recommendation that they be treated the same as intra-Community migrants. Protection can also result from agreements between the EU and third countries.) Concerns about the narrowness of rights began to be acknowledged in the Community in the mid-1970s, grew with the momentum of discussion of an “ever closer union” in the 1980s, and were reflected in the TEU, which “constitutionalizes” the notion of Union Citizen, adumbrates links with the European Convention on Human Rights, refers to rights to information and redress within the common institutions, and requires member states to agree upon certain transnational political rights. The last provision includes the rights of nationals of any member state to be protected by the diplomatic and consular services of another state when outside the EU and to vote and stand for office in municipal and European elec-

Citizenship

43

tions (not general elections) wherever they reside within the EU. Though citizenship is usually thought of as an individualistic concept, it should be noted that the TEU also constitutionalizes a channel for inhabitants of regions collectively to influence common policies through the Committee of the Regions. Broadly speaking, there are two kinds of assessment of European citizenship, which might be labeled “minimalist” and “dynamic.” The first approach stresses formal legal rights and their limitations. All critics note the exclusion of general elections, which most closely relate to state sovereignty, and potential derogations from provisions for municipal and European elections. These are possible where there are specific problems, especially questions of national identities, as in Luxembourg where the proportion of residents from other member states is larger than elsewhere (Closa, 1995). O’Leary’s trenchant analysis shows that the new voting rights are little more than reciprocal arrangements that could exist, and sometimes do, irrespective of EU membership; that the direct link between individuals and the center is slight (see also the ruling in the German Constitutional Court case of Manfred Brunner and Others v. The European Union Treaty); and that it will be difficult in practice to use the right to diplomatic and consular protection by other member states (O’Leary, 1995). Curtin and Meijers identify hypocrisy on the part of member state governments, except Sweden and the Netherlands, in their ostensible intention to enhance rights to information (Curtin and Meijers, 1995). Member states’ restrictive applications of these measures to information about border policies reinforce at a European level the “closure” effects of citizenship on people from outside the Community. In the social field, the Commission’s capacity to expand a regulatory regime of rights is restricted to what it may opportunistically introduce in a context of a reluctant Council of Ministers (Mazey, 1996). Minimalist approaches also stress the limitations of local partnership, regional subsidiarity, and the status, powers, and budget of the Committee of the Regions. The dynamic approach, in contrast, focuses on the interactions of practical policies and conceptual paradigms. For example, Weiner argues that citizenship has never been static or uniform (Weiner, 1995). There are also other accounts of the contextual nature of its meaning and its histor-

44

Citizenship

ically varied practice among EU member states (Gardner, n.d.). In addition to rights, Weiner includes “access” and “belonging” as aspects of citizenship (Weiner, 1995, 1996). She identifies in the history of integration confluences of policy imperatives and the interests of key political actors that together have created breaches in nation-state experiences of citizenship and opportunities for new paradigms and practices. In this kind of approach, the regulation of social rights and relations between EU institutions and the “social,” local, and regional “partners” (which predate the TEU) are part of access and belonging. The period of acceleration toward union is, in Weiner’s account, a time of discernible movement in the paradigm of citizenship, containing the seeds of new practice in the triggering of rights. In particular, markets and migration have made place, as well as nationality, the conceptual and practical precondition for activating legal, political, and social rights. This could become significant not only for nationals of member states but also for lawfully resident migrants from third countries. The idea of a breach—small but categorically fundamental—is also central to alternative accounts of regions (Mazey and Mitchell, 1993). Although not indicating full-scale self-determination for European regions, analysts note new interactions among regions with each other and more directly with Community institutions. Thus, collective citizenship (including access, belonging, and rights) also no longer rests exclusively on nationality but also on place. The two approaches are likely to conform with different views about the future of integration. As former French foreign minister Claude Cheysson once said, “European citizenship (in the sense of direct links between the people of Europe and its central institutions), places us in the realm of the supranational, whereas European Union [does] not” (quoted in Weiner, 1996). The minimalist approach is consistent with an expectation that European citizenship will be “neonational”: fundamentally nationality based but with a European dimension added in (Baubock, 1994). Those expecting such a development usually stress that the cultural diversity of Europe and its historical conflicts are too deeply rooted for there to be a strong transnational sense of belonging like the one that nationality provides in state-based experiences of citizenship.

The observation that place may trigger the exercise of citizens’ rights is consistent with a “neoimperial” form of citizenship in the EU. For those who see this prospect, ethnic homogeneity or shared language need not be a precondition of common citizenship (Howe, 1995). Indeed, the protection of a public space where people have the right to discuss and disagree may depend upon cultural diversity and institutional pluralism—the sine qua non of eighteenth century federalism in the United States (Beer, 1993). See also DEMOCRATIC DEFICIT; SUBSIDIARITY. Baubock, Rainer. 1994. Transnational Citizenship: Membership and Rights in International Migration. Aldershot: Edward Elgar. Beer, Samuel H. 1993. To Make a Nation. The Rediscovery of American Federalism. Cambridge, MA: Belknap Press. Closa, Carlos. 1995. “Citizenship of the Union and Nationality of Member States.” Common Market Law Review 32, pp. 487–518. Curtin, Deirdre, and Herman Meijers. 1995. “The Principle of Open Government in Schengen and the European Union: Democratic Retrogression.” Common Market Law Review 32, pp. 391–442. Gardner, J. P. N.d. Hallmarks of Citizenship; A Green Paper. London: The Institute for Citizenship and the British Institute of International and Comparative Law, pp. 47–162. Howe, Paul. 1995. “A Community of Europeans: The Requisite Underpinnings.” Journal of Common Market Studies 33, no. 1, pp. 27–46. Mazey, Sonia. 1996. “The Development of EU Policies: Bureaucratic Expansion on Behalf of Women?” Public Administration 73, no. 4, pp. 591–609. Mazey, Sonia, and James Mitchell. 1993. “Europe of the Regions: Territorial Interests and European Integration; the Scottish Experience.” In Sonia Mazey and Jeremy Richardson, eds., Lobbying in the European Community, pp. 95-121. Oxford: Oxford University Press. O’Leary, Siofra. 1995. “The Relationship Between Community Citizenship and Fundamental Rights in Community Law.” Common Market Law Review 32, pp. 519–544. Weiner, Antje. 1995. “Building Institutions: The Developing Practice of European Citizenship.” Ph.D. thesis, Department of Political Science, Carleton University, Ottawa. ———. 1996. “Making Sense of the New Geography of Citizenship: Fragmented Citizenship in the European Union.” Paper presented at the annual conference of the Political Studies Association (UK).

Bibliography

—Elizabeth Meehan

Cohesion Fund

See COMBINED JOINT TASK FORCES.

CJTFs

Bernard Clappier was a French economist and senior civil servant who played an important behindthe-scenes role in the early years of European integration. In the late 1940s Clappier was head of French foreign minister Robert Schuman’s private office at the time of the profound change in French foreign policy that led to the Schuman Declaration. Between 1951 and 1954 Clappier was director of external economic relations in the Ministry of Economic Affairs. In that pivotal position Clappier was one of Robert Marjolin’s key supporters during the negotiations leading to the Treaty of Rome; he and Marjolin together helped to convince skeptical French politicians and civil servants of the virtues of the proposed European Economic Community. In 1962 Clappier chaired the first enlargement negotiations, which French president Charles de Gaulle ended abruptly the following year. In 1964 Clappier joined the Bank of France, serving first as deputy governor and then (1974–1979) as governor.

Clappier, Bernard (1913– )

Closeness is the principle that EU policies and institutions should be brought closer to, and made comprehensible to, the EU’s citizens. Closeness could be achieved through the use of such mechanisms as referenda, institutional reform (e.g., more power for the European Parliament), and the provision of greater direct benefits. See also DEMOCRATIC DEFICIT; LEGITIMACY.

Closeness

See COUNCIL FOR MUTUAL ECONOMIC ASSISTANCE.

CMEA

The extremely complex co-decision legislative procedure, introduced in the Treaty on European Union (Article 189b) in order to give the European Parliament (EP) more power and thereby enhance the EU’s democratic accountability, adds a third stage to the two stages that existed under the earlier cooperation procedure and gives to the EP a veto over proposals of which it does not ap-

Co-decision Procedure

45

prove. The most distinctive features of the co-decision procedure come into play if, at second reading stage, the positions of the Council of Ministers (which can usually act by qualified majority vote under the procedure) and the EP (acting by a majority of its members) diverge. In that case a conciliation committee, consisting of an equal number of representatives of each institution, can be convened. If the committee agrees on a joint text, both the Council and the EP must give their approval for it to be adopted; if the committee cannot agree on a joint text, the Council may adopt it unilaterally, but the EP (acting by a majority of its members) has the power to veto the adoption. Although intended to allay a widespread popular perception of poor democratic accountability, co-decision’s complexity made it a caricature of the EU’s seeming remoteness and unfathomableness. Yet, perhaps because of the EP’s eagerness to prove that greater parliamentary involvement and improved efficiency in decisionmaking are not incompatible—or simply that the new technique was workable—procedurally co-decision has been reasonably successful, although each co-decision reached takes an average of approximately one year. The 1997 Amsterdam Treaty greatly extended the scope of co-decision and simplified the procedure by giving up the third stage. See also DECISIONMAKING PROCEDURES. Established in May 1994 under the terms of the Treaty on European Union (TEU), the Cohesion Fund contributes to environmental and infrastructure projects in economically underdeveloped member states (those with a per capita GNP of less than 90 percent of the EU average), in order to help them meet the convergence criteria for Economic and Monetary Union (EMU). In reality, the Cohesion Fund was a thinly disguised side payment to Greece, Spain, Ireland, and Portugal to ensure their support for EMU during the intergovernmental conference that resulted in the TEU. Championed by Felipe González, the fund was approved in principle after tough bargaining in the run-up to the December 1991 Maastricht summit and generously endowed only after equally tough negotiations that culminated in the Edinburgh summit of December 1992. See also COHESION POLICY.

Cohesion Fund

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Cohesion Policy

Cohesion—the reduction of economic and social disparities between richer and poorer regions—is a fundamental objective of the EU. Not only do such disparities threaten the integrity of the single market and prospects for Economic and Monetary Union (EMU), but their existence is incompatible with the sense of community and solidarity that, ideally, should infuse the movement for European integration. Indeed, an unusual blend of idealism and pragmatism has motivated the quest for cohesion, especially since the EC’s Mediterranean enlargement in the 1980s. Yet concerns about the management and utility of structural and cohesion funds (the means by which cohesion is promoted), and the projected cost of cohesion in an EU encompassing the economically underdeveloped Central and Eastern European states, have cast the future of cohesion policy in doubt. Cohesion policy—encompassing regional policy (to reduce spatial disparities, regenerate old industrial areas, and assist rural development), aspects of social policy (to combat long-term unemployment and foster vocational education and training), and a small part of the Common Agricultural Policy (CAP) (to assist rural development)—developed relatively late in the EC’s history. The preamble of the Rome treaty mentioned the need to reduce regional disparities, but the treaty itself included few redistributive mechanisms. The European Social Fund (ESF) and the European Investment Bank (EIB), both established by the treaty, were not intended primarily to promote cohesion but were nonetheless expected to help the EC’s poorer regions. Similarly, Article 92(3) declared that national subsidies were compatible with the common market if they promoted “the economic development of areas where the standard of living is abnormally low or where there is serious underemployment.” Apart from those concessions, the prevailing attitude in 1957—enunciated in Article 2 of the treaty—was that the common market would, of its own accord, “promote throughout the Community a harmonious development of economic activities” and thereby lessen disparities between regions. After all, the treaty was a package deal to distribute losses and gains between member states, not to redistribute resources between rich and poor regions. In any case, with the notable exception of the south of Italy, regional disparities in the EC of six member states were not as striking

Cohesion Policy

as in the enlarged EC of nine, ten, and twelve member states or the EU of fifteen member states. Successive enlargements therefore increased regional disparities with regard to income, employment, education and training, productivity, and infrastructure. The EC’s growing regional differences manifested themselves in a north-south divide, with Ireland included in the southern camp. The spatial characteristics of the Community’s regional imbalance conformed to the coreperiphery concept used extensively by economists and social scientists to analyze inequalities between or among regions. As a result, the Community built its cohesion policy largely on the assumption of a poor periphery (Scotland, Ireland, Portugal, central and southern Spain, Corsica, southern Italy, Greece, and—after 1990—eastern Germany) and a rich core (southern England, northeastern France, the low countries, northwestern Germany, and northern Italy). Protocol 30 of Ireland’s 1972 act of accession to the EC emphasized the need to end regional disparities in the Community, but the European Regional Development Fund was established only in 1975, largely to compensate Britain for its poor return from the CAP. The EC began to coordinate member states’ regional aid schemes in the late 1970s, although its own regional aid policy remained rudimentary. The extent of the EC’s failure to redress regional imbalances became more apparent after Greece joined in 1981 and in the run-up to Spanish and Portuguese accession in 1986. Concern that the EC’s existing disadvantaged regions in southern Italy and Greece would suffer as a result of Iberian enlargement precipitated a row between member states in early 1985 over Integrated Mediterranean Programs (IMPs), an early instrument of cohesion policy. By taking personal responsibility for resolving the IMP issue, newly installed Commission president Jacques Delors signaled the enhanced importance of cohesion during his administration. Economic, political, and moral arguments underpinned the Commission’s efforts to promote cohesion in the aftermath of the EC’s second and third enlargements. Delors had long been aware of a growing rich-poor divide in the Community, which the accession of Spain and Portugal would greatly exacerbate. The Commission’s program for 1985 cautioned that regional disparities “could become a permanent source of political confrontation” and urged that the south be given “a fairer

share of the benefits of economic development” (Commission, 1985, p. 15). Delors warned the European Parliament in March 1985 that enlargement negotiations with Greece, Spain, and Portugal had “revealed a tension in Europe which is, let’s face it, a tension between north and south. It stems not only from financial problems but from a lack of understanding, from a clash of culture, which seems to be promoting certain countries to turn their backs on the solidarity pact that should be one of the cornerstones of the Community, solidarity being conceived not in terms of assistance, but rather as an expression of the common-weal, contributing to the vigor of the European entity” (Delors, 1985, p. 6). The single market program greatly boosted the arguments of the Commission and the poorer countries in favor of a vigorous cohesion policy. The gradual worsening of regional disparities since the 1960s suggested that market liberalization would broaden rather than narrow the Community’s rich-poor divide. Advocates of a stronger structural policy exploited uncertainty about the distributional consequences of the single market program to press their claims for cohesion. Fear that the single market would make rich regions richer and poor regions poorer and that the dynamic of market liberalization would intensify existing disparities led to an explicit link between cohesion policy and the 1992 program. In the Commission’s words, “the reduction of disparities and the strengthening of economic and social cohesion should go hand in hand with the implementation of the large internal market” (Commission, 1992b, p. 9). Apart from the “solidarity principle,” the likely economic and political impact of greater regional disequilibrium strengthened the case for cohesion. The EC would not prosper, let alone survive, if excessive disparities caused poorer member states to block legislation and impede implementation of the single market program. Accordingly, during the 1985 intergovernmental conference (IGC), the Commission advocated a substantial redistribution of resources to the Community’s less-prosperous regions. Although one of the attractions of the single market program for a financially strapped EC was its relative lack of cost, the Commission’s emphasis on cohesion raised the prospect of a sizable budgetary hike. The IGC deferred until later a decision about increasing the amount of structural funds, EIB

Cohesion Policy

47

loans, and other forms of assistance for poorer regions but committed member states to promoting economic cohesion and reducing regional diversity. As a result, Article 23 of the Single European Act (SEA) added a new title, “Economic and Social Cohesion,” to the Treaty of Rome. This committed the Community to “reducing disparities between the various regions and the backwardness of the least favored nations,” called for coordination between other EC policies and cohesion, and obliged the Council to reform the structural funds within a year of the SEA’s implementation, on the basis of a Commission proposal. Delors subsequently described the revised treaty’s provisions on structural policy as one of the SEA’s “fundamental objectives” (Delors, 1988, p. 11). Delors I and Reform of the Structural Funds In February 1987 the Commission introduced a five-year budgetary package to control agricultural spending, increase the Community’s own resources, and impose budgetary discipline. The socalled Delors I package also proposed reform of the structural funds (the financial instruments of cohesion policy), a doubling in real terms of the resources available through them (making a total of ECU 60 billion available from 1989 to 1993), and a particular focus on regions with a per capita income below 75 percent of the Community average. Just as Delors had used the voluminous Cecchini Report to bolster his arguments in support of the single market, he now cited the PadoaSchioppa Report to make a compelling case for reform of the structural funds. Published in April 1987, that report assessed the “implications for the economic system of the Community of … [the] adoption of the internal market program and the latest enlargement.” One of its major conclusions pointed out “the serious risks of aggravated regional imbalances in the course of market liberalization” and, in a memorable phrase, warned that “any easy extrapolation of ‘invisible hand’ ideas into the real world of regional economics in the process of market opening would be unwarranted in the light of economic history and theory” (Padoa-Schioppa, 1987, pp. 3, 4, 10). This was grist to Delors’s mill and strengthened the southern countries’ determination to win a sizable redistribution of resources. As a staunch conservative, however, British prime minister Margaret Thatcher instinctively rejected Padoa-

48

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Schioppa’s advocacy of guiding the “invisible hand.” In her view, market liberalization throughout the Community would foster rather than hinder economic development in the southern member states. Helmut Kohl sympathized with the southern states but knew that Germany would have to contribute most of the proposed budgetary increase. Thus the battle lines were drawn for a protracted dispute that, thanks to Kohl’s largesse, the European Council eventually resolved at the special Brussels summit in February 1988. A delighted Delors called the European Council’s decision to double the structural funds by 1993 “a second Marshall Plan” (quoted in the Economist, February 27, 1988, p. 41). Despite Thatcher’s misgivings, the northern countries’ endorsement of the Delors I package demonstrated their acceptance of redistributional solidarity as part of market integration. Having agreed to double the combined size of the three structural funds—the regional policy’s European Regional Development Fund (ERDF), the ESF, and the Guidance Section of the CAP’s European Agricultural Guidance and Guarantee Fund (EAGGF)—the Council adopted regulations in June and December 1988 reforming the EC’s cohesion policy. Substantially increasing the structural funds was not enough to redress regional imbalances. As Delors told the European Parliament in January 1988, “Cohesion is not simply a matter of throwing money at problems. . . . It implies rather a willingness to act at Community level to redress the disparities between regions and between different social groups” (Delors, 1988, p. 11). Accordingly, the 1988 reform sought to turn the structural funds into effective instruments of economic development. That transformation involved welding the EC’s regional policy and aspects of EC social and agricultural policies into a powerful mechanism to narrow the northsouth divide. The 1988 reform radically revised structural policy by introducing a number of new principles and procedures and strengthening existing ones. They include: •

•

Additionality. Structural funds must add to, not substitute for, member state public expenditure. Partnership. The partnership principle is the key to involving regions, not just national governments, in formulating and implement-

•

•

ing structural policy. Because Community operations complement corresponding national measures, there must be close consultation and cooperation between the Commission, member states, and regional or local bodies at all stages of a structural program. Eligible member state plans for regional assistance are incorporated into Community Support Frameworks (CSFs), which are contractual agreements between the Commission, national, and regional authorities. CSFs set out the program’s priorities, type of aid, methods of financing, and so on. Moreover, the Commission can take the initiative and propose that member states and regions participate in operations of particular interest to it. Operational programs usually last five years. Programming. The structural funds reform involves a major switch from project-related assistance to program assistance and decentralized management. This puts the emphasis on planning and continuity rather than on ad hoc activities. Under the old system the Commission dealt with thousands of separate projects; now the Commission oversees a much smaller number of CSFs. Concentration. Instead of spreading the EU’s financial resources widely and ineffectively, structural funds now concentrate on a few major objectives. Functional and geographic concentration restricted Community assistance to five priorities: Objective 1. Assist “regions whose development is lagging behind.” These are regions with a per capita GDP of less than 75 percent of the EU average and include all of Greece, Portugal, and the island of Ireland; large parts of Spain; and southern Italy, Corsica, and the French overseas departments. They account for about 20 percent of the Community’s population. Funding source: ERDF, ESF, EAGGF Guidance Section, EIB, and the European Coal and Steel Community (ECSC). The ERDF is the largest structural fund, and the Community spends almost 80 percent of it on Objective 1. Objective 2. Promote economic conversion and modernization in declining industrial areas, including about sixty sites in nine member states, notably Britain, Spain, France, and Germany. The Com-

munity mostly helps small and mediumsized enterprises in new economic sectors and vocational training. Funding source: ERDF, ESF, EIB, and ECSC. Objective 3. Combat long-term unemployment by assisting workers over twentyfive, anywhere in the EU, who have been unemployed for more than one year. Funding source: ESF, EIB, and ECSC. Objective 4. Integrate young people, anywhere in the EU, into the workforce. Funding source: ESF, EIB, and ECSC. Objective 5. Adjust agricultural structures (with a view to CAP reform, aims to adjust production, processing, and marketing structures in agriculture and forestry). Funding source: EAGGF Guidance Fund. Economic and Monetary Union Moves toward EMU in the late 1980s raised concerns in the EC’s poorer countries similar to their concerns with efforts to complete the internal market earlier in the decade. For Delors, the architect of structural policy reform, EMU was inconceivable without a sizable increase in Community assistance for disadvantaged regions. The 1989 Delors Report pointed out that because EMU would deprive member states of their ability to devalue, it could worsen the balance-of-payments difficulties of poorer countries. Indeed, the need for member states to harmonize their budgetary policies, coupled with a loss of exchange rate flexibility, portended serious problems for less-developed regions (Delors, 1989) During the IGC on political union, Ireland, Spain, and Portugal attached the highest priority to strengthening structural policy and called for a new framework to enable the putative EU to promote cohesion in the context of closer political and economic integration. Predictably, the three countries asserted that, in the absence of mechanisms to redistribute the benefits of EMU, the more central and prosperous regions would gain disproportionately. Using moral, political, and economic arguments honed during the Delors I debate, the poorer countries claimed that failure to meet their demands could undermine the EU’s foundations. Felipe Gonzáles, the Spanish prime minister and the poor countries’ standard bearer, fought tenaciously in the run-up to the Maastricht summit to win a greater Community commitment to cohesion.

Cohesion Policy

49

From the poorer countries’ point of view, the redistributive provisions of the Treaty on European Union (TEU) were highly satisfactory. Articles 2 and 3, which enumerated the EU’s tasks and activities, specifically mentioned cohesion. Amendments to Article 130 listed rural development as an objective of structural policy; stipulated that the Commission must report every three years on progress made toward achieving cohesion; conceded that a new mechanism, outside existing funds, could be introduced; and provided a framework for extending and deepening Community policies and actions to promote cohesion in parallel with the degree of political, economic, and monetary integration in the EU. Article 130d stipulated that the Council, acting unanimously on a proposal from the Commission, and after obtaining the assent of Parliament, would set up a Cohesion Fund by the end of December 1993, to contribute to projects on the environment and on transport infrastructure. The purpose of the Cohesion Fund was to reconcile the apparent contradiction in the treaty between the budgetary rigor necessary for convergence and the budgetary lenience inherent in cohesion. At Spain’s insistence, a special protocol supplemented the treaty’s cohesion provisions. Apart from agreeing to review the size of the structural funds and to permit greater flexibility to meet new needs, the protocol specified that the Cohesion Fund would be for the benefit of member states with a per capita GDP less than 90 percent of the EU average and a program designed to achieve convergence. In effect, that meant Spain, Portugal, Ireland, and Greece. Without mentioning a figure, the protocol earmarked 85–90 percent of the fund to support environmental and transport projects. Delors II In a repeat of its 1987 performance, in February 1992 the Commission sent the Council a five-year (1993–1997) budgetary package. Entitled “The Means to Match Our Ambitions,” the Commission’s financial perspective covered the costs of implementing the TEU (Commission, 1992a). In addition to cohesion, these included economic convergence, promotion of Community competitiveness, and “amplification of external action.” The Commission proposed increasing the Community’s budgetary ceiling from 1.2 to 1.37 percent of GDP by 1997 (an annual budgetary growth rate of 5 percent) and allocating ECU 11 billion for cohesion.

50

Cohesion Policy

The Commission also proposed improving structural fund operations. Together with the Cohesion Fund, a projected 66 percent increase in Objective 1 funding would boost EU financial support for Spain, Portugal, Ireland, and Greece by 100 percent. Some of the new spending on Objective 1 would go to the five new German states (the former East Germany), which had received a special structural funds appropriation for the 1991–1993 period. Other objectives would receive a 50 percent increase in funding. Assistance for “regions dependent on fishing” would become Objective 5(a)-fisheries, and Objective 5(b) would be established to support certain “rural areas” in the EU. Circumstances in 1992 were hardly propitious for such an ambitious proposal. In its first-ever Community presidency, Portugal made little headway on Delors II. At the June 1992 Lisbon summit, the heads of government agreed only to postpone a decision on it until the Edinburgh summit six months later. Britain, in the Council presidency for the second half of 1992, had little sympathy with Delors II and fretted about the security of its budget rebate. A deepening economic recession, and Germany’s effort to meet the costs of unification, put the future of Delors II further in doubt. Ironically, the TEU ratification crisis—another gloomy development—may have saved Delors II. Battered by a year of economic and political setbacks, Community leaders wanted to establish at Edinburgh their ability to act decisively in the EC’s interest. As one observer noted, it was imperative for the Community “to avoid the high costs of a failure whose repercussions would have extended well beyond the budgetary arena” (Shackleton, 1993, p. 387). The Delors II package was also an ideal opportunity to demonstrate that redistributional solidarity had survived the year’s setbacks. Once again, Felipe Gonzáles represented the southern countries’ interests, and after intense bargaining at the Edinburgh summit, Helmut Kohl conceded most. The new financial perspective agreed to at the summit more than doubled Community assistance for the least-prosperous countries (to ECU 30 billion in 1999). As the southern member states must have known, with the Central and Eastern European states knocking on the EU’s door, Delors II was probably their last chance to get a big share of the EU budget. Paradoxically, in view of imminent cutbacks in cohesion spending, as a result of the accession of Finland and Sweden the EU created another new priority (Objective 6),

applicable as of January 1, 1995, for the development of regions in those countries with very low population densities. Conclusion Structural and cohesion funds account for more than one-third of the EU’s annual budget of nearly ECU 100 billion. Structural funds have risen from ECU 18 billion in 1992 to a planned ECU 31 billion in 1999 (at 1992 prices). The cohesion fund is set to cost an estimated ECU 14.5 billion more between 1994 and 1999. Is the money well spent? Apart from problems with the management of structural and cohesion funds, economists disagree on the usefulness of cohesion policy. Empirical evidence is difficult to distill because of the multifaceted nature of economic growth and decline. Thus, a comprehensive Commission report on cohesion policy, covering the 1983–1993 period, concluded that the north-south economic divide in Europe is closing but that the gap between rich and poor regions is growing, notably in Britain (Commission, 1996). The poorer member states’ economic improvement is due to a number of factors, not least EUwide growth in the late 1980s and macroeconomic policy reforms in the mid-1990s. Thanks to annual growth well in excess of 5 percent and to sound macroeconomic policies, Ireland’s per capita GDP rose from 63.6 percent of the EU average in 1983 to 89.9 percent in 1995. Spain moved up from 70.5 percent in 1983 to 76.2 percent in 1995, a slight drop from 1993. Portugal climbed from 55.1 to 68.4 percent, but Greece only raised its per capita income from 61.9 to 64.3 percent, despite receiving hundreds of millions of ecu in aid. The key to economic development in the poorer member states would appear to be a combination of sound macroeconomic policies, a favorable international economic climate, large allocations of resources from Brussels, and closer coordination in the formulation and implementation of EU and national regional policies. Yet the future of cohesion policy is in doubt. Rich member states resent generous financial transfers to countries that are either doing well economically (Ireland has the highest growth rate in the EU) or that seemingly abuse regional aid (Greece has a reputation for fraud and mismanagement). The Commission’s arguments that cohesion is working and that net contributors to the budget such as Germany and the Netherlands ben-

efit from extra public works contracts and other business in the recipient countries are unlikely to assuage cash-strapped “donor” governments. The cost of cohesion in an enlarged EU with numerous poor Central and Eastern European countries is potentially prohibitive. Nevertheless, the Commission’s Agenda 2000 submission to the Council identified five applicant countries for relatively early EU membership and proposed keeping EU funding for economic and social cohesion at 0.46 percent of the EU’s GDP, amounting to ECU 275 billion over the period 2000 to 2006. The Commission also proposed reducing the structural fund objectives from seven to three: a strengthened Objective 1, a redefined Objective 2, and a new Objective 3 (developing a strategy for human resources). ECU 45 billion would be earmarked for the new member states—which are likely to join only toward the end of the financial perspective— including ECU 7 billion in preaccession aid. Total transfers from the structural and cohesion funds together would be limited to 4 percent of a recipient country’s GDP (Commission, 1997). Although the Commission’s budgetary proposals are modest by the standards of many other estimates, they are likely to generate controversy in existing and prospective member states. Net contributors to the EU budget want to pay less; recipients of large-scale donations from the structural and cohesion funds want to maintain or increase their share; and prospective member states want more than the EU is likely to offer. Accordingly, the next round of budgetary negotiations, in 1999, is likely to be highly contentious and could mark the end of a generous but controversial phase of EU cohesion policy. See also COHESION FUND; COMMUNITY SUPPORT FRAMEWORK; DELORS I; DELORS II; STRUCTURAL FUNDS. Commission. 1985. Commission’s Program for 1985. Bulletin of the EC, S/1-1985. Luxembourg: Office for Official Publications of the European Communities. ———. 1992a. “From the Single Act to Maastricht and Beyond: The Means to Match Our Ambitions.” Bulletin of the European Communities, Supplement 1/1992. ———. 1992b. Reform of the Structural Funds: A Tool to Promote Economic and Social Cohesion. Luxembourg: Office for Official Publications of the European Communities.

Bibliography

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———. 1996. Cohesion Report. COM (96) 542. Luxembourg: Office for Official Publications of the European Communities. ———. 1997. Agenda 2000. COM(97)2000 final. 2 vols. Luxembourg: Office for Official Publications of the European Communities. Delors, Jacques. 1985. “Speech to the European Parliament, March 19, 1985.” Bulletin of the European Communities, Supplement 4/1985. ———. 1988. “Speech to the European Parliament, January 20, 1988.” Bulletin of the European Communities, Supplement 1/1988. ———. 1989. Report of the Committee for the Study of Economic and Monetary Union. Luxembourg: Office for Official Publications of the European Communities. Hooghe, Liesbet, ed. 1996. Cohesion Policy and European Integration: Building Multi-Level Governance. Oxford: Oxford University Press. Padoa-Schioppa, Tommaso, et al. 1987. Efficiency, Stability and Equity: A Strategy for the Evolution of the Economic System of the European Community. Oxford: Oxford University Press. Shackleton, Michael. 1993. “The Community Budget After Maastricht.” In Alan Cafruny and Glenda G. Rosenthal, eds., The Maastricht Debates and Beyond. Vol. 2 of The State of the European Community. Boulder: Lynne Rienner.

—Desmond Dinan

Historians have displayed a great reluctance to address head-on the relationship between the Cold War and the movement for European integration. Those writing in the early decades of the superpower rivalry tended at best to see an oblique and obtuse correlation that stressed a fairly independent European process of cooperation that happened to coincide with the origins and early development of Soviet-U.S. rivalry. From the late 1960s through the 1980s, the emphasis historiographically turned to the interconnectedness of Europe’s transnational activity and the global capitalistcommunist confrontation. In the post–Cold War era, this interdependency has prevailed, with some interpretations emphasizing the growth of integration “self-determination” in the last two decades. Although the onset of the Cold War coincided with the genesis of integration, there was initially near neglect of the geostrategic factors behind Europe’s integration movement. The reality has become clearer with the release of many state and private papers, especially in the 1980s: superpower politics and diplomacy heavily shaped the

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Cold War

emergence of the European movement and of European institution building between 1947 and 1957. A clear and close interplay existed between ambitious and even idealistic integrationist schemes and the Cold War international system as prescribed by the United States and USSR. A simple, monocausal Cold War explanation of integration is untenable, however, not only because European unity ideas were well formulated and articulated as early as the interwar period, and even more so by the wartime governments-in-exile in London, but also because strong federalist sentiment was gaining a significant foothold among many European political elites before 1947. Acting and working together for common purposes in common institutions with common policies became the mantra of the integrationists. Unification was not merely a product of the EastWest conflict, for long before the “Soviet threats and American inducements,” multilateralism, supranationality, and the relinquishing of national interests were dynamic European topics (Lipgens, 1982). However, national governments did little to implement these plans until ideological and political considerations concerning Soviet-U.S. belligerency divided Europe and the world in the 1947–1950 period. Only when Western Europe’s initial postwar anxiety about Germany was added to growing suspicion of Communist Russia and its newly formed bloc did European integration become a priority in the overall Western agenda. Western economic reconstruction, growth, and prosperity were seen as necessitating a collective, nondivisive enterprise that bound the Atlantic-rim states together. Thus, Washington accepted limited European integrationist vehicles for its Cold War purposes. With the Marshall Plan, U.S. foreign policy dictated a general economic approach that both solidified and protected the West from the subversion and aggression of the Soviets and employed regional cooperation modes such as the Organization for European Economic Cooperation (OEEC) to face down the enemy with a concerted economic front. The Czechoslovak coup (1948) and Berlin blockade (1948–1949) further polarized the continent and drove Western Europe into a security alliance with the United States. Military defense and economic solidarity were meshed in 1949 and 1950. Although Americans invoked the primacy of the security imperative, instituting a world econ-

omy in which trade and capital moved easily across frontiers was another driving force for Washington (Hogan, 1987). Rejection of interwar economic nationalism was shared in most Western capitals but was especially strong among integrationists. Their vision was grounded in an awareness of the limits of European power if based on individual nation states. For them, combining national markets to form a large-scale, efficient, and competitive regional economy was a prerequisite for an interdependent, free, and fluid trading system: a unified, liberal, internationalist, and capitalist Europe had to be built to regain Europe’s economic standing and authority. A primary objective was for Europe to become a real competitor in the emerging world market. The motivations underlying U.S. diplomacy were a vital part of the beginnings of European integration. An anti-Soviet posture in part explained the Euro-American partnership built after 1947, but a broader vision of a reconfigured global economy made the notion of managing European affairs through regional multilateral organs very attractive. Common institutions of economic management and regulation would be ideal for avoiding the recurrent warfare of Europe’s past. Turning centuries of Franco-German rivalry into peaceful reconciliation and associating France and Germany with their neighbors were major objectives of the integrationists. For them, Germany’s integration into the Western community was mandatory and the economic approach the preferable one. Europeans were talking about a new statecraft of collective action, either through federal or supranational institutions at most or transnational or intergovernmental arrangements at least (Duchêne, 1994). The seed time of integration was therefore when the superpower struggle over the fate of Europe opened the door for novel integrationist experiments that both facilitated a unified resistance against communism and the enhancement of a bourgeois international economic order. For the Americans, world politics was world trade, in which Western Europe would play a paramount part (De Porte, 1979). Europeans could accept the U.S. imperative that integration fortify the East-West divide but also had their own reasons to integrate. These included the need to reinforce, where necessary, the nation-state (rather than supersede it); to make small states more influential; and to use new crossnational organizations to increase national legiti-

macy and efficiency (Milward, 1984, 1992). Bolstering national governments by using integrative mechanisms was consistent with, and not contradictory to, U.S. economic and strategic aims. There is no denying that many West Europeans had an urgent set of national and regional impulses and reasons to integrate and that they were willing to employ Cold War politics for their own ends. Led by a tiny band of opportunistic politicians and bureaucrats who “networked” within Europe and across the Atlantic, governments practiced the cross-fertilization of U.S. and European objectives (Willis, 1968). The glue was anticommunism, but common economic perceptions in Europe more and more became strong integrative forces. The result was not simply free trade politics as conceived by the United States, but a continent-centered Euro-Atlantic common front for European recovery and economic revival and for the containment of both Germany and Russia. Europe’s economic reinvigoration was linked to the reform of relations between its states, away from the national sovereign model and toward common rules and institutions. What these European countries were undertaking was a basic but far-reaching reform of international relations (Laurent, 1994; Reynolds, 1985). Beyond geopolitical considerations about the superpowers, many European leaders sought to create a competitive “Third Force” in their region with relative independence from both superpowers. Cooperative multilateral arrangements with some pooling of sovereignty would ultimately result in a genuine, global competitive force, but only with the establishment of a customs union and later an economic union. There was within the unificationist mentality a wish to preserve Europe’s independence from the United States in the form of an alternative to both superpowers that would be based on the establishment of a vast European economy of scale. European initiatives such as Benelux and the OEEC became early models for the fulfillment of both reconstruction and integration. This process neither resisted U.S. hegemony nor entirely accepted it but sought to maximize Europe’s freedom of maneuver. Anchoring the new German nation in a sectoral, supranational entity promulgated by the consolidated triple alliance of the United States, Britain, and France served both the containment imperative and integration rationale (Reynolds, 1994). This interplay of motives to remake Europe fused the attainment of economic well-being and

Cold War

53

political stability with a quest for military security. If initially integration was based on steadfast U.S. material and military support and especially on the economic world view of the United States, the consensus of “Little Europe” (the original six EC member states) was for economic regionalism with a Franco-German nexus. The agreement had to do with making control of their economies external to the nation and functioning with a joint authority that had powers superseding those of the state. In contrast to many U.S. analysts who stressed the Marshall Plan as the origin of the transatlantic relationship and of integrated Europe, most Europeans focused on the European Coal and Steel Community (ECSC) as the true start and first real step toward unification (Gillingham, 1991). Washington embraced this form of integration in the 1950s, seeing it as a means of amplifying Western opposition to the Soviets and of promoting the goal of an open Europe, devoid of trade and other barriers and guided by free market forces. The United States asked that European trade and payments be liberalized and in return agreed to promote European cohesion and a degree of European unity. Even Britain’s early refusal to participate in these unique economic enterprises did not deter Washington, Bonn, or Paris. In fact, by the time a general market formation was grafted onto the ECSC skeleton in the 1955–1957 period, the impact of U.S. encouragement, French leadership, and German cooperation created a potentially mammoth economic combine that owed more to hard bargaining and strategic compromises between the Six than to the perceived Soviet menace or U.S. pressure. With Germany firmly rooted in both the regional economic and security organs by mid-decade, a ParisBonn entente took the lead in the New Europe. The restoration of European independence through commercial might was tightly joined to the integration goal (Winand, 1993). If the Americans had jump-started integration, the EC inaugurated a new era and gave a distinct European dimension to the Cold War. The EC was not only a reflection of the ideological and diplomatic Cold War strategy but also a result of a coherent European rationale that argued that global economic power through cross-national collaboration would uplift Europe’s overall international status and prestige. Europe of the Six functioned as a crucial part of a Euro-U.S. condo-

54

Cold War

minium and hegemonic bloc that was dominant in global economic and security matters, and continental actions were furthermore based on regional orientations that often differed from those of Washington. The theory was that centralized European decisionmaking would encourage economic integration that would then “spill over” into the social, defense, and foreign policy realms and would in time bring about the desired political union. In the prosperous 1960s, a stable, open, democratic, and capitalist Europe became a reality in international politics. Not yet speaking with one voice but often through commonly shared outlooks and policies, the EC was able to withstand both considerable internal discord in the Gaullist period and rising trade frictions with the United States. The independent aspect of integration was augmented by these French tendencies and transatlantic rifts. De Gaulle attempted to put his stamp on the integration movement by channeling the EC’s development in a strictly intergovernmental direction, without supranational authority or majority rule making. The stunning success of the EC encouraged other nations on both sides of the divide to seek membership or at least closer ties (Young, 1991). Two major EC initiatives further demonstrated the viability and attractiveness of integration in this era of emerging multipolarity: trade opening to Eastern Europe and the formation of intimate relations with a large group of newly independent states of the Third World. The EC’s relative freedom from the influence of others was most evident in the move to diminish communist power in Eastern Europe by drawing Soviet bloc countries into a competition that would either exhaust them or seduce and lure them away from the USSR. The risky nuclear arms and missile race, basically economic in intent and U.S. in authorship, was a complementary segment of this global test by means of which it was hoped that Western productivity and performance would cripple the totalitarian economy and system. The expansion of EastWest trade was a European outreach program and major facet of the détente process. This politics of compromise with the East reached fruition with the broader European peace settlement based on Willy Brandt’s Ostpolitik in the early 1970s. It marked the point when European moves assumed a leading role in determining the Cold War’s future (Simonian, 1985).

East-West relations were significantly influenced in a peaceful direction by the EC’s Eastern policy, which reached its zenith in the Helsinki act of 1975. Political cooperation and multilateral diplomacy were now driving the EC far beyond its original economic impetus and goal of regulating local conflict. Beyond attracting new members, the EC enticed Soviet bloc states with the benefits of extended import-export relationships. At the same time, the EC made progress on monetary affairs, foreign policy cooperation, and institutional reform. Intensified stages of integration that moved beyond extensive collaboration to actual unity were increasingly part of the EC discourse. Further integration was semistalled by the stagflation of the 1970s, but with the second relance of the mid-1980s, including the Single European Act and Spanish and Portuguese accession, a self-generated, giant, and imaginative leap ahead took place. European integration was influencing the waning Cold War more than the reverse. As the Cold War drew to a close, Community formation (the making of a larger and more closely knit transnational unit) was a prime beneficiary of the decline of military influences and the corresponding rise of economic factors in world politics. As political competition between the two systems lessened, intra-West and intra-European relations mirrored global trade competition rather than superpower rivalry. The striking improvement in East-West relations gave more and more room for decisions about integration to be made on the European side of the Atlantic. The internal dynamics of integration, not the international security framework, were decisive factors. The collapse of the Soviet bloc in 1989, partly due to the EC’s achievements, and the collapse of the Soviet Union itself in 1991 gave a quick boost and significant redirection to European integration. Despite some apprehension about an enlarged, united Germany, Western Europe took bold steps forward, first in accepting German reunification and second in pressing forward the integration agenda on a broad front during the intergovernmental conferences in 1991 (Ross, 1995; Zelikow and Rice, 1995). There were problems associated with these moves: unification did not dispel worries about Germany, and the TEU was excessively dirigiste for many Europeans. The two initiatives fell short of most federalist aspirations but recaptured the momentum for the step-by-step and incrementalist integration progress. However, the

newly formed EU committed itself to total economic and monetary harmonization by century’s end, plus the application of the integration principle in new areas such as justice, police, immigration, and foreign/security policy. Military integration (left by the wayside since 1954) and foreign policy cooperation (only partly successful through European Political Cooperation) were brought up from the back burner in 1991. Because the end of the Cold War coincided with another bout of recession, economic uncertainty combined with the revival of ethnic nationalism to undercut many apparent EU advances. Some observers even spoke about reaching the limits of integration and of pushing European integration too far and too fast at the century’s end. Yet it was obvious that integration was no longer dependent upon or a branch of either U.S. economic internationalism or the containment of the USSR. A peaceful and prosperous Europe would now be determined by limited integration, the result of Europe’s construction of a halfway house between nationalism and internationalism (Baun, 1996). Two post–Cold War challenges were to have an impact on integration and the EU. One, the old but now bigger German dilemma, persisted even though Bonn’s commitment to democracy and regional unity remained firm under Chancellor Kohl. Uneasiness continued about Germany’s becoming a regional hegemon and about an ensuing “German Europe,” but it was diluted by the obvious continuity of a “European Germany.” The second challenge was an undeniable new task of eastward expansion to make the EU truly pan-European. This drive was fused to the West’s need to forge a New European Order as the basis for a regional security system, which it was hoped would involve the Russians and Americans. It was apparent that all questions of security and political cooperation, and of further integration, would have to be addressed in tandem with the development of democratic market economies in the East. Some observers noted that the urgency to enlarge was overshadowing the much-needed deepening exercise that would reform EU institutions. Integration demanded enlargement and internal reorganization simultaneously, illustrating the continued complexity of factors that were intertwined in any further development of integration. Conflicting attitudes within the EU and the Atlantic Alliance, even on the questions of EU enlargement and NATO expansion, made it clear that

Cold War

55

the EU’s goals would not be realized easily. Gone was the Cold War cement that had once reinforced the transatlantic relationship and European integration itself. Other factors would have to impel the EU to find the internal political will and democratic consensus for additional integration. Baun, Michael. 1996. An Imperfect Union: The Maastricht Treaty and the New Politics of European Integration. Boulder: Westview. De Porte, Anton. 1979. Europe Between the Superpowers: The Enduring Balance. New Haven: Yale University Press. Duchêne, François. 1994. Jean Monnet: The First Statesman of Interdependence. New York: Norton. Gillingham, John. 1991. Coal, Steel and the Rebirth of Europe, 1945–55. Cambridge: Cambridge University Press. Hogan, Michael J. 1987. The Marshall Plan: America, Britain and the Reconstruction of Western Europe, 1947–52. Cambridge: Cambridge University Press. Laurent, Pierre-Henri. 1994. “Reappraising the Origins of European Integration.” In H. J. Michelmann and P. Soldatos, European Integration: Theories and Approaches. Lanham, MD: University Press of America. Lipgens, Walter. 1982. A History of European Integration, 1945–47: The Formation of European Unity Movement. Oxford: Clarendon Press. Milward, Alan. 1984. The Reconstruction of Western Europe, 1945–51. Berkeley: University of California Press. ———. 1992. The European Rescue of the NationState. Berkeley: University of California Press. Reynolds, David. 1985. “The Origins of the Cold War: The European Dimension.” Historical Journal 28, pp. 497–515. Reynolds, David, ed. 1994. The Origins of the Cold War in Europe: International Perspectives. New Haven: Yale University Press. Ross, George. 1995. Jacques Delors and European Integration. New York: Oxford University Press. Simonian, Haig. 1985. The Privileged Partnership: Franco-German Relations and the European Community. Oxford: Clarendon Press. Willis, F. Roy. 1968. France, Germany and the New Europe. Stanford, CA: Stanford University Press. Winand, Pascaline. 1993. Eisenhower, Kennedy and the United States of Europe. New York: St. Martin’s Press. Young, John W. 1991. Cold War Europe. London: Edward Arnold. Zelikow, Philip, and Condoleezza Rice. 1995. Germany Unified and Europe Transformed: A Study in Statecraft. Cambridge: Harvard University Press.

Bibliography

—Pierre-Henri Laurent

56

Collegiality

Collegiality refers to the operational style of the “college” of the Commission—the group of commissioners themselves. Commissioners are supposedly equal in terms of formal authority, and the president is merely “first among equals” (although the Amsterdam Treaty states that the Commission “shall work under the political guidance of its President”). In reality, some commissioners are far more influential than others (based on a commissioner’s country of origin, personal attributes, and portfolio within the Commission), and the president is not always the most influential commissioner (based on the same considerations). Collegiality (whether real or imagined) and clubability help to socialize the commissioners and make them more “European” than national or ideological in outlook. Thus, for example, a commissioner who is a Belgian socialist may make a decision that is in the EU’s interest although not necessarily in Belgium’s immediate national interest or in the interests of European socialism. See also COMMISSION.

Collegiality

See COMMON ORGANIZATION OF THE MARKET.

COM

Combined Joint Task Forces (CJTFs)

Combined joint task forces (CJTFs) are an important operational expression of an emerging European Security and Defense Identity (ESDI) and a developing Western European Union (WEU). With the end of the Cold War, both the United States and the Europeans hoped that as an ESDI emerged, the European members of NATO would assume greater responsibility for their own defense. Moreover, events in Bosnia demonstrated the necessity for European countries to be able to take military initiatives themselves, outside of the NATO area and without direct U.S. involvement. Accordingly, in January 1994 NATO leaders endorsed the idea of combined joint task forces to facilitate the development of “separable but not separate” military capabilities that could be used by NATO or the WEU. This opened the possibility that European NATO members, acting through the WEU, could use NATO military assets for operations in which the United States might choose not to take part. Two and a half years later, the modalities of CJTFs

were worked out by NATO and the WEU when NATO foreign ministers, at their June 1996 Berlin meeting, agreed that NATO could supply military forces and equipment to the WEU with the approval of the NATO Council. In practice, CJTFs are combined national units to be used in contingency operations (notably so-called Petersberg peacekeeping operations), including operations with participating nations that are not members of NATO. The forces will have at their disposal all elements needed to run land, sea, and air operations within NATO guidelines and with NATO support. See also NORTH ATLANTIC TREATY ORGANIZATION; WESTERN EUROPEAN UNION. See COUNCIL FOR MUTUAL ECONOMIC ASSISTANCE.

COMECON

See COMMUNITY ACTION PROGRAM TRAINING FOR TECHNOLOGY.

COMETT AND

IN

EDUCATION

The bulk of decisions taken in the EU are administrative rather than political or legislative in nature. The Commission supposedly has responsibility for these administrative decisions, which are necessary to implement policies in such areas as agriculture, fisheries, trade, competition, and structural development. But jealous of their national prerogatives, and fearful that the Commission might try to alter policy while implementing it, member states have set up a cumbersome committee system— known as comitology—to oversee the execution of EU policies. There are three types of committee: advisory, management, and regulatory. The Commission’s powers are strongest under the advisory committee procedure (advisory committees have no formal power to prevent the Commission from acting as it wishes) and weakest under the management and regulatory procedures (Commission actions require the support of these committees, which can act by qualified majority vote). There have been frequent disagreements among the Council, the Commission, and the European Parliament (EP) as to which committee procedure should apply when delegation powers are granted. The EP is increasingly hostile to the entire comitology system, which excludes the EP even when it

Comitology

is involved as an equal partner with the Council in the adoption of the relevant primary legislation under the co-decision procedure. See also COMMISSION; DECISIONMAKING PROCEDURES. The ambiguous nature of the Commission epitomizes the ambiguous nature of the EU itself. Neither an executive nor a legislature, the Commission combines certain elements of both. Not merely a European bureaucracy, the Commission is a highly political animal. Supposedly independent of national governments, the Commission is susceptible to member-state pressure. Sensitive to the EU’s democratic deficit, the Commission is unelected and accountable only to the European Parliament (EP). The Commission consists of the college of commissioners and a (mostly) career civil service (Eurocracy). The Commission’s formal role—initiator of legislation, guardian of the treaties, manager of the budget, executor of Community activities—puts it at the center of the EU policy process. Although largely excluded from the EU’s two intergovernmental pillars—the Common Foreign and Security Policy (CFSP) and Cooperation on Justice and Home Affairs (JHA)—the Commission is central to the EU’s functioning and effectiveness. Moreover, as the unofficial “motor” of European integration, the Commission makes a vital political contribution to the EU’s development, a contribution personified by the Commission president.

Commission

The President The Commission—in the sense of the college of commissioners—is supposed to be collegiate. Table 1 Years

1958–1967 1967–1970 1970–1972 (March 1972– Jan. 1973) 1973–1977 1977–1981 1981–1985 1985–1995 1995–1999 (July–Sept. 1999) 1999–

Walter Hallstein Jean Rey Franco Malfatti Sicco Mansholt

François-Xavier Ortoli Roy Jenkins Gaston Thorn Jacques Delors Jacques Santer Manuel Marín Romano Prodi

57

However, as “first among equals,” a position enhanced in the Amsterdam Treaty, the Commission president sets the tone for the Commission’s term in office. (See Table 1.) Not surprisingly, Commissions are generally known by the president’s name. Since 1999, people have routinely spoken of “the Prodi Commission.” Romano Prodi generally is regarded as a competent and assertive president, in contrast to the reputation of his predecessor, Jacques Santer. The Commission’s seeming weakness under Santer was partly a consequence of its unpopularity in the wake of the Treaty on European Union (TEU) ratification debacle and its leadership under the ambitious and thrusting Jacques Delors, Santer’s predecessor and the Commission’s most successful president to date. Delors’s leadership illustrates both the potential and the pitfalls for the Commission of a strong president as well as the importance of a favorable political and economic climate for the Commission’s success. Delors had a profound impact on the office he held for a quarter of the Community’s history— longer than any of his predecessors. When he became president, Delors fit the profile of previous incumbents: all were male, late middle-aged, and thoroughly immersed in their own countries’ political processes. But Delors brought special attributes and skills to the job: he was an experienced and able administrator, had shrewd political judgment and a firm grasp of economics, and was an inspiring speaker. Also, Delors envisioned a strong, politically and economically united EC, organized on federal lines, comprising a cohesive “social space” and capable of asserting itself internationally. Delors had other advantages that he exploited to the full, notably a formidable reputation as a powerful politician with a future in French national politics

Commission Presidents, 1958–2000 Name

Commission

Member State

Germany Belgium Italy The Netherlands

France United Kingdom Luxembourg France Luxembourg Spain Italy

Highest Position Held in National Government

State secretary, German Foreign Office Minister of economic affairs Minister for posts and telecommunications Minister of agriculture

Minister of finance Chancellor of the exchequer Prime minister Minister for the economy, finance, and budget Prime minister Minister for European affairs Prime minister

58

Commission

and close friendships with a number of key Community leaders, especially German chancellor Helmut Kohl. Indeed, the prospect of a post-Commission career as prime minister or president of France, one of the two most important member states, enhanced Delors’s stature immeasurably. Building on such a solid foundation and with the support of a cabinet (private office) consisting of extremely capable and dynamic people, Delors contributed enormously to the Commission’s and the Community’s transformation in the late 1980s. Without a revitalized Commission, Delors believed, the Community would remain moribund. Without doubt, the EC’s achievements at that time—the breakthrough on Iberian enlargement, negotiation of the Single European Act (SEA), agreement on the Delors I budgetary package, the success of the single market program, and the launch of Economic and Monetary Union (EMU)—owed much to Delors’s personal and the Commission’s political leadership. The Commission presidency gained in profile and status through Delors’s involvement in the European Council and by his ability to use summit declarations as a mandate for much of the Commission’s policy entrepreneurship. Similarly, Delors used his prominence at European Councils and his reputation as architect of the single market program to assert the Commission’s identity on the broader international stage. It was appropriate that the Commission received its greatest international recognition at the G7 summit in Paris in July 1989, when U.S. president George Bush requested it to lead the Western aid effort for Hungary and Poland. The Transatlantic Declaration of November 1990, which institutionalized meetings between the U.S. president, the president of the Council, and the Commission president, was a further tribute to Delors’s and the Commission’s growing international stature. Delors’s achievements proved the point that a Commission president’s performance depends not so much on the attributes of the office itself but on his personality, country of origin, national political experience and prospects, economic and political circumstances at any particular time, and the caliber of his closest advisers. By the same token, Delors’s and the Commission’s rapid fall from grace in the early 1990s during the intergovernmental conferences (IGCs) and the TEU ratification crisis showed the Commission’s vulnerability

to the dangerous combination of an overbearing president and an unfavorable political and economic climate. As a result, by 1994 (his last year in office), Delors was generally perceived as a liability rather than an asset, and the Commission’s fortunes had plummeted. The same presidential qualities and characteristics that had advanced the Commission’s interests so rapidly at a time of economic and political buoyancy proved damaging at a time of economic and political crisis. By contrast, Santer’s personal and political style was more appropriate for the Commission’s and the EU’s circumstances in the mid-1990s. Like Delors, Santer was a Eurofederalist; unlike Delors, he was accommodating, relaxed, and seemingly unambitious. Equally important, Santer was a consolidator and a conciliator, skills he sorely needed in his dealings with the “barons” who remained in his Commission from Delors’s days and with some of the ex-ministers (including ex–prime ministers) who were new to it. By sticking to first principles and eschewing the political limelight, Santer sought to rebuild the Commission’s credibility, confidence, and authority. Following the Commission’s mass resignation in March 1999, however, Santer will forever be associated with mismanagement and corruption inside the Commission. Prodi, a former Italian prime minister with a reputation for probity and efficiency, was appointed to succeed Santer with a mandate to reform and rejuvenate the institution. Prodi’s position was strengthened not only by the nature of Santer’s resignation but also by recent treaty changes. Specifically, the Amsterdam Treaty beefs up the Commission presidency by asserting that the Commission “shall work under the political guidance of its President” and that the heads of state and government “shall, by common accord with the nominee for [Commission] President, nominate the other persons whom they intend to appoint as Members of the Commission.” Moreover, in a declaration attached to the treaty, the member states agree that the Commission president “must enjoy broad discretion in the allocation of tasks within the college, as well as in any reshuffling of those tasks during a Commission’s term in office.” Prodi had some influence in mid1999 on the selection by national governments of his fellow commissioners and the allocation of portfolios, but not as much as he had hoped or as the newly implemented Amsterdam Treaty implied

that he would. It remains to be seen how the other provisions for a stronger Commission presidency will square with personal and political realities. Most likely, presidential authority will continue to depend more on the qualities and characteristics of a particular incumbent and on prevailing political and economic circumstances than it will derive from the attributes of the office itself. The College of Commissioners The commissioners—nominated by the member states, appointed by the European Council, approved by the EP, and sworn in by the European Court of Justice (ECJ)—are a college of supposed equals. To the extent that it exists, collegiality serves to point commissioners away from a nationalist and toward a supranationalist perspective on the EU’s development. But in reality commissioners are far from equal, nor are they entirely independent of national influence. The way that commissioners are popularly known—by their country of origin—emphasizes the point. Member states generally announce their choice of new commissioners in the months before the old Commission’s term expires. Governments have complete discretion in choosing commissioners “on the grounds of their general competence” (Article 157.1), although, as noted above, the Amsterdam Treaty gives the Commission president a say in the selection of his colleagues. Traditionally, large member states nominate two commissioners and small member states nominate one each. Accordingly, over the years the number of commissioners, grew (from 9, to 13, to 14, to 17, to 20) as the number of member states grew (from 6, to 9, to 10, to 12, to 15). The growing number of commissioners, and the relative decline in the number of important portfolios, became a contentious issue at the 1996–1997 IGC, where the question of the Commission’s size took up a lot of time and energy. Despite dire warnings about the unmanageableness of a college of more than the existing number of commissioners (or even with the existing number of commissioners) and imaginative ideas to limit the college to ten or twelve members, governments were reluctant to surrender their right to appoint one commissioner each. Confident that they would not be asked to make such a sacrifice, large member states were generally silent on the issue. By contrast, some small member states stated un-

Commission

59

equivocally that they would not forego “their” commissioner. The issue came to a head at the Amsterdam summit on June 16 and 17, 1997, where the IGC was concluded and agreement reached on the Amsterdam Treaty. In a legally binding protocol on enlargement attached to the treaty, member states declared that at the time of the next enlargement, the Commission “shall comprise one national” of each member state, provided that the weighting of Council votes has been remodified by then in a way that compensates those countries “which give up the possibility of nominating a second member of the Commission.” In other words, in return for abandoning the current practice of nominating a second commissioner, large member states will get more votes in the Council. Thus radical reform of the Commission’s size proved politically impossible at the 1996–1997 IGC and may remain an elusive goal. Arguably, radical reform is not necessarily in the EU’s interest. It is perhaps more important for the member states, their citizens, and the Commission to have direct, high-level channels of communication via “national” commissioners than to go through the politically painful and essentially unrewarding exercise of drastically reducing the Commission’s size. (See Table 2.) In the event, even with one commissioner per member state (large or small) in an EU of twenty member states (e.g., the existing members plus Poland, Hungary, the Czech Republic, Estonia, and Slovenia), the Commission would have twenty members—only three more than in Delors’s highly successful first Commission, following Spain’s and Portugal’s accession (1986–1989). Even with more than twenty members, the Commission could function much as it now does, with a group of undeclared but easily identifiable “core” commissioners, supported by strong cabinets, setting the Commission’s agenda and launching major initiatives. However, the treaty protocol on enlargement also declares that at least one year before the EU enlarges beyond twenty member states, another IGC “shall be convened in order to carry out a comprehensive review of the provisions of the Treaties on the composition and functioning of the institutions.” By implication, the Commission’s size will be limited to twenty, and the political dog fight over which countries might not be able to nominate a commissioner has been deferred to another day.

60

Commission

Table 2

Commissioners per Member State, 1967–2000

Dates

Member States Commissioners

France

Dates

Member States Commissioners

Denmark

1967–1972 1973–1980 1981–1985 1986–1994 1995–2000

1967–1972 1973–1980 1981–1985 1986–1994 1995–2000

6 9 10 12 15

6 9 10 12 15

9 13 14 17 20

9 13 14 17 20

2 2 2 2 2

1 1 1 1

Germany Italy 2 2 2 2 2

2 2 2 2 2

Ireland 1 1 1 1

In contrast to the Community’s early history, most commissioners are now career politicians whose political standing at home helps to enhance their status and performance in the Commission. Yet hailing from a large country and having a formidable political reputation are not preconditions for success in the Commission. Commissioners may be reappointed any number of times and must not step down if their political patrons at home resign from government or lose an election. By a two-thirds majority, the EP may sack the entire Commission. The EP came close to doing so in January 1999, following repeated calls from the EP and the Court of Auditors for stricter financial accountability in the Commission and credible media reports of cronyism in the award of lucrative contracts by research commissioner Edith Cresson. Santer’s apparent unwillingness to pressure Cresson to leave (legally he could not fire her) and political insensitivity to the allegations incensed the EP. Sander won the support of a majority of parliamentarians only in return for agreeing to the convening of a committee of “wise men” to investigate alleged mismanagement in the Commission. So damning was the wise men’s report, published in March 1999, that the Commission resigned immediately, although it remained in office in a caretaker capacity for another six months. This unprecedented crisis demonstrated the EP’s determination to hold the Commission accountable for its actions. Strengthening the EP’s position, under the TEU the Commission’s term of office was increased to five years, beginning in January 1995, bringing it into line with the EP’s

Belgium

Greece 1 1 1

1 1 1 1 1

Netherlands 1 1 1 1 1

United Luxembourg Kingdom 1 1 1 1 1

Spain Portugal Austria 2 2

1 1

1

2 2 2 2

Finland Sweden

1

1

five-year term. The TEU also stipulates that a new Commission “shall be subject as a body to a vote of approval by the European Parliament.” This procedure was used in January 1995 to approve the Santer Commission, and again in August-September 1999 to approve the Prodi Commission. Parliament has no authority to decide which commissioner gets what portfolio. Those important decisions remain with the Commission president and, especially, national leaders. Indeed, the fierceness with which governments fight for portfolios suggests that the Commission is not “completely independent in the performance of [its] duties,” as the treaty claims that it should be, or as commissioners swear before the ECJ that they will be. Personal and political considerations rather than ability or merit determine who gets the prestigious and powerful commission appointments, such as external relations, competition policy, agriculture, and the environment. (See Table 3.) The allocation of portfolios contributes to a perception that commissioners are in their national governments’ pockets. But there is an important distinction between recognizing and upholding a national interest and taking instructions from a national government. The Commission functions best when commissioners thrash out proposals from their own ideological, political, and national perspectives as well as on the abstract basis of what is best for the EU. Commissioners often use their cabinets to absorb excessive national pressure and conduct a public relations campaign for domestic consumption. The cabinet system reflects a strong French

Commission Table 3

61

Commissioners and Their Portfolios, 1958–2000

Commissioner

Country of Origin

Portfolio

January 1958–January 1963 Walter Hallstein Germany President Sicco Mansholt Netherlands Vice President, Agriculture Robert Marjolin France Vice President, Economic Affairs Piero Malvestiti Italy Transport (Resigned October 1959; replaced by Giuseppe Caron December 1959.) Jean Rey Belgium Trade Policy Hans von der Groeben Germany Competition Policy Lambert Schaus Luxembourg Internal Market Guiseppe Petrilli Italy Social Affairs Robert Lemaignen France Overseas Countries and Territories (Resigned September 1960; replaced by Henri Rochereau January 1962.) January 1963–July 1967 Walter Hallstein Germany President Sicco Mansholt Netherlands Vice President, Agriculture Robert Marjolin France Vice President, Economic Affairs Lionello Levi Sandri Italy Vice President, Social Affairs Jean Rey Belgium External Relations Hans von der Groeben Germany Competition Policy Lambert Schaus Luxembourg Transport Henri Rochereau France Overseas Countries and Territories Giuseppe Caron Italy Internal Market (Resigned May 1963; replaced by Guido Colonna di Paliano.) July 1967–January 1970 Jean Rey Sicco Mansholt Lionello Levi Sandri Fritz Hellwig Raymond Barre Albert Coppé Hans von der Groeben Emanuel Sassen Henri Rochereau Guido Colonna di Paliano Victor Bodson Edoardo Martino Wilhelm Haferkamp Jean-François Deniau

Belgium Netherlands Italy Germany France Belgium Germany Netherlands France Italy Luxembourg Italy Germany France

January 1973–January 1977 François-Xavier Ortoli Wilhelm Haferkamp Carlo Scarascia Mugnozza

France Germany Italy

President Vice President, Agriculture Vice President, Social Affairs Vice President, Research and Technology Economic and Financial Affairs Budget, Information Service Internal Market Competition Policy Development Aid Industrial Affairs Transport External Relations Energy External Trade, Financial Control

January 1970–January 1973 Franco Malfatti Italy President (Resigned March 1972; replaced by Sicco Mansholt.) Sicco Mansholt Netherlands Vice President, Agriculture (Replaced as agriculture commissioner by Scarascia Mugnozza, March 1972–January 1973.) Raymond Barre France Vice President, Economic and Financial Affairs Wilhelm Haferkamp Germany Vice President, Internal Market and Energy Albert Coppé Belgium Social Affairs, Transport, Budget, and Financial Control Jean-François Deniau France Enlargement and Development Aid Altiero Spinelli Italy Industrial Affairs, Research and Technology Albert Borschette Luxembourg Competition Ralf Dahrendorf Germany External Relations

President Vice President, Economic and Financial Affairs Vice President, Relations with the European Parliament, Environment, Transport Sir Christopher Soames UK Vice President, External Relations Patrick Hillery Ireland Vice President, Social Affairs (Resigned December 1976; portfolio managed by Raymond Vouel.) (continues)

62

Commission

Table 3

continued

Commissioner

Country of Origin

Portfolio

January 1977–January 1981 Roy Jenkins François-Xavier Ortoli Wilhelm Haferkamp Finn Olav Gundelach Lorenzo Natali Hank Vredeling Claude Cheysson Guido Brunner Raymond Vouël Antonio Giolitti Richard Burke Etienne Davignon Christopher Tugendhat

UK France Germany Denmark Italy Netherlands France Italy Luxembourg Italy Ireland France UK

President Vice President, Economic and Financial Affairs Vice President, External Relations Vice President, Agriculture and Fisheries Vice President, Enlargement, Environment Vice President, Employment and Social Affairs Development Energy, Research, Science and Education Competition Regional Policy Taxation, Consumer Affairs, Transport, Relations with Parliament Internal Market, Industrial Affairs Budget and Financial Control

January 1985–January 1989 Jacques Delors Lorenzo Natali Karl-Heinz Narjes

France Italy Germany

Henri Simonet Belgium Financial Institutions and Taxes, Energy Jean-François Deniau France Development Aid, Budget, Financial Control (Resigned April 1973; replaced by Claude Cheysson.) Altiero Spinelli Italy Industrial and Technological Affairs (Resigned July 1976; replaced by Cesidio Guazzaroni.) Albert Borschette Luxembourg Competition (Retired July 1976; replaced by Raymond Vouel.) Ralf Dahrendorf Germany Research, Science and Education (Resigned November 1974; replaced by Guido Brunner.) George Thomson UK Regional Policy Petros Josephus Lardinois Netherlands Agriculture Finn Olav Gundelach Denmark Internal Market

January 1981–January 1985 Gaston Thorn Luxembourg President Etienne Davignon Belgium Vice President, Industrial Affairs, Energy Wilhelm Haferkamp Germany Vice President, External Relations Lorenzo Natali Italy Vice President, Mediterranean Policy, Enlargement François-Xavier Ortoli France Vice President, Economic and Financial Affairs Christopher Tugendhat UK Vice President, Budget and Financial Control Antonio Giolitti Italy Regional Policy Georgios Contogeorgis Greece Transport, Fisheries, Tourism Karl-Heinz Narjes Germany Internal Market, Industrial Innovation, Environment Franz Andriessen Netherlands Relations with Parliament, Competition Ivor Richard UK Employment and Social Affairs, Tripartite Michael O’Kennedy Ireland Personnel and Administration, Statistical Office (Resigned March 1982; replaced by Richard Burke.) Poul Dalsager Denmark Agriculture (Replaced Finn Olav Gundelach, who was reappointed but died in January 1981.) Edgard Pisani France Development (Replaced Claude Cheysson; was reappointed but resigned in May 1981.)

President and Monetary Affairs Vice President, Cooperation and Development Vice President, Industrial Affairs, Information Technology, Research and Science Franz Andriessen Netherlands Vice President, Agriculture Lord Arthur Cockfield UK Vice President, Internal Market Henning Christophersen Denmark Vice President, Budget, Financial Control Manuel Marin Spain Vice President, Social Affairs and Employment, Education and Training Claude Cheysson France Mediterranean Policy, North-South Relations Alois Pfeiffer Germany Economic Affairs, Regional Policy (Died August 1987; replaced by Peter Schmidhuber in September 1987.) Grigoris Varfis Greece Coordination of Structural Funds, Consumer Protection Willy De Clercq Belgium External Relations and Trade Policy (continues)

Commission Table 3

continued

Commissioner

Country of Origin

January 1989–January 1993 Jacques Delors Franz Andriessen Martin Bangemann

France Netherlands Germany

Nicolas Mosar Stanley Clinton Davis Carlo Ripa di Meana Peter Sutherland Antonio Cardoso e Cunha Abel Matutes

Sir Leon Brittan Henning Christophersen Manuel Marín Filippo Maria Pandolfi

Carlo Ripa di Meana Antonio Cardoso e Cunha Abel Matutes Peter Schmidhuber Christine Scrivener Bruce Millan John Dondelinger Ray MacSharry Karel Van Miert Vasso Papandreou

January 1993–January 1995 Jacques Delors Manuel Marín

Luxembourg UK Italy Ireland Portugal Spain

UK Denmark Spain Italy Italy Portugal Spain

Germany France UK Luxembourg Ireland Belgium Greece France Spain

63

Portfolio

Energy Environment, Transport Institutional Questions, People’s Europe Relations with Parliament, Competition Fisheries Investments and Financial Instruments, Small Business

President, Monetary Affairs Vice President, External Relations and Trade Policy Vice President, Internal Market and Industrial Affairs, Relations with Parliament Vice President, Competition, Financial Institutions Vice President, Economic and Financial Affairs, Structural Funds Vice President, Cooperation and Development, Fisheries Vice President, Science, Research and Development, Telecommunications, Information Technology Environment Personnel, Energy Mediterranean Policy, Relations with Latin America, North-South Relations Budget, Financial Control Taxation Regional Policy Audiovisual and Cultural Affairs Agriculture and Rural Development Transport, Credit and Investments, Consumer Interests Employment, Industrial Relations and Social Affairs, Education and Training

President, Monetary Affairs Vice President, Cooperation and Development, European Community Humanitarian Office Henning Christophersen Denmark Vice President, Economic and Financial Affairs, Monetary Affairs Martin Bangemann Germany Vice President, Industrial Affairs, Telecommunications Sir Leon Brittan UK Vice President, External Economic Affairs, Commercial Policy Karel Van Miert Belgium Vice President, Competition, Personnel and Administration Antonio Ruberti Italy Vice President, Science, Research and Development Abel Matutes Spain Energy, Transport (Resigned in April 1994; replaced by Marcelino Oreja.) Peter Schmidhuber Germany Budget, Financial Control, Cohesion Fund Christiane Schrivener France Customs, Taxation, Consumer Policy Bruce Millan UK Regional Policy, Relations with the Committee of the Regions Hans van den Broek Netherlands External Political Relations, Common Foreign and Security Policy, Enlargement João de Deus Pinheiro Portugal Relations with the Parliament, Culture and Audiovisual Pádraig Flynn Ireland Social Affairs and Employment Rene Steichen Luxembourg Agriculture and Rural Development Iannis Paleokrassas Greece Environment, Nuclear Safety, Fisheries Raniero Vanni d’Archirafi Italy Institutional Questions, Internal Market

January 1995–March 1999 (Acting Commission until September 1999) Jacques Santer Luxembourg President (Left office July 1999.) Sir Leon Brittan UK Vice President, External Relations with North America, Australia, New Zealand, Japan, China, Korea, Hong Kong, Macao, and Taiwan, Common Commercial Policy, Relations with the Organization for Economic Cooperation and Development and World Trade Organization Manuel Marín Spain Vice President, External Relations with Southern Mediterranean Countries, the Middle East, Latin America and Asia (except Japan, China, Korea, Hong Kong, Macao, and Taiwan) (continues)

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Commission

Table 3

continued

Commissioner

Martin Bangemann (Left office August 1999.) Karel Van Miert Hans Ven Den Broek João de Deus Pinheiro

Country of Origin Germany

Belgium Netherlands Portugal

Pádraig Flynn Marcelino Oreja

Ireland Spain

Edith Cresson

France

Anita Gradin

Ritt Bjerregaard Monika Wulf-Mathies

Neil Kinnock Mario Monti Franz Fischler Emma Bonino (Left office July 1999.) Yves-Thibault de Silguy Erriki Liikanen Christos Papoutsis September 1999– Romano Prodi Neill Kinnock Loyola de Palacio

Michel Barnier Frits Bolkestein Philippe Busquin David Byrne Anna Diamantopoulou Franz Fischler Pascal Lamy Erkki Liikanen Mario Monti Poul Nielson Chris Patten Viviane Reding Michaele Schreyer Pedro Sobles Günter Verheugen Antonio Vitorino Margot Wallström

Sweden Denmark Germany UK Italy Austria Italy

France Finland Greece Italy UK Spain

France Netherlands Belgium Ireland Greece Austria France Finland Italy Denmark UK Luxembourg Germany Spain Germany Portugal Sweden

Portfolio

Industrial Affairs, Information and Telecommunications Technologies Competition Relations with the Countries of Central and Eastern Europe, the former Soviet Union, Mongolia, Turkey, Cyprus, Malta, and other European Countries Relations with African, Caribbean, and Pacific countries and South Africa Employment and Social Affairs Relations with the European Parliament, Relations with the Member States, Culture and Audiovisual Policy, the intergovernmental conference Immigration, Justice and Home Affairs, Financial Control, Fraud Prevention Science, Research and Development, Education, Training, and Youth Environment, Nuclear Safety Regional Policy, Relations with the Committee of the Regions, Cohesion Fund Transport (including Trans-European Networks) Internal Market, Financial Services, Customs, Taxation Agriculture and Rural Development Fisheries, Consumer Policy, European Community Humanitarian Office Economic and Financial Affairs, Monetary Policy Budget, Personnel and Administration, Translation Energy, Small Business, Tourism

President Vice President, Administrative Reform Vice President, Relations with the European Parliament, Transport, Energy Regional Policy Internal Market Research Consumer Protection Employment and Social Affairs Agriculture and Fisheries Trade Enterprise and Information Society Competition Development and Humanitarian Aid External Relations Education and Culture Budget Monetary Affairs Enlargement Justice and Home Affairs Environment

influence on the EU’s administrative apparatus. Over the years, cabinets have grown larger and more powerful, a development that prompted Prodi in 1999 to clip their wings. A good cabinet can boost the standing of an otherwise poor commissioner, and a poor cabinet can pull down an otherwise good commissioner. It is no coincidence that the most effective commissioners have the best-staffed and best-organized cabinets.

Commissioners meet every Wednesday in Brussels, or in Strasbourg if the EP is in plenary session there, to discuss and resolve various initiatives and proposals to go before the Council. Generally the president has his way, although Commission meetings sometimes become bruising battles whose outcome is unpredictable. The most notable struggles are over the common commercial policy, competition policy, and agriculture

(areas in which the Commission has considerable authority). A simple majority vote may finally decide an issue. The Eurocracy The Commission’s civil service—approximately 17,000 employees, including 3,200 personnel at the Joint Research Center and 3,000 interpreters and translators—is surprisingly small. The Eurocracy is organized into twenty-four directorates-general (DGs) and a small number of other units (services), corresponding to the Commission’s activities and responsibilities. (See Table 4.) Neither the number nor the responsibilities of the DGs correspond to the number or the portfolios of the commissioners. Thus a commissioner may have more than one DG in his portfolio, and the responsibilities of a DG may be spread over the portfolios of more than one commissioner. Conversely, a commissioner may not have a DG at all. As well as the DGs, the Commission includes a number of other services, such as the legal service and spokesman’s service, and various task forces. The Commission’s secretariat-general is a separate unit. The Commission is also surprisingly spread out. A majority of its officials work in Brussels, but some are based in Luxembourg. In Brussels itself, the Commission is dispersed in scores of buildings rented from or through the Belgian government. The Commission recruits through a highly competitive, EU-wide selection process (the concours) for university graduates. Many of the successful candidates may already have gained experience in the Commission as stagiaires, or paid interns. Based on previous experience or personal predilection, a new recruit may ask to work in a particular DG or service but is unlikely to get the assignment of his or her choice. Promotion through the junior and mid-career grades is generally predictable and uncontroversial and is based largely on seniority. However, entry into the senior grades—A3 and above—is highly politicized and extremely difficult. Not only is the number of jobs available smaller than at lower levels, but national civil servants and others who “parachute” into the senior ranks of the Commission, for instance as part of a commissioner’s cabinet, reduce the availability of senior jobs for career Eurocrats. The difficulty of progressing beyond A4 engendered a lot of frustration and resentment in the

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mid-career level of the Commission. The president’s inability to get rid of poor performers, and the stranglehold that national governments had on certain senior positions, exposed some of the Commission’s serious administrative weaknesses. The Spierenburg Report on Commission reform pointed out these problems as early as 1979 (Spierenburg, 1979), but most of its recommendations were never implemented until after the crisis of the Commission’s resignation in 1999. The preoccupation with national prerogatives that stymied promotion also prevented mobility in the Commission. Commissioners and directorsgeneral clung to existing staff levels even as the Commission’s priorities shifted dramatically in the late 1980s. Thus, although the Commission itself was far from overstaffed, certain parts of it became bloated while others remained seriously understaffed. Nor would the member states sanction a sizable increase in the civil service, especially in the aftermath of the TEU crisis. Delors’s appointment as president in 1985 raised the Commission’s morale, as did the SEA and the launch of the single market program. Yet by the end of the decade Eurocrats identified Delors himself as part of the Commission’s problem. Delors’s disregard for fellow commissioners, disdain for many directors-general, and aggrandizement of power in his cabinet fueled resentment and backbiting. With the unexpected rise in the Commission’s responsibilities in 1989 and 1990 and no commensurate increase in its size or efficiency, many officials feared that the institution would self-destruct. In order to restore the Commission’s morale and credibility in the post-Delors period, Santer made a concerted effort to put the Commission’s house in order. He discovered, however, that structural and managerial problems were rooted in the member states’ determination to retain as much influence as possible over the Commission and were compounded by successive enlargements, the proliferation of portfolios, and the excessive power of the cabinets. Only under Prodi, who took office on the crest of a reformation wave in the wake of the 1999 resignation crisis, has the Commission been able to institute major personnel and organizational changes. Yet it remains to be seen whether Prodi can overcome the two main obstacles to reform of the Commission: national influence and in-house trade union power.

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Commission

Table 4

DG DG DG DG DG DG DG DG DG DG DG DG DG DG DG DG DG DG DG DG DG DG DG DG

Commission Directorates-General, 1999–

External Relations Trade Development Enlargement Economic and Financial Affairs Enterprise Information Society Taxation and Customs Union Internal Market Competition Employment and Social Affairs Agriculture Fisheries Transport Environment Research Regional Policy Energy Education and Culture Health and Consumer Protection Justice and Home Affairs Personnel and Administration Budget Financial Control

Proposing legislation. It is an old axiom that “the Commission proposes and the Council disposes.” The Commission still proposes (at least in Pillar One of the EU), but in many cases (under the co-decision procedure) the Council and the EP jointly dispose. Most of the Commission’s proposals have a clear legal base in the treaties or in amendments to the treaties. Others may flow from legislation already adopted under the treaties or from a judgement of the ECJ. Member states sometimes dispute the legal base of a Commission proposal either because of a genuine difference of interpretation or for political reasons: they may not want the EU to involve itself in certain matters or may not want a legal base that involves qualified majority voting in the Council or the cooperation and co-decision procedures in the EP. In the postTEU period, some member states have invoked subsidiarity both to prevent action at the EU level and to delay implementation of EU legislation at the national level. Indeed, the Commission itself has generally cut back on legislative initiatives in accordance with the principle of subsidiarity and in view of the prevailing political climate. The Commission has an almost exclusive and jealously guarded right to propose legislation, al-

The Commission’s Role and Responsibilities

though both the Council and the EP may request the Commission to submit a proposal (the Commission has a shared right of initiative in the CFSP, which is an intergovernmental rather than a supranational undertaking). Apart from the Council’s and EP’s formal right to ask the Commission to initiate legislation, proposals may originate in any number of ways: a zealous Commission president, commissioner, director-general, or other official could ask his or her subordinates to prepare legislation; more likely, the proposal could come in response to the suggestion of a member state or an interest group. In 1988, after the launch of the single market program and implementation of the SEA, the Commission set out to develop an annual legislative program with the EP. In 1991 a representative of the Council presidency for the first time attended the Commission-Parliament discussions to agree on a legislative program. The three institutions concur on the importance of legislative programming in order to make the EU’s decisionmaking procedures more effective and thereby improve the EU’s public image. Ideally, the college should discuss and approve all proposals before formally submitting them to the Council. But the sheer volume of pro-

posals prepared annually makes that impossible. To expedite the process and reduce the commissioners’ work loads, draft proposals that seem uncomplicated and uncontroversial are circulated among the commissioners and, if not objected to within one week, are adopted by default. Alternatively, a subgroup of commissioners may agree to deal with routine proposals on behalf of their colleagues. Either way, the cabinets play a decisive role. Executing policy. In order to implement EU policy (excluding the CFSP and JHA), the Commission issues approximately five thousand directives, regulations, and decisions annually. The increasing impact of such acts on everyday life in the EU is a major reason for growing public hostility toward the Brussels bureaucracy. Yet few people realize that the Commission lacks a free hand in implementing EU policy. Jealous of their national prerogatives, from the outset member states devised a complicated committee system, called comitology, to constrain the Commission’s exercise of implementing powers. Accordingly, the Commission implements EU legislation mostly through three types of committees—advisory, management and regulatory—all chaired by Commission officials but made up of national civil servants. Advisory committees merely counsel the Commission on rule making, but management and regulatory committees can send proposed implementing measures to the Council for review. Managing the budget. Each year, the Commission submits a preliminary draft budget to the Council and the EP, the two arms of the Community’s budgetary authority. Since the Delors I agreement of 1988, the Commission submits its annual draft budget in the context of a multi-year forecast. The Commission has some obligations on the revenue side, but its responsibilities lie primarily on the expenditure side. These include administering appropriations for the guarantee section of the European Agricultural Guidance and Guarantee Fund (the main mechanism for financing the Common Agricultural Policy—CAP, which still accounts for approximately 50 percent of total EU expenditure) and the structural funds (made up of the European Social Fund, the guidance section of the European Agricultural Guidance and Guarantee Fund, and the European Regional Development Fund), which account for approximately 25 per-

Commission

67

cent of total expenditure. Also since 1990 the Commission has had to manage large-scale financial appropriations made as a result of the EU’s increasing external policy responsibilities, for instance, assistance for the former Yugoslav republics and the former Soviet republics and emergency humanitarian assistance. Conducting external relations. The Commission is an international actor whose stature has increased dramatically since the revolution in Eastern Europe in 1989. Most third countries and international organizations have diplomatic relations with the EU, and the Commission maintains over one hundred delegations and offices throughout the world. Because it is less directly involved in the CFSP, the Commission focuses its external relations activities mostly on trade and aid. Article 133 of the Rome treaty authorizes the Commission to conduct the EU’s international trade negotiations, but member states keep a close eye on its behavior. The so-called 133 Committee of national civil servants meets regularly with Commission officials to approve the Commission’s negotiating strategy and proposals, and the Council endorses the final agreement. In addition to liaising internationally for the EU and negotiating trade agreements, the Commission negotiates association agreements with third countries and plays an important part in the process of EU enlargement. Guarding the treaties. Under Article 169 of the Rome treaty, the Commission may bring a member state before the ECJ for alleged nonfulfillment of treaty obligations. Member states frequently fail to live up to their EU commitments, and the Commission occasionally institutes judicial proceedings. However, most member-state violations are due to genuine misunderstandings or misinterpretations or to delays in transposing EU legislation into national law. Deliberate noncompliance nonetheless exists, notably in the area of competition policy and the internal market. For political and public relations reasons, the member states and the Commission are generally reluctant to pursue cases all the way to the ECJ, and most disputes are resolved at an early stage. With the launch of the single market program, the Commission won some important new powers to enforce Community law, notably in the area of competition policy. Under the terms of the December 1989 Council regulation on merger

68

Committee of Permanent Representatives (COREPER)

control, since September 1990 the Commission has one month after notification of a merger covered by the regulation to begin an inquiry into the proposed merger and, if an inquiry is begun, another four months to issue a legal decision. The Commission depends on a Merger Task Force, located in the competition policy directorate-general, to enforce merger policy.

Conclusion The Commission is, and always will be, “at the heart of the Union” (Nugent, 1997). Yet developments in the 1990s—ranging from the Maastricht ratification crisis to the Santer resignation crisis— eroded the Commission’s self-confidence and credibility. At a time of serious economic recession and political uncertainty, it was difficult for the Commission, especially under Delors’s style of leadership, to restore its position and regain its momentum. Invidious comparisons were made between the setback to the Commission’s fortunes under Hallstein in 1966 and under Delors in 1992. But European integration had progressed too far and the world had changed too much for the Commission to lie dormant for another fifteen years. Moreover, the EU’s crowded agenda in the mid and late 1990s—managing the 1995 enlargement, preparing for the next enlargement, conducting another IGC, launching EMU, and negotiating a new financial perspective—called for strong Commission involvement. Despite the dramatic nature of his resignation, Santer’s unspectacular but concrete achievements—making subsidiarity meaningful, consulting and informing as widely as possible, encouraging deregulation and competitiveness, consolidating the single market, promoting EMU—helped gradually to restore the Commission’s political influence. In its far-reaching Agenda 2000 report on the future of the EU, submitted to the Council in July 1997, the Commission called for “a thorough re-evaluation of the Commission’s executive and management functions and a change of its administrative culture” (Commission, 1997, p. 39). The problem of legitimacy, however, will prove less tractable. Although the Commission is more accountable to the EP, it is only indirectly accountable to the EU’s citizens. Commissioners are still appointed, not elected, and the Eurocracy seems as remote as ever before. The Commission’s biggest challenge, under Prodi’s energetic leadership, is to win the respect, trust, and

loyalty of a skeptical EU citizenry, and to emphasize the Commission’s centrality in the EU system. See also DELORS, JACQUES; JENKINS, ROY; SANTER, JACQUES; APPENDIX 1; APPENDIX 4. Commission. 1997. Agenda 2000. COM(97)2000 Final. 2 vols. Luxembourg: Office for Official Publications of the European Communities. Edwards, Geoffrey, and David Spence. 1994. The European Commission. Harlow: Catermill. Grant, Charles. 1994. Delors: Inside the House that Jacques Built. London: Nicholas Brealey. Nugent, Neill, ed. 1997. At the Heart of the Union: Studies of the European Commission. Basingstoke: Macmillan. Ross, George. 1995. Jacques Delors and European Integration. Cambridge: Polity Press. Spierenburg, Dirk. 1979. “Proposals for Reform of the Commission of the European Communities and Its Services.” Brussels: Commission.

Bibliography

—Desmond Dinan

Committee of Central Bank Governors

The European Monetary Institute (EMI)—the forerunner of the European Central Bank—supplanted the Committee of Central Bank Governors, a consultative body that met monthly at the headquarters of the Bank for International Settlements in Basel, Switzerland (the only Community organ to meet regularly in a nonmember state). The committee played a prominent part in the 1991 intergovernmental conference on Economic and Monetary Union (EMU) and paved the way for stage 2 of EMU by helping to coordinate member states’ monetary policies. The governors of the national central banks formed the Council of the EMI, and one of them became its vice president. But, under the terms of the EMI’s statute, the council president himself was “selected from among persons of recognized standing and professional experience in monetary or banking matters” from outside the circle of Central Bank governors.

Committee of Permanent Representatives (COREPER)

The Committee of Permanent Representatives, known universally by its French acronym

Committee of Permanent Representatives (COREPER)

COREPER, is a key institution of the EU. There are, in fact, two COREPERs: COREPER II, made up of the permanent representatives (ambassadors) of the member states to the EU, and COREPER I, made up of their deputies. Both play a vital role in the decisionmaking process. Indeed, perhaps some 80 percent or more of decisions are now taken at the level of COREPER or below. A committee of officials designed to assist ministers was allowed for under the Treaty of Rome, but COREPER as such was first referred to only in the Merger Treaty of 1965, which brought together the institutions of the three European Communities. At that point COREPER was held responsible for preparing the work of the Council of Ministers and for carrying out specific tasks assigned to it. It was for that reason seen as a part of the trend toward greater intergovernmentalism epitomized by French president Charles de Gaulle’s “empty chair” policy in the Council and the subsequent Luxembourg Compromise, and was therefore criticized by many for undermining the role of the Commission. At the same time, COREPER was also criticized for undermining the role of ministers in the interests of further technocratization (Spinelli, 1966). However, it was not long before COREPER had come to be accepted as a body that brought technical efficiency and a sense of responsibility and commitment to finding the necessary consensus among member governments (Sasse, 1977). COREPER achieved widespread acceptance because of its critical position in coordinating the decisionmaking process. COREPER sits at the point where the horizontal and vertical dimensions of coordination meet. It has particular responsibility for coordinating across the range of European Union activities, activities that have continuously grown, either formally through treaty revision or informally through more pragmatic responses to new demands and challenges. COREPER’s role has been limited only by the role of the Special Committee for Agriculture and the Monetary Committee, with its sectoral concerns, and by the 113 Committee, with its key role in preparing external trade matters. But COREPER I, which deals with more “domestic” issues, including the budget, and COREPER II, which works more with foreign ministers, have otherwise proved indispensable, not only in the legislative process but in the wider decision-making process of the EU itself.

69

This status was indicated in the Treaty on European Union (TEU) under which, at least in part as an attempt to improve coherence and consistency if not efficiency in decisionmaking, COREPER’s formal responsibilities were extended beyond the EC framework to include final official responsibility for issues falling under the second and third pillars. The second pillar, dealing with the Common Foreign and Security Policy (previously European Political Cooperation), had been dealt with in the Political Committee made up of political directors, usually top officials in national foreign ministries. The third pillar, dealing with Cooperation on Justice and Home Affairs, had formerly been dealt with in a wide range of different committees such as the Trevi Group (which dealt with terrorism and anti–drug trafficking) or the Ad-hoc Group on Immigration (which dealt with asylum issues as well as immigration) that had been brought together under the Group of Coordinators, later known as the K.4 Committee after the relevant provisions of the TEU. The decision to establish COREPER as primus inter pares among the Political Committee and the K.4 Committee, although welcomed by some as an indication of the primacy of the “Community method,” was regarded with suspicion by others as opening up the Community superstructure to greater pressures from the member governments. It was also unwelcome to both the Political Committee and K.4 Committee, as was the attempt to integrate some of their subordinate working groups. The eventual compromise between permanent representatives and political directors (followed later by K.4 coordinators) gave the final voice to COREPER on the understanding that in normal circumstances recommendations of the Political Committee would not be amended. COREPER is the meeting point of the technical and the political aspects of each proposal. It is responsible for judging the point at which a dossier can be finalized, needs further refinement by national experts in the working groups, or requires a political decision by ministers. In fact, COREPER itself is now responsible for the large majority of all Community decisions. These are then taken by ministers in the Council as “A” points: that is, without further discussion. This is possible, even necessary, because so many of the legislative proposals put forward by the Commission are highly technical and detailed. They are the result usually of extensive consultation on the

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part of the Commission with interested groups, including member governments. Once formulated, the proposals are subject to scrutiny by the Council, in the first place by the same national officials who had earlier proffered advice but who this time are responsible for ensuring that the proposals are politically as well as technically acceptable. There are perhaps 100 to 180 working groups: some meet two or three times during any six-month presidency; others with less political momentum behind them meet perhaps only once or twice a year (Rometsch and Wessels, 1994). But if the working groups can agree or are near agreement so that COREPER can then adopt the proposal at its weekly meetings, the proposal goes on to become an “A” point. A group of officials, the Antici Group, under the leadership of an official representing the presidency of the Council, liaises with the Commission and the Council secretariat, coordinates all legislative proposals, and prepares COREPER II (Westlake, 1995). Technical issues, however, have a habit of becoming politically sensitive. It may still be possible for the permanent representatives or their deputies to agree, but it may well require further recourse to national capitals before they do so. If COREPER can still not reach agreement, then a decision has to be taken on whether to send the proposal back down to the working groups for further work by experts or to send it upward to ministers with the areas of disagreement carefully delimited. Given such a delicate position vis-à-vis their national administrations, it is not surprising that the permanent representatives frequently return home to capitals to discuss strategies and tactics. It is often the case that there they become identified, some might say overidentified, with the search for agreement. On the one hand, their constant interaction in COREPER makes them expert in what is politically possible in Brussels. On the other hand, they often thereby appear to represent the EU in national decisionmaking and are regarded with suspicion by other departments and ministers as a result (Edwards, 1996). It is a delicate balance. It is one, however, that indicates the key role that the permanent representatives and COREPER play in the decisionmaking process. See also COUNCIL OF MINISTERS; DECISIONMAKING PROCEDURES.

Edwards, Geoffrey. 1996. “National Sovereignty vs Integration? The Council of Ministers.” In J.R.R. Richardson, ed., European Union: Power and Policy-Making. London: Routledge. Rometsch, Dietrich, and Wolfgang Wessels. 1994. “The Commission and the Council of Ministers.” In Geoffrey Edwards and David Spence, The European Commission. Harlow: Catermill. Sasse, Christoph, et al. 1977. Decision-Making in the European Community. New York: Praeger. Spinelli, Altiero. 1966. The Eurocrats. Baltimore: Johns Hopkins University Press. Westlake, Martin. 1995. The Council of Ministers. Harlow: Cartermil.

Bibliography

—Geoffrey Edwards

Committee of the Regions (COR)

Partly for reasons of democratic legitimacy and partly because it sees regionalism as integral to federalism, the Commission has long advocated greater regional involvement in European integration. In October 1991, the Commission submitted a paper to the intergovernmental conference (IGC) on political union proposing the establishment of a Committee of the Regions (COR) to advise the Council of Ministers and Commission on relevant policies and draft legislation. The member states concurred and included in the Treaty on European Union (TEU) a provision establishing an advisory committee consisting of “representatives of regional and local bodies.” The COR held its inaugural meeting in Brussels on March 10 and 11, 1994. The committee elects its own chairman and officers from among its members for two-year terms and adopts its own rules of procedure (which are subject to the Council’s unanimous approval). With a total membership of 222, the COR’s composition is identical (in terms of national representation) to that of the older Economic and Social Committee (ESC). The COR has no legislative authority, but the Council or the Commission must consult it on a range of issues, notably social policy, education, culture, public health, transport, telecommunications, energy, and economic and social cohesion. The Council or Commission can set a one-month time limit for submission of an opinion. The COR may also meet and issue opinions on its own ini-

tiative if it considers that specific regional interests are involved. Acting unanimously on proposals from the member states, the Council appoints members and alternate members for renewable four-year terms. The Commission clearly stated in its June 1991 submission to the IGC that the new Committee’s members should hold elective office at regional or local level, but Article 198a of the TEU does not include that condition. Moreover, the Council decided in June 1992 that it was up to each government, using its own criteria, to nominate people to represent regional and local communities. This became a vexed political question in Britain. As a highly centralized state hostile to Eurofederalism, Britain instinctively opposed the Commission’s proposal to establish COR but reluctantly went along with the idea at the Maastricht summit. Because the TEU gives governments complete discretion to nominate COR members and because Britain lacks an institutionalized regional structure, England, Scotland, Wales, and Northern Ireland (the UK’s constituent parts) have no right to send representatives to the new committee. In the event, the British government tends to overrepresent Scotland and Wales in COR in order to appease Scottish and Welsh nationalism. Initially, the European Parliament (EP) was unhappy about COR’s existence: in a series of written questions in 1992, Europarliamentarians expressed concern about COR’s relationship with the EP and with the ESC. In reply, the Council pointed out that apart from sharing facilities and administrative support, the ESC and COR would be independent of each other. The Council also asserted that COR would have no direct dealings with the EP and would not duplicate the EP’s role in any way. Despite the ESC’s concern, the ESC’s own history (as the EU’s only other high-level advisory committee) did not bode well for COR. As if to allay widespread misgivings about COR’s future even before the committee was officially constituted, the European Council in Birmingham in October 1992 issued a statement underlining “the importance [it attaches] to the ... Committee of the Regions.” In the event, COR has not had much of an impact on the EU’s institutional or political development. Despite aggressive and imaginative leadership, its role is too limited and its composi-

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tion too heterogeneous for it to become a major player in Brussels. See also APPENDIX 1.

Committee on Agricultural Structures and Rural Development (STAR)

The Committee on Agricultural Structures and Rural Development (STAR) is a committee of senior officials, from the member states’ agriculture ministries, who prepare and coordinate meetings of the Council of agriculture ministers. It is one of only two sectoral committees of senior officials that supersede the Committee of Permanent Representatives (COREPER)—the other is the Monetary Committee, which prepares meetings of the Council of Economic and Finance Ministers (ECOFIN). Before 1988, when the name was changed to reflect the EC’s concern about rural development as well as agricultural price supports, the committee was called the Standing Committee on Agricultural Structures.

Committee on a People’s Europe See ADONNINO COMMITTEE.

Common Agricultural Policy (CAP)

The treaty establishing the European Economic Community, signed in Rome in March 1957, provides for the setting up of a common market through the abolition, between member states, of customs duties and quantitative restrictions to the free movement of goods and of all other measures having equivalent effect. Within the section of the treaty devoted to the establishment of a common market, Title II (Articles 38–47) specifically refers to agriculture. Article 38 provides that “the common market shall extend to agriculture and trade in agriculture” and that “the operation and development of the common market for agricultural products must be accompanied by the establishment of a common agricultural policy among the Member States.” This commitment to a Common Agricultural Policy (CAP), whose fulfillment has been so decisive in the development of European integra-

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tion, includes a number of objectives (outlined in Article 39): (1) to increase agricultural productivity by promoting technical progress and by ensuring the rational development of agricultural production and the optimum utilization of the factors of production, in particular labor; (2) to ensure a fair standard of living for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture; (3) to stabilize markets; (4) to assure the availability of supplies; and (5) to ensure that supplies reach consumers at reasonable prices. Although Title I (free movement of goods) lays down a precise timetable for achieving a common market from the customs point of view, the substance of the CAP was not actually spelled out in the treaty itself. Instead, Article 43 merely states that “in order to evolve the broad lines of a Common Agricultural Policy, the Commission shall, immediately after this Treaty enters into force, convene a conference of the Member States with a view to making a comparison of their agricultural policies, in particular by producing a statement of their resources and needs.” It was the newly created Commission, therefore, which set about preparing the CAP and in a relatively short time achieved considerable practical results. The Commission’s success was due mainly to the political will of the six original member states to achieve European integration on the basis of a common market of industrial and agricultural products and also to the outstanding negotiating ability that the Commission displayed in securing acceptance of the new EC by its main European and non-European trading partners—above all by the United States. The CAP that emerged in the 1960s was based on a system of guaranteed prices for the main agricultural crops and products. Ironically, it was perfectly well understood when the treaty was signed that the objectives contained in Article 39 could not be achieved using the mechanisms for market liberalization laid down for industrial products; thus, it is significant that Article 42 excludes the production and trade of agricultural products from the scope of the general provisions on competition laid down in Articles 85 to 94 of the treaty. Development of the Common Agricultural Policy The broad lines of the CAP were determined shortly after the treaty came into force, at a con-

ference in Stresa in July 1958. The Stresa conference outlined a common system of agricultural prices, developed a market framework that incorporated national agricultural systems into a common market, and emphasized the need for structural change and greater productivity. The Commission then drew up proposals on the common organization of the agricultural market within the meaning of Article 40(2) of the treaty. At the end of the first stage of the transitional period for the establishment of a common market (Article 8 of the treaty), in January 1962 the Council of Ministers adopted a “package” of measures, based on a compromise on the price of cereals, a key community commodity. An essential element of the emerging system was the setting of Community-wide prices, which in turn determined import levies and export refunds by mechanisms of intervention introduced to determine the income of farmers. The lynchpin of the system is the “target price,” that is, the price farmers are to receive within the EC. In case of overproduction, the target price turns into the “intervention price”; this is the price at which the intervention agencies, specially designated by the member states, are required to buy surplus agricultural products in unlimited quantities (guaranteed withdrawal). The intervention system guarantees farmers minimum selling prices for their agricultural products, whatever the circumstances, even when higher prices cannot be obtained on the market. The main aim of this guaranteed minimum price is to ensure that farmers have adequate incomes. Finally, the “entry price” was introduced to protect prices within the EC and thereby agricultural production in general; the entry price is the minimum price at which farm products may be imported into the Community. It was designed to prevent the EC’s agricultural market from being flooded by lower-priced imports from third countries, and it worked, thanks to a “levy” that artificially raises the price of imported products to the level of the entry price. These levies constitute part of the EC’s “own resources” and accrue to the EC budget. On the other hand, products leaving the EC enjoy an export subsidy—the “refund” paid by the EC to exporters of agricultural products to bridge the gap between (lower) world prices and (higher) prices in the EC. The export subsidy enables EC farmers to dispose of their products on the world market despite the fact that guaranteed prices within the EC are generally higher.

Article 40(4) of the treaty states that in order to enable the common organization of the agricultural market “to attain its objectives, one or more agricultural guidance and guarantee funds may be set up.” Thus, in April 1962 the Council of Ministers established the European Agricultural Guidance and Guarantee Fund (EAGGF) for the purpose of gradually taking over the burden of CAP expenditure that, apart from the costs of market intervention, included the cost of a socioeconomic policy intended to complement the prices policy and improve basic structural conditions in European agriculture. The EAGGF consists of two sections: a guarantee section for expenditure arising out of the market and prices policy (this accounts for the lion’s share of CAP expenditure and covers the cost of the minimum guaranteed price and exports refunds) and a guidance section to cover expenditure arising from the agricultural-structural policy. Initially the CAP was financed jointly by the EC and the member states, but as a result of a landmark agreement in April 1970, the EAGGF was incorporated entirely into the EC budget. This was the culmination of a series of political battles in the 1960s—most notably the 1965–1966 “empty chair crisis”—waged either wholly or partly on the issue of CAP funding, which profoundly altered the EC’s political and institutional development. The series of decisions taken at the beginning of 1962 thus heralded the three essential principles on which the common agricultural policy was to rest: the single market, based on a system of common prices; Community preference, guaranteed by entry prices and import levies; and financial solidarity, based on the EAGGF. Although the CAP achieved some of the other objectives set by Article 39 of the treaty, for instance, “to assure the availability of supplies” and “to increase agricultural productivity by promoting technical progress,” the overall impact of the CAP has in many respects been disastrous. Progress in agronomics and technology, together with an unrestricted guarantee of prices higher than those prevailing on the world market, generated massive overproduction. The ensuing cost became a huge burden for the EC’s budget while at the same time, paradoxically, most farmers’ incomes steadily fell. Public opinion reacted against both the cost of the CAP and the substantial surplus of agricultural produce generated in the EC as a result of uncontrolled output. Apart from domestic discontent, the CAP also became a major irritant in the EC’s external

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economic relations. Most industrialized countries operate policies that in one way or another, directly or indirectly, assist agricultural exports. But the EC’s high level of agricultural export subsidization pushed the United States openly to subsidize exports of agricultural produce as well and generated considerable international criticism of the CAP. In an effort to reduce the runaway cost of the CAP, appease an increasingly restive public opinion scandalized by the CAP’s waste of money and the destruction or storage of agricultural surpluses, and facilitate the conduct of multilateral trade negotiations, the EC launched a prolonged process of CAP reform, starting in 1984 with the introduction of the quota scheme for diary production. As part of a comprehensive reorganization of the EC budget (the Delors I package), concluded at an extraordinary European Council in Brussels in February 1988 after a year of contentious negotiations, EC expenditure on agriculture has been tightly controlled within a strict “budgetary discipline” whereby the “agricultural guideline” of the EAGGF cannot be increased beyond 74 percent of the rate of increase in the GNP as of 1988. Based on an agreement reached at the European Council in Edinburgh in December 1992 (the Delors II package) and an interinstitutional agreement of October 1993, the 1988 decision to control agricultural expenditure was strengthened by a Council decision in November 1994. Following enlargement of the EU in 1995, the agricultural guideline was calculated to be ECU 40.797 million for 1996 and ECU 41.805 million for 1997. Finally, after lengthy and difficult negotiations, the Council of Ministers reached political agreement at a meeting in Brussels in May 1992 on a radical revision of the main CAP mechanisms. As part of the so-called MacSharry reform (named after the agricultural commissioner), the EC began to abandon artificial support for agricultural prices in favor of direct support of farmers’ incomes (independent of production). This was to be achieved by deep cuts in guaranteed prices combined with direct payments to farmers in the form of premiums (subject to certain ceilings) for animal production and aid per hectare (connected with a set-aside requirement initially fixed at 15 percent of all land under arable crops) to reduce production and, therefore, quantities available for export. This system of direct payments to producers was coupled with backup measures aimed at protecting the environment.

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Such radical reform, although inherently positive, nevertheless entails formidable challenges for the EC both from the point of view of maintaining internal cohesion and of securing international understanding and support. Internally, differences between the legal systems of the member states mean that it is difficult to ensure respect among agricultural producers throughout the EC for the principle of nondiscrimination, a cornerstone of the correct application of Community law. Unlike the situation in the United States, where responsibility for managing agricultural policy remains exclusively in Washington, implementation (as distinct from formulation) of the CAP rests with the member states or regional authorities themselves. Aware of the administrative difficulties involved as well as of the considerable risk of fraud that is ubiquitous in the absence of centralized structures to combat it effectively, the Council and the Commission declared after the May 1992 reform agreement that “the regulations to implement [reform] ... must be as simple as possible for the measures to be acceptable to those concerned.” Another problem that the EC will no doubt have to face in the years to come and that will inevitably complicate the practical implementation of CAP reform is the insecurity felt by farmers who receive aid per hectare fixed in ecus at a time when Economic and Monetary Union and a single currency are objectives to be attained by 1999. Converting aid per hectare into national currencies therefore involves a degree of uncertainty for the recipients of such aid, especially as farmers are no longer protected by an extremely elaborate agrimonetary system originally put in place in the early 1970s to cushion the CAP from exchange rate fluctuations. Externally, the MacSharry reform contributed to the success of the Uruguay Round of the GATT. By convincing the United States and other major agricultural exporters that the EC was serious about cutting production and curbing export subsidies, the reform helped pave the way for an end to the protracted trade negotiations. Moreover, the Uruguay Round required, among other measures, a 21 percent cut in the quantity of subsidized exports. Rural Development, Forestry, and Environmental Protection Despite limited budgetary resources, the Community was able to put in place in the early 1970s a

structural policy for the modernization of European agriculture. Specific directives concerning mountain and hill farming and farming in less-favored areas were based on the granting of compensatory allowances cofinanced by the EC and by the member states. This agricultural-structural policy helped to halt the exodus from the land that inevitably accompanied the modernization of agriculture. Unfortunately, however, as a result of the cofinancing system the most prosperous member states derived greater benefit from this policy: regional imbalances were thus increased instead of reduced, which made the EC’s progress toward economic and social cohesion even more difficult. In the 1980s the Commission initiated a discussion about new development patterns for agriculture and the countryside. However, the Commission was more concerned with correcting the evils of overproduction than with taking real account of the need to stop degradation of the land. Nevertheless, the special European Council that met in Brussels in February 1988 to impose budgetary discipline and reform the structural funds established a new structural funds category, Objective 5(b), to support certain “rural areas” in the EC. This was revised as part of the Delors II package in July 1993. In July 1988 the Commission submitted a communication to the Council and the European Parliament (EP) on “the future of rural society” with the aim of encouraging joint discussions. As a result, the name of Directorate-General VI of the Commission was changed from Agriculture to Agriculture and Rural Society, and the Standing Committee on Agricultural Structures, set up in 1962 to help the Commission implement the CAP, changed its name to the Committee on Agricultural Structures and Rural Development (STAR). Despite the indisputable change in awareness that has been shown by the Commission, the EP, the Economic and Social Committee, and all professional and academic circles, it is nonetheless striking that, when reforming the CAP in 1992, the Council took very little account of the prospects for the development of rural society, apart from adopting backup measures concerning methods of agricultural production compatible with the protection of the environment and the maintenance of the countryside and introducing a Community aid scheme for forestry measures in the agricultural sector.

In the meanwhile, the Single European Act introduced an environmental dimension into all EC policies, a requirement subsequently reinforced by the Treaty on European Union. Thus the latest EU environmental action plan includes provisions concerning the CAP specifically. For the moment, however, the Council does not seem ready to tie CAP payments to any kind of action to protect the environment. Another accompanying measure in the framework of the reformed CAP is the aid program for afforestation. Apart from the adoption of one or another forestry measure applicable to agricultural holdings and specific regulations for the protection of Community forests against air pollution and forest fires, the Council has always refused to consider forestry as such as subject to CAP measures because timber is not included in the list in Annex II of the products covered by Articles 39–46 of the Treaty of Rome. Fortunately, this has not prevented a degree of EU coordination of national forestry policies, especially with respect to “sustainable management” and “environmental certification of timber,” issues that are being discussed by an intergovernmental panel on forestry under the auspices of the UN’s Commission on Sustainable Development. Given that forests are unquestionably a key factor in the development of rural society, forestry policy is a clear example of the reluctance of certain member states to view the CAP as anything other than a mechanism for market organization. By contrast, the EP has always acknowledged and encouraged the contribution of forestry to regional development and has long wanted to see the simultaneous and balanced upgrading of the economic, ecological, regenerative, and recreational functions of all forests in the EU to the status of a structural policy objective. However, the EP does not yet possess the power of “co-decision” in this area that would enable it to soften the Council’s approach. Indeed, despite its considerable budgetary authority, the EP has only a marginal role in CAP decisionmaking. Even if the agriculture ministers have on a number of occasions chosen as subjects for discussions at their informal meetings questions regarding the place of agriculture in contemporary society and its relationship with the environment and with the countryside, ministers tend to become extremely cautious when the question arises of committing EU resources to a “common pol-

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icy.” The temptation to invoke the subsidiarity principle is very strong, especially for ministers from the most prosperous member states. Accordingly, it should come as no surprise that the EU’s agriculture ministers prefer to continue discussing the future of rural society, albeit in increasing detail, in an informal framework. Moreover, Franz Fishler, the agriculture commissioner, argues with respect to EU enlargement that the CAP should not undergo radical reform but merely be simplified, supplemented, and brought more closely into line with market trends. In the long term, however, this may not be compatible with environmental protection and the restoration of the countryside. In view of the limited resources available for the EAGGF guarantee section, owing to budgetary discipline, it is difficult to envisage substantial Community aid to support rural society as such while EU funds continue to accord privileged treatment to the productivity of the most efficient farmers. Conclusion Despite all the criticism leveled at the CAP and the difficulties that it has had to face—most recently, for instance, because of the bovine spongiform encephalopathy (BSE) crisis—the CAP still remains an essential aspect of European integration, not least because it still absorbs about half of the EU budget. Although the CAP’s fundamental nature is changing—with a move away from pricing policy toward direct income support and greater concern for the environment—the future of the CAP is by no means certain, especially in view of the EU’s impending enlargement. Most of the applicant states in Central and Eastern Europe have large, relatively antiquated agricultural sectors and face daunting environmental challenges. Extension of the existing CAP regime eastward may simply not be possible. Even without enlargement, the CAP’s prospects are problematic. For example, despite the high cost of dealing with BSE, the budget adopted by the EP in December 1996 allocated ECU one billion less to the CAP than the amount authorized by the budgetary discipline. Ultimately, the fate of the CAP will depend on its ability to adapt to a need strongly felt by European citizens: ensuring the future of natural resources. Increasingly, therefore, member states will have to confront the issues of rural development and environment protection in the context of

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the CAP. The final declaration of a Commissionsponsored conference in Cork, Ireland, in November 1996 called for a specific rural development policy with its own objectives, principles, instruments, and financial means. Unfortunately, the general euphoria that accompanied the meeting was not reflected in the European Council held in Dublin less than a month later, despite the fact that some member states (notably Sweden) emphasized the importance of a comprehensive approach to the CAP in order to enhance agriculture’s potential environmental benefits while reducing pollution and overproduction. Despite recent reforms, therefore, three factors make it likely that EU agricultural policy will be further reformed in the near future: internal pressure for environmental protection and rural development, EU enlargement into Central and Eastern Europe, and an increasingly competitive international economy driven by trade liberalization. See also COMMITTEE ON AGRICULTURAL STRUCTURES AND RURAL DEVELOPMENT; EUROPEAN AGRICULTURAL GUIDANCE AND GUARANTEE FUND; MACSHARRY PLAN. Commission. 1992. Agriculture in Europe: Development, Constraints, and Perspectives. Luxembourg: Office for Official Publications of the European Communities. Marsh, John, and Bryn Green, eds. 1991. The Changing Role of the Common Agricultural Policy: The Future of Farming in Europe. London: Belhaven. Petit, Michael, et al. 1995. Agricultural Policy Formation in the European Community. Amsterdam: Elsevier.

Bibliography

—Claudio D’Aloya and Monica Mezzadri

Common Commercial Policy (CCP)

The Common Commercial Policy (CCP) of the EU is embodied in Articles 110–116 of the Treaty of Rome, which established the European Economic Community (EEC). Article 110 calls for the creation of a customs union; Article 112 calls for uniform commercial practices with nonmember states; Article 113 gives responsibility for the conduct of the CCP, both internally and externally, to the Commission and the Council of Ministers; and Article 115 requires member states to honor re-

strictions on imports from outside the Community maintained by other member states and gives the Commission authority to mandate protective measures. Articles 111, 114, and 116 have since been repealed. The establishment of a customs union and the ceding to the EC of competence in trade matters were only the first steps in the integration process. The EC’s founding fathers clearly intended to go further. In addition to abolishing all tariffs and quotas between member states, Jean Monnet, Robert Marjolin, and others intended to provide for complete freedom of passage within the EC for goods, services, capital, and people (the socalled four freedoms). Therefore, the CCP should be thought of as including measures such as the single market program designed to remove all of the nontariff impediments to free trade among member states and perhaps also Economic and Monetary Union (EMU). Once the bulk of the single market program was legislated at the end of 1992, the Commission argued that it was important to take the next step, to a single currency and monetary policy, to ensure the proper working of the single market. The framers of the Treaty of Rome considered economic integration, including a CCP, to be absolutely necessary if member states were to prosper in the postwar world. The economic arguments for integration included the need to broaden relatively small national markets to support more efficient industries in an era of technological advance and strong competition, especially from the United States. The producer and consumer benefits of regional economic integration were viewed as necessary to promote full employment, price stability, and growth in Europe. Politically, a strong, integrated economy in Western Europe would help to tie Germany into the emerging international system, build a strong Europe as a counter to Soviet expansion, and ensure a major role for Europe in world affairs. Robert Marjolin, former head of the Organization for European Economic Cooperation, adviser to the French foreign minister, and later one of the first commissioners, was openly critical of initial French opposition to economic integration. He argued that France must take the risks inherent in a free trade area and in the international division of labor if it expected to improve its economic conditions. Marjolin characterized the movement to customs union and common market

as a “test of European will,” arguing that Europe would lose ground to the United States if it did not develop a common market: the limited sectoral approach of the European Coal and Steel Community (ECSC) was not sufficient (Marjolin, 1989, pp. 280–290). The Customs Union Customs unions existed in the nineteenth century, but the first theoretical work on the concept did not appear until 1950, just as Monnet and Robert Schuman, the French foreign minister, were thinking of ways to facilitate European integration. Europe at that time was a thicket of impediments to trade. These included high tariffs, restrictive quotas, strong national preferences in transport and procurement regulations and competition policies, differing national tax systems and social insurance regimes, aggressive industrial subsidy policies, exchange rate manipulation by governments, and heavy controls on movement of capital and labor. The work of Jacob Viner, Jan Tinbergen, and James Meade provided Monnet and others strong justification for moving in the direction of integration and liberalization. The six countries of continental Europe seemed to meet the criteria for a successful customs union that would serve to benefit European producers and consumers: they were advanced economies at similar stages of industrialization, having common geographic borders, open economies, long-standing trade relationships based on competition rather than complementarity, and relatively high tariffs and quantitative restrictions. Customs union theory argued that dismantling of quantitative restrictions (QRs)—tariffs and quotas—and establishment of a common external tariff (CET) would force a more efficient utilization of factors of production (land, labor, capital, technology, and entrepreneurship). Firms with high production costs would lose their protection from competitors in other member states and would be forced to reduce costs or go out of business. Consumers would benefit from lower prices and greater choice. However, the negative effects of this process would include unemployment as firms closed or moved to lower cost areas and some loss of consumer welfare in the form of higher prices for items formerly imported at low cost from nonmember states. Viner described two effects of a customs union: trade creation and trade diversion. Trade

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creation occurs within the union as one member shifts from high-cost domestic production of a product and imports that product from a partner with lower-cost production. Trade diversion occurs when a member shifts from purchasing a product of a cheaper nonmember supplier to one of a more expensive partner in the union. These are what economists call the static effects of a customs union. In addition, there are dynamic effects, including economies of scale that result from increased market size, greater competition, increased innovation, and free movement of factors of production (Viner, 1950; Meade, 1955). International trading rules—Article XXIV of the GATT—require that arrangements such as customs unions, which give preferential treatment to members and therefore depart from the traditional GATT principle of most-favored-nation treatment, should eliminate barriers on substantially all trade among members and that the trade barriers imposed on nonmembers should not on the whole be higher or more restrictive than those previously in effect. Also, transition periods leading to such arrangements must not be overly long. (Article XXIV does not cover partial arrangements: the ECSC was approved by the GATT under the terms of Article XXV [5] after the ECSC’s member states gave assurances that the arrangement would not prejudice traditional trading partners.) Since the founding of the GATT in 1947, the EC has submitted forty notifications of preferential trading arrangements, including the 1957 EEC treaty, several bilateral association agreements with third countries, and the 1973, 1981, 1986, and 1995 enlargements of the EC and EU. The GATT has never given an opinion on compliance of the original EEC treaty with Article XXIV (nor on any of the other thirty-nine applications) (Schott, 1989). This was largely because at the time of notification, the United States chose not to contest the treaty on the grounds that the need for political integration in Europe outweighed the possible trade diversion effects of the Rome treaty. An authoritative analysis of the CET and the Common Agricultural Policy (CAP) in the early years of the EC suggests that indeed there was trade diversion and loss of welfare for third countries (Krause, 1973, pp. 104–117). In the years since that study, average EC tariff levels for non-agricultural goods have been lowered in successive GATT rounds from 13 percent to about 4

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percent. It is probably safe to say that this decrease, combined with the dynamic effects stemming from the customs union, has increased world trade. In spite of initial French opposition centered mainly on the level of the CET and concerns that high domestic social costs would make its products uncompetitive, the CCP provisions of the treaty were agreed to without much difficulty. At the Messina conference of 1955, the Benelux countries led the drive for a common market. Germany supported free trade but was more cautious because it did not wish to alienate France. France, therefore, played a key role in the negotiations, insisting on resolution of all CAP trade issues, phased tariff reductions, and a CET based on unweighted average tariff levels of member states. (Giving the same weight to countries with very high tariffs on a product and very low imports gives an upward bias to the CET; economists now allow more weight to low tariff countries—probably also the low cost suppliers—with large imports of the product in question.) The treaty laid down a strict implementation timetable to avoid foot dragging by member states. The transition period to zero tariffs and quotas and establishment of the CET was set at three steps of four years each. A unanimous vote was required to move from stage 1 to stage 2 (and two extra years were allowed if member states faced difficulties). Moves to subsequent stages were by qualified majority vote, and unanimity was required to prolong the passage from stage 2 to 3. The phased cuts in tariffs and quotas actually proceeded faster (at French suggestion) than provided in the treaty. Members were required to make across-the-board cuts on all goods but were allowed smaller cuts on sensitive goods as long as the overall average met the target. Starting maximum CET rates were set at 15 to 25 percent for manufactured goods, 10 to 15 percent for processed raw materials, and 3 percent for raw materials. The EC also offered generous reductions from these levels in multilateral trade negotiations beginning with the 1962 Kennedy Round of the GATT. All quotas (except on agricultural products) were eliminated by January 1962 and tariffs reduced to zero by July 1967. This allowed the customs union to enter into effect in July 1968, eighteen months early. Customs unions can produce effects on the growth and direction of trade and on the location

of production within the union. Studies of EC trade in the transition period show strong internal trade creation. Intra-EC trade grew 17 percent annually between 1958 and 1965 while imports from nonmembers rose only 9.2 percent. There was no strong evidence of major industrial relocation in the early period (Walter, 1968, pp. 134–160). Today, intra-EU trade accounts for more than 65 percent of total trade. Economists note that during the transition period, Europe (along with most of the world) benefited from favorable economic conditions, with 5 percent annual growth. This prosperity clearly helped the EC to achieve the customs union early without negative impacts on any members. There was some increase in internal nontariff barriers (NTBs) during the period as some members sought to protect their “national champions” from lower-priced competition. The stronger relationships developed during the transition period probably helped the Community weather the bad years of the two oil shocks and Eurosclerosis. Industry strongly supported economic integration in this period and was instrumental in pushing the Commission to take the next step of creating a single market. Commission Competence in Trade The treaty called for a common external trade policy, meaning that henceforth the EC would act as one in trade negotiations with nonmembers. In addition to ceding sovereignty on trade matters to EC institutions, member states were required gradually to cut their own QRs with nonmembers and harmonize national export and import regulations. Member states were also required to harmonize their existing bilateral commercial treaties with nonmembers so that by the end of the transition period all treaties would be in effect for the EC as a whole. Having established the principle of Community competence and the need for uniform member-state external trade regimes, the CCP provided sovereign powers for the EC to negotiate new commercial agreements with nonmembers and new relations with all categories of trading partners and to harmonize existing agreements. Under the provisions of Article 113, the process of entering into external trade agreements begins with a request from the Commission to the Council of Ministers for authority to begin negotiations. Negotiators from DG I of the Commission must take their instructions from the 113 Committee, a

Council organization that includes senior trade officials from the member states. The text of the agreement resulting from the negotiations must be approved by the Council. In the case of association agreements with nonmembers, approval of the European Parliament is also required. Certain types of agreements are approved not only by EC bodies but also by member state parliaments. In dealings with the GATT and the successor World Trade Organization (WTO), individual EU countries are contracting parties, but the EU generally speaks with one voice. On some occasions, EU member states vote individually in the GATT but only on the basis of Commission instructions. This means that for voting purposes in the WTO, the EU now has fifteen votes. Before stating the EU position, the Commission representative must seek a “coordination” of individual member state positions. In the WTO, this coordination takes place in a building in Geneva known, appropriately, as “the bunker.” The coordination procedure is also used by the EU in international commodity agreements—operated under the aegis of the UN Conference on Trade and Development (UNCTAD)— to which it belongs. The relationship between the EU and the European Free Trade Area (EFTA), a rival group that was created in 1960 by seven states not in the original EC, has evolved over the years. The EC extended tariff-free access to EFTA in 1972. In 1990, five EFTA countries entered into an extended free trade area (FTA) relationship with the EC. Entitled the European Economic Area (EEA), this was not a customs union (the EFTA five kept their individual external tariffs), but EFTA members did benefit from many of the trade liberalization measures of the EC’s single market program. Three of the EFTA EEA members have now joined the EU and the EEA is no longer viewed as an alternative to EU membership but as an “anteroom” for those nations considered eligible for later entry into the Union. The Lomé convention gives its seventy-seven African, Caribbean, and Pacific (ACP) participating states (former colonies of EU member states) preferential access to the EU market in a wide range of commodities. The agreement also provides for reductions in some NTBs as well as export promotion assistance, a commodity price stabilization fund, and environmental and industrial cooperation agreements. In the early years of Lomé, the ACP countries extended reciprocal

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preferences to the EC, but this practice has been challenged as a violation of GATT rules by the United States and others (Jackson, 1992). The generalized system of preferences (GSP) is another departure from the GATT most-favored-nation principle used by the EU, the United States, and other developed countries as an economic assistance tool. The EU GSP provides varying degrees of preferential access for many industrial and agricultural products from over one hundred least-developed countries. In addition to Lomé and GSP, the EC has developed economic relationships with other developing countries, including trade and commercial cooperation agreements with several Asian and Latin American countries, the Gulf states, and northern Mediterranean countries; regional framework agreements with the Association of Southeast Asian Nations (ASEAN) and Central America; and preferential trade and cooperation agreements with the Maghreb countries and Egypt, Jordan, Lebanon, and Syria. Internal Implications of the CCP Internally, the CCP has been the principal driver of economic integration, bringing concrete benefits first in the customs union phase (1958–1985) and later in the single market phase (1985 to the present). Member states have had several concerns about the effects of the CCP on their economies. All had to become accustomed to the loss of sovereignty concerning trade matters (as well as the loss of tariff, quota, and later NTB protection from one another). National industries faced the need to become competitive within Europe or go out of business. During the negotiation of the Single European Act in 1985, Spain and Portugal successfully argued for economic assistance from the Commission (i.e., a strong cohesion policy) to ease the transition to competition in the single market with more advanced industries in northern Europe. Integration has prompted a process of consolidation (action within companies to rationalize manufacturing and distribution facilities into fewer, larger operations) and concentration (mergers and acquisitions between companies). These activities have led to a pan-European market with increased concentration (subject to Commission vigilance to avoid antitrust violations), increased competition, and lower prices. Economists disagree on the magnitude of the dynamic effects of the CCP, but it is clear that integration has created

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economies of scale that could lead Europe to a steeper growth path.

External Effects The external effects of the CCP have provided benefits to partners receiving trade preferences (ACP countries, GSP recipients, and Mediterranean countries) and caused disputes with partners who experienced consequent trade diversion. The United States fought a sixteen-year battle in the GATT against EC preferences on Mediterranean citrus products that served to displace U.S. exports. The United States was also successful in ending the reciprocal tariff concessions extended by the Mediterranean countries to the EC. Mediterranean preferences in a wide range of products, including olive oil, wine, and citrus fruits, caused concern in Portugal and Spain as they joined the EU. Over the past few years, the EU has upgraded its trade agreements with several Central and Eastern European countries to Europe Agreements. These pacts have features similar to free trade agreements except that tariffs and QRs remain on sensitive items such as steel, coal, textiles, and certain agricultural products. The EU has also encouraged the Eastern European countries to structure their tariff schedules so that tariffs with the EU are reduced at a faster rate than those to other countries. This has led to complaints from the United States and other nations. National quotas, voluntary restraint regimes— restrictive French and Italian quotas on Japanese autos and voluntary restraint agreements (VRAs) covering electronic products—and high tariffs on semiconductors are responsible in part for increased Japanese and U.S. investment in Europe. The single market program requires member states to phase out Article 115 quotas and other QRs. The Commission in 1991 negotiated an EC-wide VRA on Japanese auto imports that replaces the individual national quotas. The auto pact is due to expire in 1999, but many observers believe it will be extended. The Commission has gradually increased its power to deal with unfair trade practices of nonmember countries. In order for the Commission to bring a trade remedy action, injury must occur in more than one member state. EU trade remedy measures, especially a strong antidumping regime and provisions to avoid circumvention of dumping orders, led Japan to bring a complaint to the

GATT. Benefiting from its strong position in the GATT, the EU fought against rapid liberalization of trade in agricultural products and opposed (until the Uruguay Round) any strengthening of the GATT dispute settlement mechanism. Enlargement also caused trade disputes with nonmembers. When new members join a customs union, they may have to raise their duties to nonmembers on certain products in order to comply with the EU CET. Under GATT rules, countries whose exports are jeopardized by enlargement of a customs union are entitled to compensation from the union in the form of offsetting cuts in the CET. The accessions of Britain, Denmark, and Ireland in 1973 and of Spain and Portugal in 1986 caused problems for U.S. agricultural and industrial exports. After threatening trade retaliation, the United States obtained compensation. See also COMMON MARKET; GENERAL AGREEMENT ON TARIFFS AND TRADE; SINGLE MARKET UNION. Jackson, John H. 1992. “The European Community and World Trade: The Commercial Policy Dimension.” In William James Adams, ed., Singular Europe. Ann Arbor: University of Michigan Press. Krause, Lawrence. 1973. “European Economic Integration and the United States.” In Melvyn B. Krauss, ed., The Economics of Integration. London: Allen & Unwin. Marjolin, Robert. 1989. Architect of European Unity: Memoirs 1911–1986. London: Weidenfield and Nicholson. Meade, James E. 1955. The Theory of Customs Unions. Amsterdam: North Holland Press. Schott, Jeffrey. 1989. “More Free Trade Areas.” In Jeffrey Schott, ed., Free Trade Areas and U.S. Policy. Washington, DC: Institute for International Economics. Viner, Jacob. 1950. The Customs Union Issue. New York: Carnegie Endowment for International Peace. Walter, Ingo. 1968. The European Common Market: Growth and Patterns of Trade and Production. New York: Praeger.

Bibliography

—Anthony Wallace

A common external tariff (CET) is the principal means by which a common market protects and distinguishes itself. The EU’s common external tariff (officially called the common customs tariff) is described in Articles 18–25 of the Treaty of

Common External Tariff (CET)

Rome. Because the EC’s original common tariff was based on a straight unweighted arithmetical average of the previous national tariffs, it was compatible with the General Agreement on Tariffs and Trade (GATT) code that forbade discrimination in international tariff arrangements. Subsequently the CET was lowered in international trade negotiations, especially in the Dillon, Kennedy, Tokyo, and Uruguay Rounds of the GATT. See also COMMON COMMERCIAL POLICY; COMMON MARKET. The need for a Common Fisheries Policy (CFP) is now widely recognized. The starting point of the theory of fisheries management is that high sea fisheries are a perfect example of a common property resource. Without management there will be overexploitation of stocks and overinvestment in boats and equipment, resulting in suboptimal economic returns and resource allocation and, ultimately, the collapse of the fishing industry as fish stocks are depleted. It has nevertheless proved extremely difficult to reach international agreements on the management of stocks. The establishment of two-hundred-mile coastal exclusion zones in the mid-1970s meant that much of the North Sea became EU waters. Allied to the accepted theory, this provided a strong case for EU management of fisheries in EU waters, as did interdependency within the fishing industry: many mature fish caught in the waters of one EU member are spawned and/or spend part of their lives in the waters of another. Although the number of fishermen in the EU is relatively small, it is estimated that for every job at sea there are up to five on land (in fish processing and boat building), and because of its nature, the fishing industry tends to be very geographically concentrated. In the 1960s there was little pressure to develop a CFP, as the sector was relatively unimportant to the original six, who clearly had other priorities. Indeed, the Treaty of Rome defines fish as an “agricultural product.” However, in the late 1960s the Commission proposed a CFP that was eventually implemented in 1971. It had three main elements: open access (free access to each other’s waters), financial assistance for the “weaker” fisheries regions; and a marketing system for fish generally along the lines of the Common Agricultural

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Policy (CAP). Perhaps more notable than the content of the policy is an omission (the lack of any significant reference to conservation of stocks) and the timing (just as negotiations for accession with four countries with significant fisheries industries and waters—Britain, Ireland, Denmark, and Norway—were about to begin). Indeed, the four potential new members did not accept the CFP: three of them insisted on adjustments, and the CFP was one of the reasons why Norway ultimately chose not to join. Consequently, the free access provision was suspended for ten years, and the new members were granted six-mile exclusion zones (extended to twelve, in places), with “verbal assurances” that these arrangements might continue thereafter. In addition, it was agreed that the Commission should present proposals for conservation measures (by 1979). In the mid-1970s, the CFP was affected by external events. Major fishing nations, beginning with Iceland in 1975, began to declare two-hundred-mile exclusion zones around their coastlines, and the EC felt compelled to do the same in 1976, thereby creating the EC “fishpond” in the North Sea. For the next six years further development of the CFP was impossible because of increasingly acrimonious disputes over how fish in EC waters should be shared out. Essentially, the UK and Ireland claimed that as the majority of the EC’s waters belonged to them, so did the fish; this was disputed by the rest of the EC. Ultimately, however, the approach of the December 1982 deadline forced compromise. The prospect of a free-for-all after 1983 if agreement was not reached and the impending accession of Spain and Portugal (with comparatively larger fishing fleets than any of the then EC members) led to concessions being made. A second CFP was finally agreed on. This CFP runs for twenty years (1983–2002) and has five main elements:

1. The principle of open access—that is, free access for all EU fishermen to all EU waters. However, there were three exceptions to this, one general and two specific. In general, a twelvemile coastal zone was created for local boats. More specifically, in a few limited areas, access of large boats was restricted, and the principle of reciprocal free access was not extended to Spain and Portugal when they acceded to the EU in 1986; Spanish access to the rest of the EU’s waters was very limited (and vice versa).

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2. Balanced exploitation of fish stocks through a system of conservation and management. The centerpiece of this was the scientifically determined “total allowable catches” (TACs) that specified annually the quantity of each of the main species that could be caught. The TACs were then divided between the member states and were supplemented by various complementary measures such as restrictions on net mesh size and temporary fishing bans at certain times, in various areas, and on taking particular species. The whole system is enforced by member states, supervised by a small EU fisheries inspectorate. 3. Financial assistance for the fisheries sector to restructure, partly through established sources, notably the Social Fund and the European Regional Development Fund (ERDF), and partly through a special program, established under the ERDF, to help regions dependent on fisheries to attract alternative employment. In addition, the CFP itself includes a fund of ECU 250 million to fund the modernization of fleets, the search for new stocks, the development of fish farming, and the temporary withdrawal of larger boats; a subsidization scheme for scrapping excess capacity was also introduced. 4. A marketing system (essentially, the system introduced by the first CFP was continued). 5. Agreements with third countries to be negotiated at EU level. This is logical, given that the EU, as the manager of the fish stocks of member states, rather than the member states themselves, is in a position to make the necessary concessions required to extract reciprocal concessions from third countries. However, this has proved to be a difficult area, and the EU has had fisheries disputes with various countries, notably Canada and Morocco, in recent years. The CFP was subject to a mid-term review, and a few minor adjustments were made in 1993, notably allowing greater use of a Multi-Annual Guidance Program (MAGP) to control overfishing and putting limits on the number of days boats can spend at sea. The fourth generation of the MAGP should have begun on January 1, 1997, but its introduction was delayed by the member states’ inability to agree on the size of a cut in EU fishing capacity. Nevertheless, the main thrust and detail of the CFP remains unchanged. In fact, a more important development than the greater use of MAGPs was the

full incorporation of Spain and Portugal into the CFP in 1996 (although the policy remains mainly concerned with the North Sea, with more limited application in the Mediterranean). In many ways, the CFP is an excellent case study of EU policymaking. The interdependencies of the fishing sector provide a strong argument for a policy at EU level, and the CFP is a typical blend of economics and politics (at all decisionmaking levels). For these reasons, the CFP has also had many problems. The operation of the TACs has not been entirely successful. There have been frequent disagreements over the “scientific basis” on which they are set, but more practically, they have been set at the end of the year for one year only, which has made planning of any kind very difficult in the fisheries sector. Moreover, national quotas set on the basis of the TACs have been occasionally difficult to agree upon and frequently difficult to implement. Allegedly there is significant overfishing. This is partly disguised where smaller fish and fish whose quota is exhausted are discarded at sea. Deliberate overfishing is made possible by poor record keeping and inadequate policing: the EU fisheries inspectorate is small and relies on (sometimes less than vigilant) national inspectors to monitor their own fishermen. Finally, there is the practice of “quota-hopping,” whereby a boat from one member state registers in another, thereby “stealing” some of its quota. British fishermen, in particular, have accused the Spanish of this practice. Inevitably, this is just one example of a whole series of intra-EU disputes that have bedeviled the CFP, as member states have sought to protect their part of what has been a declining industry with considerable overcapacity. Despite serious problems, however, the CFP probably remains superior to its alternatives: it has prevented a free-for-all in the North Sea, restricted access to EU waters by third countries, and enabled important conservation measures to be pursued. It is true that there still remains much internal EU disagreement, and the regional concentration of the industry makes the CFP contentious and politically sensitive. The CFP clearly has problems, and many fishermen and some member states remain extremely critical of it. Nevertheless the CFP is arguably a good example of where the principle of subsidiarity dictates the need for a policy at the European level.

Common Foreign and Security Policy (CFSP)

Karagiannakos, Apostolos. 1995. Fisheries Management in the European Union. Aldershot: Avebury.

Bibliography

—John Redmond

Common Foreign and Security Policy (CFSP)

The Common Foreign and Security Policy (CFSP) is an evolving intergovernmental framework for EU’s member states, with limited participation by the Commission, for the formulation and execution of common declarations, common positions, and joint actions in international politics. CFSP constitutes the second pillar of the Treaty on European Union (TEU), which also calls for the Western European Union (WEU) to become the EU’s defense arm and for the establishment of a European Security and Defense Identity (ESDI) and the development of a common defense policy. CFSP is heir to European Political Cooperation (EPC), established in 1970 to provide an intergovernmental forum (outside of the EC’s treaty framework) for foreign policy discussions, consultations, common declarations, and, on occasion, common action (Hill, 1983; Ginsberg, 1989; Holland, 1991). Whereas EPC was left completely outside the EC’s institutional apparatus, the TEU brought CFSP fully inside an EC body—the secretariat of the Council of Ministers—and endowed it with a larger and more permanent staff and with its first budget. However, because CFSP remains outside the EC treaty framework (Pillar One), both the European Court of Justice and the European Parliament have limited roles in it. Whereas EPC entailed loose arrangements for foreign policy cooperation and nonbinding member state commitments, CFSP is designed to undergird joint foreign policy actions with support and commitment from the highest levels of member state governments (Holland, 1996; Regelsberger, 1997). CFSP should not be confused with the EC’s foreign economic, humanitarian, development, and diplomatic policies and actions—all rooted in the Treaty of Rome and formulated and executed within the context of such integrationist principles as qualified majority voting, the sole right of initiative for the Commission, and the central role of European institutions. The member states—not the EU institutions—are the paramount players in

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CFSP, and all decisionmaking to date has been by consensus. Nevertheless, a major goal of the TEU was to enable the EU to draw on the two great cultures of European foreign policy cooperation—the integrationist approach of the EC and the intergovernmentalist approach of EPC—to derive a more rounded, holistic, consistent, and effective CFSP. The TEU calls on the European Council to identify areas for CFSP joint actions and on the General Affairs Council (foreign ministers) to formulate and execute them. Although the TEU provides for the opportunity of using qualified majority voting in order to implement joint actions, no actions to date have been subject to such voting. The Commission enjoys, alongside the member governments, the right of initiative. It remains the guardian of the Rome treaty within the CFSP domain, seeking to assure consistency between the EC’s external relations and CFSP, and it continues to represent the EC abroad in the areas for which it has treaty competence. The Council presidency presides over CFSP and represents the EU abroad on CFSP matters, assisted by the CFSP directorate-general in the Council secretariat. Almost thirty CFSP common positions have been adopted. Most dealt with nine states—Libya, Burundi, Sudan, Haiti, Serbia, Rwanda, Ukraine, Angola, and Nigeria—and many of the common positions were taken in accordance with UN Security Council resolutions. Two were security related: support to shut down the Chernobyl nuclear power plant and support for an international accord to address the humanitarian implications of the use of blinding lasers. Only a handful of CFSP joint actions have so far been taken. These include support for the Middle East peace process, election monitoring (e.g., in South Africa and Russia), security issues such as the convoying of humanitarian aid in exYugoslavia and civil administration in the city of Mostar, export controls on dual-use goods, diplomatic efforts to promote the renewal of the Nuclear Nonproliferation Treaty, and controls on exports of antipersonnel land mines. Thus the number and scope of common positions and joint action have been very modest. Optimists argue that the member states have to develop confidence among themselves in foreign policy cooperation before being able to project confidence outside the EU. Pessimists argue that

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the EU need not learn how to reinvent the EPC wheel and that the problems plaguing CFSP will not disappear. The evolution of the WEU as the EU’s defense arm has moved at a snail’s pace. Despite France’s ambition to develop an ESDI, the WEU has no integrated command as does NATO, no operational capacity, and no clearly defined links to some of the emerging security arrangements among subsets of the WEU membership, for example, the Franco-German Eurocorps. The NATO council in January 1994 agreed to support the ESDI and the WEU through the concept of Combined Joint Task Forces (CJTFs) in which the WEU could use NATO forces, equipment, and command structures for certain operations (notably peacekeeping operations) in which non-European NATO forces are not involved on the ground. Two and a half years later, the modalities of CJTFs were worked out by NATO and the WEU when NATO foreign ministers, at their June 1996 Berlin meeting, agreed that NATO could supply military forces and equipment to the WEU with the approval of the NATO council. Although such an arrangement means that the ESDI may now continue to evolve, it can do so only in the context of a U.S. “veto” in the NATO council. The failure of European diplomatic efforts to mediate the conflict in former Yugoslavia drove home a painful but real point to the Europeans: there can be no independent ESDI at least in the foreseeable future without the United States and NATO. The U.S.-brokered Dayton Peace Accords and the establishment of the Implementation Force (IFOR) of NATO and non-NATO troops, operating under the rubric of the United Nations, is not only a prototypical CJTF but a reflection of the EU’s continued dependence on the Atlantic Alliance. Another stumbling block to the development of the ESDI and of the WEU as the EU’s defense arm is the accession of three neutrals to the EU in 1995—Sweden, Austria, and Finland. Along with Ireland, the EU’s three new neutrals are in neither NATO nor the WEU. Thus, a formula must be found for the neutrals to practice a form of “constructive abstention,” thereby avoiding commitments that could violate their neutrality while at the same time permitting the EU to develop its security identity through effective action. Thus far, CFSP has not fared well: expectations have exceeded even the most enthusiastic

member states’ willingness to submit to intergovernmental cooperation an area central to national sovereignty (Hill, 1995). Member states differ more over the means than the ends: they are seriously divided over the role in CFSP of EU institutions, voting methods, and financing of joint actions. Although the CFSP directorate-general in the Council secretariat has been endowed with its own budget, this is inadequate to fund joint actions. Accordingly, the financing of joint actions has become a battleground for the Commission (which resists the appropriation of EC funds for CFSP undertakings) and the member states (which rarely want to spend more money on EU-related activities). CFSP is plagued by a lack of political will by some governments (such as the British) to put flesh on the CFSP bones. Other member states (such as Germany) are more inclined to make CFSP work despite preferring a more integrationist approach to cooperation that allows for more active Commission involvement and majority voting. France appears ambivalent: on the one hand, France wants to lead CFSP and the ESDI, and it has the political will and military capability to do so; on the other hand, France tends to “go it alone” when it wants to take a foreign policy initiative outside the rubric of the CFSP, which infuriates fellow EU members and diminishes CFSP’s effectiveness and potential. The EU’s quest to act more consistently and coherently in international politics, by fusing the integrationist and intergovernmentalist tendencies, has not met with success. The clash of foreign policy cultures in the run-up to and during the 1996–1997 intergovernmental conference (IGC) put the development of CFSP on hold. In the aftermath of the IGC, despite the Amsterdam Treaty’s CFSP provisions, CFSP remains caught in a void between the reality of its own weaknesses and tedious intergovernmental discussions about how to redress those weaknesses. Prospects for improving the functioning of CFSP are not particularly good, although the Amsterdam Treaty changes some aspects of CFSP that could help grease the axles of cooperation: endowing the EU with a foreign policy planning and analysis unit, designating the Council’s secretary general to act as the CFSP High Representative, reconstituting the CFSP troika (to include the Council secretary-general, the Commission president or a senior commissioner, and the Council

president), deciding to fund CFSP as part of the Community budget, facilitating use of qualified majority voting to implement the joint actions necessary to carry out CFSP “common strategies,” and introducing a flexible, “multiple speed” approach to enable members who oppose a particular CFSP activity to do so without blocking the majority from proceeding. Such opposing states would either abstain or support the majority in principle but not in implementation. Indeed, it is clear that the ESDI and future WEU actions will be based on the assumption that not all EU members will be operationally involved. Given the impending enlargement of the EU to the east and south, pressure will grow on national governments to improve the functioning of CFSP. However, even if CFSP flounders, the extensive foreign economic and diplomatic policies of the EC will continue to place the EU in a leadership position in the global political economy. If CFSP realizes its full potential, the EU will be able to translate its weight in the global economy to a newfound influence in the international political system. From a U.S. perspective, the fate of the New Transatlantic Agenda, concluded in December 1995 to translate U.S.-EU foreign policy and functional cooperation into joint and coordinated actions, depends in large part on the ability of the EU to meet its own expectations with regard to CFSP and ESDI. See also EUROPEAN POLITICAL COOPERATION. Ginsberg, Roy H. 1989. Foreign Policy Actions of the European Community: The Politics of Scale. Boulder: Lynne Rienner. Hill, Christopher. 1995. “The Capability-Expectations Gap, or Conceptualizing Europe’s International Role.” Journal of Common Market Studies 31, no. 3, pp. 305–328. Hill, Christopher, ed. 1983. National Foreign Policies and European Political Cooperation. London: Allen and Unwin. Holland, Martin, ed. 1991. The Future of European Political Cooperation: Essays on Theory and Practice. London: Macmillan. ———. 1996. Common Foreign and Security Policy: The Record of Reforms. London: Pinter. Regelsberger, Elfriede, et al., eds. 1997. Foreign Policy of the European Union: From EPC to CFSP and Beyond. Boulder: Lynne Rienner.

Bibliography

—Roy H. Ginsberg

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The Treaty of Rome (1957) provided the legal authority for an act of economic integration that was to take the form of a common market. This was to be the central feature of the European Economic Community (EEC) that now, following the Treaty on European Union (TEU) of 1992, is officially called the European Community (EC). This more recent treaty seeks to add to the common market features such as a single currency that would transform the common market into an economic and monetary union (Swann, 1996). A common market has two main dimensions, one external and the other internal. The external dimension involves the erection of a common protective fence and other devices around the integrating states. The key external defense has been the common external tariff (in treaty language the common customs tariff), to which Articles 18–25 of the Treaty of Rome apply. On the face of it such an arrangement appeared to breach the postwar GATT code that forbade discrimination in international tariff arrangements. The potential for discrimination arose from the fact that trade among the EC’s original six member states (France, Germany, Italy, Belgium, the Netherlands, and Luxembourg) was to be free of customs duties, but collectively they proposed to impose duties on goods coming from third countries (e.g., the United States). However, the GATT code provided an escape clause that allowed for common markets (specifically the customs union element) as long as the common tariff level was on average no higher than the previous national tariffs. As the original common tariff was based on a straight unweighted arithmetical average of the previous national tariffs, it escaped condemnation. Subsequently the level of this common protective fence was lowered in international tariff negotiations, specifically the Dillon, Kennedy, Tokyo, and Uruguay Rounds of the GATT. The EC established other forms of external protection, including collectively negotiated import quotas such as the Multi-Fibre Agreements. In addition, various national Voluntary Export Restraints continued to exist. These were finally brought under Community auspices as part of the 1992 single market program. The EC also disposed of various protective devices, notably the power to impose antidumping duties on unfairly priced imports and the New Commercial Policy

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Common Market

Instrument, adopted in 1984 to curb illicit trade practices that affected EC exports as well as imports. When illicit practices were proved to exist, the Council of Ministers could use various retaliatory actions, including increasing the level of import duties and applying import quotas. Internally, under Article 12 of the Treaty of Rome the member states were obliged to remove all customs duties on intra-Community trade in goods. The original six member states accomplished this within a period of eight and a half years, and new members, not already involved in reciprocal free trade arrangements, have been given from five to seven years within which to adjust. Member states were also obliged under Article 12 to remove all charges equivalent to tariffs. For example, the Italian government had been in the habit of imposing a statistical levy on imports and on exports. This the European Court of Justice (ECJ) accepted was not a customs duty as such, but a charge equivalent thereto, which therefore had to be abandoned. Member states also had to remove all quotas on intra-Community imports and exports (Articles 30–35 applied). Additionally, they had to remove all measures equivalent to quotas. This latter obligation was exemplified in the famous Cassis de Dijon case. Here the German authorities had prevented importation of a French liqueur on the grounds that German law banned the sale of liqueurs of less than 32 percent alcoholic content (exceptionally the threshold could fall to 25 percent). Cassis had a content of 15 to 20 percent. The ECJ rejected Germany’s ban, which was not a quota as such but was what Article 30 of the Rome treaty meant by a measure equivalent to a quota: indeed it had the effect of a zero quota. The Cassis and subsequent cases helped to establish a couple of key principles: goods legally marketed in one member state should be freely admitted to the markets of other member states, and refusals could only be based on mandatory requirements such as consumer protection and public health, as the protection of those interests was regarded as being justified. Moreover, such restrictions had to be the essential guarantee of the interest that was being protected. An element of proportionality thus arose. In the Cassis case the ban was disproportionate because mere information on the label as to alcoholic content would have sufficed to protect the innocent consumer.

The Rome treaty complemented these provisions for free internal trade in goods with provisions designed to provide freedom to supply services. Thus suppliers of, for example, insurance and banking services should be free to supply them across frontiers and barriers, and discrimination should be eliminated (Articles 59 to 66). However, the removal of tariffs, charges equivalent to tariffs, quotas, and measures equivalent to quotas, together with the call for freedom to supply services, was recognized as being insufficient to provide for a free and undistorted flow of trade in goods and services between member states. The Rome treaty acknowledged that various nontariff barriers (NTBs) would still exist and would stand in the way of a single market; it therefore made provision for dealing with such problems. Although considerable efforts were devoted to dealing with the NTB problem (and with other inhibitions relating to services and factors of production), only limited progress was made. It was primarily for this reason that the Single European Act of 1986 modified EC decisionmaking powers concerning the harmonization process and committed the Community to a program of single market completion by the end of 1992. Under Articles 85–90 of the Treaty of Rome, the Commission has the task of rooting out antitrust restrictions that could compartmentalize national markets and inhibit cross-frontier competition (Swann, 1995). Article 85 prohibits cartels that restrict competition in the common market and affect interstate trade. Incidentally, this law has an extraterritorial jurisdiction. Cartels may be exempted if in particular they have an improving effect and consumers share in the benefit. This law applies to public as well as private enterprises. The Commission has been endowed with appropriate enforcement powers, including a capacity to fine. Decisions to prohibit (or approve) cartels initially lie with the Commission, but provision is made for appeals to the ECJ. The Commission also has the power under Article 86 to attack dominant firms that abuse their market power and affect interstate trade. The Commission has successfully attacked dominant firms that, for example, have been engaged in predatory pricing, have employed fidelity rebates, and have foreclosed supplies of essential materials to competitors. Whereas the Paris treaty of 1951, establishing the European Coal and Steel Community, did provide a power to ban anticompetitive

mergers, no similar power was explicitly provided by the Rome treaty. However, in 1989, as a logical accompaniment to the single market program, the Council of Ministers conferred a merger-controlling power on the Commission. Only the largest mergers are caught. Under Articles 30 and 59 (the former banning quantitative restrictions and the latter relating, as we have seen, to freedom to supply services), the Community has sought to deal with discrimination in relation to public procurements. Since about 15 percent of all spending in EC states is government spending on goods and services, and since governments have been prone to favor the home-produced variety, it has been necessary to develop codes of practice that impose a requirement that public procurement must be nondiscriminatory. Rules have been introduced setting out the public purchasing principles to be applied in respect to public works and public supply contracting, public utility purchasing, and the public purchasing of services. Additional provisions have been made for legal redress at the national level when the rules are flouted. State aids (subsidies) are expressly forbidden under Articles 92 to 94 where competition is distorted and an effect on interstate trade arises. The concept of a level playing field for competition is, however, subject to qualifications. State aids of a social character are expressly exempted, and other forms of state aid may be exempted. These latter include aids for regional development, aids to particular economic sectors, and aids to support a project of common European importance (as, for example, a tunnel under the Alps). The task of vetting such subsidies falls to the Commission, which must be notified of state aids in advance. In assessing regional aids, for example, the Commission assesses the scale of the proposed regional assistance in relation to the severity of the local problem, for example, the level of unemployment and income per capita in the problem region. The Commission can ban aids, and following the TEU, financial sanctions can be imposed on states that fail to comply with regional aid rulings. The Community has also had to deal with the problem that differing national standards in respect to the design and composition of foodstuffs, consumer durables, and so on have the effect of compartmentalizing the common market, since goods that meet the standards of member state A may not satisfy those of member state B. The orig-

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inal approach was to employ Article 100, which allows the Council to harmonize national standards, that is, to produce a Community standard. Goods satisfying the latter would therefore be readily acceptable in all states. However, this proved to be a tedious business, and recently increasing use has been made of mutual recognition of existing national standards. The Community has addressed the problem of indirect taxes that impact on goods and services and can give rise to an NTB problem. The Community’s approach has been to select the valueadded tax (VAT) as the model turnover tax structure for the common market, since it does not artificially distort industrial structures and facilitates the detection and prevention of illicit export subsidies. Cross-border shopping still gives rise to distortions, but ultimately the aim is to harmonize VAT rates. This latter problem will then disappear, and goods will be exported bearing VAT. In the medium term the aim is also to harmonize excise duty structures and rates, that is, taxes on alcohol, tobacco, and so forth. The free market for goods has been complemented by steps to establish a freedom to supply services in sectors such as insurance and banking. Here, as elsewhere, the inhibiting factor has been government regulation. In banking, for example, standards of prudential regulation varied, and this stood in the way of banks’ establishing branches in other member states. The approach in banking was to adopt uniform minimum regulatory rules. As a result, a bank satisfying these requirements in member state A would be free to set up branches in other member states without any further licensing being required. In parallel with the free movement of goods and services, the EC has taken steps to provide for the free movement of labor (Articles 48 to 51) and has accompanied this by enabling measures such as the transferability of social security entitlements. In the past, the mobility of professional persons has been impeded by regulatory factors, such as differing national professional qualifications and variations in the type and length of training. Here again the harmonization process has come to the rescue, sometimes on a single profession basis and sometimes in ways that take in a broad spectrum of professions. The free movement of capital (now governed by Article 73) was given a significant boost in 1988 when it was agreed that exchange controls should be abol-

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ished. Some distortions could, however, still arise from differing national rates of corporation profits tax. The Rome treaty (Articles 52–58) also provides for entrepreneurs to set up productive operations in other member states (this is referred to as the right of establishment). Again, national regulation had proved to be the main obstacle. Thus the ability of a UK nonlife insurance company to set up business in, say, Germany was only possible when the Community had agreed on uniform rules in respect to insurance company reserves and margins of solvency. See also COMMON COMMERCIAL POLICY; COMPETITION POLICY; GENERAL AGREEMENT ON TARIFFS AND TRADE; SINGLE MARKET PROGRAM.

Swann, Dennis. 1995. The Economics of the Common Market. Harmondsworth: Penguin. ———. 1996. European Economic Integration. Cheltenham: Edward Elgar. Swann, Dennis, ed. 1992. The Single European Market and Beyond. London: Routledge.

Bibliography

—Dennis Swann

Common Organization of the Market (COM)

Based on Article 40 of the Treaty of Rome, the common organization of the market (COM) is a key element of the Common Agricultural Policy (CAP). The COM refers to how the CAP operates and is the basis for the European Agricultural Guidance and Guarantee Fund (EAGGF), the CAP’s funding mechanism. See also COMMON AGRICULTURAL POLICY. There are two main types of common position in the EU. First, with respect to legislative decisionmaking, under the cooperation (Article 189c) and co-decision (Article 189b) procedures a common position is a provisional Council of Ministers’ decision on the basis of a Commission proposal and the European Parliament’s opinion of that proposal. Parliament may demand amendments to a common position and may reject the proposed measure if not satisfied with the Council’s response. Second, with respect to the Common Foreign and Security Policy (CFSP), the European Coun-

Common Position

cil is responsible for defining principles and general guidelines; within these guidelines, the Council may adopt common positions (by unanimity). Since the CFSP became operational, the Council has adopted approximately thirty CFSP common positions, mostly dealing with conflict or crises around the world (e.g., Burundi, Haiti, Serbia, Rwanda, and Nigeria). Many CFSP common positions are taken in accordance with UN Security Council resolutions. See also COMMON FOREIGN AND SECURITY POLICY; DECISIONMAKING PROCEDURES.

Common Technical Regulations (CTRs)

Common Technical Regulations (CTRs) are mandatory norms developed by the European Telecommunications Standards Institute (ETSI) as a means of harmonizing telecommunications standards in the EU. See also REGULATORY POLICY.

Commonwealth of Independent States (CIS)

In 1992 the Council of Ministers approved a mandate for the Commission to negotiate Partnership and Cooperation Agreements (PCAs) with republics of the Commonwealth of Independent States (CIS), a loose organization linking most of the former Soviet republics. The PCAs were designed as successor agreements to the Trade and Cooperation Agreement (TCA) that the EC had signed with the USSR in December 1989 and whose terms were extended to EC relations with individual republics after the collapse of the USSR in December 1991. PCAs are in effect counterposed to the negotiation of association agreements (known as Europe Agreements) that the EU has negotiated with the Central and Eastern European states (CEES) and the Baltic States and that offer signatories the possibility of eventual accession to the EU. But like the Europe Agreements, the PCAs are socalled mixed agreements covering both national and Community sectors of competence. As a result, they must be ratified both at EU level and by the member states at national level. The consequent delay before PCAs are ratified and come into force has led the EU to offer interim agreements to PCA signatories. These

cover only matters of EU competence and therefore do not require ratification by member states. Areas covered by the interim agreements usually include all the PCA provisions on market access for goods, competition, and dispute settlement. Provisions for political dialogue, the establishment of businesses, and investment are not included, but in some cases separate specific agreements on political dialogue have been made between the EU and individual republics. Although some of its provisions are superseded by the interim agreements, the 1989 TCA signed by the EC and the USSR (but now operable with the former Soviet republics) continues to play a significant role. The TCA remains the basis for links in the field of economic cooperation and provides an intergovernmental monitoring institution—the Joint Committee—involving the EU and the partner state, which should meet once a year. The PCAs require signatories to commit themselves to principles of human rights, democracy, and a capitalist economy and contain clauses allowing one party to suspend the PCA unilaterally in the event of that party’s considering the other to be violating any of these principles. At the same time, PCAs do not entail the EU’s recognizing the PCA state as a market economy and therefore do not require the EU to apply GATT rules to trade disputes. The PCAs envisage structured, regular political dialogue between the EU and PCA states both at the highest ministerial level and at civil servant and parliamentary levels. The highest-level Cooperation Council should meet at ministerial level at least once a year. PCAs also offer the mutual granting of most-favored-nation status and the progressive elimination of trade barriers in manufactured goods between both sides. National rights are to be accorded to those investing in and establishing companies in each other’s territory. The PCAs also envisage a comprehensive protection of intellectual property rights. The movement of persons between both parties is to be left to agreements between individual national governments on both sides. Special arrangements outside the main terms of the PCAs are to be made for trade in nuclear materials, coal and steel, and textiles. The agreements can also include clauses on financial cooperation and assistance. The EU first negotiated PCAs with Ukraine, Russia, Kazakhstan, and Belarus; negotiations with Moldova and the three Caucasian republics

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followed. Progress has been slowest with the Central Asian Republics to the south of Russia and Kazakhstan. With Mongolia, the EU has a Trade and Cooperation Agreement and a Technical Assistance for the Commonwealth of Independent States (TACIS) aid program, but no PCA negotiations have taken place. Thanks to Russian pressure, the EU’s PCAs with both Russia and Ukraine envisage the possibility of a free trade regime’s being established between the EU and these countries either through the partner countries’ accession to the World Trade Organization (the successor to the GATT) or through a decision to open negotiations on a free trade area in 1998—whichever comes first. Initiating such negotiations would depend upon the extent of progress so far in implementing the PCA and in Russia’s transformation into a capitalist market economy. A similar provision for a possible negotiation of a free trade regime was included in the PCA with Belarus. Because the PCAs with Russia and Ukraine, signed in the summer of 1994, had not been ratified on the EU side eighteen months later, the interim agreement with both countries came into force on February 1, 1996. This agreement allows for better EU access to important markets for specific products such as cars and beverages, the curtailment of a range of quantitative import restrictions against EU products, and the reinforcement of the protection of intellectual property rights. For Russia and Ukraine, some quantitative restrictions against their imports and some moderation in the EU’s use of antidumping instruments were hoped for. The European Parliament (EP) protested strongly in February 1996 because it was not consulted before implementation of the interim agreement with Russia. The EP now demands that it be consulted before all such interim agreements with other countries are implemented by the Council and the Commission. After Belarus and the EU signed a PCA in March 1995, an interim agreement was initialed swiftly in April of that year. But the signing of the interim agreement was then delayed until late March 1996 because of EU concerns about human rights violations within Belarus. Following elections in Belarus, the EU decided to sign the interim agreement on the grounds that failure to do so would increase the isolation of Belarus and strengthen the opponents of systemic change there. But at the same time the EU stipulated that

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this interim agreement would, unusually, need to be approved by member states as well as by the EP and the Belarus parliament. However, this requirement was later dropped, and in July 1996 the EP’s external relations committee recommended approval of the interim agreement, despite the fact that in May and June 1996 the EP had adopted critical resolutions on respect for human rights in Belarus. But the EU still held back because of concerns about Belarus internal affairs, in particular the reduction in the role of parliament there. In the case of Kazakhstan the gap between the signing of the PCA and decisions by the EU General Affairs Council to proceed with the conclusion of an interim agreement was even longer: from January 1995 when the PCA was signed, to May 1996 when the decision was taken to conclude an interim agreement. The main cause of this delay was concern within the EU following the Kazakhstan government’s suspension of parliament in 1995. The PCA with Moldova was signed on November 28, 1995. The main problem delaying an interim agreement during the first months of 1996 was the EU’s insistence on International Monetary Fund (IMF) confirmation that the economic and financial reforms started there were making satisfactory progress. The IMF’s approval led to the conclusion of the agreement in April 1996 and its implementation on May 1, 1996. PCAs with the three republics of the Caucasus (Georgia, Armenia, and Azerbaijan) were initialed in December 1995, but progress toward interim agreements with Georgia and Armenia was delayed by the fact that both countries were in arrears in debt repayment to the EU. Negotiations began on a PCA with Uzbekistan in early 1996 after the General Affairs Council approved the Commission’s view that the republic had made adequate progress in democratic development. Negotiations were concluded swiftly, and the treaty was signed in June 1996. With Kyrgyzstan, negotiations on a PCA were concluded at the start of 1995, but the Kirgiz government pulled back from signing the agreement. Discussions on renewing cooperation took place when External Affairs Commissioner van den Broek visited Kyrgyzstan in September 1996. The government of Turkmenistan rejected close discussions with the EU. Tajikistan has been plunged in civil war for several years, and there have been allegations of massive violation of human rights.

Only one of the CIS republics, Ukraine, has consistently refused to accept its PCA as an adequate long-term framework for its relations with the EU. Since Ukraine’s declaration of independence in 1991, successive governments have declared their goal of eventual accession to the EU. Ukrainian President Leonid Kuchma has repeatedly called for an association agreement with the EU as a step toward full membership (along the lines of the Baltic states’ relationship with the EU). By the same token, Ukrainian governments have consistently rejected the notion that the CIS is a viable or legitimate framework for supranational integration. These overtures have not had a positive response from the EU. Although some EU member states (and also the United States) have urged greater Ukrainian integration with Western Europe, neither Germany nor the EU’s supranational institutions have indicated any readiness to move in the direction of establishing closer ties with Ukraine than with other PCA signatories. See also RUSSIA.

—Peter Gowan

Community Action Program in Education and Training for Technology (COMETT)

The Community Action Program in Education and Training for Technology (COMETT) is a program to enhance the quality of education and training in the high-technology sector. COMETT I (1986–1994) led to the creation of 200 universitycompany training partnerships, the organization of almost 40,000 transnational placement schemes for students and graduates, and 10,000 advanced training courses involving 250,000 people. COMETT II was launched in 1995 under the auspices of the LEONARDO DA VINCI umbrella program for vocational training. See also EDUCATION, VOCATIONAL TRAINING, AND YOUTH POLICY. In addition to its institutions and organs, the EU has a plethora of specialized agencies—ranging from service providers to think tanks—spread throughout the member states. In many cases the rationale for establishing these agencies was to

Community Agencies

satisfy national sensitivities and to encourage decentralization, not to meet legitimate needs such as better management and control of EU policies and programs. Such practical problems as recruitment procedures and remuneration for agency employees and such political problems as adequate supervision remain unresolved; as a result, the agencies’ status and accountability are uncertain. The agencies’ location (a highly contentious issue between the member states) was finally resolved at a special summit in Brussels in October 1993.

Community Support Frameworks (CSFs)

As part of a radical reform of structural policy in 1988 to promote social and economic cohesion in the EC, the Commission introduced a number of new principles and procedures and strengthened existing ones. In order to encourage close consultation and cooperation between the Commission, member states, and regional or local bodies at all stages of a structural program, the Commission now requires eligible member state plans for development assistance to be incorporated into Community Support Frameworks (CSFs): contractual agreements between the Commission, national authorities, and regional authorities. CSFs set out the program’s priorities, type of aid, methods of financing, and so on. Structural policy reform also involved a major switch from projectrelated assistance to program assistance and decentralized management, thereby putting the emphasis on planning and continuity rather than on ad hoc activities. Under the old system the Commission dealt with thousands of separate projects; now the Commission oversees a much smaller number of CSFs.

Community Trademark Office (CTMO)

As part of the single market program, under the general heading of removing technical barriers to trade, the Commission proposed a number of directives dealing with various aspects of intellectual property rights, including a proposal to create a Community trademark valid in all member states and a Community trademark office (CTMO) to manage the Community trademark. But legislation establishing the trademark office, first introduced in 1987, was derailed by nonsubstantive and seem-

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ingly intractable disputes, first over the location of the office itself and then over the working languages to be used. Eventually, following a political package deal negotiated at the special Brussels summit in October 1993 on the location of EU institutions and agencies, the CTMO opened in Alicante, Spain, in 1996. Officially, the CTMO is called the Office for Harmonization in the Internal Market: Trademarks, Designs, and Models. Article 58 of the Treaty of Rome empowers the EC to act in the field of company law in order to coordinate safeguards required by member states of companies or firms, with a view to making such safeguards equivalent throughout the Community. Company law directives adopted in the 1960s and 1970s sought to approximate member-state law to allow maximum freedom of movement for enterprises. As part of the single market program, the EC attempted to go beyond that and establish a framework for regulating cross-border corporate activity. As with other single market legislation, one of the EC’s objectives was to increase the competitiveness of European firms by allowing them to become larger and more efficient. Thus, the Commission’s 1985 white paper proposed a number of directives in this area. Measures adopted by the end of 1992 included a regulation defining the European Economic Interest Grouping (EEIG), a legal entity created to accommodate firms or other associations wanting to pool their resources for a common goal but not wanting to merge (Airbus is perhaps the best-known example); the eleventh company law directive (disclosure requirements for branch operations); the twelfth directive (single-member companies); and transparency in major holdings in company capital. The Commission had far less success with the remainder of the program. Faced with mounting employer and member-state opposition, the Commission eventually made a virtue of necessity and declared a number of company law directives, dealing with issues such as takeover bids and accounting, “nonpriority” for the creation of the single market.

Company Law

Competence means the EU’s responsibilities and scope of authority. Although the EU’s competence is set out in the treaties, in some cases it is uncer-

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tain or ambiguous, and in other cases it is “mixed,” that is, there is a division of responsibility between the EU and its member states. No explicit distinction is drawn anywhere in the Treaty of Rome in legal terms between exclusive and nonexclusive competence. However, the European Court of Justice has tended to take the view that the EU enjoys full competence in the pursuit of the objectives of the Rome treaty and that “flanking” policies, such as environmental or labor market policies, are too closely linked to the achievement of those objectives, notably the creation of the single market, to be anything other than virtually exclusive, too. External economic relations is an ambiguous area, with the EU and its member states sometimes uneasily sharing competence. For instance, the member states—not the EU—are members of the World Trade Organization, but under the terms of the Common Commercial Policy the Commission negotiates commercial agreements on behalf of the EU as a whole. Territorial problems relating to competence can arise during negotiations themselves, and especially during the ratification stage.

EU competition policy has two goals: to create and thereafter sustain the Community’s single market and to ensure that competition is the driving force of the Community’s economy, with companies allocating resources on an independent basis and striving for competitiveness in domestic and world markets. Competition policy may be divided into five categories, identified by reference to the legal provisions concerned: (1) restrictive practices (Article 85 of the Rome treaty); (2) abuses of dominant position (Article 86); (3) merger control (Regulation 4064/89); (4) state monopolies, public undertakings, undertakings with special or exclusive rights; and (5) public service obligations (Article 90) and state aid (Articles 92–94).

Competition Policy

Restrictive Practices Article 85 is divided into three paragraphs. The first sets out the basic prohibition of agreements, concerted practices, and decisions between undertakings that have as their object or effect the prevention, restriction, or distortion of competition and that may affect trade between member states. (The criterion of effect on trade between

member states, which need be only potential or indirect for Articles 85 and 86 to apply, is a jurisdictional requirement. So is the rule that the agreement, and so on, must be implemented in the Community for the Community rules to apply.) Under the second paragraph, such arrangements are null, void, and unenforceable. The third paragraph provides conditions under which exemptions may be granted. Like most systems of competition policy, the Community’s law and practice distinguish between horizontal and vertical issues. Horizontal restrictions of competition between rivals for the development, production, distribution, or sale of competing goods or services are usually treated severely, particularly where prices or output levels are fixed or markets shared. The full range of the Commission’s fact-finding and fining powers are brought to bear on such cases. However, Community competition law is not criminal law, and the sanctions available are civil: nullity of agreements, fines imposed on the undertakings, risk of action for damages in national courts. Some horizontal restraints, such as those involving small or medium-sized undertakings, are allowed, and there are block exemption regulations in force for agreements relating to research and development and specialization as well as special rules in the transport industries. Vertical restraints occur in the chain of relationships bringing a particular product or service from conception, research, development, and production to the distribution process and ultimately to the consumer. The Community’s policy against price restrictions in the vertical chain is similar to most other systems, but its severity toward territorial restrictions imposed by a producer on distributors is greater than that found in other jurisdictions. This is largely because of the Community’s goal of market integration. Many distribution systems are still conceived in terms of individual national territories within the EU (often for legitimate reasons related to differences of language, law, and consumer habit from one country to another), and territorial limits on resale tend to maintain national borders and frustrate Community citizens’ enjoyment of the benefits of a single market. The right to engage in and benefit from parallel trade, that is, sales from one member state to another that bypass the producer’s chosen distribution channels, is fundamental in the Community’s competition law.

Pursuant to Council regulations, only the Commission may grant exemptions under Article 85(3) in individual cases in respect to agreements of which it is notified. The Council may grant block exemption to a category of agreements but usually empowers the Commission to do so by means of enabling regulations. Block exemption regulations have been enacted for the following categories of agreement: exclusive distribution, exclusive purchasing, specialization, research and development, insurance, shipping consortium, various air transport, and technology transfer. Agreements of minor importance do not fall under Article 85(1) as they do not appreciably affect competition within the common market. This de minimis rule applies to agreements between undertakings that fulfill the market share and turnover criteria of the Commission’s notice on agreements of minor importance. The Commission pursues a strict policy against price fixing and market sharing. Heavy fines are usually imposed in such cases. Article 85(3) has been applied in individual cases and by means of legislation to whole categories of agreement to authorize, and thus indirectly to encourage, cooperation between companies in such areas as research and development, intellectual property licensing, and distribution. Although the burden of enforcement falls mainly on the Commission, national courts have an important part to play in Community competition law enforcement, and national competition authorities are also likely to play a greater role in the years to come in the application of the Community’s competition law. Abuse of Dominant Position The key to competition policy analysis in most cases is market definition. It is particularly important in respect to Article 86 (abuse of dominant position), in which market definition comprises two elements: the relevant product (or service) market and the relevant geographical market. Once the market is defined, an assessment may be made of possible dominance. There is a rebuttable presumption of dominance above 50 percent market share. The abuse of a dominant position, which may be held by one undertaking or several collectively, is the reprehensible conduct prohibited by Article 86. Abuses of dominant position are prohibited in so far as they may affect trade between the Community’s member states. Abuses are usually divided into two main cate-

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gories: exclusionary and exploitative. Examples of abuses include tying, excessive and predatory pricing, refusals to supply, and extension of market power to another market. Merger Control Merger control is the newest addition to the Community’s competition policy. Regulation 4064/89 came into force in September 1990, and since then a body of case law and precedent has been built up by the Commission. The arrival of the merger regulation has filled the last great gap in the Community’s competition policy. The administration of the regulation has been a success. The Community is in a transitional phase from national markets to a single, integrated market, and since the system established by the regulation calls for notifications on the basis of turnover thresholds rather than market power, it is not surprising that most mergers reported to the Commission have been approved. Between September 21, 1990, when the merger regulation entered into force, and June 30, 1996, the Commission received 477 notifications, of which 16 were later withdrawn. The second phase of detailed investigation was opened in 26 cases. Fourteen of these were approved subject to conditions, and 5 were prohibited. Public Authorities The issues of competition policy discussed so far relate to the activities of companies. There can be no doubt, however, that public authorities also have a major impact on competitive conditions in the modern European economy. This is not a discovery of the 1980s. The Treaty of Rome provided from the outset a number of competition rules addressed to member states. Article 90(1) provides that “In the case of public undertakings and undertakings to which Member States grant special or exclusive rights, Member States shall neither enact nor maintain in force any measure contrary to the rules contained in this Treaty, in particular to those rules provided for in Article 7 [now Article 6] and Articles 85 to 94.” Article 6 prohibits discrimination on grounds of nationality within the scope of the EC treaty. Articles 85 to 94 contain the Community’s competition rules. Article 90(2) provides further that the treaty, and in particular its competition rules, applies to undertakings entrusted with the operation of services of general public interest or hav-

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ing the character of a revenue-producing monopoly, in so far as the application of such rules does not obstruct the performance in law or in fact of the tasks assigned to them. Moreover, the development of trade must not be affected to such an extent as would be contrary to the interests of the Community. Finally, Article 90(3) provides that the Commission shall ensure the application of Article 90 and shall, where necessary, address appropriate directives or decisions to member states.

State Aid The Community’s competition policy would be incomplete without provisions on state aid. All the efforts in the world to ensure that companies do not distort competition would be to no avail if public authorities or entities under their control in the member states were allowed to seek to outspend each other in offering subsidies to attract investment or favor a company or group of companies in their respective territories. A subsidy spiral wastes resources, and competition in the Community should be between companies vying for customers, not between the finance ministers and taxpayers of each member state. Furthermore, the Community’s goals of economic and social cohesion and convergence between national economies and living standards would be greatly undermined if the richer nations of the Community were able to use their greater wealth to give their companies unfair advantages over the others. The Commission’s state aid policy, built on the rules set out in Articles 92 and 93 of the EC treaty, distinguishes between subsidies that further a legitimate policy goal (e.g., regional development, environmental protection, promotion of small and medium-sized companies, research and development) and those that distort competition between member states without any redeeming features. The notion of state aid includes subsidies, tax advantages, and investments from the public purse on nonmarket conditions. International Issues In the international arena, the Commission seeks to ensure that the EU’s trading partners follow the same basic rules. Thus, competition rules are at the heart of the European Economic Area agreement and are to be found in many other agreements concluded by the Community. An example is a 1995 Community agreement with the U.S.

government that provides for cooperation between the Commission and the U.S. Justice Department and Federal Trade Commission. A network of agreements containing competition provisions similar to those of the EC treaty has been concluded with the countries of Central and Eastern Europe and the Mediterranean basin. The GATT contains new rules on subsidies, and the World Trade Organization is expected to take up trade and competition issues soon, on the basis of an initiative taken by the EU. Assessment Competition policy is part of the effort to meet the challenge of creating a single market and achieving the Community’s goals. The various aspects of competition policy discussed above form one policy designed to open markets and to give companies opportunities to compete with each other. European consumers benefit from this rivalry, and the competitiveness of European industry is enhanced. The Commission has overall responsibility for the development of the Community’s competition policy and plays the primary role in enforcing its competition law. Enforcement activities are carried out in compliance with a complex set of rules of procedure designed to provide for efficient prosecution and respect for the rights of the defense (due process). The Court of First Instance and the European Court of Justice (ECJ) play key roles in hearing appeals against Commission decisions. The courts of the member states also enforce many of the competition rules, and their references to the ECJ for a preliminary ruling under Article 177 of the EC treaty also give rise to an important body of case law. The Community’s legal system contains many terms of art and a certain amount of less formal insider’s jargon: it is always important to remember that Community English is a legal language in its own right (as are other official languages). For example, the words undertaking or agreement in Article 85 cannot be understood by reference to a dictionary or their meaning in any other legal system that uses the English language. The Community’s competition policy is different from similar domestic systems because it seeks to integrate the markets of the member states into a single market as well as to pursue the usual concerns of consumer welfare and industrial competitiveness. The Community system today is charac-

terized by centralization in the hands of the Commission and extensive application of Article 85(1), leading to widespread recourse to the exemption mechanism under Article 85(3), which only the Commission can deploy in individual cases. This state of affairs is criticized in some quarters, and there are calls for the introduction of more economic analysis and a “rule of reason” approach in Article 85(1) and for decentralization of enforcement to the national authorities. However, the treaty clearly provides for a two-stage analysis whereby restrictions of competition are identified under Article 85(1) and allowed only if the tests in Article 85(3) are met, and it is still the case that the often Europe-wide analyses called for in even apparently simple competition cases are best carried out by a European body with the necessary jurisdictional and fact-finding powers. Root and branch reform is therefore unlikely, although modernization of many features of the system is certainly under way. The merger control system is young and generally judged a success, although the distinction between concentrative and cooperative joint ventures (the former subject to the merger regulation, the latter to Article 85) has proved difficult. The Commission has proposed a legislative amendment that will resolve much of this difficulty by bringing full-function joint ventures within the procedures of the merger regulation and applying the dominance test to the structural core of the joint venture and Article 85’s test to the effects of the joint venture on independent activities remaining outside it. The state aid rules are gradually being codified, and their procedural aspects are undergoing a perhaps overdue process of clarification at the hands of the Court of First Instance. This is an area where legislation is probably needed to lay down a procedural regulation and set up a system of block approvals building on the less formal guidelines, frameworks, and notices issued by the Commission over the years. However, the fact that the member states, which are the key parties in state aid procedures, are also the legislators in the Council has made the Commission traditionally reluctant to venture down the legislative path. The Commission has been able to deal effectively with the Article 90 aspects of state intervention in the economy and the drawing of the delicate line between the exceptions to competition principles that are needed in order to provide pub-

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lic services of general economic interest and the exceptions that embody selfish promotion of national monopolies and other champions—for example, in the successive stages of telecommunications liberalization. This success is because the treaty gave the Commission powers to issue decisions and directives in individual cases or generally by virtue of Article 90(3). Challenges for the future include the ongoing efforts to modernize and explain various features of the Community’s competition policy. For example, several of the block exemption regulations referred to previously expire soon. Green papers for discussion are being or have been issued on vertical restraints and horizontal cooperation agreements; the merger control regulation is being revised after a green paper exercise. Doubtless other initiatives will be designed to complete and refine competition policy for the twenty-first century. See also COMMON MARKET. Commission. 1994. Competition Law in the European Communities. Vol. IA, Rules Applicable to Undertakings. Luxembourg: Office for Official Publications of the European Communities. Commission. Report on Competition Policy. Luxembourg: Office for Official Publications of the European Communities, published annually.

Bibliography

—Jonathan Faull

Competitiveness Advisory Group (CAG)

Commission president Jacques Santer established the Competitiveness Advisory Group (CAG) in 1995 to advise the European Council on competitive issues before each summit. The group was formed at the prompting of the European Round Table of Industrialists (ERT), a high-level industrialists’ lobby, and includes several ERT members, academics, former political leaders, and trade unionists. Compulsory expenditure is one of two categories of EU expenditure (the other is noncompulsory expenditure). The distinction between the two is based on the treaties: compulsory expenditure results necessarily from treaty commitments or from

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Concentric Circles

acts adopted in accordance with with the treaties. For example, the Common Agricultural Policy (CAP) is a treaty commitment, and spending on the CAP (which accounts for more than half of EU spending) is a compulsory expenditure. See also BUDGET. “Concentric circles” describes a form of differentiated integration in which countries form sets of circles based on their level of participation in a range of intergovernmental and/or supranational activities. The circles center on a “core group” of like-minded states that are committed to the highest degree of integration. A Europe of concentric circles could form around France, Germany, and a handful of other “core countries,” with the next circle comprising the other EU member states, and an outer circle made up of the associated Central and Eastern European states. Jacques Delors, Commission president at the time of revolutionary change in Central and Eastern Europe, proposed a model of concentric circles as a means of organizing pan-European integration. See also DIFFERENTIATED INTEGRATION.

Concentric Circles

As part of the extremely complex co-decision procedure (Article 189b procedure), a conciliation committee, consisting of an equal number of representatives of the Council and the European Parliament (EP), can be convened if, at second reading stage of the procedure, the positions of the Council (usually acting by qualified majority vote) and the EP (acting by a majority of its members) diverge. If the committee agrees on a joint text, both the Council and the EP must give their approval for it to be adopted. If the committee cannot agree on a joint text, the Council may adopt it unilaterally, but the EP, acting by a majority of its members, has the power to veto the adoption. See also DECISIONMAKING PROCEDURES.

Conciliation Committee

Conférence des organes spécialisés dans les affaires communautaires (COSAC) See CONFERENCE TEES.

OF

EUROPEAN AFFAIRS COMMIT-

Conference of European Affairs Committees (CEAC)

In an effort to improve interparliamentary cooperation in the context of a widening democratic deficit, the European Parliament (EP) and national parliaments set up a Conference of Presidents and Speakers of the Parliaments of the EU, which meets once every six months. Going a step further, in 1989 the presidents and speakers established a Conference of European Affairs Committees (CEAC) of national parliaments and the EP, also known by its French acronym COSAC (Conférence des organes spécialisés dans les affaires communautaires). CEAC meets once every six months, in the country holding the Council presidency. In 1991 CEAC adopted specific rules of procedure covering the duration of meetings, their composition and organization, and decisionmaking (unanimity by those present). CEAC meetings are important political events that are usually addressed by the prime minister and foreign minister of the country holding the Council presidency and by commissioners. Largely because of significant differences in national parliaments over the importance and role of EU affairs committees in the overall parliamentary process and regarding the powers of these committees in relation to those of specialist standing committees, CEAC’s potential is limited. Nor is CEAC’s composition representative, as most of the delegations do not have a mandate from their respective assemblies. Nevertheless several parliaments and governments want to upgrade CEAC, especially in relation to the principle of subsidiarity and the need to involve parliaments (at the national or European level) in the work of the EU’s second and third pillars. See also NATIONAL PARLIAMENTS.

Conference of Parliaments of the European Community See ASSIZES.

Conference of Presidents and Speakers of the Parliaments of the EU

In an effort to improve interparliamentary cooperation in the context of a widening democratic deficit, the European Parliament (EP) and national parliaments set up a Conference of Presidents and Speakers of the Parliaments of the EU, which meets once every six months. But the conference is handi-

capped in two ways. First, its potential is limited because some presidents and speakers are not competent either to speak on political issues in an international arena or on behalf of their parliament. Second, although the presidents and speakers attach great importance to interparliamentary control of EU affairs, they cannot devote themselves to it as much as they would like, owing to their other commitments. Accordingly, in 1989 the presidents and speakers set up another body, the Conference of European Affairs Committees (CEAC) of national parliaments and the EP, to pursue more vigorously interparliamentary involvement in the EU. See also NATIONAL PARLIAMENTS.

Conference on Security and Cooperation in Europe See ORGANIZATION TION IN EUROPE.

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SECURITY AND COOPERA-

Conference on Security and Cooperation in the Mediterranean (CSCM)

In 1990, Italy (then in the Council presidency) proposed a Conference on Security and Cooperation in the Mediterranean (CSCM), along the lines of the Conference on Security and Cooperation in Europe (CSCE), to promote stability and confidence building in the Mediterranean region. The proposal did not survive Italy’s presidency but contributed to the momentum that culminated in the Euro-Mediterranean Partnership, launched by the EU and the so-called MED 12 (southern Mediterranean countries) at a conference in Barcelona on November 28, 1995.

Confidence Pact on Employment

In a speech to the European Parliament on January 31, 1996, Commission president Jacques Santer proposed a Confidence Pact on Employment among employers, trade unions, and governments to boost employment in the EU by improving the single market, curbing state aid, strengthening education and training, and promoting small businesses. During the next three months, Santer toured EU capitals, talking to employers and trade unions to win their support, and held a roundtable conference in Brussels in April with more than seventy-

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five representatives of employers’ and trade union organizations. The confidence pact was mostly a repackaging of existing macroeconomic strategy, plus long-promised plans to complete the single market. As part of his jobs initiative, Santer also tried to persuade member states to allow surplus EU funds to be diverted into the proposed TransEuropean Networks (TENs), multi-billion-dollar road, rail, and telecommunication projects that would become a symbol of EU public investment as well as a means of strengthening communications links inside the single market. But national governments, led by Britain and Germany, refused to back Santer’s expensive TENs initiative at the June 1996 Florence summit. Despite his apparent abandonment of the TENs in late 1996, Santer continued to fight for his original action plan on employment, although employers and trade unions were skeptical of the pact’s usefulness. Santer’s inability to secure TENs funding and engender enthusiasm for the confidence pact signaled a political setback for the Commission president. Several hundred influential Europeans met in the Congress of Europe, in The Hague in May 1948, to plan a strategy for European unity. The Council of Europe emerged out of their deliberations. See also COUNCIL OF EUROPE.

Congress of Europe

Some decisions in the EU—especially those relating to the Common Foreign and Security Policy and Cooperation on Justice and Home Affairs— require unanimity, or a consensus by all member states. Although there has been a trend toward voting in the Council of Ministers in order to enact legislation (institutional changes in the Single European Act and the Treaty on European Union were definite moves in that direction), the Council still likes, if possible, to reach a consensus. No member state wants to be outvoted, and ministers generally prefer to play by the old rules, treating the Council as a club rather than a legislature. See also DECISIONMAKING PROCEDURES.

Consensus

Constructive abstention is a proposed strategy by means of which EU member states that are unwill-

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Consultation

ing to support a Common Foreign and Security Policy (CFSP) initiative can register their opposition to the proposed initiative while refraining from voting against it, thereby allowing other member states to proceed. As the EU increases in size and diversity, active or constructive abstention may be a way for the intergovernmental CFSP to get off the ground and not be hampered by the misgivings of one or more member states. This is the oldest and simplest desisionmaking procedure in the EU. It works as follows: the Commission makes a proposal; the Council is the sole decisionmaker but must consult the European Parliament (EP) and cannot act—as was made clear in the 1980 Isoglucose case ruling by the European Court of Justice—before the EP has issued its opinion on the proposal. However, the EP cannot use its right to be consulted and to issue an opinion in such a way as to exercise a veto, as it is obliged to issue its opinion within a reasonable time. Depending on the treaty article upon which the proposal is based, the Council takes its decisions either unanimously or by qualified majority vote. See also DECISIONMAKING PROCEDURES; ISOGLUCOSE CASE.

Consultation

Consumer policy developed slowly and late in the EU’s history. The Treaty of Rome did not mention it specifically, and the first consumer policy unit in the Commission was established only in 1968 (in the competition policy directorate-general). Tentative steps in the 1970s included the establishment of a Consumer Consultative Committee (CCC) made up of members of the four organizations representing consumer interests at the European level: the European Bureau of Consumers’ Unions (BEUC), the Committee of Family Organizations in the Community (COFACE), the European Community of Consumer Cooperatives (EUROCOOP), and the European Trade Union Confederation (ETUC). Independent experts were also included in the CCC. In 1975 the Commission devised with the CCC a program for consumer protection and information, which was updated in 1981. The following year, the first Council of Ministers devoted exclusively to consumer affairs

Consumer Policy

discussed directives on misleading advertising, doorstep sales, and liability for defective products. Inevitably, the launch of the single market program focused attention on consumer policy. Indeed, Article 100a of the Single European Act, which provided for qualified majority voting on single market legislation, stipulated that Commission proposals “concerning health, safety, and environmental protection and consumer protection, will take as a base a high level of protection.” In 1989, at the height of the single market program, the EC launched an Independent Consumer Policy Service dealing with issues such as consumer representation, product safety, and access to legal redress and with the integration of consumer protection policies with other Community policies. A succession of Commission action plans followed. In keeping with the progressive development of a European-level consumer policy, the Treaty on European Union (TEU) contained a new title (Article 129a) on consumer protection. This stipulated that “the Community shall contribute to the attainment of a high level of consumer protection through: (a) measures adopted pursuant to Article 100a in the context of completion of the internal market; (b) specific action which supports and supplements policies pursued by the Member States to protect the health, safety, and economic interests of consumers and to provide adequate information to consumers.” Member states nevertheless were reluctant to hand over responsibility to Brussels for consumer protection, and the Commission, reeling from the political impact of the TEU ratification crisis, was reluctant to press the point. By the mid-1990s consumer groups regularly complained that the EU was emphasizing competitiveness and subsidiarity at the expense of consumer protection. The upgrading of the CCC into a Consumer Committee in 1994, ostensibly to promote a more effective dialogue between EU officials and consumer groups and to ensure that consumers’ views were taken into account in the formulation of EU policies, could not disguise the fact that consumer policy was low on the EU’s agenda. Yet interest in consumer policy at the European level surged in 1996, during the bovine spongiform encephalopathy (BSE) crisis, triggered by a British announcement of a possible link between BSE (popularly known as mad cow disease) and Creutzfeldt-Jakob disease, a human

brain condition. Public reaction to the crisis and criticism of the Commission’s handling of it led to a renewed emphasis in the EU on consumer policy. This, in turn, led to a showdown between the Commission and the European Parliament on the one hand, and the Council on the other, over parliamentary involvement in agricultural legislation. The battleground was a Commission proposal in March 1997 that by the year 2000 beef would be labeled with its country of origin. By introducing the proposal under Article 100a, the Commission sought to include the EP in the legislative process in order to ensure that consumers’ interests were better represented. However, the Council considered the proposal under Article 43, the traditional route for agricultural legislation, which excludes parliamentary scrutiny. This seemingly arcane procedural dispute was symptomatic not only of chronic tension between the EP and the Council over EU decisionmaking but also of the growing importance of consumer policy in the EU, which received a further boost when the Amsterdam Treaty amended Article 129a to give the EU greater involvement in consumer protection. The so-called contact group consists of senior diplomats from Britain, France, Germany, Russia, and the United States, who coordinate policy on Bosnia and the other former Yugoslav republics. The contact group was instrumental in brokering a cease-fire in Bosnia in 1995 and in negotiating the Dayton Peace Accords. The existence and relative success of the contact group has raised concerns among those EU member states not represented in it about whether Britain, France, and Germany are pursuing a de facto Common Foreign and Security Policy on their own. See also COMMON FOREIGN AND SECURITY POLICY; YUGOSLAVIA.

Contact Group

Convergence refers to the approximation of levels of economic performance in the EU, ideally toward a higher rather than a lower common denominator. Most EU policies promote convergence, and cohesion policy specifically aims to close the economic gap between the EU’s rich north and poor south. The policy of Economic and Monertary Union includes nominal conver-

Convergence

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gence criteria to ensure that only those member states that meet certain standards of economic performance will be able to launch a single currency, thereby ensuring the new currency’s stability and credibility. See also COHESION POLICY; ECONOMIC AND MONETARY UNION: TOWARD A SINGLE CURRENCY. The Treaty on European Union (TEU) set out a number of criteria for member states wishing to participate in the final stage (Stage 3) of Economic and Monetary Union (EMU)—launch of the single currency. The criteria, which set a standard for nominal convergence, are intended to ensure the single currency’s stability and credibility. The criteria are: (1) price stability: an average inflation rate not exceeding by more than 1.5 percent that of the three best-performing member states; (2) budgetary discipline: a budget deficit of less than 3 percent of GDP and a public debt ratio not exceeding 60 percent of GDP; (3) currency stability: respect for normal fluctuation margins of the Exchange Rate Mechanism (ERM) “without severe tensions” for at least two years, with no devaluations; and (4) interest rate convergence: an average nominal long-term interest rate not exceeding by more than 2 percent that of the three best-performing member states. Although the convergence criteria appear to be stringent, the TEU gives the European Council some discretion as it decides, by July 1, 1998, which member states will participate in Stage 3. For instance, the exchange rate criterion does not preclude realignments (in the event, a widening of the ERM margins to 15 percent following the currency crises of 1992 and 1993 makes this criterion meaningless), and the budget criterion is hedged with qualifications. The deficit may exceed 3 percent of GDP if “either the ratio has declined substantially and continuously and reached a level that comes close” to the reference value or “the excess over the reference value is only exceptional and temporary.” Similarly, government debt may exceed 60 percent of GDP if “the ratio is sufficiently diminishing and approaching the reference value at a satisfactory pace.” In addition to the convergence criteria, the European Council will consider other indicators of economic performance, such as the balance of payments and unit labor costs.

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Cooperation Procedure

See also ECONOMIC AND MONETARY UNION: TOWARD A SINGLE CURRENCY.

One of four major decisionmaking procedures in the EU, the cooperation procedure (Article 189c procedure) was introduced in the Single European Act (1986) in order to give the European Parliament (EP) a greater legislative role. At the first reading stage, the EP issues its opinion and then the Council establishes a common position. At the second reading stage, if the EP rejects the common position by a majority of its members (currently 314), the Council can adopt the legislation only by acting unanimously. Similarly, if the Commission accepts amendments approved by the EP by a majority of its members, the Council must act unanimously to reject or change them. As under the simpler consultation procedure, the Council remains the sole final decisionmaker. Under the terms of the Amsterdam Treaty, the cooperation procedure was virtually abolished, and most of the areas subject to it were made subject to the co-decision procedure. See also DECISIONMAKING PROCEDURES.

Cooperation Procedure

See DIFFERENTIATED INTEGRATION; HARD CORE.

Core Group

See COMMITTEE OF PERMANENT REPRESENTATIVES.

COREPER

COREU is a secure communications system linking the EU member states’ foreign ministries to facilitate the conduct of the Common Foreign and Security Policy and, before that, of European Political Cooperation. See also COMMON FOREIGN AND SECURITY POLICY; EUROPEAN POLITICAL COOPERATION.

COREU

See COORDINATING INFORMATION ON THE ENVIRONMENT.

CORINE

See GROUP OF CORRESPONDENTS.

Correspondents

See CONFERENCE TEES.

COSAC Coordinating Information on the Environment (CORINE)

Coordinating Information on the Environment (CORINE) was an experimental project (1985– 1990) to determine the need and practice for collecting, coordinating, and ensuring the consistency of information on the state of the environment and natural resources for the EC. CORINE was the forerunner of the European Environment Agency. See also ENVIRONMENTAL POLICY; EUROPEAN ENVIRONMENT AGENCY. In 1973 EC foreign ministers adopted the Copenhagen Report on ways to strengthen the recently launched European Political Cooperation (a procedure to coordinate member states’ foreign policies). See also EUROPEAN POLITICAL COOPERATION.

Copenhagen Report

See COMMITTEE OF THE REGIONS.

COR

OF

EUROPEAN AFFAIRS COMMIT-

See EUROPEAN COOPERATION IN THE FIELD OF SCIENTIFIC AND TECHNOLOGICAL RESEARCH.

COST

Coudenhove-Kalergi, Count Richard Nicolaus (1894–1972)

The colorful, cosmopolitan Count CoudenhoveKalergi was an indefatigable champion of European integration in the interwar years (1920s and 1930s). Proud of his internationalism—the Coudenhoves were Flemish nobles, the Kalergis were Greek, and his mother was Japanese—in 1923 Coudenhove-Kalergi wrote Pan-Europa, an influencial political tract advocating European unification (and prophetically calling for a Franco-German coal and steel community). Coudenhove-Kalergi then launched a pressure group of the same name, with chapters in many

European countries. Coudenhove-Kalergi spent World War II in the United States, mostly teaching at New York University. He returned to Europe after the war but was not in the mainstream of the European movement. Instead he served as secretary-general of the European Parliamentary Union and later campaigned to turn the European Economic Community into a political organization. See also EUROPEAN MOVEMENT.

Council for Mutual Economic Assistance (CMEA; COMECON)

The Council for Mutual Economic Assistance is better known as COMECON. It was established by the USSR in 1949 to impose economic collaboration on the countries of the Soviet bloc. For ideological reasons, the Soviets refused to recognize the EC and prevented their Eastern European satellites from negotiating badly needed trade accords with Brussels. Economic necessity finally forced Moscow to acknowledge the EC’s existence in the late 1970s and to seek a bilateral agreement between the EC and COMECON. However, the EC regarded COMECON as an unworthy interlocutor, declining to deal with it unless Brussels could also negotiate bilateral agreements with the Eastern European countries themselves. Relations between the EC and the Soviet Union improved dramatically in 1984 when Mikhail Gorbachev came to power in Moscow. Gorbachev’s obsession with economic reform throughout the Soviet bloc inevitably led him to make early overtures toward Brussels. By 1986 Willy de Clercq, the external affairs commissioner, was exploring the possibility of an ECCOMECON declaration and, under its auspices, bilateral trade agreements with individual Eastern European countries. Two years later, on June 25, 1988, Commission and COMECON officials signed a Joint Declaration in Luxembourg, opening the way for a rapid conclusion of the more desirable and practical bilateral country accords. By October 1990, the EC had signed Trade and Cooperation Agreements (TCAs) with all COMECON’s European members. COMECON itself—an unloved relic of the Cold War—was dissolved in 1991. See also CENTRAL AND EASTERN EUROPEAN STATES.

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See BALTIC COUNCIL.

Council of Baltic Sea States

Council of Economic and Finance Ministers (ECOFIN)

Although legally and institutionally there is only one Council of Ministers, in reality the Council consists of meetings of ministers having responsibility within the EU’s member states for the range of policy issues within the EU’s competence. Thus, whenever they meet to legislate for the EU, agricultural ministers, environment ministers, trade ministers, and so on constitute the Council of Ministers. Economic and finance ministers are highly influential at both the national and European levels, especially with the development of Economic and Monetary Union (EMU). When they meet as the Council of Ministers, economic and finance ministers form what is called the Council of Economic and Finance Ministers, or ECOFIN. The Council of Europe emerged out of the deliberations of several hundred influential Europeans who met in the Congress of Europe, in The Hague in May 1948. The purpose of the congress was to plan a strategy for European unity. However, a sharp difference of opinion between “unionists” and “federalists” made agreement difficult to reach. The former, personified by Winston Churchill, advocated intergovernmental cooperation; the latter, personified by Altiero Spinelli, espoused supranationalism. Both sides agreed on the desirability of European integration and on the need to establish an organization with a parliamentary body. For the “unionists” that body would be merely a consultative assembly, bound to defer to an intergovernmental ministerial committee. For the “federalists,” in contrast, the parliamentary body would be a constituent assembly charged with drafting a constitution for the United States of Europe. What emerged from the acrimonious Hague congress and from follow-up negotiations in late 1948 and early 1949 had the appearance of a compromise but was actually a capitulation to the minimalist “unionist” position. The ensuing Council of Europe was a far cry from what the federalists had initially wanted. Although pledged “to

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achieve a closer union between its members in order to protect and promote the ideals and principles which constitute their common heritage and to further their economic and social progress,” the Council of Europe did little more than exchange ideas and information on social, legal, and cultural matters. Only in one area, that of human rights, did the Council of Europe really distinguish itself. The Council’s Court of Human Rights, often confused with the European Court of Justice, became an important means of protecting and promoting civil liberties throughout Europe. In addition to its role in the early history of European integration, the Council of Europe influenced the EC’s development in at least two unexpected ways. First, the decision of the Council of Europe’s founding members to locate its assembly in Strasbourg convinced the EC’s founding members to locate the EC’s parliament there also. Second, the Council of Europe’s assembly socialized an entire generation of European politicians, particularly British parliamentarians who had had little exposure during the war to the intellectual ferment of the resistance movement. This was especially true of British Labour politicians, who were traditionally hostile to the EC. The Council of Europe enjoyed an unexpected resurgence after the end of the Cold War, when its membership grew to include almost every European country. Russia’s membership in 1996 was controversial because Russia was engaged in a brutal war with Chechnya at the time; it seemed hypocritical for the council, with its commitment to human rights, to admit a country that was carrying out large-scale human rights abuses. But the political imperative of Russian membership triumphed. Indeed, the decision to admit Russia demonstrates the council’s new role: to bring the countries of Western, Central, and Eastern Europe together in a single organization that, however powerless, can at least help to develop a sense of common identity and interest.

The Council of Ministers is one of the five official institutions of the EU. Its tasks are listed in Article 145, and its composition is given in Article 146, first paragraph, as amended by the Treaty on European Union (TEU). The EU proceeds by dialogue between the Council and two of the other institutions—the Commission and the European

Council of Ministers

Parliament (EP)—accompanying or following debate among its own member states. By virtue of the Council’s power to take decisions (Article 145, second indent), it is commonly described as a legislature, a function partly shared with the EP under treaty articles that require co-decision (Article 189b). In addition to the laws that it adopts or co-decides, the Council takes other types of decision in the external economic relations of the EC and adopts common positions and joint actions in the fields of the Common Foreign and Security Policy and Cooperation on Justice and Home Affairs. Simply put, “in the European Economic Community and in EURATOM . . . any measure of general application or of a certain level of importance must be enacted by the Council” (Noel, 1991, p. 20). The members of the Council represent the EU’s member states. As the British government describes it, “the bedrock of the European Union is the democratic nation state. The Rome Treaty of 1957 established the Council as the ultimate focus of Community decision-making on all major issues” (White Paper, 1996, p. 1). Such an assertion is not innovative or partisan in a historical perspective. Since the 1960s “clinging to national sovereignty was not . . . dictated solely by rational considerations but was also the expression of a deep-rooted, almost preconceived conviction that the nation state still provides the conditions for . . . participation by the individual in the decisionmaking process and that in the final analysis values and interests are viable only in concrete human relations as found in the nation state in contrast with all international and supranational organizations” (von der Groeben, 1987, p. 254). The TEU recognized the federal structure of some of its member states by stipulating that their representatives who sit on the Council must be of “ministerial level.” Although they need not necessarily be members of the central government, the TEU required that they should be “authorized to commit the government of that member state.” How a local minister commits the federation is a matter for the member state concerned, not for the EU, to resolve. On November 8, 1993, the Council decided to call itself the Council of the European Union. The Council’s new designation appears to have been inspired by the single institutional framework created by Article C of the TEU, which implied that the same institutions would be present

in the different spheres of competence of the EU. Because, strictly speaking, the EU possesses no institutions of its own, when the Council legislates or adopts other decisions within the competence of the EC its legal qualification is as an institution of the Community. The still widely used title Council of Ministers is a solecism; it is a relic of the treaty establishing the European Coal and Steel Community (ECSC), which textually refers once to a Special Council of Ministers (Article 7, third indent). Balance of Power In the dawn of postwar European integration, the significance of the national governments of the member states was downplayed. The ECSC Treaty was centered upon the High Authority, whose first president, Jean Monnet, regarded governments as minor players in the Community and disdained to deal with any national representatives other than ministers (von der Groeben, 1987, p. 86). At the limit, his formula allowed for governments and the High Authority to hold joint meetings when there were problems that might spill over into the responsibility of governments and that were not expressly entrusted by treaty to the High Authority. Yet this understanding of the role of the supranational authority (as the original version of Article 9 of the ECSC treaty called it) was an underestimate of the powers that the six member states were resolved to retain. Indeed, the history of integration is of the progressive shift in the center of gravity toward the representatives of the states. This tendency, which can be traced both in texts and in action, reached its high point in the TEU. There the European Council, composed of the political masters of Council members, is given responsibility for providing the EU with “the necessary impetus for its development,” and for defining “the general political guidelines thereof” (Article D, paragraph 1). The earlier doctrine that characterized the Commission as the “motor of European integration” is displaced. Accordingly, “the decision-making process evolving in the Community gives a key role to governments” (Sbragia, 1992, p. 289). The role of member states in the Council puts a question mark on the driving force of integration. “One school of thought . . . sees the Council in its present form as a major obstacle to any progress towards some kind of federal system. . . . An alternative school perceives the

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Council as the major body representing and defending legitimate national interests” (Keohane and Hoffman, 1991, p. 138). “The Council of Ministers remains the locus of what to Americans seems parochialism in the EC . . . its interactions depend to a great extent upon diplomacy and bargaining among representatives of national interests rather than the more collegial interactions that might be expected within an organization pushing towards full economic integration” (Sbragia, 1992, pp. 78, 81). The tension is systemic: “Conflicts of aim arise when the Community’s interests appear to be or are inconsistent with national interests. These conflicts are unavoidable in a Community in the making; the fate of the Community depends upon whether they can be resolved” (von der Groeben, 1987, p. 32). As long as there are national interests, they never can be resolved. Hence the charge of incapacity: “The foreign ministers of the EU are pastmasters in the strategy of not deciding. The recipe for failure is simple and well tried. Take a hot subject, studiously ignore it briefly, debate it until the temperature is agreeably tepid. If it still has any semblance of topicality and has not already been overtaken by events, either send it to a ‘high level expert group’ or by repeated postponements soften it up until there is scarcely anything left” (Die Presse, Vienna, March 13, 1996). Democratization Although the Commission (which subsumed the High Authority) is not a democratic organ, it is the embodiment of a pan-European interest, and its independence of the governments that appoint its members is entrenched in the treaty (Article 157, paragraph 2). The Council’s democratic credentials reside in the political status of its members: “The Council also helps to ensure respect for the democratic functioning of the system, insofar as each of its members is politically responsible to the national parliament before which he answers for the positions adopted at Union level” (Council, 1995, p. 6). As one of Margaret Thatcher’s foreign secretaries observed, she “expressed the balance candidly and well. Members of the European Parliament, she said, are democratic representatives. So are we” (Howe, 1994, p. 455). The Council’s “indirect democratic accountability” (Dashwood, 1996, pp. 75, 111) is a political reality but is overshadowed by the democratic legitimacy asserted by the EP, elected by direct,

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secret, universal ballot since 1979. The meager “advisory and supervisory” responsibility assigned even to an indirectly elected EP in Article 137 of the original EC treaty, when contrasted with the decisionmaking power of the Council, evoked the expression “democratic deficit” to describe a genetic weakness of the Council and of the Community. The (nominated) Parliament had acquired budgetary authority in the treaty reforms of 1970 and 1975 when the acquisition of its “own resources” of revenue had made the Community independent of the voting of supply by parliaments of the member states. The objective of the elected parliamentarians was to acquire the legislative power for which parliamentary assemblies are usually known. The member states, who had willed the direct elections, were under an obligation to respond. Their first contribution was the cooperation procedure of Article 7 of the Single European Act (SEA), along with an assent procedure for the admission of new member states (Article 237) and for the conclusion of association agreements (Article 238). Each new procedure gave the EP a bigger say in decisions. It could be overruled in the cooperation procedure; in the assent procedure it could only block, not amend. A second peace offering from national governments came with the co-decision procedure of the TEU, which empowered the EP to demand amendments to provisional Council decisions (“common positions”) under pain of rejecting the proposed measure if not satisfied with the Council’s response. Power sharing has not reached its limit. Indeed, it was an important item at the 1996–1997 intergovernmental conference (IGC), which effectively abolished the cooperation procedure and correspondingly extended the scope of co-decision in the Amsterdam Treaty.

Qualified Majority Voting “The Community and subsequently the Union has been poised between federalism and intergovernmentalism, supranationalism and cooperation between different nationalities: two different concepts of Europe known by a variety of different names [that] have been vying with each other since the earliest days of the Community” (Tugendhat, 1986, p. 71). To confer additional power on the Parliament is one response to the first forces; another is acceptance of a principle of majority rule in the Council itself.

In the beginnings of the European Economic Community, the six members chose universal unanimity, subject to moving to majority voting on selected subjects in a more mature phase of their “destiny henceforward shared.” In 1965, when this phase was due to begin, French president Charles de Gaulle took issue with a series of matters that the Council and Commission were not handling to his satisfaction, and France boycotted Council meetings. The “empty chair crisis” of 1965 ended with the Luxembourg Compromise of January 1966, a statement that continuing disagreement would not prevent the Community from functioning. Thereafter, in matters important or not, the Six and successively the Nine and the Ten, with rare and striking exceptions, pursued discussion until they reached agreement or gave up if agreement eluded them. The member states preferred decisions that were accepted without reservation and that averted the possibility of more empty chairs. Further and more radically, “the conventional political wisdom in most [member states] urges governments to get broad agreement on major political acts even if the constitutional rules might allow for a narrower margin of majority” (Keohane and Hoffmann, 1991, p. 149). Although unanimity provided a solid political foundation for Community acts, it came under fire for delaying or inhibiting progress and preventing the adoption of needed policies. The member states’ delayed response, after much internal controversy, was a provision in the SEA that made it possible for nonfiscal measures in the single market program to be passed by a qualified majority (Article 100). Despite this gesture in favor of greater efficiency and democracy, member states continued to make sustained attempts to find positions that all could accept. True, their awareness that an individual’s excessive opposition might finally be overborne may itself have helped them to conclude their discussions. But recourse to voting raised questions about whether the rules were fair. The weighted votes given to member states were biased in favor of the smaller countries. Successive enlargements increased the number of overweighted voters, prompting efforts at the 19961997 IGC to give the four larger member states (Britain, France, Germany, and Italy) more clout. This became a major sticking point at the Amsterdam Summit on June 16 and 17, 1997. In the event, the Amsterdam Treaty maintained the status

quo, but in a legally binding protocol on enlargement, the treaty links increasing the number of votes for larger member states to agreement by them to give up their second commissioner. Intergovernmentalism As long as it preferred unanimity, the Council bore little resemblance to a transnational entity pursuing an ever closer union. Indeed, it behaved more like a “diplomatic conference than . . . a normal legislature” (Federal Trust, 1995, p. 3). When national governments decided, in the negotiations that produced the TEU, to recognize that European integration had moved into fields of noneconomic policymaking, they reserved foreign and internal security policies exclusively to the intergovernmental mode. Thus, the Common Foreign and Security Policy and Cooperation on Justice and Home Affairs, although in the charge of the Council by virtue of the single institutional structure, are divorced from the Community and its methods. The role of the Council as decisionmaker is unchanged, but the participation of other institutions is either attenuated or absent. In effect, unanimity rules. As elsewhere in the Union’s spheres, the Council is blamed for inanition. The Council maintained in 1995, in its preparations for the impending round of treaty reform, that in the running-in period of the TEU it was too early to make assessments (Council, 1995, p. 13). The Commission and the EP were in no doubt that intergovernmentalism must go. Transparency and Efficiency A constant criticism of the Council in all its manifestations is that it is opaque where public acceptance demands greater transparency. The Council deliberates in private and does not reveal the tenor of its debates or the reasons for adopting its positions. By contrast, the Commission publishes all its proposals and numerous explanations and consultation papers, and the EP has its public gallery. The arrival of Sweden as a member state reinforced the pressure, in which Denmark was prominent, for the Council to open itself to public scrutiny. It responded by televising some of its sessions on a closed circuit, by naming member states outvoted in deliberations, and by improving public access to its records (Westlake, 1995, pp. 144–162). But some of its members remained apprehensive that greater transparency and improved

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efficiency did not always go together. A public session of the Council, with speakers addressing wider audiences, would change the character of the insider and encrypted dealings of closed sessions. Serious negotiation, which perforce includes game play and requires margins for bargaining, would risk being switched to rooms and corners off camera, with intentionally even less transparency (White Paper, 1996, p. 25). Clearly, “debates about democratizing the Council or rendering its work more transparent cannot be dissociated from the equally important debate about the Council’s efficiency” (Westlake, 1995, p. 163). Bureaucratization With its democratic credentials challenged and its secrecies attacked, the Council is also seen as having been captured by bureaucracy. British government ministers were quick to make the point. As one of them observed. “It makes [not] the slightest difference to the conclusions of a meeting what ministers say at it. Everything is decided, is horsetraded off at COREPER, the Council [sic] of Permanent Representatives” (Clark, 1993, p. 39). Another complained that “ministers are too busy to spend more than 5 to 10 percent of their time on the Council’s affairs. . . . They fly in, read out their speech, listen wearily to eleven other speeches, then frequently find that it is too late to come to a conclusion and take the next plane home. . . . Much of the power lies with a myriad of bodies staffed by civil servants of the member states” (Heseltine, 1989, pp. 1, 25). The Committee of Permanent Representatives (COREPER) meets weekly in two formations: (1) the member states’ permanent representatives (ambassadors) and (2) their deputies. Its function is to seek out in the heaps of paperwork that will reach the Council the “A” points on which agreement can be recorded and the other points that ministerial representatives must debate and if possible settle. “The functioning of the Council of Ministers as a whole rests in large measure on the ability of it to act as a clearing house for those measures needing further detailed consideration and those ready for immediate ministerial attention” (Edwards and Wallace, 1977, p. 11). COREPER can be depicted as a bevy of gray eminences, manipulating the Council but escaping control under the implausible fiction that, having no power, it is not accountable for its use. Or it can be described as a gathering of

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practitioners acting on the instructions they receive from their home authorities and listening with professional care to what their colleagues say. With more time at their disposal than ministers can ever have and more opportunity for social and business contacts outside the meeting room, they can explore common ground and seek to extend it. “The theory is that experienced diplomats operating behind the scenes and without the glare of publicity can deal more smoothly with contentious and difficult points than their political masters” (Tugendhat, 1986, p. 89).

A Vast Enterprise The Council itself is a “vast and complex hierarchy of separate bodies” (Edwards and Wallace, 1977, p. 4). It meets in more than twenty different formations according to subject matter. Every working week one or more councils meet for upward of three days. Preparations account for three more days. The Council’s reproduction service issues more than 100,000 documents annually. Even the dispassionate language of the Council itself shows the strain: “Recent experience of the functioning of the Council confirms that the continuing efficiency and consistency of its activities also depend upon curbing more effectively the growing number of meetings and effectively coordinating its various formations” (Council, 1995, p. 7). The catchword of the Santer Commission, “do less to do better,” has special resonance for the Council. The Council may not “meet ideal standards of effectiveness, efficiency and legitimacy, but neither do national governments” (Keohane and Hoffmann, 1991, p. 151). Whatever else may be said, there can be no real doubt that the Council remains the power base of the EU. This situation will not change significantly in the foreseeable future; thereafter further waves of enlargement can only give additional salience to the promotion of national interest within the EU. See also BUDGET; COMMITTEE OF PERMANENT REPRESENTATIVES; DECISIONMAKING PROCEDURES; DEMOCRATIC DEFICIT; APPENDIX 1; APPENDIX 7; APPENDIX 8; APPENDIX 9; APPENDIX 10. Clark, Alan. 1993. Diaries. London: Weidenfeld and Nicolson. Council. 1995. Report of the Council of Ministers on the Functioning of the Treaty on European Union. London: Her Majesty’s Stationery Office.

Bibliography

Dashwood, Alan. 1996. Reviewing Maastricht: Issues for the 1996 IGC. London: Sweet and Maxwell. Edwards, Geoffrey, and Helen Wallace. 1977. The Council of Ministers of the European Community and the President in Office. London: Federal Trust. Federal Trust. 1995. Building the Union. London: Federal Trust. Hayes-Renshaw, Fiona, and Helen Wallace. 1997. The Council of Ministers. New York: St. Martin’s. Heseltine, Michael. 1989. The Challege of Europe: Can Britain Win? London: Weidenfeld and Nicolson. Howe, Geoffrey. 1994. Conflict of Loyalty. London: Macmillan. Keohane, Robert, and Stanley Hoffmann, eds. 1991. The New European Community. Boulder: Westview. Noël, Emile. 1991. Working Together: The Institutions of the European Community. Luxembourg: Office for Official Publications of the European Communities. Sbragia, Alberta. 1992. Euro-Politics. Washington: Brookings. Tugendhat, Christopher. 1986. Making Sense of Europe. London: Viking. von der Groeben, Hans. 1987. The European Community: The Formative Years. Luxembourg: Office for Official Publications of the European Communities. Westlake, Martin. 1995. The Council of the European Union. Harlow: Cartermill. White Paper. 1996. A Partnership of Nations. London: Her Majesty’s Stationery Office.

—Sir William Nicoll

See COUNCIL OF MINISTERS.

Council of the European Union

The secretariat of the Council of Ministers is a professional civil service—part of the Eurocracy recruited in the member states and employed in Brussels to serve the EU’s institutions. With a staff of approximately 2,300 people, including about 300 A grade officials, the Council secretariat assists the Council by helping to draft the sixmonthly legislative program, providing legal advice, briefing government ministers on current EU issues, preparing the agenda for Council meetings, and drafting the meetings’ minutes. Nearly twothirds of the Council staff are translators and interpreters. Like the Commission, the Council secretariat is divided into directorates-general, although along far different lines. A legal service represents the Council before the Court of Justice, ensures

Council Secretariat

that all texts adopted are compatible, and advises the Council at all levels. The Council secretariat describes itself as “entirely at the service of the Presidency, supporting it in its efforts to find compromise solutions, coordinate work or arrive at an overall view.” Indeed, the presidency is the presidency plus the Council secretariat. What is involved, rather than merely close cooperation, is a form of common action or symbiosis in regard to preparing and carrying out the presidency program. A member of the secretariat always accompanies the presidency, at ministerial or official level, unless a particular bilateral issue is being discussed. Small countries in the presidency, more than large countries, depend heavily on the Council secretariat for support and guidance. The Amsterdam Treaty introduced an important change that not only affects the organization of the Council secretariat but also has potentially negative consequences for the secretariat itself. Under the treaty’s Common Foreign and Security Policy (CFSP) provisions, the Council secretary general will become the CFSP High Representative, and a deputy secretary-general will run the secretariat. Not only will the secretary-general therefore be a ministerial rather than a senior official type, but the innovation also suggests that one part of the secretariat will acquire a policy-formulating function, which is the diametrical opposite of what the Council secretariat has been—and arguably should be—about. See also COUNCIL OF MINISTERS; APPENDIX 9. Despite its title, the Court of Auditors has no judicial powers or functions. The audit reports that are its most publicly visible product are essentially consultative in character. The Court is commonly described as the EU’s external auditor. In reality it is one element in the patchwork of (frequently overlapping) institutional and national control authorities that together constitute the EU taxpayers’ defenses against waste, mismanagement, and fraud. The Court was established by the Brussels treaty of July 22, 1975, and began operations in October 1977. It was promoted to full institutional status by the Treaty on European Union (TEU). The Court replaced the Audit Board, a parttime body that was endowed with modest re-

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sources and enjoyed neither the status nor the independence of its successor (though by common consent it did useful work). The initial impetus for creating the Court came from certain quarters in the European Parliament (EP), where it was argued that a strong, independent audit body was the logical corollary of the transfer of certain budgetary powers from the Council of Ministers to the EP and the transition in Community finances from national contributions to the supposedly autonomous regime of own resources. Britain and Germany were the keenest supporters of the Court’s creation among the member states. Appointments to the Court are made by the Council for a period of six years (renewable). Candidates for appointment (and reappointment) are vetted by the EP. Parliament’s opinion is not binding on the Council. Parliament’s adverse opinion led to the withdrawal of one candidate in 1989, but the Council ignored the EP’s recommendation against another candidate in 1989 and two in 1994. The Court elects its own president for a period of three years (renewable) and establishes its own rules of procedure. The decision to fix Court members’ remuneration only fractionally below that of commissioners came from the Council, seemingly in the belief that a high level of salaries would help to ensure a serious hearing for Court findings. The members of the Court (one per member state) are supported by a staff of some five hundred, rather more than half of whom are employed directly on audit work, some sixty of the remainder being translators. The 1975 treaty defined the scope of the Court’s core audit work as “the accounts of all revenue and expenditure of the Community.” The Court was required to examine “whether all revenue has been received and all expenditure incurred in a lawful manner and whether the financial management has been sound.” These provisions were inherited almost verbatim from the Audit Board. The Court’s rights of access to records and on the spot audit were slightly more explicit than the corresponding powers of its predecessor; and it was required to work with and through national audit bodies when auditing in member states, whose administrations collect almost all the revenue and implement 80 percent of the expenditure of the Community budget. According to the treaty, members of the Court “shall be chosen from among persons who

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belong or have belonged in their respective countries to external audit bodies or who are especially qualified for this office. Their independence must be beyond doubt.” Since different Community countries had and have different conceptions of the proper role of a public auditor, this formula sheds little light on the nature of the Court’s intended task. It was partly in response to the perceived lack of consensus about its role and operating methods that in its 1980 Annual Report the Court nailed its colors to the mast of the systemsbased approach to audit. From the outset the Court decided to structure itself on Commission lines, with each member assuming responsibility for a defined share (known as a sector) of the audit work and the available audit staff. Most sectors concentrate on specific areas of the Community budget: for example, regional measures, agricultural measures (divided between four sectors), development aid, running costs of the institutions, and so on. Two members exercise Courtwide responsibilities. One coordinates work on the annual report and specializes in audit standards and working methods; the other coordinates the post-TEU work on the Statement of Assurance (see below). The president looks after external relations and the Court’s secretariat and legal services. All sectors are supposed to be of equal interest and importance. A member who is dissatisfied with his allotted sector can seek his colleagues’ agreement to a redistribution of sectoral responsibilities in his favor, either by a change of sector or by an extension of the responsibilities of his existing sector. Bargaining about sectors (and staff movements and promotions) is one of the normal preludes to a presidential election, and a change of president is usually followed by a fairly general reshuffling of portfolios. As head of a sector, a member of the court has de facto a considerable measure of autonomy as regards the prioritizing, planning, and direction of the audit work carried out by the allotted audit staff. Collegiate constraints begin to bite more seriously at the stage when a member exposes the results of an audit enquiry to colleagues’ view in the form of a draft audit report destined (normally) for publication in the Official Journal. The Court publishes an annual report on each year’s budget in November of the following year. The annual report—a substantial volume of rather

uneven quality and usefulness—is a compilation of chapters contributed by the Court’s different sectors and ranging selectively over the whole budget (and some associated financial operations). The Court also produces separate studies of specific financial issues and budgetary measures. These special reports, as they are known, are not limited to a particular year’s operations or accounts or to a predetermined publication date. Both types of report combine value for moneytype analyses with comments on specific problems of regularity and legality. Court reports are presented to both Council and the EP. Within the EP, their initial processing is the prerogative of the Budgetary Control Committee, with which the Court has developed a close, if not always harmonious, working relationship. The Court’s annual and special reports are compulsory reading initially for the Council and thereafter more importantly for the EP during the run-up to the latter’s annual decision to grant (or postpone or even refuse) discharge to the Commission under Article 206 of the treaty. Parliament can draw on the annual report to include comments and suggestions for remedial steps in the decision granting discharge. These comments are in principle binding on the Commission. Although it is rare, though not unknown, for the Parliament not to take any follow-up action on an annual or special report, serious follow-up action by the Council is the exception rather than the rule. The published texts of most Court reports include the Commission’s replies to the auditors’ observations. Adoption by the Court of the draft of an audit report is followed by an exchange of texts with the Commission. A process of face-to-face bargaining over the two texts then ensues: the Commission seeking to convince the Court that the sharpest of its criticisms are unjustified and should be withdrawn or attenuated; the Court aiming to eliminate from the Commission’s reply all disagreements that might cast doubt on the accuracy or wisdom of the auditors’ conclusions. The Commission will often be prepared to trade bilateral promises of remedial action for modifications to the Court’s text. This makes the process (known as procédure contradictoire) unusually productive, a fact not always apparent from the published text. The tendency of the procédure contradictoire to obscure the real impact of Court reports is enhanced by a time constraint. To plan, execute, and

complete an audit enquiry in a multilingual, multicultural environment is an immensely time-consuming operation. A gestation period of three years from start to finish (i.e., publication) is not exceptional for an important special report. Commission replies in such cases are apt to dismiss the Court’s findings as overtaken by events: in other words, sufficient time has elapsed since the Commission became aware of the auditors’ activity for remedial measures to be put in place. The Court itself has frequently argued (for example, in the introduction to its 1993 Annual Report) that the major brake on its effectiveness is the lack of political will on the part of the Commission and other institutions to act on its recommendations. But the Court must bear some of the responsibility for the failure of its reports to carry conviction with the other institutions. As the best examples of the Court’s own work have demonstrated, auditors’ findings, if they are sufficiently cogent and relevant to policy, can compel an immediate and constructive response from the Commission and the other institutions. The variable quality of the Court’s output was noted in a 1987 report by the Select Committee on the European Communities of the British House of Lords, which perceptively urged the Court to bring all its work up to the standard of the best (Court of Auditors, 1987). The 1975 treaty was never interpreted by the Court as requiring it to give an overall opinion on the accounts. This was not an oversight: the possibility was occasionally considered and rejected, with the result that the reader of its reports was given no assurance that the Court had fulfilled its treaty obligation to examine “the accounts of all revenue and expenditure.” The TEU now requires the Court to “provide the European Parliament and the Council with a statement of assurance as to the reliability of the accounts and the legality and regularity of the underlying transactions.” The first such statement of assurance, in relation to the 1994 accounts, was published in November 1995. The Court found too many errors in the transactions underlying the payments in the accounts to be able to give a positive assurance as to their legality/regularity. It would be premature to try to assess the impact of this potentially important provision of the TEU on the basis of its first (explicitly experimental) application. The Court publishes a list of all its reports over the preceding five years with each annual re-

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port. A well-researched, independent assessment of the Court has recently been published, which offers a particularly useful conspectus of the institutional context of the Court’s work (Harden, White, and Donnelly, 1995). See also BUDGET; EUROPEAN PARLIAMENT; APPENDIX 1. Court of Auditors. 1987. Sixth Report from the House of Lords’ Select Committee on the European Communities’ Session, 1986–1987. Harden, Ian, Fidelma White, and Katy Donnelly. 1995. “The Court of Auditors and Financial Control and Accountability in the European Community.” European Public Law 1, no. 4.

Bibliography

—C. J. Carey

The most important institutional change in the organization and functioning of the European legal system since the establishment of the European Court of Justice (ECJ) was the creation of a Court of First Instance in 1989. The ECJ had suggested the establishment of a lower European tribunal in the late 1970s to relieve the Court of some of its caseload, especially European Coal and Steel Community cases and personnel disputes. It took a number of years for member states to agree to a Court of First Instance, but by the late 1980s there was a consensus that the ECJ was overburdened. Thus the Court of First Instance was inaugurated in 1989; like the ECJ, it is composed of a judge from each member state. Its jurisdiction was extended in 1993 and 1994 so that now the Court of First Instance hears virtually all cases brought by private individuals, with the important exception of cases referred by national courts under the preliminary ruling procedure. See also EUROPEAN COURT OF JUSTICE.

Court of First Instance

See EUROPEAN COURT OF JUSTICE.

Court of Justice

In July 1980 Altiero Spinelli, the veteran Eurofederalist, gathered together a small number of likeminded members of the European Parliament

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CSCE

(EP), representing a wide spectrum of political opinion, in the Crocodile Restaurant in Strasbourg. By the end of the year the so-called Crocodile Club, an otherwise heterogeneous collection of parliamentarians, had decided to draft a new treaty to replace the original treaties and to launch a new EU to replace the existing EC. This was the origin of the EP’s influential Committee on Institutional Affairs, which wrote the Draft Treaty Establishing the European Union, adopted by the EP in February 1984. See ORGANIZATION TION IN EUROPE.

CSCE

FOR

SECURITY AND COOPERA-

See CONFERENCE ON SECURITY AND COOPERATION MEDITERRANEAN.

CSCM IN THE

See COMMUNITY SUPPORT FRAMEWORKS.

CSFs

See COMMUNITY TRADEMARK OFFICE.

CTMO

See COMMON TECHNICAL REGULATIONS.

CTRs

The Treaty on European Union (TEU), which entered into force on November 1, 1993, gave the EC a new competence in the cultural field. Nearly forty years earlier the signatories to the Treaty of Rome had stated in the preamble that they were “determined to lay the foundations of an ever closer union among the peoples of Europe,” and it was for many a natural consequence that efforts for deeper cultural understanding should form part of Community action. Yet establishing a cultural dimension proved an uphill struggle. The Solemn Declaration on European Union signed by the ten heads of state or government in Stuttgart on June 19, 1983, contained a section calling for cooperation in various cultural sectors “with a view to complementing

Cultural Policy

Community action.” The report of the Committee on a People’s Europe (Adonnino Committee) approved by the European Council in Milan on June 28 and 29, 1985, called for action in the areas of culture and communication. The Commission, backed up by the European Parliament (EP), maintained a small program of support to cultural projects. Community culture ministers began meeting regularly after November 1983 and worked by means of resolutions, with limited amounts of finance being made available from the Community budget. In the 1980s an ever greater number of matters having substantial cultural implications were dealt with in the Council under various economic headings, without particular heed to their cultural nature. However, member state groupings of three kinds were reluctant to allow any substantial Community cultural action: (1) those unwilling to cede any Community competence in culture either because they felt that Community action should remain strictly economic or because of their belief in maximum decentralization of cultural action, (2) those that were net payers to the Community budget and accordingly scrutinized all budget appropriations with a view to keeping them to a bare minimum, and (3) those having a “hands-off” and market-oriented approach to culture. Article 128 of the Treaty on European Union The new Article 128 of the TEU contains a balance struck between member states that wanted culture mentioned in the treaty in order to allow wider Community action and those that wanted it mentioned in order to set down limits beyond which it should not go. Paragraphs 1 and 2 of Article 128 allow the EU to take wide-ranging, coherent action in the cultural sector. Paragraph 4, stating that “the Community shall take cultural aspects into account in its action under other provisions of this Treaty,” enables the cultural sector to act as a watchdog on economic decisions affecting it. On the other hand, Article 128 recognizes that the major responsibility for European cultural cooperation lies with the member states. It is a model application of subsidiarity: rather than a Community cultural policy there is Community encouragement of action among member states, which may include supporting and supplementing their action “if necessary”; any harmonization of the laws and regulations of member states is excluded; and a lengthy decisionmaking procedure

(co-decision) is involved. The final factor making decisionmaking very difficult is that the Council has to act by unanimous vote (instead of weighted majority voting, prescribed for most Community decisions), although this has been changed in the Amsterdam Treaty. The Commission, particularly under pressure from the EP, which is very much in favor of cultural action, aimed to have cohesive and wellfunded programs in place quickly after the entry into force of the TEU. However, with all these constraints, it is not surprising that the adoption of Community cultural programs based on Article 128 is behind schedule. It is nevertheless possible, given that Commission proposals build on existing types of cultural activities carried on in an ad hoc way, to sketch out the general lines of Community cultural action concerning cooperation on creative projects and cultural networking (the KALEIDOSCOPE program); books and reading, including translation (the proposed ARIANE program); and protection of the cultural heritage (the proposed RAPHAEL program). Another Community initiative with a strong cultural content is the MEDIA II program of support to the European film and television program industry. KALEIDOSCOPE (general cultural events). Building on Commission general support for cultural events over many years, the KALEIDOSCOPE program was signed by the presidents of the EP and Council on March 29, 1996. It aims to encourage multilateral cooperation (participation from at least three member states) on creative projects or cultural events as well as improvement of skills of young creative or performing artists and other cultural operators. Most of these activities will be on a relatively small scale, with the Community’s contribution (up to 50 percent of the total) having an upper limit of ECU 50,000. Some larger-scale projects will also be covered, including a number of preexisting large projects, such as the European Community Youth Orchestra. The European City of Culture, perhaps the best-known Community cultural action, and the European Cultural Month events are temporarily covered by KALEIDOSCOPE; the Commission has been invited to present a proposal for a Community decision covering the events separately after the year 2000. ARIANE (books and reading). Many EU measures in favor of books and reading are initiated in fields outside culture: stimulation of reading as part of educational activity, value added tax

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on books within overall tax decisions, copyright in the internal market area, the fixed book price under competition policy, and so on. This makes a coherent and satisfying cultural program for books and reading difficult to achieve. Actions carried out so far on an ad hoc basis include a pilot scheme for granting financial support for translation of literary works into other languages of the EU, support for networking among colleges for literary translators, and the ARISTEION European literary and translation prizes. In the ARIANE program, presented by the Commission in October 1994, the first and largest action concerns support for translation of literary works, translation of plays for production in other EU languages, and translation of works of reference. The main aim is to widen the circulation of works first published in a lesser-used official language of the EU or one of the regional languages of a member state, through the translation of these into other EU languages. Other actions provide for assistance to projects to be carried out through networking of the various groups involved (authors, booksellers, librarians, and those otherwise promoting books and reading); measures for the improvement of skills, including joint activities by colleges for literary translators existing in most member states; and the ARISTEION prizes, one for contemporary European literary work and the other for literary translation. RAPHAEL (protection of cultural heritage). Cultural heritage is an obvious area for European cooperation, and the need for “conservation and safeguarding of cultural heritage of European significance” figures prominently in Article 128. For several years the Commission assisted two or three conservation projects per member state in an annual operation that each year was based on a specific theme—buildings for public entertainment, buildings devoted to religious purposes, and heritage gardens have been recent themes. Support has also been given for a few particularly important conservation projects, including some cultural and historic buildings damaged by fire. Many useful lessons were learned in the course of conservation projects developed through the Commission scheme. It was nevertheless felt, after discussions with specialists in the sector, that a more targeted approach could bring greater European value: common conservation problems needing a breakthrough should be pinpointed, and

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on suitable ones multinational teams should pool experience and work together to find solutions; the results of the operations should be widely disseminated. This approach forms the core of the RAPHAEL program, presented by the Commission in April 1995. The program provides support to (1) a limited number of “European heritage laboratories,” relating to works, monuments, or cities of exceptional historic, architectural, or artistic importance (projects, submitted by the member states, should bring in a multidisciplinary European team of specialists); and (2) a much larger number of conservation projects (with maximum Community support of ECU 150,000, representing not more than half the cost), in connection with common conservation themes. The projects should be submitted by the owners of the property concerned, who would be expected to ensure that experience acquired in the management and/or preservation problems involved is adequately disseminated. Support will be given to cooperation on such subjects as innovation and new technologies as well as on mobility and training of professionals. In another action, questions of public access to the cultural heritage will be addressed. Finally, the program will provide a focal point for joint action by museums and archives of the member states. MEDIA II (support for the film and television program industry). The MEDIA II program, adopted in December 1995, provides support designed to strengthen the European film and television program industry over the 1996–2000 period. It addresses economic shortcomings of the industry, which is characterized by fragmentation into national markets, with most producers being too small to compete in European and world markets, and by severe weaknesses in the cinema distribution and television circulation of European films as well as by an extremely unhealthy financial base. As a complement to the MEDIA II program, mention should be made of a Commission proposal, dated November 30, 1995, for a European audiovisual guarantee fund, designed to intensify the flow of capital into European film and television production. Films and television programs being not only economic services but also emanations of culture, any strengthening of the European industry will also promote culture in Europe, whether through large-scale flagship productions or through productions that lead to wider under-

standing among the diverse cultures present in Europe. Promotion of Statistics on Culture In the cultural area, as in any other field of EU endeavor, cooperation can be achieved more smoothly if people proceed from similar assumptions, based on comparable data. Two meetings of heads of statistical offices and national cultural administrations took place in 1995, and in a resolution adopted in November 1995, the Council agreed “to continue work on establishing comparable statistical indicators and the possible alignment of cultural statistics.” The resolution associated the work on statistics with European activity and exchange of experience on the economic aspects and job-creating role of culture. Cultural Aspects of Action Under Other Provisions of the Treaty In the 1980s some Community actions had been based on economic considerations, leaving little room for taking cultural aspects into account. At an audiovisual conference in October 1989, however, Commission president Jacques Delors committed the Commission for the first time to the view that “culture is not merchandise like other commodities, and it should not be treated as such.” Article 128 takes this question further in paragraph 4: “The Community shall take cultural aspects into account in its action under other provisions of this treaty.” Although it may be difficult to prove that culture has or has not been taken into account, the paragraph is a strong moral weapon for action in favor of culture. The problem is how to come to grips with policies in the stage of formation early enough to influence them in a cultural direction. Following requests by the Council, the Commission presented a wide-ranging report on the subject in May 1996. One cultural matter that is excluded from the treaty is restrictions on imports or exports justified on grounds of the protection of national treasures possessing artistic, historic, or archaeological value. The dismantling of internal economic frontiers through completion of the single market required a system to be built so that member states could retain their national treasures that otherwise might circulate freely within the Community (no state was ready for a concept of “European treasures”). This system was established through a directive on “the return of cultural objects unlaw-

fully removed from the territory of a member state.” It was accompanied by a regulation on “the export of cultural goods.” Conclusion The cultural programs described above do their best to fulfill the double requirement of Article 128—respecting the national and regional diversity of the cultures of the member states and at the same time bringing the common cultural heritage to the fore. If anything, greater weight has been given to cultural diversity. This is no bad thing, as most would acknowledge that the richness of Europe’s culture lies in its diversity, and this approach can help bring EU action closer to the peoples. The financial allocations being made for the cultural programs are extremely modest, and only a small proportion of requests for aid can be granted. However, the cultural programs are important, because they have a symbolic significance and can provide a catalyst of taking full account of cultural elements in Community actions under provisions of the treaty other than Article 128. Indeed, the Amsterdam Treaty states that “the Community shall take cultural aspects into account in its action under other (treaty) provisions … in particular in order to respect and promote the diversity of its cultures.” Moreover, cultural programs act as a springboard for EU cultural cooperation with third countries, particularly important in the context of the accession of Central and East European states as well as Cyprus to the EU. See also AUDIOVISUAL POLICY. —Alan Forrest

To ensure the proper functioning of the single market, in January 1996 the EU launched Customs 2000, a program (due to end on December 31, 1999) to help EU businesses and citizens apply customs regulations evenly throughout the EU, thereby avoiding distortion in the market and combating fraud.

Customs 2000 Program

A customs union is formed when two or more countries trade freely among themselves, establish a common external tariff as well as other trade

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regulations, and conduct a common trade policy. The EC became a customs union in 1968. Belgium, the Netherlands, and Luxembourg, three of the EC’s original member states, formed a customs union (Benelux) in 1948. See also COMMON EXTERNAL TARIFF; COMMON MARKET. Historically, relations between Cyprus and the EU have been affected by a number of related issues: the entry of Britain (1973) and then of Greece (1981) into the EC; the EC’s Mediterranean policy; and the conflict between Greece and Turkey. Each of these issues remains relevant in the late 1990s, but as the EU contemplates the admission of Cyprus, the overriding problem is the division of the island since 1974. It is unclear whether the EU believes that Cypriot entry can only occur after a political settlement has been reached between the Greek and Turkish communities on the island. It is also unclear whether Cypriot entry presupposes the promise of closer ties between the EU and Turkey. Yet, the EU committed itself to opening entry negotiations with the Greek Cypriot government in Nicosia six months after the end of the intergovernmental conference (IGC) in 1997. Cypriot entry raises the wider question, related to the IGC, of how the EU’s institutions might adapt to accommodate such microstates, given that the EU also considered a parallel application from Malta. Ultimately, although there are major political problems in the path of Cypriot entry, the strength of the domestic economy means that at least few economic difficulties would be posed by accession. Cyprus became independent from Britain in 1960, after a bitter decolonization struggle. Cyprus had been under British control since 1878; before then it was part of the Ottoman Empire. Cypriot sovereignty was to be guaranteed by Britain, Greece, and Turkey under a treaty that precluded either the union of Cyprus with any other state or the partition of the island. Subsequent developments have questioned these commitments: in response to a coup against the Makarios government in Cyprus, engineered by the colonels’ dictatorship in Athens, Turkey invaded and partitioned the island in 1974. Britain refused to intervene. It is clear that London now rules out any intervention that is not supported by both the Greek and Turkish communities on the island.

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Cyprus

Cyprus has been partitioned since the Turkish invasion and has sustained many personal tragedies. A so-called Green Line separates the two communities, policed by UN forces. Nicosia is Europe’s last divided capital. The ethnic composition of the island is estimated to be 78 percent Greek and 18 percent Turkish. However, some 37 percent of the island’s territory is controlled by the Turkish zone, and approximately 100,000 Turkish immigrants have settled there since 1974. The island is one of the most heavily militarized areas in the world. Some 30,000 to 35,000 Turkish troops outnumber their opponents by more than three to one. In 1983, the Turkish zone declared itself the Turkish Republic of Northern Cyprus (TRNC). However, only Turkey recognizes this regime, whose establishment remains a barrier to resolving the island’s conflict. Since 1974, the “Cyprus question” has constantly come before the UN and its Security Council. Indeed, Security Council resolution 774/92 of April 1992 sets out principles for a possible resolution of the conflict. A year before the invasion, the EC concluded an association agreement with Cyprus. This provided for a customs union in two stages. The first entailed a phased reduction of tariffs on industrial goods and agricultural products. This had been due to happen in June 1977, but the arrangement was extended until the end of 1987. The second stage of the agreement therefore began on January 1, 1988, and involved two phases. The first phase (1988–1997) provided for the reduction of customs duties and quantitative restrictions by Cyprus on most industrial goods and on fortythree agricultural products, the adoption by Cyprus of the EU’s common customs tariff, and the harmonization by Cyprus of policies concerning competition policy and related laws. The second phase (1997–2000) is intended to complete the customs union. Already, customs union arrangements cover nearly 90 percent of all Cyprus-EU trade, and the government has reduced its duties on EU imports by over 60 percent compared to the situation twenty years ago. EU market access is very important for Cyprus, as well over half the island’s exports go to the EU. It was against this background that Cyprus applied on July 4, 1990, for EU membership. Although recognizing that EU membership would benefit the island as a whole, the Turkish

Cypriot authorities strongly disputed the right of the government in Nicosia to negotiate on their behalf. The Commission’s opinion on Cyprus’s application, published on June 30, 1993, found “no insurmountable problems” in the economic sphere but commented that entry “implies a peaceful, balanced, and lasting settlement of the Cyprus question.” In March 1995 the EU linked the conclusion of an EU-Turkey customs union with a commitment to begin negotiations with Cyprus six months after the end of the 1996–1997 IGC. No date was set for their completion, however, nor for eventual Cypriot entry. It is unclear whether Turkey and the Turkish Cypriots must be satisfied before Cyprus enters the EU. In March 1996, Hans van den Broek, the commissioner for external political relations, told the joint EU-Cyprus parliamentary committee that Cyprus might join without there being a settlement. The Cypriot government had sought to reject any such link and to decouple the issue of EU membership from the Greek-Turkish dispute. Although national governments have given complementary public undertakings, privately most of them accept that it would be “monumental folly,” as the Financial Times of March 4, 1996, put it, to admit Cyprus to the EU without a peace settlement. Without a settlement on the island, Cypriot integration into the EU would be highly problematic. It would be difficult to apply the single market program, as the free movement of persons is now impossible in Cyprus. The European Parliament would likely not give its assent, as it has repeatedly called upon the TRNC to provide information on those Greek Cypriots who disappeared in 1974 and to improve its human rights record, not least with respect to the Greek enclave in the Karpas peninsula. Cypriot participation in the Common Foreign and Security Policy is also highly unlikely in the absence of a peace settlement. The Cypriot government talked in March 1995 of possibly joining the Western European Union (WEU). Yet EU member states are likely to insist that Cypriot membership in the WEU come only after a peace deal. Paradoxically, Cyprus has a good chance of meeting the convergence criteria for Economic and Monetary Union (EMU). In April 1995 the government announced that it met all the criteria, except inflation, which it expected to meet by the end of 1997. Such claims, however, disguise the

need for Cyprus to liberalize its economy. The Cypriot currency has been protected by capital controls and also by the legal control of interest rates. The Central Bank of Cyprus would also have to be made independent. Nevertheless, the economic fundamentals are relatively strong in Cyprus, and the transition to EMU would be less painful than for many existing EU member states. Clearly, much depends on the prospects for peace. In 1996 and 1997, both the United States and EU launched initiatives to broker a peace deal. The Greek Cypriot government, in whose interest a settlement is obvious, made a number of offers to resolve matters, and in early 1996 the Italian presidency considered appointing an EU coordinator for a resolution of the Cypriot conflict. Nothing came of these efforts, however. The Barcelona Declaration of November 1995 envisioned a new relationship between the EU and the Mediterranean states, including Cyprus, involving a free trade area and cooperation across a range of economic sectors. It also sought political and security cooperation. The risk for Cyprus is that, without a settlement on the island, it could be overtaken by other applicants and left in the wider set of Mediterranean arrangements. In March 1995, Turkey’s foreign minister threatened to integrate northern Cyprus into Turkey if there was not a peace deal before Cypriot entry into the EU. Rather than calling Turkey’s bluff and reminding Ankara of the economic benefits of its own ties to the EU, Brussels is likely to tread warily. Cypriot accession would oblige the EU to adapt its institutions to the representation of a microstate. Yet, once allowed to enter, Cyprus could prove a reliable and effective partner, both economically and politically (Cyprus supports Eurofederalism). Before Cyprus can become a full EU member state, however, bold peace initiatives are essential. See also MEDITERRANEAN POLICY; TABLE 6.

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Theophylactou, Demetrios A. 1995. Security, Identity, and Nation Building: Cyprus and the EU in Comparative Perspective. Aldershot: Ashgate Publishing.

Bibliography

—Kevin Featherstone

The Czech Republic is on a fast track to EU membership, having rapidly modernized its economy and consolidated its democracy since the revolution in 1989. Czech prospects of joining the EU were indirectly boosted by the disintegration of Czechoslovakia in December 1992, when poorer and politically unstable Slovakia went its own way. The sundering of Czechoslovakia required a renegotiation of the EU’s Europe Agreement with that country and its replacement by separate agreements with the Czech Republic and Slovakia on October 4, 1993, which entered into force on February 1, 1995, for an unlimited period. Czech prime minister Vaclav Klaus formally presented his country’s application for EU membership to Council president Lamberto Dini in Rome on January 3, 1996, with the understanding that accession negotiations would begin six months after the end of the 1996–1997 intergovernmental conference. Despite its rapid transformation, the Czech Republic still has a long way to go in terms of adopting EU norms and standards and of modernizing its agricultural sector. This did not deter Klaus, an ardent neoliberal and Thatcherite, from irritating his EU counterparts by frequently criticizing the EU and its supposedly bloated bureaucracy while he was prime minister. On July 16, 1997, the Commission issued a favorable opinion on the Czech application. See also CENTRAL AND EASTERN EUROPEAN STATES; TABLE 6.

Czech Republic

The Dayton accords, brokered by the United States at an air force base in Dayton, Ohio, on November 21, 1995, brought an end to more than three years of fighting in the former Yugoslavia. In order to emphasize the transatlantic nature of the peace initiative, the accords were formally signed by the presidents of Bosnia and Herzegovina, Croatia, and Serbia at a ceremony in Paris on December 14, 1995. See also YUGOSLAVIA.

Dayton Accords

D

A decision is an EU legal instrument directly binding on the individual or enterprise to which it is applied.

Decision Davignon, Viscount Etienne (1932– )

“Stevy” Davignon, the Belgian public servant and, in later life, corporate businessman, played an important role in the EC’s development on two occasions. First, as political director of the Belgian foreign ministry in 1970, Davignon chaired the committee of member-state representatives that drafted a report on foreign policy coordination between member states. The Davignon Report laid the foundation for European Political Cooperation (EPC). Second, as commissioner for research and industry (1977–1985), Davignon worked with the chief executive officers of leading European manufacturers to promote collaboration in research and development and boost Europe’s waning position in the global marketplace. Thus Davignon was primarily responsible for a number of EC-sponsored programs in the early 1980s to improve European competitiveness (most notably the European Strategic Program for Research and Development in Information Technology [ESPRIT] program), which helped lay the foundation for completion of the single market. Davignon is also remembered in the Commission for his declaration of a “manifest crisis” and use of European Coal and Steel Community emergency powers to save Western Europe’s steel industry, although at a cost of thousands of jobs. This may have cost Davignon the top Commission job in 1984, when Britain’s Margaret Thatcher refused to back him as a compromise candidate for the Commission presidency reportedly because of Davignon’s handling of the steel crisis. In February 1997 Davignon presented another influential report, this time a five-year assessment of the EU’s framework programs for research and technological development.

The first thing to be said about EU decisionmaking procedures is that there are many of them. Precisely how many depends on what is counted: all types of procedures or just legislative procedures? If just legislative procedures, are both “policy” and “administrative” procedures to be counted or only the former? When are variations in “standard” procedures to be regarded as sufficiently distinctive to merit being counted as procedures in their own right? And are informal procedures— which in some cases are extremely important—to be counted as well as formal procedures? Given the potential for answering questions such as these in many different ways, it is not surprising that counts of the number of EU decisionmaking procedures frequently vary considerably. Assuming, however, that neither too tight nor too loose a view is taken as regards what to count, most estimates put the number of clearly distinctive decisionmaking procedures at somewhere between 20 and 30. So, for example, in a report it issued in 1995, the Commission listed a total of 29 “main decision-making procedures provided for in the Treaty on European Union” (TEU): twentytwo under the EC pillar, 4 under the Common Foreign and Security Policy (CFSP) pillar, and 3 under the Justice and Home Affairs (JHA) pillar (Commission, 1995, pp. 80–84). Why are there so many procedures, and what are the main differences between them? The answers to these questions stem primarily from two very closely interrelated facts: first, political

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elites—in the member states and in EU institutions—have always agreed that some types of decisionmaking lend themselves to an essentially intergovernmental approach and other types lend themselves more to a supranational approach; second, there has never been a consensus among elites about just where the balance between supranationalism and intergovernmentalism should be or what precise form each should take. Among the many overlapping issues concerning the supranational/intergovernmental balance in procedures that have been debated over the years, the following have generated most heat: •

•

• •

Which procedures should be located within the framework of the treaties (thus automatically giving the Commission and the Court of Justice important roles), and which should be located outside (thus reducing the role of the Commission, removing any role for the Court, and making national governments the key actors)? Whether inside or outside the treaties, what powers must lie essentially in the hands of national governments via the European Council and/or Council of Ministers and what powers can be given to, or shared with, the Commission, the European Parliament (EP), and the Court? Within the Council, for what types of decisions should unanimity be required and for what types should majority voting be permitted? Insofar as the EP is to play a part in decisionmaking procedures, to what extent and in what decisionmaking areas should it have a real and effective role—that is to say, in what circumstances should it be confined to an advisory role and in what circumstances should it have decisionmaking powers?

Given that decisionmaking procedures have to be agreed to unanimously by the governments of the member states, the absence of a consensus on such key questions has meant that it has not been possible to establish a simple decisionmaking framework. As new issues have come onto the EU agenda, as existing responsibilities have grown in importance, as procedures in some areas have come to be seen as unsatisfactory, and as majority elite opinion has drifted (albeit unsteadily and not without challenge) in a supranational di-

rection, a range of procedural questions has had to be addressed. Frequently they have been so addressed amid differences and controversy as to what should be done. The differences and the controversy have been most apparent since the relaunch of the EC in the mid-1980s. Many of the problems have stemmed from the British government’s taking a much more intergovernmentalist position than other governments. The UK’s stance, however, has not been the only factor making for difficulties, because although all other governments, plus the Commission and the EP, have supported extensions in supranationalism, they have by no means been in full accord as to its nature or its scope. As a result of this lack of agreement, decisions about decisionmaking procedures, which are taken mainly, but not exclusively, in the framework of intergovernmental conferences (IGCs), have only been possible by producing an ever more complicated decisionmaking system. This system has seen, over the years, the creation of both new decisionmaking procedures and an increasing range of variations within existing procedures. Regarding new procedures, examples include the cooperation procedure and the assent procedure, which were created by the Single European Act (SEA); the codecision procedure, which was created by the TEU; and the CFSP and JHA procedures, which were also created by the TEU. Regarding variations within procedures, examples include the use of the cooperation procedure without Britain under the TEU’s Social Protocol (until the new Labour government agreed in 1997 to incorporate the Social Protocol into the Amsterdam Treaty) and the requirement that unanimity, rather than a qualified majority, be required under the co-decision procedure when decisions are taken in two policy areas: culture and research framework programs. Types of Decisions A useful way of classifying EU decisionmaking procedures is in terms of the sorts of decisions to which they apply. Major constitutional and directional decisions. Decisions of this kind—covering such matters as treaty changes, the principles and timetable of Economic and Monetary Union (EMU), and EU accessions—are made by, or at least have to be approved by, the European Council. Because it meets for only a few days each year, the work of the European Council is carefully prepared by the

Council of Ministers, working usually in close association with the Commission. Decisions of the European Council, which are taken, except in rare circumstances, by unanimity, are political decisions and require further appropriate action by the Commission and Council if they are to be given legal effect. Legislative decisions. There are four main legislative procedures: consultation, cooperation, co-decision, and assent. Under each of the procedures, the Council and the EP may request the Commission to bring forward a proposal, but the Commission alone has the formal right of initiation (apart from a very small number of exceptional cases). The principal differences among the four procedures concern the powers of the EP, which vary from the right to be consulted (under the consultation procedure) to the right to exercise a veto (under the co-decision and assent procedures). An important difference within each of the consultation, co-decision, and assent procedures is whether or not qualified majority voting (QMV) applies within the Council. QMV applies to all Council decisionmaking under the cooperation procedure, except when the Council wishes to take a view that differs from that of the Commission or, at second reading stage, from the EP. In the consultation procedure, the Commission makes a proposal, either on its own initiation or at the request of the Council or of the EP “acting by a majority of its members.” The Council is the sole final decisionmaker, but it must consult the EP, and it cannot act (as was made clear in the 1980 Isoglucose case ruling by the Court of Justice) before the EP has issued its opinion on the proposal. The EP cannot use its right to be consulted and to issue an opinion in such a way as to exercise a veto, for it is obliged to issue its opinion within a reasonable time. Depending on which treaty article the proposal is based upon, the Council takes its decisions either unanimously or by QMV (see below for QMV rules). The Council must act unanimously when it seeks to amend Commission proposals (which themselves may have been amended in light of the EP’s opinion). The cooperation procedure (Article 189c procedure) differs from the consultation procedure in three main ways: it is a two-reading, rather than a one-reading, procedure; it gives greater powers to the EP; and the Council can always act by QMV, except when it is in dispute with the Commission

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or the EP. At first-reading stage, the EP issues its opinion and then the Council establishes a “common position.” At second-reading stage, if the EP rejects the common position by a majority of its members, the Council can only adopt the legislation by acting unanimously. Similarly, if the Commission accepts amendments approved by the EP by a majority of its members, the Council must act unanimously to reject or change them. As under the consultation procedure, the Council remains the sole final decisionmaker. Under the terms of the Amsterdam Treaty, the cooperation procedure was virtually abolished, and most of the areas subject to it were made subject to the co-decision procedure. The extremely complex co-decision procedure (Article 189b procedure) adds a third stage to the two stages that exist under the cooperation procedure and gives to the EP a veto over proposals of which it does not approve. The most distinctive features of the procedure come into play if, at second-reading stage, the positions of the Council, which can usually act by QMV under the procedure, and the EP, acting by a majority of its members, diverge. In this eventuality a conciliation committee, consisting of an equal number of representatives of each institution, can be convened. If the committee agrees on a joint text, both the Council and the EP must give their approval for it to be adopted. If the committee cannot agree on a joint text, the Council may adopt it unilaterally, but the EP, acting by a majority of its members, has the power to veto the adoption. (The 1997 Amsterdam Treaty greatly extended the scope of co-decision and simplified the procedure by giving up the third stage.) The assent procedure is used for only a very limited range of “normal” legislation and is designed primarily for certain sensitive constitutional/political issues and for some types of international agreements. Under the procedure the Council adopts a position by unanimity, usually, but not always, on the basis of a proposal by the Commission. The Council’s position is referred to the EP, which may give or withhold its assent with, in most cases, only a nominal majority required rather than a majority of all members. The EP has no power of amendment under the procedure. If assent is given, the Council adopts the proposal. Common Commercial Policy decisions. Under the Common Commercial Policy (CCP), the

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member states act as one when they negotiate with trading partners about terms of trade. The Commission conducts the actual negotiations, but it does so under mandates laid down by the Council and with agreements having to be approved by the Council. The Council can act by QMV if necessary. The EP has no formal role under this procedure, but it is usually informally consulted, especially on potentially important negotiations. Common Foreign and Security Policy decisions. Decisionmaking under the CFSP pillar of the TEU is primarily intergovernmental in character. The European Council is given responsibility to “define the principles of and general guidelines for the common foreign and security policy” (Article J.8[1] TEU). Within these guidelines, the Council may adopt common positions (by unanimity) and joint actions (by unanimity, or by QMV if this is agreed to unanimously). The Commission is “fully associated” with CFSP work but does not enjoy the exclusive right of initiative it has under the EC pillar, for all member states also enjoy a right of initiative. The EP has no formal powers but does have the rights to be consulted, to be informed, and to ask questions of the Council and make recommendations to it. Justice and Home Affairs decisions. Decisionmaking under the JHA pillar is very similar to that under the CFSP pillar, except that no formal role is assigned to the European Council. Budgetary decisions. Since 1988, decisions about the size and composition of the EU’s budget are taken at two stages. The first stage involves agreement, by unanimity, at European Council level on medium-term financial perspectives that set down general parameters for EU income and expenditure. The current financial perspective covers the years 1993 to 1999. The second stage involves agreement on the annual budget. The annual budgetary cycle starts with the Commission’s issuing a preliminary draft budget in the early part of the year and continues via two readings in the Council and two readings in the EP. If the schedule is met (which it has been since the two-stage procedure was established in 1988), the budget is formally adopted at the EP’s second reading, which is held at its December plenary meeting. The Council and the EP are co-decisionmakers in that both must give their approval for the budget to be adopted, but the Council has stronger powers than the EP over compulsory expenditure (mainly agricultural), and the EP has stronger powers over

noncompulsory expenditure (the largest element of which is structural funding). Administrative decisions. Many decisions, such as those involving the day-to-day management of the Common Agricultural Policy, are administrative rather than political in character. Responsibility for making these decisions is delegated to the Commission, usually in association with one of three types of committee: advisory, management, and regulatory (a practice known as comitology). The Commission’s powers are strongest under the advisory committee procedure (advisory committees have no formal power to prevent the Commission acting as it wishes) and weakest under the regulatory procedure (Commission actions require the support of these committees, which can act by QMV). There have been frequent disagreements among the Council, the Commission, and the EP as to which committee procedure (if any) should apply when delegation powers are granted. Qualified Majority Voting As has been noted, the Council takes its decisions either by unanimity or by QMV (apart from a small number of instances covering mainly procedural matters, where simple majority voting is possible). When QMV applies, the voting weight of member states is as follows: Germany, France, Italy, the UK Spain Belgium, Greece, the Netherlands, Portugal Austria, Sweden Denmark, Finland, Ireland Luxembourg Total

10 8

5 4 3 2 87

For proposals to be adopted by a qualified majority, there must be at least “62 votes in favor where this Treaty requires them to be adopted on a proposal from the Commission, 62 votes in favor, cast by at least 10 members, in other cases” (Article 148[2]). In practice, legislative proposals fall under the first of these provisions, whereas the most important application of the second provision is under the CFSP and JHA pillars of the TEU. Two other points should be noted about QMV rules. First, under the Social Protocol of the TEU (in operation between 1993 and the revision of the

TEU by the Amsterdam Treaty in 1997), which involved legislative decisions being made without British participation, a qualified majority constituted 52 votes. Second, under the Ioannina Compromise, which the Council agreed on in 1994 in order to accommodate fears (mainly British) about the weakening of the size of the qualified majority when the EU enlarged in 1995: “If members of the Council representing a total of 23 to 25 votes indicate their intention to oppose the adoption by the Council of a decision by a qualified majority, the Council will do all within its power to reach, within a reasonable time … a satisfactory solution that can be adopted by at least 65 votes” (Council, 1995). Efforts at the 1996–1997 IGC to give the four larger member states (Britain, France, Germany, and Italy) more clout became a major sticking point at the Amsterdam summit on June 16 and 17, 1997. In the event, the heads of state and government maintained the status quo, but in a legally binding protocol on enlargement, the Amsterdam Treaty links increasing the number of votes for larger member states to agreement by them to give up their second commissioner. The eventual reweighting of votes will also entail a recalculation of qualified majority and the blocking minority. See also BUDGET; COMMISSION; COUNCIL OF MINISTERS; EUROPEAN COUNCIL; EUROPEAN PARLIAMENT. Commission. 1995. Report for the Reflection Group. Luxembourg: Office for Official Publications of the European Communities. Council. 1995. “Press Release 4061/95,” issued January 10 in Brussels. Nugent, Neill. 1994. Government and Politics of the European Union. 3d ed. Basingstoke: Macmillan.

Bibliography

—Neill Nugent

Deepening is the process by which the EU’s competence is increased and policy scope broadened. There is a general presumption that during enlargement (widening), the EU should also deepen lest a wider EU mean a weaker EU. See also ENLARGEMENT.

Deepening

De Gasperi, Alcide (1881–1954)

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Alcide De Gasperi was born on April 3, 1881, in Pieve Tesino, a small village in the Trentino region, which at the time was part of Austria-Hungary. De Gasperi began his education in Trentino and completed it at the University of Vienna, where he obtained his degree in Letters and Philosophy in 1905. Upon returning to Trentino he became the editor of the Catholic paper, La Voce Cattolica, which he renamed Il Trentino. At the same time, De Gasperi began his long political career as a cofounder of the Partito Popolare Trentino and in 1911 was elected a member of parliament in Vienna. De Gasperi became an Italian citizen in 1918, when Trentino became a part of Italy; three years later he was elected to the Italian parliament. In 1925 he became leader of the Partito Popolare Italiano, forerunner of the postwar Christian Democratic Party. Two years later, De Gasperi was arrested and sentenced to a four-year prison term because of his continued opposition to Benito Mussolini. Upon his early release, De Gasperi spent the next fourteen years in the Vatican, effectively in internal exile. After the war De Gasperi began his distinguished service in the Italian government: from December 1945 until July 1953 he was prime minister in eight successive coalitions. During this period De Gasperi worked strenuously for European unity and began a lasting and strong friendship with two other founding fathers of European integration: Robert Schuman and Konrad Adenauer. In recognition of De Gasperi’s efforts on behalf of European unity, he was awarded the prestigious Charlemagne Prize in 1952 and was elected president of the Common Assembly of the European Coal and Steel Community (ECSC) in 1954, just months before his death. As prime minister, De Gasperi dedicated much of his time to foreign policy. He defended the interests of Italy, a defeated nation, at the Paris Peace Conference in 1946 and convinced the United States, France, and Britain that his country was ready to be part of the society of democratic nations. He also fought for the return of the territory of Trieste to Italy and for Italy’s participation in the Marshall Plan (1948), NATO (1949), the ECSC (1951), and the ill-fated European Defense Community (EDC) (1954). De Gasperi’s dedication to the idea of a European integration has several roots. (1) He was born in a border region and throughout the first part of his life lived in very close contact with people of different languages and cultures. Early

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on De Gasperi understood the importance of tolerance and respect for ethnic and cultural differences and the need for cooperation among all people. (2) From his profound Christian faith, De Gasperi derived a commitment to the idea that social solidarity should extend beyond national borders. (3) Because he had lived through two devastating world wars, De Gasperi sought above all peace between nations, which he believed could only be obtained through close international cooperation. (4) De Gasperi favored a close alliance with other European countries and with the United States in order to confront the Soviet Union during the emerging Cold War. (5) He deeply believed that Europe was already spiritually united through a common history and civilization. (6) De Gasperi realized that Italy’s democratic future and economic prosperity would be enhanced through close association with other Western European countries. De Gasperi thought that a united Europe should be achieved through close cooperation between free and equal nations. Just as in the past cities had combined to form nations, nations should strive to create a higher entity. The nation, then, should not be considered an end in itself but a means to achieve something higher. Striving toward integration, nations should be willing to give up part of their sovereignty for the good of all. Sovereignty should be surrendered to central European institutions, whose establishment De Gasperi strongly favored, notably in the fields of defense and economic policy. However, nations should protect their cultural identity and their languages, neither of which De Gasperi saw as an obstacle to the process of European integration. De Gasperi also thought that a united Europe would be committed to the ideas of peace and democracy. Although favoring the establishment of European institutions to encourage the process along, De Gasperi never believed that Europe should be united by decree. Nations would have to agree to be part of the integration process. Accordingly, the process of European integration would be slow, gradual, and prone to setbacks owing to the resistance that nations would initially put up against further concessions of sovereignty. Yet De Gasperi was never pessimistic about the achievement of European unity. In that regard he found inspiration in his own country’s history. Regions and cities that were culturally, linguistically, polit-

ically, and economically different and that had distrusted each other for centuries nevertheless succeeded in achieving unity. There was no doubt in De Gasperi’s mind that Europe would unite; it was just a matter of time. Indeed, in order to achieve unity, there was a lot more to destroy (prejudice, cowardice, and resentment) than to build. De Gasperi placed a lot of hope in the ambitious project of establishing the European Defense Community. The common army that would result was not supposed to compete with the U.S. military establishment but to cooperate with it inside NATO. De Gasperi never countenanced European integration as an attempt to establish a third bloc between the United States and the Soviet Union. Simply put, Europe had too much to gain from its cooperation with the United States. De Gasperi’s enthusiasm for the EDC was due not exclusively to a perceived need to control German rearmament but to a conviction that integration in the field of defense would encourage deeper political integration. De Gasperi therefore favored the establishment of an elective assembly to ensure democratic control of the common armed forces. Accordingly, De Gasperi was the author of Paragraph 38 of the EDC treaty, which introduced the idea of a European Political Community. De Gasperi further believed that political integration could only happen in conjunction with a process of economic integration, which would spill over from one sector to another and would consist not just of a customs union but also of a common market, a European central bank, and eventually a common currency. De Gasperi had the good fortune to see his European ideals partially realized with the establishment of the ECSC in 1952 but also witnessed the political struggle over ratification of the EDC treaty. Only twelve days after De Gasperi’s death, the French National Assembly decisively rejected the proposed defense community. Arnoulx de Pirey, Élisabeth. 1991. De Gasperi: Le Père Italien de l’Europe. Paris: Téqui. Carrillo, Elisa A. 1965. De Gasperi: The Long Apprenticeship. Notre Dame, IN: University of Notre Dame Press. De Gasperi, Maria Romana, ed. 1979. De Gasperi e L’Europa. Brescia: Morcelliana.

Bibliography

Petrilli, Giuseppe. 1975. La Politica Estera ed Europea di De Gasperi. Roma: Edizioni Cinque Lune.

—Salvatore Lombardo

Charles de Gaulle, president of France between 1958 and 1969, is renowned for his championing of the nation-state and hostility toward the EC. Indeed, de Gaulle provoked a number of crises in the EC in the 1960s, yet his contribution to European integration and his attitude toward the Community were far from negative. Despite its threat to French sovereignty, the EC offered de Gaulle an unprecedented opportunity to promote two overriding objectives: French economic advancement and an institutional framework in which to embed Franco-German rapprochement. Thus the EC flourished in its early years not because de Gaulle reluctantly acquiesced in it—either for legal reasons, or because his government depended on the support of the pro-EC independents in the National Assembly, or because he was preoccupied with the war in Algeria—but because he strongly supported a certain amount of sectoral economic integration. Apart from industrial rejuvenation, de Gaulle saw in the EC a unique opportunity to modernize the large and cumbersome French agricultural sector. The solution lay in the proposed Common Agricultural Policy (CAP), which would provide a Community-wide outlet for French produce, guarantee high prices in the EC regardless of low prices on the world market, and subsidize the export of surplus produce outside the EC itself. Although subsequently denigrated as a drain on EC resources and an impediment to international trade accord, in the 1960s the CAP proved a vital instrument of Community solidarity and helped restructure declining Western European agriculture. More important, without the CAP there would not have been a Community of any kind. Just as the French assembly had successfully insisted on agricultural provisions in the Treaty of Rome, so, too, had de Gaulle demanded implementation of those provisions as a condition of implementing the treaty as a whole. The industrial customs union and common external tariff came into being because of, and not despite, the CAP.

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De Gaulle’s generally positive position on European economic integration complemented his policy toward Germany. Whereas de Gaulle had left the French political stage in 1946 advocating a punitive policy toward a weak, divided Germany, he returned in 1958 to a radically altered European scene. With Germany reindustrialized and rearmed, de Gaulle abandoned his earlier position and espoused instead the then-orthodox French policy of reconciliation and rapprochement. De Gaulle cemented this policy in an exceptionally close relationship with Chancellor Konrad Adenauer. Both leaders believed that their countries’ future, and the future of Europe, depended above all on close Franco-German accord. The Elysée treaty, signed by de Gaulle and Adenauer in January 1963, symbolized the close friendship between them and their countries and became the institutional basis for Franco-German leadership in Western Europe. Apart from developing a close relationship with Adenauer, de Gaulle is best known in the context of the EC for keeping Britain out and for curtailing the powers of the European Parliament (EP) and Commission. Once again, both seem negative achievements. But allowing Britain into the Community in the early 1960s would in all likelihood have thwarted the CAP, undermined economic integration, and turned the customs union into a broad free trade area. Shortly before signing the Elysée treaty in January 1963, de Gaulle had vetoed Britain’s application for EC membership. Apart from economic considerations, at issue was de Gaulle’s conception of the Community and his espousal of a “European Europe.” The Treaty of Rome could only succeed, he thought, in the context of a broader political framework of intergovernmental cooperation. Such cooperation was an essential prerequisite for the emergence of an economically strong, politically assertive, and militarily independent Europe. As Britain’s worldview differed fundamentally from France’s, de Gaulle could not take seriously Britain’s candidacy for Community membership. He vetoed Britain’s second membership application in 1967 for essentially the same reasons. De Gaulle’s stand against the Commission in 1965 epitomized his hostility to supranationalism. The epic clash between de Gaulle and Commission president Walter Hallstein, personifying the conflict between nationalism and supranational-

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ism, erupted in the infamous Empty Chair Crisis of 1965–1966. An ambitious Commission proposal to fund the CAP from the Community’s own resources, and in the process extend the EP’s budgetary power, caused de Gaulle to withdraw French representation in the Council of Ministers in July 1965 (hence the “Empty Chair”). But the crisis took a new twist when de Gaulle announced at a press conference in September 1965 that France would not accept a provision of the Rome treaty, due to be implemented on January 1, 1966, introducing qualified majority voting (QMV) in the Council on a limited range of issues. De Gaulle’s attack on QMV and insistence on a national veto over EC legislation greatly exacerbated the situation. The other member states shared France’s concern about being outvoted in the Council but argued that important national interests were unlikely ever to be ignored. The results of the December 1965 French presidential election brought de Gaulle back to the negotiating table. The crisis dominated the election, with de Gaulle’s opponents campaigning in favor of France’s retaking its seat in Brussels. Deprived of an absolute majority in the first round of balloting, de Gaulle and François Mitterrand contested the second round alone. As expected, de Gaulle won but by the surprisingly narrow margin of 11 percent. The result demonstrated the domestic limits on de Gaulle’s EC policy. The general got the message; a week later he announced that the French foreign minister would attend a meeting of his EC counterparts in Luxembourg. The crisis finally ended with the so-called Luxembourg Compromise: an agreement to disagree over majority voting. While maintaining the principle of majority voting, the compromise acknowledged that “when very important issues are at stake, discussions must be continued until unanimous agreement is reached.” The Luxembourg Compromise heightened member states’ awareness of each other’s special interests and increased their reluctance to call a vote in the Council even when no vital interest was at stake. As a result, decisionmaking in Brussels virtually ground to a halt until the early 1980s, when a huge legislative logjam finally convinced member states to move toward majority voting. De Gaulle devoted his remaining years in office mostly to French foreign policy beyond the Community, notably to an effort to undermine NATO and establish good relations with the So-

viet Union and its Eastern European satellites. These policies proved spectacularly unsuccessful. At the same time, de Gaulle neglected domestic affairs and was caught totally unawares by the student and workers demonstrations of May 1968, which almost toppled not only his government but also the Fifth Republic. Although de Gaulle survived politically, the events of May 1968 demolished his personal popularity and fatally compromised his credibility as president. Moreover, the crisis further weakened France economically and caused serious financial instability. De Gaulle continued as president for less than a year. Defeat in two referenda in April 1969, one about the structure of local government and the other about reform of the senate, prompted his departure. Those relatively inconsequential issues, on the outcome of which he had staked his presidency, brought the “decade of de Gaulle” to an abrupt end. De Gaulle bequeathed a mixed legacy to the EC. On the one hand he was instrumental in getting the EC going in the early 1960s, but on the other he severely impaired its development toward supranationalism. He also kept the EC small, restricting it to the so-called Little Europe of the Six centered on the Franco-German core. But Europe and the EC had changed much during his eleven years as president. Most important, Germany had grown economically and was becoming more assertive politically. By 1969, France was no longer economically and politically the most powerful member state. That fact was not lost on Georges Pompidou, de Gaulle’s successor, who sought to compensate for the changing balance of power in the Community by allowing Britain to join. Thus, within three years of de Gaulle’s departure, his Gaullist successor endorsed the EC’s first enlargement. See also FRANCE. Camps, Miriam. 1966. European Unification in the Sixties: From the Veto to the Crisis. New York: McGraw-Hill. De Gaulle, Charles. 1971. Memoirs of Hope: Renewal and Endeavor. New York: Simon and Schuster. Lacouture, Jean. 1991. De Gaulle: The Ruler, 1945–1970. London: Collins-Harville.

Bibliography

—Desmond Dinan

Delors, Jacques (1925– )

Jacques Delors was president of the Commission for a decade, from January 1985 to December 1994. Those ten years, the most important in the EC’s modern history, were remarkable for the importance the Commission assumed as agenda setter and energizer of European integration. They saw the Single European Act (SEA), completion of the single market, changes in Europe’s budgetary procedures and scope, development of regional redistribution policies, commitment to Economic and Monetary Union (EMU), progress on the “social dimension,” German unification, the end of the Cold War, and the 1991 intergovernmental conferences (IGCs). The decade ended in serious new difficulties for Europe, however, epitomized by the Treaty on European Union (TEU) ratification crisis.

Delors, Jacques (1925– )

Background Jacques Delors was born in Paris in 1925, son of an employee of the Banque de France. He grew up in an urban Catholic setting and was involved with the progressive Catholic youth movements. Young Delors did not attend university but instead began work at the Banque right out of secondary school. He rose quickly while learning international financial matters. Highly disciplined, dedicated to constant hard work, and committed to a Left-Catholic version of social change, Delors turned early to trade unionism, even refusing promotion at the Banque to be an activist. Delors used his expertise in economics to teach in union schools, write articles for the union’s journal, and, eventually, run the union’s research department. Delors became an important figure in the generation of Christian activists who would later play major roles in French life and, in particular, the renovation of the French Left. Delors entered public life in the 1960s, moving into the upper reaches of the Planning Commission, not the last of Jean Monnet’s creations that he would help to energize. In 1969, in the aftermath of the “May events” (student and worker protests) and Charles de Gaulle’s resignation from the French presidency, Delors became social affairs adviser to Gaullist prime minister Jacques Chaban-Delmas, promoting New Society reforms such as a planned and negotiated program of public sector income development that would double as an incomes policy. Delors was also responsible for an innovative program of job training. The ma-

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ture Delorist vision resulted from these experiences. Delors saw the market as indispensable allocator of resources, decisionmaker, and source of economic dynamism but believed that on its own it could guarantee neither equity nor a moralized social order. These things depended upon “dialogue” among different groups—employers and labor in particular—to reach clearer understandings about what had to be done and what could be shared. “Dynamic compromise,” based on discussion, was the secret of success. Behind this was Delors’ conviction that society could not be reduced either to a market writ large or a utilitarian aggregation of isolated individuals. Neither socialist statism nor collectivist transformation were solutions either. A moralized society grew from delicate interdependence in which social groups granted one another active solidarity. Individuals became responsible through engagement with their social group in the active promotion of this solidarity. Delors, a moderate, shared none of the “rupture with capitalism” passion that was the French Left’s stock in trade until the early 1980s. He was thus somewhat out of place in 1970s France when schematic Left-Right ideological confrontation dominated the scene. He nonetheless made his way into the new Socialist Party, where his support for François Mitterrand in intraparty struggles won him the last electable place on the 1979 Socialist list to the European Parliament (EP), where he chaired the monetary affairs committee and befriended legendary Community activists like Altiero Spinelli. After Mitterrand won the French presidency in 1981, Delors became finance minister, where he quickly found himself hostage to policies that he found unwise: nationalization, inflationary Keynesianism, and expensive new social programs. Managing the franc’s stability was particularly difficult. France’s deteriorating economic situation pushed Delors to the fore. He was first to demand a “pause” in reforms and later was the architect of the Left’s first austerity program in 1982. He was also central in the 1983 realignment of the European Monetary System (EMS), which was the turning point for French politics that led to new strategies within the context of European integration. The end of Delors’s tenure as finance minister in 1984 made him available for his new duties in Brussels.

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President Delors The Delors Commission began in January 1985 with a flurry of activity that quickly consigned Europessimism to memory. Delors and the Commission prepared their white paper on completing the internal market, the launching pad for renewal of European integration. An intergovernmental conference to update the Treaty of Rome produced the SEA, which the Commission in large part also shaped. The SEA changed Council decision rules to allow qualified majority voting, initiated the cooperation procedure granting amending power to the EP, and expanded the Community’s competence, in particular to economic and social cohesion. The next major project was the Paquet Delors (Delors I), a three-dimensional program of budgetary innovation introduced in 1987. It first proposed new multiyear budgeting projections in exchange for Commission pledges of budgetary discipline. Thus, in future the EC would be spared the annual budgetary squabbles that had often been disruptive. Instead, every five years or so there would be grands rendez vous to set out the EC’s medium-term financial future. Next, Delors I reformed the Common Agricultural Policy (CAP) by introducing price stabilizers. Finally, and most important, it reformed the structural funds: the EC’s different regional development instruments were regrouped around new objectives and their funding doubled over five years. The bulk of this new funding was earmarked for the EC’s lessdeveloped areas through a new planned and programmed approach run by the Commission in “partnership” with member states and regions. The rest would go to help reverse deindustrialization, promote rural redevelopment, and provide training and other opportunities for the long-term unemployed and youth. After the Delors package was passed in 1988, Delors began a new campaign for EMU, first persuading the European Council to set up the Delors Committee, composed of central bankers and experts. The committee, marked in particular by tough struggles between Delors and Hans-Otto Pöhl of the German Central Bank, produced a report that argued that EMU was needed because it was implied by the single market: without EMU, currency fluctuations might undermine market unification. The deeper argument was political: by pooling sovereignty in economic policy areas, EMU would bring a huge leap forward in Euro-

pean integration. The report, which Delors largely wrote, set out a three-stage plan. The first stage, beginning with the liberation of capital flows in 1990, would involve “mutual surveillance” of national budgetary policies to promote convergence. The second stage would establish a European System of Central Banks to prepare the coming of a single European currency. The third stage would bring full EMU and a single currency. In its initial formulations, EMU was to be both “economic” and “monetary.” Europe needed an “economic policy government” to give general guidance plus an independent monetary policy body that would respect those economic policy guidelines. The European Council initiated movement toward an IGC to consider the treaty changes that EMU necessitated. At that point Delors turned toward social policy, an area not well covered in the Treaty of Rome. Moreover, member-state opposition, particularly from the UK, to changing the development of social policy had been ferocious. Less had been achieved, therefore, than even the treaties allowed. Accordingly, Delors’s 1989 Community Charter of Social Rights (Social Charter) was designed less to break new ground than to prompt member states to make good on what already existed in the treaties. The action program that followed included thirty-seven proposals to be introduced by the end of 1992. Most were passed by qualified majority voting, enabling the Community to build solid regulations covering workplace health and safety. Where unanimity was needed, the British vetoed. Proposals for European Works Councils in multinational companies, the regulation of “atypical” work, maternity and parental leave, and other important matters were blocked. Social Dialogue among Euro-level social partners, the other dimension of the Delors social program, became important during and after the 1991 IGCs. Because the EC had been very much a creation of the Cold War, the collapse of the Soviet bloc was a huge systemic shock. More perceptive than most about the implications of the collapse, in July 1989 Delors persuaded the leading industrialized countries to allow the EC to coordinate aid to Poland and Hungary (later expanded to other Central and Eastern European states). He responded with great perspicacity to German unification and worked to facilitate the entry of the former East Germany into the EC. He also promoted association treaties with the newly ex-socialist

countries, thereby granting aid and opening up prospects for ultimate EC memberships. He then initiated negotiations with European Free Trade Association countries to establish a European Economic Area and encouraged support for the European Bank for Reconstruction and Development as well. In 1990, prompted by German chancellor Helmut Kohl and by Mitterrand, Delors supported calling a second IGC on political union, to occur simultaneously with the EMU conference. Having taken to admonishing the EC as “an economic giant and political dwarf,” Delors shared the German and French leaders’ hope of promoting new Euro-level foreign and defense policies. The other item on the agenda was giving greater democratic legitimacy to the EC. The road to Maastricht was thus opened. Delors and the Difficult Beginnings of the EU Delors originally hoped that the two IGCs would together amount to a giant leap forward for European integration, but results fell far short. Discussions about EMU, well prepared by the Delors Report, brought predictable conclusions. Britain was given the possibility of opting out of the single currency. The Germans, preoccupied with unification, diminished the importance of Delors’s Stage 2 by putting off the European central banking system until Stage 3 (substituting for it a weaker European Monetary Institute). More important, the Germans also obliged stringent “convergence criteria” for judging potential EMU members in the realms of price stability, interest rates, budget deficits, and debt. This stress on budgetary convergence made the proposed EMU less a matter of economic policy than of monetary constraint, a shift to which Delors objected strongly. Finally, dates were set for movement to EMU: it would be 1997 if a majority of member states fit the convergence criteria; 1999 definitively for any who fit. The TEU thus decided upon a multi-speed Europe for economic and monetary matters: those who qualified could proceed directly to EMU and a single currency; those who initially did not qualify would need arrangements to join later; those who refused the single currency (Britain and later Denmark) needed yet another path. The political union negotiations were messier. The constitutional result was a three-pillar “temple”: the EC, an intergovernmental Common Foreign and Security Policy (CFSP), and in-

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tergovernmental Cooperation on Justice and Home Affairs. The pillars were joined by a common preamble. Delors, who caused a stir by insisting upon Europe’s “federal vocation,” opposed this arrangement in favor of a “tree” whose different functions would be connected to a common Community “trunk.” The new CFSP was so weighed down by cumbersome decisionmaking rules that very little could come of it (excepting perhaps an infelicitous split between the EC’s Common Commercial Policy, conducted in Community ways, and “foreign policy,” conducted intergovernmentally). The pillar on Justice and Home Affairs was even less substantial. The other major change, in the interests of “democratic legitimacy,” allowed the Council and the EP to codecide important legislative matters. The procedures were so complicated and opaque, however, that any advance in democracy was obscured. The treaty also made an important new commitment to “subsidiarity”: the EU should only act where and when it could achieve results that member states could not. Lack of precision made it difficult to achieve the clarification of national and transnational roles that subsidiarity implied, however. The TEU was no triumph for Delors. The Commission had very little influence over the important political union negotiations and, beyond its substantive weaknesses, the final treaty text was a literary disaster. Delors did manage one coup during the final hours of negotiations, however. Throughout the year-long talks it had become manifest that Britain’s conservative government wanted no change in the Community’s social policy mandate. At the Maastricht summit social policy turned out to be the final sticking point, since the British refused to accept even the most minimal wording changes to allow the talks to conclude. Using Kohl as an intermediary, Delors placed a Commission paper on the table to create a Social Protocol to the new treaty. This allowed eleven of the twelve member states to move forward without the British on a somewhat extended range of social policy matters. The wording of the protocol, derived from the Commission’s own proposals to the political union talks and later endorsed by the “social partners,” contained an ingenious notion. The Commission could declare that it intended Community action in a specific social area. Then the social partners could decide to negotiate as a substitute for legislation. If the negotiations concluded in a contract, Council approval

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could give it the force of law. This “negotiate or we will legislate” clause broke the deadlock in social dialogue. The first negotiations, in 1994, were on European Works Councils. They broke down, and legislation followed. But very quickly thereafter, on the parental leave issue, the first genuine European “collective agreement” was concluded. Maastricht was a turning point, but one that marked the end of the post-1985 renewal of European integration rather than the qualitative leap forward that Delors had wanted. The Commission continued business as usual after Maastricht, promoting a reform of the CAP in 1992 that the next year helped completion of the Uruguay round of the GATT. Delors used the GATT deadline as pressure to move the CAP away from its wasteful price support system toward subsidized land setasides with fewer perverse incentives to overproduction, land pollution, and international dumping of surpluses. In 1992 Delors also managed to get a second budgetary package (Delors II) through the European Council. Among other things it proposed doubling the structural funds yet again by 1999. Despite these achievements, dark clouds gathered over Delors’s last years. The difficulties in ratifying the TEU, beginning with the negative Danish referendum in June 1992, announced the change in weather. Sold as a cure-all for Europe’s economic problems, the single market had failed to deliver: growth rates did not rise and unemployment continued to soar, in part as firms rationalized for market integration. In this context, the glaring limits of the social dimension signaled that the single market was more for business than for people. Ordinary Europeans evidently felt let down. The massive crisis in the European Monetary System that began in late 1992 intensified doubts and cast shadows over the EMU schedule. The coming of recession in 1992 made things even worse. Member states, under pressure from electorates, began to pull back from new European commitments. Delors’s last major effort was a 1993 white paper, Employment, Growth and Competitiveness, meant to contribute to a new “model of development” for Europe. The key issue was Europe’s chronically rising levels of unemployment. Europe’s growth levels and ability to create new jobs had fallen behind other areas, even if the single market had limited the damage. The EU needed to promote an “information society.” Labor markets

should be made more flexible through enhanced lifelong educational commitments, active labor market policies, and social pacts in which workers and employers agreed to share productivity growth between wages and investment. Social protection systems should eliminate disincentives to labor market participation and burdens, particularly on employers, that discouraged hiring and investment. The EU could facilitate the coming of such reforms by promoting the major public works programs announced in the TEU’s transEuropean networks in transport, telecommunications, and energy infrastructures. The entire white paper was a proactive reflection aimed at preserving what Delors felt to be best about the European model of society, while resisting the sirens of “all market” neoliberalism. Alas for Delors, the white paper turned into more of a last political will and testament than a program for change. The Delors Decade in Retrospect The Delors decade brought the most ambitious efforts to promote European integration since the years immediately following the EC’s launch. Accomplishments were huge, but the decade ended with the EU in crisis. Delors and the other major promoters of renewed European integration had hoped to complete the internal market, as set out in the Rome treaty, while engineering as much spillover as possible into regulatory and political areas. The strategy was flawed. The history of the EC demonstrated that spillover into political and quasi-state areas (state building) was contingent upon, but in no way an automatic product of, market building. What had happened by the early 1990s was that Delors’s market building had succeeded, whereas spillover toward state building largely failed. For Delors, whose central purpose was to pyramid resources earned from the single market program into political areas to preserve the European model of society, this was a defeat. Delors had also gambled that the policy course of the EC, beginning with 1992, would lead to an attenuation of Europe’s democratic deficit. Despite reforms to give the EP more power, this gamble was also lost. What happened was that although the single market program “marketized” a number of areas in which member states had earlier made democratic public decisions and thus removed those areas from politics altogether, national political forces largely failed

to Europeanize their own activities. Reforms to grant the EP more power were blunted by the complexity and opacity of the new procedures. If anything, the democratic deficit had worsened by the end of 1994. Perhaps the best way to understand the Delors decade is as the culmination of the founding moment of European integration rather than the beginning of a new stage. In particular, the implicit “finality” of Europe’s founders, that integration would produce something resembling a federated nation state writ large, looked less and less meaningful. Delors had worked feverishly to deepen Europe before widening it. Implied in this was a commitment to a single community. The end of the Cold War and the prospect of EMU threatened the constitutional structures of the EU that had already been built. Integrating the newly independent states of Central and Eastern Europe became an urgent task. If the EU could not help to build new economic, political, and security interdependencies for the post–Cold War world, the costs in terms of democratization and peace could be very large. But it was quite inconceivable to construct such interdependencies through complete membership for the Central and Eastern European countries in the EU. A Europe of “variable geometry” would have to be built over the medium term in which different countries might be members of different dimensions of the EU, some political, others economic, still others in both areas. This implied different types of affiliation that would put new members on track toward more complete membership at some later moment. It would be difficult to do in a setting in which some existing members did not believe in political integration at all. Finally, the influx of a large number of new members, however affiliated, meant a complete redesign of Europe’s institutions that, planned for six members, were creaking and groaning with fifteen. These fundamental new tasks were for Delors’s successors to resolve. In addition, the traditional Monnet method of “integration by stealth,” through clever promotion of spillover from market to politics, had also reached the end of its useful road. Although Delors had used this model of integration, building Europe behind the backs of ordinary Europeans could only work as long as Europe did not impact unduly on their daily lives. It ceased to be so successful when the single market began to affect

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people tangibly. Equally important, the Monnet method had proven itself largely ineffective at promoting spillover from economics to politics. Building a solid political dimension to European integration could not be accomplished either by market-building engineers in Brussels or by foreign ministers making deals behind closed doors. It had to be done openly and democratically. Finding a new method for proceeding and a new way to confront the challenge of political integration were also left to Delors’s successors. Delors, Jacques. 1975. Changer. Paris: Stock. ———. 1988. La France par l’Europe. Paris: Clisthène-Grasset. Translated as Our Europe. London: Verso, 1991. ———. 1992. Le Nouveau Concert Européen. Paris: Odile Jacob. ———. 1994. L’Unite d’un homme. Paris: Odile Jacob. Delors, Jacques, with Philippe Alexandre. 1985. En sortir ou pas. Paris: Grasset. Grant, Charles. 1994. Delors: Inside the House That Delors Built. London: Nicholas Brealey. Hellman, John. 1981. Emmanuel Mounier and the Catholic Left, 1930–1950. Toronto: University of Toronto Press. Maris, Bernard. 1993. Jacques Delors, Artiste ou Martyr. Paris: Albin Michel. Milesi, Gabriel. 1985. Jacques Delors. Paris: Pierre Belfond. Rollat, Alain. 1993. Delors. Paris: Flammarion. Ross, George. 1995. Jacques Delors and European Integration. Cambridge: Polity Press. Winock, Michel. 1995. Histoire de la revue “Esprit.” Paris: Seuil.

Bibliography

—George Ross

In February 1987, Commission president Jacques Delors unveiled an ambitious budgetary package. Officially called Making a Success of the Single Market (because many of its provisions related to the recently launched single market program), the package subsequently became known as Delors I to distinguish it from a similar Delors II budgetary package five years later. The first Delors package had four parts: (1) Common Agricultural Policy (CAP) reform to take account of changes in production and international trade; (2) reform of the structural funds to make them effective instruments of economic cohesion (structural policy was reorganized around new objectives, and the

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Delors II

amount of the funds doubled over five years); (3) adjustment of the level (raising the ceiling from 1.16 percent of GNP in 1987 to 1.4 percent in 1992) and breakdown of own resources; and (4) a Commission pledge of “budgetary discipline.” The Delors I package was highly controversial: the Commission and the poorer, southern member states were determined to win a doubling of the structural funds because of the inherent danger of greater imbalances in a single market, but the rich, northern countries balked at paying substantially more money to the south. The European Council in Copenhagen, in December 1987, failed to resolve the issue. Germany’s chancellor Helmut Kohl, then in the council presidency, convened a special summit in Brussels in February 1988 to try again to reach agreement. There he and Spanish prime minister Felipe González, representing the rich north and the poor south, respectively, hammered out an agreement that, according to some commentators, amounted to a second Marshall Plan for Europe.

Delors II is the popular name for the budgetary package proposed by Commission president Jacques Delors to pay for implementation of the ambitious Treaty on European Union (TEU). The package, which would give the EU a budget 33 percent greater than the existing EC budget, sought to cover the cost of three new responsibilities: establishing a cohesion fund to provide assistance to the EU’s poor countries (Greece, Portugal, Ireland, and Spain) in the run-up to Economic and Monetary Union (EMU), improving EU industries’ international competitiveness, and meeting the EU’s greatly expanding foreign and security policy obligations. The fate of Delors II soon became embroiled in the TEU ratification crisis and nearly fell victim to Germany’s seeming inability to contribute substantially more money to the EU at a time of pressing domestic political and economic problems relating to reunification. The European Council failed to resolve the issue in Lisbon in June 1992 but finally reached agreement on the package in Edinburgh in December 1992.

Delors II

Delors Plan (for Economic and Monetary Union)

See DELORS REPORT. The European Council in Hanover in June 1988 recalled the Single European Act’s reference to Economic and Monetary Union (EMU) and decided to appoint a committee to consider the matter further. Commission president Jacques Delors chaired the committee, which subsequently bore his name. The other members were the EC member states’ central bank governors, another commissioner, and three independent experts—all acting in a personal capacity. The committee completed its report, officially entitled Report of the Committee for the Study of Economic and Monetary Union but popularly known as the Delors Report or the Delors Plan, in April 1989. The report outlined three stages by which member states could achieve EMU. Stage 1 involved the establishment of free capital movement in the EC and closer monetary and macroeconomic cooperation between member states and their central banks. Stage 2 called for a new European system of central banks to monitor and coordinate national monetary policies. Stage 3 envisioned “irrevocably fixed” exchange rate parities, with full authority for economic and monetary policy passing to EC institutions. The European Council discussed the Delors Report at the June 1989 Madrid summit and decided to launch Stage 1 on July 1, 1990. Six months later, at the December 1989 Strasbourg summit, the European Council (despite British objections) decided to convene an intergovernmental conference (IGC) to determine the treaty revisions necessary to move to Stages 2 and 3. The IGC opened in Rome in December 1990 and concluded at the Maastricht summit in December 1991. To a great extent the Treaty on European Union’s provisions for EMU follow the contours outlined in the Delors Report. See also ECONOMIC AND MONETARY UNION: POLITICAL ISSUES; ECONOMIC AND MONETARY UNION: TOWARD A SINGLE CURRENCY.

Delors Report

In the mid-1990s it was generally accepted that the EU suffered from a democratic deficit. Indeed, it was a common jibe that the EU would itself fail to meet the democratic conditions for membership that it imposed on all applicant states. Yet forty

Democratic Deficit

years earlier the democratic basis of the integration process was contested by virtually no one. Such a radical change in the climate of opinion since that time arose out of the growth in the competence of European institutions. As these competences were extended, so the issues of democratic control and popular participation became more important. Increasingly divergent opinions emerged as to how to make the institutions more democratic. The role of the European Parliament (EP) was at the center of much of this argument, but all European institutions were caught up in a broader debate about the possibility of developing democracy at the European level. In the early years of European integration, the supporters of integration were primarily concerned to ensure that member states were persuaded to share sovereignty within specific policy sectors with the active encouragement of the Commission. The EP was perceived as a useful supportive body with the potentially significant power of censure over the Commission. The provision in the Treaty of Rome for the institution to be directly elected was of major importance but of little direct effect, at least until Charles de Gaulle had ceased to be president of France (in 1969). The opponents of moves toward supranationalism stressed the importance of the role of the Council of Ministers and the ability of member states to exercise veto rights in defense of national interests. They insisted on the restricted character of the competences of the Community and the need for all states to agree before they could be extended. As for the EP, it could not be seen as a significant competitor with national parliaments: it only had consultative powers in relation to legislation, and its members were essentially concerned with national issues, as (until 1979) they were all drawn from national parliaments. However, the relationship between the extension of Community competences and the role of the EP was brought into sharp relief by the debate over Community financing at the end of the 1960s. In 1970 the Community moved from a system of national contributions to a budget financed by own resources (resources that belong to the Community and not to the member states). A number of governments and parliaments, notably the Dutch, were only willing to accept this change on condition that parliamentary control of the European purse was exercised at the European level.

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Hence the treaty changes of 1970 and 1975 that gave significant budgetary powers to the EP. This change in the powers of the EP and the prospect of direct elections led to a review of relations between the EP and national parliaments. The Vedel Report (Commission, 1972) noted that the extension of the Community’s powers meant that national parliaments had lost legal and de facto powers. It went on to argue that “the logic of a democratic system would require that this loss of parliamentary power at national level should be compensated at the European level,” and put the case in favor of greatly extended legislative rights for the EP, a higher level of accountability of the Commission to the EP, and closer ties between the EP and national parliaments. This agenda, designed to establish the norms of liberal democratic government at the European level, has been central to the activity of the EP throughout the intervening years. Particularly since it has been directly elected, the EP has argued that its status as a representative institution legitimizes its role on behalf of the European electorate in favor of a greater parliamentary presence inside the institutions of the EU. The EP’s strategy has been extremely successful. In terms of legislation, the EP has won an increased role, first through the cooperation procedure introduced under the Single European Act and then through co-decision, which was included in Article 189b of the Treaty on European Union (TEU). In the 1996–1997 intergovernmental conference (IGC), the extension of the latter procedure was a central, successful objective of the parliament’s efforts, designed to ensure that all legislation requires the support of the peoples of Europe as expressed by the EP as well as that of the states of Europe in the form of the Council. Indeed it is often argued that further use of qualified majority voting (QMV) makes such an extension of co-decision an essential democratic safeguard, ensuring a parliamentary voice in the legislative procedure. Without it not only would the EP be marginalized but so would national parliaments: QMV inevitably tends to weaken the scrutiny that the latter can exercise, however effective they are in holding their governments to account. The EP has also made significant headway in its efforts to strengthen the accountability of the executive by winning a say over appointments to the Commission. In particular, it obtained the right under the TEU to give its opinion on the prospec-

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tive president of the Commission and to give a vote on the Commission as a whole. This latter right it extended unilaterally by instituting a series of confirmation hearings for all the members of the Commission. Here too the EP has indicated the direction it would like future reform to take: it wishes in particular to be able to choose the president of the Commission from a number of candidates proposed by the European Council. At the same time, the EP has recognized that accountability for decisions extends beyond appointment procedures and that the extension of the competence of the EU poses an ever greater challenge to parliamentary institutions faced by powerful bureaucratic interests. The EP’s own role in exercising scrutiny remains very limited in a number of areas. It has deplored its exclusion (and indeed that of all parliaments) from the decisionmaking process under the second and third pillars of the TEU relating to the Common Foreign and Security Policy and Cooperation on Justice and Home Affairs. It has also objected strongly to the system of secondary legislation that gives the member states, alongside the Commission, a significant say under the so-called comitology procedures but that excludes the EP even when it is involved as an equal partner with the Council in the adoption of the relevant primary legislation under co-decision. The EP has devoted considerable energy to persuading national parliaments of the validity of this agenda and of the interests that all parliaments share in exercising control over their respective executives in relation to the EU. By no means have all national parliaments been convinced. Even those parliaments, such as the German and Dutch, that broadly support the EP’s view of how legislative power and the accountability of the executive should be organized at the European level have wished to reinforce their own control over the development of the EU. In Germany, for example, the constitution was revised to include an extra article on Europe (Article 23) that specifies that significant changes in the powers of the EU will require the support of two-thirds majorities in both houses of parliament (the Bundestag and Bundesrat). This provision also applies to the move to the third stage of Economic and Monetary Union, despite the automatic character of the move as presented in the TEU. Those parliaments, notably the British and French, that are less enthusiastic about the EP’s

agenda for resolving the democratic deficit propose different solutions. The French parliament has pressed the idea of setting up a new institution that would give national parliaments a direct say in the legislative process of the EU, for example, by being able to express a view on whether proposals of the Commission are in conformity with the principle of subsidiarity. Within the British parliament discussion has focused on obliging the Community institutions to give a set amount of time to national parliaments to express a view before a decision is taken, with the possibility that if a significant percentage opposed a particular proposal it could only be carried in the Council by unanimity. In both cases one can observe an ongoing commitment to national parliaments as the essential mechanism for resolving the democratic deficit. However, the debate about the democratic deficit has now extended beyond the relationship between the EP and national parliaments. It is no longer just about the role of parliamentary institutions representing the people but has come to encompass a wider set of issues relating to popular participation in decisionmaking. In this sense, the debate about democracy in the EU has come to mirror that taking place in the member states, where parliaments are no longer universally seen as the only or even the central answer to sustaining democratic life. The reason why this has happened can be traced to the dramatic events that have marked the development of the EU in recent years. Externally, the collapse of communism in Central and Eastern Europe ended the contrast in political forms that had marked the two parts of Europe for forty years, leaving much more room for questioning the democratic credentials of the Community. Internally, the inclusion in the TEU of the provisions on European citizenship and the reluctance of prospective European citizens in Denmark and France to support the treaty in referenda in 1992 and 1993 obliged all to reconsider the notion that European integration enjoyed tacit public support and to review the necessity of and mechanisms for greater popular participation in the operation of the EU. One word that came to be central to this broader debate was closeness (or proximity). It has become an article of faith that a way needs to be found to bring the European institutions closer to the individual citizen. Yet opinions differ as to how this can best be done. Some are prepared to contemplate the mechanisms of direct rather than

representative democracy and to favor the use of referenda as a way of ascertaining the opinions of the European electorate. But they are immediately faced with the question of whether such referenda should be Europe-wide or restricted to one country. Inevitably the answer to that question depends on the answer that the framers of the referendum wish to obtain. More conventional responses to the issue of closeness can be divided into those geared toward institutional change and those stressing the need for direct benefits to European citizens as a way of obtaining their support for European integration. In both cases, the search for a democratic basis for the EU extends well beyond the claims of parliaments to be fully involved in the European process. Three words have become the stock-in-trade of those favoring institutional change: transparency, subsidiarity, and simplification. In October 1993 the Council, the Commission, and the EP responded to the changing attitude toward openness by signing an agreement designed to make the workings of the institutions more transparent and thereby easier to understand for the average citizen. Among other things, the agreement provided for the Council to open some of its debates to the public and to publish the minutes of meetings and for the Commission to undertake broader consultation in the form of green and white papers. This proved to be more than an anodyne commitment, as the limits of the agreement were soon tested. The Guardian newspaper took the Council to court for failing to hand over the minutes of certain meetings. The European Court of Justice ruled in the autumn of 1995 in favor of the British paper and imposed on the Council the obligation to justify decisions not to release material of this kind. The result is particularly difficult for the Council to manage following the accession in 1995 of Sweden and Finland, countries with strong traditions of openness in public life. The 1993 agreement also sought to give more content to the concept of subsidiarity. Although that principle was incorporated into the TEU, the dispute as to the level at which powers should be exercised did not end. For some, not least the British Conservative government of that time, subsidiarity was a mechanism for ensuring that national governments are able to repatriate powers and reduce the volume of EU legislation. In practice, the level of new legislation was reduced as the single market became a reality, but those

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members’ concern about central power was not diminished. For others, the principle cannot apply only to the relation between the Community and national levels but should also spread to the regional level. It is this spirit that lay behind the creation of the Committee of the Regions. This body provides a voice in Brussels for the regions of Europe and seeks to ensure that the other institutions do not forget the concerns of individual citizens. One effect of the institutional compromises has been to bring about a system that is very difficult for an outsider to understand. There are, for example, more than twenty decisionmaking procedures that the EP has argued should be reduced to three: consultation, co-decision, and assent. However, a stronger form of this argument is to suggest that the treaties themselves need to be radically overhauled to eliminate redundant articles and to produce a single coherent text, laying out general principles first and then moving on to the specifics relating to particular areas of policy. This action would serve to make the treaties look much more like a constitutional document, and for that reason alone it is not universally welcomed. At the same time, such an overhaul would provide a mechanism for enabling the citizens of Europe to see more clearly the nature of the system of governance into which they are being drawn ever more closely. However, the debate about democracy in the EU has extended beyond institutional requirements. A system can arguably be democratic, however opaque and complex its procedures, however centralized its system of governance. Hence it is now frequently argued that citizens are entitled to expect certain rights within a democratic EU or that the EU should deliver certain public goods to win the active participation of its citizens. The first argument is used to support the inclusion of a catalog of fundamental human rights within a revised version of the treaty. This could, for example, involve the accession of the EU to the European Convention on Human Rights, leading to a major broadening of the rights of European citizens beyond the formal political rights at present found in Article 8 of the treaty. The second point is the one that lies at the heart of the claim that the EU must address the central issue of unemployment and can only hope to win the support of its peoples if it is seen to be effective in action to bring more people back to work, particularly at a time when the desire to meet the convergence

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criteria for EMU is obliging all member states to find ways to cut public deficits. This last claim shows how the extension of the argument about democracy beyond institutions leads directly to the wider issue of legitimacy. A distinction can be made between formal and social legitimacy. The former requires that the existing structure of power should have been formally approved by democratically elected parliaments; the latter supposes broad societal acceptance of the system (Weiler, 1993). As Weiler pointed out, social legitimacy depends on the willingness of minorities to accept the decisions of the majority within the particular geographical boundaries of a polity. The EU is some considerable way from winning the degree of legitimacy that has been enjoyed by national polities in this respect. Is it possible that such societal legitimacy can be enjoyed by the EU? There are those who think not, including former British prime minister Margaret Thatcher, who has argued that without a Europe-wide public opinion based on a single language, European democracy is not possible. And yet such arguments are far from conclusive, as the example of Switzerland shows. At the same time, all participants in the process of treaty change continue to search for an adequate democratic base for the institutions and activities of the EU, fueled by the continuing enthusiasm of the new democracies of Central and Eastern Europe to join, by the lack of any feasible alternative political project, and by the references to democracy in the treaties themselves (for example, Article F[1]). It may be too much to expect the EU to meet the same level of legitimacy as its member states; it may not even be necessary for it to do so, provided it delivers a reasonable level of benefits in terms of efficiency. Nevertheless, an ongoing debate about the democratic deficit is inevitable: the extension of the powers of the European institutions has become inextricably linked with the argument over the conditions under which those powers should be exercised and the control that can and should be exercised over the process. People disagree about what those conditions and what that control should be, but such disagreement can itself be seen as contributing to the development of a necessary democratic culture at European level. See also DECISIONMAKING PROCEDURES; EUROPEAN PARLIAMENT; LEGITIMACY.

Commission. 1972. “Report of the Working Party Examining the Problem of the Enlargement of the Powers of the European Parliament (Vedel Report).” Bulletin of the European Communities, Supplement 4/72. Marks, G., F. W. Scharpf, P. C. Schmitter, and W. Streeck. 1996. Governance in the European Union. London: Sage. Newman, Michael. 1996. Democracy, Legitimacy and the European Union. New York: St. Martin’s Press. Weiler, Joseph. 1993. “After Maastricht: Community Legitimacy in Post-1992 Europe.” In William James Adams, ed., Singular Europe: Economy and Polity of the European Community After 1992. Ann Arbor: University of Michigan Press.

Bibliography

—Michael Shackleton

A quick glance at the small size of the Danish population, territory, and economy; at Denmark’s geopolitical location between Germany and the Nordic countries; and at Denmark’s long-standing and encompassing involvement in international trade in goods and services immediately reveals a country highly dependent upon developments taking place abroad. Indeed, Denmark was rarely capable of influencing international developments itself, although its survival and welfare depended so highly on their course. As a result, Danish politicians early in the twentieth century drew two lessons. First, only through alliances with other states could international influence be obtained. Second, the signing of reciprocally binding international commitments, subject if possible to some rule of law, represented for that reason a major Danish interest that even outweighed the interest of safeguarding unfettered national sovereignty. Involvement in relevant international decisionmaking forums became tantamount to an enhancement of the nation’s ability to shape its own future. Although this recognition was shared overwhelmingly by the Danish political classes, membership in the EC and EU has generated seemingly endless political problems. These problems have arisen because, as a result of frequent referenda, ordinary people have become the real decisionmakers in Denmark. Most of these referenda were the legally inescapable consequences of a clause (Article 20) inserted in 1953 into the coun-

Denmark

try’s constitution, the objective of which was to facilitate Danish participation in new, postwar international arrangements. Accordingly, Article 20 qualifies the transfer or pooling of Danish sovereignty in three major ways. The first condition is reciprocity of obligations between the participating states. The second is that sovereignty can only be transferred I nœrmere bestemt omfang (a formula difficult to comprehend in Danish, let alone in its English translation: “to a more specified content”). The third condition is that a bill of ratification of a draft EC/EU treaty, especially one of accession, must be adopted by a qualified majority of five out of every six members of parliament. Alternatively, a simple majority for ratification suffices if the draft bill is subsequently confirmed by the verdict of the voters in a referendum. Such confirmation is granted if a simple majority of the participating voters approve the treaty. However, a majority against ratification overthrows the opinion of the parliamentary majority only if more than 30 percent of all voters vote no. On October 2, 1972, Denmark held its first Euro-referendum (on whether or not to join the EC). The referendum was called because, although the pro-membership political parties had more than the requisite parliamentary majority for ratification of the accession treaty, they preferred to let the people speak directly on such an important issue. In the event, 63.5 percent voted in favor and 36.53 percent against (the turnout was 89.9 percent). A majority of voters believed what the country’s then social democratic prime minister, Jens Otto Krag, had repeatedly told them that EC membership was essentially about: free trade within a customs union and the benefits for Danish farmers of participation in the EC’s bountiful Common Agricultural Policy (CAP). Krag and leaders of the other pro-Community political parties also insisted that membership was not about transfers of sovereignty and certainly not about political union. Moreover, the pro-membership parties almost sanctified the so-called veto principle when they vested in a country’s right to veto legislation the ultimate instrument of national self-protection against creeping integration instigated by others. Whether the political class knew better is now immaterial. What matters is that a choice was made that would haunt the political establishment: Denmark acceded to the Community with a commit-

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ment to something entirely different than what the Community’s founding fathers had envisioned (an ever closer political union among the peoples of Europe). Initially, Community policymaking and agendas remained for most ordinary voters something distant and incomprehensible and of only minor practical importance for their day-to-day lives. Predictably, therefore, voters’ participation in the 1979 and 1984 direct elections to the European Parliament (EP) was low: 48 percent and 52 percent respectively. These figures should be compared to participation rates in national and local elections, which frequently surpassed 75 percent during the same period. Indifference and opposition to the EC continued to grow: ten years after the successful referendum in 1972, 44 percent of Danes declared that they were against continued membership, and only 34 percent expressed support for the EC. In spite of this, the February 18, 1986, referendum, which preceded Denmark’s ratification of the Single European Act (SEA), was won with a vote of 56.2 percent in favor and 43.8 percent against. It was hardly comforting for the pro-integration parties that this victory was achieved only after the then (conservative) prime minister, Poul Schlüter, solemnly declared that prospects for European union were “stone-dead.” From the successful 1986 SEA referendum to the unsuccessful June 1992 referendum on the Treaty on European Union (TEU), the share of the yes vote dropped so that the number of no votes surpassed the number of yes votes by between one and two percentage points (50.7 percent against and 49.3 percent in favor). More than one in two voters rejected ratification of the TEU despite the fact that the Danish political establishment was unanimously in favor of, and had publicly argued for, ratification. Poor planning by the “yes” campaign, together with a number of factors unrelated to European integration, contributed to the treaty’s rejection. Yet all politicians agreed that only if four specific EU-related items were singled out and exempted from the treaty could the Danish people be asked to vote anew on ratification. These had to do with special treatment of Denmark in relation to EU citizenship, the third stage of the Economic and Monetary Union (EMU), defense cooperation, and cooperation on matters pertaining to justice and home affairs. The European Council, at

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its meeting in Edinburgh in December 1992, acceded to Denmark’s request for special treatment. When, as a result, the fourth referendum on Denmark’s EC/EU membership was held on May 18, 1993, the share of the yes vote grew to 56.7 percent. Thus, after more than twenty years of membership that brought Denmark uncounted billions of ecus in economic benefits, the nation’s elites and ordinary citizens were almost as divided on the question of European integration as they had been in 1972. The former considered EU membership fundamentally important for Denmark, regardless of whether the legal basis of decisionmaking was in the first, second, or third pillar of the TEU. However, many ordinary voters defined Danish interests differently. For them, participation in the single market program (widely seen as a good thing) represented the upper limit of Denmark’s involvement in European integration. Skepticism about deeper integration is reinforced by a “Danes versus the others” divide, with “the others” loosely defined as operating “down there” in Brussels. The national media frequently insinuate that those down there pursue hidden anti-Danish objectives, including antienvironmental, anticonsumer, and anti–public health agendas. It does not help that many pro-EU politicians frequently indulge in anti-EU rhetoric in pursuit of narrow and short-term political goals. Opponents of deeper integration are mostly represented either by political parties on the far left and the far right or by several grassroots organizations that have seats in the EP but not in the national parliament. The fact that mainstream Danish political parties generally advocated deeper integration, and thus did not voice the uncertainties, anguishes, fears, and animosities of the ordinary voters, helps explain the birth and growth of these grassroots organizations. Be that as it may, it is a fact of Danish political life that for a long time EC activities remained matters of foreign rather than domestic policymaking; not surprisingly, the foreign ministry remained responsible for the coordination and conduct of Denmark’s policies vis-à-vis Brussels. Yet there are signs that the Danish political establishment seeks to domesticate EU politics, lest future referenda result in a rejection of the EU. It is no accident that social-democratic politicians have taken the lead in arguing in favor of this

process of policy internalization. The Social Democratic party suffered in particular from a bitter divide between pro- and anti-integrationists (mostly on the party’s left wing), a divide that dates back to the first referendum of 1972. The split between left- and right-leaning Social Democratic voters persists and is detrimental to the party’s performance in European elections: in the 1994 EP elections, the party’s share of the total vote fell to an alltime low of 15.8 percent, in contrast to 34 percent of the popular vote in the national parliamentary elections that followed three months later. If the internalization of EU politics has become one sign of the increasing maturity of the Danish electorate, recent EU developments are welcome in Denmark, not least by the beleaguered Social Democrats. These changes include the decision to admit Central and Eastern European countries into the EU in the foreseeable future (Denmark strongly supports the accession of the Baltic states) and a rebalancing of the respective influences on EU policymaking of free trade interests and somewhat conflicting social interests such as the fight against unemployment, social dumping, and so on. Opinion polls show that such changes impinged positively on many Danes’ perception of the EU because the new orientations arguably give the EU a more human face. Finally, a push for a normalization of Denmark’s relationship with the EU could come from a wholly unexpected development: Denmark is about to become a net contributor to the EU’s budget, not least because of the consequences of accession to the EU of new member states from Central and Eastern Europe. Surprisingly, opinion polls suggest that such a fundamental shift does not detract from ordinary Danes’ commitment to enlargement, which is obviously perceived in political rather than economic terms. Could it be that an unnatural “rich uncle” complex distorted ordinary Danes’ understanding of the EU? It is difficult to answer this question. Yet, ungratefulness and even animosity toward the benefactor often characterizes the receiver of important gifts for which he or she offers nothing in return. In sum, if Denmark remains in the EU after the next round of referenda to ratify the Amsterdam Treaty, the time may have come when this small nation-state will cast all the political weight it possesses on the side of a transformation of the EU into a more politically coherent, socially re-

sponsible, economically effective, and diplomatically significant body. See also OPPOSITION MOVEMENTS; TABLE 6; TABLE 10; APPENDIX 2; APPENDIX 3. Patersen, Nikolaj. 1996. “In the Strategic Triangle: Denmark and the European Union.” In Robert Bideleux and Richard Taylor, European Integration and Disintegration: East and West. London: Routledge. Pedersen, Thomas. 1996. “Denmark and the European Union.” In Lee Miles, ed., The European Union and the Nordic Countries. London: Routledge. Worre, Torben. “Denmark: Second Order Containment.” In van der Cees Eijk, et al., Choosing Europe? The European Electorate and National Politics in the Face of Union. Ann Arbor: University of Michigan Press.

Bibliography

—Hjalte Rasmussen and Nick Hœkkerup

A derogation is a temporary exemption for a member state from EU legislation. Derogations are often granted to new member states for periods of five or ten years under the terms of their accession agreements.

Derogation

The EU is the world’s largest donor of humanitarian aid. In 1992, the Commission established the European Community Humanitarian Office (ECHO) to provide emergency humanitarian and food aid to the former Yugoslav republics; the African, Caribbean, and Pacific countries (as part of the Lomé conventions); and countries in Latin America, the Mediterranean, the Near and Middle East, Central and Eastern Europe, the Commonwealth of Independent States, and the Far East. ECHO operates through a wide range of partners, including nongovernmental organizations, international relief organizations, and UN agencies. In an effort to improve coordination between EU and member-state aid programs, in 1992 the Commission produced the Horizon 2000 report, which proposed strategies for cooperation and collaboration until the year 2000. See also LOMÉ CONVENTION.

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Differentiated integration emerged as one of the key issues in the run-up to the 1996–1997 intergovernmental conference (IGC). Its origins go back much farther, indeed to the origins of the EC itself. The debate on differentiation has, however, been much clouded by the huge number of terms to describe forms of European integration other than the ideal type in which all participating countries in principle operate the same rules and policies in virtually identical ways. Differentiation is the most straightforward and most neutral term used to denote variations in the application of European policies or variations in the level and intensity of participation in European policy regimes. As we shall see, many other terms have been coined, most of which seek to prescribe or proscribe a particular preference about integration or to convey a particular metaphor for the process of integration. Why does the issue arise at all and why so acutely in a period of debate over reform of the EU? There are at least five main reasons. First, it is a commonsense observation that there are and always have been objective differences among the EU member states and indeed between regions or groups within the member states. This was true even in the original and intimate membership of only six countries. From the outset, therefore, the treaties admitted that objectively defensible differences should under certain circumstances be reflected in differentiation in the rules that were to be applied. Hence special protocols were attached to the treaties, special clauses were added to some legislative acts, or under the formula for directives variation of implementation was accepted, usually time delays. Here lies the origin of the term differentiation and the explanation for its periodic recognition by the European Court of Justice (Ehlermann, 1982). This need not be a great problem, and much the same happens within national political systems. But problems start when governments begin to plead the case for differentiation on the basis of subjective preference rather than objective circumstance or when a differential application of policy by one member state causes negative externalities for others. Second, also from the outset, the EC was only one of many European frameworks for policy cooperation. It coexisted with a variety of other forums, some formal and some informal,

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that had quite different memberships: the Benelux, comprising three founder EC countries; or Western European Union (WEU), containing the EC six but also Britain; and many informal or functional groupings, for example in science and technology. It is from this experience that the term variable geometry was derived in the late 1970s. Again for a long time this was not much of a problem except insofar as there might be an occasional contradiction of policy between groupings that touched the same policy areas. The reality, however, is that this latter situation has become more and more common as the policy scope of the EU has expanded and as the membership of the club has been enlarged. This has induced some supporters of a strong EU to argue more vociferously the case for the EU to be the primary and predominant forum for policy cooperation: for example, by absorbing other European forums, such as the WEU. But it has also led some subgroups to insist on retaining a distinct identity for certain purposes, whether, for example, on a “regional” basis as in the Nordic Council or by the creation of new restricted groupings such as that of the Schengen agreement. Third, divergence is a specific form of difference, generally linked in EU terminology to levels of economic performance or patterns of socioeconomic variation. The policy issue within the EC, and later the EU, has been the extent to which such divergence might hamper integration or be accentuated by integration policies and, if either of these things happens, the extent to which it then falls to the EU to “do something” about it. Thus within the context of the common, later single, market the question for policymakers was whether and how to compensate the divergent regions or countries, in particular through budgetary transfers. Since the mid-1980s this has underpinned the case for cohesion policies and spending. A parallel debate arose and remains potent as regards Economic and Monetary Union (EMU), the whole philosophy of which has been based upon the notion that all member countries should strive to attain convergence of performance and of policy. This has always been juxtaposed with the assumption that not all member states would actually converge, either because of their economic character or because of their public policy. Hence the Exchange Rate Mechanism (ERM) of the European Monetary System (EMS) was launched with the full participation of only the stronger

economies (with the exception of Britain), and the Treaty on European Union (TEU) explicitly specifies the conditions for an EMU with fewer members than the EU. Both features of this economic discussion have become more pointed over the years (Pisani-Ferry, 1995). A light discussion about a “two-speed” Europe, started in the early 1970s, became a sharp argument with the TEU’s plans for EMU and with the calls for eastern enlargement to absorb transition countries with as yet much poorer and less-developed economies. Fourth, the founding rules of the EC gave each member state a form of parity within the decisionmaking process and indeed sought to circumscribe the historic weight of Germany as a European power. Nonetheless, issues of power and relative influence have always hovered close to the surface of the political discussion. The core political issue has been how to recognize differences of power in the way that the EC/EU established its agenda and reached its decisions, that is, beyond the formula for weighted voting in the Council of Ministers. Thus the Franco-German special relationship might also be a “motor” of integration for the wider group or, less benevolently, the “axis” of integration. For many years there was a recognition of informal leverage from Paris and Bonn in concert but clear resistance to any notion that this might be formalized as a governing directorate. As the size of the EC/EU has increased, so this issue has periodically reemerged, with suggestions of a “multi-tier” construction, some member states in the first league and others left to follow, or of a pattern of “concentric circles” around the more integration-minded governments. This discussion has taken on a completely different character as eastern enlargement has raised the possibility of a membership of, say, twenty-seven EU member states. Fears of either dilution of integration (wider, but weaker) or a breakdown of the institutions under the weight of numbers have made much more persuasive the case for an inner group—noyau dur or Kern Europas (Deubner, 1995)—of explicitly more important countries in the driving seat. It is only thus, it is argued, that widening might be made acceptable by deepening, even though this would mean that there would then be second- or third-class members of the EU. Fifth, there is the issue of integration itself— both how pervasive its policy scope should be and how invasive the political authority of the EU should be vis-à-vis the member states. The TEU

extended both scope and authority to an extent that found some governments unwilling to accept all of the consequences and that provoked vocal public dissent, acutely in some member states. Thus the TEU itself includes a number of “optout” or “opt-in” clauses as well as a proliferation of special protocols and declarations. It also embeds the principle of subsidiarity as an apparent counterweight to the centralization of power in the EU institutions. At one level these devices allow at least some countries, notably Britain and Denmark, the opportunity to practice singularity. At another level they imply a breakdown of the notion of one set of policies that apply to all member states. Of course views differ on whether or not this is a healthy development. Under increasingly intense pressure from domestic critics of the EU, in the mid-1990s the British government preached the benefits of “flexibility” as an operating principle for the EU. Its critics counterposed the objection that this would be tantamount to the creation of an à la carte Europe, bereft of collective disciplines and of solidarity. Thus it becomes clear that the issue of differentiation has come to revolve in particular around the question of EMU, the prospect of yet further enlargement, and the conflict between integrationists and intergovernmentalists in the EU. The 1996–1997 IGC could not therefore escape a debate on this among the various proposals for treaty reforms, hence its inclusion in the Report of the Reflection Group (1995) chaired by Carlos Westendorp, who retained the term flexibility in order to keep the British within the discussion (indeed, the draft Amsterdam Treaty contained a section on flexibility or closer cooperation). The difficulty lies in how to operationalize differentiation or flexibility, given the range of reasons for its presence in the debate and the mixture of motives for developing the concept (Ehlermann, 1995; Stubb, 1996; Wallace and Wallace, 1995). Thus we need to clarify a little further what might underpin a more explicit definition of differentiation. A first yardstick is what the starting basis, which can be neither differentiated nor flexible, should be. In other words, is there a minimum set of core policies to which all EU members have to subscribe and on which there should be no room for maneuver? If so, is this the same as the inherited acquis communautaire or a significant revision, perhaps reduction, of the acquis? EU formal documents tend to insist on the inherited acquis,

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even though the sustainability of this position is not evident. In particular two points should be noted. One is whether there can be scope for variation around the core policy of the single market, for example to permit local “differences of taste” (e.g., the Danes prefer to have beer sold only in bottles and not in cans) or to allow differences in how products are processed (e.g., differentiated social and environmental processes), as long as the product in question conforms to minimum essential requirements in order to circulate freely. Another is whether EMU should be seen as part of the core policy set, even though it may lie beyond the reach of some existing and potential members. A second approach to the subject is to argue that it is really about the so-called hard-core countries. This view asserts that some member states are actually more important, more committed, and more integration minded than others. They should therefore carry more weight and should be allowed to proceed more quickly than others or to pioneer particular arenas of cooperation. The hard core tends to come down to France, Germany, and the Benelux countries (five of the six founder members), with EMU once seen as the likely manifestation of this cohort. We should, however, note that although this implies a projection by them of greater political power, if a common defense is set as a priority goal, it would be logical to look to British participation as a necessary and not just desirable component. Here lies a serious inconvenience in the argument, given the record of British European policy but also the weight of British military capability. A third issue is whether or not a vanguard group, whether composed of a cohort of really committed countries or defined by the extent of policy ambition, would or should be able to go so far out in front that in practice others would be left irretrievably behind. The temptation of practitioners has been to argue diplomatically that the slower or the more reluctant should always find the door open to their participation; in other words, that a vanguard need not be exclusive. It is this view that lies behind the suggestion that any such groupings of less than the whole EU membership should be bounded by the treaties and open to late joiners. Yet as the EMU rules already reveal, there is scope to block late joiners, precisely on the grounds that they are too different or divergent. Thus we can see that differentiation encompasses the range from a form of sensible policy management of local differences to the systemic

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issue of power and relative leverage within the EU. For some member states the policy and political choices have long been made, notably in the five countries that recur as candidates to constitute the core. But for other member states the choices are much more troublesome.

Deubner, Christian. 1995. Deutsche Europapolitik: Von Maastricht nach Kerneuropa? Baden-Baden: Nomos Verlaggsgesellschaft. Ehlermann, Claus-Dieter. 1982. “How Flexible Is Community Law? An Unusual Approach to the Concept of ‘Two Speeds.’” Michigan Law Review 82, pp. 1274–1293. ———. 1995. Increased Differentiation or Stronger Uniformity. Florence: European University Institute Working Paper RSC No. 95/21. Pisani-Ferry, Jean. 1995. “L’Europe à géométrie variable: une analyse économique.” Politique Étrangère, no. 2/95, pp. 447–465. Stubb, Alexander. 1996. “A Categorization of Differentiated Integration.” Journal of Common Market Studies 34, no. 2 (June), pp. 283–295. Wallace, Helen, and William Wallace. 1995. Flying Together in a Larger and More Diverse European Union. The Hague: Dutch Scientific Council for Government Policy.

Bibliography

—Helen Wallace

The doctrine of direct effect is a legal principle that underpins EC law. By declaring that the Treaty of Rome established individual rights that national courts had to protect, the European Court of Justice (ECJ) promulgated the doctrine of direct effect in its landmark Van Gend en Loos decision (1963). Together with a later decision establishing the doctrine of supremacy of EC law, this decision transformed the EC’s preliminary ruling system (whereby national courts may ask the ECJ for a ruling on a point of EC law) into a mechanism to challenge the compatibility of national law with EC law. The doctrines of direct effect and supremacy of EC law therefore created a means for individuals to pull the ECJ into national policy debates and an obligation for national courts to set aside laws and policies that violate European law. See also EUROPEAN COURT OF JUSTICE.

Direct Effect

Direct Elections to the

The European Parliament (EP) is directly elected every five years. Voting systems and constituency sizes vary from country to country, and balloting is spread out over a week in some member states, but elections to the EP constitute a unique, EU-wide exercise in democracy. Although the Treaty of Rome called for direct elections, it was 1974 before member states reached a political agreement to hold them, and another five years before the first direct election took place. A reluctance on the part of some member states (notably Britain and France) to give the EP additional power or prestige accounted for the delay in allowing, and then organizing, direct elections. Although voter turnout has steadily declined since 1979, the decision to hold direct elections nevertheless marked the beginning of a process whereby national governments have enhanced the EP’s authority as part of an effort to improve the EU’s legitimacy and close the democratic deficit. See also DEMOCRATIC DEFICIT; EUROPEAN PARLIAMENT.

European Parliament

A directive is an EU legislative instrument addressed to member states. It is binding with regard to the result to be achieved but allows member states to choose the means to achieve that result.

Directive

A directorate-general is an organizational unit (equivalent to a civil service department) in the Commission, Council of Ministers secretariat, or European Parliament secretariat. See TABLE 4; APPENDIX 4; APPENDIX 6; APPENDIX 9.

Directorate-General

The European Council in Fontainebleau in June 1984 decided, almost as an afterthought, to establish an Ad-hoc Committee on Institutional Affairs to consider the EC’s response to recent internal and external developments. When Ireland took over the Council presidency in July 1984, Prime Minister Garret FitzGerald nominated his friend and former foreign minister, Jim Dooge, to chair the com-

Dooge Committee

mittee, to which the other Community leaders appointed their personal representatives. The socalled Dooge Committee drew on the recent Genscher-Colombo proposals and the European Parliament’s Draft Treaty on European Union in an effort to “translate a wide range of existing views on the nature of European integration into politically acceptable reform.” The committee’s report, dealing with a variety of institutional issues and a plethora of policy options from technology, to political cooperation, to the internal market, generated an intense discussion on the future of European integration at the Milan summit in June 1985. As a result, and based on a majority vote of the heads of state and government, the European Council decided to convene an intergovernmental conference (IGC) to negotiate treaty amendments, which resulted in 1986 in the Single European Act. See also INTERGOVERNMENTAL CONFERENCE. The double-price system is a proposed method of introducing the new single currency (the euro) by showing prices in both the national currency and the euro in order to build consumer confidence and demonstrate that there are no hidden price increases in the switch over.

Double-Price System

See GENSCHER-COLOMBO PROPOSALS.

Draft European Act

Draft Treaty Establishing the European Union

In February 1984 the European Parliament (EP) overwhelmingly passed the Draft Treaty Establishing the European Union. The treaty originated in the work of the Crocodile Club (called after a famous restaurant in Strasbourg, where it first met), a small group of members of the EP from different political parties who shared a commitment to reviving the EC. Altiero Spinelli, the veteran Italian Eurofederalist, led the group, which in 1982 formed the nucleus of the EP’s influential Institutional Affairs Committee. Spinelli and his colleagues believed that, in the first direct elections held in June 1979, the European electorate had given the parliament a mandate to revise the EC’s treaties and resuscitate European integration.

Dublin Convention

141

A consensus emerged in the Institutional Affairs Committee that a new treaty was needed to replace the existing treaties and a new union was needed to replace the existing Communities. The union would incorporate the EC’s institutional structure and competences but include numerous reforms and additional authority. In deference to member states’ sensitivities to the centralization of power in Brussels, the Draft Treaty explicitly mentioned the principle of subsidiarity (the idea that the union would be responsible only for tasks that could be undertaken more effectively in common than by the member states acting separately). Passage of the Draft Treaty gave a boost to the momentum then gathering in the EC for institutional reform. It coincided with developments such as the Genscher-Colombo proposals and the Stuttgart Declaration to jolt the Community out of its political malaise in the early 1980s. Coming only four months before the decisive European Council in Fontainebleau, which finally resolved the debilitating British budget dispute, the Draft Treaty contributed to the climate of change in which the Dooge Committee met and the 1985 intergovernmental conference took place. Accordingly, the Draft Treaty contributed in its way to the decisive Single European Act. The dual mandate refers to politicians who are members of both the European Parliament (EP) and a national parliament. Before direct elections to the EP, when members of the EP (MEPs) were appointed by national political parties from the ranks of national parliamentarians, by default every MEP held a dual mandate. Since the advent of direct elections, however, the dual mandate has become almost extinct, as national political parties and EP political groups strongly discourage—and in many cases prohibit—their members from standing for both national and EP elections. The advantage of the dual mandate is that it helps keep the EP and national parliaments in close contact with each other; the disadvantage is that holders of the dual mandate cannot do both jobs adequately and undermine public credibility in both institutions (but especially in the EP).

Dual Mandate

Dublin Convention

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Dunkirk Treaty

Signed by EC member states in June 1990, the Dublin convention determining the state responsible for examining applications of asylum lodged in one of the member states is one of two agreements intended to develop an EU immigration policy (the other is the External Frontiers convention). Specifically, the Dublin convention aims to prevent multiple applications by EU asylum seekers. To that end, member states are in the process

of establishing a computerized fingerprint recognition system (EURODAC) for asylum seekers. The convention took an inordinately long time to ratify, not least in the country where it was signed (Ireland). Finally, the European Council, meeting in Amsterdam on June 16 and 17, 1997, welcomed the completion of the ratification procedures that allowed the convention to enter into force by September 1, 1997.

See EUROPEAN CENTER STUDIES.

ECIS

E

See EUROPEAN COURT OF JUSTICE. See COUNCIL TERS.

See EURO-ARAB DIALOGUE. See EUROPEAN AGRICULTURAL GUIDANCE GUARANTEE FUND.

EAGGF

FOR

RECONSTRUCTION

AND

AND

See EUROPE BY SATELLITE.

EBS

See EUROPEAN COMMUNITY.

EC

See EUROPEAN CENTRAL BANK.

ECB

See ECONOMIC COMMISSION FOR EUROPE.

ECE

See EUROPEAN COMMUNITY HUMANITARIAN OFFICE.

ECHO

See EUROPEAN CENTER FOR INDUSTRIAL RELATIONS.

ECIR

OF

ECONOMIC

AND

FINANCE MINIS-

Economic and Financial Committee

EAD

See EUROPEAN BANK DEVELOPMENT.

INFRASTRUCTURE

ECJ

ECOFIN

EBRD

FOR

Effective January 1, 1999, with the launch of the third stage of Economic and Monetary Union (EMU), the EU’s monetary committee will be renamed the Economic and Financial Committee. Consisting of senior officials from member state finance ministries, but with the addition to it of representatives of the European Central Bank, the committee will continue to coordinate meetings of the finance ministers’ council (ECOFIN) and help to work out the implementation of EMU. Although its role is advisory only, the Economic and Financial Committee will be an unusually influential body, just as the monetary committee now is, because it reports directly to ECOFIN and deals with the politically sensitive issue of EMU.

Economic and Monetary Union (EMU): Political Issues

The agreement on Economic and Monetary Union (EMU) contained in the Treaty on European Union (TEU) represents one of the biggest leaps forward yet undertaken by the European integration process. The EMU initiative raises a varied set of important political questions, relevant to both public debate and academic analysis. These concern the nature of policy development and negotiation in the European integration process; the power relationships displayed in the policy sector (in particular the exercise of, and response to, German leadership); the relationship between the EU’s policy agenda and the structural constraints of the wider international political economy; the role of agency (the particular configuration of leaders, with their own preferences and beliefs, and their importance in securing this particular

143

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Economic and Monetary Union (EMU): Political Issues

agreement); the reciprocal effects between the domestic and the European policy levels including, most notably, the national consequences of EMU decisionmaking; and, finally, the extent to which the EMU project has been legitimated and the prospects for its realization. This range of issues reflects the far-reaching nature of the EMU project, one that has relevance to the European integration process as a whole. EMU originated in the Werner Report of 1970 and the development of the European Monetary System (EMS), established in 1979. Following the initial success of the EMS and in the aftermath of the Single European Act (SEA), a number of papers on monetary policy were circulated in the first months of 1988. French finance minister Edouard Balladur and his Italian counterpart, Giuliano Amato, presented papers criticizing the constraints and asymmetries of the current EMS; they were followed by Germany’s Hans-Dietrich Genscher—a foreign minister acting beyond the normal diplomatic domain—and later by Gerhard Stoltenberg (German finance minister), using the platform provided by Germany’s EC presidency at the time. The German lead was crucial, given the strength of the mark, and it helped to give preliminary shape to the terms under which EMU might be relaunched. Following Genscher’s initiative, Commission president Jacques Delors and German chancellor Helmut Kohl worked closely together to prepare an agreement on EMU at the European Council meeting in Hanover in June 1988, and French president François Mitterrand rallied to the idea. Accordingly, the European Council created an ad hoc committee under Delors’s chairmanship (the Delors Committee) to study how EMU might be achieved. The committee’s composition raises intriguing questions: it contained all the central bank governors of the EC member states (an astute tactic to identify the governors with the EMU momentum) and was chaired by the most assertive Commission president for decades. The committee’s report, signed by all the central bank governors and published in April 1989, set out a three-stage blueprint for EMU. The report— the bulk of which found its way into the eventual TEU—placed EMU firmly on the top of the EC’s agenda. Progress was neither simple nor straightforward, however. The British government, engulfed by an internal ministerial crisis over sterling’s entry into the EMS, expressed strong opposition to

EMU. Yet, in the momentum established by the Delors Report, the British were left running behind the rest: British reservations could not stop progress toward EMU. Two separate counterproposals from London, for a parallel currency (the hard ecu) and for a common currency, were not taken up. At Madrid in June 1989, the European Council envisaged an intergovernmental conference (IGC) on EMU. In the meantime, a European Parliament report (the Guigou Report) sustained the momentum toward EMU by raising some of the questions that would have to be answered at the IGC. At the same time, wider developments— the collapse of communism in Central and Eastern Europe and the ensuing process of German unification—demanded attention. These developments probably delayed progress on EMU, as the Germans wrestled with their own new monetary union (which came into effect on July 1, 1990). German unification certainly provoked a new concern among Germany’s neighbors (notably the French) to bind Germany to the EC and to the West. In any event, the European Council, meeting in Strasbourg in December 1989, confirmed the launch one year later of an IGC on EMU. By its next regular meeting (in Dublin in June 1990), the European Council had agreed that a second IGC on political union should be called: this was a direct response to the new situation in Central and Eastern Europe. Negotiations on the detailed content of EMU could now commence. Italy, in the Council presidency during the second half of 1990, acted to prepare both IGCs (a European Council meeting in Rome in October agreed to the EMU mandate) and settled disputes as to their organizational structure. Both IGCs opened in Rome in December 1990 but began in earnest under the successive Luxembourg and Dutch presidencies of 1991. The IGC on EMU met at different levels: on eleven occasions as a ministerial IGC but twice as regularly at the level of “personal representatives” (the finance ministers’ nominees), in addition to separate meetings of a working group of junior officials. There were three “informal” meetings of the Council of Economic and Finance Ministers (ECOFIN) to discuss progress on EMU: May 10–12 in Luxembourg, September 20–22 in Apeldoorn, and November 30 and December 1 in Scheveningen. The Committee of Central Bank Governors made various technical submissions; indeed, its papers on the putative European Cen-

Economic and Monetary Union (EMU): Political Issues

tral Bank (ECB), European System of Central Banks (ESCB), and European Monetary Institute (EMI) determined much of the treaty’s final content. Other important submissions to the IGC included draft treaties presented by the Commission (December 1990), the French government (January 1991), and the German government (February 1991); an earlier Spanish paper on EMU generally (September 1990); a British proposal for a “hard ECU” as a possible common currency (January 1991); the Luxembourg presidency’s draft treaty or “nonpaper” (June 1991); and, finally, several partial draft treaties by the Dutch presidency (August and September 1991) together with its full draft treaty of October 1991 and a later working document of early November. The negotiations were concluded at the historic European Council in Maastricht on December 9 and 10, 1991, although the final version of the treaty was not signed until the following February, to allow for some “polishing up” of the text. The euphoria of Maastricht was soon undermined by the problems of ratifying the treaty itself and by the crises of currency speculation that greatly weakened the EMS in September 1992 and July-August 1993. Since August 2, 1993, the fluctuation band for currencies in the exchange rate mechanism of the EMS has been set at ± 15 percent of the central rate (up from just 2.25 percent). Despite these pressures, Stage 2 of EMU began as scheduled on January 1, 1994. Yet the complex formula providing for a decision before the end of 1996 on the transition to the third and final stage of EMU was put aside: the required degree of economic convergence between the member states had not been attained. Instead, the expectation was that a decision would be taken in early 1998 on the eligibility of each member state for entry into Stage 3, which would begin on January 1, 1999 (as foreseen in the TEU). In view of its right to opt-out, the British had to notify their partners before the end of 1997 whether or not they intended to participate in Stage 3 (presuming that they met the economic preconditions). But the viability of this path is subject to a variety of political as well as economic pressures. In particular, national elections are proving a major political constraint. National parliamentary elections due in France in the spring of 1998 were brought forward to May 1997, with disastrous consequences for President Jacques Chirac and near-disastrous consequences for EMU. Instead of

145

sustaining the conservatives’ majority in parliament, the elections returned a left-wing majority highly critical of the deflationary drive toward EMU. The new French government’s questioning of the post-EMU stability pact almost derailed the June 1997 Amsterdam summit. Federal elections are due in Germany in the fall of 1998, by which time the decision to proceed with the abolition of the mark could prove highly controversial; already Chancellor Kohl is looking more vulnerable than at any time during his long period in office. The stress placed by Theo Waigel, Germany’s finance minister, on the need for proper compliance with the TEU’s provisions for economic convergence before Stage 3 can begin indicates his reelection concerns in conservative Bavaria in the fall of 1998. Moreover, although Article 109j of the TEU specifies that the European Council will make the key decisions on proceeding to Stage 3, any public statements from the German central bank (Bundesbank) on the suitability of particular member states to join the single currency could prove crucial, not least in terms of the acceptance of the process by the financial markets. Explaining Economic and Monetary Union The path taken toward EMU and the policy process that produced the agreement can be analyzed from a number of perspectives. A distinction can be drawn between the endogenous and the exogenous factors that have affected EMU. As the above summary emphasizes, diverse actors and relationships are relevant to an explanation of how the EMU agenda was set. Individual politicians (notably Genscher, followed by Kohl and Delors) showed policy leadership, the inclusion of central bank governors in the Delors Committee “incorporated” them into EMU’s developing momentum and increased EMU’s legitimacy, and the FrancoGerman axis proved crucial in smoothing the path toward (and during) the negotiation stage. The will of prominent European leaders (notably Kohl and Mitterrand) to press ahead indicates how essential the role of “agency” was. Leaders and their representatives have to operate within two domains—the European and the domestic—that have their own distinct demands and constraints (a “two-level” bargaining game). Those involved in preparations for EMU were acutely aware of the conflicting pressures upon them from both levels. The normal fare of bargaining—such as the construction of package

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Economic and Monetary Union (EMU): Political Issues

deals, side payments, and threats of rejection, which are all relevant to the IGC—takes on an unusual character in such a situation. The two-level game also involved a set of varied, but overlapping, networks of actors, concentrated in the insular world of monetary policymaking. In addition, the nature of the European institutions and their rules affected the outcome of the EMU agreement. “New institutionalist” explanations would highlight the constraints accepted under the technical rules of the EMS, allied to the informal conventions and codes of behavior of the European Council, ECOFIN, the Committee of Central Bank Governors, and a unique forum like an IGC. These institutional factors influenced the scope of the EMU agenda: past rules represent heavy “sunk costs” and encourage a process of incremental change. With the EMS and its associated experiences, the EC was subject to a “path dependency.” The negotiators were also engaged in a collective process of policy learning: searching for viable solutions to problems commonly identified in the technical design of EMU. The effect of the EMU negotiations on the various domestic political systems, and vice versa, is the source of a wider controversy among analysts. In part, it is a question of identifying the key actors involved in the EMU agreement and distinguishing their prime motivations. Realists would highlight national governments (albeit seen as pluralistic entities, preoccupied with domestic interests and policy problems) as the key actors. Hence, EMU might be seen as being driven by the desire to “rescue” individual nation-states from threats to their autonomy posed by the globalization of financial markets. In essence, domestic political interests in shoring up the capability of states to deliver sound monetary policies converged to make an EMU agreement possible. Alternatively, these same states might be seen as being bound up in a process of transformation, prompted by the dynamics of the integration process itself and changes in the world economy. Transformation can be portrayed as a redefinition of the terms of national debate, a shifting of the domestic agenda, and a restructuring of the balance of political forces within states. In short, national actors became prisoners of the processes that they created (e.g., the single market program, the operation of the EMS) and prisoners of processes that others created for them (e.g., globalization, the deregulation of financial markets).

Thus, the degree of control possessed by any particular set of national or EC actors is seen as being limited by these developments. Whichever interpretation seems more plausible, it is certainly the case that national actors had different motivations and strategies: Germany sought to make its power more acceptable to its neighbors by placing itself under a European umbrella, France sought to redress the asymmetries of the EMS and tie Germany to a European framework, and Italy shared many of the French concerns but also saw advantages for itself in accepting an external monetary discipline (a vincolo esterno) to overcome domestic resistance to such a course. Each accepted that its hands might be tied. An exception was the UK, which expressed its traditional desire to maintain national choice and flexibility. The EMU process cannot be understood by reference to internal factors alone, as the EMU negotiators were responding to a variety of exogenous pressures as well. The structural changes of globalized financial markets have already been alluded to. Moreover, the EMS was itself a search for monetary stability in a world still wrestling from the collapse of the Bretton Woods system. The will to proceed with EMU, even after the EMS crises of 1992 and 1993, is indicative of the response to these external pressures. Moreover, attitudes toward EMU were affected by wider political developments in Europe. After 1989, the collapse of communism in Central and Eastern Europe increased concerns over German power and future foreign policy orientation. German unification may have delayed the EMU negotiating process—given the need of West Germany to attend to the problems of a monetary union with the East—but it also renewed old concerns. As the EU approaches the EMU goal, questions about the nature of the system of governance that produced it and is charged with sustaining it are likely to come to the fore. The EU is a sui generis system and not altogether a coherent one. After Maastricht, there was much jockeying for position (turf fighting) between the EU institutions over the details of EMU coordination and management. With EMU, popular criticism of the lack of democratic accountability may rise in some member states. Moreover, with the transition to EMU, governments may find comfort in shifting the blame for unpopular actions (such as cuts in welfare programs) to the EU level. Hitherto the clos-

Economic and Monetary Union (EMU): Toward a Single Currency

eted and opaque nature of monetary policy has hidden the specific distributive effects of EMU. In an era of budget retrenchment, welfare reform, and labor market deregulation, this veil is likely to be lifted. Disputes are likely to be intensified with a “multi-speed” transition to EMU: domestic reaction to national exclusion in founder member states such as Belgium and Italy could be very hostile, should it occur. The framework for managing a two-speed shift to EMU is still to be completed, and this may itself exacerbate relations within the EU. In short, the legitimacy of the entire EMU exercise is probably yet to face its stiffest test. The commitments of the TEU may be weaker than originally envisaged. Accordingly, it is still difficult to predict whether EMU will be achieved. See also ECONOMIC AND MONETARY UNION: TOWARD A SINGLE CURRENCY; EUROPEAN MONETARY SYSTEM. Baun, Michael. 1996. An Imperfect Union: The Maastricht Treaty and the New Politics of European Integration. Boulder: Westview. Kenen, Peter B. 1995. Economic and Monetary Union in Europe: Moving Beyond Maastricht. Cambridge: Cambridge University Press. Padoa-Schioppa, Tomasso. 1994. The Road to Monetary Union in Europe: The Emperor, the Kings, and the Genies. Oxford: Clarendon.

Bibliography

—Kevin Featherstone

Economic and Monetary Union (EMU): Toward a Single Currency

The planned completion of Economic and Monetary Union (EMU) is a grand-scale experiment in the deepening of European integration that would create a currency area for a population of nearly 400 million people, who generate the world’s highest GDP and constitute its largest trading power. In the greater scheme of things, EMU is yet another in a long series of attempts to devise an efficient international monetary regime. The search for such a system has a history of endeavors that have swung like a pendulum between free floating and fixed (pegged) exchange rates but have mostly settled somewhere in between. EMU is anchored in the Treaty on European Union (TEU), which took effect in November 1993 after ratification by the then twelve member

147

states of the EC. New members have to accept EMU as part of the EU’s acquis communautaire (body of existing law). EMU is the culmination in the monetary sector of what had started in the real sector with the creation in 1968 of a customs union and was intensified by the single market program in the 1980s. The TEU set the EMU clock ticking. With the system put on automatic pilot, EMU is presumed to start January 1, 1999, and the single currency, the euro, is set to become the participants’ sole legal tender by July 1, 2002. National moneys have long symbolized political and monetary policy independence. Thus, the geographic domain where money enjoys legal tender status (acceptability in settlement of private and public debt) has, with few exceptions, coincided with the boundaries of nation-states. For some countries (those engaged in anti-inflation policies) the national currency has become synonymous with sometimes hard-won domestic and international purchasing-power stability. For other countries, inflationary money creation has served two objectives: lowering unemployment (in the misguided belief that an inflation-unemployment trade-off existed in the long run) and capturing seigniorage benefits—especially important for countries with a weak tax-collection system. What is unique with EMU is the determination of a group of independent countries deliberately to relinquish de jure monetary autonomy by creating an EU central bank, the European Central Bank (ECB), which is to be independent of national and supranational governments in order reliably to pursue price stability. It is for the ECB to determine noninflationary money supply and monetary growth and to conduct monetary policy for the euro zone. Member states’ central banks, forming with the ECB the European System of Central Banks (ESCB), will be reduced to regional central banks, comparable to the twelve regional U.S. Federal Reserve Banks. The replacement of well-weathered national currencies, such as the German mark, with an untested euro suggests that the participating countries’ expectations of economic or political benefits surpass the expected costs of switching over to a new currency and that the entire operation is worth the risk of the new currency’s not achieving the status and stability of some of the existing national moneys. The goal of closer political and economic integration clearly outweighs the member states’ desire for economic policy indepen-

148

Economic and Monetary Union (EMU): Toward a Single Currency

dence. Accordingly, calculation of economic costs and benefits of a single currency is taking second place to the costs and benefits of achieving the political goal of deeper European integration. And yet, if the economic foundation is not solid, the political goals will become too expensive and the successful attainment of political and economic unification will become correspondingly remote.

The Road to Economic and Monetary Union The road to EMU dates to the foundation of the European Coal and Steel Community in 1952 and the broader-based Treaty of Rome in 1957. EMU received an additional push with the Single European Act (SEA) of 1986, which was designed to complete the single market program by January 1, 1993. The SEA was the EC’s attempt to overcome Eurosclerosis and an acknowledgment that the member states could no longer solve their economic problems individually but had to pool resources. The single market was expected to create a high level of employment through the abolition of nontariff barriers and the guarantee of four freedoms—free movement of goods, services, people, and capital. Altogether, Europe would enjoy economies of scale, become more competitive, increase its international bargaining power, stimulate investment, and achieve a higher rate of growth. Going beyond that, free capital movement implied a degree of monetary as well as of real economic integration. Thus, the watchwords of the European Commission were One Market, One Money (Commission, 1990) and, one might add, one central bank. The movement toward fixed exchange rates or a single currency has been long in coming and has been influenced by internal as well as external developments. Although the Treaty of Rome gave monetary aspects scant attention (Article 117), the member states established a monetary committee as early as 1958; it was followed in 1964 by a committee of central bank governors, established to minimize member states’ pursuit of conflicting monetary and other economic policies. Over time, monetary matters took on greater weight, as capital controls were gradually removed. International capital flows grew faster than trade and had a growing influence on balance of payments and exchange rates. Spurring the creation of an EC currency area was the perception by the late 1960s that a U.S. policy of “benign neglect” of the international sec-

tor was turning “malign.” With the future of the Bretton Woods system uncertain, the German mark emerged as the dollar’s alternative international reserve and investment currency. This created expectations of a revaluation of the mark, which occurred in 1969. The dollar and mark thus entered into a seesaw—a relationship that persisted for the next three decades. Dollar policy and its impact on the mark, and therefore on other EC currencies, spurred the member states to search for a way to decouple themselves from dollar influence by creating a pegged-rate system. Meanwhile, starting in the late 1950s, academic literature stressed the limits of the peggedrate system and proposed the introduction of flexible exchange rates. Under such a regime, strong-currency countries’ policies would be insulated from the inflationary policies of other countries. Inflationary pressures would be “bottled up” at home, internal-external policy conflicts would be resolved, and balance-of-payments disequilibria, exchange rate misalignments, and reserve inadequacy would be avoided. The Commission, however, supported a system of fixed exchange rates. Some of the Commission’s arguments had general relevance, such as the fear of competitive depreciations and exchange rate volatility. Others were sui generis to the EC, especially the point that exchange rate changes complicated already complex calculations of support price and compensation adjustments in the Common Agricultural Policy. At the Hague summit in December 1969, the heads of state and government decided to lower exchange rate flexibility and move toward monetary union. They appointed a committee under the leadership of Pierre Werner, Luxembourg’s prime minister and finance minister, to devise a system of eventually inalterably fixed exchange rates for the EC. In October 1970, the Werner Plan called for a three-stage, ten-year approach to monetary union, which the Council of Ministers endorsed in March 1971. During the plan’s first phase, the margins of permissible exchange rate fluctuations and exchange rates changes for member states were gradually to be reduced, and central bank interventions were to limit exchange rate fluctuations. In the second stage, a European Monetary Cooperation Fund was to start, aiding with shortand medium-term credit. Exchange controls were to be loosened and greater economic policy cooperation among the member countries to be

Economic and Monetary Union (EMU): Toward a Single Currency

adopted. In the third stage, beginning in 1980, EMU was to be achieved, exchange rates irrevocably fixed, capital markets unified, and a regional central bank established. By the end of the decade, economic policy would be fully coordinated and monetary union instituted. Economic developments in the following decade, however, did not favor realization of the Werner Plan. Clearly, the push for greater EC monetary cohesion predated the first breakdown of the Bretton Woods system but intensified when the United States closed the gold window on August 15, 1971 (the so-called Nixon shock), effectively setting the dollar free. Under the December 1971 Smithsonian agreement, which was to salvage the Bretton Woods system, the International Monetary Fund (IMF) widened exchange rate margins from 0.75 percent to 2.25 percent. With this development, an unexpected anomaly ensued for EC member states: their currencies could henceforth fluctuate by 9 percent against each other but by only 4.5 percent against the dollar. The EC (plus Sweden and Norway) narrow-margins arrangement of March 1972—the famous “snake in the tunnel” involving a band of 2.25 percent—was an informal arrangement intended to correct this situation. However, events in the foreign exchange markets overtook economic arrangements: the Smithsonian agreement collapsed in February 1973, and the dollar floated, leaving the “snake in the lake” free to fluctuate against the dollar. Exchange rate changes against the dollar and against each other strained the cohesion of EC currencies, especially in the wake of the October 1973 oil shock and member states’ contradictory economic policy responses to the inflationary impact of quadrupling oil prices and ensuing worldwide recession. When apparent conflicts between domestic and international requirements developed, the weaker-currency countries dropped out of the snake rather than accept the hard-currency discipline imposed by German monetary policy, only to return, as some did, when domestic economic conditions were conducive to following Germany’s economic policies. Dollar weakness aggravated problems for the EC, as the mark appreciated against the dollar, pulling other snake currencies with it, and the narrow-margins arrangement proved to be untenable for countries with a laxer monetary policy. By the second half of the 1970s, the snake had shrunk to a “minisnake,” consisting of Germany and its closest trading partners (Bel-

149

gium, the Netherlands, and Luxembourg) as permanent snake members. Like the Bretton Woods system (with the dollar as its anchor), the snake arrangement (with the mark at its hub) was asymmetrical, as the German central bank’s low-inflation monetary policy became the pace setter for the EC’s narrow-margins arrangement. In the 1960s, under the Bretton Woods system, a persistent debate about EMU had started between “monetarists” and “economists,” a debate that intensified as the Werner Report was being prepared and, later, when the international monetary system switched to floating rates among the major economies. The monetarists claimed that fixed rates would force convergence in the real sector to assure exchange rate stability. The economists contended that convergence of fundamentals in the real sector and in the setting of policy goals was a necessary, if not sufficient, prerequisite for stable exchange rates. Evidence suggests that under a floating rate regime, inflation rates can—and do—diverge more than under pegged rates and that the currencies of high-inflation countries tend to depreciate against countries with low inflation. This supports the economists’ viewpoint on the prerequisites for successfully installing fixed exchange rates. The predilection for fixed exchange rates in the EC has changed little over the years. Both the rationale for the convergence of fundamentals and pegged exchange rates and the dramatis personae have remained constant over the decades. To this day, the French represent the monetarist school of thought, whereas the Germans (particularly the central bank) still adhere to the economist position. Moreover, in the late 1970s, flexible exchange rates were no longer viewed favorably, especially by countries that experienced an inflation-depreciation spiral. Nor did the anticipated smooth and automatic balance-of-payments adjustments materialize, and the prediction that international reserves would no longer be in great demand proved highly inaccurate. At the same time, a loss of confidence in the dollar and in U.S. policy gave the EC’s member states a new impetus to search for greater cohesion among themselves and distance themselves from the impact of dollar exchange rate movements. The European Monetary System In the fall of 1977, Commission president Roy Jenkins suggested that Europe should revive the

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Economic and Monetary Union (EMU): Toward a Single Currency

goal of monetary union. Drawing on Jenkins’ proposal, German chancellor Helmut Schmidt and French president Valéry Giscard d’Estaing concluded that the time had come to create a regional but more pliant Bretton Woods–type exchange rate arrangement for the EC. This was the genesis of the European Monetary System (EMS) and its narrow-margin exchange rate mechanism (ERM), intended to provide a zone of monetary stability for Europe. The German central bank feared that most countries would be unable to stay with a strong mark, which would either cause instability in the EMS or force inflationary policies upon Germany. Although, from the economists’ standpoint, the fundamentals were not propitious for a pegged rate system, the monetarists’ view prevailed and the EMS was launched on March 13, 1979. As with the Bretton Woods system, ERM members could let their currencies float within a predetermined margin, ±2.25 percent, or ±6 percent if they were not in the snake at the start of the EMS. Italy opted for the wider margin; Britain joined the EMS from the beginning but stayed out of the ERM until October 1990. However, unlike both the Bretton Woods system and the snake arrangements, the ERM was to operate symmetrically for all members. A carefully crafted EMS/ERM was to ensure this symmetry by making the European Currency Unit (ecu)—a composite of participating currencies—the center of the system. It was to be the ecu against which the member currencies would establish their central rates, rather than maintaining the bilateral grid of national currencies as had existed under the Bretton Woods system and the narrow-margins arrangement. A currency could thus reach the upper (or lower) limit without another member currency’s being at the bottom (or ceiling), as had been the case with the grid. Currencies pushing against the ceiling would be as out of step as currencies moving to the floor of the band and could be forced to take corrective economic policies. The adjustment burden would thus no longer fall exclusively on the weaker currency or currencies. To assure timely internal policy and/or exchange rate adjustment, a divergence indicator was installed (“rattlesnake”) to sound the alarm for adjustment when currencies reached 75 percent of the permissible divergence from their parity to the ecu. However, an error in the formula permitted a currency to reach the outer limits before making contact with the divergence indicator.

A Belgian compromise finally accommodated Germany’s objection, and the EMS became a hybrid, using both the ecu and the bilateral grid. Not entirely unexpectedly, in the early years of its existence the EMS suffered the fate of its predecessors, the Bretton Woods system and the snake, and was considerably less stable than hoped for. Far from imposing the monetarists’ convergence toward the best-performing countries, inflation rates between low- and high-inflation countries at times diverged by over ten percentage points. Again, as under the Bretton Woods system, tensions between currencies grew, and necessary exchange rate adjustments were postponed until extreme pressures had developed. Two camps emerged, and the system did not work symmetrically. The mark became the anchor, reserve, and investment currency in the EMS, and German monetary policy became the pacesetter for those countries choosing the hard-currency option. After three devaluations of the French franc within less than two years, French president François Mitterrand took a U-turn in March 1983 and adopted the hard-currency option, thereby ending the EMS crisis and reducing divergence. Policy divergence had led to frequent bilateral and multilateral exchange rate adjustments—eleven between 1979 and 1987, but mostly during the first five years of the ERM operation. The novelty, compared with the Bretton Woods system, was that bilateral and multilateral exchange rate adjustments followed joint decisions by the EMS members. A new phase of stability in the EMS started in 1987 and lasted until the summer of 1992. During that time many observers and market participants assumed that something closely resembling fixed rates had arrived and that extraordinary income without commensurate exchange risk was obtainable by investments in high-interest countries. Accordingly, capital flowed to the highestinterest-rate countries, as investors no longer assumed that the interest rate differential might reflect risks from future realignments of weaker currencies. In this climate and in the wake of the SEA, a committee for the study of EMU, under the chairmanship of Commission president Jacques Delors, issued the Report on Economic and Monetary Union in the European Community (Commission, 1989). Although written under different assumptions and circumstances (e.g., disbelief in the un-

Economic and Monetary Union (EMU): Toward a Single Currency

employment/inflation trade-off), the Delors Report harked back to the Werner Plan and envisioned the implementation of EMU in three stages, with the first stage beginning in 1990. The calm after 1987 came to an abrupt end in the fall of 1992, when exchange rate distortions became untenable, and Britain and Italy chose to withdraw from the ERM rather than devalue their severely overvalued currencies. Another period of turmoil in August 1993 prompted ERM participants to take the political element out of exchange rate adjustments and widen the margins of permissible exchange rate fluctuations of ERM currencies to ±15 percent, thus eliminating the one-way option and permitting the system to resemble one of flexible exchange rates.

Launching Economic and Monetary Union At its meeting in Madrid in June 1989, the European Council endorsed the Delors Report and set July 1, 1990, as the start of Stage 1, whereby exchange controls and most restrictions on capital movements would be eliminated, national economic policies better coordinated, and central bank cooperation intensified. It was during Stage 1 that the intergovernmental conference (IGC) on EMU took place. This time Germany, especially again its central bank, insisted that the treaty set criteria for nominal economic convergence as a prerequisite for the transition to irrevocably fixed exchange rates or a single currency. Although clearly spelled out, the criteria—all monetary ones, and none from the real sectors of the economy (such as growth or unemployment rates)— are nevertheless subject to political interpretation and decisions. Stage 2, devised as a transition period to the irrevocable locking of exchange rates, began as scheduled on January 1, 1994. According to the Delors Report, Stage 2 would allow the EC to gain experience with closer policy cooperation and prepare for the final stage by devising multiannual programs to reduce inflation and budget deficits. To this end, the European Monetary Institute (EMI), precursor of the ECB, came into being at the beginning of Stage 2. The EMI had the tasks of coordinating member states’ monetary policies and supervising the proper functioning of the EMS. The Delors Report did not specify how long Stage 2 would last, and a debate on the issue ensued at the IGC. Some member states wanted Stage 2 to be as short as possible or to be elimi-

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nated entirely, arguing that it was neither necessary nor desirable to prepare for the single currency. In the event, the TEU included a second stage, which was to last until December 31, 1996, if more than half the EU member states met the convergence criteria by that date. Otherwise, countries meeting the criteria by the end of 1997 would be able to enter Stage 3 on January 1, 1999. Stage 3 would involve establishment of the ECB and the permanent fixing of exchange rates. The TEU, devised to ensure EMU’s credibility, set the following criteria for prospective participating states: (1) an inflation rate not to exceed by 1.5 percent that of “the three best-performing member states”; (2) an interest rate not 2 percent greater than the average of the three best-performing countries (the assumption being that the countries with the lowest inflation would have the lowest interest rates); (3) membership in the ERM, without a devaluation, during the two years before entry into EMU; (4) a deficit-to-GDP ratio not to exceed 3 percent; and (5) a debt-to-GDP ratio (of all levels of government) not to exceed 60 percent. It seemed highly unlikely that the EU’s two most important member states, Germany and France, would meet all of the criteria. France and Germany had deficits exceeding the 3 percent limit and were moving away from rather than coming closer to that reference point. Yet an EMU without Germany and France is inconceivable. In the end, the heads of state and government will make a political decision as to which countries meet the criteria, on the basis of advice from the Commission and the EMI. Already, the guessing game over who will and who will not be a founder member of EMU is influencing interest rates and currency exchange rates (including that of the dollar). Most likely there will be an EMU of at least two speeds: the founding members or the “ins” and the outsiders or the “pre-ins.” The future “ins” hope to prevent competitive devaluations by the “pre-ins” by establishing a system whereby the nonmembers’ currencies could fluctuate against the euro within a band of ±15 percent, modeled on the ERM and called the ERM II. After January 1, 1999, participants in Stage 3 will have a single currency, the euro. One euro will equal one ecu (at least on paper), and national currencies will still be legal tender. The method of calculating exchange rates for that time has not yet been determined. After the introduction of the

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euro, the continuity of contracts is guaranteed, whether they were denominated in ecu or in national currencies. After January 1, 2002, euro banknotes and coins will be legal tender, alongside national currencies; the latter will lose legal tender status no later than July 1, 2002.

Expected Economic Costs and Benefits The costs and benefits of EMU will depend on whether the euro zone becomes an optimum currency area, with greater mobility of factors of production, goods, and services. Costs to a currency area increase as demand shocks are concentrated in one region and a country loses the possibility of absorbing part of the shock through the exchange rate mechanism. If European integration leads to greater real convergence of the member states’ economies, rather than to greater concentration of certain industries in certain countries, and if demand shocks therefore become symmetrical, the loss of the degree of freedom of exchange rate flexibility will be less critical. Among the many benefits expected from a single currency is greater transparency, as prices in the euro zone will be quoted in the same unit of account. A single currency will also eliminate conversion costs. The Commission estimates that these amount to between 0.25 and 0.50 percent of the EU’s GDP. This is not a net benefit to the EU, however, as an estimated 5 percent of banks’ revenues stem from currency transactions. More significantly, EMU will eliminate the exchange rate risk of currency fluctuations between countries closely linked in the single market, thereby facilitating an increase in intra–euro zone trade and investments, promoting economic growth and employment. Much will depend on whether the participating countries choose the “correct” exchange rate when they lock their currencies into the euro zone. For instance, Britain repeated the mistake of 1925 (return to the gold standard) by entering the ERM in 1990 at too high a rate for the pound sterling. This caused high unemployment, which was corrected only after the first major ERM crisis, when Britain dropped out of the mechanism in September 1992. Similarly, Germany has been unnecessarily burdened by the choice of too high a conversion rate for the East German mark at the time of German economic and monetary unification (July 1, 1990). The EU needs to heed these lessons.

Conclusion There is a temptation to compare the move toward EMU with the move toward completion of the single market and even to argue that EMU is the logical conclusion of market integration. Yet a profound difference exists between these two occurrences: the single market program had a formal deadline (December 31, 1992) for implementing its nearly three hundred directives. At the same time it was understood that not meeting the deadline would not cause major problems, as implementation of the directives was part of a longterm, ongoing development. By contrast, although part of the integration process, EMU represents a definitive break with the past and arguably should not be held hostage to an arbitrary deadline. Most important, euro zone participants will have to abandon their own currencies and monetary policy independence, thereby taking a big political risk. The business community is split, with large firms and banks investing in prospects of EMU, and smaller firms more skeptical and reticent. The markets now vacillate between expectations that EMU will take off or will not take off; will take off on time or will take off late; will take off with only the northern EU member states (with or without Britain and Denmark, which have negotiated possible opt-outs) or will take off with most EU members (including Italy, Portugal, and Spain). One thing, at least, is certain: whenever it happens, EMU will split the EU into two camps, the “ins” and the “outs.” And it seems unassailable that a two-speed EMU, and a split EU, will invalidate the slogan One Market, One Money. See also ECONOMIC AND MONETARY UNION: POLITICAL ISSUES; EUROPEAN MONETARY SYSTEM. Commission. 1990. “One Market, One Money: An Evaluation of the Potential Benefits and Costs of Forming an Economic and Monetary Union.” European Economy 44. Commission. 1989. Report on Economic and Monetary Union in the European Community. Luxembourg: Office for Official Publications of the European Communities. Kenen, Peter B. 1995. Economic and Monetary Union in Europe: Moving Beyond Maastricht. Cambridge: Cambridge University Press. Ludlow, Peter. 1982. The Making of the EMS. London: Butterworth.

Bibliography

—Hugo M. Kaufmann

Economic Integration Theory

See COHESION POLICY.

See CONVERGENCE.

Economic and Social Cohesion

Economic Convergence

Economic and Social Committee (ESC)

Economic Integration Theory

The Economic and Social Committee (ESC) is an organ of the EU consisting of 222 part-time members who represent employers, trade unions, and other interested groups, such as farmers and consumers, and who are appointed by the national governments. In terms of size and national representation, the ESC’s composition is identical to that of the newer Committee of the Regions (COR). Indeed, the COR and ESC share facilities in Brussels. The inclusion of the ESC in the original Treaty of Rome reflected the EC founders’ desire to involve representatives of social and economic groups in EC policy formulation. Thus, the ESC’s purpose is to proffer advice to the Council and Commission on pending legislation. The ESC produces approximately two hundred consultative documents annually, the majority of which are opinions requested by the Council or the Commission. The rest are reports issued on the ESC’s own initiative (since 1972 the committee has had the right to give its view on any matter of EC interest) or information reports. Although in some cases an ESC opinion is obligatory before proposals can become law, the Council and Commission rarely heed the ESC’s advice. The committee’s output is a valuable and generally underused source of EU policy analysis. See also APPENDIX 1.

Economic Commission for Europe (ECE)

Established in 1947, the Economic Commission for Europe (ECE) was a UN-sponsored organization that took over the work of various wartime and immediate postwar organizations charged with reconstruction. Thereafter the ECE promoted economic cooperation (mostly regulatory issues) and devoted much of its attention in the late 1980s and early 1990s to helping Central and Eastern European states make the transition to a market economy. The ECE’s fiftieth anniversary, celebrated at its 1997 annual session, was accompanied by a major overhaul of its activities, objectives, and resources.

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Economic integration means abolishing barriers to trade and investment as well as adopting comprehensive competition rules for goods and factor markets (e.g., capital and labor markets). One may distinguish between monetary integration, in which countries move toward absolutely fixed exchange rates or a common currency, and real integration, which refers to trade and foreign investment. Removing trade barriers does not necessarily result in full factor mobility, especially labor mobility. Standard neoclassical integration and trade theory shows that free trade among a group of countries will induce an equality of factor returns. This is because the country well endowed with capital will specialize in the production and export of capital-intensive goods while importing laborintensive goods, effectively increasing its labor supply, whereas the country well endowed with labor will do the opposite, thus effectively enhancing its supply of capital. In the end the profitwage ratios in both countries will be equal. If after several decades trade has led to similar real wage rates in the countries of a regional integration scheme, there should be no dramatic labor movements even if all restrictions on mobility of production factors are lifted. All four basic freedoms—free trade in goods and services, free capital movement, and free labor mobility—are ensured in the EU single market, a situation that came about only gradually. In a two-country model, traditional economic theory shows that switching from autarky to free trade improves welfare in the sense that global consumption can be increased through trade. More generally, the elimination of tariff barriers benefits the world economy because producers with the lowest costs can increase their market share. However, dynamic models that take into account growth, research and development (R&D), and the role of multinationals will often paint a different picture than short-term static analysis based on a partial equilibrium model (Tironi, 1982; Ethier, 1986; Klodt, 1992). If interindustry trade is dominant, there could be serious transitory adjustment costs, since the expansion of foreign firms in a certain sector will

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be accompanied by the contraction of this sector in the home country. Thus workers will have to shift from declining sectors to expanding industries. If intraindustry trade is dominant—a typical finding for EU countries—adjustment problems are relatively small; for example, automotive firms in country A will specialize in the production and export of big cars while firms in country B will specialize in the production of small cars. Transitory adjustment problems, which are rarely considered in economic models, could become permanent problems if long-term unemployment erodes the skills of laid-off workers. These workers will find it impossible to find a new job at the old wage rate. In some cases the structure of the economy slows adjustment to change, possibly because wages cannot fall easily (perhaps as a result of regulation or strong resistance from labor) or because of barriers to shutting down failing firms or starting new ventures. These factors can cause major economic problems, such as persistent unemployment, unless governments are allowed to compensate through exchange rate adjustments.

Traditional Integration Theory Economic integration can vary in intensity. The lowest level of integration consists of preferential trade arrangements in which countries accord each other low tariff rates for imports while outsiders continue to face high tariff rates. A more intensive form of integration is a free trade area (FTA) that abolishes tariffs between participating countries while each country maintains an individual tariff vis-à-vis third countries. The main benefit is trade creation between the FTA countries, whose producers also can more easily exploit economies of scale. The next step, a customs union, harmonizes external tariffs of member countries, so that the common external tariff (CET) typically is close to the members’ pre–customs union average tariff rate. This implies a tariff increase for some outside producers. Finally, a common market combines product market integration with factor mobility, which tends to equalize returns on factors of production throughout the market. Benefits in a customs union occur in the form of trade creation (higher trade in goods among member countries), but there will also be trade diversion for outsider countries, that is, previous external suppliers will be crowded out by firms inside the customs union that no longer face a tariff

burden. Insider firms benefit as long as their product costs are below the total cost (price plus tariff) of competing imported products. Whether the combined effects of trade creation (positive effect) and trade diversion (negative effect) will be positive depends on various factors, including the number of countries involved in the customs union (Pomfret, 1986; Jovanovic, 1992). Although the world gains from trade liberalization, the formation of a customs union does not always enhance global welfare. However, the negative effects of trade diversion are insignificant as long as the customs union stimulates economic growth so that import demand for both internal and external imports is raised. It is not always clear that the elimination of trade barriers within regions makes the world economy better off, although elimination of quantitative restrictions is always welfare improving. Although traditional trade theory has no clear-cut answers for regional economic integration schemes, modern theory, which takes into account the effects of product differentiation and innovation, presents a stronger case for regional integration. The EC achieved a customs union in 1968 and then proceeded toward further integration. The removal of restrictions on trade in services and the creation of a common market with common competition policy rules were fully achieved by the single market program, which also abolished physical trade barriers (border controls) and introduced the principle of mutual recognition of standards. The EU single market program has brought major economic benefits, but it is unclear whether benefits will be spread evenly among member countries and whether the single market will benefit all main outsider trading partners (Hufbauer, 1990; Neven, 1990; Tichy, 1992). Because trade takes place in space, distances and transportation costs are important. Thus, trade between neighboring countries should be relatively high, especially if the respective per capita incomes and GDP growth are high (the former offering opportunities for trade in differentiated products and the latter fueling demand for traded goods). Hence, if formation of a customs union stimulates economic growth and economic convergence toward high per capita incomes, regional clusters in world trade will develop. This is already the case: seventy-five percent of the EU’s trade is intra-EU trade and trade with other European countries. Partly as a result of the North American

Free Trade Agreement, U.S. trade is dominated by Canada and Mexico. Similarly, intra-Asian trade has grown since the Association of Southeast Asian Nations adopted a trade liberalization program in 1995. A considerable share of trade is accounted for by multinational companies whose international networks represent both vertical integration (linking downstream and upstream activities) and horizontal integration at the firm level. Real capital mobility has increased worldwide since 1985, and the EU has been able to attract rising foreign direct investment (FDI) inflows, especially owing to increasing intra-EU flows. With ongoing privatization and deregulation of public utilities and other sectors, new opportunities exist for the formation of EU multinationals. Moreover, FDI is also influenced by the level of innovation of individual firms. The higher the technological level in a particular country, for example, the higher its relative share in world patents, the greater the incentive for its firms to produce abroad as a means of exploiting other countries’ advantages while at the same time protecting the firm’s advantage. From the perspective of an innovative firm, licenses are very poor substitutes for FDI, as the licensee is likely to reinforce its competitive position at relatively little cost, especially as information markets are imperfect and intellectual property rights weak. A real appreciation of its home country’s currency will increase a firm’s ability to acquire foreign firms, which will become relatively less expensive. Also, the absence of a language barrier between countries facilitates investment (Froot and Stein, 1991). New Integration and New Growth Theory The new theory of integration focuses on internal economies of scale (average costs in a large firm are lower than in small firms) and external economies of scale (firms near each other enjoy certain spillover effects; for example, the R&D results of an innovator can be observed by neighboring firms). Economies of scale can be more easily exploited within a group of integrating countries. However, firms from outsider countries might suffer, as their exports to the integrating countries could fall. Nevertheless, external economies of scale in a customs union can be exploited by outsiders to the extent that there are no restrictions on FDI inflows. Product differentiation also plays a role in recent models, which assume that the larger variety of goods produced in a large cus-

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toms union, as opposed to stand-alone countries, will benefit consumers. Analyses show that, in a free trade regime, benefits accrue to both the country producing under economies of scale and the importing country. Indeed, trade is shown to be a full substitute for factor mobility, and dynamic economies of scale achieved via the single market program could yield a permanent increase in the EU’s growth rate (Baldwin, 1989). Benefits from regional free trade in the presence of economies of scale will accrue differently to the countries involved in a customs union depending on the type of specialization pursued by individual countries. For example, country A, specializing in aerospace production, will derive a larger benefit if economic rents in the aerospace industry are higher than in the locomotive industry. However, benefits across countries could be shared more equally if FDI flows from country B to A, that is, if part of country A’s aerospace industry is owned by citizens of country B. This issue still has to be explored analytically. Trade with differentiated products leads to oligopolistic interdependence that can stimulate different forms of strategic pricing and investment behavior. Recent approaches emphasize the role of R&D in combination with dynamic economies of scale. Dynamic economies of scale imply unit cost reduction as a function of cumulated output, which can be modeled explicitly in the industry’s learning curve for a given generation of products. For example, the first one thousand units of a new chip generation will have a high percentage of technical misprints on the chip surface—say, only 50 percent are error free and can be sold—but after 100,000 units the failure rate falls to 10 percent. This implies that regional integration can reinforce the customs union’s international competitiveness, because a larger domestic market in combination with government procurement in favor of domestic firms or government R&D subsidies for those firms facilitates innovators’ attempts to move quickly down the learning curve (Brander and Spencer, 1981, 1985). This in turn means that foreign markets can be attacked with relatively low prices. Trade diversion might indeed be welcomed by members of the customs union because foreign competitors in high-technology industries could find it harder to increase sales and thus move more quickly down the steep learning curve characteristic of high-technology goods toward more effi-

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cient production. In the absence of innovation and economies of scale, trade diversion for outsiders could still be welcomed by the customs union to the extent that it can improve its terms of trade. This would be the case if, as a consequence of trade diversion, excess capacities of outsiders depress world market prices for those goods as well as intermediate inputs, which can then be imported at relatively reduced prices by the customs union members. In a customs union, consumers enjoy a greater variety of products if firms can spread fixed R&D costs over a greater number of consumers. As large countries have relatively favorable starting conditions for high-technology production (where R&D costs have to be spread over a large number of consumers), the formation of a customs union might reinforce such first mover advantages in the international technology race. Thus, people living in large countries could benefit more from a customs union than those in small countries. Generally, empirical evidence shows a mixed picture of economic convergence in the EU. Although considerable convergence has taken place among the original member states, there is a sustained northsouth divide within today’s EU. This could also be explained by new growth theory, which argues that agglomeration advantages in a setting with skilled personnel and R&D could imply that integration reinforces the position of central regions (leading regions in economic terms). The reduction of political risk as a consequence of market integration means that new member states benefit from additional foreign direct investment flows from source countries in the customs union (Welfens, 1996c). Indeed the overall investment output ratio in the union will increase, resulting in positive growth effects. This will be the case especially if the increased presence of foreign investors brings positive technology spillover effects for the host country so that the marginal product of capital increases (Welfens, 1992). Indeed, Spain and Portugal recorded high per capita FDI inflows after joining the EC, which certainly contributed to economic growth on the Iberian Peninsula. In the 1980s Greece was a counterexample because poor domestic macroeconomic policies and lack of privatization rendered the country unattractive for foreign investors. It is symptomatic that Greece consistently recorded low growth and high inflation rates in the fifteen years after EC accession in 1981, so that its cur-

rency could not join the exchange rate mechanism of the European Monetary System (EMS). Economic integration increasingly relies on multinational companies, which account for about 33 percent of trade between developed countries and for most of international technology trade. Intracompany trade in goods and technologies plays an important role in technology intensive industries, which are likely to increase in the EU. This follows from the opening up of Central and Eastern Europe, whose producers can easily invade EU markets with standard products, thereby giving EU firms an incentive to move up the technology ladder. As firm-specific advantages (typically tied to innovations) are the basis for multinational investment abroad, it is clear that EU firms increasingly will become multinational companies. This tendency is reinforced by EU R&D programs, which encourage intra-EU cooperation, and by the formation of EU joint ventures. It will also be stimulated by Economic and Monetary Union (EMU) and the growth of EU financial markets, which will facilitate corporate takeovers. Monetary Union and Economic Integration Theory Beyond the free movement of goods and services within a common market, economic liberalization can encompass full liberalization of capital flows and even a currency union that establishes absolutely fixed exchange rates and a common currency (De Grauwe, 1997; Welfens, 1996a). The highest form of economic integration is an economic and monetary union, a step the EU plans to take in 1999 by combining the single market with a single currency (the euro). Countries can organize monetary integration in various ways, depending on the degree of national monetary policy autonomy left to them. Fixing parities, with a certain bandwidth for the exchange rate(s), reinforces market transparency and can reduce exchange rate risk under certain circumstances so that productmarket integration is reinforced. With competitive tradables markets there will also be strong pressure on prices of tradable goods to equal prices abroad (in terms of an exchange rate reflecting purchasing power parity). The monetary approach to the balance of payments shows that except for dominant world reserve currency countries—notably the United States and Germany—no country can pursue autonomous monetary policy. Policy measures could be important for reducing the vari-

ance of output and employment relative to that of the initial shock caused by full monetary integration, and maintaining full employment will support aggregate demand in the customs union and indeed could be a political prerequisite for maintaining economic integration. As a result of the post–World War II Bretton Woods system, exchange rate stability endured in Western Europe until 1973, when EC member states switched to floating exchange rates. Launched in 1979, the EMS’s exchange rate mechanism (ERM) worked fairly well with a standard parity margin of ± 2.25 percent (a wider band of 6 percent applied to some participating currencies). But in 1992, faced with massive speculative attacks, Britain and Italy left the ERM and floated their currencies (although Italy reentered in November 1996). Other countries stayed in the ERM but devalued and widened their parity margins to ±15 percent. France and other countries argued that British and Italian exports benefited unfairly after 1992, as the pound and the lira devalued by up to 30 percent, thereby giving both countries a massive price advantage and threatening the integrity of the single market. The 1992 currency crisis reinforced French and German industry’s support for a monetary union that would eliminate competitive devaluations once and for all in the EU. Already in 1970 the Commission had proposed monetary union after a ten-year transition program (the Werner Plan). However, this was never implemented, as the oil price shocks of 1974 undermined efforts for a common monetary policy and further economic integration. The 1989 Delors Report was a second blueprint for EMU, which the member states largely adopted in the Treaty on European Union (TEU). However, they failed to meet the nominal convergence criteria on time for the 1997 deadline. The Commission claims that monetary union is a natural complement for the single market and, hence, an essential aspect of real economic integration. The main argument for a positive link between monetary union and trade expansion is that full monetary integration eliminates exchange rate risks within the EU (or an EU subset of EMU countries) while external shocks cause reduced volatility of macroeconomic aggregates. Another possible consequence of EMU is that a different euro-dollar exchange rate (compared to the previous ecu-dollar rate) could trigger higher FDI inflow for the EU. If the euro is weaker than

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the ecu, U.S. foreign investors will be able to acquire EU companies more easily. However, with an appreciating euro, EU companies could more easily acquire U.S. companies or companies in countries whose exchange rate is linked to the dollar. To the extent that a higher inward EU foreign direct investment stock stimulates EU imports, this would mitigate the trade diversion effects of EMU. Monetary union should create more integrated and competitive financial markets, which should in turn lead to lower nominal and real interest rates— assuming that the new European Central Bank can quickly establish an anti-inflation reputation. Lower real interest rates would stimulate economic growth and increase the real value ‘of assets, thereby enhancing economic welfare. To the extent that EMU causes permanent unemployment, however, there is a welfare loss. Conclusion Further EU enlargement, which silently began with German unification, will raise various problems that can be assessed on the basis of modern theory, including the gravity equation (Baldwin, 1994; Welfens, 1996b; Welfens, 1997a). Although the creation of a larger customs union will reinforce the exploitation of economies of scale and trade in differentiated products, it is unclear whether there will be economic convergence within the enlarged EU and among the newcomers themselves. The longer the economic catching-up process takes, the higher the EU budgetary transfers necessary for the newcomers. This will be a major political issue in the EU as long as high unemployment rates persist. Europe’s history of interwar disintegration shows that protectionism can rapidly emerge from a situation of political instability and high unemployment rates (Tilly and Welfens, 1996). Thus, a comprehensive theory of integration will have to take into account unemployment differentials among countries—affecting labor mobility even under factor equalization— and the impact of multinational companies (Welfens, 1997b). The most recent strand of research, which combines the effects of FDI and regional integration and takes into account the reduction of global political transactions costs, strongly supports the case for regional integration, provided that it is embedded in the overarching framework of the World Trade Organization (WTO). An important final aspect of regional integration is that functional integration schemes, which

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stimulate trade both within the group and globally, are a way to reduce international political transaction costs. In view of the proliferation of nationstates after the end of the Cold War, international organizations are finding it more and more difficult to reach a consensus about liberalization and dispute settlement procedures. Thus, WTO conflict resolution could be facilitated by integration schemes that first reinforce free trade regionally and then help organize trade between customs unions. Yet there is also the risk that regional trading blocs could compete so keenly against each other that political cooperation and global liberalization (including the maintenance of free trade) could become impossible between trading blocs. The EU plays a key role internationally because its visible success has encouraged regional integration schemes elsewhere. If EMU is successful, other regional groupings will likely try to launch some form of monetary integration. Indeed, full global economic and monetary integration might be the ultimate ideal. However, remaining barriers between regions arguably could serve as a useful buffer, slowing the spread of economic disruption caused by external shocks. In a fully integrated world economy, economic shocks would rapidly affect all countries. Whatever one thinks about eventual global economic integration, regional economic integration has undoubtedly benefited Western Europe and the world generally. Moreover, integration theory bears out the advantages of economic liberalization in Central and Eastern Europe and gives a valuable impetus to reform efforts in the former Soviet Union and elsewhere. See also COMMON COMMERCIAL POLICY; COMMON MARKET.

Baldwin, R. 1989. “The Growth Effects of 1992.” Economic Policy, no. 9, pp. 247–281. ———. 1994. Towards an Integrated Europe. London: Council for European Policy Research. Brander, J. A., and B. Spencer. 1981. “Tariffs and the Extraction of Monopoly Rents Under Potential Entry.” Canadian Journal of Economics 14, pp. 371–389. ———. 1985. “Export Subsidies and International Market Share Rivalry.” Journal of International Economics 18, pp. 83–100. De Grauwe, P. 1992. The Economics of Monetary Integration. London: Macmillan. Ethier, W. 1986. “The Multinational Firm.” Quarterly Journal of Economics 101, pp. 805–834.

Bibliography

Froot, K. A., and J. C. Stein. 1991. “Exchange Rates and Foreign Direct Investment: An Imperfect Capital Markets Approach.” Quarterly Journal of Economics (November), pp. 1191–1217. Hufbauer, G. C., ed. 1990. Europe 1992. An American Perspective. Washington, DC: Brookings. Jovanovic, M. N. 1992. International Economic Integration. London: Routledge. Klodt, H. 1992. “Technology-Based Trade and Multinationals’ Investment in Europe: Structural Change and Competition in Schumpeterian Goods.” In M. Klein and P.J.J. Welfens, eds., Multinationals in the New Europe and Global Trade, pp. 107–121. Heidelberg and New York: Springer. Neven, E. 1990. “EEC Integration Towards 1992: Some Distributional Aspects.” Economic Policy 5, 1, pp. 14–46. Pomfret, R. 1986. “The Trade-Diverting Bias of Preferential Trading Arrangements.” Journal of Common Market Studies 24, 2, pp. 109–117. Tichy, G. 1992. “Theoretical and Empirical Considerations on the Dimension of an Optimum Integration Area in Europe.” Aussenwirtschaft 47, pp. 107–137. Tilly, R., and P.J.J. Welfens, eds. 1996. European Economic Integration as a Challenge to Industry and Government. Heidelberg and New York: Springer. Tironi, E. 1982. Customs Union Theory in the Presence of Foreign Firms. Oxford: Oxford Economic Papers, pp. 150–171. Welfens, P.J.J. 1992. “The Economic Challenges of Privatization and Foreign Direct Investment in Eastern Europe.” Management International Review 32, no. 3, pp. 199–218. ———. 1996a. European Monetary Integration. 3d rev. and enlarged ed. Heidelberg and New York: Springer. ———. 1996b. Economic Aspects of German Unification. 2d rev. and enlarged ed. Heidelberg and New York: Springer. ———. 1996c. “The EU Facing Economic Opening-Up in Eastern Europe: Problems, Issues and Policy Options.” In R. Tilly and P.J.J. Welfens, eds., European Economic Integration as a Challenge to Industry and Government, pp. 103–172. Heidelberg and New York: Springer. ———. 1997a. The Single Market and the Eastern Enlargement of the EU. Heidelberg and New York: Springer. ———. 1997b. Product-Market Integration in the Presence of MNCS and Unemployment: Towards a New Theory of Economic Integration. EIIW Working Paper, Potsdam University.

—Paul J.J. Welfens

See EUROPEAN COMPANY STATUTE.

ECS

Education, Vocational Training, and Youth Policy

See EUROPEAN COMMUNITY STUDIES ASSOCIATIONS.

ECSAs

See EUROPEAN COAL AND STEEL COMMUNITY.

ECSC

See EUROPEAN COAL AND STEEL COMMUNITY CONSULTATIVE COMMITTEE.

ECSC Consultative Committee

Ecu is both the word for an ancient French coin and the acronym (as ECU) for European Currency Unit, an artificial currency used to maintain a parity grid and a divergence indicator in the Exchange Rate Mechanism (ERM) of the European Monetary System. The value of the ecu is based on a basket of member state currencies, weighted according to the strength of those currencies. The ecu is also used for accounting purposes in the EU’s institutions. Finally, the ecu is a prototypical single European currency. Indeed, when Stage 3 of Economic and Monetary Union (EMU) begins, the ecu will be replaced by the euro, and the rates at which member states’ currencies are to be irrevocably fixed in relation to each other and to the euro will be determined. See also HARD ECU.

Ecu

See EUROPEAN DEFENSE COMMUNITY.

EDC

See EUROPEAN DEVELOPMENT FUND.

EDF

See EUROPEAN DEFENSE INDUSTRY GROUP.

EDIG

Education, Vocational Training, and Youth Policy

Education and training are areas in which member states have largely preferred to go their separate ways and in which the Commission has achieved comparatively little. Furthermore, national self-interest has generally been strongest among member

159

states that pretend the greatest enthusiasm for the single market. For example, one major achievement, the 1989 directive requiring member states to recognize each other’s diplomas of higher education, has yet to be passed into Belgian national law. It is accordingly fortunate that convergence in educational and training standards toward the levels enjoyed in the most affluent member states has been a characteristic of market forces over the past decade. There has been a steady increase in the proportion of the 25–59 age group attaining an educational level corresponding to at least upper secondary education (which rose to 57 percent for the EC Twelve in 1994) and also in the proportion obtaining a degree. This improvement has been most marked in countries in which education levels were very low before the country joined the Community, but the gap between best and worst remains wide. Thus, whereas over 85 percent of the 25–29 age group in 1994 had completed upper secondary education in Denmark, Germany, and the Netherlands, the Portuguese equivalent was 35 percent and that for Spain was 50 percent. What is arguably more alarming is that the proportions for Britain and Italy were below 60 percent. Furthermore, urban/rural disparities are not merely undesirably wide in Greece, Spain, Portugal, Denmark, and Italy but appear in many cases to be even wider among young people, who tend to gravitate to urban areas for their upper secondary education. In contrast, such disparities are insignificant in Germany, the Netherlands, and Britain. Britain is the only country to show no locational disparity in respect to higher education. Educational levels are improving more rapidly among women than among men. Indeed, roughly the same proportion of women as men currently complete upper secondary education in the EU. Nevertheless, family background still plays a part. Within the EU, the probability of a child’s progressing beyond compulsory schooling is closely related to the educational level achieved by both parents and in particular by the head of household. Broadly speaking, the higher the educational achievement, the greater the probability of being in work, especially where women are concerned, with this correlation showing up most markedly in Italy and the Netherlands. In the EC Twelve in 1994, those with degrees had an average unemployment rate of 6.1 percent; the rate for those who had completed upper secondary educa-

160

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tion stood at 8.8 percent; and unemployment for those who had completed the minimum compulsory schooling stood at 13.2 percent. In most countries, and especially for women, a degree offers the best possible long-term protection against unemployment. Furthermore, this is most obviously true for recent graduates for whom work experience is less relevant. Nevertheless, this group is struggling to find appropriate jobs, especially with long-term contracts, during the current period of low growth, and overqualification has become a serious issue that needs to be addressed.

The Community Role in Education Education is of fundamental importance for economic and social welfare. Traditionally, however, its costs and benefits were seen as wholly national in scope, and education was accordingly excluded from the Treaty of Rome in 1957. During the ensuing two decades, a number of nonbinding resolutions and conclusions by the Community, in particular the 1976 resolution of the Council of ministers of education concerning a program of action on education, provided a framework within which member states could begin to cooperate. The Stuttgart Declaration of June 1983 and the Fontainebleau Declaration of June 1984 laid down the foundation for the concept of European citizenship, which in turn generated a need to place much more emphasis upon the culture and history of Europe as a whole and for this to be promoted via cooperation between institutions of higher education. The Single European Act (SEA) of 1986 further emphasized the need for a European dimension in education, which found its expression in a Council resolution in May 1988 inviting the Community and member states to integrate the European dimension into the school curriculum, teaching material, and teacher training. The Treaty on European Union (Chapter 3, Article 126) articulated this in a more formal manner, stating that “the Community shall contribute to the development of quality education by encouraging cooperation between member states with a view to developing the European dimension in education, particularly through the teaching and dissemination of the languages of the member states; encouraging mobility of students and teachers, inter alia by encouraging the academic recognition of diplomas and periods of study; promoting cooperation between educational establishments; developing exchanges of informa-

tion and experience on issues common to the education systems of the member states; encouraging the development of youth exchanges and of exchanges of socio-educational instructors; and encouraging the development of distance education.” The existence of a treaty article means that the EU’s legal framework of directives and other instruments could be brought into play for the first time. It was intended that this would be directed primarily toward school-level education, with other articles (such as Article 127) covering vocational training. However, the Commission was aware that member states would not appreciate being told how to run their schools, and Article 126 was careful to point out that nothing would be done without “fully respecting the responsibility of member states for the content and the organization of education systems and their cultural and linguistic diversity.” The Commission’s green paper on the European dimension of education constantly reiterates this desire not to offend member states and is careful to point out that it “does not comprise a proposal” and that its contents are “indicative of the actions which could most appropriately be encouraged by the Community” (Commission, 1993). The Community was able, however, to initiate a noncontroversial series of action programs in the field of education and academic exchange, commencing at the end of the 1980s, managed by the Task Force for Human Resources (TFHR). These programs included the European Community Action Scheme for the Mobility of University Students (ERASMUS) (1987–1994) and the Action Program to Promote Foreign Language Competence in the European Community (LINGUA) (1990–1994). The current Community action program, called SOCRATES, has a budget of ECU 1,000 million covering 1995 to 1999 and is designed to encourage innovation and improve the quality of education through strengthening cooperation between the various educational institutions. SOCRATES activities comprise ERASMUS for higher education, L’Europe à l’école for school education, and horizontal measures, including the promotion of languages. The Community Role in Vocational Training Action programs were also devised in relation to vocational training, with a view to providing a supportive role to the Research and Technological Development Framework Program. They included the

Community Action Program in Education and Training for Technology (COMETT) (1986–1994); PETRA (a program for the vocational training of young people and their preparation for adult and working life, 1988–1994); EUROTECHNET (a program to promote innovation in the field of vocational training resulting from technological change in the EC, 1990–1994); and FORCE (an action program for the development of continuing vocational training in the EC, 1991–1994). The current EU umbrella program, called LEONARDO DA VINCI, has a budget of ECU 800 million covering the 1995–1999 period and is designed to ensure the implementation of a vocational training policy to support and supplement the action of the member states as a means toward realizing an open European area for vocational training and qualifications. LEONARDO consists of three parts: measures to sustain the quality of member states’ systems, arrangements, and policies; measures to support innovative capacity in actions on the training market; and networks and accompanying measures (promotion of the European dimension). In addition to SOCRATES and LEONARDO, other programs cover professional training and youth exchanges. For instance, Youth for Europe III (1995–1999) extends the earlier programs covering youth exchanges and youth policy and has as its main objective the fostering of quality education through enabling young people, and especially the disadvantaged, to participate in exchange activities. Even though the above programs are to be highly commended, a note of caution is nevertheless in order. The Commission has stated that the promotion of the European dimension is to be approached primarily through “mobility and the knowledge of several languages” and “the academic and vocational recognition of diplomas” (Commission, 1994, p. 11). However, as indicated earlier, current high levels of unemployment, especially among young people, are fostering a tendency among some member states to retain barriers against the free movement of labor throughout the EU. Benner, Dietrich, and Dieter Lenzer. 1996. Education for the New Europe. Providence, RI: Berghahn Books. Brock, Colin, and Witold Talasiewicz. 1994. Education in a Single Europe. London: Routledge.

Bibliography

ELDR

161

Commission. 1993. Green Paper on the European Dimension of Education. COM(93)457 Final. Luxembourg: Office for Official Publications of the European Communities. ———. 1994. “Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and to the Committee of the Regions. Education and Training in the Face of Technological, Industrial, and Social Challenges: First Thoughts.” COM(94)528 Final. Luxembourg: Office for Official Publications of the European Communities. ———. 1996a. Education and Training: Tackling Unemployment. Luxembourg: Office for Official Publications of the European Communities. ———. 1996b. Youth for Europe: A Program for All Young People, 1995–2000. Luxembourg: Office for Official Publications of the European Communities.

—Peter Curwen

See EUROPEAN ECONOMIC AREA; EUROPEAN ENVIRONMENT AGENCY.

EEA

See EUROPEAN ECONOMIC COMMUNITY.

EEC

See EUROPEAN ECONOMIC INTEREST GROUPING.

EEIG

See EUROPEAN FREE TRADE ASSOCIATION.

EFTA

See EUROPEAN INVESTMENT BANK.

EIB

See EUROPEAN INFORMATION CENTERS.

EICs

See EUROPEAN INVESTMENT FUND.

EIF

See EUROPEAN LIBERAL, DEMOCRATIC, FORMIST PARTY.

ELDR

AND

RE-

162

Elysée Treaty

The Treaty of Friendship and Reconciliation signed by French president Charles de Gaulle and German chancellor Konrad Adenauer in the Elysée Palace, Paris, in January 1963 was a landmark in postwar Franco-German relations. In the so-called Elysée treaty, both sides pledged “to consult each other, prior to any decision, on all questions of foreign policy . . . with a view to reaching an analogous position” and established an elaborate consultative mechanism of biannual summits, joint councils of finance and defense ministers, and an active youth exchange program. Initially the treaty alarmed many in Germany—including members of Adenauer’s own Christian Democratic party— who feared that the chancellor was being unduly influenced by de Gaulle, who was then pursuing a seemingly anti-American and anti-EC foreign policy. Accordingly, a new preamble to the treaty, inserted at the insistence of a majority in the German parliament in May 1963, asserted Germany’s primary commitment to existing alliance obligations and subordinated the Franco-German entente to Germany’s multilateral obligations in the Atlantic Alliance, the EC, and even the GATT. Weakened as an instrument of Gaullist policy, the Elysée treaty instead became an important building block for deeper European integration. Despite his disappointment over the German parliament’s behavior, de Gaulle continued to attend regular bilateral meetings under the terms of the treaty. More important, subsequent French presidents and German chancellors, as well as a host of government ministers and officials, similarly stuck to a fixed schedule of bilateral meetings. With the rapid improvement of Franco-German relations in the early 1970s and a growing consensus in both countries about the importance of deeper integration, these frequent, institutionalized contacts facilitated the EC’s revival in the 1980s and remain an essential element of the EU’s momentum to this day. See also FRANCE, GERMANY, AND POST–COLD WAR EUROPE.

Elysée Treaty

See FLAG.

Emblem

See EUROPEAN AGENCY MEDICINAL PRODUCTS.

EMEA

FOR THE

EVALUATION

OF

See EUROPEAN MONETARY INSTITUTE.

EMI

See CONFIDENCE PACT ON EMPLOYMENT.

Employment Pact

The Empty Chair Crisis, which takes its name from France’s withdrawal from the Council of Ministers and the Committee of Permanent Representatives (COREPER) in July 1965, brought the EC to a standstill until the crisis was resolved by the so-called Luxembourg Compromise of January 1966. Even after France resumed full participation in the EC’s institutions, the terms of the Luxembourg Compromise impaired the Community’s development for nearly twenty years, until political and economic changes in the mid-1980s obliged the member states to reform decisionmaking in the Council. The crisis began over the Commission’s proposals to link a financial provision for the Common Agricultural Policy (CAP) with greater power for itself and the European Parliament (EP). President Charles de Gaulle of France wanted a new financial arrangement for the CAP but not enough to sanction the Commission’s plan. Moreover, de Gaulle objected to the introduction of majority voting in the Council of Ministers, mandated by the Treaty of Rome to come into operation in January 1966. For de Gaulle, an ardent intergovernmentalist, the prospect of being outvoted in an international organization was unacceptable. De Gaulle withdrew French representation from the EC in July 1965 after the breakdown of talks to consider the Commission’s CAP proposals. Three months later he announced that France would not retake its seat in the Council unless the member states agreed to defer majority voting. The others refused to comply. Thus the crisis seemed set to continue indefinitely, until de Gaulle suffered a setback in the presidential election of December 1965. Although victorious, de Gaulle had to fight off a stiff challenge from François Mitterrand, who ran on a pro-EC ticket. Chastened, de Gaulle decided to return to the negotiating table. The crisis finally came to a close at a foreign ministers’ meeting in Luxembourg on January 28

Empty Chair Crisis

and 29, 1966, where agreement was reached to adopt an interim financial regulation for the CAP, deferring the question of additional powers for the Commission and the EP. Majority voting in the Council remained the outstanding issue. After restating their positions, both sides approved a short declaration, the Luxembourg Compromise, which maintained the principle of majority voting but acknowledged that “when very important issues are at stake, discussions must be continued until unanimous agreement is reached.” Apparently the result was a draw; in fact it represented a victory for de Gaulle. The Council approved temporary funding for the CAP in May 1966. In the meantime, the Commission’s ambitious proposals had been soundly defeated. Moreover, despite other member states’ statement of support for majority voting, the Luxembourg Compromise impeded effective decisionmaking in the Council for many years to come. General de Gaulle’s insistence on unanimity heightened the member states’ awareness of each other’s special interests and increased their reluctance to call a vote in the Council even when no vital interest was at stake. See EUROPEAN MONETARY SYSTEM.

EMS

See ECONOMIC AND MONETARY UNION: POLITICAL ISSUES; ECONOMIC AND MONETARY UNION: TOWARD A SINGLE CURRENCY.

EMU

Ruud Lubbers, prime minister of the Netherlands and president of the European Council, proposed a European Energy Charter in July 1991 to help the Soviet Union develop its vast oil and natural gas industries and to secure imports of Soviet energy into Western Europe. Lubbers’s initiative involved a large international conference in The Hague, in December 1991, followed by continuous negotiations in Brussels for a treaty to implement the charter. By the time the treaty was signed by fifty countries in Lisbon on December 17, 1994, the initiative had lost much of its luster: the Soviet Union had collapsed, and many of its successor states lacked the political skills and legal capacity

Energy Charter

Energy Policy

163

to negotiate effectively; the United States distrusted the initiative, seeing it as a European effort to edge the United States out of lucrative Eastern European economic opportunities; and the EU had largely lost interest. Today, the energy charter is more significant as a case study of indifferent international negotiation than as an instrument of post–Cold War, pan-European economic development. Although the Treaty on European Union (TEU) confirms that the sphere of activity of the EU encompasses the energy sector, it is nevertheless a fact of political life that certain member states are still not prepared to transfer important responsibilities as regards energy policy to the European level. Moreover, in accordance with the principle of subsidiarity established in the treaty, energy policy must be largely regarded as the member states’ responsibility. Nevertheless, energy policy in the EU has a firm legal basis: coal is covered by the European Coal and Steel Community (ECSC) treaty, particularly Article 3 (general objectives) and Articles 57–64 (production and prices); nuclear energy is covered by the European Atomic Energy Community (EURATOM) treaty, in particular Articles 40–76 (investment, joint undertakings, and supplies) and Articles 92–100 (the nuclear common market); and overall energy policy and energy policy in other fields are covered by the European Economic Community (EEC) treaty, particularly Article 103(4) (supply difficulties) and Article 235, and are implicit also in the Single European Act (SEA). Instead of a separate energy chapter, the energy sector was simply incorporated in the TEU’s list of objectives (Article 3t). Moreover, energy is included under the TEU’s “Environment” title (Article 130s [2]), which deals with the choice of energy sources and the energy supply structure. The TEU further mentions Trans-European Networks (transport, telecommunications, and energy infrastructure) (Title XII, Articles 129b, c, and d in connection with Articles 70 and 130a) to help promote economic and social cohesion in the EU.

Energy Policy

Policy Development The EU’s energy policy owes its origins to a postwar concentration, for political and economic rea-

164

Energy Policy

sons, on two supply technologies: coal and nuclear power. In the 1970s, in the aftermath of the oil crisis, the need to reduce excessive dependence on imported oil focused attention on energy policy. As a result, during the 1980s some limited policy initiatives were taken in relation to renewable energy and energy efficiency. Until the late 1970s there was fundamental agreement on the Community’s energy policy and its objectives: nuclear energy was given special importance as a future source of energy for the EC, thereby making it independent of energy imports. The EURATOM treaty, which entered into force in 1958 at the same time as the EEC treaty, was intended to promote nuclear energy for this purpose. Since the early 1980s, however, a consensus about nuclear energy no longer exists. The treaties establishing the ECSC and EURATOM were concluded under different political, social, ecological, and economic conditions from those that now prevail. Today there are differences of opinion among the public, national governments, and European institutions not only about nuclear energy but also about other important energy issues. In the absence of agreement on energy policy, it is difficult for the EU to make strategic decisions in this field. The two most important issues, nuclear safety and the greenhouse effect, have as yet remained totally unsolved although it is precisely such transborder problems that are suitable for action at the European level. The objectives of the EU’s energy policy are currently under review. According to a recent Commission white paper, An Energy Policy for the European Union (COM[95] 682 final), energy policy must form part of the general aims of the EU’s economic policy based on market integration, deregulation, limited intervention (based on what is strictly necessary in order to safeguard the public interest and welfare), sustainable development, consumer protection, and economic and social cohesion. However, beyond those general aims energy policy must pursue goals that reconcile competitiveness, security of supplies, and protection of the environment. Overall, energy policy must satisfy the EU’s central concern for job creation and the quest for greater business efficiency, on the one hand, and for environmental protection, on the other. In pursuing these aims, the EU cannot be unaware that its energy dependence will increase in the near future and that the choices to be made as

regards protection of the environment in particular may heighten that dependence. Nor may it disregard the fact that European integration involves greater solidarity in the energy choices made by each of the member states. Finally, it cannot forget that the energy scene is marked by crises and by changes in outlook that justify flexibility and adaptation in defining and implementing an energy policy. In view of these various constraints, the white paper acknowledged that (1) market integration is the central, determining factor in the EU’s energy policy; (2) concerns regarding competitiveness and environmental protection require a balanced approach in the medium or long term that is based on internalization of costs; (3) the external dimension is generally the most important vehicle for action, first of all because the EU’s supplies come mainly from outside producers and, above all, because the growth of consumption in nonmember countries will be the main cause for concern in the years ahead; and (4) security of supply will continue to be a constant concern of public authorities. The white paper provided an indicative work program for the Commission for the years ahead that takes account of the limits of EU action for reasons linked either to subsidiarity or to budgetary constraints. The white paper’s recommendations do not go beyond the limits set out by the present treaties and stay within the framework of the budgetary forecasts. Therefore the Commission does not envision any transfer of powers or any new budget spending. Implementation of the program will pass through the EU’s normal decisionmaking process via proposals and communications or new management approaches toward existing machinery. However, since all action in the energy sector must adapt to changing conditions, on the basis of a common perception of the problems and their consequences, the work program will be monitored and adjusted every two years as part of a report on energy that will enable relevant institutions to provide an update on the aims pursued. Apart from general energy objectives, the Commission has set several sectoral objectives: maintaining the percentage of solid fuel (coal) in total energy consumption figures, in particular by making the relevant production capacity more competitive; increasing the ratio of natural gas in the energy balance; establishing maximum safety

conditions as a prerequisite for the planning, construction, and operation of nuclear power stations; and increasing the share of renewable sources of energy. Although the EU has achieved undeniable successes in pursuing these objectives, the success rate of the various member states in achieving them is still very unequal. Present Situation The EU has already achieved a degree of success in respect to its energy objectives (reduction of energy dependence, development of crude oil substitutes, energy saving, and so on). Since 1975 the Community has seen a considerable increase in primary energy production, especially as a result of increased oil production in the UK. Despite a considerable increase in economic output, the rise in gross domestic energy consumption in the EU has been relatively slight. Also since 1975, the EC has considerably reduced its energy dependence, especially its dependence on crude oil. However, there are still considerable differences between member states in respect to production and consumption, overall energy dependence, and the attainment of energy conservation objectives and crude oil substitution. There are also great differences between member states concerning the share of individual energy sources in total consumption. This is attributable not only to structural differences between member states but also to different national energy objectives (for example, in respect to nuclear energy). Sectoral aspects. The EU’s energy policy objectives are to promote the use of coal and other solid fuels and to make domestic production capacity more competitive. There are now virtually only three coal-producing countries left in the EU—Britain, Germany, and Spain—because large quantities of much cheaper coal are being imported from outside the EU. The correspondingly large subsidies needed to maintain production in Germany and Spain are meeting with increased resistance from buyers, consumers, and suppliers of other sources of energy. The questions of whether the EU should permit the continuation of coal subsidies in the long term (beyond the year 2000) and what level of production (ceiling) should be permitted for the coal-producing countries are currently a subject of controversy. The EU’s policy objective in regard to hydrocarbons is to substitute other forms of energy for crude oil. Community measures to encourage

Energy Policy

165

prospecting (e.g., offshore exploration) and exploitation of hydrocarbons (e.g., natural gas) are a step in this direction. Security of supply is to be encouraged by diversifying sources (member states must keep stocks of the main petroleum products corresponding to ninety days’ consumption on the basis of the previous year’s figures). Nuclear energy is still accorded a key role in the EU’s energy policy objectives. However, since the Chernobyl disaster in April 1986, the role of nuclear energy has become highly controversial. Abandonment of the nuclear option is at best a medium-term prospect, but greater efforts must undeniably be made to improve the safety standards of nuclear power stations. The share of renewable sources of energy (approximately 2 to 3 percent of total consumption) is to increase significantly. Research, development, and demonstration projects. The Community’s research framework program encompasses many energy-related projects in order to support the above-mentioned energy policy objectives. These projects are designed to improve the acceptance level, competitiveness, and scope of application of traditional energy forms (e.g., reactor safety and management of radioactive waste produced by nuclear energy; gasification and liquefaction in the case of coal); encourage the development of new forms of energy (alternative energy sources, nuclear fusion); and promote energy saving and the rational use of energy. The single market program. In the energy sector, completion of the single market requires the removal of numerous obstacles and trade barriers, the approximation of tax and pricing policies, measures in respect to norms and standards, and environmental and safety regulations. Following the directives adopted in 1990 and 1991 on transit of electricity and gas, a further opening of the electricity and gas networks for large industrial customers (third party access) remains highly controversial. The greenhouse effect and international cooperation. Because the EU has not yet been able to achieve a consensus on energy policy, a number of major decisions concerning the greenhouse effect and international cooperation are still outstanding. The EU has stressed its commitment, particularly as regards international cooperation and efforts to combat the greenhouse effect, to taking action itself. However, the highly controversial

166

Engrenage

1992 proposal for the introduction of a carbon dioxide (CO2) tax has not yet been implemented, partly because of strong opposition by a number of member states or industrial sectors involved and partly because of lack of support from the EU’s main competitors (the United States and Japan) on the international market. Participants at the UN conference on climatic change, in April 1995, expressed particular regret at the EU’s failure to take action on the proposed CO2 tax. Comprehensive cooperation with the Central and Eastern European countries that are undergoing radical change is also under discussion, particularly in respect to energy and environmental policy. The EU, with its financial resources and technical know-how, has a particular role to play in this context. The European Energy Charter, which was finally signed in Lisbon on December 17, 1994, after laborious negotiations, could provide a long-term basis for essential East-West cooperation in the energy sector. See also ENVIRONMENTAL POLICY; EUROPEAN ATOMIC ENERGY COMMUNITY; EUROPEAN COAL AND STEEL COMMUNITY; RESEARCH AND TECHNOLOGICAL DEVELOPMENT POLICY. Leydon, Kevin. 1996. European Energy Policy to 2020: A Scenario Approach. Luxembourg: Office for Official Publications of the European Communities. McGowan, Francis, ed. 1996. European Energy Policies in a Changing Environment. Heidelberg: Physica Verlag. Walde, Thomas, ed. 1996. The Energy Charter Treaty: An East-West Gateway for Investment and Trade. London: Klewer.

Bibliography

—Peter Palinkas

A French word with no direct English translation, engrenage loosely means “getting caught up in the gears.” It connotes the “Monnet method” of integration: individuals, interest groups, institutions, and national governments, once involved in a specific course of action, find themselves having to take additional, broader actions that unwittingly deepen European integration.

Engrenage

The six founding members of the EC subscribed to the principle written into the Rome treaty of March

Enlargement

25, 1957, that “any European State may apply to become a member of the Community” (Article 237). This opened up the way to four successive enlargements: Britain, Denmark, and Ireland joined in 1973; Greece in 1981; and Spain and Portugal in 1986. Austria, Finland, and Sweden joined the newly launched EU in 1995, bringing the membership to fifteen states. (See Table 5.) Enlargement, however, has not come to a halt. There is now talk of the possibility of a future EU composed of 20, 24, 27, even 30 members. The fall of the Berlin Wall and the disintegration of the Soviet Union radically changed the architecture of Europe. Many claim that the EU’s center of gravity has moved well to the east of Brussels. German chancellor Helmut Kohl, for example, declared in an April 1994 speech that “the Baltic Sea is just as much a European one as the Mediterranean.” Ten countries of Central and Eastern Europe have addressed membership applications to the EU: Hungary (March 31, 1994), Poland (April 5, 1994), Romania (June 22, 1995), Slovakia (June 27, 1995), Latvia (October 13, 1995), Estonia (November 24, 1995), Lithuania (December 8, 1995), Bulgaria (December 14, 1995), Czech Republic (January 17, 1996), and Slovenia, a republic of the former Yugoslavia (June 10, 1996). In addition, applications have been pending, though not necessarily active, from four other countries: Turkey (April 14, 1987), Cyprus (July 3, 1990), Malta (July 16, 1990), and Switzerland (May 20, 1992). It is not unlikely that some of the other former Soviet Republics, Albania, and possibly some other republics of the former Yugoslavia may also seek membership in due course. The original criterion for membership, “Europeanness,” has been extended as a result of changing circumstances in the European and international arenas, and also as a result of experiences derived from protracted negotiations with applications in all previous enlargements (the first enlargement took well over ten years, the third almost ten). Although there have been no treatybased modifications in the membership criteria, additions to the list of qualifications have been based on two principal sources: Article 237, Paragraph 2, of the Rome treaty and Article O, Paragraph 2, of the Treaty on European Union (TEU) both lay down that “the conditions of admission … shall be the subject of an agreement between the Member States and the applicant State.” Since 1992, meetings of the European Council and inter-

Enlargement Table 5

EC/EU Member States, 1957–2000

Original Member States (1957) Belgium France Germany Italy Luxembourg Netherlands

1st Enlargement (1973) Britain Denmark Ireland

2nd Enlargement (1981) Greece

3rd Enlargement (1986) Spain Portugal

governmental conferences (IGCs) have, more or less officially, added four more conditions. In addition to being European, a state must have a liberal democratic system in which the rule of law and respect for human rights prevail; it must have a market-based economy; and it must be prepared to accept the acquis communautaire (rights and obligations deriving from EU treaties, laws, and regulations) as it exists at the time of accession; finally, although this is an implied condition, applicants must not pose major distributive or budgetary problems for the EU. The procedures for enlargement are contained in Article O of the TEU. The first requirement is that the Council of Ministers consult the European Commission, which issues an “opinion.” (See Table 6.) This includes a detailed description of the political and economic situation in each applicant country, an evaluation of its capacity to adopt and implement the acquis in all areas of the EU’s activity, an indication of possible problems that may arise in accession negotiations, and a recommendation concerning the opening of negotiations. An opinion also provides an analysis of the applicant’s current situation and an assessment of the progress to be expected before accession, bearing in mind changes in the EU’s acquis and the changing situation in the applicant country. In the preparation of its opinion, the Commission largely uses information provided by the applicant countries themselves. The Commission’s opinion on Turkey’s application was issued on December 20, 1989, but because of severe political problems associated with Turkish membership there has been no forward movement despite a promise included in the 1964 association agreement with Turkey that it would lead eventually to membership. Opinions on Cyprus and Malta were issued on June 30, 1993, and a commitment was made to move ahead with negotiations no later than six months after the conclusion of the 1996–1997 IGC. However, as a result of a change in government in October

4th Enlargement (1995) Austria Finland Sweden

167

Candidates for 5th Enlargement

Czech Republic Poland Hungary Estonia Slovenia Romania

Latvia Lithuania Bulgaria Slovakia Cyprus Malta

1996, Malta decided to put its application on the back burner. As far as Switzerland is concerned, Swiss voters effectively rejected membership of the EU when, in a referendum in December 1992, they rejected membership of the European Economic Area. By far the biggest enlargement issue is that of accession by the ten Central and Eastern European states (CEES). Preparations for this eastern enlargement take place against a background of widespread political and economic change throughout Europe. There are enormous implications both for the CEES and the EU. The CEES are looking for an anchorage in European political, economic, security, and defense organizations. They are diverse in size, wealth, and progress in building market economies and democracies. The average per capita GDP is only about 30 percent of that of the EU, and the GDP of the ten states combined is less than 5 percent of the EU Fifteen. For its part, the EU must make decisions on the entry into the third phase of the Economic and Monetary Union, it is engaged in treaty revision, and it faces the expiration of existing financing arrangements in 1999. In addition, it is attempting to define its Common Foreign and Security Policy and is involved in the adaptation of NATO and the Organization for Security and Cooperation in Europe (OSCE) to the new conditions of the 1990s. Since June 1993, an elaborate framework has been developed to expedite the process of enlargement to include the CEES, and there has been a marked widening and deepening of relations between the EU and most of the CEES. It was then that the European Council, meeting in Copenhagen in June 1993, first established that those countries that had signed Europe Agreements with the EU could be eligible for membership. These agreements give the signatories associate status (meaning that they are potential EU members) and cover both political and economic relations. The Madrid

168

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Table 6

Chronology of Enlargement

Country UK

Denmark Ireland Norway Greece Spain Portugal Austria Finland Sweden Czech Republic Poland Hungary Romania Slovenia Estonia Latvia Lithuania Bulgaria Slovakia Cyprus Malta Turkey Switzerland

Application

Aug. 9, 1961 May 10, 1967

Aug. 10, 1961 May 11, 1967 July 31, 1961 May 11, 1967 July 21, 1967

Nov. 25, 1992 June 12, 1975 July 28, 1977 Mar. 28, 1977 July 17, 1989 Mar. 18, 1992 July 1, 1991 Jan. 17, 1996 Apr. 5, 1994 Mar. 31, 1994 June 22, 1995 June 10, 1996 Nov. 28, 1995 Oct. 27, 1995 Dec. 12, 1995 Dec. 16, 1995 June 27, 1995 July 4, 1990 July 16, 1990 Apr. 14, 1987 May 20, 1992

Commission Opinion

Sep. 10, 1961 Sep. 29, 1967 (revised Oct. 1, 1969) Sep. 10, 1961 Sep. 29, 1967 (revised Oct. 1, 1969) Sep. 10, 1961 Sep. 29, 1967 (revised Oct. 1, 1969) Sep. 29, 1967 (revised Oct. 1, 1969) Mar. 24, 1993 Jan. 26, 1976 Nov. 29, 1978 May 19, 1978 July 31, 1991 Nov. 4, 1992 July 31, 1992 July 16, 1997 July 16, 1997 July 16, 1997 July 16, 1997 July 16, 1997 July 16, 1997 July 16, 1997 July 16, 1997 July 16, 1997 July 16, 1997 June 30, 1993 June 30, 1993 Dec. 20, 1989 —

Begin Negotiations

Accession Treaty

Referendum

Membership

— Jan. 22, 1972

— Oct. 2, 1972

— Jan. 1, 1973

Oct. 10, 1961 June 30, 1970

— Jan. 22, 1972

Oct. 25, 1961 June 30, 1970

— Jan. 22, 1972

Oct. 26, 1961 June 30, 1970

June 30, 1970

Apr. 5, 1993 July 27, 1976 Feb. 5, 1979 Oct. 17, 1978 Feb. 1, 1993 Feb. 1, 1993 Feb. 1, 1993 Mar. 31, 1998 Mar. 31, 1998 Mar. 31, 1998

Jan. 22, 1972

June 24, 1994 May 24, 1979 June 11, 1985 June 11, 1985 June 24, 1994 June 24, 1994 June 24, 1994

— —

— May 10, 1972 Sep. 25, 1972

Nov. 28, 1994 — — — June 12, 1994 Oct. 16, 1994 Nov. 13, 1994

— Jan. 1, 1973

— Jan. 1, 1973 —

— Jan. 1, 1981 Jan. 1, 1986 Jan. 1, 1986 Jan. 1, 1995 Jan. 1, 1995 Jan. 1, 1995

Mar. 31, 1998 Mar. 31, 1998

Mar. 31, 1998

Note: The European Council decided in December 1999 to begin accession negotiations with Romania, Latvia, Lithuania, Bulgaria, Slovakia, and Malta early in 2000, and it recognized Turkey as a candidate country. Switzerland’s application is on hold.

European Council in December 1995 reiterated the existing membership criteria and referred also to the need “to create the conditions for the gradual harmonious integration of the candidate countries particularly through the development of the market economy; the adjustment of their administrative structures; and the creation of a stable economic and monetary environment.” The European Council asked the Commission to “make its evaluation of the effects of enlargement on Community policies [impact study]; to embark upon the preparation of a composite paper which will complement the opinions and impact studies by providing an overall approach to questions of enlargement; and to submit a communication on the future financial

framework of the EU, having regard to the prospect of enlargement, immediately after the conclusion of the IGC.” It is quite clear, therefore, that “there is scope for different interpretations of many of these conditions, and it is not possible to give a clear definition of an acceptable country. . . . It may also be the case that the Community’s criteria may be interpreted more generously for some applicants than others, with consequent political implications” (Redmond, 1993, p. 210). The Europe Agreements provide the legal framework for the association between the applicant countries and the EU and establish a forum for discussing progress in preparations for membership at a ministerial level in the association

councils, at a senior level in the association committees, and in joint parliamentary association committee meetings. The Essen European Council in December 1994 went a step further by deciding to establish a “comprehensive strategy” for preparing those countries that have Europe Agreements for accession to the EU. The comprehensive strategy includes alignment of single market legislation, support by the EU for transition from the EU’s current program of grant assistance (the Pologne et Hongrie: Actions pour la Reconversion Économique [PHARE] program) to the CEES, and a “structured dialogue” with all the CEES. The structured dialogue consists of meetings of heads of state and government (once a year) and ministerial meetings in the fields of foreign affairs (twice a year); the internal market, finance, economic affairs, and agriculture (once a year); justice and home affairs (twice a year); and transport, telecommunications, culture and education, research, and environment (once a year). The Commission was asked to forward to the Council a comprehensive package of communications (opinions, impact study, composite paper, and report on the EU’s future financial framework) on enlargement soon after the end of the IGC in June 1997. The Commission did so in July 1997 when it produced its voluminous Agenda 2000 report, which endorsed the membership applications of Poland, Hungary, the Czech Republic, Estonia, and Slovenia (Commission, 1997). In light of Agenda 2000 and the results of the IGC, the European Council decided in December 1997 that the Czech Republic, Poland, Hungary, and Slovenia would be included in the first phase of the negotiations. The negotiations will be conducted by the Council presidency of the EU on behalf of the member states, with the assistance of the Commission. It is up to the Commission to determine the bases for negotiation in each sector, although bearing in mind the injunctions of the Madrid European Council that the applicant countries should be treated on an equal basis. Accordingly, accession negotiations will begin in early 1998. Previous negotiations have taken anywhere from thirteen months for Austria, Sweden, and Finland to seven years in the case of Spain and Portugal. Much will depend on the complexity of the issues to be resolved in each case. Given the wide range of problems under consideration, it is clear that some negotiations will take longer than others. At the end of the ne-

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gotiations with the different applicants, in accordance with Article O of the TEU, “the conditions of admission and the adjustments to the Treaties on which the Union is founded which such admission entails shall be the subject of an agreement between the Member States and the applicant state. This agreement shall be submitted for ratification by all the contracting states in accordance with their respective constitutional requirements.” In light of all these requirements, the first accessions are not likely before the years following 2000. According to Commission sources, the benefits of enlargement, when it occurs, should include extending the zone of stability in Europe, thus contributing to security and peace throughout the continent; stimulating economic growth and providing new opportunities for business throughout Europe by extending the single market from 370 million to 480 million consumers; giving the EU greater weight in world affairs and making it a stronger partner in international negotiations (Commission, 1996). By the opposite token, there will be heavy burdens, above all in the Common Agricultural Policy and the structural funds, the two largest components of EU spending, but there has been no precise assessment of the costs to be incurred. However, no matter what the cost, the heads of state and government declared unequivocally at the Madrid summit in December 1995 that “enlargement is both a political necessity and a historic opportunity for Europe.” See also CENTRAL AND EASTERN EUROPEAN STATES. Commission. 1996. “Enlargement: Questions and Answers.” Memo 96/78, July 30, 1996. Brussels: Spokesman’s Service of the European Commission. ———. 1997. Agenda 2000. COM(97)2000 Final. 2 vols. Luxembourg: Office for Official Publications of the European Communities. Michalski, Anna, and Helen Wallace. 1992. The European Community: The Challenge of Enlargement. London: Royal Institute of International Affairs. Murphy, Anna. 1996. “Enlargement and the Wider Agenda of the European Union.” ECPR News 7, no. 3 (Summer). Redmond, John. 1993. “The Wider Europe: Extending the Membership of the EC.” In Alan Cafruny and Glenda G. Rosenthal, eds., The Maastricht Debates and Beyond. Vol. 2 of The State of the European Community. Boulder: Lynne Rienner.

Bibliography

170

ENs

Redmond, John, and Glenda G. Rosenthal, eds. 1998. The Expanding European Union: Past, Present, Future. Boulder: Lynne Rienner.

—Glenda G. Rosenthal

See EUROPEAN STANDARDS COMMITTEE; REGULATORY POLICY; STANDARDS AND CONFORMITY ASSESSMENT.

ENs

See SMALL AND MEDIUM-SIZED ENTERPRISES.

Enterprise Policy

Environmental policy, although officially accepted as an area within the EC’s policy competence in 1973, achieved much greater prominence during the late 1980s and early 1990s than it had in the earlier period of EU policymaking. Although the EU’s legislation is not equally important across all issue areas, the EU is now a central actor in the making of environmental policy in Western Europe. Furthermore, environmental standards as set at the EU level are the key reference points for the Central and Eastern European states (CEES) as they plan for accession. Finally, the EU’s participation in global environmental negotiations and treaties—the Montreal protocol and the UN Conference on Environment and Development (UNCED) in particular—has made its international positions on global environmental issues of consequence to third parties all over the planet.

Environmental Policy

The Evolution of Environmental Policy Environmental protection became a Community responsibility in 1972 when the heads of state and government, meeting several months after the UN Conference on the Human Environment (the Stockholm conference), decided that the Community should act to protect the environment. Although there was no specific legal basis for such a competence, the Community, acting under rules of unanimity, enacted far-reaching legislation to combat pollution. Between 1973 and 1987, roughly twenty important pieces of legislation were approved. These were not necessarily connected to trade or to transborder pollution. In the case of legislation reg-

ulating the quality of surface water from which drinking water was to be drawn, for instance, the Community’s action was more far reaching than national legislation and covered national waters as well as waters crossing national frontiers. A directorate-general (DG XI) for environmental policy was created in the Commission in 1981. Although it has remained relatively small compared to those concerned with economic and internal market activities, DG XI represents an institutional acknowledgment of the growing importance of environmental protection within the Community’s policy portfolio. It has also provided the main channel for environmental groups trying to pressure the Commission toward “greener” proposals, with the result that it has often been treated with suspicion by those within the Commission concerned with economic development and market liberalization. Given the breadth and crosscutting nature of environmental issues, several powerful DGs other than DG XI are also involved in this policy arena. Generally, the shape of a proposal is significantly affected by the identity of the DG that seizes control of the policy agenda. In particular, the directorates-general concerned with the internal market, agriculture, transport, and energy are often important in influencing Commission proposals. The Single European Act (SEA) represented a significant step in the institution-building process that has characterized the arena of environmental protection. Most important, it gave the Community an explicit legal basis upon which to operate. It also divided decisionmaking procedures into two categories. Those measures linked to the creation of an internal market were to be decided by qualified majority voting in the Council of Ministers, whereas those designed to protect the environment as such required unanimity. The European Parliament (EP) had a greater role to play in the former case than in the latter, as the use of qualified majority voting in the Council triggered the cooperation procedure in the EP. In May 1990, the Council approved a regulation (1210/90) establishing the European Environment Agency (EEA) and the European Environment Information and Observation Network. Although the Council did not accept the EP’s position that the new agency should be able to carry out inspections in the member states, it did leave open the possibility of future discussion of that

option. What the Council did not do in 1990, however, was to decide on the city in which the EEA should be located. Finally, at the Brussels summit of October 1993, Copenhagen was chosen as the seat of the new environmental agency, which, along with the Environment Information and Observation Network, “is intended to provide the Community and the Member States with objective, reliable and comparable information at European level enabling them to take the requisite measures to protect the environment” (Johnson and Corcelle, 1995, p. 364). In other words, it is to provide comparable data rather than to enforce EU environmental legislation. The Treaty on European Union (TEU) extended qualified majority voting and the role of the EP in environmental policymaking. However, the concept of “subsidiarity,” enshrined in the treaty, led to political conflicts over whether environmental legislation had become too intrusive. The fact that some environmental restrictions were related neither to transboundary pollution nor to market distortions was particularly criticized (Golub, 1996). Although some member states, Britain and France in particular, tried to obtain the roll-back of legislation felt to be overly stringent, that attempt was defeated. The Commission did agree, however, to simplify environmental legislation. Finally, the Amsterdam Treaty enshrined the principle of sustainable development as a core EU value. The Politics of Environmental Policymaking The extent of EU involvement in European environmental policymaking is so extensive that some observers have argued that this policy arena has very strong “federal” features. Clearly, as Nigel Haigh has written, “it cannot be repeated too often that it is impossible to understand the environmental policy of any of the EC Member States without understanding EC environmental policy” (Haigh, 1992, preface). Neither has EU jurisdiction limited itself to those areas that are clearly transboundary or affect international trade. EU environmental policy has addressed areas such as bathing water and urban wastewater, for example. How has the EU become so involved and so important? Although some countries have had some environmental protection laws, the field of “environmental policy” as we now think of it is very new. The countries that have become most active in

Environmental Policy

171

defining the substance and parameters of this new policy field have emerged as the policy leaders in many forums, including the EU. EU-level policymaking in the environmental arena is often driven by the activities of those leaders. A small number of member states approve significant new environmental protection laws while the rest of the member states do not (Sbragia, 1996). In particular, Germany, the Netherlands, and Denmark—the so-called green members or green troika—are the established policy leaders; the newest members— Sweden, Finland, and Austria—are expected to emerge as policy leaders as well. Countries such as Greece, Italy, Spain, Portugal, Ireland, and Belgium typically pass legislation only after it has been agreed to in Brussels. In fact, it is the EU’s policymaking process that engages the “laggards.” Typically, an environmentally progressive member state passes national legislation that is viewed either as a threat to the internal market or as damaging to the competitiveness of an industry. The affected industry therefore wants to externalize the cost of the new regulation by imposing it on its European competitors. Alternatively, there may be an environmental problem (such as urban wastewater) that the green member states think should be treated uniformly throughout the EU. Although the green members are often the catalysts for action by Brussels, environmental policy is segmented into sectoral policy, and political dynamics therefore vary considerably across sectors. No member state is the leader in all environmental sectors at all times. Therefore, states outside the “green troika” act as leaders in certain areas. For example, directive 76/464 (dealing with dangerous substances in water) was prompted by Belgium. Directive 75/440 (concerning the quality of surface water intended for the extraction of drinking water) was stimulated by proposed French regulation. In 1983 the British Royal Commission on Environmental Pollution called for lead-free gasoline in Britain and called on the government to lead a European initiative to phase out the use of lead in gasoline altogether. The small “green” states can trigger important policy waves. Both the Danes and the Dutch introduced carbon dioxide taxes at the national level, thus causing the Commission to worry that such taxes would distort the single market. In response, the Commission acted as a “policy entrepreneur” to place the carbon dioxide tax on the EU’s agenda

172

Environmental Policy

before the Rio earth summit in 1992. Although for a variety of reasons, including U.S. opposition, the carbon dioxide tax was not adopted, interests opposed to the tax have not been able to remove it from the policy agenda altogether (Zito, 1995). Notwithstanding the important role of other states, Germany plays a pivotal role in putting environmental issues (especially those concerning air pollution) on Brussels’s policy agenda. In the 1970s, Germany was not a pacesetter when it came to environmental protection (Weale, 1992a). But the German context changed dramatically in the early 1980s, when Germans realized that their forests were dying because of acid rain. As a result, Germany emerged as a “green” state (Weale, 1992b). By late 1982, German government policy was committed to a far-reaching set of environmental goals. The Green Party, founded in 1980 and present in the Bundestag since 1983, maintained pressure on the governing coalition. One of Germany’s key policy goals was to have the EU introduce more stringent environmental measures, partially to protect German industry from the competitive effects of more stringent German regulations (Boehmer-Christiansen and Skea, 1991). German influence has been particularly pronounced in the area of air pollution legislation. Once an environmental issue has made it to the EU’s agenda, the institutional dynamics of the EU’s policymaking system take over. The Commission typically tries to draft a directive that is less restrictive than the most restrictive national laws while more restrictive than the laws of the “laggard” states. EU environmental legislation thus has often ratcheted environmental protection upward in many of the member states (Kramer, 1992; Sbragia, 1996) but at the same time has been criticized by many in the “green” states as not progressive enough. In the last enlargement negotiations, the environmentally conscious applicants (Sweden, Finland, and Austria) carried on very difficult negotiations concerning their environmental laws, which were often more, and sometimes far more, stringent than the analogous EU legislation and furthermore introduced protection in areas where the EU did not (Johnson and Corcelle, 1995, pp. 10–11). In particular, the so-called periphery has been pressured to raise environmental standards. The Mediterranean states of Greece, Italy, Spain, and Portugal have typically given environmental protection low priority (La Spina and Sciortino,

1993). The desire for rapid economic development, and in Spain the concern with high unemployment, have made it difficult for ideas of sustainable development to make headway. However, in the 1990s Italy began to move in the direction of a more active proenvironmental stance, primarily because of the commitment and persistence of individual ministers. The fact that Italy, particularly northern Italy, is now far wealthier than the rest of the periphery may be favoring such a stance. Spain, however, has retained a far more skeptical position, blocking the further extension of qualified majority voting in some areas of environmental policy in the negotiations leading to the TEU. The European Court of Justice (ECJ), for its part, has played an important role in the incorporation of environmental policy in the EU’s jurisdiction. In the 1970s, it ruled that the Community could act in that area even though no mention of environmental protection was made by the Treaty of Rome. Its pronouncements were so strong in this area, in spite of the lack of an explicit legal basis, that environmental policy has been viewed as one of the areas in which the “judicial activism of the Court” has been particularly striking (Koppen, 1993, p. 136). Given the role of the ECJ in promoting free trade within the Community, it has played a critical role in delineating the degree to which environmental policy can restrict free trade. In recognizing exceptions to Dassonville, the key case calling for the removal of nontariff barriers, environmental protection has been typically treated as an appropriate exception. The Court’s decisions have generally supported environmental protection but insisted that, when choosing among policy alternatives, governments choose those mechanisms of protection least restrictive of trade. Implementation In the 1990s, the issue of enforcement of EU environmental legislation has become more prominent. Given the institutional structure of the EU, administrative implementation is the responsibility of the member states. Although the Commission can monitor the transposition of EU legislation into national law, it can do very little to monitor directly the extent to which such legislation is actually executed on the ground. It relies primarily on individual citizens and nongovernmental groups to bring noncompliance to its attention. Such noncompliance can then be prosecuted through the ECJ, but the standards of evidence demanded require that

citizens and environmental groups in the member states provide the data that will allow the Commission to make a persuasive case to the Court. Given the relatively weak organizational capacity of environmental groups in many of the member states (see, for example, Diani, 1995; Prendiville, 1994), such a system for monitoring enforcement leaves huge gaps. Although the Commission is exploring the establishment of networks among enforcement agencies and creating partnerships with other actors, it is clear that enforcement of EU environmental legislation will be problematic in many of the member states for a long time to come. International Involvement The EU has become active at the international and global arena in a wide variety of forums and in a wide variety of issue arenas. Its competence to act in the international arena is rooted in the ERTA decision by the ECJ, a decision that essentially granted the Community external competence in an area once EU legislation had been approved in that area (Koppen, 1993). The EC is a signatory to a large number of international conventions, many of them addressing environmental problems in Europe. For example, the EC is a signatory to the Paris convention (Convention for the Prevention of Marine Pollution from Land-based Sources, signed in July 1974) covering pollution in the northeast Atlantic (Haas, 1993). Throughout the 1990s, the European Council gave environmental protection an increasing amount of attention. The international role of the EU in this sector began to be highlighted. At the Dublin summit of June 1990, the European Council issued The Environmental Imperative, a declaration that specifically focused on the external environmental role of the Community. In the words of the declaration, the Community had “a special responsibility to protect and enhance the natural environment not just of the Community itself but of the world of which it is a part.” The declaration called on the Community to take a leading role in global environmental affairs. In fact, the Community had begun to be viewed as an important actor at the global level since the mid-1980s. In the negotiations over the regulation of chlorofluorocarbons, the Community became an important actor in the ozone arena. It became a signatory to the major treaty (the Vienna convention) and the ensuing protocol (the Montreal protocol) and acted as a leader in the

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173

formulation of subsequent amendments to that protocol. In the case of climate change and environment and development, addressed during the Rio summit in 1992, the Community, represented by both the Commission and the Council presidency, again played an important role. EU access to the global arena has not been easy. Even at the regional level, the Community has not always been permitted to become a signatory to environmental treaties. For example, Sweden and the USSR prevented the Community from signing the Helsinki convention (Convention on the Protection of the Marine Environment of the Baltic Sea Area) in 1974 (Haas, 1993). At the global level, the United States has often been skeptical of the ability of the Community qua Community to ensure compliance by its member states. It has therefore often resisted demands by the Community to be granted an independent international status. The compromise agreed to by both sides has typically been that the Community would sign a convention but so would the member states (Sbragia, 1998). Such agreements are therefore known as “mixed agreements.” Conclusion Environmental policy has gradually become increasingly important within the EU’s policy portfolio. It has also come to shape and orient the environmental policy of the member states, with many of them implementing only that level of environmental protection agreed to in Brussels. At the global level, environmental protection has permitted the EU gradually to carve out an international profile for itself. See also EUROPEAN ENVIRONMENT AGENCY. Boehmer-Christiansen, Sonja, and Jim Skea. 1991. Acid Politics: Environmental and Energy Policies in Britain and Germany. London: Belhaven. Diani, Mario. 1995. Green Networks: A Structural Analysis of the Italian Environmental Movement. Edinburgh: Edinburgh University Press. Golub, Jonathan. 1996. Sovereignty and Subsidiarity in EU Environmental Policy. EUI Working Paper RSC No. 96/2. Florence: European University Institute. Haas, Peter M. 1993. “Protecting the Baltic and North Seas.” In Peter M. Haas, Robert O. Keohane, and Marc A. Levy, eds. Institutions for the Earth: Sources of Effective International Environmental Protection, pp. 133–182. Cambridge: MIT Press. Haigh, Nigel. 1992. Manual of Environmental Policy: The EC and Britain. Essex: Longman.

Bibliography

174

EP

Johnson, Stanley P., and Guy Corcelle. 1995. The Environmental Policy of the European Communities. 2d ed. London: Kluwer. Koppen, Ida J. 1993. “The Role of the European Court of Justice.” In J. D. Liefferink, P. D. Lowe, and A.P.J. Mol, eds., European Integration and Environmental Policy, pp. 126–149. New York: Belhaven. Kramer, Ludwig. 1992. Focus on European Environmental Law. London: Sweet and Maxwell. La Spina, Antonio, and Giuseppe Sciortino. 1993. “Common Agenda, Southern Rules: European Integration and Environmental Change in the Mediterranean States.” In J. D. Liefferink, P. D. Lowe, and A.P.J. Mol, eds., European Integration and Environmental Policy, pp. 217–236. New York: Belhaven. Prendiville, Brendan. 1994. Environmental Politics in France. Boulder: Westview. Sbragia, Alberta. 1996. “The Push-Pull of Environmental Policy-Making.” In Helen Wallace and William Wallace, eds., Policy-Making in the European Union. 3d ed. Oxford: Oxford University Press. ———. 1998. “The European Union and Compliance: A Story in the Making.” In Edith Brown Weiss and Harold K. Jacobson, eds., Engaging Countries: Strengthening Compliance with International Environmental Accords. Cambridge: MIT Press. Weale, Albert. 1992a. The New Politics of Pollution. Manchester: Manchester University Press. ———. 1992b. “Vorsprung durch Technik? The Politics of German Environmental Regulation.” In Kenneth Dyson, ed., The Politics of German Regulation. Brookfield, VT: Dartmouth. Zito, Anthony R. 1995. “Integrating the Environment into the European Union: The History of the Controversial Carbon Tax.” In Carolyn Rhodes and Sonia Mazey, eds., Building a European Polity? Vol. 3 of The State of the European Union. Boulder: Lynne Rienner.

—Alberta Sbragia

See EUROPEAN PARLIAMENT.

EP

See EUROPEAN POLITICAL COOPERATION.

EPC

See EUROPEAN PEOPLE’S PARTY.

EPP

See EUROPEAN PAYMENTS UNION; EUROPEAN POLITICAL UNION.

EPU

See EUROPEAN COMMUNITY ACTION SCHEME MOBILITY OF UNIVERSITY STUDENTS.

ERASMUS THE

FOR

See EUROPEAN REGIONAL DEVELOPMENT FUND.

ERDF

See EXCHANGE RATE MECHANISM.

ERM

See EXCHANGE RATE MECHANISM II.

ERM II

See EUROPEAN ROUND TABLE OF INDUSTRIALISTS.

ERT

See EUROPEAN SPACE AGENCY; EUROPEAN SURVEILLANCE AUTHORITY.

ESA

See ECONOMIC AND SOCIAL COMMITTEE.

ESC

See EUROPEAN SYSTEM OF CENTRAL BANKS.

ESCB

See EUROPEAN SECURITY AND DEFENSE IDENTITY.

ESDI

See EUROPEAN SOCIAL FUND.

ESF

See EUROPEAN STRATEGIC PROGRAM FOR RESEARCH DEVELOPMENT IN INFORMATION TECHNOLOGY.

ESPRIT AND

See BALTIC STATES.

Estonia

See EUROPEAN TELECOMMUNICATIONS STANDARDS INSTITUTE.

ETSI

Euro-Mediterranean Partnership

See EUROPEAN TRADE UNION CONFEDERATION.

ETUC

See EUROPEAN UNION.

EU

See EUROPEAN UNIVERSITY INSTITUTE.

EUI

See EUROPEAN ATOMIC ENERGY COMMUNITY.

EURATOM

See EUROPEAN RESEARCH COORDINATION AGENCY.

EUREKA

See EUROPEAN EMPLOYMENT SERVICES.

EURES

At the Madrid summit in December 1995, the European Council decided that the new currency, due to be used in daily transactions on January 1, 2002, at the latest, will be called the euro. The exchange of national notes and coins for the euro will be completed no later than July 1, 2002. One euro will equal one ecu.

Euro

The Euro-Arab dialogue (EAD) was a diplomatic initiative launched in the mid-1970s by the Commission and the member states (through the foreign policy coordination mechanism of European Political Cooperation) and the twenty countries of the Arab League. At the first meeting, held on July 31, 1974, it was agreed that a Euro-Arab General Commission and a number of working parties would be set up. The EAD never had much potential, however, because the two sides had a fundamentally different perception of the procedure’s nature and future: the European side refused to tackle overt political issues, such as Palestinian representation, and the Arab side was not eager to give specific assurances regarding the supply of oil to European countries. The EAD reached a stalemate in 1978, after the historic U.S.-brokered Camp David ac-

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175

cords between Israel and Egypt (which resulted in Egypt’s exclusion from the Arab League). EAD resumed briefly in 1981 and again in 1989–1990 but collapsed in the wake of the 1991 Gulf War. See EUROPEAN ASSOCIATION COMMERCE AND INDUSTRY.

Eurochambers

OF

CHAMBERS

OF

Originating in November 1993 as a Franco-German military brigade, the fifty thousand–strong Eurocorps “rapid reaction force” now consists also of units from Belgium, Luxembourg, and Spain (Eurocorps’ command rotates every two years among participating countries). Some see the Eurocorps, which is based in Baden Wurttenberg and became fully operational in 1995, as the nucleus of a future European army. More realistically, the Eurocorps symbolizes close Franco-German military cooperation and a quest by some EU member states for a European security and defense identity.

Eurocorps

EURODAC is a proposed computerized fingerprint recognition system for EU asylum seekers. The system would help implement the Dublin convention (1990), an agreement among EU member states to prevent multiple asylum applications. EU justice ministers took the first step toward setting up EURODAC in 1994, when they allocated funds for a feasibility study of fingerprinting at external borders. The proposed system is controversial because it could violate privacy laws, give the impression that asylum seekers are suspected criminals, and be seen to impose a new barrier between the EU and the Central and Eastern European states.

EURODAC

Euro-Mediterranean Partnership

Launched by the EU and the so-called MED 12 (Algeria, Cyprus, Egypt, Israel, Jordan, Lebanon, Malta, Morocco, Syria, Tunisia, Turkey, and the Autonomous Palestinian territories) at a conference in Barcelona on November 28, 1995, the Euro-Mediterranean partnership seeks to promote security and sustainable development in the Mediterranean region. As part of the new partner-

176

EUROPA

ship, the contracting states pledged themselves to establish a Mediterranean Free Trade Area by 2010 and to link it through the EU to another free trade zone with the countries of Central and Eastern Europe. The partnership is the centerpiece of the EU’s Mediterranean policy. See also MEDITERRANEAN POLICY. The Commission makes a large amount of information on the EU’s history, policies, and institutions available through the EUROPA server (http://europa.eu.int), which it launched on the Internet in 1995. EUROPA handles some two million “hits” (accesses) per month.

EUROPA

Europe Agreements are association agreements between the EU and the Central and Eastern European states (CEES). The EU generally negotiates association agreements with neighboring countries to develop close economic and political relations, but it designated Europe Agreements as a cut above regular association agreements in order to demonstrate its commitment to the CEES’s difficult economic and political transition and acknowledge the CEES’s desire to join the EU. Europe Agreements superseded technical cooperation agreements negotiated between the EC and the CEES as the Cold War came to an end. On December 16, 1991, the EC signed the first Europe Agreements with Poland, Hungary, and Czechoslovakia (the agreement with Czechoslovakia never went into effect owing to the breakup of the country, but agreements with Slovakia and the Czech Republic were signed on October 4, 1993). The agreements included provisions for foreign policy coordination and cultural exchange as well as economic cooperation. Although they did not contain explicit commitments to EU membership, the agreements noted the CEES’s aspiration to accede, an aspiration that implicitly governs their operative provisions. Europe Agreements were later signed with Romania (February 1, 1993), Bulgaria (March 8, 1993), and the Baltic states (June 12, 1995), and a draft agreement was initialed with Slovenia on June 15, 1996. The Europe Agreements establish the usual bilateral association institutions: an association council, an association committee, and a parliamentary committee.

Europe Agreements

The Commission negotiated the Europe Agreements under Article 238 of the Treaty of Rome, which gives the EU the right to establish with nonmember states “association involving reciprocal rights and obligations, common action and special procedures.” However, as mixed agreements covering areas of both EU and national competence, Europe Agreements were signed by the EU and its member states and required the approval of the Council of Ministers, the European Parliament (EP), member states’ parliaments, and the parliament of the associated country before entering into force. As a result, there were long delays before the agreements became operational. In order to facilitate trade and investment during this lengthy ratification process, the Commission concluded interim agreements covering trade liberalization and other areas of exclusive EU competence. See also CENTRAL AND EASTERN EUROPEAN STATES.

European Agency for the Evaluation of Medicinal Products (EMEA)

As part of the single market program, in its 1985 white paper the Commission proposed a number of directives to unify the highly fragmented pharmaceutical sector. The relevant directives addressed such questions as common testing rules, price transparency, patient information, advertising, and above all, a move toward a centralized system for granting marketing approvals for new drugs. The Commission envisioned a system based on a European-level agency that would eventually take responsibility for all new drug approvals, backed by a host of new harmonizing directives laying down common procedures for testing and approval and ensuring free movement for human and veterinary medicines. Although the bulk of the work on common testing rules, residue limits, and the like had been completed by the end of 1990, debate continued over the status and function of the proposed new agency. On the basis of the catch-all Article 235 of the Rome treaty, member states finally decided in 1992 to establish a European Agency for the Evaluation of Medicinal Products (EMEA) but with a far more limited function (at least initially) than originally planned. Composed of a secretariat and two existing committees of member-state representatives (the Committee for Proprietary Medici-

European Atomic Energy Community (EURATOM)

nal Products and the Committee for Veterinary Medicinal Products), the new agency would be responsible for approving all medicines based on biotechnology and all veterinary medicines likely to improve the productivity of farm animals (this peculiar list resulted from a previous debate over the safety of biotechnology generally and over the possible approval of BST, which improves milk yields of dairy cows). Manufacturers of “innovative” medicines would have the option of applying to the EMEA for centralized approval, which would be valid in all member states. Manufacturers of other types of drugs would have to submit them for member-state approval, subject to mutual recognition and with binding arbitration at the EMEA in case of disputes. The EMEA began operating in January 1995 from its headquarters in London’s Docklands, in consultation with a network of two thousand experts from academia and national regulatory bodies. Despite some manufacturers’ fears that political considerations would remain an essential part of the regulatory process (national governments have considerable control over the new agency), the EMEA got off to a good start and quickly established a system under which national authorization recognized by it would be accepted by all member states. Harmonization and consolidation sped up the approval process, and companies are able to request specific advice from the EMEA at any time during product development. See also SINGLE MARKET PROGRAM.

European Agricultural Guidance and Guarantee Fund (EAGGF)

In April 1962 the Council of Ministers established the European Agricultural Guidance and Guarantee Fund (EAGGF) to finance the Common Agricultural Policy (CAP), which, apart from a mechanism for market intervention, included a socioeconomic policy intended to improve basic structural conditions in European agriculture. Thus, the EAGGF consists of two sections: a guarantee section for expenditure arising out of the market and prices policy (this accounts for the lion’s share of CAP expenditure and covers the cost of the minimum guaranteed price and exports refunds) and a guidance section to cover expenditure arising from the structural policy See also COMMON AGRICULTURAL POLICY.

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European Association of Chambers of Commerce and Industry (Eurochambers)

The European Association of Chambers of Commerce and Industry (Eurochambers) represents twelve hundred chambers of commerce and industry in thirty-two countries, with around fourteen million member companies, mostly small and medium-sized enterprises (SMEs). As part of the Pologne et Hongrie: Actions pour la Reconversion Économique (PHARE) program, the Commission funds Eurochambers to organize managerial training for SMEs in Central and Eastern Europe.

European Atomic Energy Community (EURATOM)

The European Atomic Energy Community (EURATOM) came into existence simultaneously with the European Economic Community on January 1, 1958. Moreover, the treaties establishing both Communities were signed together in Rome on March 25, 1957. Jean Monnet first proposed an organization, along the lines of the successful European Coal and Steel Community (ECSC), to promote the peaceful use of atomic energy and, at the same time, further the cause of European integration. Even while the ECSC treaty was being negotiated, Monnet knew that coal was rapidly losing its position as the basis of industrial power and, by extension, military might. Atomic energy had already revolutionized strategic doctrine and seemed poised to replace coal and oil as the main energy source of the future. Thus Monnet proposed a European Atomic Energy Community in order both to achieve the immediate objectives of the ECSC itself and to promote the distant goal of European federation. The French government was well disposed toward EURATOM, which offered an opportunity to share the exorbitant costs of atomic energy research and development while enjoying all the benefits. U.S. president Dwight Eisenhower’s recent Atoms for Peace initiative had increased EURATOM’s attraction. Not only was the United States willing to share nuclear technology for peaceful purposes, but also the State Department recognized the importance of Monnet’s initiative for the European integration movement. Notwithstanding U.S. support, other ECSC member states disliked the EURATOM idea, not least because they distrusted French motives.

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European Bank for Reconstruction and Development (EBRD)

In November 1954 Monnet announced his decision to resign from the High Authority of the ECSC, in part to promote EURATOM. He did so by establishing an elite interest group of political party and trade union leaders: the Action Committee for the United States of Europe. Although the Action Committee became a highly visible and successful lobby for further European integration, it failed to advance the EURATOM idea over a contemporaneous proposal to establish a common market among the six ECSC member states. The 1956–1957 intergovernmental conference (IGC) to draft plans for further European integration focused on the common market proposal. Yet a report by Paul-Henri Spaak, which laid the basis for the IGC’s outcome, proposed that the two objectives of sectoral integration (atomic energy) and wider economic integration (a common market) be realized in separate organizations, with separate treaties. The IGC culminated in the signing of the Treaties of Rome in March 1957, establishing the European Atomic Energy Community and the European Economic Community (EEC). From the outset EURATOM was a poor relation to the EEC. When the EURATOM institutions merged with those of the EEC and the ECSC in 1967, EURATOM virtually lost its own identity. Moreover, the other member states’ suspicion of France’s nuclear policy, an abundance of cheap imported oil in the 1960s, and—despite the oil crisis in the 1970s—growing environmental and safety concerns about atomic energy resulted in EURATOM’s marginalization.

European Bank for Reconstruction and Development (EBRD)

The European Bank for Reconstruction and Development (EBRD) is the only international financial institution that has a specific brief to help the Central and Eastern European states make the transition to market economics. The EBRD originated in a call by French president François Mitterrand in October 1989 to promote reform in Central and Eastern Europe (including the Soviet Union) by establishing a regional investment bank. In December 1989 the European Council, meeting in Strasbourg, endorsed Mitterrand’s proposal. Although initially France wanted to confine membership to the EC and its member states, the

European Council agreed that other Western countries, notably the United States, should be invited to participate. Negotiations opened in Paris in January 1990 and ended five months later with an agreement to establish the EBRD. The agreement stipulated that the bank’s emphasis would be on helping eligible countries with private-sector development and transition to free market economics, privatization, reform of the financial sector, stimulation of direct investment, and environmental rehabilitation. Membership in the bank was open to European countries, to non-European countries that are members of the International Monetary Fund, to the EC, and the European Investment Bank. The bank now has fifty-nine shareholders, including the EU and its member states. The EBRD began operations in April 1991, in London. In deference to France, Jacques Attali, one of Mitterrand’s closest friends and advisers, was appointed its first president. Attali was a colorful and controversial character whose avowed antiAmericanism exacerbated tension between the EC and the United States (the largest single shareholder, although collectively the EU and its member states have far more shares). Attali’s undoing, however, was a series of revelations in the Financial Times newspaper in 1993 about waste and mismanagement in the EBRD’s headquarters. In June 1993 Attali resigned. He was replaced six months later by Jacques de Larosière, a former French central bank governor. Under de Larosière’s leadership, the bank regained its credibility, doubled its capital, and began to reap the first substantial gains from its portfolio of equity investment in Central and Eastern Europe. See also CENTRAL AND EASTERN EUROPEAN STATES.

European Center for Industrial Relations (ECIR)

The European Center for Industrial Relations (ECIR) promotes harmonious industrial relations by running educational programs for employers and trade unionists and by providing information on the structure and operation of employer and trade union organizations and on EU economic and social policies. Part of the EU-funded European University Institute in Florence, the center was launched in October 1995.

European Coal and Steel Community (ECSC)

European Center for Infrastructure Studies (ECIS)

Founded in March 1994 by the European Round Table of Industrialists, the European Center for Infrastructure Studies (ECIS) is a small, nonprofit think tank, supported entirely by membership subscriptions and research contracts, that encourages the development of infrastructure networks by providing analysis and information. FrançoisXavier Ortoli, a former Commission president, was elected the first president of ECIS, which is located in Brussels.

European Center for the Development of Vocational Training (CEDEFOP)

The European Center for the Development of Vocational Training (CEDEFOP) is an independent agency, funded by the Commission, to analyze the impact at the European level of new forms of work organization and training programs. Established in 1975, CEDEFOP was located in Berlin until it was moved to Thessaloniki in 1994 as a result of a reshuffle of European institution and agency locations (making it the first European institution or agency to be located in Greece).

The European Central Bank will come into operation at the beginning of Stage 3 of the plan outlined in the Treaty on European Union to achieve Economic and Monetary Union (EMU). The ECB will be an independent body with exclusive responsibility for the formulation and implementation of the EU’s single monetary policy. An executive board of six individuals, appointed by the European Council for a nonrenewable term of eight years, will run the ECB’s day-to-day operations. Together with the governors of the national central banks, the Executive Board will constitute the Governing Council, the chief policymaking body of the ECB. The ECB will be located in Frankfurt, where its forerunner, the European Monetary Institute, is currently located. See also ECONOMIC AND MONETARY UNION: POLITICAL ISSUES; ECONOMIC AND MONETARY UNION: TOWARD A SINGLE CURRENCY.

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The Council of Ministers’ annual designation of a European City of Culture is one of the best-known actions in the developing area of EU cultural policy. The program began in 1985 and is temporarily included in the EU’s KALEIDOSCOPE program for general cultural events (1996–2000). Designated cities include Stockholm (1998), Weimar (1999), and Kraców (2000). See also CULTURAL POLICY.

European City of Culture

European Coal and Steel Community (ECSC)

The initialing of the Treaty of Paris on April 15, 1951, marked the first great step toward the economic and political integration of Europe. Once ratified, the treaty brought into existence the European Coal and Steel Community (ECSC), which commenced operations in Luxembourg in June 1952. Europe’s first so-called supranational institution, the ECSC grew out of negotiations launched dramatically on May 9, 1950, with the announcement of the Schuman Plan proposal by the French foreign minister, Robert Schuman. Its real author, however, was Jean Monnet, head of the French Plan de Modernisation et d’Equippement (Modernization Plan). Monnet chaired and directed the Paris proceedings as well as serving as the first president of the High Authority, the executive arm of the ECSC, until November 1954. In addition to France, the countries represented at the negotiations were Belgium, the Netherlands, Luxembourg, Italy, and the Federal Republic of Germany. Participation was open to other nations, but Britain refused to enter the talks. The six nations that took part in them made up the eventual membership of the Community. The founding of the Coal and Steel Community, whose institutions in 1967 formally merged with those of the European Economic Community (EEC) and the European Atomic Energy Community (EURATOM), was more significant as an episode in the diplomatic history than the political economy of Europe. Monnet and his followers claimed to have discovered in supranationalism a new principle and in the ECSC a new mechanism for overcoming the nationalism at the root of the two tragic European wars of the first half of this century. Yet the High Authority never effectively regulated the heavy industry of Western Europe, which though market responsive continued to operate within the

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framework of national producer associations and legislative environments; consequently the High Authority had no broader economic impacts. For this reason, but partly also because of Monnet’s unpopularity as president of the High Authority, the supranational ECSC did not provide a model for the institution that launched Europe on the second stage of integration, the European Economic Community. The coal-steel pool nonetheless set in motion a process, led by West Germany, involving the delegation of sovereign powers to a transnational authority at the European level that began what, for lack of a better term, can be called integration.

Establishing the European Coal and Steel Community Though Jean Monnet’s personal contribution was essential to the creation of the ECSC, he was not alone in imagining that a coal-steel pool, if set up in Western Europe, could provide a framework for peace and prosperity. Robert Schuman shared this hope, as did many policymakers in wartime Germany, the United States, and elsewhere, France not least of all. It is worth noting that discussions in August 1943 among Free French officials in Algiers resulted in highly sophisticated plans for such an organization. Intellectually, the proposal for a coal-steel pool had many fathers and, once launched, could draw on profound sources for support. However, it also faced a dense logjam of past and present problems that had to be cleared before real progress could be made toward its realization. One cannot easily imagine that anyone other than Monnet, or for that matter any committee or authority of whatever sort, could have done this job with such dispatch and so effectively; only he had the necessary connections, knowhow, and energy to manage the task. Monnet was an international businessman and civil servant with powerful friends on Wall Street and in Washington, where he had represented Britain in lend-lease matters during the war. He was also an influential adviser behind the scenes and deserves credit for his powerful advocacy of, and help in organizing, the Victory Program. Thanks to his access to the U.S. aid pipeline, Monnet enjoyed a high degree of autonomy as postwar head of the Modernization Plan, and his friendships with such movers and shakers as Secretary of State Dean Acheson and U.S. High Commissioner in Bonn John J. McCloy proved to be crucial to the success of the Schuman proposal.

So, too, were lessons learned in wartime Washington where, Monnet discovered, a few able and well-placed policymakers, working in close cooperation, could outperform even the best-oiled bureaucracies. During the Schuman Plan negotiations, as well as during his tenure as president of the High Authority, Monnet held all the lead strings. It must be added that this was in no small part thanks to Schuman, whose loyal backing helped Monnet circumvent the French administration and cabinet, which, in being called upon to ratify the Treaty of Paris, faced what amounted to a fait accompli: Europe: oui ou non! This removal of the coal-steel pool from quondam politics had, given the vividness of French war memories, a critical bearing on the outcome. The bold presentation of the Schuman Plan as something unprecedented and transcendent— though it was neither—produced a public relations coup of titanic proportions that was also an essential ingredient of success. By 1950 the idea for a coalsteel pool in Western Europe was very much in the air. Furthermore, there existed in the region a wellworked tradition of cartel-based producer cooperation that between the wars had given rise to schemes for conflict-resolution on a broader scale. These private networks continued operating in “New Order” Europe. Implicit, furthermore, in the notion that supranational control of heavy industry could prevent further world wars was a suggestion that it had caused them in the first place, something that no serious analysis would support. Yet lack of intergovernmental coal-steel cooperation had, after both world wars, vexed attempts to structure the framework of peace settlements. The acute shortage of combustible materials after 1945 provided daily reminders of this fact to everyone who slept cold at night or returned home from work in a factory unable to operate for lack of power. There existed finally a deep, even unfathomable, longing for peace that kept only the most skeptical from suspending disbelief, if only briefly, that new approaches to Franco-German reconciliation might work. The harsh reality in postwar Western Europe was that only the Ruhr disposed of the coal that everyone needed. Without the interposition of an effective control mechanism over the Ruhr, economic recovery was thus ultimately hostage to the smokestack barons of the ex-Reich. Monnet’s attempt to secure a settlement on this basis, backed strongly by the United States, depended on German chancellor Konrad Adenauer’s gaining com-

pliance from Ruhr industry to a regulatory regime that was an anathema to it. This regime represented an application of the trust-busting ideology of the New Deal; its purpose was to break up the Ruhr Konzerne and supporting cartel structure. Chancellor Adenauer managed to square the circle in the course of two sets of difficult negotiations running from December 1950 to January 1951 with, on the one hand, a team representing McCloy and Monnet and, on the other, the delegates of Ruhr heavy industry. The settlement removed the last obstacle to concluding the Paris talks. The Treaty of Paris consisted of exactly one hundred articles, plus annexes, setting aims and objectives, defining powers, and specifying rules of business conduct. The new Community was to serve a number of noble ends. In addition to preventing war, it was to ensure fair competition, raise and equalize wages and benefits, and stimulate economic growth. The powerful High Authority held management responsibility, its power hedged in special circumstances by a Council of Ministers representing the contracting states. The Council could direct the High Authority to take action in certain specified emergencies and had power to ratify certain fundamental decisions, which in the last analysis required assent from the contracting states. The treaty also provided for a high court with broad powers of review and a general assembly composed of appointees from the national parliaments to debate policy, statutory bodies with long-run significance for Community operations. Accomplishments The ECSC worked to the satisfaction of no one, yet its accomplishments were substantial. Monnet, first of all, tried to run the High Authority as he had the French Plan, through hand-picked commandos, thereby demoralizing the able industrialists and senior officials recruited to staff it. Monnet’s disinterest in coal-steel problems, along with abiding preoccupation with such extraneous issues as the European Defense Community, added to the problem. An advisory committee (AC), which provided for producer representation within the High Authority, became a focal point of opposition to Monnet. It stemmed initially from a Ruhr subject to decartelization decrees but soon also from other regions once it became clear that they were to be subject to a similar set of rules. The disputes between Monnet and the AC in turn mir-

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rored a broader systemic conflict that, during the years of Monnet’s presidency, the producers won. In short, trustbusting got nowhere, the Konzerne returned, an international steel export cartel reformed, and prewar patterns of producer cooperation in Western Europe revived. The openings of the common markets for coal and steel, in February and May 1953, had mainly symbolic significance. Regulation by producer associations and national governments continued much as before. However, the ECSC made progress in a number of important areas. The social agenda was not one of them; “wage harmonization,” as promised in the treaty, went nowhere. “Readaption,” meaning worker relocation and retraining, similarly flopped, in spite of a generous U.S. loan provided to make it possible. Still, the transitional arrangements provided in order to make Italian steel competitive did work and set a precedent critical for the subsequent expansion of the EC. The ECSC also developed a European scrap policy that, though its execution was open to criticism, nevertheless provided for a strategic reserve that limited hoarding, smoothed out the price cycle, and demonstrated that a European public authority could act on behalf of industry where private arrangements had failed. Breakthroughs also occurred in harmonizing taxes and unifying railroad rates. Each of these unspectacular developments was part of a learning process that would continue to be both cause and effect of the progress of integration itself. The broader success of the ECSC owed at least as much to Adenauer and the West Germans as it did to Monnet, the French, and the Americans. Chancellor Adenauer championed the Schuman Plan as an expedient means of bringing the occupation to an end, confident that if the principle of equality were granted—the one point about which he was adamant—the Federal Republic’s economic strength would assure West European respect for the national interest. The political exercise of sovereign powers was, as such, a secondary matter; here concessions could be made and indeed were. Political dwarfism and economic gigantism are more than mere clichés; they are the basis for the semisovereign status that has made Germany a model for the other great nations of Europe and without which reunification would have been impossible. The pursuit of Westintegration worked because of the Wirtschaftswunder (economic mira-

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cle): by the mid-1950s West Germany had become the engine of Europe’s economic development. The growth of these years provided persuasive evidence, regardless of the specific workings of the ECSC, of the wisdom of treating the Ruhr and the producers of the Federal Republic generally as a European asset. The decision to advance integration by means of a new customs union confirmed the course taken with the founding of the ECSC. See also MONNET, JEAN; SCHUMAN, ROBERT. Gillingham, John. 1991. Coal, Steel, and the Rebirth of Europe, 1945–1955. Cambridge: Cambridge University Press.

Bibliography

—John Gillingham

European Coal and Steel Community (ECSC) Consultative Committee

Made up of delegates from the member states, the European Coal and Steel Community (ECSC) Consultative Committee advises the Commission on ECSC-related initiatives and proposals (energy policy, research and technological development policy, external trade agreements, and so on). The committee meets about six times a year. See COMMISSION.

European Commission

European Committee for Standardization

See EUROPEAN STANDARDS COMMITTEE. There are three European Communities: the European Coal and Steel Community (ECSC), the European Atomic Energy Community (EURATOM), and the European Economic Community (EEC). Collectively they are known as the European Community (EC) and comprise the first pillar of the EU.

European Communities

In November 1993, when the Treaty on European Union (TEU) came into force, the European Com-

European Community (EC)

munity (EC) became the collective name for the three Communities—the European Coal and Steel Community (ECSC), the European Economic Community (EEC), and the European Atomic Energy Community (EURATOM)—that make up the first pillar of the European Union (EU). Nevertheless, the EC still refers unofficially to the EEC, the most important and far-reaching of the three Communities. This entry outlines the history and development of the EC from the origins of the EEC to the launch of the EU. The EEC originated in a proposal in 1952 by J. W. Beyen, foreign minister of the Netherlands, to extend the competence of the proposed European Political Community, which was part of the proposed European Defense Community (EDC). The Beyen Plan, a scheme for a customs union and common market embracing the six member states of the ECSC, survived the defeat of the EDC in August 1954 and, consequently, the demise of the European Political Community. Beyen believed that sectoral integration alone was insufficient to promote economic development and, ultimately, political union. Instead, the Six should abolish quotas and tariffs on intra-Community trade, establish a joint external tariff, unify trade policy toward the rest of the world, devise common policies for a range of socioeconomic sectors, and organize a single internal market. Beyen’s idea was revived at a meeting of ECSC foreign ministers in Messina, Sicily, in June 1955 called to discuss the future of European integration. Paul-Henri Spaak, the Belgian foreign minister, had prepared a memorandum, on behalf of the Benelux countries, suggesting further integration along the lines of Jean Monnet’s idea for an Atomic Energy Community and Beyen’s advocacy of a common market. The foreign ministers’ decision at least to give the question of European integration further thought, by asking Spaak to form a committee and write a report on future options, constituted the first “relaunch of Europe.” During the next twelve months Spaak steered the work of a number of committees and subcommittees that drafted specific parts of a precise proposal to advance the European idea. His report, presented to his fellow foreign ministers at a meeting in Venice in May 1956, urged that the two objectives of sectoral (atomic energy) integration and wider economic integration (a common market) be realized in separate organizations, with separate treaties. The Venice foreign ministers’

meeting marked the first stage of a protracted process of intergovernmental negotiations, culminating in the signing of the Treaties of Rome in March 1957, which established EURATOM and the EEC. The negotiations that led to the establishment of the EEC were by no means smooth. Following the failure of the EDC in 1954 and the seeming overambition of the ECSC High Authority under Monnet’s presidency, supranationalism had acquired a bad name, and politicians had to proceed cautiously. Nor were all potential member states eager to embrace competition and open markets. France, in particular, was loath to abandon protectionism. Robert Marjolin, a senior French negotiator, fought what he called “the Battle of Paris” trying to promote French interests, on the one hand, and overcome the resistance of French politicians and civil servants, on the other. Marjolin and others argued the case for a customs union and common market on its own merits but bolstered their position with the legitimate assertion that France could not have the desirable atomic energy community without the less desirable economic community. Moreover, they convinced their fellow negotiators of the need to meet two fundamental French demands—the inclusion of agriculture and special provisions for France’s overseas possessions in the proposed common market. The other countries agreed in part because of the benefits that would accrue to all from a common agricultural policy and because Belgium and the Netherlands would benefit as well from extending market access to the member states’ overseas possessions. But the main reason for the other states’ acquiescence was the importance to them of including France in the EEC. An EEC without Britain was perfectly possible; an EEC without France was impracticable. As FrancoGerman reconciliation lay at the core of the Community, and the Community was the key to Germany’s postwar rehabilitation, Chancellor Konrad Adenauer was willing to pay almost any price to placate Paris. The preamble of the EEC treaty was far less flowery than its ECSC counterpart, referring only to the signatories’ determination “to lay the foundations of an ever closer union among the peoples of Europe.” The treaty itself outlined the essential principles of the common market: the free movement of goods, persons, services, and capital; a customs union and common external tariffs; and

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various EEC policies. The new Communities’ institutional frameworks emulated that of the ECSC but with a stronger Council of Ministers and a correspondingly weaker Commission. Because Luxembourg, home of the ECSC, did not want a further influx of foreigners, by default Brussels, site of the intergovernmental conferences that led to the Treaties of Rome, hosted the new EC institutions. However, the Assembly (Parliament), common to all three Communities, continued to hold its plenary sessions in Strasbourg. The first EEC Commission, under the presidency of Walter Hallstein, set about implementing the Rome treaty. Its responsibilities included external economic relations, economic and financial affairs, the internal market, competition, social affairs, agriculture, transport, and relations with overseas countries and territories. In some of these areas the treaty laid down a specific timetable to implement certain measures; in others, the treaty provided no more than general guidelines and statements of principle. The most immediate and tangible task was to establish the customs union. Thanks to French financial and economic reforms, the first intra-EEC tariff reductions took place on schedule on January 1, 1959, and the customs union came into existence ahead of schedule on July 1, 1968. Whereas tariff barriers could easily be identified and eliminated between member states, policies in areas such as competition, social affairs, transport, energy, and regional disparities were far harder to formulate. A combination of sometimes vague treaty provisions, member state apathy or outright opposition, and philosophical and ideological differences between and among the Commission and Council—factors that are as cogent in the EU today as they were in the early years—impeded progress in the EC. The result was a spotty record of policy formulation and implementation. The Common Agricultural Policy (CAP) was the most challenging and controversial of the EC’s early initiatives. In order to be politically acceptable and economically practicable, the CAP had to replace individual member states’ systems of customs duties, quotas, and minimum prices with an EC-wide system of guaranteed prices and export subsidies. Sicco Mansholt, vice president of the Commission with responsibility for agriculture, was the CAP’s chief architect. Detailed discussions on the CAP’s fundamental principles and procedures took place in the early 1960s, as the

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Commission and the member states thrashed out the precise means by which it would operate. A dispute between French president Charles de Gaulle and the Commission over a financial provision for the CAP precipitated one of the worst crises in the EC’s history. Realizing how eager de Gaulle was to secure the financial regulation, the Commission proposed funding the CAP by a system of EC own resources, thereby increasing the powers of the Commission and the Parliament. De Gaulle strongly opposed a further augmentation of the EC’s supranational authority and especially objected to a move, mandated under the treaty, to replace unanimity with majority voting in EC decisionmaking. Following a breakdown of negotiations with the Commission and the other member states, in July 1965 de Gaulle stopped French participation in the Council of Ministers and the Committee of Permanent Representatives (COREPER). The so-called Empty Chair Crisis ended in January 1966 with the Luxembourg Compromise, which amounted to an agreement to disagree over majority voting. Under the terms of the Luxembourg Compromise, France resumed its full participation in the EC, but the consequences of the crisis, particularly in terms of the Commission’s self-confidence and the Council’s decisionmaking procedure, persisted into the early 1980s. In the 1960s the EC also addressed the question of enlargement when Britain, Denmark, Ireland, and Norway applied to join. Accession negotiations began in 1961 but ended abruptly in January 1963 when de Gaulle announced at a press conference in Paris that Britain was not yet ready for membership. De Gaulle objected to Britain’s strategic dependence on the United States, which he thought would prevent the EC’s proper political development. He vetoed Britain’s second application in 1967, essentially for the same reason. Only when de Gaulle resigned as president of France in 1969 did enlargement become feasible. Georges Pompidou, de Gaulle’s successor, called for a special summit of EC leaders to resolve the enlargement issue. Pompidou advocated enlargement in the context of “completion” and “deepening.” Completion meant moving to a system of “own resources” to finance the CAP; deepening meant extending the EC’s competence into new areas. The Hague summit on December 1 and 2, 1969, broke the deadlock over enlargement and set the EC on course for the decade ahead. As a result of decisions taken at The Hague, the follow-

ing year EC leaders endorsed two reports on deepening. The first proposed European Political Cooperation (EPC), a procedure for foreign policy coordination among the member states. The second outlined a plan for Economic and Monetary Union (EMU). At the Paris summit on October 19 and 20, 1972, held on the eve of the EC’s first enlargement (Britain, Denmark, and Ireland joined on January 1, 1973), the member states declared their intention “before the end of the present decade to transform the whole complex of their relations into a European Union.” This was an extraordinary statement even by the standard of EC rhetoric and illustrates the member states’ high hopes for European integration at the beginning of the 1970s. As the decade progressed, however, and the EC became bogged down in high inflation rates, soaring unemployment, and low economic growth, prospects for European union grew more and more remote. Thus the 1970s were difficult for the EC. Europessimism replaced the Eurooptimism of 1971 and 1972. The Middle East war in October 1973 and the ensuing oil embargo and price rises threw the member states’ economies into chaos. Instead of pursuing a joint approach to their common problems, the member states took individual action. Coupled with the demise of member-state solidarity, bureaucratic inertia in Brussels and decisionmaking paralysis in the Council (a legacy of the Luxembourg Compromise) virtually brought the EC to its knees. An effort by French president Valéry Giscard d’Estaing to revive the EC by institutionalizing summits of heads of state and government in a new European Council served only to emphasize the extent of the EC’s malaise. Yet the EC survived the 1970s and revived spectacularly in the 1980s, thanks in part to Giscard’s initiative. The seeds of the EC’s revival were sown in the late 1970s, during the Commission presidency of Roy Jenkins (1977–1981), and reaped in the following years. At that time the member states finally implemented a long-standing plan for direct elections to the European Parliament (EP), the first of which took place in June 1979. The new, directly elected EP proved much more assertive than its predecessor and, under the leadership of Altiero Spinelli, drafted a revised constitution for the EC. The Draft Treaty Establishing the European Union, passed by the EP in February 1984, contributed to the momentum then developing to deepen European integration.

Also during the Jenkins presidency, the EC concluded Greece’s accession negotiations and began negotiations on Spanish and Portuguese membership. The accession of Greece and imminent accession of Spain and Portugal forced member states to tackle the EC’s decisionmaking problems and coincided with the Draft Treaty and the Genscher-Colombo proposals for institutional reform and greater involvement in foreign and security policy. A third beneficial development during the Jenkins presidency was the launch of the European Monetary System (EMS) in March 1979. Eighteen months earlier Jenkins had made an important speech advocating monetary union. After initial hesitation, Chancellor Helmut Schmidt of Germany warmly embraced Jenkins’ initiative. At the Bremen summit in July 1978, Schmidt unveiled a Franco-German proposal to establish a zone of relative monetary stability in a world of wildly fluctuating exchange rates. The ensuing EMS was a success and helped participating member states to fight inflation and recover economic growth. It also gave member states the confidence to embark on the single market program, which epitomized the EC’s resurgence in the 1980s. The single market program was a response not only to the EC’s failure to date to bring about a real common market but also to Europe’s perceived declining competitiveness vis-à-vis the United States and Japan, especially in the hightechnology sector. Etienne Davignon, a Commission vice-president (1981–1985), developed extensive contacts with European industrialists and promoted close Commission-industry cooperation in research and development. His enterprise spawned a number of collaborative ventures in the early 1980s and helped to generate enthusiasm among industrialists and businesspeople for the single market initiative. Arthur Cockfield, a vice president in the first Jacques Delors Commission (1985–1989) who had responsibility for the internal market, produced a white paper in 1985 outlining the steps necessary to bring about a situation in which people, capital, goods, and services could move freely within the EC. But such an ambitious plan was unlikely to succeed without a radical reform of EC decisionmaking. Nor could the EC have made much progress as long as it remained embroiled in a bitter controversy over Britain’s budgetary contribution, which Margaret Thatcher reopened as

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soon as she became prime minister in 1979. Resolution of the British budgetary question at the Fontainebleau summit in June 1984, after nearly five years of frustration and aggravation, freed the EC’s leaders to set their sights on a higher goal. This was the climate in which the European Council convened in Milan in June 1985. In an unprecedented move, a majority of EC leaders outvoted the recalcitrant minority—Britain, Denmark, and Greece—and called for an intergovernmental conference (IGC) to revise the Treaty of Rome. The IGC produced the Single European Act (SEA), which set a target date of December 31, 1992, for completion of the single market program; stipulated that most of the single market decisions would be subject to majority voting in the Council; and brought EPC, the environment, research and development, and regional policy explicitly within the treaty framework. Full ratification of the SEA (signed in February 1986) was delayed until July 1987. More hard negotiating followed, especially on compensation for poorer countries in the single market, before the program took off in 1988 and 1989. Jacques Delors personified the EC’s extraordinary revitalization at that time. Energetic, ambitious, and farsighted, Delors gave the Commission a new sense of purpose. His close friendship with Chancellor Helmut Kohl of Germany and political affinity with French president François Mitterrand gave Delors exceptional influence in the European Council. However, Delors soon ran afoul of Thatcher, especially for his espousal of a Social Charter to allow workers to enjoy the full benefits of the single market. Thatcher directed much of her hatred of socialism, supranationalism, and European federalism at Delors and the Brussels bureaucracy. Thatcher also opposed Delors’ effort to cement the single market by relaunching EMU. In April 1989 Delors produced a plan (the Delors Report) to achieve EMU in three stages: by promoting economic convergence, establishing a European central bank, and ultimately creating a single currency. Despite his misgivings about currency union, Kohl supported the Delors Report, and Mitterrand was enthusiastic. The Spanish government, then in the Council presidency, strongly supported Delors’ initiative. At the Madrid summit, in June 1989, the European Council agreed that Delors’s plan provided a blueprint for EMU and decided to launch the first stage by July 1, 1990.

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In and of itself the single market program was insufficient to maintain a powerful momentum toward EMU. Yet the contemporaneous revolution in Eastern Europe and the imminent reunification of Germany gave a huge boost to EMU and added political union to the agenda. Delors rapidly realized that what he called the “acceleration of history” in Central and Eastern Europe afforded the EC a unique opportunity to reaffirm its political objectives and to expedite EMU. The other member states’ consent to German unification was the bargain upon which the EC’s future hinged. The deal was struck at the Strasbourg summit in December 1989. An exuberant Chancellor Kohl sought to allay his partners’ anxieties about German unification and especially to overcome deep French suspicion. At the end of the historic meeting, the other member states acknowledged Germany’s right to self-determination but only in the context of European integration and unification. In concrete terms, this meant an end to German foot-dragging over EMU and a commitment to proceed on political union. The Strasbourg summit set the stage for two years of frenetic discussions among the member states and the Commission about the nature, scope, and competence of the “new” EC in the “new” Europe. During 1990 member states decided to convene two parallel IGCs, one on EMU and the other on political union. Both conferences opened in Rome on December 13 and 14, 1990, and culminated in the Maastricht summit on December 9 and 10, 1991. Of the two IGCs, the one on EMU made most progress. After all, the Delors Report already existed as a blueprint. Member states—including what seemed like a more compliant Britain following Thatcher’s departure as prime minister— began to tackle the plan’s most pressing particulars, notably convergence criteria, composition of the European Central Bank (ECB), and the ECB’s relationship to other EC institutions and the member state governments. At Maastricht the heads of state and government effectively adopted the Delors Report and set the definitive date of 1999 for a single currency. By contrast, the parallel intergovernmental conference on political union lacked focus and direction. Negotiations covered a wide range of issues, including institutional reform, the Social Charter, and foreign and security policy. The Dutch, who took over the Council presidency in

July 1991, proposed that member states embrace EMU, foreign and security policy, cooperation on home affairs, and the Social Charter in a unitary EU structure. The other member states, however, preferred to keep foreign and security policy and home affairs on an intergovernmental basis, outside the formal treaty framework. As a result, the new treaty established an EU that resembled a temple resting on three separate pillars: the Communities (now collectively called the EC), a Common Foreign and Security Policy, and Cooperation on Justice and Home Affairs. The treaty reformed decisionmaking, notably by strengthening the EP’s legislative power, and extended the EC’s competence to include such matters as education, culture, and consumer protection. British prime minister John Major’s opposition to the Social Charter obliged the other member states at the last minute to remove it entirely from the proposed union and move it instead to a separate protocol that Britain alone did not sign. The TEU was to have been ratified in 1992 in order to be implemented on January 1, 1993. However, Denmark’s narrow rejection of it in a referendum on June 2, 1992, sparked a ratification crisis throughout the EC, especially in Britain. At the very least, the Danish vote caused a serious legal problem: even if the other eleven member states ratified the treaty, Denmark’s rejection obviously invalidated it. At worst, the failure of the TEU would scuttle the putative EU and reverse the rapid advance made by European integration in the late 1980s and early 1990s. Eventually the ratification crisis—in the narrowest sense—was resolved by concessions made to Denmark at the European Council in Edinburgh, on December 11 and 12, 1992, and approved in a second Danish referendum on May 18, 1993. But in a broader sense—in terms of the new EU’s credibility, legitimacy, and self-confidence—the ratification crisis has persisted into the late 1990s. See also EUROPEAN UNION; SINGLE EUROPEAN ACT; TREATY ON EUROPEAN UNION. Dinan, Desmond. 1994. Ever Closer Union? An Introduction to the European Community. Boulder: Lynne Rienner. Urwin, Derek W. 1991. The Community of Europe: A History of European Integration Since 1945. London: Longman.

Bibliography

—Desmond Dinan

European Community Action Scheme for the Mobility of University Students (ERASMUS)

In order to encourage student and faculty exchanges, and thereby deepen European integration at a personal and professional level, in 1987 the EC launched the European Community Action Scheme for the Mobility of University Students (the ERASMUS program). Managed by the Task Force for Human Resources (TFHR) within the Commission, the program provided funding and logistical support to help university students spend part of their undergraduate career in another member state and expand their field of study to include European languages and culture. ERASMUS also promoted curriculum development across member-state boundaries, facilitated intensive short-term study-abroad courses, and provided a badly needed system of credit transfer. In the academic year 1996–1997, nearly 200,000 students were in some way involved in ERASMUS. In 1995 ERASMUS was brought under the auspices of SOCRATES, an umbrella program for action at all educational levels. With a budget of ECU one billion for the years 1995–1999, SOCRATES seeks to “encourage innovation and improve the quality of education through strengthening cooperation between the various educational institutions.” See also EDUCATION, VOCATIONAL TRAINING, AND YOUTH POLICY.

European Community Humanitarian Office (ECHO)

In 1992, the Commission established the European Community Humanitarian Office (ECHO) to provide emergency humanitarian and food aid to the former Yugoslav republics; the African, Caribbean, and Pacific countries (as part of the Lomé conventions); and countries in Latin America, the Mediterranean, the Near and Middle East, Central and Eastern Europe, the Commonwealth of Independent States, and the Far East. In 1997, ECHO funded nearly two thousand projects in over eighty countries on four continents. ECHO operates through a wide range of partners, including nongovernmental organizations (which

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administer nearly 60 percent of ECHO funding) and UN agencies (which administer over 25 percent). See EUROPEAN COURT OF JUSTICE.

European Community Law

European Community Studies Associations (ECSAs)

European Community Studies Associations (ECSAs) are a network of nationally based academic organizations for research and scholarship on all aspects of European integration. The European associations coordinate their activities within ECSA Europe, an umbrella organization largely funded by the Commission. ECSA U.S. is the largest and most active of the many national associations.

European Company Statute (ECS)

The European Company Statute (ECS) is a proposed set of guidelines and mandates to facilitate transnational business in the EU. The purpose is to establish a type of company—a so-called European Company—that could operate throughout the EU and be governed by a single EC law directly applicable in all member states. The ECS would enable cross-border associations, commercial entities, and legal associations to operate with greater flexibility and mobility. First suggested by the Commission in the early 1970s, the ECS has been bedeviled by the inclusion in it of a proposal for greater worker involvement in company decisionmaking. Having gotten nowhere with this idea in the 1970s and early 1980s, in the wake of the single market program in the late 1980s the Commission proposed a European Works Councils Directive to involve employees directly in major decisions of a European Company. The proposed Works Councils Directive provoked bitter resistance from the British government, which adamantly opposed anything that smacked of socialism and workers’ rights. At the Maastricht summit in December 1991, Prime Minister John Major negotiated a British opt out from the Social Chapter of the Treaty on European Union, thereby obliging the other member states to attach a protocol to the treaty in order to pursue social policy among themselves. The Works Councils

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Directive was eventually passed in 1994 under the social protocol, thereby bypassing British opposition and excluding Britain from its provisions until Britain signed the Social Chapter under a new government in 1997.

European Confidence Pact on Employment

See CONFIDENCE PACT ON EMPLOYMENT.

European Convention for the Protection of Human Rights and Fundamental Freedoms

The European Convention for the Protection of Human Rights and Fundamental Freedoms was adopted on November 4, 1950, by the Council of Europe. Ten protocols were later added to it. The convention guarantees such civil and political rights as the right to a fair trial, freedom of expression, free elections, and respect of property. The EU has not signed the convention, although all of its member states have. Concerns about the narrowness of rights in the EC were first expressed in the mid-1970s and grew with the EC’s political transformation in the late 1980s. Accordingly, the Treaty on European Union (TEU) included a Declaration on Fundamental Rights and Freedoms, established EU citizenship, referred to rights to information and redress within the EU’s institutions, and required member states to agree upon certain transnational political rights. These provisions and other innovations in the TEU have not allayed public unease about democratic unaccountability and citizens’ rights in the EU. Hence the possibility that the EU may accede to the European Convention for the Protection of Human Rights and Fundamental Freedoms. See also HUMAN RIGHTS.

European Cooperation in the Field of Scientific and Technological Research (COST)

European Cooperation in the Field of Scientific and Technological Research (COST) was an early program for research and development in the high-technology sector, notably in informatics and telecommunications. COST was not specifically an EC program, but in 1971 the EC joined with neighboring countries to participate in it.

See also RESEARCH AND TECHNOLOGICAL DEPOLICY.

VELOPMENT

A study of the European Council is an essential part of any attempt to understand the evolution of European integration, perhaps even that of Western Europe as a whole, over the last twenty years. The European Council’s activities and functions, its successes and failures, have shaped the European integration process since the 1970s like no other institution. Indeed, the European Council has been responsible for such pivotal decisions as those on the Single European Act (SEA) and the Treaty on European Union (TEU), in addition to deciding other “constitutional” questions for the EU, such as enlargement and financial resources. Yet the European Council, composed of the heads of state and government of the member states and the president of the Commission, remains the EU body most difficult to grasp in legal and political science terms. To those unaccustomed to the EU, the European Council may appear to be another example of intergovernmental cooperation by means of summits—a classical realist tool. The dearth of written rules governing its operation serves only to reinforce this impression. However, this would be a superficial interpretation of a body that finds itself playing a key role at the top of a unique, highly developed and intermeshed institutional and political system. The fact that the leaders of fifteen Western European states meet together at least twice a year to take decisions on subjects ranging from the Common Foreign and Security Policy to Economic and Monetary Union and Justice and Home Affairs is indicative of the extent to which the policy decisions and tools of the EU and its member states have become fused. The highest political representatives of the member states have developed a form of collective responsibility for this new European system. The European Council is, however, not an institution of the EU in the legal sense. Founded on a decision of the governments of the member states at the Paris summit in 1974, the European Council was only given a formal legal base in Article 2 of the SEA, though no reference was made to it within the EC treaty itself. A similar arrangement is to be found in the TEU, with the European Council being dealt with in the section entitled

European Council

“Common Provisions” (Article D), outside the EC treaty proper, and therefore not subject to the latter’s constitutional-like checks and balances. The Role of the European Council According to Article D of the TEU, “the European Council shall provide the Union with the necessary impetus for its development and shall define the general political guidelines thereof.” The actual role of the European Council can be characterized by referring to three basic functions. First, there is what can be described as constitutional architect of the EU. This function is often vaguely attributed to the European Council, in the form of providing a “general political impetus” for the European construction and of identifying answers to the fundamental questions facing the EU. Especially in the 1980s, the European Council agreed to numerous important initiatives, such as the convening of the intergovernmental conferences on the SEA (Milan summit, 1985), economic and monetary union (Strasbourg summit, 1989), and political union (Dublin summit, 1990), which in the end were to lead to agreement on the TEU itself. By means of these decisions, the heads of state and government have significantly enlarged the scope and magnitude of joint activities. They have repeatedly identified the problems of Western Europe as areas for some kind of common or coordinated policy to be pursued either by the EU or by the member states cooperating in some other manner (often intergovernmental), on each occasion indicating the way in which the particular problem should be approached. A second and quite different function of the European Council concerns agenda setting: the adoption of general guidelines in economic, social, and foreign policy issues and of especially important declarations on specific subjects. Accordingly, the European Council can be described as the “stimulator” and “agenda-setter” of the EU and its policies. The foreign policy profile of the EU has, in particular, benefited greatly from the statements of the heads of state and government. There are European Council declarations on virtually all international political crises since the 1970s: on South Africa, the Middle East, ex-Yugoslavia, and the collapse of the Soviet Union, among others. As a result, the European Council can now be seen as the highest symbol of the EU vis-à-vis the world. It is also the case that the European Council has

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played a key and facilitating role in furthering the member states’ cooperation in the areas of Justice and Home Affairs covered by the third pillar of the TEU: numerous declarations are to be found on issues such as terrorism and international crime as well as on annual “work programs” to be undertaken in the areas concerned. A third function of the European Council, which has been of key importance to the development of the EU, is decisionmaking, both for the EC and for the EU’s other two pillars. As such, the European Council can be seen as the EU’s “ultimate decisionmaker.” Thus the European Council often steps in to decide on particularly controversial financial and institutional questions, although it never itself adopts the legally binding decisions for the EU. Rather, it is left to the EU’s normal decisionmaking procedures to turn a political agreement reached in the European Council into a binding legislative act. The decisionmaking process in the European Council is highly informative. Many crucial decisions are arrived at as a result of the forging of “package deals”: a number of distinct issues, which are often from different policy areas and have not on their own found the agreement of all member states, are put on the table in the hope that transsectoral compromises can be reached. Only the heads of state and government are in a position to be able to bargain with one another about each others’ relative gains and losses in various policy areas at the same time. It may well require considerable time and energy on the part of the national leaders, but the further development of the EU is highly dependent on this summit-style of bargaining; the way in which substantial parts of the TEU came to be agreed upon is once again witness to this. On such occasions, the heads of government and state find themselves, contrary to their nature, in situations where they are forced to discuss concrete formulations in great detail. It is only by discussing the technical details of a text that the real political issues upon which there is disagreement can come to the fore, and it is only then that the tough decisions can be taken. One less significant, but nonetheless interesting, feature of the European Council is the style of interaction that takes place within it. The leaders of the larger member states tend to dominate debate in the European Council to a greater extent than in the Council of Ministers, despite the fact that in theory, at least, each member state’s voice

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or weight within the European Council is of equal value. On some issues, however, the president of the Commission or some of the leaders of smaller member states may also play a considerable role. It is also the case that the country holding the European Council presidency plays a greater leadership role in the preparation and formulation of decisions than it plays in the Council of Ministers. As for voting in the European Council, it is quite exceptional that the heads of state and government ever proceed to anything like a formal vote on an issue (one exception, however, was the decision at the Milan summit in 1985 to convene an intergovernmental conference against the wishes of Britain, Denmark, and Greece); it is more usual that the presidency notes simply that consensus has been reached.

Consequences for the EU’s Institutional Balance When the European Council was first established, there was concern in some quarters that it would permanently alter the original institutional balance of the EC. The expectation of some was that the heads of state and government would undermine the Commission’s monopoly of the right of initiative, would downgrade the Council of Ministers to some kind of subordinate chamber, and would effectively circumvent the limited rights of the European Parliament (EP). The development of the European Council has shown, however, that these trends have not been fully realized. In many areas, especially those of a less controversial nature, the European Council has had little or no effect on the normal institutional workings of the Community. Moreover, the Commission and especially its president have gained in profile and status through their involvement in the European Council and by being able to use the European Council’s declarations as some kind of mandate for much of their policy activity. The consequences for the EP appear to be less positive. While it may be the case that the president of the EP has, since 1988, been able to put forward Parliament’s opinion at the beginning of each session of the European Council, this does not hide the fact that more often than not the rights of the Parliament (according to the treaty) vis-àvis the European Council are given purely lip-service by the latter. The heads of state and government also determine the constitutional rights of the EP without showing a great deal of desire to

enter into discussion on the subject with Parliament itself. The Council of Ministers, on the other hand, has not seen itself become a second-class chamber, with its position in the EU’s institutional structure being sustained by the way in which it both prepares and follows up the work of the European Council. More problematic in constitutional terms is the fact that the European Council finds itself outside the checks and balances of the EU system, something that was stated emphatically once again in the TEU. Indeed the activities of the European Council remain beyond the reach of the judicial control of the European Court of Justice (Article L). Conclusion Given the considerable challenges that have confronted European integration over the last twenty years, the European Council has made a significant contribution to the overall strengthening of Western Europe. Since the mid-1980s, its decisions have helped to shape the evolution of the Community into the EU. It can only be expected that in the remainder of the 1990s the European Council will continue to be the constitutional architect, the stimulator, and the ultimate decisionmaker not only for the EU but also for the whole of Europe, thereby reinforcing the European Council’s (and the EU’s) role in the international system. This status will be boosted by such activities as meetings between the president of the European Council and the president of the United States and other key international actors. Within the EU system, the European Council’s position will be reinforced by its role in areas such as the nomination of the Commission president (Article 158 [2] EC). This not only serves to augment the symbolic nature of the European Council’s leadership within Europe and beyond but also clearly underlines the agenda-setting character of its role with regard to the work undertaken by the EU’s institutions. Finally, the European Council should be seen not as an accidental product of the political whim of the heads of state and government but rather as a sign of a fundamental development in Western Europe toward the common use of state instruments and the accompanying institutional fusion. Far from being the champion of a realist, state-centric approach to European integration, the European Council will continue to exemplify the pooling of member states’ policymaking tools and decisions.

The European Council can, therefore, be seen as a manifestation of the way in which the interdependent welfare states of Western Europe have chosen to integrate their activities and instruments in virtually all areas of public policy in order to meet the overall economic, social, and foreign policy expectations of their electorates. However, the fact that this body comprises the heads of state and government (the highest representatives of the EU member states) reflects the desire of the member states to ensure the efficiency of the EU system by, on the one hand, reforming the constitutional architecture of the EU while, on the other, seeking to maintain the influence of national governments over the decisions that shape the future of Europe. The balance between these two concerns of the member states is a hard one to strike. Accordingly, the European Council is as much a symbol of the member states’ struggle for unity as a manifestation of their obstinacy. See also APPENDIX 7; APPENDIX 8. Bulmer, Simon, and Wolfgang Wessels. 1987. The European Council: Decision-making in European Politics. Basingstoke: Macmillan.

Bibliography

—Philip Myers and Wolfgang Wessels

The Court of Justice—formally the European Court of Justice (ECJ)—is the Court of the EU. Although located in Luxembourg, the ECJ is often confused with the European Court of Human Rights in Strasbourg (the court for the European Convention of Human Rights). The ECJ is composed of a judge from each member state, selected by the national government to serve a six-year renewable term.

European Court of Justice (ECJ)

Origins and Development of the EU’s Legal System The ECJ was created in 1951 as part of the European Coal and Steel Community (ECSC), primarily to protect firms and states from the new, supranational European institutions (the model was the high French administrative court—the Conseil d’État—that protects individuals from abuses of authority by the French government). In the ECSC, the High Authority enforced the treaty through decisions and recommendations and, with

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the Council of Ministers’ assent, could fine member states that failed in their obligations and firms that broke ECSC rules. Decisions of the High Authority could be appealed to the Court, which had the authority to reverse the decision and award damages to injured parties. The Court also heard challenges to the validity of Council decisions, contract disputes between the ECSC and private contractors, and personnel disputes by employees of the European institutions. The ECSC’s legal system was adapted for the European Economic Community (EEC) but in a way that made it rather weak and ineffectual. In the Treaty of Rome, the Commission (which incorporated the High Authority) lost the authority to fine states or firms for breaking EC law. Instead the Commission or another member state had to bring charges of treaty infringements before the Court (Articles 169 and 170). If a breach was found, the Court could declare that the member state had failed to fulfill its treaty obligations, but no sanctions or penalties could be levied. Especially in the 1960s and early 1970s the Commission and the member states were reluctant to use the legal mechanisms of the treaty; thus the Court had few significant cases to consider and few opportunities to develop its jurisprudence. When it did have cases, its decisions were unenforceable. The original EC legal system was eventually transformed by a number of key decisions that the Court of Justice rendered in cases referred to it by national courts under the preliminary ruling procedure (Article 177). The procedure works as follows: an individual argues before a national court that a national law or policy conflicts with European law. If there is a question about the meaning of the European law, the national judge can make a “preliminary ruling reference” to the ECJ asking for an interpretation of the EC law. The parties in the case are allowed to submit arguments to the ECJ, as are EC institutions and national governments. The Court’s advocate general suggests to the Court what it should do, based on an analysis of the arguments, the case law of the Court, and the laws in question. The Court issues its decision, and the national judge applies the ECJ ruling to the case at hand. Alternatively, the national court can resolve the dispute on its own, based on previous ECJ jurisprudence. Individuals do not have the option of raising infringement charges directly in the ECJ, and if the national judge refuses to make a reference or follow ECJ jurisprudence,

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there is little that the individual can do except to appeal the decision to a higher national court. In its 1963 Van Gend en Loos decision, the Court established the doctrine of direct effect, which declared that the treaty created individual rights that national courts had to protect. In other words, the decision established that European citizens had a right to have their government respect its European legal obligations. In its 1964 Costa v. Enel decision, the ECJ established the doctrine of the supremacy of EC law, which granted EC law primacy over national law—even national laws adopted subsequent to the EC law. These decisions transformed the preliminary ruling system from a mechanism primarily designed to allow individuals to challenge EC laws into a mechanism to challenge the compatibility of national law with EC law (Mancini, 1989; Weiler, 1991). The doctrines of direct effect and supremacy of EC law created a means for individuals to pull the European Court into national policy debates (Burley and Mattli, 1993) and an obligation for national courts to set aside laws and policies that violate European law. The transformation of the preliminary ruling system fundamentally altered the EC legal system. Preliminary ruling references became the largest source of ECJ cases, and most of the ECJ’s landmark decisions were made in preliminary ruling decisions. Individuals raised legal questions that the Commission and member states never would have asked, allowing the Court greatly to expand the reach and scope of European law in the national realm. Because of national court references to the ECJ, national governments found their ability to keep national policy issues out of the EC legal realm to be significantly diminished. The transformed preliminary ruling system also made ECJ decisions enforceable, reducing a significant political threat against the ECJ—noncompliance. National courts became key intermediaries in the EC legal system and a significant source of political leverage for the ECJ against national governments (Alter, 1996; Weiler, 1994). Although many legal scholars regard the Court as a “motor of European integration” in the early years, most observers consider the Court’s political impact to have been rather marginal in the 1960s and 1970s. As many have pointed out, without the direct effect and supremacy of Community law, the EC legal system would have remained remote to European citizens and European

politics, and many violations of European law would have remained unaddressed. Thus the Court’s jurisprudence in the 1960s transforming the preliminary ruling system was very significant. But in the 1960s and 1970s ECJ decisions tended to be more legally bold than politically provocative, and the Court did not start to wield its power to significantly influence national or EC policy until the late 1970s and 1980s. The Role of the Court in the EU In today’s EC legal system, the Court serves three main functions: it helps ensure that EU institutions do not exceed their authority; it helps resolve disputes between EU institutions and between member states; and it helps to ensure national compliance with EC law. In all of these roles, the ECJ is the highest authority, and its decisions are binding and final. A check on EU institutions. The ECJ is the constitutional court of the EU, reviewing the validity of EC laws and Commission decisions to make sure that EU institutions do not violate Community law or exceed their authority. Challenges to the validity of EC law and Commission decisions can be raised in national courts and referred to the ECJ or brought to the Court through “direct appeals” by individuals, member states, or one of the EU institutions. There are many reasons why an EC law or a Commission decision might be found to be invalid. The law could be ultra vires, exceeding the authority of the EC institutions under the treaties; the law could violate basic rights guarantees of national constitutions or the European Convention of Human Rights; or a Commission decision could have lacked due process or have been based on insufficient or incorrect information. Dispute resolution between EU institutions and member states. The European Court also hears disputes among its constituent parts: the member states and the different institutions of the EU. A national government or the Commission can challenge a Council decision if it believes that the decision was adopted under the wrong voting rule or that policymaking in the area under question is best handled at the level of the national, regional, or local government. In light of amendments in the Treaty on European Union (TEU), the European Parliament can now challenge the Council if it believes that its own pre-

rogatives in the policymaking process have been infringed. Ensuring national compliance with European law. The Commission is the primary monitor of member states’ compliance with the treaty. It gathers and investigates complaints from individuals, firms, and other member states and raises infringement cases before the ECJ if it suspects a violation of European law. Member states can also raise infringement suits, but they usually let the Commission pursue the issue. In light of the ECJ’s jurisprudence on the direct effect and supremacy of EC law, individuals can also raise challenges in national courts to the compatibility of national law with European law. Preliminary ruling references have been used to challenge national policies that serve as barriers to the free movement of goods, people, services, and capital, such as health and safety rules designed primarily to keep out products produced in other countries. Preliminary ruling references have also been used to challenge national policies that seemingly have little to do with the free movement of goods, people, capital, or services. For example, Irish student groups challenged an Irish ban on the advertisement of abortion services, and the British Equal Opportunities Council challenged British gender equality laws. Especially in cases such as these, the Court has been accused of overstepping its authority and meddling in the affairs of member states. The Role of the Court in EU and National Politics The ECJ is primarily a legal body. But in fulfilling its legal mandate it inevitably plays a political role and influences the process of European integration. Its influence extends both to EU policymaking and national politics. At the EU level, the ECJ influences the rules of the policymaking process and policy outcomes. By resolving disputes about policymaking procedure, the Court influences the negotiation process, allowing different institutions and member states greater or lesser influence in decisionmaking. In addition, when the Court decides on the validity of an EU regulation or directive, it influences what policies EU institutions can pass and how EU law is interpreted and implemented. Usually the Court becomes involved in EU policy issues when a national government, EU institution, or interest group disagrees with an EU policy or, concerned

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about its lack of influence over the policymaking process, turns to the legal realm to challenge the status quo. But the Court also engages in its own activist policymaking, reading into the treaties meanings that were not necessarily intended by national governments, in order to influence the process of European integration (Rasmussen, 1986). For example, in its Cassis de Dijon decision the Court read into the treaty a requirement for the mutual recognition of national health, safety, and technical standards and provoked a fundamental change in EU harmonization policy (Alter and Meunier-Aitsahalia, 1994). At the national level, the ECJ has influenced the domestic policy of member states in areas as diverse as educational policy, industrial relations, gender equality, and the advertising of abortion services. In these cases, the European legal system was used by individuals and domestic groups to challenge national policies with which they disagreed, in hopes of achieving policy outcomes that they had failed to achieve through national channels. There are of course limits to the role the Court can play in the policymaking process. A significant limit comes from the nature of the legal process itself. The Court must wait for cases to be raised; thus it must wait to be invited into a policy debate by a national government, European institution, individual litigant, or national court. The Court must also stick to the legal method and the language of law lest it undermine its legal legitimacy or lose the support of national courts (Slaughter and Mattli, 1995). In addition, public opinion and political concerns also create limits on what the Court can do. Although limits to judicial activism exist, the Court has shown itself quite capable of acting independently and influencing policy at the EU and national levels. In many respects, judicial politics is part of the EU policymaking process, and the opinion of the ECJ can be important in shaping policy outcomes. Changes in the European Legal System Since 1989 Since 1989, there has been a series of changes in the organization and functioning of the European legal system. The most important institutional changes were the creation of a Court of First Instance and the ECJ’s acquisition of sanctioning authority. On a political level, greater scrutiny of the Court has led it to moderate some of its jurisprudence.

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Creation of the Court of First Instance. The ECJ suggested the establishment of a lower European tribunal in the late 1970s to relieve the Court of some of its caseload, especially ECSC cases and personnel disputes. It took a number of years for member states to agree to create the Court of First Instance, but by the late 1980s there was a consensus that the Court of Justice was overburdened. The Court of First Instance was established in 1989; like the Court of Justice, it is composed of a judge from each member state. Its jurisdiction was extended in 1993 and 1994, so that now the Court of First Instance hears virtually all cases brought by private individuals, with the important exception of cases referred by national courts under the preliminary ruling procedure. The “direct appeals” tend to involve fairly technical legal issues, including competition policy, antidumping cases, and state aids. Adding sanctioning power to the Court in infringement cases. One of the greatest weaknesses of the original EC legal system was the lack of sanctioning power for the Court and the unenforceability of ECJ decisions. Transforming the preliminary ruling system helped address this weakness by harnessing national courts to enforce ECJ jurisprudence. In 1991 the ECJ won for the EC legal system the right to provide remedies for some violations of European law, declaring that national courts could require compensation by the national government for individuals hurt by a failure of a national government to implement EC directives punctually and properly (Francovich v. Italy). As part of the TEU, the ECJ was also granted authority to order fines against states in infringement suits raised by the Commission or other member states. With these changes, violating European law has become more costly, and the ECJ has gained greater leverage to induce compliance with EC law. A changing political context. For many years, the Court operated in a state of “benign neglect” by the public and by political bodies. Legal representatives from member states monitored the Court’s activities, but seldom did ECJ decisions arouse significant political or public passion. For a number of reasons, the Court has become a focus of attention by political bodies and public opinion, leading to a significant change in the political climate in which the Court operates (Weiler, 1993). National displeasure with the Court was shown when it was excluded from the TEU’s two inter-

governmental pillars—the Common Foreign and Security Policy and Cooperation on Justice and Home Affairs. Subsequently the Court was vilified by the anti-TEU forces in Denmark and France and by the Euroskeptics in Britain. It has even been criticized by some of its traditional supporters, including the German government. There has also been significant debate over whether the Court’s jurisdiction should be expanded to include new intergovernmental agreements regarding a Customs Information System, fraud against the Community, and the European Police Office (EUROPOL). Finally, the ECJ’s tendency toward expanding EC authority at the expense of national sovereignty has been criticized by the Court’s crucial intermediaries—national courts. In light of this criticism and the broader crisis of legitimacy facing the EU, the Court has started to moderate its jurisprudence. The ECJ still applies its established doctrine to cases but has started to find limits to EC authority in the national realm. See also APPENDIX 1. Alter, Karen. 1996. “The European Court’s Political Power: The Emergence of the European Court as an Influential Political Actor in Europe.” West European Politics 19, no. 3, pp. 458–487. Alter, Karen, and Sophie Meunier-Aitsahalia. 1994. “Judicial Politics in the European Community: European Integration and the Pathbreaking Cassis de Dijon Decision,” Comparative Political Studies 24, no. 4, pp. 535–561. Burley, Anne-Marie, and Walter Mattli. 1993. “Europe Before the Court.” International Organization 47, no. 1, pp. 41–76. Cappelletti, Mauro. 1989. The Judicial Process in Comparative Perspective. Oxford: Clarendon Press. Mancini, Federico. 1989. “The Making of a Constitution for Europe.” Common Market Law Review 24, pp. 595–614. Rasmussen, Hjalte. 1986. On Law and Policy in the European Court of Justice. Dordrecht: Martinus Nijhoff Publishers. Slaughter, Anne-Marie, and Walter Mattli. 1995. “Law and Politics in the European Union: A Reply to Garrett,” International Organization 49, no. 1, pp. 183–190. Weiler, Joseph. 1991. “The Transformation of Europe.” Yale Law Journal 100, pp. 2403–2483. ———. 1993. “Journey to an Unknown Destination: A Retrospective and Prospective of the European Court of Justice in the Arena of Political Integration.” Journal of Common Market Studies 31, no. 4, pp. 417–446.

Bibliography

———. 1994. “A Quiet Revolution: The European Court of Justice and Its Interlocutors.” Comparative Political Studies 26, no. 4, pp. 510–534.

—Karen J. Alter

European Currency Unit (ECU) See ECU.

European Defense Community (EDC)

On June 25, 1950, North Korean forces invaded South Korea. The attack was perceived in the West as a possible precursor to a Soviet attack on Western Europe. In this situation the issue arose of the reservoir of manpower available in the Federal Republic of Germany for western defense. The question was how to utilize this reserve, just five years after the defeat of Germany in May 1945. The answer proposed by the French prime minister, René Pleven, to the French National Assembly on October 24, 1950, was a solution modeled on the earlier Schuman Plan for a coal and steel community. Pleven was clear that the new European army was not to be a traditional coalition but would instead involve a fusion of forces and equipment under a European political authority (the putative European Political Community), although he was careful to add that member states would retain control of their forces not integrated into the European army. The announcement came against a background of two conflicting pressures: the adamant view of a clear majority in France and elsewhere against German rearmament and the reaction to Korea. Although the political debate became torrid, the European Defense Community (EDC) treaty was signed on May 27, 1952, by the six European Coal and Steel Community (ECSC) member states (France, Germany, Italy, Belgium, the Netherlands, and Luxembourg). It consisted of 132 articles and 12 associated protocols as well as a number of declarations and conventions, principally concerning reciprocal security guarantees and cooperation arrangements between the EDC and NATO and among Britain, the United States, and the EDC. The treaty defined the EDC as a supranational community, with common institutions, armed forces, and budget. The EDC was supranational because its decisions (some of

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which could be taken by a majority vote) would be binding and because the treaty envisaged the fusion of forces, not just their coordination. The EDC had an exclusively defensive remit, was to be within the NATO framework, and would operate on the basis that an attack on one member state constituted an attack on all. NATO’s supreme commander in Europe would supervise the organization, equipping, and instruction of the force. Member states would be able to retain national forces for overseas defense and international missions. The institutional system consisted of a council, composed of a representative from each participating states’ government, which was to oversee the actions of a board of commissioners and the member states. Voting in the council was to be weighted to reflect the military contributions made by the states. The Board of Commissioners, consisting of nine members, was to be the EDC’s executive organ. Initially, the EDC Assembly was to be shared with that of the ECSC, although France, Germany, and Italy would have three additional members each. The assembly could force the board’s resignation by a two-thirds majority. According to Article 38 of the treaty, the assembly was also to “examine problems arising from the co-existence of different agencies for European cooperation . . . with a view to ensuring coordination within the framework of the federal or confederal structure.” The basic military units would be composed of troops of the same national origin, who would depend on supranational echelons to fulfill logistical functions. The general staff would be integrated. Eventually the board was to take over recruiting, the formulation of a common doctrine, plans for mobilization, and the territorial distribution of forces, but all within a NATO framework. The board was to prepare common equipment and infrastructure programs as well as authorizing the import and export of war materials, although Germany had to accept continuing restrictions on the production of certain weapons. The treaty was to last fifty years and to cover the European territory of the member states only, although its forces might be used to defend the European territory of non-EDC but NATO members. French unease continued to grow after the treaty was signed. There were fears about German preponderance and German rearmament, about the apparent abandonment of France’s own national

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forces, and the ability of the new European defense force to deter or stop a Soviet attack. There was also concern that, despite a gradual firming up of British and U.S. commitments, these assurances did not go beyond existing obligations and did not answer the fears about German revanchism. In addition, the French were increasingly preoccupied with events in Indochina, suffering a decisive defeat at Dien Bien Phu in May 1954. It was feared that the EDC would dilute French ability to fight elsewhere for their overseas territories. The French government’s attempts to meet these criticisms by proposing additional protocols to the treaty that would in effect have allowed France to retain a national army were rejected by its partners. Ratification of the treaty proved controversial in most member states. Whereas the Dutch would have preferred a NATO solution, they accepted that France would only allow German rearmament on the basis of an integrated European army. In Germany, the opposition Social Democratic Party (SPD) argued that Germany was not being treated as a genuinely equal partner. The SPD also feared the EDC’s impact on German unification, and its members were anxious about the political implications of rearmament in Germany itself. There were additional questions as to whether the EDC was compatible with the German Basic Law (constitution). The chancellor, Konrad Adenauer, only gained a sufficient majority after elections in September 1953 to change the Basic Law and secure ratification. He saw German membership in the EDC as a way to avoid German neutralization or incorporation into the Soviet bloc. Membership would also have the advantage of easing historic Franco-German tensions and achieving full equality for Germany. There were a number of difficulties in Italy, where a ratification bill passed the relevant parliamentary committees but had not been sent to the full chamber before events in France rendered the issue moot. The decisive French vote took place in the National Assembly in August 1954, on a procedural motion that the occasion was not appropriate for debate and that the proposed treaty be rejected without further consideration. The EDC mustered 264 supporters, but 319 opposed, 12 abstained, and a further 31 deputies (including 23 members of the government) took no part in the vote. All the Communists voted against the EDC, as did all but 2 of the Gaullists (1 also abstained). Only the Movement Républicain Populaire voted

solidly for (albeit with 2 against and 4 abstentions). Other parties were about equally divided. Yet the fundamental question of German rearmament remained unresolved. It was the British who salvaged the situation, convening a conference that led to the Paris agreements of October 1954. By these agreements Italy and Germany joined the Western European Union (WEU), which was integrated militarily into the NATO framework. At the same time a sovereign Germany joined NATO, although the WEU was to ensure that Germany did not produce certain categories of armaments. A further gesture to reassure those anxious about German rearmament was Britain’s agreement to maintain specified military forces on the European mainland and to allow the WEU a role in determining whether they could be withdrawn from there. With the collapse of the EDC, hopes for an overarching European Political Community collapsed too, and aspirations to build a federal or confederal structure had to be put into abeyance. For that reason, the collapse of the EDC was widely seen as a serious setback for European integration. See also NORTH ATLANTIC TREATY ORGANIZATION; WESTERN EUROPEAN UNION; APPENDIX 3. Fursdon, Edward. 1980. The European Defense Community: A History. London: Macmillan. Lerner, Daniel, and Raymond Aron, eds. 1957. France Defeats EDC. New York: Praeger.

Bibliography

—Trevor C. Salmon

European Defense Industry Group (EDIG)

The European Defense Industry Group (EDIG) is an interest group representing defense contractors in the EU. Although defense is not an EU competence, greater economic integration and the possible development of an EU defense policy greatly interest European armaments manufacturers, not least at a time of defense expenditure cutbacks. The group is dominated by British, French, and German manufacturers and united by a mutual concern about competition from the United States.

European Development

European Economic Area (EEA)

The European Development Fund (EDF) is used to finance EU aid to the African, Caribbean, and Pacific countries that are signatories of the Lomé convention. Because the member states are also signatories of the convention in their own right and want to control spending as much as possible, the EDF is not included in the development cooperation section of the EU’s general budget (much to the European Parliament’s chagrin). See also LOMÉ CONVENTION.

Fund (EDF)

The European Economic Area (EEA) extends the EC’s single market to three countries of the European Free Trade Association (EFTA): Iceland, Liechtenstein, and Norway. The EEA is only concerned with the EC, the first pillar of the EU, and does not extend to the EU’s Common Foreign and Security Policy and Cooperation on Justice and Home Affairs. The EEA agreement, which was signed in Oporto, Portugal, on May 2, 1992, and came into effect on January 1, 1994, established the largest integrated economic zone in the world, covering 370 million people in eighteen countries. Since 1994 the EEA has facilitated the smooth transition of Austria, Finland, and Sweden (former EFTA countries) to full EU membership and provided Iceland, Liechtenstein, and Norway open access to their most important market (the EC) without requiring them to take the politically impossible step of joining the EU. The present organization, however, falls short of the original vision.

European Economic Area (EEA)

Background The accession to the EC of Britain, Denmark, and Ireland in 1973 prompted the remaining EFTA countries—Austria, Iceland, Norway, Portugal, Sweden, and Switzerland—to negotiate bilateral free trade agreements (FTAs) with the EC. The FTAs created a successful sixteen-nation free trade area by eliminating tariffs on industrial goods and some processed agricultural products (Pedersen, 1991). Their scope, however, was limited, and by the early 1980s both the EC and EFTA were ready to expand their relationship. In April 1984, the EC and EFTA issued a joint declaration in Luxembourg committing the two organizations to increased cooperation with a view to creating a European Economic Space (redesignated “Area” in 1990). EFTA’s interest in

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closer EC ties increased with the Community’s launch of the single market project in 1985, but the “Luxembourg process” proved inadequate to meet the EFTA countries’ need for a permanent, dynamic, and wide-ranging relationship with the newly energized EC (Wallace, 1988; Wallace and Wessels, 1991; Hegg, 1993). The EC too wanted to expand the dialogue with its EFTA partners, if only to delay their likely applications for EC membership. In January 1989, Commission president Jacques Delors invited EFTA to negotiate with the EC a more extensive and structured partnership. Two months later EFTA accepted Delors’ invitation, thus launching the “Delors-Oslo process” that eventually led to the 1992 EEA Agreement. The negotiation and enactment of the EEA Agreement proved difficult (Danspeckgruber, 1992; Hegg, 1993; Sæter, 1993; Reinisch, 1993). First, the EC and EFTA came into the negotiations with divergent objectives. The EC wanted integration with EFTA countries as long as it did not require changes to existing EC law, extensive exceptions and derogations tailored to the needs of specific EFTA countries, or substantial EFTA participation in EC decisionmaking. EFTA, on the other hand, wanted the EC to adjust to individual national needs and to grant EFTA countries full participation in the governance of areas covered by the EEA. This basic dispute was settled largely in the EC’s favor, with EFTA assigned a marginal role in decisionmaking. Second, the negotiations required EFTA to forge a common position before bargaining with the Commission. EFTA had never before negotiated on behalf of its members and sometimes found it difficult to find a single voice. This led to the third difficulty: the presence of parallel bilateral negotiations between individual EFTA members and the EC. These negotiations over transit, fish, and other issues on which EFTA did not take a common position only complicated the proceedings. Fourth, the European Court of Justice (ECJ) objected to the draft treaty in 1991 because the proposed EEA court would have superseded the ECJ, requiring unacceptable changes in the Treaties of Rome. This forced a revision of the EEA agreement in early 1992 to satisfy the ECJ’s concerns. Finally, the Swiss failed to ratify the EEA agreement after a referendum on December, 6, 1992, resulted in a narrow majority against. The Swiss defection forced the renegotiation of

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certain parts of the agreement and delayed implementation until January 1994 (Nell, 1994).

The EEA Agreement The EEA agreement extends the four freedoms of the single market program—the free movement of goods, services, capital, and persons—to the three contracting EFTA countries. To ensure that rules governing the enlarged market were identical in content and interpretation (i.e., “homogeneous”), the agreement required EFTA countries to adopt wholesale the relevant portions of the EC’s acquis communautaire and associated case law. Specifically, this meant that the EFTA countries (1) accepted articles of the EEC treaty governing the single market by writing them into the EEA agreement, (2) adopted approximately fourteen hundred Community acts listed in annexes to the EEA agreement, (3) rewrote their own domestic legislation to incorporate Community law, and (4) agreed to abide by previous ECJ interpretations of Community law (Reinisch, 1993). In short, the EFTA countries agreed to bear the heaviest burden of adjustment in creating the enlarged European market. Detailed rules implementing the four freedoms are at the heart of the EEA agreement. First, duty-free trade in industrial goods, the primary accomplishment of the FTAs, continues in the EEA under simplified rules of origin. In addition the EEA reduces technical barriers to trade. State aid to industry, for instance, is prohibited if it distorts competition; public sector contracts must be open to competitive bid from companies in all EEA countries; and common product standards are accepted throughout the EEA. A safeguard clause, however, is included in the agreement that allows a party to suspend a specific treaty obligation for a limited time to alleviate a serious economic, social, or environmental problem. Second, trade in services—including road, rail, air, and maritime transport; financial services (banking, insurance, and securities trading); telecommunications; and television—is also liberalized by the EEA agreement. The key principle governing services is the right of establishment: EEA companies have the right to offer their services or establish a branch anywhere covered by the agreement. Third, almost all restrictions on capital movements have been eliminated. EEA governments may still grant concessions as a means of controlling their natural resources, such as waterfalls and offshore petro-

leum deposits (a major point of contention for Norway), but must treat all EEA companies as domestic applicants. Fourth, the agreement guarantees free movement of people by allowing those looking for work to remain in an EEA country when they find employment. The agreement also provides for mutual recognition of diplomas and other formal qualifications for work. Finally, the EEA goes beyond the four freedoms by incorporating several “horizontal provisions.” For example, much EC law regarding social policy, consumer protection, environmental policy, the establishment of corporate enterprises (company law), and the compiling of economic statistics is included. Moreover, the agreement contains measures to facilitate greater cooperation in education, training, research and development, tourism, and disaster preparedness (Reinisch, 1993). Through the EEA agreement, the EFTA signatories participate in most of the EU’s single market, but not all of it. Most notably, EFTA countries do not participate in the Common Agricultural Policy, nor does the EEA cover trade in all agricultural goods. Some markets for agricultural products, particularly processed foods, are liberalized by the agreement, but no comprehensive approach is attempted. The EEA represents some liberalization of trade in fish and fish products, and efforts continue in this direction, but no comprehensive fisheries or fish trade policies are envisioned in the near future owing to the political sensitivity of these sectors in Iceland and Norway. Tax harmonization and monetary policy also remain outside the EEA agreement. Furthermore, external trade policy escapes EEA governance because EFTA and the EU have formed a glorified free trade area, not a customs union with a common external tariff that would require a common stance toward third countries. Thus, while comprehensive, the agreement does not cover sensitive areas in which EFTA countries still guard their sovereignty. The EEA agreement achieved “homogeneity” by adopting most of the EC’s existing single market legislation. But both EFTA and the EC also wanted a dynamic area—one that could incorporate new integrative policies. As the EC was the recognized engine of economic integration, the question was how to incorporate EFTA countries into the EC’s decisionmaking process. The EFTA countries wanted equal participation; what they received was the right to be consulted in the early

stages of policy formation but no formal role until after the EC had taken a decision. Once the EC decides, the EFTA countries, speaking with one voice, must accept the new policy, win agreement on a compromise, or reject the policy and risk suspension of sections of the EEA agreement (Reymond, 1993). The result was less than satisfactory for EFTA countries, contributing to the decision by the majority of them to apply for outright EC membership before completing the EEA negotiations. The institutions of the EEA give the organization a supranational appearance, though this now seems more cosmetic than real. At the highest level stands the EEA Council, composed of representatives of the EC member states, the Commission, and the EFTA member states. It meets twice a year and functions primarily as the EEA’s political rudder. The Joint Committee is the main legislative and administrative body. Its several tasks include exchanging views and information on current and pending EEA law, transforming new EC law into EEA law, overseeing the implementation and operation of the EEA agreement, and settling disputes between the EC and EFTA (Reinisch, 1993). The committee meets at least once a month and is composed of high-level representatives of member states. In decisionmaking, the EC and EFTA must each speak with one voice, and decisions must be unanimous. The agreement also calls for the establishment of an EEA joint parliamentary committee (composed of members of the European Parliament and the parliaments of the EFTA states) and an EEA consultative committee (composed of representatives of the social partners). Neither institution has any genuine decisionmaking power. The one institution that could have given the EEA a true supranational character was the proposed EEA court. But the ECJ objected to the court precisely because of its ability to question ECJ decisions. Accordingly, relations between EFTA and the EC are now based more on traditions of international law that emphasize interstate bargaining rather than supranational decisionmaking. Therefore, to assure compliance with its EEA commitments, EFTA, by separate agreement, has had to further institutionalize its relations. First, it has created a European Surveillance Authority (ESA) to oversee competition policy in its three EEA countries. Second, it has created an EFTA court to enforce EEA treaty obligations within

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EFTA. Again, disputes arising between EFTA and the EC must be settled politically in the EEA Joint Committee or the EEA Council. Conclusion The EEA has worked reasonably well for the parties involved, but it is certainly far from what European leaders originally envisioned. From the EU’s perspective, the EEA lost its raison d’être when Switzerland rejected the agreement and Austria, Finland, and Sweden joined the EU. The EEA performed a valuable service by preparing the way for Nordic and Alpine accession, but now it is little more than a minor economic arrangement with three rather quirky nations who cannot or will not become EU member states. As a consequence, the EC has downgraded its political participation in the EEA Council, to the displeasure of the EFTA countries. From EFTA’s point of view, the EEA is a necessary disappointment. The EFTA countries need the single market but have very little ability to influence policymaking in Brussels. With only three small countries in its EFTA pillar, the EEA has for all practical purposes (although not in a legal sense) ceased to function as a multilateral organization and instead provides a forum for bilateral relations between the EC and each EFTA country. Moreover, far from being attractive to other countries seeking a stepping-stone to EC membership, as some envisioned (Peers, 1995), the EEA has become a European backwater that no country is eager to join. Can the EEA survive? It will for the time being because the EFTA countries depend on it for their participation in the single market. The real question is how long democratic countries can accept rules coming from Brussels without their genuine participation in the decisionmaking process. At the heart of the EEA lies a democratic deficit that perhaps only EU membership can erase. See also EUROPEAN FREE TRADE ASSOCIATION. Danspeckgruber, Wolfgang. 1992. “The European Economic Area, the Neutrals, and an Emerging Architecture.” In Gregory F. Treverton, ed., The Shape of the New Europe. New York: Council on Foreign Relations Press. Hegg, Han Wessel. 1993. “Negotiating the European Economic Area Agreement.” In Brent F. Nelsen, ed.,

Bibliography

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Norway and the European Community: The Political Economy of Integration. Westport, CT: Praeger. Nell, Philippe G. 1994. “Rules of Origin: Problems and Solutions to the Swiss Non-Participation in the European Economic Area.” Journal of World Trade 28, no. 6, pp. 65–82. Pedersen, Thomas. 1991. “EC-EFTA Relations: An Historical Outline.” In Helen Wallace, ed., The Wider Western Europe: Reshaping the EC/EFTA Relationship. London: Pinter. Peers, Steve. 1995. “An Ever Closer Waiting Room? The Case for Eastern European Accession to the European Economic Area.” Common Market Law Review 32, pp. 187–213. Reinisch, August. 1993. “The European Economic Area.” The Journal of Social, Political and Economic Studies 18, no. 3, pp. 279–309. Reymond, Christophe. 1993. “Institutions, DecisionMaking Procedure and Settlement of Disputes in the European Economic Area.” Common Market Law Review 30, pp. 449–480. Sæter, Martin. 1993. “Norwegian Integration Policy in a Changing World: The Primacy of Security.” In Brent F. Nelsen, ed., Norway and the European Community: The Political Economy of Integration. Westport, CT: Praeger. Wallace, Helen. 1988. “Introductory Report.” In J. Jamar and H. Wallace, eds., EEC-EFTA: More Than Just Good Friends? Bruges: De Tempel. Wallace, Helen, and Wolfgang Wessels. 1991. “Introduction.” In Helen Wallace, ed., The Wider Western Europe: Reshaping the EC/EFTA Relationship. London: Pinter.

—Brent F. Nelsen

European Economic Community (EEC)

The European Economic Community (EEC) is popularly known as the European Community (EC). It was established on March 25, 1957, by the Treaty of Rome, and began operating on January 1, 1958. The EEC is the most important and far reaching of the three European Communities—the other two are the European Coal and Steel Community (ECSC) and the European Atomic Energy Community (EURATOM). Since November 1993, when the Treaty on European Union (TEU) came into force, the EC is the official name for the three Communities and makes up the first pillar of the European Union (EU). Nevertheless, the EC still refers unofficially to the EEC alone. See also EUROPEAN COMMUNITY.

European Economic Interest Grouping (EEIG)

A European Economic Interest Grouping (EEIG) is a legal entity created to accommodate firms or other associations wanting to pool their resources for a common goal but not wanting to merge (Airbus is perhaps the best-known example). Some trade associations have also applied for recognition as an EEIG. The EU encourages EEIGs as part of its single market strategy, aimed at increasing the competitiveness of European firms by allowing them to become larger and more efficient. EEIGs are bound to the terms of organization and operation set by the EU and must register and publish their organization in the Official Journal of the European Communities. See EUROPEAN ECONOMIC AREA.

European Economic Space

European Economic Stability Pact

See STABILITY AND GROWTH PACT.

European Electrotechnical Standards Committee (CENELEC)

The European Electrotechnical Standards Committee (CENELEC) is the counterpart of the European Standards Committee (CEN) that deals specifically with electrotechnical standards, both voluntary standards and those required to demonstrate compliance with EC directives (e.g., on electromagnetic compatibility). Members of CENELEC are the national electrotechnical committees in charge of standardization within the EU member states plus Norway, Iceland, and Switzerland; these committees are in turn composed of representatives from national industry. CENELEC maintains close liaison with the global International Electrotechnical Committee (IEC) as well as electrotechnical committees in Central and Eastern Europe and Turkey in developing European Norms (ENs) to be applied through the European Economic Area (EEA).

See also EUROPEAN STANDARDS COMMITTEE; REGULATORY POLICY; SINGLE MARKET PROGRAM; STANDARDS AND CONFORMITY ASSESSMENT.

European Employment Services (EURES)

As part of a continuing EU effort to promote employment, in 1996 the Commission launched the European Employment Services (EURES), a computer network that provides access to three services: a database of job vacancies throughout the EU, a database of general information on living and working conditions in participating countries (members of the European Economic Area), and an electronic mail system for rapid and easy communication. EURES succeeds SEDOC, the European System for the International Clearing of Vacancies and Applications for Employment.

European Environment Agency (EEA)

In May 1990 the EC created a European Environment Agency (EEA) to collect and disseminate information on the environment, thereby partially filling the information gap that has plagued EC efforts to formulate and enforce environmental policy. A dispute over the siting of European agencies delayed establishment of the EEA until October 1993, when it opened in Copenhagen. The EEA’s work covers air quality and atmospheric emissions; water quality and resources; the state of the soil, flora, and fauna; land use and natural resources; waste management; noise emissions; environmentally hazardous chemicals; and coastal protection. An executive director is responsible for the everyday operations of the agency, and a management board (consisting of one representative from each of the EU’s member states, two senior Commission officials, and two scientists designated by the European Parliament) oversees the agency’s activities. At the end of 1994 the management board appointed five European Topic Centers (ETCs) to coordinate information on air quality, air emissions, inland waters, nature conservation, and marine/coastal issues. A scientific committee, composed of two representatives from each member state, scrutinizes the EEA’s reports. The EEA has no enforcement powers and can only report cases of noncompliance and violation of

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EU environmental policy to the Commission. Although the EEA is an EU agency, membership is not limited to EU member states: Norway, Iceland, and a number of Central and Eastern European countries are also members. See also ENVIRONMENTAL POLICY.

European Free Trade Association (EFTA)

In the early 1960s it was often said that Europe was “at sixes and sevens.” “Sixes” referred to the EEC, which had six member states, and “sevens” referred to the European Free Trade Association (EFTA), with its seven member states. The term not only made a clever numerical distinction between the two recently established organizations but also indicated a degree of competition and conflict between them. During the Messina conference in 1955 the UK had proposed establishing a free trade association instead of the putative EEC. The British preferred a limited, intergovernmental free trade area rather than a comprehensive, supranational Community and feared that the EEC would be protectionist and damaging to nonmember state interests. Some Scandinavian countries as well as neutral Austria and Switzerland favored Britain’s approach. But the six persevered with their negotiations and launched the EEC in 1958. Britain nevertheless pressed ahead with the idea of a free trade area that would incorporate and possibly supplant the new Community. Having decided not to pursue EC membership, the British sought instead to enjoy the benefits of free trade in Europe while eschewing a common external tariff, a common agricultural policy, and any form of economic integration. French president Charles de Gaulle especially disliked the implications of Britain’s proposal for agriculture, a sector specifically excluded from the proposed free trade area. Although talks about a possible free trade area to include the six and the other Western European countries had continued since the second half of 1956, de Gaulle brought them to an abrupt end in November 1958, soon after coming to power. Undaunted, in 1960 Britain formed the European Free Trade Association with Austria, Denmark, Norway, Portugal, Sweden, and Switzerland.

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Using a small secretariat in Geneva and occasional ministerial meetings, EFTA restricted its activities solely to promoting free trade among its member states. By contrast, the Community established a customs union, a common external tariff, and a Common Agricultural Policy (CAP). In the early 1960s and 1970s the EC negotiated trade agreements with each of the EFTA countries, and the relationship between both organizations became cooperative and harmonious. After all, the member states of both organizations continued to trade actively with each other. Paradoxically, it was Britain, EFTA’s instigator, that almost immediately broke ranks and applied to join the EC in 1961. Prime Minister Harold Macmillan advocated Britain’s accession to the Treaty of Rome for negative rather than positive reasons. By the end of the 1950s, Macmillan grasped that EFTA and the British Commonwealth were inadequate vehicles for promoting British influence and prosperity in the world. He saw EC membership as the only response to Britain’s declining economic position. Denmark, economically dependent on Britain, followed suit and also applied to join the EC. Both countries eventually did so in 1973. The remaining EFTA member states (later increased in number by the accession of Iceland, Finland, and Liechtenstein) were content to remain outside the EC, although the EC-EFTA Luxembourg Declaration of 1984 stressed both sides’ interest in developing closer relations. The success of the single market program in the late 1980s gave added impetus to the Luxembourg Declaration, as EFTA member states feared that they would be blocked out of the EC’s expanded, frontier-free market. At the same time, reform and revolution in Central and Eastern Europe brought the Cold War to an abrupt end and opened the way for the neutrals to apply for EC membership. Attracted by the single market and unencumbered by the Cold War conception of neutrality, Austria submitted an application in July 1989. Sweden, Finland, and Switzerland followed suit over the next three years. The EC was simultaneously flattered and alarmed by the prospect of so many new applicants, especially as the single market had not been completed and the Treaty on European Union was still under negotiation. In an effort to ward off EFTA applicants for EC membership, at least for a

few years, and at the same time extend the benefits of the single market to the wealthy EFTA countries, the EC proposed a joint EC-EFTA European Economic Space, later called the European Economic Area (EEA). Negotiations for an EEA treaty began in June 1990 and ended in October 1991. The three most contentious issues, unresolved until the last moment, were fishing rights, Alpine trucking rights, and a cohesion fund for the EC’s poorer members to compensate for better EFTA access to EC markets. To everyone’s surprise, the EC’s Court of Justice rejected the EEA treaty in December 1991 on the grounds that the proposed EC-EFTA tribunal to adjudicate EEA-related disputes was incompatible with the Treaty of Rome. After hasty EC-EFTA renegotiations in early 1992, the Court removed its objections. That left the EC and EFTA member states free to ratify the EEA treaty so that it could come into force in January 1993, simultaneously with the single market. Two years later, on January 1, 1995, Austria, Finland, and Sweden joined the European Union, thus making the EEA virtually meaningless and reducing EFTA’s ranks to three countries: Iceland, Liechtenstein, and Switzerland. See also EUROPEAN ECONOMIC AREA.

European Information Centers (EICs)

The Commission established a network of European Information Centers (EICs) in 1987 to help small and medium-sized enterprises (SMEs) acquire information on the single market program (notably on public procurement, marketing, and standardization). EICs also provide information on EU programs, arranged in five categories: structural funds, the environment, training, research and development, and the information society. Information on external relations is organized by geographical area. There are nearly three hundred EICs throughout Europe, the vast majority of which are in the EU itself. Many EICs have some form of a subnetwork, thereby multiplying the points of contact for information on the EU. All together, EICs provide information to around 300,000 firms.

European Investment

European Investment Bank (EIB)

The European Investment Bank (EIB) is an autonomous financial body within the EU. Two factors highlight the importance as well as the mystery surrounding its operations. First, the EIB finances a sizable part of the European integration effort. In 1996, the EIB approved ECU 23.2 billion worth of loans, a figure that exceeds the yearly programmed average disbursements for EU structural operations financed from the EU budget over the period 1993 to 1999. Indeed, the EIB has become the largest multilateral disburser of loans, its yearly lending volume exceeding that of the World Bank since 1993. Second, the EIB stands virtually alone among EU institutions in forging direct contact with economic agents operating in the EU, in both the public and private sectors: almost everything else the EU does relies on the intermediation of agencies of the member states. The EIB is a telling hieroglyph of Europe’s constitution. EU finances, whether on or off budget, have always been and continue to be strictly controlled by the member states. The EIB started its career as an ancillary institution whose statute is a protocol mandated by Part Three, Title IV (Articles 129–130) of the Treaty of Rome. It graduated to the status of an EU institution approximately equal in rank with the Council, Commission, and the European Parliament (EP) in the Treaty on European Union (TEU), at least with respect to textual placement alongside them in Part Five, Title I (Chapter 5, Articles 198d–198e). Despite this, the EIB is “owned” by the member states, in the sense that they contribute the capital subscriptions that allow it to function. Reflecting this reality, the bank’s governing bodies are appointees of the member states’ central governments. A board of governors (composed of the finance ministers of the member states) exercises general supervision and sets overall policy. The board of directors, again appointed by national governments, formally approves loans and other activities prepared by the bank’s management committee (comprising a president and seven vice presidents and invariably including large-member-state representatives). Directors are in most cases civil servants, although several, drawn entirely from the large member states, have banking experience at the senior management level. Still, the EIB has a very large dose of autonomy in decisionmaking, reinforced by generous

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endowments of capital and further enhanced by a high gearing ratio of loans to subscribed capital. The institution was meant to conform to the basic integrated market design of the EEC. An enduring culture of restraint with respect to direct political intervention by member states is a legacy of the original concrete aim of the bank to create a nongrant, technically justifiable supplement to development funds for areas of the Community that could not otherwise attract capital. Though exceptions exist, the EIB is no capital trough for politically motivated and economically unworthy projects. Two analytically separable but intimately related developments sustain the bank’s autonomy. The first is the bank’s success rate. The EIB never provides full financing but usually takes a stake in the range of 30 to 40 percent of the total project cost. Most projects are proposed to the bank at an advanced stage of development, only after having attracted some other form of finance. Consequently, loan volume in excess of ECU 80 billion has supported projects worth over ECU 250 billion between 1991 and 1995 (5 percent of total gross fixed capital formation in the EU during that period). Yet there have been virtually no outright defaults, though some payment schedules have been renegotiated, even as the public sector share of EIB lending—and therefore the amount secured by sovereign cover—plunged from nearly 80 percent to close to 40 percent of loan volume. This might be interpreted as evidence of excessive risk averseness of bank management, but it is just as easily attributable to the checks and balances at work in the loan appraisal process. A tripartite synergy involving the interaction between geographically oriented lending directorates, the functionally oriented economic studies directorate, and the Technical Advisory Service (TAS), whose staff are engineers with a minimum of ten years prior experience, also contributes to the Bank’s autonomy. The chemistry that has developed between the three EIB subcultures associated with these functions contributes to the success of projects while at the same time conferring a kind of “Good Housekeeping seal of approval” upon the borrowers, a demonstrable if intangible value added when compared to the commercial banking sector. These synergies redounded to the EIB’s own borrowing success. Its bonds invariably have the highest ratings and correspondingly

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the lowest interest, a fact that gives the EIB a small price advantage over commercial loans that can be passed along to borrowers. Taken together, these elements have produced a virtuous circle that lend such prestige to the bank that, aside from exceptional situations, heavy-handed political interventions by national governments would be easy to resist. The three subcultures will probably persist despite the 1995 organizational reform that merged the economic studies directorate and the TAS in a new projects directorate. Nevertheless the EIB is and must be responsive to political direction. After all, the EIB was founded to advance the aims of regional integration in Europe. It would be surprising if the development and refinement of these aims were not reflected in its operations. Lending criteria evolved incrementally in response to specific loan demand but also in response to the evolving legal and political situation in the Community. The main channels are the Commission, the member states (through the system of vice presidents), and the EP. The EIB’s position in relation to the EU has been designed for operational autonomy within a general legal framework. The bank’s board of governors has the authority to decide on new lending operations within the EU. When operating outside of the EU in support of EU development and cooperation policies, however, the EIB acts on new mandates from the Council of Economic and Finance Ministers (ECOFIN), whose legal bases originate in decisions taken by the Council and the EP. The Commission is represented on the bank’s board of directors, and the two institutions have developed an intensive dialogue, conducted on the Commission’s part by way of an interagency process led by directorate-general (DG) II (economic and financial affairs). Other important DGs in the process are development (VIII), environment (XI), regional policy (XVI), and industry (III). Relations with the EP are more distant and somewhat more contentious, as the EU budget functions at least implicitly as security for loan guarantees issued by the bank. The EIB is bound to safeguard its autonomy, whereas some in the EP insist on a general political oversight role. Political interest of another kind also plays a role in EIB operations, as some vestiges of member-state influence remain, at least for the big states. This is manifested in the collegiality of the management committee, a practice that diminishes the effectiveness of assigning spheres of re-

sponsibility to individual vice presidents. A fully professionalized institution would more likely assign executive responsibility for specific departments to the vice presidents, thus integrating them into the structure of the organization. Though superficially like the Commission, a body that is also appointed and collegial, in reality this practice encourages national preference. Regional development was the bank’s first focus, though employment and support of the single market were not far behind. In 1984 the bank added environmental modernization as an explicit lending criterion. A variety of instruments has been developed to carry out policy. Global loans—EIB credit tranches provided to other financial intermediaries—were introduced to help smaller firms and to contribute to job creation. The accession of Spain, Portugal, and Greece to the EC led to bank-supported Integrated Mediterranean Programs (a form of regional assistance) and introduced a programming dimension to EIB operations. This dimension has been expanded since 1990 to EU nonmembers through METAP, a lending program oriented to the environment, and new “horizontal” lending operations designed to support the EU’s new regional development goals in the Mediterranean. The bank has also supported EU development policy with lending to the African, Caribbean, and Pacific countries with which the EU has a development assistance program and since 1993 to countries in Asia and Latin America. Furthermore, the EIB contributes to the EU’s preaccession strategy for the countries of Central and Eastern Europe. Nevertheless, the volume of lending to projects located in non-EU countries accounts for only 8 percent of the total, although no predetermined ceiling has been set in either absolute or percentage terms. Rounding out the bank’s operational profile is the expertise (project appraisal) it provides to developers whose projects, although not financed by the EIB, are deemed important to the integration project in general. Included under this category are appraisal of Cohesion Fund and TransEuropean Networks (TENs) projects, as well as advice given on nuclear modernization projects supported by European Atomic Energy Community (EURATOM) loans and other funds in Central and Eastern Europe. Moreover, in acknowledgment of its institutional conservatism, the EIB helped give birth to a sister agency, the European Investment Fund (EIF), agreed to by the Council

in 1993 and launched in 1995 to support projects whose risk profile the EIB was unwilling to accommodate. The EIB is a 40 percent shareholder in the EIF; the chairman of the EIF supervisory board is the president of the EIB. Last but in no way least, the EIB also contributes to integration on the borrowing side, floating its own bonds denominated in all of the EU’s fourteen separate currencies, thus assisting in the maturation of local capital markets. In fact, some 80 to 85 percent of its issues are in EU currencies. But the bank also borrows in other currencies, particularly the U.S. dollar and the Japanese yen. Taken together, these practices make the bank one of the world’s leading benchmark borrowers, although it has also moved into structured issues in recent years (EIB, 1996a). Also worthy of mention in this context is the bank’s preparations for Stage 3 of economic and monetary union (the irrevocable fixing of exchange rates). Since the December 1995 Madrid summit, the EIB has been issuing promise payment in euros (the future single currency), whose price will be fixed in terms of the currencies participating in the monetary union; the ecu-euro settlement will occur on a one-for-one basis. The first issue of this kind was an ECU 500 million borrowing carrying a coupon of 6 percent. Thus, the EIB is already playing an important role in underpinning Stage 3 (EIB, 1996b). Gradually, EIB operations were expected to conform with current and (in light of investment time horizons) anticipated EU policy. Especially after the ratification of the Single European Act (SEA), EU environmental and procurement legislation found its way into the loan appraisal process and the TAS staff increased correspondingly, for the bank’s engineers were tasked with assuring compliance with standards in these areas. Because the engineers in most cases visited the project sites, they developed an unparalleled familiarity with the sectors in which the bank does most of its business: infrastructure for transport, energy, and communications; energy systems; and parts of manufacturing industry (e.g., petrochemicals). Staff expertise (in economic analysis and financing as well as in engineering) has given the bank a certain leverage over borrowers. As a result, although the EIB is fundamentally responsive to specific project proposals that must pass the tests of financial soundness, economic sense, and

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compliance to EU policy and law, its contribution to integration is multifaceted and direct. Growing EU policy multiplicity complicated the EIB’s task, requiring the balancing of competing priorities. For instance, it remains to be seen how much effect the sustainability mandate of the EU’s fifth Environmental Action Program, the SEA mandate to integrate environmental policy into other EC policies, and the enshrining of the principle of sustainable development as a core EU value will have on EIB operations. Though a new environmental charter was adopted by the board of directors in 1995, there is little to suggest that the EIB is willing to apply sustainability criteria to big projects: doing so would have major implications for the bank, perhaps requiring it to suggest alternatives to whole systems, for example, in the transport sector. Significantly, a strategic environmental impact assessment of the TENs apparently was not undertaken. Will the EIB become a victim of its own success? Multilateral development banks the world over are in relative decline, consonant with significant increases in worldwide financial integration and market reforms. In the EU, the single market and preparations for Economic and Monetary Union (EMU) point to a significant maturing of financial markets, to the point that questions have recently been raised about whether, in a market-based EU, a public lending institution still has a role to play. Although a certain degree of skepticism may be merited, the record shows an ever-increasing role and a differentiation of functions. What this points to is a legacy of success and a reservoir of trust that will carry the EIB into new territory. Despite changes in the EIB’s ethos and identity, three factors are likely to enhance the bank’s importance in the future. First, because it is off budget, the EIB is the only EU entity in a position to provide some relief from the economic adjustment and fiscal rigor necessary to meet the EMU convergence criteria and to contribute to the fight against unemployment. Second, the EIB is in a unique position to implement EU policy impartially, thereby helping to achieve the transnational uniformity of economic opportunity essential for the proper functioning and credibility of the EU. This is particularly the case in procurement and environmental legislation. To the extent that recent organizational changes have diminished the role of the bank’s engineers in project appraisal, however, there is legitimate cause for concern. Finally, the EIB will have a

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traditional role to play vis-à-vis EU candidate states in Central and Eastern Europe. Stabilization of the Mediterranean—a vital foreign policy interest of the EU—will also require EIB activity. See also TRANS-EUROPEAN NETWORKS.

and Christian Democratic groups, the two other established European political “families.” See also PARTY GROUPS IN THE EUROPEAN PARLIAMENT.

European Investment Bank (EIB). 1983. European Investment Bank: 25 Years, 1958–1983. Luxembourg: EIB. ———. 1996. Information. Luxembourg: EIB, quarterly. Heinemann, Friedrich. 1996. “Europäische Investitionsbank: Subsidiärer Finanzintermediär oder Umverteilungsinstrument?” Wirtschaftsdienst 73, pp. 98–103. Honahan, Patrick. 1995. “The Public Policy Role of the European Investment Bank Within the EU.” Journal of Common Market Studies 33, pp. 315–330. Lankowski, Carl. 1994. “Environment Impact Assessment Review in the European Investment Bank: A Report on Current Practices.” Manuscript for the World Wide Fund for Nature, EU Brussels Office. Lewenhak, Sheila. 1983. The Role of the European Investment Bank. London: Croom Helm. Wenning, Marianne. 1992. Greening the EIB. Brussels: World Wide Fund for Nature.

European Market Access Strategy

Bibliography

—Carl Lankowski

As part of its emergency growth package to stimulate economic recovery in the EC, the European Council in Edinburgh in December 1992 decided to establish a European Investment Fund (EIF) to support projects whose risk profile the European Investment Bank (EIB) was unwilling to accommodate. The EIB subscribed 40 percent of the EIF’s ECU 2 billion capital; the Commission and other financial institutions subscribed 30 percent each. Operational since 1995, the EIF provides guarantees worth between ECU 5 and 10 billion for various infrastructural projects. The president of the EIB is chairman of the EIF’s supervisory board. See also EUROPEAN INVESTMENT BANK.

See MARKET ACCESS STRATEGY.

The European model of society espoused by Commission president Jacques Delors and others during the height of the single market program in the late 1980s posited social policy, redistributive policies, and market liberalization as essential elements of a harmonious and prosperous EC (i.e., an organized European space). Ideological opposition from neoliberals, however, and a biting economic recession in the early 1990s tempered Delors’s vision and weakened EC social policy. Nevertheless the European model of society still appeals to many on the center-left and center-right in Europe, not least because it distinguished Europe from what many Europeans see as an inhumane, nakedly capitalistic United States. See also DELORS, JACQUES.

European Model of Society

European Investment Fund (EIF)

European Liberal, Democratic, and Reformist Party (ELDR)

The European Liberal, Democratic, and Reformist Party (ELDR) is one of the oldest party groups in the European Parliament, although only the fourth largest and with far fewer seats than the socialist

European Monetary Institute (EMI)

In its provisions for Economic and Monetary Union (EMU), the Treaty on European Union stipulated that a European Monetary Institute (EMI), a forerunner of the European Central Bank, would be constituted at the outset of EMU’s second stage. Accordingly, the EMI was established on January 1, 1994, in Frankfurt and supplanted the Committee of Central Bank Governors, which had met monthly in Basel, Switzerland. The EMI’s purpose is to facilitate closer cooperation between member states’ central banks, coordinate member states’ monetary policies, monitor the European Monetary System, and advise the European Council in 1998 as to each member state’s eligibility for participation in Stage 3 of EMU (the irrevocable fixing of exchange rates). The EMI acts as a watchdog, ensuring that member states make a good faith effort to meet the EMU convergence criteria. In order to ensure the single currency’s stability and credibil-

ity, the EMI has rejected any suggestion that the criteria be relaxed. See also ECONOMIC AND MONETARY UNION: POLITICAL ISSUES.

European Monetary System (EMS)

The EU’s exchange rate regime, the European Monetary System (EMS), began operation on March 13, 1979, under a cloud of almost universal skepticism. Its predecessor, the European currency “snake,” had failed to stabilize nominal exchange rate values, and there was little on the political or economic front to indicate that the new regime would keep European currencies in line. However, the EMS confounded the skeptics over the next decade, as exchange rate fluctuations decreased and EMS membership widened. Indeed, the perceived success of the EMS contributed to a revived European integration movement, most notably the push for monetary integration and a single currency that culminated in the plan for Economic and Monetary Union (EMU) in the Treaty on European Union. However, a series of exchange rate crises and the exit of several member states in the 1990s once again raised doubts about the ability of the EU governments to cooperate in the monetary realm. The varied history of monetary cooperation in the EMS has engaged political scientists, economists, and historians in a series of lively, albeit inconclusive, debates about the sources, extent, and implications of this monetary cooperation. European political leaders have sought to stabilize the value of their currencies vis-à-vis other EU states for three main reasons. First is the belief that large swings in nominal currency values can disrupt trade and investment flows within the common market (Commission, 1990), although there is little empirical evidence linking exchange rate volatility to a decrease in cross-border economic activity (Krugman, 1988). A more certain trade-related effect is in the area of the EU’s Common Agricultural Policy, which becomes more complicated and costly to administer with each currency fluctuation (McNamara, 1993). Second, European leaders view fixed rates as a way to promote political unity within Europe, as many equate floating exchange rates with the economic dislocations and political conflicts of the interwar era. A final, contemporary reason why member states have pursued exchange rate cooperation is

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the perception that linking national currencies to a regime that includes the strong and stable German mark will lower inflationary expectations and thus inflation itself (Woolley, 1992). The EMS has been seen as a way to borrow credibility for governments trying to keep inflation low. The EMS was constructed in a series of negotiations held throughout 1978 (Ludlow, 1982). The core of the EMS proposal was its Exchange Rate Mechanism (ERM), in which member-state moneys would be allowed to fluctuate vis-à-vis other EC currencies only within predetermined bands of ±2.25 percent of the currency’s value. The project got an initial boost from Commission president Roy Jenkins, who saw the EMS as having the potential to reinvigorate a flagging European integration project. However, the crucial impetus for the EMS rested in the personal determination of French president Valéry Giscard d’Estaing and German chancellor Helmut Schmidt. Since the currency snake’s demise, changes in the international geopolitical environment had made the idea of exchange rate stabilization, with the potential for further monetary integration and a heightened profile for Europe in international affairs, more attractive. Schmidt’s immediate concern was the appreciation of the German currency against the U.S. dollar, which he feared would make German exports uncompetitive, squeezing profits and increasing unemployment. More fundamentally, both Giscard and Schmidt viewed the depreciation of the dollar as indicative of a broader decline in U.S. leadership under President Jimmy Carter, one that, in their view, could only be met with a deepening of European economic cooperation and increased political unity. The critical role of this elite level commitment to monetary cooperation by Schmidt and Giscard was reflected in the insulated nature of the EMS negotiations. Aides drew up the initial proposal entirely outside, and in secret from, the normal channels of national and EC policymaking, and the two leaders then presented it to the EC heads of state at the Copenhagen summit in April 1978. The German and French leaders convinced their colleagues to launch a study of a new European exchange rate system, with routinized policy coordination, foreign exchange intervention obligations, and a new institution, the European Monetary Fund, to manage a pool of foreign exchange reserves and provide balance of payments assistance.

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The contentious details of how the system would work were further hammered out at another summit meeting in Bremen in July 1978. The stronger currency countries (led by Germany’s Bundesbank) insisted on ensuring that the system would not be set up in a way that might dilute their anti-inflationary efforts, whereas the weaker currency countries (primarily France and Italy) pushed for a more flexible system to ensure their continued participation. At issue was the degree to which the onus would be on a weaker currency state to act to keep its exchange rate in line (i.e., by fiscal or monetary policy changes or by currency interventions) and the degree to which the other states would guarantee exchange rate stability (i.e., by such actions on behalf of their partner states). In the end, despite some cosmetic innovations to the contrary, the stronger currency view prevailed, and states were largely left responsible for adjusting their policies to stay within the EMS. Most importantly, while the European Currency Unit (ECU) was adopted as the formal pivot for the system, the German mark became the de facto pivot, meaning the weaker currency states would have to adjust to a low inflation standard. The agreement to create a European Monetary Fund with its own pool of ecus, in an effort to keep the system from relying heavily on the mark and to help the weaker currency states adjust, was quietly dropped. Finally, the very short term financing facilities (VSTF), a system of central bank swap arrangements intended to increase the financial resources available to member states, were not widely used, as most interventions occurred within the exchange rate bands, whereas VSTF funds were reserved for interventions at the margins of the agreed bands. The ERM began functioning in March 1979. With the exception of Britain, all the then member states of the EC (Belgium, Denmark, France, Germany, Ireland, Italy, Luxembourg, the Netherlands) participated (although Britain remained a member of the EMS). The ERM performed well beyond expectations. The new regime managed to weather the severe shocks of the second oil crisis of 1979 and the recession of the early 1980s and did so with an increasing sense of collective responsibility and communication among the members of the Committee of Central Bank Governors and the Council of Economic and Finance Ministers (ECOFIN), the two bodies overseeing the functioning of the EMS. Not only did the new system retain its membership, but it went from an ini-

tial period of wide currency swings and frequent exchange rate realignments (1979–1983) to a transitional period of decreasing fluctuation and realignment (1983–1987) to a period of extraordinary exchange rate stability (1987–1992) (IMF, 1990). Capital controls decreased over this time as well, driven by numerous factors, including national level imperatives, the single market program, and moves toward EMU. With the entry of three more members to the ERM—Spain in 1989, Britain in 1990, and Portugal in 1992 (albeit within larger fluctuation bands initially)—the EMS was lauded as one of the most successful and visible parts of the European integration movement. A series of exchange rate crises starting in September 1992 tarnished the reputation of the EMS, however. Multiple devaluations, the exits of Britain and Italy from the ERM, and the decision to widen the allowed bands of fluctuation from 2.25 percent to 15 percent cast doubt on the stability of the currency regime. Yet by 1994–1995, currency values had stabilized, and most currencies were trading within narrow fluctuation bands, even though the wide bands remained the official exchange rate grid. Despite this, Britain and Italy still remained outside the ERM. The political workings of the EMS have been the source of some dispute among academics, particularly the relationship between Germany and the other EMS participants. Germany has played a critical role in the EMS, one that defies easy categorization. The mark has functioned as the anchor currency of the system, and thus German monetary policy can be said to set the benchmark for Europe (Giavazzi and Giovannini, 1989). However, Germany has not acted autonomously in its interest rate, money supply, and currency intervention policies but has been somewhat affected by its partner states as well. Germany’s role might be better understood as promoting the defense of price stability before other goals, a prioritization that became increasingly popular within the other EU states over the life of the EMS (McNamara and Jones, 1996). This has resulted in a convergence in monetary policies toward the price stability emphasis of the Germans, with an eventual convergence in inflation rates, which has underpinned increased stability in the EMS. Most strikingly, the French, key partners with the Germans in the quest for monetary integration, became proponents of a “strong franc” philosophy that appeared much closer to

German hard currency policies than to former French exchange rate strategies (Cameron, 1996). An emerging consensus in economic policy ideology, driven in part by international economic pressures and the failures of past Keynesian-based expansionary policies, has been an important factor in this development (McNamara, 1997). Nonetheless, efforts continued to ease the burden of the system’s operations on the weaker currency states, most notably the Basle-Nyborg reforms of 1987, which allowed for earlier and easier financing of government interventions to support currency rates. The proposal to move from the EMS to an EMU was also viewed by some as a way to ensure that decisionmaking over the direction of monetary and exchange rate policy would be shared among all member states, not determined by de facto German leadership. Developments in the early 1990s put a heavy strain on the cooperative consensus that had developed in the EMS. Internally, the EMS had become overly rigid as currency realignments ceased by the late 1980s, making the system ripe for attack by currency traders. Externally, the reunification of Germany and the uncertain process of ratification of the Treaty on European Union produced heavy waves of currency speculation against member states whose governments were perceived as being less committed to the system (such as Britain) or less able to stay within the system because of domestic economic problems or political pressures (such as Italy) (Eichengreen and Wyplosz, 1993). Even France, whose economic fundamentals by the 1990s outshone the traditionally strong German economy, suffered from speculative attacks. However, a coordinated defense of the franc by France and Germany managed to keep the EMS intact at the core. By mid-decade, the EMS appeared to have weathered the worst. The key issue now facing the EMS member states is how to manage the transition from exchange rate regime to monetary union. Difficult questions remain about the relationship between those member states that go ahead with EMU and those that continue within the ERM, as well as how to minimize the impact of speculative flows during the transition period (Kenen, 1995). The EMS may confound observers once more by successfully evolving into a monetary union, or it may be torn apart by the effort to move beyond fixed exchange rates.

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Cameron, David. 1996. “Exchange Rate Politics in France, 1981–83: The Regime-Defining Choices of the Mitterrand Presidency.” In Anthony Daley, ed., The Mitterrand Era. New York: Macmillan. Commission. 1990. “One Market, One Money.” European Economy 44. Eichengreen, Barry, and Charles Wyplosz. 1993. The Unstable EMS. Brookings Papers on Economic Activity 1. Giavazzi, Francesco, and Alberto Giovannini. 1989. Limiting Exchange Rate Flexibility. Cambridge: MIT Press. International Monetary Fund (IMF). 1990. The European Monetary System: Developments and Perspectives. Washington, DC: IMF. Kenen, Peter B. 1995. Economic and Monetary Union in Europe: Moving Beyond Maastricht. Cambridge: Cambridge University Press. Krugman, Paul. 1988. Deindustrialization, Reindustrialization and the Real Exchange Rate. NBER Working Paper 2586. Ludlow, Peter. 1982. The Making of the European Monetary System. London: Butterworth Scientific. McNamara, Kathleen R. 1993. “Common Markets, Uncommon Currencies: Systems Effects and the European Community.” In Jack Snyder and Robert Jervis, eds., Coping with Complexity in the International System. Boulder: Westview Press. ———. 1998. The Currency of Ideas: Monetary Policy in Europe. Ithaca: Cornell University Press. McNamara, Kathleeen R., and Erik Jones. 1996. “The Clash of Institutions: Germany in European Monetary Affairs.” German Politics and Society (Fall). Woolley, John. 1992. “Policy Credibility and European Monetary Institutions.” In Alberta Sbragia, ed., Euro-Politics. Washington, DC: Brookings.

Bibliography

—Kathleen R. McNamara

European Movement

The European movement was a popular and political drive for cooperation and integration that swept Europe in the immediate post–World War II years; the European Movement is the name of an influential lobby group for deeper European integration. Repugnance against the slaughter of two European civil wars in as many generations, and the economic depression and political extremism of the intervening years, fueled widespread support for a reorganization of the international system. Words like federation, union, and supranationalism were bandied about as panaceas for Europe’s ills. This trend gave rise in the late 1940s to the European movement, a loose collection of

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individuals and interest groups that ranged across the political spectrum from the noncommunist left to the discredited far right but had in common a shared advocacy of European unity. The intellectual ancestry of the European movement stretched into antiquity, but its immediate roots lay in the interwar years. In 1923 an Austro-Hungarian aristocrat, Count Richard Coudenhove-Kalergi, buoyed by the success the previous year of his book Pan-Europa, launched an organization of the same name. Inspired as much by the devastation of the Great War as by the emergence during it of a powerful United States and a potentially menacing Soviet Union, Pan-Europa quickly acquired an ardent following, not least among influential politicians. The zenith of the pan-European movement was a stirring speech by Aristide Briand, then French foreign minister, before the League of Nations in 1929. But the lofty ideals of European unity were soon swept aside by the flood tide of fascism in the 1930s. It took the bitter experience of defeat and occupation in 1939 and 1940 for pan-European ideas to revive and flourish in European minds. The wartime Resistance movement, itself a loose collection of individuals and groups opposed to Axis occupation, took up the cause of European unity as one plank of a proposed radical reorganization of postwar politics, economics, and society. Resistance literature, secretly circulated in occupied Europe, espoused the goal of international cooperation and integration as a basis for future peace and prosperity. In 1944, Altiero Spinelli, a fervent federalist and a future commissioner and member of the European Parliament, helped to write one of the most influential wartime tracts on integration, the Draft Declaration of the European Resistance. The legacy of the prewar Pan-Europa and of the wartime Resistance movement generated a groundswell of support for European unity in the early postwar years. Politicians as different as Konrad Adenauer (a German Christian Democrat), Paul-Henri Spaak (a Belgian Socialist), and Winston Churchill (an English Conservative) espoused the cause of economic and political integration. They were typical of the diverse individuals, sharing a determination to promote European cooperation and reconciliation, who came together in May 1948 at the Congress of Europe, a glittering gathering of more than six hundred in-

fluential Europeans from sixteen countries. The Council of Europe, which emerged from their lengthy deliberations, represented the high point of the European movement. Thereafter political interest in European integration concentrated more on sectoral economic integration, culminating in the establishment of the three European Communities in the 1950s. Since then a specific group called the European Movement, organized internationally but with national branches, has lobbied intensively and at a high level for deeper European integration. In recent years, the group has focused its attention on generating political support for major constitutional reform, notably EU treaty revision. The European Movement’s president in 1997, at the conclusion of the 1996–1997 intergovernmental conference, was Mário Soares, former president of Portugal. See also ORIGINS OF EUROPEAN INTEGRATION. See EUROPEAN STANDARDS COMMITTEE; REGULATORY POLICY; STANDARDS AND CONFORMITY ASSESSMENT.

European Norms (ENs)

The European Parliament (EP) is unique. It is a parliament with a role unfamiliar to most Europeans and with members often little known in the countries that elected them, but it contains four former prime ministers, several prominent mayors and regional leaders, and no fewer than fifty-nine members who have held national ministerial office. It can dismiss the Commission but has no power over the Council of Ministers, it can veto future EU enlargement and say no to an agreement as important as the EU-Turkey customs union, and yet it is not even formally consulted on some other international agreements. The EP is a parliament that can reject certain categories of EU legislation under co-decision with the Council and yet issues purely consultative opinions that can be ignored in other areas of legislation and does not even have a formal power of legislative initiative. It is a parliament that shares responsibility for EU budgetary expenditure with the Council and yet has more say over some areas of budgetary expenditure than others (and more than many national parliaments)

European Parliament (EP)

and virtually no say over revenue. Some member states wish to endow the EP with more powers, and yet it is seen by many Europeans as subordinate in legitimacy to national parliaments. Finally, the EP is a parliament that is seen as important or potentially important by some Europeans and as an irrelevant talking shop by others. These are just some of the differences and in some cases apparent paradoxes that inevitably have a blurring impact on the public image of the EP. A Parliament Unlike Any Other A key factor affecting public perception is that the EP has a number of features that sharply distinguish it from more familiar national parliaments. A directly elected supranational parliament. The first and most obvious point is that it is still the only example of a directly elected supranational parliament, with its 626 members from fifteen countries elected in simultaneous elections (over a four-day period) every five years. These elections are still held under national rules, however, in the continuing absence of a uniform electoral procedure. Unusual composition. Unlike the U.S. Congress, in which the Senate represents the states on an equal basis and the House of Representatives reflects the respective population of each state, the EP has to reconcile the representation of both states and peoples. As a result, 99 members of the European Parliament (MEPs) are from Germany and only 6 from Luxembourg, but that represents 1 MEP for every 800,000 Germans compared to 1 MEP for every 60,000 Luxembourgers. A multilingual parliament. The EP is probably the most genuinely multilingual of all parliaments, with its eleven official languages in full use. Unlike the situation in the UN with its five official languages, MEPs are politicians and not diplomats, so ability to speak foreign languages, although highly desirable, cannot be a mandatory requirement for those seeking election to the EP. A nomadic parliament. A confusing feature of the EP (and one that is costly and inefficient) is that it is a nomadic parliament. The European Council has decided that the “seat” of the EP is Strasbourg in France, and yet it meets there in plenary sessions for an average of only four days a month. Most of its committee meetings are held three hundred miles away in Brussels, where an increasing number of shorter additional plenary ses-

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sions are also held. Two thirds of the Parliament’s staff is still based in Luxembourg (approximately halfway between Strasbourg and Brussels), but one third is based in Brussels. Facilities are thus duplicated between the three working places, and an additional travel burden is imposed on EP staff and, of course, on MEPs besides the normal to-and-fro to their individual countries and constituencies. Since the question of the EP’s seat is, under the treaties, a matter for national governments, the battle over the seat has become an enduring one, with a majority (but not an overwhelming one) of MEPs preferring Brussels to be the center of operations but without the power to impose their will. A rapidly changing parliament. The EP’s turnover at successive elections (typically 50 percent and even 60 percent at the 1994 elections) has been exceptionally high by parliamentary standards, and its overall membership has grown after direct elections and successive EU enlargements from 198 before 1979 to 626 today. Even more important, the EP’s powers and role within the EU system have also been continuously evolving. New budgetary powers were given to the EP in 1970 and 1975. In 1987 the Single European Act (SEA) created a new legislative procedure (the cooperation procedure) and gave the EP the right of assent (i.e., to say yes or no) for accession treaties and association agreements. In 1993 the Treaty on European Union (TEU) gave a whole series of new powers to the EP, including co-decision with the Council in jointly approving certain types of legislation, extension of the existing cooperation and assent procedures, new rights with regard to certain EU appointments, and reinforced control powers. A number of interinstitutional agreements between the EP, Council, and Commission have further consolidated these changes. In 1997 the Amsterdam Treaty greatly extended the scope of co-decision and deepened the EP’s involvement in a number of EU activities. Moreover, the EP, besides its other functions, has itself constituted a lobby for promoting further EU institutional change (i.e., the treaty for a European Political Community drafted by the members of the first ad hoc European Assembly after 1952, the Draft Treaty Establishing a European Union that was adopted in 1984, and the draft constitution prepared but never formally endorsed in 1994). A parliament operating within a unique institutional structure. The EP exists within an EU

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institutional structure that is itself unique (and not fully understood by most EU citizens) and within which familiar national distinctions between executives, legislatures, and judiciaries cannot easily be applied. Moreover, like the EU itself, the EP has to operate in both intergovernmental and supranational frameworks. Unlike national parliaments, the EP has not been allocated a clear role in a fixed constitutional framework (whether written or unwritten) but has seen its role evolve as a result of successive intergovernmental negotiations. Perhaps most important for its image, unlike most national parliaments the EP does not have the right to create or bring down a government. It can bring down the Commission (but has never done so) but not the Council of Ministers or the European Council, which have the most powerful position within the EU’s institutional structure. Nor can the EP be separated into groups or parties consisting of those who support a government and those who support an opposition. Voting patterns within the EP are based on variable national, regional, sectoral, and ideological cleavages rather than on consistent majorities and minorities. Moreover, membership of the EP is drawn from fifteen different national parliamentary traditions (some, for example, more deferential to executives or less concerned about detailed legislative scrutiny or control work than others) that inevitably affect individual MEPs’ perceptions of their own role, let alone the perceptions of the European public at large. Given that the latter’s main point of reference is their national parliament, the role of the EP is thus even less clear to individual European citizens. It is tempting, therefore, for many of them to conclude that the EP is not a real parliament. The fact that the EP’s role is not the same as that of national parliaments in the EU member states does not necessarily mean that it must be weak. The U.S. Congress, for example, does not create or dismiss U.S. administrations but is still arguably the strongest parliament in the world. In an EU that is not fully supranational, the EP cannot expect to have similar powers, but it can nevertheless have a distinctive and important role. A parliament with uneven powers. In a number of areas the EP’s powers are already greater than those of certain national parliaments. A feature of its powers, however, is that they are so uneven: strong or very strong in some areas, weak or very weak in others. The result of all this is that the EP

starts from a base of much greater influence in some policy areas than in others. It has a strong role, for example, on single market matters where it is generally involved in co-decision. It is obviously less influential in the predominantly intergovernmental areas of Common Foreign and Security Policy and of Justice and Home Affairs, where the Parliament’s extremely weak role mirrors that of other Community institutions such as the Commission and the European Court of Justice (ECJ). The EP’s role is also, however, relatively weak in certain policy areas falling under the EU’s first pillar, such as Economic and Monetary Union (EMU), and in areas in which the Commission, for example, has a very strong role, such as the Common Commercial Policy, competition policy, and even the Common Agricultural Policy. The EP is only involved by means of simple consultation in an area such as fiscal policy with direct consequences for the single market. In some cases Parliament’s powers vary considerably even within a relatively narrow policy area. In the environment policy article of the Treaty of Rome (Article 130 S), the EP is respectively involved by means of consultation, cooperation, and co-decision, depending on the specific policy area. In the field of Trans-European Networks (Article 129), the EP’s involvement is by means of co-decision on the general guidelines but only by means of cooperation on the accompanying financial measures and other implementing measures. (However, under the terms of the Amsterdam Treaty, the cooperation procedure was virtually abolished, and most of the areas subject to it were made subject to the co-decision procedure.) One final consequence of these uneven powers is that they increase the need for cooperation between the EP and the national parliaments within the EU institutional structure. Although there is a tendency for the EP and national parliaments to see each other as rivals, their work on EU matters is in fact often complementary, with different roles and different strengths and weaknesses in different areas. Functions In spite of these unusual features, the EP has a number of functions that are more immediately familiar to any student of parliaments. The EP is closely involved in the EU legislative process and is one of the two arms of the EU budgetary authority. It has a small but evolving role in approving EU appointments and a vital, but often diffi-

cult, role in scrutiny and control of EU institutions and of EU programs and policies. It has an important information function on EU matters. Involvement in legislation. The EP has no power of legislative initiative (although since the TEU it can ask the Commission to submit proposals), but it is now consulted on practically all Community legislation. It also gives its views on prelegislative documents from the Commission, such as green papers and important background documents. It is reconsulted on legislation when significant changes are proposed in the course of examination by Commission or Council. The ECJ has made it clear (in the 1980 Isoglucose case) that the Council has to wait for Parliament’s opinion before adopting legislation. The EP is increasingly involved in EU legislative planning. It has also played an important role in putting new issues on the EU policy agenda. Parliament’s influence on legislation varies according to the procedure used. The single-reading consultation procedure gives it least influence but is still used in such important cases as agriculture, taxation, certain international agreements, and new Community initiatives taken pursuant to Article 235 of the Rome treaty. The two-reading cooperation procedure introduced under the Single European Act was less used after the co-decision procedure was introduced under the TEU and was virtually abolished in the Amsterdam Treaty. Before amendment of the TEU, the cooperation procedure applied in eighteen areas, including transport and development policy, several areas of social policy, and implementation of rules in a variety of areas. That procedure kept the EP involved longer in the legislative process and gave the EP’s opinions real weight when parliament rejected a proposal on second reading (when the Council could only overrule it unanimously) or when the EP’s amendments on second reading were supported by the Commission (when the Council could again only reamend the text by unanimity). It is the co-decision procedure (Article 189 b) that gives the Parliament the most say, first by enabling the EP to reject draft legislation without any possibility of being overruled and second by providing a formal negotiating mechanism (the Conciliation Committee between Council and Parliament). The procedure applied in fifteen areas before its use was extended in the Amsterdam Treaty, most frequently in the case of single mar-

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ket harmonization but also in other areas such as the Framework Program for Research and Technological Development, measures on the free movement of workers and the right of establishment, services, and certain cultural, environmental, public health, and consumer protection measures. Although seemingly long and cumbersome, the procedure has generally worked smoothly since it came into operation in November 1993, and few proposals have been finally rejected by the Parliament. Besides these main legislative procedures, the EP also has to give its assent in a few areas of legislation. In these cases it can only approve or reject the measure and not amend it. The assent procedure is also used in other nonlegislative cases, such as for the enlargement of the EU (when the EP, for example, had to approve the accession of Sweden, Finland, and Austria) and for the conclusion of association agreements (including revisions or additions to such agreements, such as financial protocols). The EP has used the assent procedure to effect on several occasions, as when it initially refused an agreement with Israel and turned down financial protocols with Syria and Morocco. The scope of the assent procedure was increased by the Amsterdam Treaty to cover a new provision: sanctions in the event of a serious and persistent breach of fundamental rights by a member state. As regards other international agreements entered into by the EU, the EP’s role has been a more limited one, with no formal consultation at all on Article 113 trade agreements (such as those under the GATT and the World Trade Organization), although the Parliament’s right to information has gradually developed. Moreover, the EP’s involvement in important international agreements was extended by the TEU. Involvement in the budgetary process. The EP has considerable budgetary powers as regards expenditure but not revenue. It can increase or reduce Community expenditure within certain limits, can redistribute spending from one part of the budget to another, and can reject the EU budget (as it did in 1979 and 1984) or a supplementary budget (as it did in 1982). The EP also has the exclusive right to grant a discharge to the Commission as regards the way in which it has implemented the budget (it refused such a grant in November 1984). The EP has less power and autonomy with regard to so-called compulsory ex-

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penditure (essentially agricultural expenditure) than for other, noncompulsory expenditure. Over the years the EP’s involvement in longer-term budgetary planning has been increased through two interinstitutional agreements (agreed to in 1988 and 1993) over permitted levels of annual spending covering periods of several years. Involvement in EU appointments. At the outset the EP had no role in EU appointments, which were an exclusive matter for the member states. As a result of the TEU the EP’s role has increased, although it does not have the U.S. Senate’s power formally to reject any appointments. The EP is now consulted on the choice of the Commission president (and in 1994 only accepted Jacques Santer by 260 votes in favor and 238 against: although he was not obliged to do so, he would almost certainly have stood down if the vote had gone against him) and then votes on the Commission as a whole (but not on individual commissioners). The EP is consulted on appointments to the Court of Auditors (on one occasion successfully Term

Table 7

President

pushing for the withdrawal of a French nominee) and to the presidency of the European Monetary Institute (this first taking place in November 1993). When the European Central Bank is established, the EP will be consulted on appointments to its presidency and to its executive board. The EP is also exclusively responsible for the choice of the EU ombudsman (the first such appointment was made by the EP in 1995). To build on its new powers in this field, the EP has begun to introduce confirmation hearings of the nominees (with the highest profile hearings being held for the individual nominees to the Santer Commission in January 1995). Involvement in scrutiny and control. Besides its role in budgetary control (i.e., in granting the budgetary discharge mentioned above), the EP is also involved in numerous other scrutiny and control activities. Its most spectacular power is that of dismissing the Commission as a whole, but the handful of censure motions that have been put down so far have all been easily defeated or withdrawn.

Country

Presidents of the European Parliament

Presidents of the Common Assembly of the ECSC 1952–1954 Paul-Henri Spaak Belgium 1954 Alcide De Gasperi Italy 1954–1956 Guiseppe Pella Italy 1956–1958 Hans Furler Germany

Presidents of the European Parliament 1958–1960 Robert Schuman 1960–1962 Hans Furler 1962–1964 Gaetano Martino 1964–1965 Jean Vuvieusart 1965–1966 Victor Leemans 1966–1969 Alain Poher 1969–1971 Mario Scelba 1971–1973 Walter Behrendt 1973–1975 Cornelius Berkhouwer 1975–1977 Georges Spenale 1977–1979 Emilio Colombo 1979–1982 Simone Veil 1982–1984 Piete Dankert 1984–1987 Pierre Pflimlin 1987–1989 Lord Henry Plumb 1989–1992 Enrique Barón Crespo 1992–1994 Egon Klepsch 1994–1996 Klaus Hänsch 1997–1999 Jose Maria Gil-Robles 1999–2002 Nicole Fontaine

a. Formerly Christian Democratic Group. b. Formerly Socialist Group.

France Germany Italy Belgium Belgium France Italy Germany Netherlands France Italy France Netherlands France UK Spain Germany Germany Spain France

Political Group

Socialist Group Christian Democratic Group Christian Democratic Group Christian Democratic Group

Christian Democratic Group Christian Democratic Group Christian Democratic Group Liberal Group Christian Democratic Group Christian Democratic Group Christian Democratic Group Socialist Group Liberal Group Socialist Group Christian Democratic Group Liberal Group Socialist Group European People’s Partya European Democratic Group Socialist Group European People’s Party Party of the European Socialistsb European People’s Party European People’s Party

European Parliament (EP) Table 8

215

European Parliament Committees and Subcommittees

Committee on Foreign Affairs, Human Rights, Common Foreign and Security Policy Committee on Budgets Committee on Budgetary Control Committee on Citizen’s Freedoms and Rights, Justice and Home Affairs Committee on Economic and Monetary Affairs Committee on Legal Affairs and the Internal Market Committee on Industry, External Trade, Research, and Energy Committee on Employment and Social Affairs Committee on the Environment, Public Health, and Consumer Policy Committee on Agriculture and Rural Development Committee on Fisheries Committee on Regional Policy, Transport, and Tourism Committee on Culture, Youth, Education, the Media, and Sport Committee on Development and Cooperation Committee on Constitutional Affairs Committee on Women’s Rights and Equal Opportunities Committee on Petitions

The EP’s normal means of scrutiny, however, are less dramatic, such as putting oral and written questions to the Commission and the Council, grilling commissioners and national ministers in individual parliamentary committees, drawing up annual reports in particular policy areas and urgent resolutions on current political topics or human rights issues, holding public hearings on controversial issues, and setting up temporary committees of inquiry (which have been given formal status under the TEU: an inquiry on fraud in the field of Community transit was the first one under the new rules). When all else fails the EP can, subject to certain restrictions, also take a case before the ECJ. Other functions. Besides the above, the EP also plays an important intermediary role in EU issues. It has increasing contacts with nongovernmental organizations (NGOs) and other interest groups, with individual citizens (who also have the right to petition the Parliament), and, of course, with the media. Moreover, MEPs not only put forward national, regional, and constituency points of view to decisionmakers in other EU institutions (as well as requests for Community funding) but also seek to explain EU issues back home. Contacts between the EP and national parliaments have also multiplied in recent years, as have contacts with regional and local authorities.

In order to carry out these various functions, the EP has developed a set of distinctive structures (and incidentally also has complete autonomy over its own agenda and its internal budget). The 626 MEPs represent almost one hundred different national political parties, but they are now grouped together in eight party groups, with only 30 MEPs remaining nonattached. Although the groups vary in homogeneity and have not yet evolved into Europe-wide political parties, they play a fundamental role in the life of the EP. Parliament’s president (who plays a key representational role for the EP) is elected every two and a half years (see Table 7), as are the fourteen vice presidents and five quaestors. Much of the EP’s preparatory work (such as drawing up reports) is carried out in its twenty committees (see Table 8). In contrast to the U.S. Congress, there are only three subcommittees. There are also a considerable number of interparliamentary delegations to third countries. A phenomenon worth mentioning is that of the EP’s intergroups (consisting of MEPs from different countries and from different political groups with a common interest in a particular third country or policy subject) that, although having no formal role, can have an important mobilizing function. Finally, it should be noted that the EP’s individual members have considerable powers, and one of the advantages of not having a government to support is that individual Structures

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“backbenchers” often have greater independence and more interesting tasks than their equivalents in national parliaments.

Future Role The EP is a relatively young institution. Its role has evolved significantly in recent years, and it now has considerable, if uneven, powers that are still unfamiliar to most Europeans. The further evolution of its role is essentially linked to the future of European integration itself, and the degree to which the EP’s powers will be reinforced in the future is thus highly uncertain. Moreover, even if EU “deepening” does go ahead, it is unlikely to take a centralizing form, and the future tasks of democratic control within any new EU institutional structure will continue to have to be shared between the EP and national and, in some cases, even regional parliaments. Whatever happens, however, democratic accountability at the EU level will have to be strengthened, and in the course of this process the EP will have to seek to make itself better known and better accepted, and its powers will have to become more coherent and less uneven. In the shorter term, the most probable change in the EP’s powers is in the legislative area, where the EP is pushing for co-decision to become the general procedure for all legislation. The EP’s general control powers may also be reinforced. Greater EP power over the budget and in the field of appointments will be more difficult to achieve, but the EP will continue to push for them with vigor and will also continue to push for greater involvement in those policy areas where it is currently particularly weak, such as Common Foreign and Security Policy, Justice and Home Affairs, and certain aspects of EMU. The Amsterdam Treaty put a ceiling of seven hundred on the EP’s overall membership, but disputes over its seat and over a uniform electoral system are likely to continue for some time to come. See also BUDGET; COMMISSION; COUNCIL OF MINISTERS; DECISIONMAKING PROCEDURES; DEMOCRATIC DEFICIT; NATIONAL PARLIAMENTS; PARTY GROUPS IN THE EUROPEAN PARLIAMENT; APPENDIX 1; APPENDIX 5. Bibliography

Corbett, Richard, Francis Jacobs, and Michael Shackleton. 1995. The European Parliament. 3d ed. London: Cartermill. Westlake, Martin. 1994. The European Parliament: A Modern Guide. London: Pinter.

—Francis Jacobs

European Payments Union (EPU)

Established in September 1950 under the Marshall Plan, the European Payments Union (EPU) facilitated currency clearing among the central banks of sixteen Western European countries and contributed to the reconstruction of postwar Europe. The EPU ceased operating in 1958, when the participating countries had restored their own currency convertibility. The European Peoples’s Party is the Christian Democratic group in the European Parliament. It is second in size to the European Party of Socialists. See also PARTY GROUPS IN THE EUROPEAN PARLIAMENT.

European People’s Party (EPP)

European Police Office (EUROPOL)

During the 1991 intergovernmental conference (IGC) on political union, Germany pressed for greater police collaboration to combat organized crime, particularly in anticipation of increasingly porous European borders following the end of the Cold War. This pressure was the basis for a provision in the Treaty on European Union’s pillar on Justice and Home Affairs (JHA) stipulating the possible establishment of “a Union-wide system for exchanging information within a European Police Office” (Article K1[9]). Accordingly, the European Police Office (EUROPOL) was set up in The Hague in January 1994 to collect and analyze criminal intelligence on a transnational basis. However, a dispute between member states over EUROPOL’s role and scope and between Britain and its partners concerning the jurisdiction of the Court of Justice (ECJ) over EUROPOL’s activities (Britain objected to what it saw as a further surrender of national sovereignty) delayed ratification of the agency’s convention. The dispute marred the

June 1995 Cannes summit, although member states signed the long-delayed convention to establish EUROPOL a month later (on July 26) on the understanding that the ECJ’s role would be resolved by June 1996. In the event, the dispute continued beyond that time, having become a victim of the British government’s obstructionism in mid-1996 in retaliation against the EU’s ban on British beef exports as a result of the bovine spongiform encephalopathy (BSE) crisis. Apart from the BSE debacle, lack of progress on EUROPOL was a source of mounting EU irritation with Britain. Germany, which saw EUROPOL as a vital weapon against organized crime from the east, especially resented Britain’s behavior. Finally, on Franco-German insistence, the European Council in Dublin in December 1996 identified the granting of “operative powers” to EUROPOL as a priority for the IGC then in session, and Britain won an opt out from the ECJ’s jurisdiction over the agency. At the Amsterdam summit in June 1997, the heads of state and government reiterated the priority they attached to ratification by all member states of the EUROPOL convention before the end of 1997. In the meantime EUROPOL continued to operate on a restricted basis, dealing with twenty-four hundred cases in 1996 alone (mostly having to do with drugs and money laundering). See also JUSTICE AND HOME AFFAIRS. French prime minister René Pleven’s proposal in October 1950 for a European Defense Community (EDC) contained a proposal also for a political authority to oversee the putative military organization. The six member states of the European Coal and Steel Community (ECSC)—France, Germany, Italy, Belgium, the Netherlands, and Luxembourg—went on to sign the EDC treaty in May 1952. The ECSC’s Assembly (forerunner of the European Parliament) then took the initiative and drafted a treaty for a European Political Community. The collapse of the EDC in August 1954, when the French National Assembly refused to ratify the treaty, doomed the European Political Community, with its far-reaching prospects for a federal or confederal structure binding the six member states. See also EUROPEAN DEFENSE COMMUNITY.

European Political Community

European Political Cooperation (EPC)

European Political Cooperation (EPC)

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Although the EC did not embrace foreign policy, security, or defense cooperation, the founding fathers sought to create “an ever closer union” (Treaty of Rome, preamble) and to fashion a single European voice in world affairs. In their view, only a united Europe could regain the pre–World War II influence of major Western European states. There were several false starts in operationalizing these aspirations, notably the failure of the European Defense Community (EDC) and the associated European Political Community in the 1950–1954 period and the abortive Fouchet Plan of 1961–1962. Progress was only made after the Hague summit of heads of state and government in December 1969 that agreed, among other things, to instruct the foreign ministers to report on “the best way of achieving progress in the matter of political unification” and on paving the way “for a united Europe capable of assuming its responsibilities in the world.” The ensuing foreign ministers’ report of November 1970 claimed that such progress was likely to be achieved by cooperation in the field of foreign policy, involving exchanges of information, consultation, and attempts to coordinate the member states’ international actions. The mechanism for performing these tasks became known as European Political Cooperation (EPC). Procedural issues were tackled by a committee under the chairmanship of Etienne Davignon, a Belgian diplomat (and later commissioner). EPC was to consist of foreign ministers’ meetings twice a year; those meetings were to be prepared by the Political Committee, consisting of the heads of the foreign ministries’ political departments, meeting at least four times a year. Special working parties would be created to deal with specific functional and regional problems, and a “group of correspondents” (junior foreign ministry officials) would be responsible for day-to-day liaison. The system was to operate separately from the Community proper and was avowedly intergovernmental. There was no question of voting in EPC; all participants had a right to veto. EPC was to be chaired by the state occupying the presidency of the Council of Ministers, that state providing the secretarial and organizational backup. EPC had no treaty base; it depended instead on political agreement among the member states.

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EPC evolved informally, and a European “reflex” of foreign policy coordination began to develop. Member states welcomed the informal nature of EPC, its pragmatic mechanisms, its flexibility, and its usefulness for concerted action. As part of the growing intensity of consultation, a telex liaison system, known as COREU, was established between the foreign ministries. In 1974 the foreign ministers decided to hold EPC meetings at the margin of Council meetings, thus avoiding a repetition of the situation in November 1973 when foreign ministers had an EPC meeting in Copenhagen in the morning (under the auspices of the Danish presidency) and moved to Brussels in the afternoon for a meeting of the General Affairs Council (foreign ministers). Informal ministerial meetings to allow exchanges of view (so-called Gymnich meetings) were also introduced, as was the troika arrangement, whereby each rotational presidency would be assisted by its immediate predecessor and successor. Especially important was the Paris summit decision of 1974 to create the European Council (regular meetings of heads of state and government) that, among other things, was to provide a platform for EPC discussions at the highest level. EPC’s pragmatic development was accompanied by rhetorical flourishes about European union, but a document on European Identity, published in December 1973, was noticeably thin on content. By that time, rhetoric had been overtaken by the reality of disparate member state reactions to the Arab-Israeli war of October 1973. This demonstrated that although able to agree on routine matters, on major international disputes member states were still driven by perceived self-interest. The habit of working together had grown, but as one participant pointed out, “we have reached a plateau” (de Schoutheete, 1980, p. 81). Further periodic attempts were made to give EPC more structure and to make it more binding and coherent. These included the London Report of 1981 and the Genscher-Colombo initiative of November 1981, which culminated in the Solemn Declaration on European Union (the Stuttgart Declaration) in 1983. The London Report (adopted by foreign ministers at a meeting in London on October 13, 1981) codified and intensified existing practice but also agreed on the need for EPC to become less reactive and more anticipatory in its approach to international developments. Member states had debated the appropriate content of EPC, and the re-

port noted their agreement to discuss in EPC “certain important foreign policy questions bearing on the political aspects of security.” On November 19, 1991, Hans-Dietrich Genscher and Emilio Colombo, the German and Italian foreign ministers, presented to the European Parliament their governments’ proposals for a European Act, which included proposals for closer political cooperation. Eventually, the heads of state and government adopted the Solemn Declaration on European Union at their summit in Stuttgart on June 17–19, 1983. But the Solemn Declaration did little more than expand the scope of EPC discussions to “the political and economic aspects of security.” The next major development was the incorporation of EPC into the Single European Act (SEA) of 1986: Title III (Article 30) of the SEA codified the basic organizational structure and operational parameters of EPC. Despite having been incorporated into the SEA, EPC still entailed political obligations, not legally binding ones, and foreign policy cooperation remained strictly intergovernmental. The SEA confirmed EPC’s organizational structure, including a central role for the Council presidency; quarterly meetings of foreign ministers; the Political Committee’s preparatory role; the group of correspondents’ responsibility for monitoring day-to-day liaison; and the role of the working groups (consisting of foreign ministry officials) to tackle specific matters under the direction of the Political Committee. The SEA also set up a secretariat, based in Brussels, to “assist the presidency in preparing and implementing the activities” of EPC, under the authority of the presidency. According to the SEA, EPC encompassed the “political and economic aspects of security,” which by implication excluded the military aspects. The Irish government confirmed this in a declaration attached to the SEA, affirming that the SEA’s provisions on EPC did not affect “Ireland’s long established policy of military neutrality.” Developments in Central and Eastern Europe in 1989 and the consequent decision in 1990 to hold an intergovernmental conference (IGC) on political union foreshadowed the transformation of EPC into the Common Foreign and Security Policy (CFSP) in the Treaty on European Union (TEU), but this was not before EPC’s fragility on major international issues was exposed in the Gulf and Yugoslav crises. The member states adopted twelve different responses to the 1990 Gulf crisis;

European Research Coordination Agency (EUREKA)

in 1991, on the eve of the Maastricht summit, the twelve divided again over their response to the Yugoslav war, especially over the issue of whether and in what circumstances to recognize Croatia and Slovenia (Salmon, 1992). On major foreign policy issues member states continued to maintain their freedom of maneuver, and hence their propensity to diverge. Often such divergence was covered over by the declaratory nature of EPC, and the member states’ ability to unite “behind a common position sufficiently loosely defined to allow each to add his own interpretation, so producing some forward movement without confronting the major obstacles ahead” (Wallace, 1983). Yet apart from words, Commission president Jacques Delors lamented in 1991, the EC and EPC system possessed only three foreign policy instruments: public opinion, the threat of withholding diplomatic recognition, and economic sanctions (Delors, 1991). There was never a complete or wholly predictable pattern of EPC solidarity. Yet third countries increasingly viewed member states as a coherent force in international relations and as a diplomatic bloc on a wide range of issues. On routine foreign policy matters, EPC established a policy line from which member states found it difficult to depart, and the evolving European reflex made it normal to search for consensus. Moreover, EPC was notably successful in coordinating member states’ positions at the Conference on Security and Cooperation in Europe, especially in the mid-1970s and early 1980s, and in promoting a distinctive European position on the Middle East, especially in the form of the landmark Venice Declaration of May 1980, which called for Palestinian autonomy. See also COMMON FOREIGN AND SECURITY POLICY. Delors, Jacques. 1991. Quoted in The Week (European Parliament) (September 9–13), p. 1. de Schoutheete, Phillippe. 1980. La Cooperation Politique Européenne. Paris: Nathan. Ginsberg, Roy. 1989. Foreign Policy Activity of the European Community. Boulder: Lynne Rienner. Holland, Martin, ed. 1991. The Future of European Political Cooperation: Essays on Theory and Practice. London: Macmillian. Nuttall, Simon. 1992. European Political Cooperation. Oxford: Clarendon Press. Salmon, Trevor C. 1992. “Testing Times for European Political Cooperation: The Gulf and Yugoslavia, 1990–1992.” International Affairs 68, no. 2 (April).

Bibliography

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Wallace, William. 1983. “Cooperation and Convergence in European Foreign Policy.” In C. Hill, ed., National Foreign Policies and European Political Cooperation. London: Allen and Unwin.

—Trevor C. Salmon

European Political Union (EPU)

European political union (EPU) encompasses the noneconomic aspects of European integration, ranging from the EU’s institutional structure to foreign and security policy. Interest in EPU revived in the late 1980s not only because of the success of the single market program but also because of the revolution in Central and Eastern Europe and German unification. Commission president Jacques Delors realized that what he called the “acceleration of history” in Central and Eastern Europe threatened to derail the single market program and undermine European integration. Accordingly, he seized the opportunity to rethink the EC’s political agenda and expedite Economic and Monetary Union (EMU). Delors received a huge boost from German chancellor Helmut Kohl and French president François Mitterrand. In a famous letter in April 1990, both leaders endorsed European union and called for “fundamental reforms—economic and monetary union as well as political union—[to] come into force on January 1, 1993.” This was the starting point for two years of frenetic discussions in the EC, including the intergovernmental conference of 1991, about the nature, scope, and competence of EPU. The ensuing Treaty on European Union included greater majority voting in legislative decisionmaking, greater EC competence, more power for the European Parliament, a Common Foreign and Security Policy, and Cooperation on Judicial and Home Affairs. See also TREATY ON EUROPEAN UNION. See MARSHALL PLAN.

European Recovery Program

European Regional Development Fund (ERDF)

The European Regional Development Fund (ERDF) is one of the EU’s “structural funds,” that is, one of the means by which the EU promotes

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social and economic cohesion. The ERDF originated in the Paris summit of October 1972, when leaders of the EC’s then six member states endorsed a proposal to develop regional policy in the Community, which could only succeed if the member states committed funds to regional development. In reality, however, the ERDF was designed to make side payments to Britain in lieu of Common Agricultural Policy (CAP) subsidies (Britain, which joined the EC in January 1973, had the smallest and most modern agricultural sector in the EC). Politically, the ERDF failed to buy off British critics of the CAP or of the EC. Economically, the ERDF became an effective instrument of regional and cohesion policy after the Delors I budgetary package of 1988 doubled the fund’s size. See also COHESION.

European Research Coordination Agency (EUREKA)

The European Research Coordination Agency (EUREKA) was launched in 1985, on the initiative of the French government, as a direct response to the U.S. Strategic Defense Initiative (SDI). More broadly, EUREKA was one of a number of European initiatives in the 1970s and 1980s to help reduce the gap between research and applicable results and to restore Europe’s international competitiveness vis-à-vis the United States and Japan. EUREKA is not an EU program, but the EU and its member states were founding members and participate in it with other European countries. EUREKA promotes advanced technology in nine areas: medicine and biology, communications, energy, the environment, information, lasers, new materials, robotics, and production, automation, and transport. By the mid-1990s EUREKA focused mostly on the development of High-Definition Television (HDTV) and the harmonization of European standards of broadcasting and reception.

European Round Table of Industrialists (ERT)

The European Round Table of Industrialists (ERT) is one of the most influential business organizations in Brussels. Considered both an interest group and a think tank, the ERT is composed of forty-five chief executive officers (CEOs) or

chairpersons of major European companies. The purpose of the organization is to shape the larger industrial and economic policy initiatives of the EU. Recognized as one of the primary forces behind the single market program, the ERT continues to be an important voice in EU industrial matters both in Brussels and across the European continent. The ERT’s political clout is due, in part, to its novel form. Historically, European-level business groups were made up of national industry associations, which were in turn composed of sectoral industry associations. The ERT’s membership, however, consists of leading individuals in European industry. ERT members—most of whom enjoy close relations with national political leaders— meet with and directly lobby EU and member state officials (Cowles, 1995b). The ERT also differs from traditional European-level organizations in its approach to EU policy making. For example, UNICE—the Union of Industrial and Employers’ Confederations of Europe—is the industrial “peak association” in Brussels, which reviews and provides position papers on most horizontal (cross-industry) EU legislation. The ERT does not seek to duplicate UNICE’s work and rarely focuses on individual legislation. Instead, the ERT serves as an “idea generator and agenda-setter” vis-à-vis the Commission and other EU institutions for those issues of importance to its membership, including competitiveness, Trans-European Networks (TENs), information highways, and education (Cowles, 1995b). Modeled after the CEO-led Business Round Table in the United States, the ERT was created in 1983 by CEO Pehr Gyllenhammar of the Swedish automaker Volvo. With strong support from industry commissioner Etienne Davignon, Gyllenhammar recruited seventeen CEOs to come up with a plan to address Europe’s economic malaise of the time. The early ERT membership included CEOs from such large European companies as Bosch, Fiat, ICI, Lafarge Coppée, Olivetti, Philips, and Saint-Gobain, among others. The ERT developed a goal to revitalize the EC by setting the agenda for creating a single European market. The group sought to influence EC policymakers through direct contacts with Commission and member state officials as well as by promoting pan-European projects, funded partly or completely by the companies, that would demonstrate the firms’ commit-

ment to a united Europe. In early 1984, the ERT issued a report, Missing Links, that outlined the development of three major trans-European projects, including a road/rail transport route between Britain and continental Europe. The latter served as a precursor to the Channel tunnel project. ERT members also played a significant role in influencing then French president François Mitterrand to renew his support for the European Community in 1984 with a major industrial initiative. Mitterrand later proved to be an important proponent of the single market program (Cowles, 1995a; Cowles, 1996). In 1985, Wisse Dekker, CEO of Philips, the Dutch electronics firm, unveiled a plan to create a single market in 1990 by focusing on four key areas: ending border controls, opening up public procurement, harmonizing technical standards, and promoting fiscal harmonization. The plan was presented to the heads of state and government as well as leading Commission officials. Dekker’s “Europe 1990” proposal was revolutionary not only because it came from an important business leader but also because it was a bold, simple plan to create a single market in five years. The paper was soon embraced by the ERT. Meetings were held between Commission officials and ERT members to promote the single market agenda. In many respects, the Dekker paper was the precursor to the white paper issued six months later that served as the blueprint for the 1992 program (Cowles, 1995a; Cowles, 1996). Following the signing of the Single European Act in February 1986, the ERT set up a “watchdog group” to follow implementation of the single market program. Every six months, ERT members would meet with leading officials in the country holding the Council presidency to encourage action on the 1992 program. Throughout this period, the ERT enjoyed close relations with Commission president Jacques Delors and key members of his cabinet. The Commission president publicly acknowledged the influential role of major business actors, notably the ERT, in promoting the single market project (Krause, 1992). Since the establishment of the single market program, the ERT has continued to influence the EU industrial agenda in other important ways. Under the leadership of ERT chair Jérôme Monod, CEO of Lyonnaise des Eaux, the ERT began to issue a series of megareports to the heads of state and government, commissioners, and

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other leading politicians. The megareports became “visiting cards” for ERT members to use to call personally on their government leaders and present the ERT’s concerns. The first report, Reshaping Europe, outlined steps to improve the competitiveness of the European economy (ERT, 1991). Negotiators at the 1991 intergovernmental conferences (IGCs) discussed Reshaping Europe among themselves and noted the industrialists’ positions when revising the treaty. Before the Edinburgh summit in December 1992, the ERT presented another report, Rebuilding Confidence, which called for concerted government action to address the economic and political crisis in Europe and increase infrastructure funding (ERT, 1992). Although the results of the Edinburgh summit were mixed, the European Council did agree to spend $200 billion for infrastructure projects. The third ERT megareport, Beating the Crisis, was launched to coincide with the Delors Commission’s white paper, Growth, Competitiveness and Employment. The ERT report called for “a radical shift in Europe’s approach to industrial development and growth” (ERT, 1993). Like other megareports, Beating the Crisis received considerable coverage by the European press. Over twenty-two thousand copies of the report were printed in English, French, and German and distributed to European opinion makers. Beating the Crisis also proposed the creation of a European competitiveness council to ensure that EU legislation did not hinder European industrial productivity. This proposal was made again in another ERT report, European Competitiveness: The Way to Growth and Jobs (ERT, 1994). At the Essen summit in December 1994, the heads of state and government supported the proposal, and the following year Commission president Jacques Santer established the Competitiveness Advisory Group (CAG). Several ERT members have served on the CAG, which formally advises the European Council on competitiveness issues prior to each summit. In addition to the megareports, the ERT has played a very active role in promoting the information society and TENs as well as the improvement of education throughout Europe. For example, Carlo De Benedetti, the former CEO of Olivetti, led European companies in negotiations with U.S. and Japanese firms in an effort to ensure that practical global information society proposals were on the agenda for the Halifax G7 summit in

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June 1995. In the area of TENs, the ERT created the European Center for Infrastructure Studies (ECIS) in March 1994, which now operates as a nonprofit association supported entirely by membership subscriptions and research contracts. The ERT has been active in the education domain for several years. In 1988, for example, the ERT established the European University-Industry Forum to bring together rectors, presidents, and vicechancellors of European universities to promote curriculum changes to prepare students for “lifelong learning.” Many of the ideas found in the 1995 ERT report, Education for Europeans, can be found in the Commission’s own White Paper on Education and Training. More than thirty-six thousand copies of the ERT report were published in seven languages and sent to education ministers and other authorities throughout Europe. The ERT also has contributed to policy debates on Economic and Monetary Union and the 1996–1997 IGC. ERT members, for example, met Carlos Westendorp, chairman of the pre-IGC reflection group, to discuss industry concerns. As in the earlier single market debate, the ERT members’ goal was not to promote narrow points of interest but to advocate a larger policy approach to the IGC. As one permanent representative and IGC negotiator noted in a personal interview in July 1996, the ERT’s purpose is “to orient and influence European decisionmaking . . . at the beginning of the debate. . . . [The ERT’s role] is not so much as a lobbyist . . . but as a group of individuals who have a certain view of what Europe should look like—and they are willing to put money on the table [to promote these views].” Since its inception, members of the ERT have preferred to promote their views in private discussions with national and European government officials, in formal reports to European opinion leaders, and in contacts with the European media. Even though avoiding a public role, the ERT has grown in visibility over the years. As a result, the ERT has increasingly come under attack by groups who charge that the big business organization has unduly influenced European policymaking to the detriment of larger societal interests. ERT members formally meet twice a year in plenary sessions that serve as the organization’s primary decision- and policymaking sessions (Cowles, 1995b). Usually held in the member state holding the Council presidency, the plenaries also provide an opportunity for ERT members to

hold direct meetings with leading government officials—including prime ministers, foreign ministers, and central bank presidents. The ERT Steering Committee, made up of seven members and headed by the ERT’s chairman, is responsible for the organization’s overall political strategy. This core group determines the ERT’s primary foci, arranges telephone and face-to-face meetings with heads of state and government, and discusses the timing of ERT activities. In addition, the ERT has several policy groups that focus on issues such as competitiveness and bench marking, export controls, the environment, North-South relations, Central and Eastern Europe and Russia, and employment-labor markets. ERT associates—designated company officials who work on ERT matters—generally run the policy groups and play an important behind-the-scenes role in the organization. In recent years, several members have hired major European political figures to serve as their ERT associates. In 1997, for example, ERT associates included Riccardo Perrissich of Pirelli, former director-general of directorate-general III (industry) during the Delors commission; Elmar Brok of Bertelsmann, adviser to German chancellor Kohl and member of both the European Parliament and the IGC reflection group; and Paavo Raantanen, former foreign minister and ambassador of Finland. The ERT also holds ad-hoc meetings for specific events. In September 1993, for example, ERT members met with French prime minister Edouard Balladur to express their concerns regarding the status of the Uruguay Round GATT negotiations. The following year, an ERT delegation went to Moscow, where they met with Prime Minister Victor Chernomyrdin to discuss market access, legal reform, and investment opportunities in Russia. Since 1988, the ERT secretariat has been located in Brussels. Secretary-General Keith Richardson, who joined the ERT that same year, is widely recognized as a key force behind the ERT and its development. As of 1997, seven full-time staff as well as several part-time outside consultants were working in the ERT secretariat. See also ECONOMIC AND MONETARY UNION; SINGLE MARKET PROGRAM. Cowles, Maria Green. 1995a. “Setting the Agenda for a New Europe: The European Round Table of Indus-

Bibliography

trialists and EC 1992.” Journal of Common Market Studies 33, no. 4 (December), pp. 501–526. ———. 1995b. “The European Round Table of Industrialists: The Strategic Player in EU Affairs.” In Justin Greenwood, ed., European Business Alliances, pp. 225–236. Herts, UK: Prentice-Hall. ———. 1996. “Business Means Europe: Who Built the Market?” In Martyn Bond, Julie Smith, and William Wallace, eds., Eminent Europeans. London: Greycoat Press. European Round Table of Industrialists (ERT). 1991. Reshaping Europe. Brussels: ERT. ———. 1992. Rebuilding Confidence. Brussels: ERT. ———. 1993. Beating the Crisis. Brussels: ERT. ———. 1994. European Competitiveness: The Way to Growth and Jobs. Brussels: ERT. ———. 1995. Education for Europeans. Brussels: ERT. Krause, Axel. 1992. Inside the New Europe. New York: HarperCollins.

—Maria Green Cowles

European Security and Defense Identity (ESDI)

The Treaty on European Union mentioned the development of a European Security and Defense Identity (ESDI) as an important step in the evolution of European integration. The two potentially controversial aspects of an ESDI were the form it would take and its impact on NATO—and more broadly on U.S.-European relations. Some EU member states saw the ESDI as an opportunity to emphasize Europe’s independence of Washington; others argued that the ESDI should be anchored firmly in NATO. The TEU itself suggested the form that an ESDI would take: a revived Western European Union (WEU) linked to the EU’s Common Foreign and Security Policy. In the aftermath of the Cold War and with the lessons of Bosnia obvious to all, a consensus emerged among Europeans on the need to keep the United States militarily engaged in Europe and on the danger of advocating an independent ESDI. Thus reassured, at the NATO summit of January 1994 the Atlantic Alliance gave its full support for the development of ESDI, with the EU and WEU as the main tools. NATO proclaimed that the transatlantic link would be reinforced by the strengthening of the European pillar of the Atlantic Alliance and that the establishment of the ESDI would enable the European allies to take more responsibility for managing their security and defense. The U.S.-EU

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New Transatlantic Agenda (1995) further endorsed the ESDI. See also COMMON FOREIGN AND SECURITY POLICY; WESTERN EUROPEAN UNION. As part of its social policy provisions, the Treaty of Rome (Articles 123 to 128) established a European Social Fund (ESF) to finance training and relocation programs for displaced workers. The ESF is an important instrument of structural policy, which aims to promote economic and social cohesion in the EU. Since the reform of structural policy—and doubling of the structural funds—in 1988, the ESF has contributed greatly to fighting long-term unemployment and facilitating the occupational integration of young people through vocational training, subsidies for recruitment in newly created jobs, and promotion of self-employed activities. See also COHESION POLICY; SOCIAL POLICY.

European Social Fund (ESF)

The European Space Agency (ESA) is a consortium of countries that produces the Ariane rocket launcher used to send commercial satellites into orbit (France’s Aérospatiale is the primary contractor). The ESA succeeded the European Launch Development Organization (ELDO), established to rival the U.S. space program. Despite the June 1996 launch failure of the Ariane-5 rocket, the ESA has a reputation for cost effectiveness and competence. Ariane rockets are launched from the European Space Center in Kourou, Guyana, where the ESA opened a new control center in January 1996. The agency’s large operating costs, as well as unprecedented developments in telecommunications technology and policy (Ariane generally launches communications satellites), suggest that the ESA’s nature and composition may change markedly in the near future.

European Space Agency (ESA)

European Standards Committee (CEN)

The European Standards Committee (CEN) is an organization of EU member state standards bodies such as the German and the British standards institutes, which are in turn composed of representatives from national industry. The goal of CEN is to de-

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velop Europe-wide product standards, both those to which manufacturers adhere voluntarily and those needed to demonstrate compliance with EU directives. Standards are developed within committees of experts drawn largely from industry, that is, companies that are members of CEN’s national constituent associations. CEN and its companion body CENELEC (European Electrotechnical Standards Committee) play a vital role in the development of the single internal market by producing the detailed technical standards needed to demonstrate compliance with the general “essential requirements” set forth in most EU product safety directives under the new approach. These standards, known as European Norms (ENs), may, among other objectives, ensure compatibility of products; set out minimum levels of safety, quality, or efficiency; and establish procedures for testing or assessing conformity with these requirements. Adherence to an EN standard is presumed to demonstrate compliance with the applicable directives and thus allows producers to offer goods freely throughout the EU; over time, ENs are expected to overtake national standards as the primary methods of demonstrating adherence to essential requirements. Following criticism of CEN for its closed membership and opaque processes in the early years of the drive toward the single market, CEN (and CENELEC) also took on responsibilities for liaison with non-European standards groups such as the American National Standards Institute. As European bodies, CEN and CENELEC have close links with the International Standards Organization (ISO) and International Electrotechnical Committee (IEC) respectively as well as with Central and Eastern European standards organizations. See also REGULATORY POLICY; SINGLE MARKET PROGRAM; STANDARDS AND CONFORMITY ASSESSMENT.

European Strategic Program for Research and Development in Information Technology (ESPRIT)

The European Strategic Program for Research and Development in Information Technology (ESPRIT) was one of the EC’s earliest initiatives in the field of technological research and development. ESPRIT originated in a climate of acute difficulty for Europe’s high-technology sector, not least because of intensive competition from

the United States and Japan. Under the circumstances, manufacturers, politicians, and government officials became more susceptible to the idea that closer collaboration under the EC’s auspices held the key to European industry’s survival and success. By contrast, the notion of national champions became increasingly outmoded. Etienne Davignon, Commission vice president with responsibility for industrial affairs between 1981 and 1985, took the lead in promoting Community-wide technological collaboration. By cultivating the chief executive officers of major European manufacturers in the high-technology sector, Davignon developed powerful industrial support for cross-border collaboration. In May 1982 the Commission unveiled a proposal, “Toward a European Strategic Program for Research and Development in Information Technology,” that the Council of Ministers, already lobbied by Davignon’s group of European manufacturers, approved the following June. The ensuing ESPRIT program called for major European manufacturers, smaller firms, universities, and institutes throughout the Community to collaborate on “precompetitive” or basic research. That distinction helped reduce friction between the industrial participants and satisfy the concerns of the Commission’s competition watchdog. A pilot scheme of thirty-eight projects, funded by the Community and the private sector, got underway in 1983. The EC launched a full-fledged ESPRIT the following year. ESPRIT facilitates partnerships and joint ventures among representatives of government, industry, universities, and research institutes. Programs are concerned with information technology, specifically microelectronics (the manufacture of semiconductors), the manufacture of computer equipment, and software and systems design. Originally managed by directorate-general (DG) XIII (telecommunications, information, and innovative industry), following a Commission reorganization in 1993 responsibility for ESPRIT was given to DG III (industry). See also RESEARCH AND TECHNOLOGICAL DEVELOPMENT.

European Surveillance Authority (ESA)

The European Surveillance Authority (ESA) was established by the European Free Trade Association (EFTA) in 1993 to oversee competition policy

in Iceland, Liechtenstein, and Norway, the three EFTA countries that, together with the EU, form the European Economic Area (EEA). It was necessary to establish the ESA to ensure compliance with EEA commitments after the European Court of Justice (ECJ) rejected a proposed EEA court, which would have ensured compliance with the EEA’s obligations but would also have superseded the ECJ, thereby necessitating unacceptable changes in the Treaty of Rome. See also EUROPEAN ECONOMIC AREA.

European System of Central Banks (ESCB)

The European System of Central Banks (ESCB), consisting of the European Central Bank (ECB) and national central banks, will formulate and implement monetary policy for the euro zone. Thus, the ESCB will conduct foreign exchange operations, hold and manage the official foreign reserves of the participating member states, promote the smooth operation of payments systems, advise EU institutions and national authorities within its field of competence, and collect relevant statistical information. See also ECONOMIC AND MONETARY UNION: TOWARD A SINGLE CURRENCY.

European Telecommunications Standards Institute (ETSI)

The European Telecommunications Standards Institute (ETSI) harmonizes telecommunications standards in the EU by developing mandatory norms called Common Technical Regulations (CTRs). See also EUROPEAN STANDARDS COMMITTEE; REGULATORY POLICY; STANDARDS AND CONFORMITY ASSESSMENT.

European Trade Union Confederation (ETUC)

The European Trade Union Confederation (ETUC) is a highly influential interest group of national trade unions and trade union confederations in the EU. Reflecting European labor’s early skepticism about integration (many trade unionists saw the EC as inimicable to workers’ interests), ETUC was established only in 1973, with its headquarters in Brussels. ETUC became prominent a decade later when, in conjunction with the

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single market program, the Commission proposed a charter of workers’ rights (the so-called Social Charter). Although the Social Charter never became law, it was the basis for the social protocol attached to the Treaty on European Union (TEU), which excluded Britain from its provisions until Britain opted back in under the terms of the 1997 Amsterdam Treaty. Under the terms of the TEU (as amended by the Amsterdam Treaty)—and in keeping with established Commission practice— ETUC is one of three “social partners” with which the Commission negotiates draft social and economic policy legislation. The other partners are the Union of Industrial and Employers’ Confederations of Europe (UNICE) and the European Center of Public Enterprise. Founded in 1978 on the initiative of the European Trade Union Confederation, the European Trade Union Institute analyzes social, economic, and political developments in the EU that are especially relevant for workers.

European Trade Union Institute

European union has always been the objective of European integration. A common analogy described European union as the destination toward which the EC train was headed. But European union was an ill-defined terminus. Despite many exhortations over the years, there was never a clear idea of what a union would look like. Thus the preamble of the Treaty of Rome called for “an ever closer union” among the peoples of Europe; the Paris summit in October 1972 was famous— or infamous—for declaring that “the member states of the Community, the driving force of European construction, affirm their intention before the end of the present decade to transform the whole complex of their relations into a European Union”; the European Council in Stuttgart in June 1983 adopted a Solemn Declaration on European Union; and the preamble of the Single European Act affirmed that European union was the ultimate goal of European integration. Yet none of these documents or initiatives spelled out exactly what the competence or structure of the EU would be. The European Parliament’s Draft Treaty Establishing the European Union was the first coher-

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European United Left

ent and reasonably detailed description of a putative EU. According to the Draft Treaty, the EU would incorporate the existing Communities’ institutional structure and competences but include numerous institutional reforms and additional competences, notably in the field of foreign and security policy. In deference to member states’ sensitivities to the centralization of power in Brussels, the Draft Treaty explicitly mentioned the principle of subsidiarity. It was not until the late 1980s, however, that a combination of circumstances in Western and Eastern Europe—notably the success of the single market program, growing support for Economic and Monetary Union (EMU), and imminent German unification—led the member states to convene two intergovernmental conferences (IGCs) in 1990 that resulted in the Treaty on European Union (TEU). In it the member states defined European union for the first time and, indeed, established the EU. The treaty declared that the EU is founded upon the European Communities supplemented by an intergovernmental Common Foreign and Security Policy (CFSP) and intergovernmental Cooperation on Judicial and Home Affairs. The treaty sets out the union’s objectives: to promote economic and social progress, to assert the EU’s identity on the international scene, to strengthen and protect the rights of EU citizens, to develop close cooperation on justice and home affairs, and to maintain in full the body of existing Community law. At the same time, one of the treaty’s Common Provisions states that the TEU “marks a new phase in the process of creating an ever-closer union among the peoples of Europe.” The TEU was to have been implemented on January 1, 1993. However, Denmark’s narrow rejection of it in a referendum on June 2, 1992, sparked a ratification crisis throughout the EC. Eventually the ratification crisis—in the narrowest sense—was solved by concessions made to Denmark at the European Council in Edinburgh, on December 11 and 12, 1992, and approved in a second Danish referendum on May 18, 1993. But in the broader sense of the new EU’s legitimacy, credibility, and confidence, the ratification persisted well beyond the TEU’s eventual coming into force on November 1, 1993. The EU’s first enlargement—the accession of Austria, Finland, and Sweden on January 1, 1995—failed to dispel the atmosphere of gloom

brought about by the TEU ratification debacle and deepened by a lingering economic recession, in which preparations took place for an IGC to review the treaty. Unlike previous IGCs, which were the culmination of a process of deepening integration, the 1996 IGC took place only because it was mandated by the TEU. Doubtless there were cogent reasons in any case for holding another IGC—the TEU was clearly flawed and the inevitable accession of numerous Central and Eastern European countries made institutional reform imperative—but in the prevailing political climate neither the Commission nor the member states were eager to launch another round of negotiations. Hence the desultory nature of the 1996–1997 IGC, culminating in the Amsterdam Treaty, which failed to bring about the kinds of sweeping reforms that, by any objective measure, the EU urgently needs. The inadequacy of the Amsterdam Treaty is symptomatic of the EU’s situation in the late 1990s. On the one hand, the EU is about to embark on the third stage of EMU; on the other hand, it seems incapable of confronting the challenge of enlargement into Central and Eastern Europe. The EU’s indecisiveness reflects the member states’ uncertainty in the face of a rapidly changing post–Cold War political-security and global political-economic environment. New strains and tensions in the EU are putting old standards and tenets to the test: Will France and Germany continue to overcome their differences and provide strong leadership? Will the large and small member states continue to pull together? Will the EU’s institutional structure continue to absorb serious political and economic shocks? The course of European integration has always been difficult to divine, and the EU’s current predicament makes predicting the EU’s future even more hazardous and exacting. One thing, at least, is sure: the EU established in 1993 and reformed in 1997 is neither final nor definitive. In that sense, European union remains an uncertain destination. See also AMSTERDAM TREATY; TREATY ON EUROPEAN UNION. See PARTY GROUPS IN THE EUROPEAN PARLIAMENT.

European United Left

Europe of Nations Group

European University-Industry Forum

In 1988 the European Round Table of Industrialists established the European University-Industry Forum to bring together rectors, presidents, and vice-chancellors of European universities to promote curriculum changes to prepare students for “life-long learning.” See also EUROPEAN ROUND TABLE OF INDUSTRIALISTS.

European University Institute (EUI)

The European University Institute (EUI) is an EUfunded institute for doctoral research and scholarship on European affairs (with concentrations in history, economics, law, and culture). EC member states signed a convention establishing the EUI in 1972, and the institute officially opened in 1976 in a former monastery outside Florence. The institute houses the EU’s archives.

European Women’s Lobby (EWL)

The European Women’s Lobby (EWL) is a large and influential pressure group founded in 1990 to promote the interests of women in the EU. Apart from its impact on EU social policy, the EWL is significant because it arose directly from the initiatives of a group of women in the Commission itself.

European Works Councils (EWCs)

European Works Councils (EWCs) are made up of representatives of management and labor within transnational companies or organizations operating in the EU. The purpose of the councils is to facilitate worker consultation and information on decisions regarding company operations. Each council may consist of up to thirty members and meets at least once a year. Subcommittees may be formed on an ad hoc basis to focus on issues regarding employee-manager relations and strategic decisionmaking. EWCs are mandated under the provisions of the European Works Councils Directive, one of the most controversial pieces of legislation in the

227

EU’s history. The directive originated in the infamous draft Vredeling directive of 1980 (named after the commissioner for social policy), which proposed expanding workers’ information and consultation rights in multinational companies. Whereas previous proposals relating to information and consultation in the workplace had largely followed current member state practices, the Vredeling directive went well beyond existing provisions at the national level by requiring multinationals to give employees details of the company’s entire operations, including those outside the EC. Lingering Eurosclerosis and resurgent neoliberalism pushed social policy onto the back burner in the early 1980s, and the draft directive languished. The Commission returned to the charge in the late 1980s, when President Jacques Delors proposed a charter of workers’ rights (the so-called Social Charter) to complement the single market program. Under the auspices of the Social Charter, the Commission proposed a European Works Council Directive to involve employees directly in major decisions of a “European Company”—a new legal entity that could operate throughout the EU and be governed by a single EC law directly applicable in all member states. The proposed Works Council Directive provoked bitter resistance from the British government, which adamantly opposed anything that smacked of socialism and workers’ rights. At the Maastricht summit in December 1991, Prime Minister John Major negotiated a British opt out from the Social Chapter of the Treaty on European Union; the other member states then attached a protocol to the treaty in order to pursue social policy among themselves. The Works Council Directive was eventually passed in 1994 under the social protocol (thereby bypassing British opposition and excluding Britain from its provisions, until a new British government signed the Social Chapter in 1997). By the time the directive was adopted, more than thirty agreements concerning information and consultation were already in use in the EU, mainly in French and German multinationals. Although Britain was not associated with the directive, many companies based there made voluntary agreements on worker consultation and information. See also SOCIAL POLICY.

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Europe of the Regions

Europe by Satellite (EBS) is an EU-sponsored satellite information service available to television companies throughout Europe and the Mediterranean region. EBS offers a daily fare of illustrated news, live coverage of events, and press conferences.

Europe by Satellite (EBS)

unit has about one hundred agents and thirty-five liaison officers and conducts approximately one thousand actions annually. See also EUROPEAN POLICE OFFICE; JUSTICE AND HOME AFFAIRS. The term Eurosclerosis refers to the stagnation, inflation, and unemployment that followed the oil shock of 1973—when the price of oil quadrupled as a result of the Arab oil producers’ embargo and cartelization in the aftermath of the Middle East war. Eurosclerosis lasted until the early 1980s. Because the EC’s member states tended to respond to the economic setbacks of the 1970s individually rather than collectively, Eurosclerosis is synonymous with little or no progress on European integration.

Eurosclerosis

Europe Day is an annual celebration of French foreign minister Robert Schuman’s famous declaration on May 9, 1950, calling for a pooling of Franco-German coal and steel resources and thereby laying the foundation for the EU. See also SCHUMAN, ROBERT.

Europe Day (May 9)

The Europe of Nations group was a short-lived political group in the European Parliament, made up of French and Danish opponents of further integration and some Dutch members. It was also known as the DeVillers list, after its leading member, a prominent French Euroskeptic. The group was dissolved in November 1996, after which its members were nonaffiliated. See also PARTY GROUPS IN THE EUROPEAN PARLIAMENT.

Europe of Nations Group

“Europe of the regions” is a catchphrase referring to the importance of regional development in the EU and the necessity to involve regional authorities in the integration process. See also COMMITTEE OF THE REGIONS.

Europe of the Regions

The term Euroskeptic refers generally to an opponent of further integration and specifically to a right-wing British opponent of the EU. As a large and vocal group in the British Conservative Party, Euroskeptics had a disproportionate influence on the British government’s policy toward the EU until the Labour Party’s victory in the May 1997 general election.

Euroskeptic

See STATISTICAL OFFICE MUNITIES.

EUROSTAT

See EUROPEAN POLICE OFFICE. The European Drugs Unit, which is located in The Hague, is part of the European Police Office (EUROPOL), the EU’s fledgling police agency. Although ratification of the EUROPOL convention was delayed by a dispute between member states over the role of the Court of Justice, the drugs unit became operational in the 1994. The

EUROPOL Drugs Unit

EUROPEAN COM-

Euro-x is an informal council of finance ministers of countries participating in the final stage of Economic and Monetary Union. “Euro” refers to the single currency, “x” to the variable number of participating member states. Euro-x originated in a French proposal to establish a political counterweight to the independent European Central Bank (ECB). Germany and like-minded member states had no intention of undermining the ECB’s independence or commitment to price stability, but saw in euro-x a forum for discussions among euro-zone countries about maintaining fiscal discipline or setting the euro’s exchange rate. Thus,

Euro-X EUROPOL

OF THE

the European Council endorsed the euro-x proposal at the December 1997 Luxembourg summit. Much to the new Labour government’s disappointment, as a noncharter euro-zone member state Britain was excluded from initial euro-x membership. Member states participating in the irrevocable fixing of exchange rates—Stage 3 of Economic and Monetary Union (EMU)—will form the euro zone (i.e., the zone within the EU—and possibly eventually encompassing all the EU—where the euro will be legal tender). See also ECONOMIC AND MONETARY UNION: TOWARD A SINGLE CURRENCY.

Euro Zone

See EUROPEAN WORKS COUNCILS.

EWCs

See EUROPEAN WOMEN’S LOBBY.

EWL

Exchange Rate Mechanism (ERM)

The Exchange Rate Mechanism (ERM) is the core of the European Monetary System (EMS), an initiative launched in March 1979 to establish a zone of relative monetary stability in a world of wildly fluctuating exchange rates. The ERM allows participating states’ currencies to fluctuate relative to each other only within predetermined bands, originally ± 2.25 percent but now within 15 percent of agreed central rates (except for the German mark and the Dutch guilder, which move in a 2.25 percent band). The ERM underwent a number of realignments in the early 1980s and again in the

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early 1990s during the currency crises that precipitated the departure of the British pound and the Italian lira. See also EUROPEAN MONETARY SYSTEM.

Exchange Rate Mechanism II (ERM II)

Modeled on the pre–single currency Exchange Rate Mechanism (ERM), an ERM II will regulate relations between the euro (the single currency) and other EU currencies (i.e., the currencies of EU member states not participating in Stage 3 of Economic and Monetary Union). The European Council decided on the framework of ERM II in Dublin in December 1996, based on proposals drafted by the Council of Economic and Finance Ministers (ECOFIN) and the European Monetary Institute, and adopted a resolution setting out the mechanism’s principles and fundamentals at the Amsterdam summit in June 1997. ERM II will provide for relatively large fluctuation margins for noneuro currencies in relation to the euro. The European System of Central Banks (ESCB) and the national central banks of noneuro member states will intervene to maintain currency parities within the fluctuation limits (15 percent). The External Frontiers convention, an elaborate set of rules for coordinating visa applications in the member states, is one of a number of measures intended to develop an EU immigration policy. Held hostage to a dispute over Gibraltar between Britain and Spain, the convention has not been implemented. See also JUSTICE AND HOME AFFAIRS.

External Frontiers Convention

F The terrible experience of World War I evoked in Europe a growing interest in the federal idea. After the war, Count Richard Coudenhove-Kalergi, an Austrian aristocrat, propagated European union as the way to restore Europe’s declining power in relation to Russia and the United States (Coudenhove-Kalergi, 1926). In 1929 French foreign minister Aristide Briand proposed a union as a framework for peaceful relations among France, Germany, and other European states. More structured federalist proposals were made in the late 1930s by such British writers as Lord Lothian, Lionel Robbins, and William Beveridge, who were alarmed at the drift of Europe’s sovereign nation-states toward another great war (Mayne and Pinder, 1990; Pinder, 1986b). Their writings reached Altiero Spinelli, confined by Mussolini on the island of Ventotene. Spinelli, together with fellow political prisoners, was inspired to produce the Ventotene Manifesto, which has remained a basic document for the postwar federalist movement. The federal idea was already gaining ground among the Resistance in occupied countries, and in 1944 Spinelli organized a meeting in Geneva of Resistance representatives from a number of countries (Lipgens, 1984). The scene was set for a resurgence of federalism after the end of the war.

Federalism

Federalism After World War II In the mid-1940s, the idea of permanent peace secured by federation became widely popular among many whose countries had suffered most from the war, and a European federalist movement was established (Lipgens, 1986). One wing of the movement, based mainly in France and de-

riving its philosophy from Pierre-Joseph Proudhon, emphasized the importance of local autonomies in the economic and social as well as political fields. Although this wing did not prevail in the federalist movement as a whole, its ideas presaged the growth of federal structures within European states such as Austria, Germany, and later Belgium, with increasing devolution also in Spain, Italy, France, and elsewhere (Burgess, 1986). This wing, however, lacked a precise concept of a federal European constitution. The other wing of the movement, called Hamiltonian because it was based on principles derived from the Founding Fathers of the United States, worked for a constitution dividing the powers of government between a federal Europe and its member states, with democratic institutions at each level and with federal powers in fields of common interest, such as security and economics. This wing, strongest in Germany, Italy, and the Netherlands, became more influential, and its ideas gained widespread public support on the continent. But it made little headway in countries that had escaped wartime occupation, and the British government in particular opposed proposals for anything beyond intergovernmental cooperation. Nor were most of the other governments, as they began to recover their authority in the postwar period, ready to take the plunge to a fully federal constitution. It was Jean Monnet who devised a way to break out of this impasse. Monnet’s method was to put in place successive elements of federal powers and institutions as problems arose that they could help to solve. Thus federalism was seen as a process, not a single constitutional act. Although this has by now been the principal form of federalist action in Europe for nearly half a century, it has received limited academic attention (Friedrich, 1968; Pinder, 1986a, 1993, 1995). The process has generally been seen as a neofunctionalist phenomenon, with emphasis on leadership by a supranational executive relying on “spillover” of integration from one sector to another; and most of the literature has ignored the idea that a process of integration may be promoted by people with the aim of building up federal powers and institutions through a series of specific steps. Such federalists have included Monnet, Spinelli, Jacques Delors, and many others, who have secured for each step the support of more conventional economic, social, or political interests.

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Federalism

Federal Development of the EC In 1950, Monnet saw the need for France and Germany to place under a common authority the coal and steel industries that had been the basis for their war potential. He explicitly identified this, in the Schuman Declaration, as “the first concrete foundation of a European federation which is indispensable for the preservation of peace.” The proposal led to the establishment of the European Coal and Steel Community (ECSC), with the ultimate aim of political union supported by the leaders of France, Germany, Italy, and the Benelux countries (the six founding member states). The Community’s institutions prefigured those of a federation, with the High Authority (precursor of the Commission) as executive, the Court of Justice as judiciary, and the Assembly (later called the European Parliament) and Council as the house of the people and the house of the states. But the ECSC was only a first step toward a federation, with narrow competences and a weak Assembly. It was soon followed by draft treaties to set up a quasi-federal European Defense Community and European Political Community, but nationalists in the French parliament secured their rejection in 1954. This caused the federalist movement to split, some pursuing Monnet’s approach of steps toward federation and others following Spinelli in demanding a convention to draft a federal constitution (Mayne and Pinder, 1990, pp. 123–127). Monnet’s approach soon had a second success. In establishing the European Economic Community (EEC) in 1958, the member states greatly enlarged the field of competence of institutions with the federal characteristics of those of the ECSC, thus consolidating their capacity to provide a framework for peace. At the same time the new competences enabled the Community to respond to the challenge of U.S. economic prosperity and power by establishing a common market with a common external tariff and by providing for wide-ranging economic cooperation. Thus Community institutions, with their significant federal elements, became responsible for substantial economic powers. What some federalists call a pre-federal Community was by then solidly enough based to continue its progress, if at a slower pace, through the 1960s and the 1970s. In the 1960s its federal elements were under attack by French president Charles de Gaulle. In the 1970s a combination of

economic turbulence and the antifederalist government of the newly joined United Kingdom likewise put a brake on further federal developments. The federalist spirit of France’s five partners had, however, remained strong through the 1960s; and in the 1970s the European Parliament (EP) acquired real budgetary powers, an essential element in a federal system. Then the first European direct elections were held in 1979. Federalists continued to influence the Community and its potential for development through the 1970s and, with growing success, the 1980s (Burgess, 1989). Spinelli, who remained a great federalist leader, was elected to the EP in 1979 and set about persuading the Europarliamentarians that they should counter the stagnation then afflicting the Community by drafting a constitution for a federal European union. He persuaded the EP to set up a special committee for that purpose and got it to draft a treaty of European union that would provide the Community with federal institutions and powers in the economic, social, and environmental fields. But the Draft Treaty Establishing the European Union left security and foreign policy for the time being as matters for cooperation among member states (Bieber, Jacque, and Weiler, 1985). Thus it may be said to have provided for a federal union but not yet a federal state. Spinelli secured backing from French president François Mitterrand for the Draft Treaty and this, together with the proposal of Commission president Jacques Delors to complete a single market by 1992, led to the Single European Act (SEA), which entered into force in 1987. The SEA and the Treaty on European Union (TEU), which became operative in 1993, added substantial further federal elements to the structure of the Community. Delors was the federalist who promoted these developments, with crucial support from Mitterrand, who had a general commitment to political union, and from German chancellor Helmut Kohl, who increasingly came to embody the federalist ideals that he had absorbed as a young man in Germany after World War II. The SEA provided for a vast program of legislation to create the single market and for the majority voting in the Council that was essential to enact it, together with a cooperation procedure that gave the EP legislative influence, though not much power. The SEA also gave the Community environmental powers. The SEA and the success of the single market program paved the way for the TEU (Duff, Pinder, and Pryce, 1994). This provided for the single currency

and at the same time established the federal principle of subsidiarity, which reserves to the member states all powers not required by the EU in their common interest. The treaty introduced the concept of EU citizenship and gave the EP considerable new powers, including co-decision, which placed it on a par with the Council for a significant part of legislation, on top of a wide extension of the cooperation procedure and the right to approve (or not) the appointment of the Commission (Corbett, 1994). The TEU also erected two new “pillars” alongside the Community, to deal with internal and external security, and named the whole structure of the Community together with the new pillars the European Union. But the latter was largely intergovernmental, and federalists predicted it would remain ineffectual until reformed in a federal direction. The EU: How Federal? The EU now has substantial federal powers and institutions. When the single currency project is complete, its economic powers will be about as extensive as those of the United States; it has environmental powers and a small but significant budget. Thus it has the main powers of a federal union in the economic and environmental fields, though as long as the system for internal and external security remains intergovernmental it will not become a federal state. The Community’s legal system “possesses most of the characteristics of a federation” (Hartley, 1988, p. 47). The Council, in which the procedure of qualified majority voting applies for most legislation, is approaching a federal house of the states for the EU, after the pattern of the German Bundesrat in which the Länder governments are represented. The EP, as the house of the people, has important legislative and budgetary powers as well as the right to approve a new Commission, which resembles a federal executive. But the Council still dominates both legislative and executive functions to an extent that would not be possible in a genuinely federal system. Thus a few crucial steps remain to be taken to create a federal union: to give the EP a full power of legislative codecision; to curb the Council’s executive role, probably through use of the EP’s powers in order to make the Commission a parliamentary executive; to introduce the single currency in all member states; and overarching these, to draw up a constitution based on the existing structures thus reformed and thereby give the union a sound juridical basis that is comprehensible to the citizens. Most federal-

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ists accept that the transfer of powers over security to the federal institutions can wait until confidence in them is sufficiently mature, at which time it will be possible to convert the EU into a federal state. Prospects for Federal Europe The neorealist school predicts that Europe will not become federal, insisting instead that the nation-state will remain the only viable unit. Euroskeptics share this view and hope that, as the Union is enlarged to Central and Eastern Europe and the number of member states rises to thirty or more, the federal elements in its institutions will be diluted and perhaps swept away. Although most of the EU’s citizens view its institutions more favorably, there has been a wave of unease, following the TEU, about their remoteness and complexity. Federalists can respond that all the member states, save Britain and Denmark, were prepared to accept the inclusion of the federal goal in the TEU; that the new Labour government in Britain may well be more positive; and that if Britain and others remain obdurate, a nucleus of federally minded member states may proceed together toward the federal goal. Enlargement, federalists can claim, has always in the past been accompanied by the addition of new federal elements. Moreover, there is evidence that the EU’s citizens do not object to the federal idea: for example, in a survey in late 1995, 45 percent were found ready to accept a federal structure for the union, with only 15 percent against. Among the supposedly antifederalist British, the proportion in favor was the same, and no more than 19 percent took the contrary view (Commission, 1996). Federal Europe is a great and difficult project that can in no way be taken for granted, but federalists have grounds to believe that it will eventually succeed. See also COUNCIL OF MINISTERS; DECISIONMAKING PROCEDURES; EUROPEAN PARLIAMENT; INTEGRATION THEORY; MONNET, JEAN. Bieber, Roland, Jean-Paul Jacqué, and Joseph H.H. Weiler, eds. 1985. An Ever Closer Union: A Critical Analysis of the Draft Treaty Establishing the European Union. Brussels: Commission of the European Communities with the European University Institute. Burgess, Michael. 1986. Federalism and Federation in Western Europe. Beckenham, Kent: Croom Helm.

Bibliography

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Federal Republic of Germany

———. 1989. Federalism and European Union: Political Ideas, Influences and Strategies in the European Community, 1972–1987. London: Routledge. Commission. 1996. Eurobarometer: Public Opinion in the European Union. Report no. 44. Luxembourg: Office for Official Publications of the European Communities. Corbett, Richard. 1994. “Representing the People.” In Andrew Duff, John Pinder, and Roy Pryce, eds., Maastricht and Beyond: Building the European Union. London: Routledge. Coudenhove-Kalergi, Count Richard. 1926. Pan-Europe. New York: Knopf. Duff, Andrew, John Pinder, and Roy Pryce, eds. 1994. Maastricht and Beyond: Building the European Union. London: Routledge. Friedrich, Carl J. 1968. Trends of Federalism in Theory and Practice. London: Pall Mall Press. Hartley, T. C. 1988. The Foundations of European Community Law. Oxford: Clarendon Press. Lipgens, Walter. 1982. A History of European Integration 1945–1947: The Formation of the European Unity Movement. Oxford: Clarendon Press. Lipgens, Walter, ed. 1984. Documents on the History of European Integration. Vol. 1, Continental Plans for European Union 1939–1945. Berlin and New York: de Gruyter. ———. 1986. Documents on the History of European Integration. Vol. 2, Plans for European Union in Great Britain and in Exile 1939–1945. Berlin and New York: de Gruyter. Mayne, Richard, and John Pinder, with John Roberts. 1990. Federal Union: The Pioneers: A History of Federal Union. Basingstoke: Macmillan. Pinder, John. 1986a. “European Community and Nation-State: A Case for a Neo-Federalism.” International Affairs 62, no.1. ———. 1986b. “Federal Union 1939–1941.” In Walter Lipgens, ed., Document on the History of European Integration. Vol. 2, Plans for European Union in Great Britain and in Exile 1939–1945. Berlin and New York: de Gruyter. ———. 1993. “The New European Federalism: The Idea and the Achievements.” In Michael Burgess and Alain-G. Gagnon, eds., Comparative Federalism and Federation: Competing Traditions and Future Directions. New York: Harvester Wheatsheaf. ———. 1995. European Community: The Building of a Union. Oxford: Oxford University Press.

—John Pinder

See GERMANY.

Federal Republic of Germany

See BUDGET.

Financial Persectives

There are a surprising number of similarities between the policy priorities of Finland and the EU. Perhaps the most important of these relates to coexistence with an unpredictable and enigmatic Russia. For centuries, the Finns have seen themselves as a border nation belonging to both West and East. During the decades after World War II, Finland was embedded relatively deeply in the informal Soviet empire, doing its best to maintain as much freedom as possible. This historical experience of being in the middle or belonging to both West and East provides a good point of entry to a brief analysis of how Finnish-EU relations have developed. The framework of Finnish foreign and security policy in the postwar decades has been called constitutional realism (based on many of the ideas of political realism). Finnish constitutional realism can be characterized as a judicial view of the world, emphasizing the role of law and the legitimacy of international conduct instead of common values (Huru, 1995). The hard core of constitutional realism was given concrete expression in 1947 by the multilateral Paris peace treaty and in 1948 by the bilateral Friendship, Cooperation, and Mutual Assistance Treaty (FCMA) with the Soviet Union. This hard core was, of course, supported and supplemented by other international treaties and by an active policy within the framework of the Conference on Security and Cooperation in Europe—now the Organization for Security and Cooperation in Europe (OSCE). In 1990, as a response to revolutionary change in Central and Eastern Europe, Finland reinterpreted both the peace treaty and the FCMA Treaty, thus opening the way for the decision in 1992 to apply for EU membership (Huru, 1995; Penttilä, 1994). The main issues in the debate preceding the advisory referendum of October 16, 1994, were the economic consequences of membership, possible security implications, and the correct “reference group” for the country. Simply put, the debate was about the price of food and relations with Russia. The outcome of the referendum was 53 percent in favor and 47 percent against membership. In absolute terms the result was 1.6 million yes votes against 1.2 million no votes, together representing 74 percent of all eligible

Finland

voters. Accordingly, Finland joined the EU on January 1, 1995. A brief analysis of the vote indicates two important lines of division. Proponents of membership had a majority in the seven southernmost administrative districts. Even more important, the urban population not only in the south but also in northern Finland voted for membership, whereas support for membership among the rural population was weak. It seems reasonable to suggest that the “Russian question” had no impact on voters along the eastern border, who resented membership and were more concerned about the prospects for Finnish agriculture in the EU. Security issues had a stronger impact on urban population and male voters, who quite often listed the security implications of accession among the reasons for their support of membership. Unlike the situation in neighboring Sweden, opinion polls in Finland indicate continuing support for membership. In economic terms, food prices, for example, went down, but membership did not significantly relieve unemployment even though it contributed to general economic stability. Monetary policy remained a source of speculation until the markka entered the exchange rate mechanism of the European Monetary System on October 14, 1996, in order to permit Finland’s early participation in Economic and Monetary Union. EU membership has not brought any visible changes in foreign and security policy orientation. Apart from EU membership, it is observer status in the Western European Union (WEU), participation in the Partnership for Peace (PfP), and an active role in the OSCE and the UN that provide the backbone of Finland’s foreign and security policy. The government entered the 1996–1997 intergovernmental conference (IGC) stressing the need to continue the intergovernmental character of the Common Foreign and Security Policy (CFSP). Military crisis management is considered an integral part of CFSP, where all member states can participate in decisionmaking but where they can also retain the right to independent decisions. In the “new Europe” of the post–Cold War period, the need for peacekeeping and crisis management operations is increasing. Accordingly, Finland and Sweden drafted a proposal in April 1996 regarding the development of a WEU capability for such missions. For the foreseeable future, the Finnish government does not see a need for a merger of

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the WEU and the EU, which it successfully opposed at the June 1997 Amsterdam summit. Finland supports international peacekeeping and military crisis management operations while at the same time maintaining an independent national defense. Recent weapons acquisitions, together with observer status not only in the WEU but also in the North Atlantic Cooperation Council (NACC), along with full participation in the PfP, imply an improved situation in terms of military security. Although the principle of military nonalignment has been one of the cornerstones of Finland’s foreign and security policy since the end of World War II, it is no longer accepted without debate (Jalonen, 1995; Nokkala, 1995). Finnish and EU foreign and security policy interests most obviously converge in regard to relations with Russia. For Finland, the continuation of reform in Russia is a key factor influencing the stability of northern Europe. Not surprisingly, the development of an EU strategy toward Russia is a Finnish priority (Jalonen, 1994). Finland supported Russian membership in the Council of Europe in the hope that this would establish an additional bond between Russia and the rest of Europe and increase Russia’s commitment to OSCE- and UNapproved codes of acceptable internal and external behavior. Russo-Baltic relations are a source of concern, and the Finnish government strongly supports Baltic membership in the EU as a compromise between the Baltic states’ broad integrationist aspirations and Russia’s opposition to NATO enlargement to the gates of St. Petersburg. Finland itself is not considering NATO membership, but according to a Council of State report to parliament in June 1995, Finland reserves the option to “assess its security situation and arrangements” if the security situation in Europe changes essentially. See also RUSSIA; TABLE 6; TABLE 10; APPENDIX 2; APPENDIX 3. Alho, Kari, Mika Erkkila, and Markku Kotilainen. 1996. The Economics and Politics of Integration: A Finnish Perspective. Dordrecht: Kluwer. Huru, Jouko. 1995. “Finland at the Gates of the European Security Community.” In Clive Archer and Olli-Pekka Jalonen, eds., The Changing European Security Landscape. Tampere Peace Research Institute, Research Report, No. 63. Jalonen, Olli-Pekka. 1994. “Suomi ja lähialueet.” In Petri Lempiäinen, ed., Suomen ulkosuhteet 1990-lu-

Bibliography

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vun Euroopassa: Talous ja turvallisuus. Helsinki: Painatuskeskus. ———. 1995. “Turvallisuusyhteisön sotilaallinen ulottuvuus.” In Jouko Huru and Olli-Pekka Jalonen, eds., Eurooppalaistuvan Suomen turvallisuushaasteet. Tampere Peace Research Institute, Research Report, No. 72. Nokkala, Arto. 1995. “Suomen puolustuspolitiikka ja yhteisöllisyyden haaste.” In Jouko Huru and OlliPekka Jalonen, eds., Eurooppalaistuvan Suomen turvallisuushaasteet. Tampere Peace Research Institute, Research Report, No. 72. Penttilä, Risto E.J. 1994. “Suomen ulko-ja turvallisuuspolitiikan murros, 1985–1992.” In Petri Lempiäinen, ed., Suomen ulkosuhteet 1990-luvun Euroopassa: Talous ja turvallisuus. Helsinki: Painatuskeskus.

—Olli-Pekka Jalonen

FitzGerald, Garret (1926– )

Garret FitzGerald, the Irish politician and statesman, strove to bring his country to the forefront of European integration, first as foreign minister (1973–1977) and then as prime minister (1981–1982 and 1982–1987). As foreign minister, FitzGerald presided over the Council of Ministers during the first six months of 1975; as prime minister, he presided over the European Council during the last six months of 1984. FitzGerald sometimes had difficulty reconciling his obligations as Ireland’s prime minister with his aspirations as a European integrationist. His two most troubling tasks were to assert Ireland’s neutrality (with which he disagreed) during discussions in European Political Cooperation about security and defense issues and to protect Irish dairy farmers from the consequences of badly needed reform of the Common Agricultural Policy (CAP). On one celebrated occasion, FitzGerald left a European Council meeting in deference to the Irish agricultural lobby. See also IRELAND. The EU flag consists of a circle of twelve gold stars set against a background of deep blue. According to the Commission’s information service, “the number of stars is invariable, twelve being the symbol of perfection and entirety.”

Flag

Flanking measures protect and buttress the single market by ensuring fair competition, economic and social cohesion, environmental measures, and workers’ rights. See also COHESION POLICY; COMPETITION POLICY; ENVIRONMENTAL POLICY; SOCIAL POLICY.

Flanking Measures

Flexibility is a neutral and politically acceptable term to denote the possibility of some member states integrating more closely than others as the EU enlarges and becomes more diverse politically and economically. The report of the reflection group, established by the member states to prepare the ground for the 1996–1997 intergovernmental conference (IGC) retained the term “flexibility” in order to keep Britain within the discussion. The Irish presidency’s proposal for a revision of the Treaty on European Union, released in December 1996, contained a section on flexibility, which it termed “enhanced cooperation.” This made its way into the Amsterdam Treaty, which called for closer cooperation to allow groups of member states to move forward in limited areas without waiting for all the others, provided that a qualified majority agreed. In some respects, this is merely a recognition of prevailing practices, with opt ins and opt outs in a number of policy areas. Moreover, the flexibility chapter is hedged with conditions and constraints as to its possible use. But the codification of flexibility, and the institutionalization of differentiated integration, sends a striking signal in an increasingly large and diverse EU: where necessary, some member states will proceed faster than others to achieve internal and external policy objectives. At the same time, it raises serious problems about decisionmaking procedures, the acquis communautaire, and EU representation in international organizations. See also AMSTERDAM TREATY; DIFFERENTIATED INTEGRATION.

Flexibility

The Fontainebleau summit, held in June 1984 in the old royal palace outside Paris, was one of the most important in the EU’s history. For the previous five years the EC had been bogged down in a debilitating and aggravating dispute over Britain’s budgetary contribution. At issue was Prime Minis-

Fontainebleau Summit

Framework Program for Research and Technological Development

ter Margaret Thatcher’s legitimate claim that Britain paid too much into the Community and received too little directly in return. Few doubted that Thatcher had a valid point, but her aggressive style infuriated her EC counterparts and helped prevent a resolution of the problem (a series of summits in 1983 and early 1984 had ended in deadlock). President François Mitterrand, who presided over the Fontainebleau summit, did his utmost in the preceding weeks to broker a settlement. After much hard bargaining at the summit itself, Thatcher won a rebate in the amount of 66 percent of Britain’s annual net contribution, and as part of an overall budgetary agreement member states decided to curtail spending on the Common Agricultural Policy (CAP) and increase the EC’s revenue. Thus, the Fontainebleau summit finally ended the British budgetary dispute, began the badly needed process of CAP and budgetary reform, and allowed the European Council to concentrate in future on the EC’s strategic direction. Also at the summit, the leaders decided to establish an ad hoc committee on institutional affairs to consider the EC’s response to internal and external challenges. Known by the name of its chairman, the so-called Dooge Committee helped lay the foundation for the Single European Act and the EC’s revival in the late 1980s. See also DOOGE COMMITTEE; SINGLE EUROPEAN ACT. The EU does not have a common forestry policy, but forestry issues come under the rubric of the Common Agricultural Policy and structural policy. See also COMMON AGRICULTURAL POLICY.

Forestry

The expression Fortress Europe gained currency in the United States during the single market program in the late 1980s. Fearful that the EC was becoming more protectionist and that the Commission was unresponsive to its trading partners’ concerns, some U.S. businesspeople and commentators complained that the single market program would turn Europe into an economic fortress. The Commission dismissed such claims, which were undoubtedly exaggerated, but nevertheless took pains to explain the program abroad and became more responsive to international concerns.

Fortress Europe

See also SINGLE MARKET PROGRAM.

237

The failed Fouchet Plan (1961–1962) was the means by which French president Charles de Gaulle sought to bring about a “Union of States” in Europe. De Gaulle’s idea was to involve the six member states of the EC in a new intergovernmental organization to coordinate foreign and defense policy. A series of bilateral meetings between France and its EC partners in the summer and fall of 1960 paved the way for a summit meeting in Paris, on February 10 and 11, 1961, which resulted in a decision to continue intergovernmental discussions under the chairmanship of Christian Fouchet, the French ambassador in Denmark. At a summit in Bonn on July 18, 1961, EC leaders asked Fouchet to draft “proposals on the means of giving the union of their peoples a statutory character”; before the end of the year Fouchet submitted a design for a confederation of European states. With the goal of a common foreign and defense policy, as well as cooperation on cultural, educational, and scientific matters, the Fouchet Plan outlined an institutional framework that included a ministerial council, a commission of senior foreign ministry officials, and a consultative assembly of delegated national parliamentarians. Apart from German chancellor Konrad Adenauer, however, leaders of the other member states were unenthusiastic about the Fouchet Plan. In particular Josef Luns, the Dutch foreign minister and a future secretary-general of NATO, questioned de Gaulle’s motivation and purpose. Resentment of an apparent Franco-German fait accompli fueled Luns’s concern about the future of the EC, the likely U.S. reaction, and Britain’s possible role. Luns’s intransigence augured ill for the Fouchet Plan, which collapsed after a series of acrimonious meetings in early 1962. See also DE GAULLE, CHARLES.

Fouchet Plan

The four freedoms are the free movement of goods, services, capital, and labor across national frontiers. These were the objectives of the single market program. See also SINGLE MARKET PROGRAM.

Four Freedoms

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France

Framework Program for Research and Technological Development

Framework programs are the main instrument of EU research and technological development policy. Under the terms of the Treaty on European Union, the European Parliament and the Council of Ministers use the co-decision procedure to adopt framework programs, which set out the EU’s activities in the field of research and technological development. The programs are implemented by means of specific programs in each area of activity (such as telecommunications, environmental protection, informatics). Because of their scope and complexity, a number of Commission directorates-general are involved in planning and executing the framework programs. On April 26, 1994, the Council and the Parliament adopted the fourth framework program for research and technological development and demonstration (1994–1998). In November 1996 and February 1997 the Commission presented preparatory documents on the fifth framework program and presented a formal proposal for adoption of the program in March 1997, with the aim of having the program operational at the beginning of 1999. See also RESEARCH AND TECHNOLOGICAL DEVELOPMENT POLICY. The EC was a French invention: Robert Schuman proposed it, and Jean Monnet designed it. Most of the leading individuals in the subsequent history of European integration were French: Charles de Gaulle, François Mitterrand, and Jacques Delors. Yet the widely different perspectives personified by these individuals (de Gaulle was an ardent intergovernmentalist and Delors a fervent Eurofederalist) epitomized deep divisions in France about the development of the EC/EU, despite near unanimity that some degree of European integration was essential for French economic and political security. French self-interest in European integration stems from two historical, strategic, and economic facts of life: first, Germany; second, declining competitiveness. Franco-German rivalry over disputed frontier regions and, more broadly, for influence and hegemony in continental Europe led to three increasingly costly and devastating wars between 1870 and 1940. By the end of World War

France

II it was clearly in France’s interest to end FrancoGerman rivalry and break the cycle of violence and war. At the same time, France was economically weak relative not only to Germany but also to other Great Powers in Europe and abroad. The conclusion was simple: France had to modernize economically. A joint solution to France’s related economic and strategic problems seemed sensible. But what approach should France take? France’s initial postwar response (formulated and implemented by both de Gaulle and Monnet) was to modernize at the expense of German economic weakness, especially in the strategically vital coal and steel sector. But far from reconciling France and Germany, such a policy was bound to foster German resentment and revanchism. Although Germany had few sympathizers in the immediate postwar years, France’s Western allies urged a less severe and short-sighted approach, especially in the context of the worsening Cold War. Under strong U.S. diplomatic pressure, France changed tack in the early 1950s and embraced European integration. Strategically, the launch of the EC represented a novel initiative to tie France and Germany so closely together that war between them would become impossible and unthinkable; economically, it represented an unprecedented French acceptance of market integration and limited competition. Neither of these was embraced easily, uncritically, or enthusiastically in France. French negotiators who helped draft the Rome treaty faced considerable opposition in the French government and civil service, where Germanophobia and protectionism still ran deep. Ironically, it was de Gaulle, who returned to power in 1958 and crafted the Fifth Republic, who dispensed the tough medicine (domestic fiscal and monetary reforms) that made it possible for France—and therefore the other member states—to reduce tariffs and eventually implement the customs union ahead of schedule. Similarly, it was de Gaulle who put Franco-German relations on a solid foundation in 1963 by concluding the Elysée treaty with Chancellor Konrad Adenauer. Apart from the prospect of meeting long-term economic and strategic objectives, the EC offered France a more immediate advantage, which de Gaulle quickly drove home. This was the Common Agricultural Policy (CAP), written into the Treaty of Rome at French insistence, and fleshed out in marathon negotiations in the early 1960s. In

effect, the CAP subsidized French farmers—the most numerous and least efficient in Western Europe—at the EC’s expense. Not surprisingly, the CAP was widely seen throughout the EC as a generous side-payment to France in return for the customs union, which was more beneficial in the short term to Germany and the Benelux. Although de Gaulle was indispensable in getting the EC up and running, he is best known for his implacable opposition to supranationalism. De Gaulle had no objection to the EC’s going in a political direction, as long as it was intergovernmental and helped to distance Western Europe from the United States, hence his Fouchet Plan (1962) for a political and security community based on the EC and his rejection of Britain’s membership application. He opposed Britain’s membership not because of lingering wartime resentment or latent Anglophobia but because he knew that Britain would never participate in a political community independent of the United States. The other member states’ rejection of the Fouchet Plan, in part because of its perceived antiAmericanism and its exclusion of the UK, strengthened de Gaulle’s determination to thwart the Commission’s ambition and derail supranationalism. The inevitable showdown came in June 1965, ostensibly over proposals to enhance the Commission’s and the European Parliament’s powers as part of a package to fund the CAP. De Gaulle called the Commission’s bluff and pulled France’s representatives out of the Council and the Committee of Permanent Representatives (COREPER), thereby precipitating the “empty chair crisis.” But de Gaulle’s real target was the treaty’s provisions for qualified majority voting (QMV) in the Council, due to come into effect in January 1966. The crisis ended later that month with the Luxembourg Compromise, which upheld the principle of QMV but condoned the practice of decisionmaking by unanimity. It is easy to accept de Gaulle’s extremism as representative of French opinion; after all, Gaullism and Gallicism seemed synonymous. But the reason why de Gaulle ended the 1965–1966 standoff is instructive: he received the unmistakable message in the December 1965 presidential election that a sizable percentage of the electorate disapproved of his EC policy. The bearer of that message was none other than François Mitterrand, who ran de Gaulle a close second in 1965 and eventually became president of France in 1981.

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Mitterrand’s presidency (at least following his famous U-turn in 1983 on economic policy) represents the other end of the spectrum of French opinion toward European integration. Not only did Mitterrand announce his new-found commitment to European integration in a speech to the European Parliament (EP), but his advocacy of the single market program inevitably resulted, in the Single European Act (SEA) and its aftermath, in a repudiation of the Luxembourg Compromise (although for obvious reasons Mitterrand was unwilling to admit as much when asked to do so during the tense Treaty on European Union [TEU] referendum campaign in September 1992). If de Gaulle and Mitterrand represent the two poles of French presidential (and mainstream political) opinion on European integration, then Georges Pompidou, Valéry Giscard d’Estaing, and Jacques Chirac—the other presidents of the Fifth Republic—must lie somewhere in between. Indeed, Pompidou is close to the de Gaulle end; Giscard is in the middle; and Chirac—a nominal Gaullist—is close to the Mitterrand end. Although the range of opinion between de Gaulle and Mitterrand is broad, French presidential and mainstream political preferences nevertheless have a lot in common: distrust of the Commission (notwithstanding Delors’s ten-year ascendancy and the fact that the Commission is modeled on the French bureaucracy), dislike of the EP (despite strenuous French efforts to keep it in Strasbourg), support for the Council of Ministers (the institutionalization of national interest in the EU), and affection for the European Council (a Giscardian invention). Thus, French proposals to the intergovernmental conferences (IGCs) on treaty reform in 1985, 1991, and 1996–1997 strike a familiar chord: a minimal extension of EP authority, greater use of the European Council, and the least possible recourse to QMV with respect to new EU competences. The EU is sometimes caricatured as a vehicle for the promotion of French policy in Europe and the wider world. Indeed, the French are refreshingly honest in their self-interest in European integration, especially with regard to cultural, commercial, industrial, and foreign policy. Culturally, French efforts to promote and protect the French language—for instance, by trying to limit imports into the EU of “foreign” (i.e., U.S.) films and television programs—have had only limited success. In industrial policy the French—never keen on the

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free market—have attempted to substitute “Eurochampions” (large, EU-supported firms, notably in the high-technology sector, capable of competing globally) for “national champions,” which are illegal under EC law. Similarly, in commercial policy, the French have sought to replace national protectionism with Europrotectionism, as recent rows over agricultural export subsidies and the Uruguay Round of the GATT clearly illustrate. In foreign policy, the French have tried to shape European Political Cooperation and its successor, the Common Foreign and Security Policy (CFSP), into EU instruments for the projection of French influence globally. Here the French have a distinct advantage, being the only big member state seriously committed to the CFSP (Britain is equivocal about the EU in general, Germany still shies away from the foreign policy spotlight, and Italy is preoccupied with domestic problems). The way in which the Balladur Plan, a French initiative to strengthen stability in Central and Eastern Europe, became the CFSP’s first joint action shows how successful the French are at Europeanizing their foreign policy. At the same time, France has not abandoned unilateralism in international affairs, as occasional forays into Francophone Africa and events in Bosnia demonstrate. Apart from using the EU to achieve French objectives and project French power, France also uses the EU to prevent German domination in Europe, notably in economic and monetary policy. Thus, Economic and Monetary Union (EMU) is largely a French initiative to end the German central bank’s de facto monopoly of European monetary policy by establishing a European Central Bank in which France would at least have a say. This was the motivation behind French prime minister Edouard Balladur’s call in 1987 for EMU, which started the process that led to the IGC on EMU in 1991 and culminated in the TEU the following year. German unification strengthened the French case for EMU, made Chancellor Kohl even more sensitive to French concerns about Germany’s potential preponderance in Europe, and gave Kohl—who favored EMU in any case—the political impetus to overcome the central bank’s recalcitrance on the issue. EMU may make sense economically (in terms of the EU’s declining competitiveness) and strategically (in terms of Franco-German and Euro-German relations), but it is exacting a huge cost in terms of public acquiescence in European integra-

tion. Nowhere is this more obvious than in France, where high unemployment is popularly seen as a consequence of meeting the criteria to participate in the single currency. The TEU referendum in September 1992 revealed surprisingly deep resentment in France of deeper European integration, which rogue politicians eagerly exploited. The drive for EMU exacerbated the resentment and contributed to the defeat of the conservative government in May 1997. The deep political ambivalence inherent in EMU was clearly evident at the Amsterdam summit in June 1997, when Lionel Jospin, France’s new socialist prime minister, insisted on a review of the EMU stability pact and the adoption by the European Council of a separate resolution on growth and employment. At the same time, the end of the Cold War raised questions about the durability of the Franco-German alliance, and even of the EU itself, in a radically transformed international environment. Yet, for all the public soul-searching in France over the EU and despite strong opposition to EMU, France has no choice but to stay the course. For France, history, geography, demographics, and economics all point in the same direction: toward a closer Franco-German relationship and deeper European integration. The future EU might bear only a slight resemblance to today’s EU and might be centered on a core group of member states with common macroeconomic, monetary, fiscal, foreign, and even defense policies. If so, it is inconceivable that France and Germany together would not be at the center of it. See also DE GAULLE, CHARLES; FRANCE, GERMANY, AND POST–COLD WAR EUROPE; MITTERRAND, FRANÇOIS; TABLE 10; APPENDIX 2; APPENDIX 3. Dreyfus, Francois-George, Jacques Moritez, and Max Peyrard. 1993. France and EC Membership Evaluated. London: Pinter. Flynn, Gregory. 1995. Remaking the Hexagon: The New France in the New Europe. Boulder: Westview. Kramer, Stephen Philip. 1994. The French Role in the New Europe. Westport, CT: Praeger.

Bibliography

—Desmond Dinan

France, Germany, and Post–Cold War Europe

The years 1995 and 1996 were ones of crucial political transition in France. The fourteen-year pres-

idency of François Mitterrand ended with the tworound presidential elections of April-May 1995. Former president Mitterrand died on January 8, 1996, after a long and largely secret struggle against prostate cancer. Jacques Chirac took office on May 17, charged with three main tasks: to reduce unemployment while juggling fiscal and monetary policy so as to meet the convergence criteria for Economic and Monetary Union (EMU); to prepare France’s government and public opinion for the 1996–1997 intergovernmental conference (IGC); and to launch the largest French defense reform since President Charles de Gaulle’s in 1958 (Tiersky, 1996). The new French military would be changed in two ways. The first had to do with overall strategy and contingency planning. In a stunning reversal of traditional French policy, Chirac decided to end conscription and introduce an all-volunteer “professional” army. In place of the Cold War French army, configured to join with NATO allies to meet a land invasion from the east, France’s post–Cold War army will have as its nucleus a lean, fifty- to sixty-thousand troop rapid reaction force, such as Britain already has and Germany is also in the process of creating. This British-French-German symmetry indicates how European defense planners have conceived post–Cold War threats and missions and what the separate and combined European militaries will look like. Rather than standing armies designed to meet a huge conventional invasion from the east, they will be rapid reaction forces, capable of transporting both heavy and light-armed divisions over long distances. They will also be “double hatted” in the sense of fitting either pure NATO missions or else NATO–Western European Union (WEU) missions. The latter would be missions in which the Europeans in the WEU make use of NATO “separable but not separate” logistical and intelligence equipment, which only the United States provides in NATO, for missions in which U.S. military forces do not participate. This military force structure—in effect a European defense and security pillar within rather than outside NATO, whose missions require NATO Council decisions (i.e., U.S. political approval, too)—is what will back up the EU’s goal of a Common Foreign and Security Policy (CFSP), according to the NATO council communiqué of June 3, 1996. The second broad aspect of Chirac’s defense reforms was to change French military forces and

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capabilities themselves. This means a radical downsizing of the French army from 400,000 to about 250,000 (excluding the domestically deployed paramilitary gendarmerie), elimination of the once politically sacred Albion Plateau land component of the force de frappe’s triad, and a smaller navy. Among other things, Chirac’s defense reforms represent a radical French adaptation to a post–Cold War Europe in which, absent the Soviet threat and the Soviet Union itself, keeping a geostrategically reluctant and semi-isolationist United States “in” has become a central priority for the Europeans, not least for the French themselves. From this priority arises the much-touted French return to some of the NATO command institutions, notably the rejoining of the Military Committee. Announced in fall 1995 and begun on June 13, 1996, when the French defense minister ended a thirty-year French absence from the Military Committee’s meetings, the Chirac policy is cutting the old Gaullist Gordian knot. A complete French return to a suitably reformed integrated command structure can no longer be excluded and may, in fact, be Chirac’s intention. Can this really be? Has Gaullism been so easily overturned in Paris? The answer is not so complex, given a realistic rather than a political cultural, stereotypical understanding of French policy. Certainly, after decades of French resistance to “American hegemony” inside NATO, Chirac’s declaration to a joint session of Congress during his 1996 state visit to Washington that a U.S. leadership role is “necessary” even for post–Cold War European security might seem to be heresy. But Gaullism (and all the other bases of French policy today) needs to be understood not as psychological compensation for old psychological wounds but as national interest—as a mix of a few intransigent principles and sometimes spectacular, annoying attitudes with a fundamental pragmatic realism about the basics (e.g., de Gaulle’s own switch on French Algeria and his immediate support of the United States in the Cuban missile crisis). Absent the Soviet threat and the Cold War superpower bloc structure, the old French geostrategic policy, including policy toward NATO, had simply lost its reason for being. Remaining outside the NATO command had lost its politicaldiplomatic leverage between the two superpowers and the two blocs. Moreover, Europe’s abject fail-

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ure to act decisively to end the war in Bosnia was a lesson taken to heart. Of course the French are glad that Europe is “beyond Yalta,” even if France has paid a substantial price in political-diplomatic leverage. Pure neorealists and cynics, seeing a loss of French power in the end of the Cold War, wrongly suggest that France might really prefer a return to the Cold War even at the price of Eastern Europe’s suffering. But this judgment illustrates the inadequacy of the “billiard ball” conception of international relations: Westphalian states defined by sovereignty struggling only for power and place. What is inside the billiard balls—different kinds of regimes, economies, cultures, and moralities— matters a great deal. French policy faces two dilemmas in the still emerging post–Cold War European landscape. First, what should a Europe beyond Yalta mean for France economically, diplomatically, and in security terms; that is, which possible Europe should the French prefer? Second, what should French policy be toward its two main partners, unified Germany and the United States, given the danger of France’s being overwhelmed and given the historical French tendency toward domestic weakness and division? In the formerly divided Europe, built on a divided Germany, France had permanent leverage on the Federal Republic of Germany and, to a limited extent, on U.S. policy as well. In post–Cold War Europe, French policy, whether run by Mitterrand or Chirac, pursues one overriding goal, albeit with a concrete and a hypothetical element. The concrete element is to keep the consequences of German unification within acceptable limits, which means keeping unified Germany firmly in the EU and in NATO. This also means enlisting the United States as a silent partner to keep the Franco-German “couple” balanced. The hypothetical element involves preparing the EU, and changing what is necessary to change, for the possibility of a renationalized, aggressive Russia. The French believe that unified Germany will be strong and should be strong. They also believe, or hope, that Germany need not be hegemonic. After all, except at the moment of German unification when, with remarkable backing by the U.S. administration, a German national policy was imposed on a reluctant France and others, Germany’s leaders have continued the Germans’ post–World War II strategy of voluntary international self-re-

straint. Even the coming successor leadership generation, with no personal memory of the war’s horrors, will likely still see partnership rather than mercantilism and/or direct domination as being in Germany’s interest. For the French, as President Chirac showed in numerous ways during his first year in office, this means that a continued superpreferential Franco-German partnership—the French/German “core” of European integration—must be France’s policy, even though Germany’s specific interests and its semihegemony in the east of Europe will necessarily be a constant issue and strain. There will no doubt be other issues as well. Close, prolonged working together among various levels of Franco-German policymakers, debating and instigating projects, getting them approved by the Council of Ministers and by other EU institutions, must therefore remain the primary French modus operandi in the European process. Despite the serious, to-be-expected issues of the 1989–1992 period (Mitterrand’s doubts about German unification and the controversial diplomatic recognition, pushed through by Germany, of Croatia and Slovenia), the fact is that the Franco-German partnership has stayed remarkably coherent and resilient. Germany’s worries in 1996 about Chirac’s military reforms (that French abandonment of conscription could spill over into German public opinion and that French budget cutting and reconfiguration will squeeze France’s share of the burden in joint military and intelligence projects) will surely strain ties once again. But the problems of any given moment should not be confused with the fundamentals, meaning the basic national interest of both countries to continue their partnership and centrality in the European integration process. For its part, Germany faces serious domestic problems (unprecedented unemployment, social security overextension, and some declining market shares abroad) that threaten its capacity to lead and to be the EU’s paymaster. Additional worries include the capacity to finance Eastern European economic development, a burden insufficiently shared by the EU and by France in particular. Finally, Germany has to be more concerned than other EU countries about the possibility of an aggressive nationalist regime in Russia. The conclusion is that unified Germany, now permanently prone to overextension abroad and to overcommitment at home, has excellent reason to try not to take France for granted in the EU and

CFSP-NATO-WEU contexts. France and Germany, Germany and France need each other; a close relationship is in the national interest of both countries. France, moreover, has certain advantages, first among them the knowledge that German political leaders and business elites themselves know history’s lesson: that Germany will ultimately come to grief in any Sonderweg; that the worst position for the Germans is to find themselves “alone,” which calls up the possibility of some new “nightmare of coalitions.” In addition, France is Germany’s only possible partner at the center of European integration. By geography, size, economy, and political and cultural strength, France (even if it is notably inferior to certain German strengths) can act as a counterweight, whereas Britain or Italy, let alone Spain, cannot. For this reason, President Mitterrand was not much interested in British prime minister Thatcher’s offers, described at length in her memoirs, of a special Franco-British relationship to balance Germany (Thatcher, 1993). For three decades the Franco-German tandem has produced substantial practical results for Germany as well as for France. Most of Germany’s trade goes west (particularly to France), not east. What would be Germany’s advantage in changing the basic framework? Finally, there are the somewhat less tangible but not necessarily less important factors, such as public opinion. Strikingly, French and German young people for years have regularly been telling opinion pollsters that each is the other’s “best friend” in Europe. However vague and mentally ahistorical this friendship might actually be, it is, in itself, a remarkable (even historic) political fact. The French motivation to continue European integration seems therefore very strong, if not entirely irreversible. Given this, any politician hoping to be president, even a neo-Gaullist like Chirac, cannot frankly be “against Europe.” At most a nationalist-inclined candidate who really hopes to win can, while campaigning, talk more or less directly about the price of European integration. Once in power, however, any French leader must sit down, with an appetite, at the European table—although joining the table does not mean that everyone orders the same thing, or agrees on who will pay the bill. French voting patterns reinforce this Europeanism. The anti-Europe—more precisely, the anti–Treaty on European Union (TEU)—groups

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are found toward the ends of both the right and left wings. This means nationalist and/or social or populist Gaullists on the right and the communists on the left. The polarized, outlying location of anti-TEU sentiment is important, showing that in France the pro- and anti-Europe cleavage runs not between right and left but (as in Britain) inside the conservative camp, with the French communists being largely a historical avatar of protest voting. And French communist anti-TEU voters will usually vote for a European-oriented socialist on the second presidential ballot, nullifying their antiEurope strength, whereas on the right, nationalist or populist conservative voters will often abstain rather than vote for a clearly pro-European conservative. This was one reason why Giscard d’Estaing in the 1970s could not count on his neoGaullist Rally for the Republic (RPR) coalition partner, whose leader was none other than Jacques Chirac. According to Giscard, RPR treachery was the main reason why he was defeated by Mitterrand in his 1981 reelection bid. Chirac’s 1995 presidential strategy illustrated this further. His electoral rhetoric throughout the 1994–1995 prepresidential speculation was ambivalent, both anti- and pro-TEU (e.g., his wavering on the single currency). The point was to woo both pro-TEU conservative voters (the UDF, centrists, and RPR voters, about one-third of whom are favorable to “Europe”) and anti-TEU supporters of the RPR (Philippe Séguin and Charles Pasqua were the leading figures here) and other extreme right voters. But only months after his victory in May 1995, Jacques Chirac moved clearly away from an anti-TEU approach. He lost interest in combating la pensée unique, the conformist idea that there is only one sensible French policy, that of high interest rates for a strong franc combined with significant government budget cutting to meet the EMU convergence criteria. The alternative policy, the so-called other policy (Séguin’s advocacy of lower interest rates to reduce unemployment by getting higher growth rates, at the understood price of a higher inflation rate) was put on a back burner. Chirac instead came out decisively in favor of full steam ahead to meet the convergence criteria, which meant reaffirming the first priority of Franco-German cooperation and of European integration as opposed to a national-based attack on unemployment as the most urgent French prob-

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lem. The only surprising thing was that anti-TEU RPR leaders and voters raised so little resistance. Even though the 1992 referendum on the TEU was won by a narrow margin and weekly opinion polls show French sentiment leaning against “Europe,” or some specific aspect of it, an underlying majority in favor of European integration and of Franco-German partnership has become a new idée reçue in French political culture. Therefore, the kind of radical in-or-out choice that Mitterrand faced in March 1983, when he opted squarely for the EC, may not arise again. The EU framework may slowly unravel or expire from disinterest, but it is unlikely either to explode or to implode, regardless of the change of government in France. The question of what, how, and who pays with respect to enlargement and institutional reform are a large menu of various national interests and policies. The French government set three priorities for the 1996–1997 IGC: enacting decisionmaking reforms, which in tomorrow’s even-larger EU will mean a variable geometry or concentric circle model of mixed methods; lessening the democratic deficit, particularly by making the Commission more accountable to the European Parliament (EP) and especially to the Council, which, for the French at least (though not in the same way for the Germans) remains the central EU institution; and moving forward sharply on the CFSP, into which the Chirac military reforms, described earlier, must obviously fit. As under all presidents of the Fifth Republic (François Mitterrand not least), French policy sees the European Council as the most effective and, in its way, the most democratic institution, given that the heads of government and/or state are elected nationally and, in the French case, directly. Arguably this gives the European Council more democratic legitimacy (although the French do not entirely believe it themselves) than the EP, which the Germans favor. The French prefer the European Council in reality because it is an intergovernmental/confederal institution in which a national veto can still be used. Changes in the way the Council of Ministers operates—for example, longer presidencies and combined presidencies for smaller countries— were a few of the French proposals at the IGC. The Germans, by contrast, wanted a more powerful and democratic EP, not instead of a reformed Council but as well as it. The French are wary of

the EP for two reasons: first, they think it too unrepresentative and fragmented to function even approximately like a national parliament; second, a stronger EP would provoke demands at home for a constitutionally stronger French parliament as well. The French expect that enlargement will lead to an EU running at various speeds or levels of participation, as in fact it already does. Diversified decisionmaking methods will be necessary, and a central group of countries, built around the Franco-German core, is both likely and desirable. Feelings of guilt over EU inertia regarding the disaster in Bosnia have given Chirac room to move strongly on the CFSP front. Chirac’s defense reforms, his “historic” return to NATO’s unified command institutions, and his welcome of continued U.S. alliance all relate to this. Europe, and the world as a whole, Chirac said, “needs the United States. . . . [U.S.] political commitment to Europe, and military presence on European soil, remain an essential factor in the stability and security of the continent” (quoted in The Economist, February 10, 1996, p. 45). France’s new attitude made possible the NATO communiqué of June 3, 1996, which finally clarified that after years of wrangling the post–Cold War European pillar would not be independent of NATO. The CFSP as diplomacy, say the French, has been hardly visible thus far. Its decisions and recommendations have had little actual implementation, and there is little consistency between Council decisions, on the one hand, and Commission and member-state actions and declarations, on the other. Key examples are the EU’s failure to follow through on the 1993 European Stability Pact (the Balladur Plan) for Central and Eastern Europe and the catastrophe of EU-UN peacekeeping attempts in Bosnia. France’s priority for CFSP reform is to reinforce the Council’s centrality in deciding joint actions and in committing member states. Only the intergovernmental Council expresses any genuine common will, and national sovereignty can increasingly be converted into “pooled sovereignty” through qualified majority voting (although this would probably also mean increasing the big countries’ weighted votes, which the small member states refused to accept at the June 1997 Amsterdam summit). Consensus could remain the basis of decisionmaking, with qualified majority voting being used to implement those decisions. The French also proposed that the Council appoint a CFSP High Representative (HR) as the EU’s for-

eign policy voice and face. Indeed, it was agreed in the Amsterdam Treaty that the Council secretary-general would act as the High Representative and that a new planning and analysis unit would be established in the Council secretariat. There is reason to suppose the French believe that the first HR, at least, ought to be French. See also COMMON FOREIGN AND SECURITY POLICY; FRANCE; GERMANY; NORTH ATLANTIC TREATY ORGANIZATION; WESTERN EUROPEAN UNION. Thatcher, Margaret. 1993. The Downing Street Years. New York: HarperCollins. Tiersky, Ronald. 1996. “A Likely Story: Chirac, FranceNATO, European Security, and American Hegemony.” French Politics and Society 14, no. 2 (Spring), pp. 1–8.

Bibliography

—Ronald Tiersky

The EU wages a constant battle against fraud. Lax oversight, especially by national agencies charged with carrying out EU policies (member states administer approximately 80 percent of EU expenditure), exposes the EU to widespread cheating. Much of this is with regard to the biggest category of spending, on agricultural price supports. The issue has become more pressing in recent years for both financial and political reasons: financially, the cost of fraud is rising (the Commission estimated that fraud cost about 1.4 percent of the EU’s budget in 1995); politically, reports of fraud and mismanagement are fueling the EU’s unpopularity and contributing to the EU’s legitimacy crisis. The Court of Auditors and the European Parliament (EP) are the defenses at the EU level against waste, mismanagement, and fraud. Despite its title, however, the Court of Auditors has no judicial powers or functions; its reports are essentially consultative in character. Yet recent reports, highly critical of financial control in the Commission, have triggered extensive debates in the EP and received considerable publicity in the national media. Apart from the EP’s normal means of scrutiny—debates, written questions to the Commission and the Council, interrogation of commissioners and national ministers in individual parliamentary committees, and holding public hearings on controversial issues—the

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Treaty on European Union gave the EP formal authority to set up temporary committees of inquiry. Significantly, the first such inquiry was into fraud. Clearly, one of the most visible and creditable ways for the Commission to redeem itself in particular, and the EU in general, is by trying to stamp out fraud. Under the presidency of Jacques Santer, the Commission has put a far greater emphasis on openness and financial responsibility: Erkki Liikanen, the budget commissioner, and Anita Gradin, the commissioner for financial control and fraud prevention (a new portfolio), are jointly spearheading the reform effort. Both commissioners come from the new Scandinavian member states, which have a reputation for open government and bureaucratic integrity. Commission initiatives to fight fraud include a draft convention on the protection of the EU’s financial interests, proposed under the EU’s third pillar (Cooperation on Justice and Home Affairs), and the establishment of a Sound Financial Management Group (SFMG) to improve financial administration at the EU level. Chaired by Commissioner Liikanen, the SFMG includes personal representatives of the finance ministers of the member states. At its first meeting in March 1996, the group agreed to urge national governments to ratify the EU financial interests convention. A related Sound and Efficient Management Initiative (SEM 2000) also aims to tighten control over the EU budget. Significantly, the Amsterdam Treaty included a provision for “countering fraud affecting the financial interests of the Community.” This calls for close cooperation among the Commission, member states, and competent authorities to protect the EC’s financial interests and gives the Council authority, under the co-decision procedure, “to adopt the necessary measures in the fields of the prevention of and fight against fraud affecting the financial interests of the Community with a view to affording effective and equivalent protection in the Member States.” See also BUDGET; COURT OF AUDITORS. Functionalism is a classical theory of regional integration that holds that a common need for technocratic management of economic and social policy leads to the formation of international agencies.

Functionalism

See G7.

G8

G Four EU member states (Britain, France, Germany, and Italy) are members of the G7: an exclusive club consisting of the world’s most industrialized countries (Canada, Japan, and the United States are the other members, and Russia is a socalled half-member). The G7 was launched in 1975—at a time of deep recession—to try to coordinate economic policy among leading industrial countries. The EU’s small member states resented their exclusion from the club, and their implicit representation in it by the large member states, hence their insistence that the president of the Commission also attend the G7’s annual summits. After a political wrangle within the EC (France, which had launched the G7 initiative, wanted to keep the Commission out), the Commission president took his place at the G7 summit in 1977 and has attended ever since. Since the collapse of the Soviet Union, the Russian president has attended part of the annual summit. In deference to Russia’s demand for equal representation, the group is sometimes described as the G8 (the June 1997 Denver summit was known as the Summit of the Eight), although in reality Russia’s fragile economic situation precludes the country’s full participation in the group. Apart from the annual summit meetings of the world’s leading prime ministers and presidents, the G7 also includes separate finance ministers’ meetings and occasional ad hoc meetings (such as a ministerial meeting on the information superhighway, which the Commission hosted in Brussels in February 1994). For all its glamour and high visibility, however, the G7 has generally been of limited economic and political importance and has not achieved its full potential.

G7

In July 1990 the Commission agreed to coordinate Western economic assistance to the Central and Eastern European states, which were then emerging from the disintegrating Soviet bloc. The Commission acted on behalf of the group of twentyfour industrialized countries (which corresponded at the time with the membership of the Organization for Economic Cooperation and Development). The G24 initiative greatly enhanced the Commission’s international profile during a key period of the EC’s development and transformation.

G24

See GENERAL AGREEMENT ON TARIFFS AND TRADE.

GATT

See GULF COOPERATION COUNCIL.

GCC

Although legally and institutionally there is only one Council of Ministers, in reality the Council consists of meetings of ministers having responsibility in their member states for the range of policy issues within the EU’s competence. Thus, whenever agricultural ministers, environment ministers, trade ministers, and so on meet to legislate for the EU, they constitute the Council of Ministers. Foreign ministers, who form what is called the General Affairs Council, have a special role in the EU: they are responsible for foreign and security policy cooperation and for resolving issues upon which the specialized councils are unable to agree. Accordingly, the General Affairs Council is recognized as the most important council in the constellation of ministerial meetings in Brussels. See also COUNCIL OF MINISTERS.

General Affairs Council

General Agreement on Tariffs and Trade (GATT)

The General Agreement on Tariffs and Trade (GATT) formally entered into force in January 1948, when it was signed by twenty-three coun-

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tries in Geneva, Switzerland. Originally designed to serve as an interim arrangement for the more comprehensive International Trade Organization (ITO), the GATT by default became the world’s key international trade organization in 1950, when the U.S. Senate failed to ratify the Havana Charter, and the proposed ITO collapsed. Lacking resources of its own (except for a secretariat in Geneva), the GATT served primarily as a forum and institutional expression of a code of principles enabling member states to negotiate tariffs and other trade regulations. On January 1, 1995, a successor organization to the GATT, the World Trade Organization (WTO), was established as a result of the Uruguay Round of GATT negotiations. The GATT reflected the prevailing postwar philosophy of international trade liberalization. The preamble to the General Agreement identified the key objective of the GATT as “the substantial reductions of tariffs and other barriers to trade and … the elimination of discriminatory treatment in international commerce.” The most important rule (Article 1) was that of nondiscrimination. All members agreed to adhere to the principle of most favored nation (MFN), which stipulated that “any advantage, favor, privilege or immunity granted by any contracting party to any product originating in or destined for any other country shall be accorded immediately and unconditionally to the like product originating in or destined for the territories of all other contracting parties.” At its inception the GATT also endorsed some significant limitations on free trade in the interest of domestic stability. The United States pressed successfully for an agricultural regime that would allow production and price controls, export subsidies, and protectionism. International trade in services was not covered by the agreement. The code also allowed for temporary actions to impose quantitative restrictions on imports when they threatened injury to domestic producers or caused serious balance-of-payments problems. Notably, the GATT also permitted the establishment of regional trading arrangements and customs unions, such as the European Economic Community (EEC), provided they covered most trade and did not raise trade barriers to outsiders. Subsequently, the MFN principle was also qualified to enable the granting of trade preferences to developing countries. As the principal architect and key actor in the post–World War II international economy, the

United States served as the chief sponsor of GATT liberalization efforts. However, the formation and progressive expansion of the EC’s customs union provided the motor force of GATT liberalization efforts. The United States supported Western European economic integration but also sought to liberalize world trade as a means of minimizing the trade-diverting potential of a European regional bloc. Between 1947 and 1961, five rounds of tariff negotiations were conducted, culminating in the Dillon Round of 1960–1961, when the EEC presented its common external tariff to the world. During this time, average tariffs decreased from over 40 percent to approximately 20 percent. In the meantime, establishment of the EEC in 1958 had caused the United States to push for a sixth set of negotiations, resulting in the Kennedy Round. In that round, launched in 1963 and concluded in 1967, average tariffs were reduced by a further 33 to 39 percent, and an attempt was made to include agriculture in the GATT regime. Although the Kennedy Round was hailed as a success, the increasing salience of nontariff barriers led the United States to press for new negotiations to reduce nontariff barriers to trade. Europe, initially opposed to further negotiations, was encouraged by the collapse of the Bretton Woods system and growing protectionist sentiments in the United States to agree to a seventh GATT round, the Tokyo Round, in 1974. At the conclusion of that round in 1979, tariffs were reduced by a further 27 percent to an average of less than 5 percent. Seven nontariff barrier agreements were signed, encompassing such areas as government procurement, customs valuation, subsidies, standards, and antidumping. Articles 110–116 of the Rome treaty describe the EEC’s competence in international trade. By definition, a customs union establishes a common external tariff as well as other trade regulations, and members of such a union are in principle enjoined from conducting an independent trade policy. Recognizing the advantages of a common policy and negotiating stance, member states granted the Commission considerable discretionary power over trade negotiations. At the same time, however, member states also greatly limit the Commission’s autonomy: the Council of Ministers establishes the Commission’s negotiating mandate, a committee of national officials (the “113 committee,” based on Article 113 of the Rome treaty) participates in negotiations on an advisory basis,

General Agreement on Tariffs and Trade (GATT)

and the Council may approve the final agreement by qualified majority (although it usually does so by unanimity). The EEC was not formally a “contracting party” to the GATT, although it was granted de facto all of the rights and obligations of a full signatory. The Commission once asserted that “it is in the GATT that the Community has its highest profile,” and the Commission has attempted to use the GATT to promote its power and profile (Dinan, 1994). Given that trade policymaking is shared among the Commission and the member states, inevitably the Commission’s behavior in the GATT has revealed chronic tension between member states and the Commission. The intervention of member states at every step of trade negotiations is clearly visible in basic divisions that have traditionally emerged between the more protectionist states, among which France has been most prominent, and states favoring liberalization, such as Britain. Therefore, trade negotiations have had the character of a two-level game in which the Commission has had to negotiate simultaneously with the rest of the world and with member-state governments (Putnam, 1988). The practical effect of this complex dynamic has been to place great constraints on the Commission while at the same time strengthening its hand visà-vis the United States, particularly in negotiations over agriculture (Devuyst, 1995). The Uruguay Round, the eighth and final round of GATT negotiations, began in 1986. The Council of Ministers approved the final agreement in December 1993, and the commissioner for external economic relations and the president of the Council signed the Uruguay Round Final Act in April 1994 in Marrakech, Morocco. The Uruguay Round resulted in a comprehensive global trade deal without historical precedent, with great significance for the EU. It also generated intensive conflict not only between the United States and the EU but also among the member states themselves and between the Commission and certain member states. As with previous rounds of negotiations, the driving force behind the Uruguay Round was the United States or, more particularly, U.S. concerns in the mid-1980s about the consequences for international trade of EC deepening (as a result of the Single European Act) and widening (as a result of Mediterranean enlargement). U.S. fears of a Fortress Europe could be allayed by a broadened

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multilateral accord that would firmly embed the single market within a framework of global liberalization. Such fears were particularly acute at a time of transatlantic monetary conflicts, the rising dollar, and the loss of traditional agricultural export markets to Europe. The Uruguay Round Final Act, comprising twenty-eight separate agreements, included the following key provisions: a framework of rules designed to liberalize services, protection of intellectual property, phasing out of bilateral quotas for textiles and clothing and tariff reductions, a comprehensive agreement in farm trade under which quotas were replaced with tariffs and export subsidies were cut, tariff reductions designed to reduce the average tariff to approximately 3 percent, reform of rules on dumping, attempts to prevent voluntary export restraints, streamlining of arbitration procedures and GATT rules, and transformation of the GATT into the WTO. The proposed liberalization of agriculture and services provoked intensive conflict between the United States and the EC. Historically, both of these politically sensitive sectors have been subject to extensive national regulation and protectionism. As chief sponsor of liberalization, the United States anticipated clear benefits from greater access to world markets based on its perceived comparative advantage. For the EC’s member states, however, liberalization involved costs as well as benefits. The liberalization of services ultimately proved less difficult than that of agriculture. The United States is the world’s leading exporter of commercial services but is followed closely by France, Germany, Italy, and Britain. The sharpest conflicts arose over the liberalization of audiovisual services. The United States charged that the EU’s Television Without Frontiers directive, under which member states were obligated to “ensure” where practicable that broadcasters reserved a majority proportion of their transmission time for European works, discriminated against U.S. television exports. The Commission sought to mediate between France, which demanded a “cultural exception,” and Britain, which favored liberalization. In the end, a compromise was reached under which the cultural sector was included within the GATT regime in principle but no specific obligations were made. Agricultural negotiations proved to be much more difficult. After World War II, both Europe

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and the United States pursued highly interventionist strategies in agriculture that dramatically increased output and encouraged farmers to become increasingly dependent on export markets. The Common Agricultural Policy (CAP) involved a costly system of protection, payments to farmers designed to expand output, and export subsidies. By the mid-1980s, even as the United States favored liberalization policies that would greatly endanger the CAP, the CAP itself greatly strained the EC budget. When the EC resisted a multilateral agreement that would go beyond its already substantial internal farm reforms, the United States applied commercial and diplomatic pressure to divide the member states and provoke further opposition to the CAP (Libby, 1993; Laursen, 1993). A preagreement reached between the United States and EC at Blair House, in Washington, D.C., in November 1992 greatly limited CAP support for farmers and gradually phased out export subsidies. But France rejected the accord and threatened to use its veto in the Council to prevent the signing of the entire Final Act. As the December 1993 deadline for completion of the Uruguay Round approached, France requested the formation of a so-called Jumbo Council, consisting of ministers of foreign affairs, foreign trade, and agriculture. Britain publicly repudiated French demands, even as the United States exerted pressure not to reopen the Blair House accord. A week before the deadline the United States announced its willingness to make concessions on export subsidies and to engage in annual consultations with the EC concerning participation in the growth of the world market. France also obtained a promise that the EC would compensate French farmers for “sacrifices” going beyond those anticipated as a result of the CAP’s internal reforms. Eventually the Council approved the final agreement but by consensus rather than by qualified majority. However, although the amendments to the Blair House preagreement established a sufficient degree of internal cohesion on agricultural matters, disputes over the Commission’s competence in trade threatened to prevent the newly formed EU from signing the Uruguay Round Final Act. Member states claimed that the Final Act was a “mixed agreement” subject to dual (Commission and member-state) competence. In particular, they pointed to the environment, social policy, and services as trade policy issues over which the Commission could not

claim exclusive authority. For its part, the Commission argued on the basis of Article 113 that the Commission was the EU’s sole negotiator on trade issues. In April 1994 the Commission requested an opinion from the Court of Justice concerning the EU’s trade competence. The Court’s opinion, issued in November 1994, did not uphold the Commission’s position; it decreed that EU trade policy is subject to the dual competence of the Commission and the member states (Devuyst, 1995). The opinion of the Court confirmed that responsibility for trade policy will remain divided and that individual member states will continue to play a key role in the making of EU trade policy. See also COMMON AGRICULTURAL POLICY; COMMON COMMERCIAL POLICY; COMMON MARKET; EUROPEAN ECONOMIC COMMUNITY; U.S.-EU RELATIONS: TRADE AND INVESTMENT; WORLD TRADE ORGANIZATION. Devuyst, Youri. 1995. “The EC and the Conclusion of the Uruguay Round.” In Carolyn Rhodes and Sonia Maizey, eds., Building a European Polity? Vol. 3 of The State of the European Union, Boulder: Lynne Rienner. Dinan, Desmond. 1994. Ever Closer Union? An Introduction to the European Community. Boulder: Lynne Rienner. Laursen, Finn. 1993. “The EC, the United States, and the Uruguay Round.” In Alan Cafruny and Glenda Rosenthal, eds., The Maastricht Debates and Beyond. Vol. 2 of The State of the European Community. Boulder: Lynne Rienner. Libby, Ronald. 1993. Protecting Markets: U.S. Policy and the World Grain Trade. Ithaca: Cornell University Press. Putnam, Robert. 1988. “Diplomacy and the Logic of Two-Level Games.” International Organization 42 (Summer).

Bibliography

—Alan W. Cafruny

Genscher, Hans-Dietrich (1927– )

For twenty-three consecutive years Hans-Dietrich Genscher served in the German government, including eighteen consecutive years as foreign minister (1974–1992). Genscherism was a term used to describe German efforts to balance the Federal Republic’s opening to the East (Ostpolitik) with its commitments to the EC and NATO in the West. In Genscher’s case, personal considera-

tions added poignancy to Ostpolitik: Genscher had been born in what became, after 1949, the German Democratic Republic. For all his enthusiasm for Ostpolitik, Genscher never wavered from his commitment to the EC. He always saw integration as an essential means of achieving the related goals of German and Western European prosperity and security and (ultimately) German and European reunification. In the early 1980s, Genscher was instrumental in trying to revive the EC, notably with the so-called Genscher-Colombo draft European Act (November 1981) and its sequel, the Solemn Declaration on European Union adopted by the heads of state and government in Stuttgart (June 1983). At the end of the decade, dramatic developments in Central and Eastern Europe seemed to vindicate Genscher’s optimism. Like Chancellor Kohl, Genscher seized the opportunity presented by the revolutions there to advance and quickly achieve the coveted goal of national unity. Genscher had been the first Western leader to back Soviet president Mikhail Gorbachev and was the last to drop him. Genscher also remained a strong supporter of massive Western aid to the USSR and to its successor states. Moreover, the intergovernmental conferences of 1991, in which he played a leading role, culminated in the Treaty on European Union, which anchored united Germany firmly in the new EU. By the time he voluntarily left office in 1992, however, Genscher’s reputation was tarnished. Kohl’s firm grip on unification policy and U.S.-EC relations, and the foreign minister’s unseemly rush to recognize Croatia’s independence during Yugoslavia’s fragmentation (which some say precipitated war in Croatia), suggested that Genscher was finally beginning to lose his once magical touch. See also GENSCHER-COLOMBO PROPOSALS; GERMANY. On November 19, 1991, Hans-Dietrich Genscher and Emilio Colombo, the foreign ministers of Germany and Italy, presented to the European Parliament their governments’ proposals for a European act. The so-called Genscher-Colombo proposals advocated reform of the decisionmaking process, an end to the increasingly artificial distinction between European Political Cooperation (EPC) and the EC’s external economic relations, and the extension of EPC into the security and de-

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fense domain. The proposals thus sought to shake the EC out of its political and institutional malaise, but they met a mixed response from within the other member states and from Washington, which distrusted the development of a separate European security and defense identity. The European Council, meeting in London on November 26 and 27, 1981, asked the foreign ministers to consider the proposals and report back; the foreign ministers failed to agree on a way forward and could not concur on the relatively mild foreign and security policy proposals. Consequently, their report to the European Council in Stuttgart on June 17–19, 1983, gave rise only to the Solemn Declaration on European Union, a vague, insubstantial assertion of the EC’s international identity. See also EUROPEAN POLITICAL COOPERATION. It is impossible to think about the EU without thinking also about Germany. Would there be an EU without Germany? Is European integration the definitive solution to the so-called German Question? Or is the EU, as a British government minister once publicly remarked, really “a German racket”? Undoubtedly, the German question was one of the major motivations behind post–World War II European integration. By mid-1945 Germany was utterly defeated and about to be divided between the Soviet-occupied East and the American, British, and French–occupied West. The onset of the Cold War added strategic urgency to a pressing problem: what to do with the Western zones of occupation? Punitive policies like the infamous Morganthau Plan, which advocated the permanent pasturalization of Germany, were clearly impracticable. Germany was too big, too central, and too populous not to be allowed to recover economically. Having suffered so much more than its Allies from German aggression, understandably France was eager to keep postwar Germany down. Indeed, France’s own postwar recovery and economic modernization were predicated in part on perpetual German weakness. The French modernization plan, initiated by Charles de Gaulle (France’s provisional postwar leader) and launched by Jean Monnet (a leading civil servant) in 1945, sought to build up French industry at the expense of Germany’s shattered coal and steel sector.

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Germany

Regardless of French recalcitrance, however, the United States and Britain gradually adopted a more accommodating policy toward Germany, culminating in the establishment of the Federal Republic in 1949 with limited sovereignty. In the long term, Allied interests would be served best by avoiding the mistakes of thirty years before and ensuring that post–World War II Germany did not harbor bitter resentment of the victorious powers. In the short term, growing Soviet hostility toward the West made it imperative for the Allies to reconstitute Germany politically and economically but in a way that would satisfy French security concerns and comprehensively tackle the roots of conflict in Western Europe. This was the background to the Schuman Plan, France’s response to U.S. pressure for a more flexible and far-reaching policy toward Germany. Adoption of the Schuman Plan was highly contentious in France but seemed like a godsend to Germany: an opportunity for international rehabilitation and full economic recovery. Konrad Adenauer, the new Germany’s new chancellor, certainly saw it as such; he made European integration one of two international cornerstones for the Federal Republic’s development (the other one was NATO membership, which happened in 1955). Yet Germany’s commitment to European integration was neither easy nor inevitable. Adenauer, a conservative politician, was distrusted by the Social Democratic Party (SPD), whose large labor constituency viewed the European Coal and Steel Community, and later the European Economic Community, as a capitalistic enterprise (“Europe, Inc.”) inimicable to workers’ interests. Kurt Schumacher, the SPD leader, also opposed EC membership because of a well-founded concern about the possible impact of European integration on the division of Germany between East and West. It took Monnet’s considerable powers of persuasion, largely through the recently formed Action Committee for the United States of Europe, in which labor was well represented, to convince the SPD to support ratification of the Treaty of Rome in the German parliament. Within a short time of the contentious ratification debate, the SPD dropped its reserve toward the EC and adopted, with the Christian Democratic Union (CDU), a bipartisan approach toward European integration. The bipartisanship has lasted to this day but may be sorely tested by the third stage of Economic and Monetary Union

(EMU) in 1999. The SPD’s about-face was due partly to new SPD leadership and even more to an early realization that the EC was not contrary to workers’ interests. In general, German employers and workers made their peace in the postwar period by adopting a consensual, neocorporatist approach to industrial relations, against a background of extraordinary economic growth in the 1950s and 1960s (the “economic miracle”). By fostering the recovery and restructuring of heavy industry and by providing a tariff-free Western European market for the sale of high-quality, sought-after German goods, the EC contributed greatly to Germany’s prosperity, a prosperity shared (albeit unevenly) by all German classes. Thereafter Germany’s role in the EC settled into a predictable pattern. In Chancellor Willy Brandt’s words, Germany became an economic giant but remained a political dwarf. Ironically, Brandt himself rocked the boat politically by embarking upon a vigorous Ostpolitik when he became chancellor in 1969. Brandt’s efforts to normalize relations with the USSR, East Germany, and other Soviet bloc countries alarmed the CDU opposition and Germany’s Western allies. This led Brandt to anchor Ostpolitik firmly in Westpolitik, notably by affirming Germany’s commitment to European integration, in which Brandt in any case strongly believed. Thus Brandt advocated the EC’s first enlargement and supported concomitant efforts to deepen integration in the early 1970s by coordinating monetary policy (the unsuccessful Werner Plan) and foreign policy (through European Political Cooperation). An unusually close relationship with France was another predictable element of Germany’s involvement in European integration. The Elysée treaty, signed in January 1963 by Adenauer and de Gaulle (who had returned to power in 1958), laid a solid institutional foundation for Franco-German cooperation. At the time, Adenauer’s CDU colleagues and the SPD opposition fretted that Adenauer was jeopardizing Germany’s relationship with the United States by flirting too much with de Gaulle. In the event, the treaty became the basis not of a Franco-German–dominated “European Europe” but of Franco-German hegemony within an EC that fitted comfortably into the Cold War scheme of things. Because of the stature of de Gaulle and Adenauer and because the Elysée treaty institutionalized regular summit meetings, there is a tendency

to think about Franco-German influence in the EU almost entirely in terms of the personal relationship between the leaders of both countries. Indeed, the president of France and the chancellor of Germany have generally been on good terms with each other, none more so than Valéry Giscard d’Estaing and Helmut Schmidt in the 1970s and then François Mitterrand and Helmut Kohl in the 1980s and early 1990s. But the relationship has sometimes been uneasy, as it was between Georges Pompidou, de Gaulle’s immediate successor, and Willy Brandt. Equally important, however, close Franco-German relations have been built upon a dense network of official contacts at all levels of government and upon the willingness of both sides to resolve inevitable differences for the sake of their own country’s national interest as well as a shared commitment to a new European order. One of the most striking differences on European affairs between France and Germany concerns the EU’s institutional architecture. Germany is at the supranational end of the spectrum of European integration; France tilts toward intergovernmentalism. In institutional terms, this difference translates into German support for a strong European Parliament and for greater use of qualified majority voting (QMV). Curiously, Germany is not a big backer of the Commission, and only one German, Walter Hallstein, has been Commission president. Perhaps the lingering aftertaste of Hallstein’s ambitious presidency, which culminated in a disastrous clash with de Gaulle, chilled Germany’s feelings toward the EU’s executive body. Critics say that Germany’s persistent advocacy of institutional reform—greater parliamentary power and more QMV—is to be expected from a country with the largest parliamentary delegation, the largest number of weighted votes, and the ability to strike bargains and leverage support in the EU’s decisionmaking councils and conciliation committees. A benign interpretation points to a familiarity with federalism as a major reason for Germany’s advocacy of EU institutional reform and fear of the nationalist past as another driving force behind Germany’s espousal of a supranationalist future. Certainly, Chancellor Kohl is genuinely committed to deeper integration as a means of strengthening German democracy and prosperity, reassuring Germany’s neighbors, and enhancing European stability. Unification in 1990 presented the greatest challenge to Germany’s commitment to European

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integration and the other member states’ commitment to the new Germany. Germany passed the test, with Kohl steamrollering the Bundesbank’s opposition to EMU and also advocating political integration in order to lock united Germany firmly into a strong, democratic, and ultimately continent-wide EU. But some of Kohl’s EC partners equivocated: British prime minister Margaret Thatcher used language and imagery redolent of a bygone era, and Mitterrand worried aloud about the possible consequences for Europe of German unity. Well before the end of the 1991 intergovernmental conferences (IGCs), it was obvious that Kohl would win only weak EU political and institutional reforms in return for giving up the German mark. Ironically, in view of his disappointment with the Treaty on European Union (TEU), Kohl is unswerving in his support for EMU. Although the 1996–1997 IGC and the ensuing Amsterdam Treaty merely tinkered with institutional reform, Kohl stuck to the TEU’s flawed bargain and pressed ahead with plans to launch a single currency in 1999. Already acclaimed as the chancellor of German unification, doubtless Kohl wants to be seen also as the chancellor of European unification. But EMU is dividing Europe instead of unifying it and is devoid of the comprehensive institutional reforms that Kohl originally envisioned as an essential part of the post–Cold War compact for a new Europe. Just as EMU is dividing Europe, it is also engendering a popular backlash in Germany against Kohl and the EU. Germans are profoundly uneasy about giving up the mark—a symbol of German democracy and stability (currency reform in 1948 paved the way for the founding of the Federal Republic in 1949) and a testament to sound economic management—for an unattractive and potentially weak euro. Whatever may be said about Kohl, it is highly doubtful that ordinary Germans would be more inclined to abandon the mark if the EU were willing to deepen politically. For most Germans, EMU is the latest and most egregious example of EU intrusion into their everyday lives and the blurring of the distinction between domestic and Europolitics. The EC’s increasing reach first became apparent in 1986 with the signing of the Single European Act (SEA), which posed a particular problem for Germany, the EU’s only large federal state. The SEA involved an extension of EC competence not only at

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the expense of national governments’ authority but also at the expense of Germany’s regional governments’ authority. The threatened erosion of Germany’s cherished federalism as a result of deeper integration seemingly continued with the TEU and led to a series of amendments to the German constitution in late 1992, including a new clause (Article 23) that calls for the federal government to involve the Bundesrat (the upper house of parliament, representing regional governments) in EU decisionmaking “in so far as it would have to be involved in a corresponding internal measure or in so far as the Länder [states] would be internally responsible.” In a landmark ruling in October 1993, which removed the last obstacle to the entry into force of the TEU, the German constitutional court protected German federalism from further Euro-encroachment. Although the judges declared that the treaty was compatible with Article 38 of the Basic Law, which stipulates that the members of the Bundestag (the lower house of parliament) and the Bundesrat together represent all of the German people, they nevertheless asserted the ultimate sovereignty in the putative EU of the democratic parliaments of the individual member states. Thus the court affirmed that the EU would not be a state based on a “European people, but that the various peoples of the member states would exercise the EU’s sovereign rights through their national parliaments.” European integration has had a marked effect on German politics and economics, just as Germany’s role in the EU has had a marked effect on the integration process. With the imminent launch of EMU, both Germany and the EU are at a crossroads. Apart from the economic implications of EMU, the political stakes are extremely high. Will Germans acquiesce in the replacement of the mark by the euro? Will the SPD adopt a populist position and champion either a deferral or an abandonment of the single currency during the 1998 election campaign? Or will EMU work and establish Kohl as the chancellor of German and European unification? The answers to these questions will be decisive for Germany’s and for Europe’s future. See also ADENAUER, KONRAD; FRANCE, GERMANY AND POST–COLD WAR EUROPE; KOHL, HELMUT; APPENDIX 2; APPENDIX 3. Bibliography

Heurlin, Bertel. 1996. Germany in Europe in the Nineties. New York: St. Martin’s. Lankowski, Carl, ed. 1993. Germany and the European Community: Beyond Hegemony and Containment. New York: St. Martin’s. Schweitzer, Carl-Christoph, and Detlev Karsten. 1993. The Federal Republic of Germany and EC Membership Evaluated. New York: St. Martin’s Press. Tompson, Keneth W. 1996. Europe and Germany: Unity and Diversity. Lanham, MD: University Press of America. Von der Groeben, Hans. 1995. Deutschland und Europa in einem unruhigen Jahrhundert. Baden-Baden: Nomos Verlagsgessellschaft. Zelikow, Philip. 1996. Germany Unified and Europe Transformed: A Study in Statecraft. Cambridge: Harvard University Press.

—Desmond Dinan

Giscard d’Estaing, Valéry (1926– )

As president of France between 1974 and 1981, Valéry Giscard d’Estaing helped steer the EC through a period of economic stagnation and political malaise that sapped the movement for European integration. Giscard became president of the Fifth Republic at approximately the same time that Helmut Schmidt became chancellor of Germany; for the next seven years both leaders were close friends and collaborators, virtually running the EC between them. Going well beyond the framework of the 1963 Elysée Treaty, Giscard and Schmidt got together often for dinner, spoke at least weekly on the telephone, and caucused regularly on the fringes of multilateral meetings. Giscard’s greatest contribution to the EC was the European Council, which he inaugurated at a meeting of heads of state and government in Paris in December 1974. The idea was typically Giscardian: regular meetings of member-state leaders, without an army of advisers, to give the EC overall direction and resolve outstanding problems. Giscard also organized the annual summit meetings of the major industrialized countries (the G7) along the same exclusive lines. With his knowledge of economics (he had been finance minister in France for nearly ten years) and grasp of international affairs, Giscard was in his element in small, elite groups of politicians and statesmen. The European Council proved its worth at the end of the 1970s in relation to the Franco-German

initiative for a European Monetary System (EMS). Regular meetings of the EC’s leaders provided Schmidt and Giscard with an opportunity to promote their monetary proposal and a forum in which to approve the EMS at the highest possible decisionmaking level. The EMS was a classic example of the Franco-German alliance at work: without French backing, Schmidt’s initial idea for an EMS would not have succeeded; with French backing, success was assured. Following a lastminute delay in France caused by concern about the possible impact of the EMS on the Common Agricultural Policy (CAP), the EMS began operating on March 13, 1979. As president of France, Giscard seemingly grew aloof, remote, and patronizing. François Mitterrand’s victory in the presidential election of 1981 brought Giscard crashing back to earth. Thereafter Giscard returned to the French parliament and also served a term in the European Parliament (EP), where he led the liberal group. While in the EP Giscard become an advocate of greater EC competence and supranationalism, causes he had opposed as president of France. See also FRANCE. Felipe González, Spain’s young and charismatic prime minister from 1982 until 1996, was an unequivocal advocate of European integration. Under González, Spain shook off the legacy of forty years of Francoism (backward industry, soaring unemployment, and rampant inflation) and experienced the highest growth rate of GDP in Europe in the late 1980s. After taking Spain into the EC in 1986, González distinguished himself as an ardent integrationist, wholeheartedly accepting the single market program and consistently supporting moves toward economic and political union. When González’s Socialist Party (PSOE) came to power in 1982, accession negotiations between Spain and the EC, which had begun in 1979, were at a standstill. Over the next few years González introduced a series of measures designed to restructure Spanish industry and otherwise modernize Spain’s sagging economy. Although internal EC problems continued to plague Spain’s already protracted negotiations, in the first two years of his stewardship González was instrumental in ensuring that Spain would join the EC without further delay (his close relationship with

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François Mitterrand was perhaps Gonzalez’s greatest asset in this regard). At the same time, González refuted his earlier opposition to NATO, which Spain had joined in 1982 under the centrist government of Adolfo Suarez, and mobilized public opinion in favor of continued NATO membership in the 1986 referendum. Along with a favorable global economic environment, EC membership—notably the inward investment and structural funds that came with it—provided the boost that Spain’s economy needed. Politically, EC membership represented a return for Spain to international respectability. By the late 1980s, as Spain’s leading advocate of modernization and closer ties to the rest of Europe, González came to personify the country’s youthful democracy, prosperity, and hope for the future. González supported moves in the late 1980s and early 1990s toward deeper integration and insisted that any treaty revision include provisions for a “cohesion fund” to help narrow the disparities between the EC’s stronger and weaker economies. In a feat of diplomatic deftness and political will, González got his way: the Treaty on European Union (TEU) called for the establishment of a cohesion fund by the end of 1993. Gonzalez was also instrumental in including the concept of EU citizenship in the new treaty. Another provision of the TEU, however, proved tricky for González. As part of the agreement to implement Economic and Monetary Union (EMU) by the end of the decade, the treaty included a number of convergence criteria—economic requirements that any country wishing to participate in the single currency would have to meet. To achieve these goals, Spain faced years of budget cutbacks. Not all sectors of Spanish society shared González’s Eurofever, not least trade unions intent on maintaining Spain’s liberal unemployment benefits. Nor was the PSOE in complete accord with its leader’s seeming tilt to the right. At the same time, a deep recession throughout Europe triggered high unemployment in Spain. By the mid-1990s, despite the conspicuous lack of a formidable opposition, González’s political position had weakened. It was domestic political developments, however, that proved Gonzalez’s undoing and overshadowed Spain’s presidency of the Council of Ministers in the latter part of 1995. Amid accusations of corruption and the operation of a secret antiterrorist murder

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squad, González lost the March 1996 general election. See also SPAIN.

Greece became the tenth member of the EC in 1981, having been an associate member since 1962. Greece’s road to EC membership was blocked in 1967 when a military junta overthrew the country’s democratic government. Only when democracy was reestablished in 1974 did Greece again receive economic and technical assistance and become a contender for EC accession (Kazakos and Ioakimidis, 1994). Indeed, the postdictatorship era in Greece was marked by the country’s preoccupation with EC membership. The distinguished conservative politician, Konstantinos Karamanlis, was perhaps most responsible for Greece’s successful effort to join, thanks largely to his diplomatic skills and close relationship with French president Valéry Giscard d’Estaing. The Commission had given a negative opinion on Greece’s application, arguing that economic conditions in Greece were not yet right for full membership. However, for political reasons (notably to discourage any attempts by the military to reestablish an authoritarian regime) the Council of Ministers disregarded the Commission’s opinion and approved the Greek application. The primacy of political considerations set a precedent for subsequent Iberian and Central and Eastern European accessions. Greece’s relationship with the EC and EU has gone through four major phases: (1) the preparatory and enthusiastic stage (1974–1981) under the conservative New Democracy party’s leadership, which culminated in an accession treaty; (2) a period of strained relations (1981–1989) during the socialist party’s rule, owing mainly to the belligerent approach of Prime Minister Andreas Papandreou; (3) an interregnum (1990–1993) under the New Democracy government of the Euroenthusiastic Konstantinos Mitsotakis, when Greece was closest to the EC; and (4) a final stage (post-1993) when PASOK, the socialist party, came back to power. Although PASOK had considerably changed its attitude toward European integration, nevertheless Greece-EU relations were strained during this fourth stage for two major reasons: first, Papandreou’s past behavior did not inspire confidence among his European counterparts; sec-

Greece

ond, Greece found itself embroiled in the Balkan conflicts, which created psychological and political complexes. Yet it is noteworthy that Papandreou’s departure from office in February 1996 brought a new leadership to the country that is younger, less ideological, less nationalistic, and— most important—more pro-European. The new prime minister, Kostas Simitis, and the development minister, Vaso Papandreou, are well known in EU circles and have promised to bring the country closer to Brussels. Assessment Greece’s membership in the EC should be assessed from three important perspectives: economic factors, foreign and security policy considerations, and political and cultural issues. The economy. Greece’s hopes that the economy would benefit immediately from greater market access as a result of EC membership proved unrealistic. Far from contributing to economic development, market opening played a negative role. Well-established industries in northern European countries did not permit the less-competitive Greek industries to adapt successfully. This is reflected in the relative economic position of Greece vis-à-vis the other member states, which is believed to have worsened since Greek accession. In 1980 the Greek GDP per capita was 58 percent of the EC’s average; by 1991 it had fallen to 52 percent and was still dropping (Kazakos and Ioakimidis, 1994). Although this is one way to estimate the economic impact of membership, there are other important considerations. Greece is one of the member states that has received generous financial transfers from the EU’s structural and cohesion funds to launch infrastructural projects that are essential for the country’s future economic development. Greece is currently engaged in a number of large-scale projects that will fundamentally alter the country’s economic prospects by the year 2000, including construction of a new international airport in Athens (the largest European project underway), the Egnatia Highway to connect northeastern Greece to the Ionian port of Igoumenita in the west, and the Athens Metro. EU funding covers most of the cost, with Greece providing the balance. Because Greece receives large amounts of money for development projects, critics of Greek membership point out how little Greece contributes to the EU economy. Strictly speaking this is accurate, but EU member states benefit from

each other not only through visible and measurable transactions but also by means of hidden trade and nonconspicuous money transfers. For instance, most of the above-mentioned projects are being carried out by contractors from other EU member states (mainly from countries that are net contributors to the EU budget). Thus large parts of the net contributors’ funds are repatriated, even more so because the Greek government contributes also to the funding of these projects. Furthermore, Greece and the EU stand to benefit economically from recent changes in the Balkans and in Central and Eastern Europe generally. As mentioned earlier, Greek companies have not been able to take advantage of a highly competitive EU market. In the emerging Balkan markets, however, Greek companies have taken a leading role compared to those of other EU countries. Three factors have contributed to the success of Greek economic involvement in the Balkans: first, Greece has enjoyed some influence indirectly through the EU’s programs (such as Pologne et Hongrie: Actions pour la Reconversion Economique—PHARE) for economic assistance to the region; second, Greece is the only EU member state that borders the Balkan states; and third, there is a strong cultural affinity between Greek and other Balkan businessmen. As one observer remarked, the Greeks are not deterred by the shaky legal framework, bureaucratic foot dragging, and delays in obtaining licenses and permits that are still an inevitable part of doing business in the Balkans. Foreign policy and security. Greece’s geographical position—separate from the other member states and at the end of the Balkan Peninsula—inevitably affects Greece’s role in the EU. For instance, Greece has frequently taken a stand on foreign policy issues markedly different from one that would otherwise reflect a “common” EU foreign policy position. During most of its EU membership, Greece was governed by PASOK under the leadership of Andreas Papandreou. Papandreou’s independent and ideological positions often suggested that the country’s interests were best served by having close relations with the Soviet bloc rather than with Western Europe. Until the end of the Cold War the country’s borders were relatively secure and protected from possible Soviet aggression by NATO. At the same time, Greece’s territorial integrity was threatened by neighboring Turkey, a NATO member and an EU associate member. The disintegration of the

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Communist bloc, the five-year conflict in Bosnia, and the irredentist tendencies of the newly formed republics in the Balkans resulted in new insecurities. Moreover, to a large extent Greeks considered themselves abandoned by the EU when these new threats arose. In particular, there were two cases in which Greece felt that it was not supported by the EU: the first had to do with the name, constitution, and flag of the Former Yugoslav Republic of Macedonia; the second was the dispute between Greece and Turkey over an uninhabited island in the Aegean, about which U.S. diplomat Richard Holbrook, architect of the Dayton Peace Accords, accused the EU of “literally sleeping through the night” as Greece and Turkey went to the brink of war (quoted in The Economist, May 18–24, 1996, p. 50). Although Greece is generally seen as deviating from the EU foreign policy norm, a close analysis of the country’s foreign policy since the early 1980s suggests that Greece helped rather than hindered the development of a genuine EU foreign and security policy. Even during Papandreou’s reign, Greek recalcitrance may have proved beneficial for the EU. For example, in the early 1980s, Papandreou’s harmonious political approach to the Soviet Union helped ease the strain of EC-USSR relations. Similarly, in the early 1990s, because Greece was the only EU member state to maintain good relations with Serbia, Greece helped build a bridge between Brussels and Belgrade. But perhaps the most significant contribution by Greece to the EU’s fledgling foreign and security policy is its insistence on greater solidarity and cooperation. Regardless of ideological orientation, Greece’s political leadership always sought an EU commitment to the protection of external borders. An example of this was Prime Minister Simitis’s support at the European Council in Florence in June 1996 for a future “clause of solidarity in the EU in case there is a threat for the external borders,” a move fully consistent with the spirit of the Treaty on European Union (TEU) (Macedonian Press Agency, June 23, 1996). Although Greece does not feel protected by the EU in terms of foreign policy and security, nevertheless it is fair to conclude that EU membership has enhanced Greece’s overall security: only in extraordinary circumstances would another country attack an EU member state. Political stability and culture. A quest for political stability was the foremost reason why

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Greece applied for EC membership. Developments since 1981 prove that this goal has been accomplished: Greek political parties have been modernized; elections have been free and fair; and the constitution has been revised to incorporate a number of provisions that are even more advanced than those in most democratic countries. Perhaps one of Greece’s most important contributions to the EU is in the area of integration culture. Given their long and distinguished history, Greeks see themselves as having the strongest ethnic and cultural identity in Europe. Surprisingly, such strongly held nationalistic and cultural attitudes do not necessarily conflict with the EU’s ideal of integration. Indeed, Greeks generally feel able to preserve their national independence and cultural heritage while participating fully in European integration. This would appear to contradict the theory that the more nationalistic an EU member state, the less likely it will be to support the development of a strong EU (Hoffmann, 1966). Measurements of member-state public opinion with regard to deeper European integration consistently show Greece near the top of the table. The Greek parliament has been even more positive about European integration. For instance, 286 of the 300 Greek parliamentarians voted in favor of ratifying the TEU (Koliopoulos, 1994).

Conclusion The relationship between Greece and the EU may not be what optimistic supporters of membership had initially expected. Clearly, a general economic convergence of Greece toward the level of the most advanced member states has not happened. Nevertheless, Greece hopes to meet the TEU criteria for participation in the final stage of Economic and Monetary Union. Inflation in Greece has fallen considerably, the national debt has dropped, and the Greek government seems determined to cut the budget. Without guidelines and pressure from the EU, such an economic turnaround would not have happened. There are a number of areas in which both the EU and Greece have benefited from Greek membership. Greece has become a stable democracy, has enhanced its position in world affairs, and has improved its national security and its bargaining powers vis-à-vis its neighbors. These are perhaps the main reasons why Greek public opinion is among the most supportive in Europe of deeper integration. Yet it would be wrong to assume that EU

membership benefits Greece without Greek membership’s benefiting the EU as well. Greece’s geographical and cultural characteristics provide two important links to Europe: one is the physical link with the countries of southeastern Europe and the Middle East; the other is the cultural link to the Orthodox world. Greeks can be said to possess two identities: one Eastern and the other Western (Pettifer, 1994). Because of Greek membership, the EU is perhaps able to understand the Balkans better. Finally, Greece has contributed to the EU the largest merchant fleet in the world (more than 50 percent of the EU’s merchant vessels belong to Greece). Apart from the fleet itself, Greece has contributed to the EU its “long-standing commercial and shipping links with the Arab countries and the Balkans. . . . [These] are a new Community asset, which the Greek Government described as ‘the dowry we bring with us as a new … member’” (Daltrop, 1989, p. 157). See also TABLE 6; APPENDIX 2; APPENDIX 3. Daltrop, Ann. 1989. Political Realities: Politics and the European Community. London: Longman. Hoffmann, Stanley. 1966. “Obstinate or Obsolete? The Fate of the Nation-State and the Case of Western Europe.” Daedalus 95 (Summer), pp. 892–908. Kazakos, Panos, and P. C. Ioakimidis. 1994. Greece and EC Membership Evaluated. New York: St. Martin Press. Koliopoulos, Kostas. 1994. “Greece and the Ratification of the Maastricht Treaty.” In Finn Laursen and Sophie Vanhoonacker, eds., The Ratification of the Maastricht Treaty. Maastricht: European Institute of Public Administration. Pettifer, James. 1994. The Greeks: The Land and People Since the War. Middlesex: Penguin.

Bibliography

—Christos Bourdouvalis

Green currencies were artificial exchange rates introduced at a time of fluctuating real exchange rates in the late 1960s in order to maintain uniform, EC-wide prices in the Common Agricultural Policy (CAP). Farmers received Monetary Compensatory Amounts (MCAs) to bridge the gap between green currencies and real exchange rates. Green currencies further complicated the already complex CAP, emphasizing its remoteness from economic reality. See also COMMON AGRICULTURAL POLICY.

Green Currencies

Gymnich Meeting

Greenland caused a minor sensation in January 1985 by leaving the EC. Greenland was a member not in its own right but by virtue of “belonging” to Denmark. Greenland won home rule in 1978, and a majority of Greenlanders voted in a referendum on February 23, 1982, to leave the EC. Denmark, still responsible for Greenland’s foreign relations, negotiated the necessary agreement with the Commission. See also TABLE 10.

Greenland

A green paper is a vehicle the Commission uses to communicate ideas and stimulate interinstitutional and public discussion about proposed policies and programs. The Commission issues about ten green papers annually.

Green Paper

See PARTY GROUPS IN THE EUROPEAN PARLIAMENT.

Greens

The group of coordinators is a group of memberstate officials that coordinated the work of special committees (such as the Trevi Group and the Adhoc Group on Immigration) dealing with issues that subsequently came under the third pillar (Cooperation on Justice and Home Affairs) of the Treaty on European Union (TEU). After implementation of the TEU, the group of coordinators became known as the K.4 Committee, named for the relevant provisions of the treaty. See also COMMITTEE OF PERMANENT REPRESENTATIVES; JUSTICE AND HOME AFFAIRS.

Group of Coordinators

The group of correspondents is a group of junior foreign ministry officials responsible for day-today liaison between member states on Common

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Foreign and Security Policy issues and before that on European Political Cooperation. See also COMMON FOREIGN AND SECURITY POLICY; EUROPEAN POLITICAL COOPERATION. The EU has a strained relationship with the Gulf Cooperation Council (GCC) and its members— Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman. Despite having signed a cooperation agreement in 1988 and having opened talks on a possible free trade agreement in 1990, fundamental political and economic differences separate both sides. Most recently, the GCC reacted angrily to a Commission initiative to introduce a carbon dioxide energy tax in the EU, fearing that it would greatly reduce demand for oil. Although the proposal has been shelved, the GCC remains wary of the EU’s environmental activism.

Gulf Cooperation Council (GCC)

The Gulf War broke out in January 1991, during the early months of the EC’s intergovernmental conferences (IGCs) that resulted in the Treaty on European Union (TEU). The war and the preceding crisis, which began after Iraq’s invasion of Kuwait in August 1990, demonstrated the member states’ inability to coordinate their security and defense policies and the EC’s fundamental weakness vis-à-vis the United States. Thus, the Gulf War seemed to strengthen the member states’ resolve in the IGC on political union to give the putative EU the means to project political and even military power. In the event, neither the Gulf War nor the Yugoslav war, which broke out in June 1991, proved adequate to overcome deep-rooted national reluctance to develop a common defense policy, and the TEU’s provisions for a Common Foreign and Security Policy were surprisingly weak.

Gulf War

H See CONGRESS OF EUROPE.

Hague Congress

Adopted by the Western European Union (WEU) council in The Hague in October 1987, the Platform on European Security Interests (the Hague Platform) was an important milestone in the WEU’s revitalization after more than thirty years of hibernation. The declaration set out general guidelines for the WEU’s role as the putative defense arm of the EC and as the basis of a strengthened European pillar of NATO. See also WESTERN EUROPEAN UNION.

Hague Platform

The Hague summit of the heads of state and government of the six EC member states on December 1 and 2, 1969, symbolized the EC’s emergence from the shadow of French president Charles de Gaulle, who had blocked enlargement and supranationalism until his resignation earlier that year. In view of Western concern about the possible impact of Germany’s new Ostpolitik (policy of rapprochement toward the Soviet bloc) and domestic pressure for a French initiative in the EC, President Georges Pompidou (de Gaulle’s successor) called a special summit (the European Council did not yet exist). The summit took place in The Hague, as the Netherlands then held the rotating EC presidency. This was the first meeting of EC leaders since the tenth anniversary celebration of the Treaty of Rome in 1967. With de Gaulle gone and enlargement once again at center stage, most member states anticipated a decisive breakthrough; in the end, the sum-

Hague Summit

mit spawned the “spirit of The Hague,” a feeling that the EC was once more on the move. See also POMPIDOU, GEORGES. Walter Hallstein was the first president of the Commission. Apart from an academic interest in European integration, Hallstein’s initial involvement in the European movement came in the early 1950s, when Chancellor Konrad Adenauer asked him to represent Germany in the negotiations to bring the Schuman Plan to fruition. Accordingly, Hallstein worked closely with Jean Monnet to bring about the European Coal and Steel Community. In the mid-1950s Hallstein served as state secretary in the German Foreign Office before taking up his appointment as president of the Commission in 1958. From the beginning of his presidency, Hallstein used every opportunity to espouse European union along federal lines and sought to turn the Commission into an embryonic government of a supranational EC. This put Hallstein squarely at odds with French president Charles de Gaulle, who bitterly opposed any extension of the Commission’s power. The showdown came in early 1965, when Hallstein introduced proposals to link completion of the financial arrangement of the Common Agricultural Policy (CAP), which was due to take place on July 1 that year, with greater budgetary power for the European Parliament (EP) and executive authority for the Commission. Robert Marjolin, a vice president of the Commission, warned Hallstein not to persist with his CAP and decisionmaking proposals. Although de Gaulle wanted a new financial regulation for the CAP, he wanted even more to thwart Hallstein’s ambition. In a conflict between both men, Marjolin knew, de Gaulle would easily come out the winner. But Hallstein pressed ahead and took the additional inflammatory step of first announcing the proposals, not to the Council of Ministers in Brussels, but to the EP in Strasbourg. De Gaulle made clear to his Community counterparts that France would reject the Commission’s proposals. The crucial Council meeting opened on June 28 and ended in deadlock two days later. De Gaulle promptly recalled his permanent representative to Paris and announced that French officials would no longer participate in the Council or its numerous committees, thus precipitating the so-called

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Empty Chair Crisis. The real issue at stake was not so much agricultural policy or budgetary authority, however, but the planned move to qualified majority voting in the Council on January 1, 1966, which de Gaulle saw as an unacceptable assault on national sovereignty and Hallstein saw as indispensable for the EC’s development. The crisis, which paralyzed the EC for seven months, was eventually resolved at a foreign ministers’ meeting in Luxembourg in January 1966. There, both sides approved a short declaration, the Luxembourg Compromise, which amounted to an agreement to disagree over majority voting. Although maintaining the principle of majority voting, the compromise acknowledged that “when very important issues are at stake, discussions must be continued until unanimous agreement is reached.” Ostensibly, the outcome was a draw or even a victory for the EC. The French presidential election result of December 1965 had apparently clipped de Gaulle’s wings, the other member states had not reneged on majority voting, and the Community soon resumed full operation. Yet in reality the crisis ended in victory for de Gaulle: not only was agricultural funding secure but also Hallstein’s supranational ambitions were severely curtailed. As a result, the crisis had profoundly undermined both Hallstein’s credibility and the Commission’s confidence. For well over a decade thereafter the Commission refrained from asserting itself. De Gaulle exacted his revenge on Hallstein when the member states discussed the composition of the new, merged Commission of the Communities, due to come into office in July 1967. Kurt Kiesinger, the German chancellor, wanted to renominate Hallstein as Commission president, but de Gaulle strenuously opposed the nomination. The issue quickly degenerated into an undignified squabble, with a possible compromise involving Hallstein’s appointment for one year only. In May 1967 Hallstein settled the matter by announcing his impending resignation. He stepped down on July 6, 1967. See also COMMISSION; DE GAULLE, CHARLES. Various interpretations of differentiated integration posit the existence of a “hard core” (or “core group”) of like-minded EU member states that would forge closer economic, political, and secu-

Hard Core

rity cooperation among themselves, regardless of the EU’s less-committed member states. Speculation on the membership of a possible hard core inevitably includes France, Germany, and the Benelux countries: essentially, the EC’s original member states, minus Italy. See also DIFFERENTIATED INTEGRATION. The hard ECU was a British proposal of June 1990 for the launch of a hardened European currency unit (ECU): an ECU that could not be devalued against its component currencies. The hard ECU would be another, parallel currency circulating alongside existing national currencies. A new institution, the European Monetary Fund, would issue the hard ECU. In time, the hard ECU could develop into a dominant common currency and even into a single currency, if the EC’s member states so decided. Some member states saw the proposal as a British effort to thwart the intergovernmental conference (IGC) on Economic and Monetary Union (EMU) that opened in December 1990. Others saw it as an indication that Britain took the prospect of EMU seriously. In the event, the proposal was too idiosyncratic and came too late to influence the single currency debate. Nevertheless, Britain continued to advocate the hard ECU until almost the end of the IGC, in December 1991. By the time Britain quietly dropped the hard ECU idea, its main concern was to stay in the fast track of a de facto two-speed EU while keeping open the option of not participating in a single currency. See also ECU; ECONOMIC AND MONETARY UNION: TOWARD A SINGLE CURRENCY.

Hard ECU

See EUROPEAN STANDARDS COMMITTEE; REGULATORY POLICY; SINGLE MARKET PROGRAM; STANDARDS AND CONFORMITY ASSESSMENT.

Harmonization

For obvious reasons, member states have been reluctant to cede responsibility for health policy to the EU. Yet even the most reluctant member states concede that the EU has an important role to play in promoting public health, notably by coordinating and enhancing national policies and programs and by liaising with nonmember states and rele-

Health Policy

vant organizations. Accordingly, the Treaty on European Union included a new clause (Article 129) on public health, giving the Council of Ministers the authority to adopt (under the co-decision procedure) “incentive measures” for health protection but not including the harmonization of the member states’ laws and regulations. The Commission set out the broad lines for action in the field of public health in a 1993 framework document, which provided for programs in eight priority areas, such as cancer, AIDS, health promotion, and drug dependence. Most of these programs have since been adopted. Two years later the EU adopted its first report, prepared jointly with the World Health Organization, on the state of health in the EU (the report painted a reasonably good picture but pointed out striking disparities and important health problems that need to be resolved). Given the limited scope of Article 129, and the general emphasis on subsidiarity (member states’ rights), inevitably health policy made little progress at the EU level. Indeed, it seemed more significant as a political battleground for the contentious co-decision procedure than as a substantive policy area. Nevertheless, the Amsterdam Treaty amended Article 129 to give the EU greater power in the field of public health policy. As prime minister of Britain, Edward Heath brought his country into the EC in 1973. He first became involved with the EC in 1960, when Harold Macmillan, then Britain’s prime minister, instructed Heath to conduct Britain’s first entry negotiations in Brussels. French president Charles de Gaulle abruptly vetoed those negotiations on January 14, 1963. Although bitterly disappointed, Heath persevered in his determination to bring Britain into the EC. Heath’s next opportunity to do so came in 1970 when he became prime minister after his Conservative Party’s election victory. Harold Wilson, Heath’s predecessor as prime minister, had submitted Britain’s second application for EC membership in 1967, but de Gaulle had again exercised a veto. De Gaulle’s resignation in 1969 and replacement by Georges Pompidou augured well for a reactivation of Britain’s application, and Heath’s election one year later gave added impetus to Britain’s effort to join. Yet few of Heath’s fellow Conservative Party members shared the

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prime minister’s ardor for integration. Most saw membership largely in negative terms—as Britain’s only feasible option. The issue also split the opposition Labour Party, whose leader, Harold Wilson, now equivocated. As the entry negotiations unfolded, Wilson moved from ambivalence toward open opposition of British accession, bringing the bulk of Labour with him. Following the political breakthrough at the Hague summit on December 1 and 2, 1969, Britain’s entry negotiations began on June 30, 1970, in Luxembourg and ended almost a year later in Brussels. Familiar issues from Britain’s previous applications resurfaced in the new discussions. However, the talks were far less contentious and protracted than in the early 1960s. For one thing, Heath was so eager for membership that he quickly settled any differences; for another, Commonwealth and European Free Trade Association concerns about British membership in the EC had abated in the intervening decade. The impact on the Commonwealth of Britain’s accession to the EC now focused exclusively on specific problems like imports of Caribbean sugar and New Zealand dairy products. Nevertheless, the negotiations occasionally stalled, particularly on the controversial questions of Britain’s budgetary contribution during the transition phase and the related issue of the dubious benefit to Britain of the Common Agricultural Policy. A meeting between Heath and Pompidou in Paris, on May 20 and 21, 1971, helped resolve the outstanding problems and set the tone for Britain’s first year in the EC. So harmonious was the HeathPompidou relationship, in marked contrast to the relationship between German chancellor Willy Brandt and Pompidou, that to some it appeared that Britain was set to replace Germany as France’s favored EC partner. In the event, the leadership of all three countries changed at approximately the same time in early 1974, and the old pattern of FrancoGerman leadership soon reasserted itself. Valéry Giscard d’Estaing succeeded Pompidou, Helmut Schmidt replaced Brandt, and Heath lost the February 1974 general election to Harold Wilson. Soon afterward, Heath lost the Conservative Party’s leadership to Margaret Thatcher. The political and personal differences between them were striking, especially on European issues. Heath remained avidly committed to the Community, whereas Thatcher strongly opposed deeper political integration. Heath suffered through Thatcher’s

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eleven years in office, repeatedly attacking her negativism and obstructionism toward the EC. His numerous House of Commons speeches denouncing Thatcher’s EC policy—and that of her successor, John Major—were especially prescient and enlightening. See also UNITED KINGDOM. See HELSINKI FINAL ACT.

Helsinki Accords

The Final Act of the Conference on Security and Cooperation in Europe (CSCE) was signed in Helsinki in August 1975 by the heads of state and government of the thirty-five participating countries (all European countries except Albania, plus the United States and Canada). The Helsinki Final Act (also called the Helsinki Accords) was not an international treaty but a statement of political intent and commitment to bring about peaceful change, to minimize the dangers of miscalculation, and to manage crises and controversies in East-West relations. Grouped in three “baskets,” or categories of commitments, the accords covered political, economic, cultural, humanitarian, information, and military confidence-building measures. The conference that culminated in the Helsinki Accords was one of the first occasions on which the EC’s member states coordinated their foreign policies through the mechanism of European Political Cooperation. See also EUROPEAN POLITICAL COOPERATION.

Helsinki Final Act

See CHARTER OF PARIS FOR A NEW EUROPE.

Helsinki II

This phrase refers to a classification of EC acts that range from advisory to legislative, with a view to establishing an appropriate hierarchy for them. The Treaty on European Union contained a Declaration on the Hierarchy of Community Acts, and the EU’s member states agreed to attempt at the 1996–1997 intergovernmental conference to draw a clear distinction between genuinely legislative measures, which need to be decided upon by the Council of Ministers and (in some cases)

Hierarchy of Norms

the European Parliament, and other rule-making acts that may be adopted by the Commission (as the EU’s executive). In the event, the Amsterdam Treaty did not address the issue. The High Authority of the European Coal and Steel Community (ECSC) was the supranational institution responsible for formulating a common market in coal and steel and for such related issues as pricing, wages, investment, and competition. Jean Monnet, author of the Schuman Plan that gave rise to the ECSC, became the High Authority’s first president in 1952 (he resigned in 1955). In 1965 the member states signed a treaty merging the executive institutions of the three Communities, thereby establishing a single Commission and a single Council of Ministers. When the merger treaty came into force on July 1, 1967, the High Authority ceased to exist. See also COMMISSION; MONNET, JEAN.

High Authority

High Level Group of Experts on the Common Foreign and Security Policy

In 1994 Hans van den Broek, the commissioner for external political relations, convened a group of current and former senior officials of national governments and EU institutions to advise on foreign and security policy in advance of the 1996–1997 intergovernmental conference. In December 1994 the High Level Group of Experts on the Common Foreign and Security Policy issued a report, “European Security Policy Towards 2000: Ways and Means to Establish Genuine Credibility.” The report dealt with a range of issues and made a number of recommendations, including the appointment of a senior politician to direct and personify the EU’s foreign and security policy. See also COMMON FOREIGN AND SECURITY POLICY. In an effort to improve coordination between the EU’s development policy and member-state aid programs, in 1992 the Commission produced the Horizon 2000 report, which proposed strategies for cooperation and collaboration until the year 2000. See also DEVELOPMENT POLICY.

Horizon 2000

Human Rights

Protection of fundamental human rights has been a central feature of modern constitutions as well as much of the judicial review activity of supreme courts in Western countries in the postwar era. Concepts such as individual dignity and privacy as well as more classical notions of liberty and equality before the law have been the standard repositories of constitutional interpretation by courts exercising judicial review of governmental legislation and administrative action. Both the concept and practice of judicial review have penetrated, albeit in a limited way, even legal cultures such as Britain and France that for long have resisted. Indeed, judicial review in general and the protection of individual rights in particular are widely considered as a conditio sine qua non of constitutional democracy and the rule of law. Yet the treaties establishing the European Community—the constitution of the EC—contain neither a bill of rights nor any reference at all to the need for, or the means of, protecting fundamental human rights against encroachment by EC (now EU) public authorities. The absence of a reference to human rights in the treaties is not unique. Many regulatory treaties do not contain human rights protection clauses. Should a state in pursuance of its international treaty obligation seek to violate the rights of the individual or should an international organization seek to do the same thing, the individual would, it could be thought, receive his or her protection from national courts applying national constitutions and from transnational bodies specifically set up for the protection of human rights. But the EC developed in a way that rendered the absence of human rights protection problematic. Starting in the early 1960s, the European Court of Justice (ECJ) put in place a constitutional reading of the treaties that gave many of their provisions “direct effect,” meaning that they were to be considered part of the law of the land. What is more, these directly effective provisions were to be the “supreme” law of the land—a higher law overriding conflicting national provisions. Accordingly, it became legally and politically imperative that a way be found to vindicate fundamental human rights at the Community level. How could one assert the direct effect and supremacy of European law—vesting huge constitutional power in the political organs of the Community—without postulating embedded legal and

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judicial guarantees on the exercise of such power? After all, the effect of direct effect and supremacy would be to efface the possibility of national legislative or judicial control of Community law. This imperative was all the more urgent given the notorious democratic deficiencies of European governance, in some respects more acute in the 1960s than in the 1980s and 1990s. How could one expect the constitutional and other high courts of the member states—especially of those member states with national constitutional orders and judicial review, such as, at that time, Germany and Italy—to accept the direct effect and supremacy of Community norms without an assurance that human rights would be protected within the Community legal order and, critically, that individuals would not lose any of the protections afforded under national constitutions? Protecting human rights became a joined legal and political imperative. Among the human rights narratives in the EU two themes seem to be of utmost importance. The first is structural, namely the ways in which the constitutional gap came to be fully or partially filled. The second is, for want of a better term, spiritual, namely the way in which the concept of human rights enmeshes (or otherwise) with the specificity of European integration as distinct from normal constitutional orders. In the absence of a written bill of rights in the treaties and the EC’s apparent freedom to disregard individual rights in Community legislation and administrative action, the ECJ, in an exercise of bold judicial interpretation and a reversal of an earlier case law, created an unwritten higher law of fundamental human rights. Culled from the constitutional traditions of the member states and international agreements such as the European Convention for the Protection of Human Rights and Fundamental Freedoms, this higher law provided a yardstick against which legislative and administrative acts of the Community organs binding on or affecting individual citizens could be measured in the normal course of judicial review provided by the treaty. In recent years the court has extended the purview of this judicial power to certain limited classes of member-state acts, principally in cases where member-state authorities act as the executive arm of the Community. The content of this “unwritten bill of rights” is rather traditional and represents some synthesis of the constitutional traditions of the member states. The court has also stated that EC

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measures that violate the relevant substantive provisions of the European Convention for the Protection of Human Rights and Fundamental Freedoms are not acceptable in the Community. Attempts to codify such practices into a written bill of rights entrenched in the treaties, such as the April 1989 European Parliament (EP) Declaration of Human Rights, have not found favor in the various intergovernmental conferences (IGCs) convened over the years to modify the treaties. Nonetheless, the content of the parliamentary declaration represents a good image of the actual content of rights protected by the court. Likewise, several initiatives to push for the adhesion of the EC to the European Convention for the Protection of Human Rights and Fundamental Freedoms—notably a Commission initiative in 1978—have been rebuffed by both the member states and the ECJ. Attempts to extend the canopy of protection to the EU as a whole were unsuccessful at Maastricht. Although the Treaty on European Union contains a general human rights clause, activities outside the first pillar (EC) are excluded from judicial review, rendering the commitment more hortatory than real. The EC’s and EU’s human rights activity is not confined to the judicial process. Protection of human rights is one of the objectives of the second and third pillars (the Common Foreign and Security Policy and Cooperation on Justice and Home Affairs) as well as a dimension of the development and cooperation policy of the Community (Article 130u). Even before, and without a clear mandate, there was a plethora of nonjudicial activity. The principal expressions of this have been numerous resolutions and questions in the EP on an infinite variety of human rights issues, resolutions and “statements” of the European Council in the framework of European Political Cooperation and the Common Foreign and Security Policy, and discussions in other more generic contexts. Respect for human rights has become a frequent feature in legal instruments regulating relations of the Community with third countries, and numerous items of expenditure would come under this rubric, notably the laudable, if shady, transfers of funds to the European Rights Foundation, the activities of which most certainly extend well beyond the competences of the Community and the EU. But it is the legal arena that best explicates the problematics of human rights and integration. The central role played by the ECJ has not been

without controversy. Although the court arrogated a power nowhere mentioned in the treaties, the general trend has been supportive of the court. Indeed, it is now widely accepted that the court did have sound legal grounds on which to base its jurisprudence. It is also a widely shared view that the court acted not only legally but also wisely in filling an embarrassing lacuna in the treaty and in giving the individual an additional judicial guarantee. The notorious democratic deficit of the Community rendered the usual “counter majoritarian” critique of judicial review less convincing. In a 1977 joint declaration, the EC’s principal political institutions not only expressed their commitment to upholding fundamental human rights but also endorsed the new judicial architecture. One area of controversy has concerned the practice of the court in specific cases as distinct from the principle of protection. It has been charged of the court that its human rights jurisprudence is a rhetoric that masks a strategy of self-aggrandizement and political legitimation of the Community. This tantalizing critique suffers from its own self-aggrandizement and has not been satisfactorily demonstrated. Reality is far more banal. The record of the court displays a patchiness that is characteristic of all supreme courts operating in this treacherously politicized field. A second area of controversy, far more real, has been that of “standards.” In asserting its right to subject Community legislation to human rights–based judicial review, the ECJ denied member-state courts the right to apply memberstate constitutional standards to Community legislation. A Community-wide standard of protection administered by the ECJ was to replace—in relation to Community legislation—review by member-state courts based on member-state constitutional provisions. The constitutional courts of Italy and the Federal Republic of Germany refused to accept this “dictate”—although in its more recent decisions the German constitutional court has softened its earlier reserve. Exploring this on-going debate will shed light both on the dynamics of human rights protection and its deeper significance in the process of integration and disintegration. Indeed, few areas of European legal integration better illustrate the themes of uniformity and diversity and of European multiculturalism. The classical vision regards a commitment to fundamental human rights as a unifying universal ideal, one of the core values around

which the peoples of Europe may coalesce in a shared patrimony. But the opposite is true, too. Beyond a certain core, reflected in Europe by the European Convention for the Protection of Human Rights and Fundamental Freedoms, the specific definition of fundamental human rights often differs from polity to polity. These differences might reflect fundamental societal choices and form an important part in the different identities of polities and societies. They are often that part of social identity about which people care a great deal. Often people might consider that these values, as an expression of their specific identity, should be respected against any unifying encroachment. Given that the rights are considered fundamental, so would be the differences among them. When the court has to choose that variant of a right for Europe, it is making, implicitly, a choice about the cultural identity of Europe. The problem is most easily demonstrated when at issue is a Community measure—such as a restriction on the use of private property—that could be thought to violate national constitutional provisions in one member state but not in another. Direct effect and supremacy mean that the national legal orders must uphold the Community measure, potentially compromising the fundamental human right to private property. The potential conflict of values emerges, classically, in response to the question: which standard of protection should the ECJ adopt? One line, suggested in some cases, would adopt a “maximalist” approach, choosing the highest standard in the Community. There are several reasons for this maximalist approach, including an idealistic argument that the Community should always seek to adopt the highest standard of human rights available. Idealism would, in this instance, be complemented by expediency: how would you expect a national constitutional court to accept less? And yet, the maximalist approach does not work and cannot work and, for good reason, has been rejected by the court. The maximalist approach would be satisfactory neither from an individual member-state perspective nor from a Community or EU perspective. In some cases it is not achievable at all. The maximalist approach would leave the Community at the constitutional dictate of an individual member state. In many cases the choice of the highest standard would be impossible to achieve, as for example, when different member states hold conflicting maximal standards. This might be true in the field of abortion rights.

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The approach of the ECJ has been to enhance its jurisdictional autonomy and the integrity of the Community judicial process. In its jurisprudence, the implicit claim of the court has been that the Community legal order can do no better or worse than its national counterparts. It inevitably falls to the court itself to achieve that fundamental balance between competing values for the Community legal order. The court has to develop a constitutional ethos that should reflect the various member-state constitutions as well as the EU’s own founding treaties. It is a new polity, the constitutional ethos of which must give expression to a multiplicity of traditions. The implicit claim of the ECJ is that in this polity a balance will have to be struck that derives from the specificity of the Community. The process on this reading is not about high or low standards. It is a call to acknowledge the Community and the EU as a polity with its own separate identity and constitutional sensibilities that has to define its own fundamental balances—its own core values, even if these cannot be dissociated entirely from the context within which the Community is situated. The Community is its member states and their citizens, but the Community is, too, an autonomous identity. At the deepest level, the creation of an autonomous ethos of human rights protection reaches to the individual not only as an object of protection but also as a moral agent. The appeal of multiculturalism as an idea and movement is in its invitation to a pluralist, ever-richer understanding and acceptance of human potentialities within the polity. But often embedded in the multicultural political agenda is a dangerous contradiction. The call for a pluralist multicultural society in which the diversity of different groupings has to be acknowledged and celebrated is all too frequently, for obvious political reasons, associated with a stifling conformism within each group making up the multicultural polity (a conformism that favors one aspect of individual identity—race, ethnicity, gender, and so on—and that would have each individual define himself or herself in terms of that identity aspect). With numbing regularity the translation of the multidimensional vision of society is, in the arena of political praxis, achieved at the expense of a forced, one-dimensional vision of the individual within that society—multicultural society composed of monocultural individuals. The solution of the human rights issue by the Community should be read as a recognition of the

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cultural diversity that exists in the polity and that has to be respected when making European choices. This is a two-way process of legal production and legal consumption. Legal production is, indeed, conscious of the multicultural soil from which this production is nourished. This soil bears fruit in the shape of the European human rights norm (and the reconstructed multicultural societal value that it reflects) that, in the field of application of European law, can now be plucked by individuals in the member states. Legal consumption of the norm by individuals is the way in which individuals will be receiving and experiencing choices informed by a wider cultural context than the ones they are accustomed to. They may be educated in the practices and sensibilities of tolerance and intolerance each time they are confronted with a norm that is different from those they normally know. Recall, of course, that the differences can play out both to their advantage and disadvantage. Some will react favorably, with tolerance; others unfavorably, with intolerance. Some might celebrate the brave new world; others might yearn back to the comfort of the familiar. None can be unaware of the new context to which they belong. In this sense, then, we have a vision of a society with multicultural sensibilities that is not only reflective but also constitutive of individuals with multicultural sensibilities. Another element that is critical in the European human rights construct is that the European human rights apparatus does not replace the national ones (in the member states) or the transnational one (European Convention for the Protection of Human Rights and Fundamental Freedoms). It coexists alongside them in the sphere of application of Community law that overlaps only partially the national and transnational spheres. Implicit in this reading of the European situation is the recognition of the multiple identity of the individual. The individual has simultaneous belongingness (French, European, and so on), which means that the “I” is not “a Frenchman living in Europe” but an “I” that is French and European in the same way that someone may be simultaneously male and Buddhist and a saxophonist. Implicit in this reading also is an “I” that has a multiple identity defined by such diverse things as gender, religion, and personal history, each of

which brings with it not only cultural sensibilities but also its own claims for loyalty and corresponding, and oft-conflicting, sets of values. That there can be conflict between the sets of values is not simply banal—it is a necessary reflection of the complexes and conflicts that exist within each individual. From time to time, choices have to be made between the pull of conflicting values and loyalties. And often one such element will come to dominate the sense of personal identity. Whatever the choice, how much better that it is made as a result of the internal conflict and eventual, conscious or subconscious, deliberation. And whatever element turns out to dominate—nationality, or religion, or gender—it is much better that it be tempered by the conflict of competing claims and values. European human rights, on this reading, is multiculturalism internalized. See also CITIZENSHIP; EUROPEAN CONVENTION FOR THE PROTECTION OF HUMAN RIGHTS AND FUNDAMENTAL FREEDOMS. Cassese, Antonio, Andrew Clapham, and J.H.H. Weiler, eds. 1991. European Union: The Human Rights Challenge. 3 vols. Florence: European University Institute. Clapham, Andrew. 1991. Human Rights and the European Community. Vol. 1, A Critical Overview. Baden-Baden: Nomos. Schermers, Henry, and Denis Waelbroeck. 1992. Judicial Protection in the European Communities. 5th ed. Boston: Kluwer.

Bibliography

—J.H.H. Weiler

Hungary’s economic reforms predated the collapse of communism in 1989 and positioned the country for early accession to the EU. Trade flows between the EU and Hungary more than doubled between 1989 and 1997 (the EU share of Hungary’s total trade is now nearly 70 percent). Hungary’s Europe Agreement came into force on February 1, 1994, and Hungary applied for EU membership on March 31, 1994. Hungary is pursuing a vigorous preaccession strategy in order to be ready to participate in the single market and its flanking policies. In July 1997 the Commission presented a favorable opinion on Hungary’s application, and accession negotiations began in early 1998.

Hungary

I Iceland is a member of the European Free Trade Association and the European Economic Area, through which it is closely associated with the EU. Although EU accession is discussed in Icelandic political circles, widespread concern about the possible impact of the EU’s common fisheries policy on Iceland’s lucrative fisheries industry makes it unlikely that Iceland will apply for full membership. See also EUROPEAN ECONOMIC AREA; EUROPEAN FREE TRADE ASSOCIATION.

Iceland

See INTERGOVERNMENTAL CONFERENCE.

IGC

Immigration emerged as an explicit Europeanlevel policy area only in the Treaty on European Union (TEU). However, its precursor lies clearly in the intergovernmental Ad-hoc Group on Immigration, formed in 1986. This forum operated outside the scrutiny of the European Parliament (EP), Commission, and European Court of Justice (ECJ); its activities were predicated on the “threat” posed by asylum seekers, illegal immigrants, and international crime; its secrecy modeled on the so-called Trevi Group formed by the member states a decade earlier to deal with terrorism and other cross-border criminal activities. These initiatives at a European level are strikingly one sided: they emphasize control of immigrants and asylum seekers while offering little in the way

Immigration Policy

of immigrants’ rights or measures to combat racism or xenophobia (Geddes, 1995). Member states have drawn up two conventions on immigration policy: the Dublin convention of June 1990 and the External Frontiers convention. The Dublin convention was not ratified for a long time by the Irish Republic. (The European Council, meeting in Amsterdam on June 16 and 17, 1997, welcomed the completion of the ratification procedures that allowed the convention to enter into force by September 1, 1997.) The External Frontiers Convention, an elaborate set of rules for coordinating European visa and border policies for aliens, is deadlocked by a dispute between Spain and the UK over Gibraltar. Also in 1990, France, Germany, and the Benelux countries signed an implementing convention for the 1985 Schengen agreement, a sophisticated intergovernmental arrangement to remove internal frontiers and strengthen external ones, in line with the objectives of the Single European Act. Although other member states subsequently signed the treaty, Britain and Ireland secured an opt out from its provisions when the Amsterdam Treaty incorporated Schengen into the TEU and committed the continental EU member states to open their internal borders by 2004. The TEU negotiations resulted in a structure of “pillars” in order to preserve the intergovernmental nature of sensitive policy areas while incorporating these areas into the EU framework (Hix, 1995). The third pillar—Justice and Home Affairs (JHA)—includes asylum policy, crossing of external borders, and immigration policy (Article K.1[1] to [3]). Immigration policy is further categorized into conditions of entry and movement, conditions of residence and employment, and the combating of illegal entry, residence, and work. The Commission has the right of shared initiative in these areas, to which Article K.9— allowing the transfer of competence to the first pillar—applies. Visa policy, on the other hand, is located within the first pillar (i.e., the EEC treaty as amended by the TEU). Two regulations have been passed based on Article 100c (first pillar): regulation 1683/95 establishing a model visa and regulation 2317/95 on countries requiring visas. The latter, on which agreement curiously was reached at a JHA meeting, names 101 countries whose nationals require visas for entry to the EU (this compares with 129

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such countries identified by the Schengen group) and another 28 countries whose nationals may need visas to enter certain EU countries. Thus visa arrangements are far from harmonized. Article K.3 of the TEU enables the Council to adopt “joint positions,” “joint actions,” and “conventions.” Joint positions adopted by the Council do not produce any legal effects (O’Keeffe, 1995), apart from an obligation to defend common positions under Article K5. Joint actions may have legal effect, but this is so far unclear. Conventions are enacted under international law, unless specifically authorizing justiciability by the ECJ: this means that variable effects can occur, depending on the particular legal system of the member state (Baldwin-Edwards, 1991). So far, only a few joint actions concerning immigration have been taken under the third pillar, notably a decision on group travel by schoolchildren from third countries resident in a member state and a decision on airport transit arrangements reached on November 23, 1995, listing ten countries whose nationals require airport transit visas when traveling through the international zones of airports without holding entry or transit visas. Both these Council decisions arguably should have been located within the visa provisions of the first pillar. JHA meetings have led to a plethora of resolutions, recommendations, and conclusions, whose form and legal basis have been challenged by the EP. These instruments are an attempt to approximate national policies and thus cover the whole spectrum of immigration and residence controls. The resolutions cover, among other topics, family reunification (1993), admission for employment (1994), admission for self-employment (1994), admission for study (1994), minimum guarantees for asylum procedures (1995), burden sharing with regard to displaced persons (1995), and third country nationals with long-term residence (1996). The last is significant in that it indicates a recent shift away from purely control measures and toward consideration of harmonized rights of aliens in the EU. Largely, it incorporates features of the 1957 Council of Europe’s Convention on Establishment, which almost all EU member states implement anyway. The recommendations include those on expulsion (1992), which deals with over stayers, illegal immigrants, and refused asylum seekers; on

illegal employment and expulsion (1993), which deals with checks and subsequent expulsion of third country nationals; and on concerted action on expulsion (1995). A radical shift on immigration policy emerged in the run-up to the 1996–1997 intergovernmental conference (IGC) and accounted for a number of provisions in the Amsterdam Treaty. There had been much criticism of the secrecy, unaccountability, and general lack of effectiveness of the policy process in the third pillar. The preIGC Reflection Group of foreign ministers’ personal representatives considered that matters of immigration and asylum policy needed to be put fully under Community competence (ILPA, 1996) and identified three main reasons for the third pillar’s failure: unclear objectives and poor scheduling; lack of a normative legislative framework for citizens’ rights; and complex working structures that impede decisionmaking. At the JHA meeting on November 23, 1995, ministers agreed that they should publish acts relating to immigration, asylum, and third country nationals and that a monitoring procedure should be set up to examine the effectiveness of previous JHA instruments. The Commission, however, pushed much harder for reform. Two recent Commission proposals indicate the extent of this: a proposal for a directive on the right of third country nationals resident in an EU member state to travel in the EU and a communication on the possible application of Article K.9 to areas of immigration and asylum policy. The former seems logical, given that nonresident aliens allowed to enter the EU will have the right to travel freely throughout the EU. Yet this proposal has the problem of setting a powerful legal precedent for Commission activity in the sensitive immigration area (“Legislative Free Movement,” 1996). The discussion of the K.9 passerelle (gateway) article is interesting because it argues that the procedure for application of K.9 is too difficult: the “double lock” requires unanimity at Council level followed by adoption by all member states in accordance with their respective constitutional requirements (O’Keeffe, 1995). Thus the Commission advocated wholesale reform: nothing less than a transfer of Article K.1(1) to (6) from the third to the first pillar of the EU. In the event, as part of the “progressive establishment of an area of freedom, security, and justice,” the Amsterdam

Treaty incorporated immigration policy into the EC. One area in which the ECJ has played a significant role in immigration affairs, and effectively created a circumscribed Community policy, is that of “agreements” with third countries. These agreements—most notably association and cooperation agreements—give rise to certain rights of residence, employment, and social benefits. The most controversial so far have been the agreements with Turkey and Morocco. JHA ministers have resolved to insert readmission clauses into future agreements, whereby illegal aliens can be deported to those countries. It seems likely that these hitherto disparate areas of policy will be more connected in the future. Also EU citizenship, currently completely dependent upon acquisition by a third country national of a member state’s nationality, may in the future be linked with EU immigration and immigrant policy. For the moment, however, national sensibilities and sovereignty seem too important for extensive “Communitarization” of this area: it remains to be seen what conditions are necessary for radical change. See also CITIZENSHIP; JUSTICE AND HOME AFFAIRS. Baldwin-Edwards, Martin. 1991. “The Socio-political Rights of Migrants in the European Community.” In Graham Room, ed., Towards a European Welfare State? pp. 189–234. Bristol: SAUS. Geddes, Andrew. 1995. “Immigrant and Ethnic Minorities and the EU’s Democratic Deficit.” Journal of Common Market Studies 33, no. 2 (June), pp. 197–217. Hamilton, Kimberly A., ed. 1996. Migration and the New Europe. London: Frank Cass. Hix, Simon. 1995. The 1996 Intergovernmental Conference and the Future of the Third Pillar. Brussels: CCME. Immigration Law Practitioners’ Association of the UK (ILPA).1996. 1996: The Intergovernmental Conference on the Renegotiation of the European Union Treaties. London: ILPA. “Legislating Free Movement: An Over-Ambitious Commission Package?” (editorial). 1996. Common Market Law Review 33, pp. 1–5. O’Keeffe, David. 1995. “Recasting the Third Pillar.” Common Market Law Review 32, pp. 893–920.

Bibliography

—Martin Baldwin-Edwards

Implementation

271

The extent of the implementation of EU treaty commitments, laws, and policies has become a central political issue in the process of European integration since the beginning of the 1980s and the launch of the single market program. The debate about implementation within EU institutions and national governments, and among leading social and economic actors, is a measure of the increasing body of law with which they are expected to conform and of the claims on resources that these obligations to the EU make upon them all. Differences in practice on the ground have also led to some landmark judgments in the European Court of Justice (ECJ), several of which have gravely embarrassed national governments and made clear the extent of the erosion of national sovereignty. Concerns over implementation can be said to cover three broad areas: (1) transposition of EU legislation into national law, whether by primary or secondary legislation or changes in administrative practices; (2) application of EU law by relevant authorities; and (3) enforcement of EU law, including penalties for noncompliance. Responsibility for conforming with the legal order of the EU varies according to the legal instruments deployed by EU institutions. Parts of the treaty have direct effect (e.g., Article 119 requires equal pay for equal work), in which case it is the duty of all individuals to conform with EU law without further government intervention. Many of the most developed policies of the EU, however, have been put in place by means of directives that instruct the member states to deliver certain EU-wide agreed-upon policy objectives within a certain time limit, leaving to the discretion of the states the means by which the objectives may be achieved. The Commission has oversight of all implementation issues in the EU and has direct responsibility for day-to-day administration of some policy areas (e.g., agriculture, fisheries protection, trade, competition, and structural funds). The Commission has the right to take up specific cases of suspected nonimplementation of EU law with individuals, organizations, and governments and may use the EU’s legal machinery to secure redress. Many aspects of existing EU policy are overseen for implementation purposes by management, regulatory, or advisory committees, variably composed of representatives or officials from

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Implementation

all over the Union (a procedure known as comitology). Other implementation duties may be given to specialist agencies, such as the European Agency for the Evaluation of Medicinal Products in London, the European Environment Agency in Copenhagen, and the European Police Office in The Hague. National governments also have the prime responsibility for the effective implementation of directives, other policies delegated to them by the EU (e.g., collection of customs duties), and obligations arising from accession to the various treaties founding the EU. National courts, the ECJ, and its companion court, the Court of First Instance, all have duties to interpret and apply treaty principles, and EU legislation in particular cases, as part of the implementation process. The first stage of implementation is usually transposition of EU law into national law, where this is required, or into national, regional, or local administrative practice. The Commission scrutinizes carefully the steps taken by national governments to effect such transposition and, if dissatisfied, may issue formal “reasoned opinions” to governments before referring cases to the courts (Article 169). A few countries, particularly Italy, have become notorious for not transposing legislation within the time limits set by the EU. Many states also make errors in transposition that may be identified by the Commission or as a result of case law. The Commission is particularly wary of transposition by administrative circulars in member states, which may be altered at will, rather than by primary or secondary legislation. Three years after the planned completion of the single market on January 1, 1993, the Commission found that transposition of the relevant measures into national law was almost complete in Denmark and the Netherlands, but only 90 percent complete in Germany and Belgium. The application of treaty principles and legislation is most commonly, in the first instance, the responsibility of the member states, whose governments may themselves devolve this responsibility to regional or local governments, nationalized industries, or parastate agencies. There are great differences among the member states in the precise allocation of such roles between public bodies. The EU looks to the governments of the member states to ensure that European rules are applied correctly in their territory and can and does take national governments to the ECJ as a last resort: annually the Commission refers ap-

proximately eighty such cases to the Court. Within each member state, government agencies and privatized or public utilities and companies are expected to apply EU rules regardless of whether they are specifically enjoined to do so by national governments. European law is applied by the national courts where legal issues have already been decided under previous case law. Where there is doubt about the interpretation of European law in particular cases, the national courts may use the provisions of Article 177 of the Rome treaty to seek a preliminary ruling from the ECJ before making a definitive legal judgement. Approximately 250 such requests are made annually to the Luxembourg-based courts. Although the Commission oversees the application of EU law in the member states and across the EU generally, it does not normally have the means to check outside those areas of responsibility that are under its direct control. Exceptions to this are starting to emerge as a result of instances of fraud, which have been increasingly highlighted by the Court of Auditors in the 1990s. More usually, the Commission relies upon complaints and information received from outside agents (individuals, interest groups, press reports, and national governments) before mounting an investigation of possible noncompliance with EU rules. In addition, in many policy areas national governments are required by EU law to submit periodic reports to the Commission about their experience in applying particular legislation, but the quality of such reports is variable and the information is often very late in arriving. The enforcement of EU rules is thus the shared responsibility of EU, national, regional, and local governmental institutions: the precise configuration varying according to each state’s law and custom. The enforcing agents (such as the police, customs officials, immigration officers, and environmental, transport, and labor inspectors) usually have a variety of functions to exercise, only some of which derive from EU legislation. The capacity of such agencies to enforce EU rules depends upon the availability of resources provided by national, local, or regional authorities and upon the policy priorities decided within each agency or by other policymakers in the member states. Penalties for noncompliance are set by the member states in accordance with national norms and traditions, except for policies directly adminis-

tered by the Commission. The Commission may impose fines for breaches of EU competition policy amounting to up to 10 percent of the turnover of the offending company. The ECJ is increasingly seeking penalties that are proportionate, dissuasive, and appropriate for specific breaches of EU law. The Council of Ministers is becoming more aware of the need for greater harmonization of penalties and sanctions on the grounds of fairness and the removal of cross-border distortions. Article 171 of the Treaty on European Union also permits the ECJ, on the recommendation of the Commission, to fine member states for nonimplementation of EU law. Spain and Italy were fined heavily in 1994 for nonimplementation of the milk quota regime. Individuals, following the Francovich judgment of 1991, may also be able successfully to claim damages from governments in the member states that do not implement EU directives. Variable implementation of EU rules can have a marked impact on the efficacy of agreed-upon policies and a significant distorting effect on the single market in practice. This has occurred in areas of regulatory policy such as environmental standards and workplace health and safety measures, in which significant cost savings as a result of noncompliance can give competitive advantages to firms based in noncomplying member states. This variability of application and enforcement of EU rules has led to pressure to set up specialist agencies monitoring the practical impacts of EU policies (such as the European Environment Agency) and to the increasingly detailed nature of Union directives, in an effort to minimize significant national variations in the implementation of EU laws. Among the least well implemented EU laws have been the Wild Birds directive (1979), several water quality directives, the Environmental Impact Assessment directive (1985), public procurement directives, rules governing the creation of new national technical standards, and regulations limiting the working hours of commercial truck drivers. The Commission started 1,138 infringement proceedings in 1996 concerning possible cases of noncompliance with EU rules. The reasons for poor implementation of treaty and legal requirements are manifold. Part of the problem is the quality of legislation itself, which sometimes is not thought through well enough or is poorly translated or which may be illadapted to national legal traditions. Member states

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may lack the technical or administrative capacity to apply EU rules, or they may have real problems securing adequate financial resources, parliamentary approval, or the support of public opinion for the measures. Inadequate consultation with interested parties or with the relevant enforcement agencies before adoption of EU legislation, in particular in federal states, often causes subsequent problems and delays in implementation. Difficulties may arise when an individual or company in one member state seeks to assert rights under EU law in another member state. A recent alternative to starting cross-border legal action is to seek redress through “administrative cooperation” mechanisms using a network of contacts in relevant government departments in each state. Implementation problems highlighted by political institutions and socioeconomic interests have become an integral part of policy evaluation by the EU authorities. The separation of the rulemaking parts of government from those that are responsible for and pay for the administrative costs of rule implementation has become a major issue for several states, especially the poorer ones. Since 1992, the cohesion fund has been able to contribute to the costs of implementing EU environmental standards in Spain, Portugal, Greece, and Ireland. The effective delivery of existing policies is now the central concern of the Commission in regard to the single market and the environment. The prospect of adding several less economically developed new member states to the EU at the start of the twenty-first century is reinforcing the ambition of EU officials to consolidate the gains secured for integration around the agenda of effective implementation. In this they are supported by a wide variety of political, social, and economic actors. Political scientists speculate whether this new emphasis on effective and even implementation of EU policies represents a major constraint upon the sovereignty of the nation state. Also open to question is whether traditional “top-down” or “bottomup” models of implementation apply in a complex hierarchy of governance such as the EU or whether analysis centered on multilevel bargaining and policy networks is more appropriate. See also COMMISSION; EUROPEAN COURT OF JUSTICE; SINGLE MARKET PROGRAM.

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Majone, Giandominico, ed. 1996. Regulating Europe. London: Routledge.

Bibliography

—Allen Butt Philip

See INTEGRATED MEDITERRANEAN PROGRAMS.

IMPs

Industrial policy can be defined as the wide range of government actions designed to promote growth and increase the competitiveness of a particular sector or sectors in an economy. Since such actions imply preferential treatment, it is logical to add to the definition the conditions that other sectors benefit indirectly from the support given to the targeted sectors and that none of them be damaged by the policy actions. Traditional industrial policy instruments include macroeconomic and tax policies, subsidies, government procurement programs, support to research and development (R&D), procedures for elaborating technical standards, education and infrastructure improvement programs, favorable antitrust regimes, export assistance, and foreign trade and investment policies. A benign or laissez-faire industrial policy is characterized by a primary emphasis on achieving a stable and predictable macroeconomic environment for industry, investing in infrastructure and human capital, avoiding the practice of “picking winners,” maintaining open trade and foreign investment policies, using procompetitive antitrust regimes, and supporting R&D at the precompetitive level (basic research and applied research up to the construction of a noncommercial prototype). Aggressive or dirigiste industrial policies range from the Soviet-style command economy, which seeks to make virtually all of the decisions governing economic transactions, to the indicative planning model of France and Japan, which is based on industry-government consensus. Elements of dirigiste policy include targeting of specific sectors through favorable tax, procurement, subsidy, and trade policies; R&D support that tends to go beyond the precompetitive stage; and antitrust policies that restrict competition.

Industrial Policy

Many nations pursue differing mixes of dirigiste and laissez-faire policies at different stages in their histories. In the United States, which considers itself a market-oriented non–central planning economy, vigorous military procurement programs in the 1950s and 1960s provided great stimulus to the computer and commercial aircraft industries. In Japan, the directions of a strong central planning apparatus did not shape the eventual multifirm structure of the automobile industry. In Europe, national industrial policies have fluctuated in response to economic conditions, resulting in a wide range of practices from Thatcherite noninterventionism to the highly dirigiste policies of France in the 1960s. A growing body of research demonstrates that even though political and cultural values are important in explaining why one nation’s industrial policy has evolved differently from others, situational factors (level of economic development; institutional, financial, and legal structure; resource endowment; and business outlook) are equally important. Nations in the “catch-up” stage of economic development tend to pursue more interventionist industrial policies than fully developed nations. Another key predictive element is the nature of the business-government relationship, which can range from adversarial, as in Britain of the Thatcher period, to highly corporatist, as in France and Germany. Both the situational variables and the relationship variable explain to a considerable degree the evolution of a Europe-wide industrial policy. Phases of EU Industrial Policy Industrial policy at the EU level has gone through several phases since the Treaty of Rome came into effect in 1958. The treaty itself did not call for a strong collective industrial policy but left the right to pick winners to the member states. The treaty laid the groundwork for the future expansion of a community-wide policy by setting forth the vision of a single market governed by a competition policy (Articles 85, 86, 92–94) designed to avoid the negative aspects of dirigisme. Unilateralism and collaboration (1958– 1975). In the twenty years following the Rome treaty, Europe-wide industrial policy was not a subject of debate. Member states were free to follow the industrial policy of their choice. The move from customs union (achieved in 1968) to single market was delayed by the failure to move from

the unanimity rule to majority voting in the Council of Ministers. As a result, the legislation that would have created the single market and accentuated the need for a common European industrial policy languished for years. National industrial policies in this period were determined by cultural and situational values. France and Germany, galvanized by the threat of U.S. dominance of hightechnology sectors, began to nurture national champions through subsidies, supportive government procurement policies, national quotas, and nontariff barriers. During this period, European countries began important collaborative projects in aviation (Concorde and Airbus) with the aid of extensive national government subsidies that supported product development and even production. In the UK, the Labour government felt the need to establish a National Economic Development Organization designed to improve the competitiveness of British industry. Interventionist industrial policy (1975– 1985). Following the oil shock of 1973, European industry was plunged into a ten-year nightmare of stagnation, inflation, and unemployment. It was during this period of so-called Eurosclerosis that the Community intervened with specific industrial policy actions designed to complement member-state efforts to return national champions to growth and prosperity. These actions included attempts to resuscitate the failing steel, chemicals, and shipbuilding industries with subsidies to ease the pain of downsizing, modernization, and restructuring. The Commission also used its competence to conduct trade policy to negotiate bilateral agreements restricting developing country exports of textiles to the Community. In high-technology sectors such as electronics and telecommunications, the Community, which had already established a new Directorate General for Industrial Affairs (DG III) in the Commission, began to provide funding for cooperative R&D projects. Beginning of the single market and economic recovery (1985–1990). In the early 1980s, Industry Commissioner Etienne Davignon convened a group of European manufacturers in the so-called European Round Table of Industrialists (ERT) to discuss Community support for crossborder industrial collaboration. European industrial leaders, aware that national industrial policies were failing to develop globally competitive firms, sought help from the Community in developing “European champions.” Over time, the group was

Industrial Policy

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skillfully channeled from a lobbying effort to increase community aid for R&D projects to a powerful force for implementation of the dormant single market concept. Encouraged by pressure from business, the Commission made a final determined effort to launch the single market. The white paper of 1985 outlined the three hundred or so minimum legal steps needed to ensure freedom of passage of goods, services, people, and capital throughout the Community. By calling for the deregulation of restrictive national rules governing trade, the single market program sought to expose European industry to market forces. The resulting competition was expected to force consolidation and achieve economies of scale, thereby improving competitiveness. The policy was designed to develop European champions rather than national champions. In order for this bold design to succeed, a major change in the Treaty of Rome was necessary. Accordingly, the Single European Act (SEA) changed the rules to allow for majority voting on most of the single market legislation, much of which had already been drafted but had not passed when subject to unanimity. The SEA blessed the white paper and set a deadline for implementation of December 31, 1992. It also committed the Community to strengthen the EC’s scientific and technological base through multiannual “framework programs.” Much of the proposed single market legislation was adopted by 1990. At the same time, the Commission made it clear that national subsidies (state aids) to declining industries would be reviewed vigorously; those not meeting the Treaty of Rome criteria would be weeded out. The debate over European industrial policy (1990 to the present). By 1990, it was clear that Europe had emerged from recession and that the single market program, combined with a vigorous competition policy, was proving to be a powerful supply-side industrial policy tool. These developments polarized thinking about the shape of a future industrial policy for Europe that would prolong the current period of economic expansion. Powerful forces in Europe (especially the ERT) were advocating continued support from either the Community or member states for strategic sectors. Arrayed against them were those arguing for further deregulation and supply-side policies and a completely hands-off industrial policy. In an attempt to resolve the debate by determining the causes of the economic recovery, the Commission identified several factors. Fairly consistent and

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mutually supporting fiscal and economic policies between 1985 and 1990 had reduced inflation, increased returns on investment and profits, and stimulated employment. In addition, the single market effort to dismantle barriers was a powerful positive stimulant to business. After listening to both sides of the debate, the Commission set forth its views (Commission, 1990) on the European industrial policy of the future, which it identified as neither top-down and dirigiste nor laissez-faire. The Commission saw no place for central planning in the new policy and pledged to follow the principle of subsidiarity (regulating at the lowest possible level of government). The Commission identified four challenges to EC industry: globalization, the rising cost of labor and capital, the need to diffuse technological innovation, and the importance of human capital improvement. The Commission also identified five prerequisites for an industrial policy to assure continued industrial growth: securing a competitive environment (avoiding excessive concentration and unfair subsidies), following stability-oriented and predictable macroeconomic policies, promoting continuous human capital formation, promoting economic convergence and greater social cohesion, and achieving a high level of environmental protection. The 1990 report then listed the catalysts needed to promote change. First was completion of the single market by means of elaboration of Europe-wide product standards, full implementation of the directives liberalizing government procurement, abolition of all restrictive national quotas, provision of a coherent legal framework for business, and development of trans-European networks in energy, transport, and telecommunications. The single market was seen as the most important industrial policy tool. The second catalyst was pursuit of an open but vigilant trade policy based on enforcement of international rules. Policies to help improve European competitiveness include promotion of R&D and innovation in a way that creates the environment for bottom-up programs, rapid transfer of know-how and improved training programs, programs tailored to small and medium-sized enterprises, better use of human resources, and an open market for business services. The Treaty on European Union reaffirmed the EU’s ability to supplement member state industrial policies but maintained limits on the initiation of industrial policy by requiring a unani-

mous vote in the Council for specific policy measures. The Commission’s 1993 white paper, Growth, Competitiveness, and Employment, stressed the importance of laying the foundations for the information society and developing multinational infrastructure networks in achieving competitiveness. A subsequent industrial policy paper (Commission, 1994) reaffirmed the horizontal approach to industrial policy supported by targeted programs to support research and training, aggressive competition policy, and a rigorous and neutral approach to state aid. In 1995, the Commission established a Competitiveness Advisory Group made up of industrialists, academics, and former political leaders, charged with preparing semiannual reports on the current state of competitiveness. The Reality of European Industrial Policy The 1990 statement suggested that the Commission had made a 180-degree change in policy, rejecting sectoral intervention in favor of open competition. In spite of the references to subsidiarity, the new policy sharply limited the scope of national industrial policies. As one observer described it, the policy reflects a middle way between a philosophy of emphasis on equity (regulation of markets to protect a range of interests) and efficiency (an unfettered, integrated market) (Gaster, 1992). This view is reinforced by an analysis of EU trade and foreign investment policy since 1990. There is evidence that, at the urging of business interests, the EU has continued to support strategic sectors (such as electronics) through an amalgam of active industrial policy programs, especially support for R&D, and vigorous Commission use of trade policy tools such as the antidumping regime, high tariffs on semiconductors, and rules of origin provisions. Such a strategic trade policy for electronics has allowed Europe, unlike the United States, to retain sizable semiconductor, computer, and consumer electronics production capability. Much of the most efficient production capacity is supplied by Japanese, U.S., and Korean firms that found it necessary to set up plants in Europe to get around trade barriers. Despite DG III’s strong position, the Community has also applied its state aids policy somewhat selectively since 1990, occasionally allowing member states to bail out weak national airlines, steel mills, auto producers, and shipyards.

The Commission’s “middle way” industrial policy has had mixed results. Economic growth is returning to Europe after the widespread recession of the mid-1990s, but unemployment still persists at double digit levels. Member states are dragging their feet on implementing some of the key industrial policy elements of the single market. The current policy was formed as a result of the perceived need of industries and their national governments to become world-class competitors. The interaction between European business and the Commission greatly influenced the creation of a policy tailored to meet efficiency needs (the single market program) but also to give European industry a fair chance (in the form of trade protection) to catch up. It is too early to tell whether this policy will survive the economic fluctuations and political changes of the future. See also EUROPEAN ROUND TABLE OF INDUSTRIALISTS; SINGLE MARKET PROGRAM. Commission. 1990. Industrial Policy in an Open and Competitive Environment: Guidelines for a Community Approach. COM(90)566 Final. Luxembourg: Office for Official Publications of the European Communities. ———. 1994. An Industrial Competitiveness Policy for the European Union. COM(94)319 Final. Luxembourg: Office for Official Publications of the European Communities. Devine, P., Y. Katsoulacos, and R. Sugden. 1996. Competitiveness, Subsidiarity, and Industrial Policy. London: Pinter. Gaster, Robin. 1992. Industrial Policy in Europe and the United States: Competition and Cooperation in the 1990s. Study Papers Submitted to the Subcommittee on Europe and the Middle East of the Committee on Foreign Affairs of the U.S. House of Representatives. Washington, DC: U.S. Government Printing Office.

Bibliography

—Anthony Wallace

Infringement Procedures

The information society is the more genteel European term for what Americans call the information superhighway. Like the United States and other developed countries, the Commission and the member states are trying to come to terms with recent, ongoing technological changes that have revolutionized the quantity and availability of information, notably through the Internet. In its 1993 white paper, Growth, Competitiveness, and Employment, the Commission identified the information society and the telecommunications networks that would bring it about as one of the main avenues for leading Europe into the twenty-first century. Similarly, in its various pronouncements on education, the Commission has stressed the importance of student and teacher access to, and familiarity with, the information society. In February 1994 the Commission showcased its interest in the social and economic implications of the information society by hosting a G7 ministerial conference on the subject. Soon afterward, in July 1994, the Commission produced a strategy and a series of measures designed to integrate the EU into the information society. More than two years later, in November 1996, the Commission attempted to sharpen this strategy, although the nature of its four priorities— improving the economic environment, investing in the future, putting people first, and establishing global rules—suggest that the Commission is still groping for a precise approach. However, in at least one important respect the information society has had a marked impact on EU public policy: fear of falling behind in the global information revolution has given the EU a powerful impetus to hasten the liberalization of telecommunications, a key element in the rapid development and exploitation of the information society. See also TELECOMMUNICATIONS POLICY.

Information Society

The Commission is responsible for ensuring that member states fulfill their EU obligations and may take infringement cases before the European Court of Justice (ECJ) if it suspects a violation of EC law (Articles 169 and 170 of the EEC Treaty). The Commission may become aware of a possible infringement for any number of reasons: an individual, an enterprise, or another member state may complain, or an investigation by Commission officials could uncover possible violations. If the Com-

Infringement Procedures Industrial Research and Development Advisory Committee (IRDAC)

This consultative group, made up of industry and union representatives, advises the Commission on the practical application of the EU’s research and technological development policy. See also RESEARCH AND TECHNOLOGICAL DEVELOPMENT POLICY.

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mission decides to act, it first sends a “letter of formal notice” requesting the member state concerned to explain the alleged breach. The Commission generates approximately 1,100 letters of notice annually. The member state then has about two months to reply. If the member state fails to reply or does not provide a satisfactory explanation, the Commission issues a “reasoned opinion” outlining why it considers the member state to be in violation of the treaty. The Commission issued 433 reasoned opinions in 1996, more than double the number (192) it issued in 1995. Again, the Commission usually gives the member state two months to comply. Most cases end with a letter of notice or a reasoned opinion. The Commission referred 93 cases to the ECJ in 1996 (up from 72 in 1995). The breakdown by country was as follows: Belgium, 20; Greece, 17; France, 11; Germany, 9; Italy, 9; Spain, 9; Portugal, 6; Ireland, 4; Luxembourg, 4; Netherlands, 2; Austria, 1; and the UK, 1. The Treaty on European Union gave the ECJ authority to order fines against states in infringement cases. See also COMMISSION; EUROPEAN COURT OF JUSTICE; IMPLEMENTATION. See DIFFERENTIATED INTEGRATION; HARD CORE.

Inner Core

Integrated Mediterranean Programs (IMPs)

Integrated Mediterranean Programs were a form of regional economic assistance launched by the EC in 1986, at the time of Spain’s and Portugal’s accession, largely in response to Greek demands. The programs were supported by the European Investment Bank. See also MEDITERRANEAN POLICY. Thousands of works theoretically analyzing economic and political integration in Europe have been published over the past forty years. This survey is limited to a representative sample of theoretical contributions to broad explanations of the political dynamics of European integration, with attention to empirical confirmation. Specialized economic, legal, technical, and policy literatures are left aside, though much of the research cited here reflects this work. The topics covered in this

Integration Theory

entry are classical theories of regional integration, the foundations of modern theories of regional integration, theories of major interstate decisions, and theories of everyday policymaking. Classical Theories of Regional Integration Classical theories of integration emerged to justify the use of and explain the success of particular political strategies for regional integration. None is a theory in the modern sense: a coherent set of causal mechanisms based on a set of explicit, comprehensive assumptions. Instead these theories resemble ideal-typical trajectories toward political integration and possible strategies for realizing them (Pentland, 1981). Nonetheless, they remain touchstones for theory and activism. The four theories presented here are federalism, functionalism, Karl Deutsch’s “security community” approach, and neofunctionalism (NF). Federalism. Federalism is a theory of integration developed during the first half of this century. It is associated with Count Richard CoudenhoveKalergi, Altiero Spinelli, numerous wartime resistance groups, and many democratic leaders in the immediate postwar period, followed by a number of more recent writers (Spinelli, 1966; Stirk, 1989; Pentland 1973; O’Neill, 1996). In the federalist view, the inception of which owed much to the inspiration of the League of Nations, the major challenge facing modern European nations is the suppression of war, the major causes of which are essentially ideological: nationalism, undemocratic ideologies, and excessive attachment to national sovereignty. Regional integration can help overcome these problems. Efforts to promote integration are likely to be most successful, so federalists argue, if they focus on ideological persuasion and international institution building. Postwar federalists proposed the conversion of public opinion to the European ideal through education and transnational citizen exchanges, as well as international legal integration through democratic institutions, particularly international courts and parliaments. Federalist ideology underlay the postwar European movement and the Council of Europe, founded in 1948, with its European Convention for the Protection of Human Rights and Fundamental Freedoms. Though federalism lost influence thereafter, federalists continued their criticism, which emanated particularly from the European Parliament (EP), of the more pragmatic, economic strategy of inte-

gration adopted by the EC, which they held to be a futile means of achieving true political integration. Functionalism. Widely espoused through the 1950s, functionalism is associated with David Mitrany and Lionel Robbins as well as many international technocrats of the interwar and immediate postwar period and a steady stream of subsequent writers (Pentland, 1981; Mitrany, 1966; Groom and Taylor, 1975). Mitrany’s view, patterned on the New Deal and other interwar experiments in government intervention, is most developed. Regional institutions, functionalists argue, grow out of the common need for technocratic management of economic and social policy, which leads to the formation of international agencies. Such agencies promote economic welfare, thus eventually gaining legitimacy, overcoming ideological opposition to strong international institutions, and in the long run evolving into a sort of international government, though perhaps not a true state. “Security community.” Two attempts to develop more dynamic theories of integration synthesizing federalism and functionalism were advanced by social scientists during the 1950s. In his “security community” approach, drawn from an analysis of previous efforts at nation-state–building, Karl Deutsch proposed that modernization leads to increasing levels of social interaction and communication, which in turn causes convergence of individual and group values toward more cosmopolitan norms, eventually leading (at least among modern, democratic governments) to the formation of a security community, in which no state poses a threat to any other (Deutsch, 1954, 1957). The Deutschian model did not generate a long-term following among theorists or activists, largely because its political predictions seemed vague. Since its basic dynamic results from social interaction, the precise institutional and political predictions remained secondary. Later studies, moreover, found little correlation between value change and political outcomes. Even so, the metaphor continues to be powerfully evocative, resulting in descriptions of the EU as a “multi-perspectival polity” or a “security community.” Neofunctionalism. A second attempt at a federal-functional synthesis, ultimately more influential for the study of integration, was NF, first advanced by Ernst Haas in the late 1950s and deepened by others (Haas, 1958; Lindberg and Scheingold, 1970; Nye, 1971). Haas, whose rea-

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soning constituted, among other things, a social scientific account of the sort of engrenage tactics pursued by Jean Monnet at the time, argued that a sui generis “theory of regional integration”—that is, a distinct theory of the formation of international political communities—is possible on the basis of the assumption that the forces moving integration forward are endogenous and self-reinforcing (Pentland, 1973). The critical explanatory hypotheses of NF focus on the unintended or unexpected feedback of previous integration decisions, termed “spillover.” For Haas, the precise reasons for initiating economic integration, often geopolitical, are relatively unimportant. Once economic integration is launched, however, spillover tends to create two types of pressure for an expansion in the scope or intensity of integration. In economic spillover, social groups demand further economic integration in order to preserve or extend existing gains. In political spillover, integration creates new transnational and supranational actors, who tend on balance to favor greater integration and are advantageously placed to engineer it. Haas wrote in the era of “the end of ideology” and, like the functionalists, assumed that among modern welfare states rational economic management was a priority requiring centralized, technocratic, relatively apolitical administration. He argued, at least initially, that spillover was relatively automatic, at least where state intervention was important. Expectations and values eventually adapt to integration, creating a transnational political community, which in the end legitimates centralized regional governance. By the mid-1970s, however, the combination of empirical disconfirmation and theoretical limitations led to the abandonment of NF as a unified approach, even by proponents like Haas. Though the deep structural variables highlighted by NF did provide a plausible account of the relative success of European integration compared to, say, similar experiments in Central America, Africa, and other areas, its strong predictions about the integration process within Europe were not borne out. Rather than spillover promoting deeper integration, in turn creating pressures for the centralization of technocratic administration, during the 1960s and 1970s outcomes across issues and countries varied. Some areas regressed or stagnated while others were buffeted by outside factors foreign to NF, such as economic crisis, geopolitical values, and

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response to global developments. Anomalies sprang up: integration tended to be most successful in areas where governments were liberalizing, such as the common market, not in areas where state intervention was heavy, such as the production of atomic energy. Moreover, economic integration moved forward even though political integration was blocked by French president Charles de Gaulle. In short, a strong, even dominant, role for member states persisted in most areas, with little evidence of automatic spillover (Moravcsik, 1993). Empirical anomalies reveal theoretical weakness. NF, it was agreed, relied on a teleological assumption of progress rather than deriving predictions from a general theory of how actors choose to manage interdependence. Once it was acknowledged that spillover was not automatic—reflected at the time in the introduction of concepts like “spill back” and “dramatic-political actors”—NF forfeited nearly all of its explanatory power. NF, some concluded, had been overambitious, attempting to formulate a theory of dynamic, endogenous feedback without a reliable theoretical foundation explaining static state decisionmaking: how states choose to manage economic interdependence, based on consistent microfoundational assumptions about actors, preferences, and constraints. In short, NF is inadequate not simply because simple variants appear to be empirically disconfirmed but because more sophisticated versions of it remain indeterminate. Subsequently, Haas himself termed NF a “pre-theory” of integration and called for something new (Harrison, 1974).

Modern Theories of Regional Integration By the mid-1970s, champions and critics of neofunctionalism alike agreed that an adequate explanation of integration must be (1) general, that is, formulated in terms of generally applicable, microfoundationally grounded theories of state responses to interdependence; (2) choice theoretic, that is, focused on variation in the choices of states and societal groups for and against integration; and (3) multicausal, that is, employing more than one theory to explain integration (Puchala, 1972; Sandholtz, 1992; Moravcsik, 1993). One implication is that it is no longer appropriate to speak of a single theory of regional integration. The issue is instead what combination of theories best contributes to an understanding of integration

and precisely how they should be synthesized into a coherent account. During the remainder of the 1970s and most of the 1980s, despite a move toward greater recognition of the importance of national governments—termed intergovernmentalism—no comparable synthesis was developed to replace NF. Less attention was paid to integration in general; remaining theorists tended to focus on narrower aspects of integration, including the role of technocratic and elite networks, domestic politics, national leaders, comparative policy studies, and the economics of monetary integration (Wallace, Wallace, and Webb, 1977; Bulmer, 1986; Taylor, 1983; Caporaso, 1974; Sasse et al., 1977). Interest in broad integration theory arose once again in the late 1980s, largely in order to explain the rejuvenation of the EC with the Single European Act (SEA) and the Treaty on European Union (TEU). Some scholars rethinking integration theory in this period drew on theories of foreign economic policy, interstate bargaining, and international regime formation developed in the preceding two decades to develop such an explanation. Such theories were quite different than the “realist” theories prevailing twenty years before but had internalized concern about political economy as well as much political analysis of pluralism, institutions, and power initially developed to explain domestic societies. On this basis, Stanley Hoffmann, Robert Keohane, Andrew Moravcsik, Paul Taylor, Geoffrey Garrett, and others proposed an essentially rationalist account of integration, termed liberal intergovernmentalism (LI) (Keohane and Hoffmann, 1991; Moravcsik, 1991; Taylor, 1983; Garrett, 1993). LI was initially presented as a framework for synthesizing theories into a coherent account of large EU decisions taken under unanimity, though it can be applied to other types of decisions as well. LI divides EC decisionmaking into three stages—preference formation, interstate bargaining, and institutional delegation—each of which is explained by a different set of factors. Each of the three elements must be theoretically specified. Most variants of LI argue that national preferences reflect the issue-specific pressures to manage economic interdependence, with geopolitical concerns playing a secondary role; bargaining outcomes reflect relative power stemming from the nature and intensity of preferences, with supranational actors playing a secondary role; and institu-

tional delegation reflects the desire for credible commitments, with ideology and technocratic considerations playing secondary roles (Moravcsik, 1993). Theories of Major Interstate Decisions This section presents specific theories of preferences, bargaining, and institutional choice, based on the three-stage LI framework, and looks at historical institutionalism and the problem of implementation. National preference formation. What determines underlying national preferences for and against policy coordination through integration? The LI approach sees integration primarily as a means of achieving issue-specific domestic goals. Generally this is done by managing issue-specific policy interdependence—that is, coordinating the transnational externalities of national policies, whether trade protection, competitive devaluation, or foreign policy cooperation. Governments relatively vulnerable to negative externalities imposed by the unilateral policies of other governments tend to favor integration, whereas relatively invulnerable governments have little reason to coordinate policy (Moravcsik, 1993). On the margin, governments may also employ integration as a means to achieve goals otherwise impossible to achieve through domestic political means (Moravcsik, 1994). To this basically pluralist model of policymaking, one could add the role of differential representative structures (Risse-Kappen, 1996). LI explanations of specific decisions, such as the SEA, must rest on a concrete specification of preferences resulting from issue-specific patterns of international interdependence—that is, the nature of domestic social demands and the pattern of transnational policy externalities. Given that the EC’s core activities are largely economic, the assumption of issue specificity implies that national preferences are grounded in political economy. Governments engage in policy coordination either to influence the economic externalities of the policies conducted by foreign governments—in this case, largely trade policy, trade-related regulatory policy, or monetary policy—or to impose domestic reform seen as desirable to the maintenance of international competitiveness. Externalities, and therefore pressures for cooperation, arise when the unilateral policies chosen by one government inconvenience or benefit politically significant so-

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cial groups in other nations. In a zero-sum situation in which preferred policies are incompatible or in a situation in which unilateral policies can be adjusted in a cost-effective way to counteract the effects of external pressures, little incentive for cooperation exists. Where preferred policies are convergent or compatible, cooperation is more likely—the precise pressures depending on the costs of adjustment. In recent years, a large body of work has emerged to explain national preferences on specific EU policies, most of it grounded in theories of foreign economic policy. Support for tariff and quota liberalization reflects the economic interests of producer groups. Producers tend to seek liberalization that increases their relative competitiveness and oppose liberalization where they are uncompetitive. Patterns of intraindustry trade facilitate liberalization as well (Pelkmans, 1984; Milward, 1992; Moravcsik, 1993). Agricultural preferences of national producers for high support prices are commensurate with national income. Support for regulatory or social harmonization reflects a balance between producer group interests and public demands for and prior levels of regulatory protection (Vogel, 1995; Leibfried and Pierson, 1996). Monetary policy balances producer interests, on the one hand, and general institutional and partisan preferences for monetary discipline, on the other hand. In these economic matters, issue-specific economic goals are supplemented by geopolitical and ideological motivations only where economic preferences are diffuse, uncertain, or weak. In monetary policy, important factors cited include the level of capital mobility, the need for policy credibility, the international interests of producers, the nature of shocks, central bank institutions, the party in power, and domestic wage-bargaining institutions (Eichengreen, 1992; Frieden, 1993; Garrett, 1995; Goodman, 1991). There is general agreement that preferences in monetary policy are more uncertain than preferences in trade policy (Giovannini, 1993). The constraints imposed by public opinion on integration are being systematically explored (Eichenberg and Dalton, 1993; Franklin et al., 1996). Support for cooperation on traditional “high politics” issues, such as foreign and defense policy cooperation, is similarly issue specific, reflecting the pattern of policy externalities, with economic interests secondary. Support for foreign and defense policy cooperation, for example, tends to

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be inversely proportional to the viability of unilateral foreign and defense policies. Ideological concerns about neutrality and Europe’s position play a secondary role. Although theories focusing on the structural issue-specific determinants of national preferences (externalities, interdependence) remain the most logically developed and empirically confirmed, two major alternative approaches to explaining national preferences exist, both of which stress the autonomous role of ideas. The first ideational alternative stresses distinctive national ideas about geopolitics and harks back to the mid1960s, in the wake of de Gaulle’s disruptive decisions. Leading critics of NF, led by Stanley Hoffmann, argued that the real determinants of national preferences lay in geopolitical ideologies, which, Hoffmann asserted, reflect in turn enduring tendencies in national histories, cultures, and political beliefs (Hoffmann, 1966). In the context of the 1960s, Hoffmann stressed in particular the views of divergent European governments vis-àvis the superpowers and the desire to create a European third force, a view echoed in some historical treatments of the period. Others stress the role of the European movement. Most recent analyses stress ideological commitment to the Franco-German relationship and efforts to resolve the German problem (McCarthy, 1993; Picht and Wessels, 1990). In the strongest version of this view, economic policies are merely means to geopolitical ends; in a weaker version, economic interests dominate issues of “low politics” but are trumped whenever “high politics” considerations arise. Recent empirical evidence has called into question the role of geopolitical ideology. For instance, historical analyses suggest that Jean Monnet’s “European movement” was relatively unimportant, even counterproductive, after the early 1950s; that the European policies of British prime minister Harold Macmillan and of de Gaulle were driven primarily by economic interest, not geopolitics; and that national governments were committed to the TEU and monetary integration even before German reunification raised geopolitical issues (Milward, 1992). Yet there is important evidence of the importance, even if secondary, of geopolitical ideology. Such considerations helped transform general pressures favoring trade liberalization toward the particular solution of a relatively small trading bloc with relatively strong central institutions. Geopolitical ideology has been

particularly decisive in influencing German policy from chancellors Adenauer to Kohl. Recent economic explanations argue that this is because German governments enjoyed relatively wide autonomy, given that economic interest groups would support a relatively broad set of policy alternatives (Moravcsik, 1995). The second ideational alternative stresses the spread of policy ideas. One view is that EC institutions act as conduits for discourse and persuasion among technocratic officials, resulting in the spread of ideas (Majone, 1993a). Another view is that governments adopt policy ideas in areas in which preferences are unclear, owing to the uncertainty in causal theories, by learning from apparent success around them, one oft-cited example being the long-term effort by France and, to a lesser extent, Italy to copy German macroeconomic policy style (McNamara, 1997). A third view revives the Deutschian argument that communication and interaction lead to the internalization of pro-EC norms over time (Risse-Kappen, 1996). Such arguments are presented in more detail in the later section on everyday decisionmaking. Interstate bargaining. Given a pattern of state preferences, what factors shape the outcomes of large interstate bargains within the EU? Despite the evident importance of interstate bargaining, classical integration theory until very recently offered few explicit analyses of it beyond the NF view that supranational political entrepreneurs help to “upgrade the common interest.” LI analyses of interstate bargaining rest on three premises: unitary state action, low transaction costs, and Nash bargaining dynamics (Moravcsik, 1993). First, in international bargaining, EU governments act, to a first approximation, “as if” they were unitary actors. Although of course domestic actors translate their disagreements to the international level, pursuing autonomous international strategies where they can, this need not invalidate the predictions of a unitary state approach if their relative influence remains unaltered in the international setting and the decision comes down in the end to a series of state decisions incorporating domestic preferences in an orderly fashion. Second, an LI analysis assumes that the transaction costs of major interstate bargains are low, relative to the resources and interests of member states. This suggests that governments can themselves provide the information necessary to bargain efficiently. Governments use negotiations to

exchange information, to persuade one another to realize “common interests” efficiently, and to institutionalize iterated bargains. Preexisting international institutions may help to promote such agreement, although how much influence they have in large decisions is an empirical question. In short, states negotiate efficiently. Third, following Nash bargaining theory, LI predicts that the distribution of benefits in EU negotiations reflects the nature of unilateral and coalitional alternatives to agreement, including issue linkages and threats of exclusion and exit. The more attractive the agreement, relative to the best unilateral or coalitional alternative, the more a government is generally willing to compromise or exchange to achieve it. Bargaining outcomes are thus decisively constrained by the most recalcitrant governments, though this does not, as some interpret the argument, mean that they converge to the “lowest common denominator.” All governments have an incentive to compromise somewhat. Where a threat of costly exclusion is credible, moreover, governments may accept instead an agreement imposing absolute losses (Moravcsik, 1995). An alternative view is proposed by those who focus on the role of informal supranational entrepreneurship. A common criticism of LI is that the Commission, the European Court of Justice (ECJ), and the EP play an important role as informal political entrepreneurs in major negotiations, systematically manipulating the decisions of member states in a way that “upgrades the common interest,” despite their lack of any formal powers in such treatyamending negotiations. This approach harkens back to the NF analysis of “political spillover” by Haas and especially Lindberg, who stressed the role of supranational officials, particularly in the Commission, in initiating new topics, advancing proposals, and mobilizing social actors. Similar arguments have been revived more recently by many authors but have been taken furthest by Wayne Sandholtz, who argues that such entrepreneurship is a “necessary” condition for agreement (Sandholtz and Zysman, 1989; Ross, 1995; Marks, 1993; Haas, 1958; Lindberg, 1963; Sandholtz, 1992). Predictions about the precise conditions under which informal supranational entrepreneurship is likely to be effective are scattered throughout the literature. Some argue that supranational officials emerge from an activist political culture (Ross, 1995), that highly technical issues are involved (Jachtenfuchs and Kohler-Koch, eds.,

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1996), or that governments underrepresent or misrepresent potentially powerful, but systematically unorganized or underrepresented societal interests, which can be activated through the provision of information. Although a number of recent contributions question the extent and scope of effective supranational entrepreneurship, the theoretical and empirical debates continue (Alter and Meunier-Aitsahalia, 1994; Moravcsik, 1995). Institutional choice. Given a set of substantive agreements, why and under what conditions do governments delegate sovereignty to supranational officials or pool it in arrangements for majority voting? Member governments have deliberately created an EU decisionmaking structure that requires each government to seek the approval of its counterparts and sometimes of supranational officials in order to promulgate a policy or even to act unilaterally—though some of this may reflect unintended consequences, discussed in more detail below. In short, many EU institutions are designed to restrict the legal sovereignty of member governments, thereby limiting the foreign and domestic policies each may pursue. What explains delegation and pooling? One hypothesis is that governments have traditional ideological commitments to various visions of Europe (Hoffmann, 1966). A second hypothesis, which seems to explain many national positions, is that many large-country governments prefer to centralize power in the Council, where they enjoy greater influence (Bulmer and Wessels, 1986). A third hypothesis, consistent with NF, is that the centralization of power and decisionmaking is necessary for technocratic reasons, owing to the high costs of coordination and information provision. A fourth hypothesis, drawn from regime theory, maintains that governments delegate and pool sovereignty to assure the credibility of commitments. Strong institutions are most likely where there is a strong common interest in cooperation, yet a strong temptation to defect, requiring governments to “lock in” linkages and compromises. Governments that favor particular substantive outcomes support appropriate institutions. Empirical results are indecisive. Concern about credible commitments offers a plausible explanation for delegation and pooling in cases like the Common Agricultural Policy (CAP), Economic and Monetary Union (EMU), majority voting on single market issues, and legal enforcement of EC law. It is less compelling than ideological

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factors in explaining policy in areas where the substantive implications remain unclear, such as increased powers for the EP. There is good evidence that majority voting introduced by the SEA permitted swifter passage of apparently more significant legislation, though it is worth noting also that this did not result in a greater number of directives per year (Wessels, 1996). Historical institutionalism and the problem of implementation. A few theorists have challenged the sort of explanations so far examined, in particular LI accounts, by providing more rigorous microfoundations for arguments, resurrecting the neofunctionalist argument that the process of integration is dominated by unintended and largely undesired consequences. Such “historical institutionalist” or path-dependent theories of integration maintain that unintended consequences are particularly likely where uncertainty is prevalent, discount rates are high, and preferences unstable and where policies draw large investments from societal actors, rendering policy reversal costly. Such arguments have been explicitly employed to explain some elements of large interstate bargains, for example, the precise form of Britain’s social policy opt out at the Maastricht summit and the level of CAP prices. Yet most empirical arguments in this tradition are not directed at large bargains. Instead, they are to be found in the literatures reviving neofunctionalism to explain the importance of the ECJ, examining principal-agent problems in the EU, and analyzing the “transformation of the state”—all of which are considered in forthcoming sections of this entry. Historical institutionalist theories place primary emphasis on the implementation of and societal response to major decisions rather than on the decisions themselves. In order to develop more precision, such theories require greater specification of unintended economic and political spillovers, which would require closer attention to two types of factors: those that drive socioeconomic responses to policy and those that lock in institutional arrangements. Were such a theory to emerge, it would be compatible with LI approaches; indeed, just as the theoretical power of neofunctionalism required a firm grounding in static theories of state decisionmaking, in order to know what feedback is important for decisionmaking, a historical institutionalist account must turn to a fundamental LI theory.

Related to contemporary discussion of the historical institutionalist approaches has been a recent focus on purported differences between explanations of European integration drawn from international relations and those drawn from comparative politics, with the former seen as “rationalist” and the latter as “institutionalist,” “normative,” or otherwise distinctive (Hix, 1996). A variant, heavily represented in the German literature, sees international relations theory as being concerned with cooperation and negotiation, whereas theories of domestic politics are concerned primarily with the “problem-solving capability” of institutions (Jachtenfuchs and KohlerKoch, 1996). Yet the invocation of competing subdisciplines is misleading (Hurrell and Menon, 1996). The functional regime theory that forms the foundation for modern international political economy is explicitly historical institutionalist (Keohane, 1983, 1984; Krasner, 1983; Hurrell, 1993), whereas much contemporary comparative political economy as applied to the EC focuses almost exclusively on material incentives (Frieden, 1993; Milner, 1995; Rogowski, 1989). Similarly, international relations theory, as well as bargaining and negotiation analysis, is centrally concerned with the efficacy and efficiency of international cooperation, its “problem-solving capability,” and integration with domestic politics, as well as distributional concerns (Keohane, 1984; Keohane and Milner, 1996; Haas, 1989; Putnam, 1988). From a broader perspective, the EC is best seen not as an area of research in which international relations and comparative politics clash but instead as an area in which the breakdown of clear theoretical boundaries between the study of comparative and international politics has proceeded the furthest, enriching both. This is particularly clear in research on everyday policymaking. Theories of Everyday Policymaking There is general agreement that everyday decisions must be analyzed differently than major EC negotiations, because member-state decisions to “delegate” and “pool” sovereignty in EC institutions, as analyzed above, alter the constraints on everyday decisionmaking (Keohane and Hoffmann, 1991). There are three closely related reasons for this. First, the decision rules within which governments act, such as qualified majority voting, Commission initiative, EP participation, and

judicial oversight for consistency with the treaty, constrain states, shifting their relative influence. Second, where decision rules explicitly delegate authority to supranational actors other than the national delegations in the Council of Ministers, such as Commission officials, members of the EP, and ECJ judges, preferences of these actors must often be considered. Third, institutions alter the representation of societal interests to decisionmakers. Changes in decisionmaking autonomy of supranational actors, timing and procedure of rules, flows of information, domestic constitutional rules, and the scope of decisionmaking all directly and indirectly empower or obstruct social actors. The resulting policymaking system—often referred to as “multi-level,” “multi-tier,” “interlocking,” “nonhierarchical” polity, or simply as a “policy network”—is at least potentially more complex and differentiated than that within national polities, requiring a distinctive analysis crossing domestic and international lines (Jachtenfuchs and Kohler-Koch, eds., 1996; Marks, 1993; Risse-Kappen, 1996). There exist two broad types of explanations of everyday decisionmaking: (1) LI models that focus on Nash bargaining but acknowledge delegation and pooling of sovereignty, with the attendant agency problems; and (2) “two-level” models, which focus on changes in domestic policymaking and social coalitions induced by integration and on the more complex forms of policymaking that might emerge. LI models of everyday decisionmaking: Nash bargaining, win-sets, and agency problems. LI models of everyday decisionmaking suggest that governments pursue the same underlying preferences that they pursue in major negotiations, though their strategies for doing so reflect different institutional constraints. In the everyday legislative process, as in major decisions, governments negotiate on the basis of win sets, preference intensity, and alternatives to agreement, but the determination of bargaining outcomes is made more complex by the institutionalization of everyday decisions, which helps increase the credibility of reciprocal commitments under conditions of uncertainty and iterated bargaining. Institutional constraints are particularly relevant to everyday EU decisionmaking wherever majority voting and Commission initiative are required. Under such circumstances, intergovernmentalists predict outcomes above the “lowest common denominator” in a direction favored by a

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qualified majority, the Commission, and perhaps also (where it can exploit appropriate Council majorities) the EP. A formidable literature has grown up explaining and predicting bargaining outcomes on the basis of formally delegated powers as well as the spatial distribution and intensity of preferences (Bueno de Mesquita and Stokman, 1994; Tsebelis, 1994). Empirical tests confirm that governments with median positions should benefit from cooperation, whereas outliers, particularly negative preference outliers facing a majority vote, are weakened. Explicit issue linkage appears to be of secondary importance—though of course majority voting itself is, in the LI view, a means of formally inducing iterated linkage. The intergovernmentalist approach predicts in addition that there will be considerable support for the activities of the ECJ in enforcing commitments, something that numerous studies have observed. Many analyses invoke the “autonomous” power of the Commission to explain the outcomes of everyday policymaking (Heretier, 1996). Research and technological development policy is one area of particular inquiry in which the Commission seems to have played an important “leadership” role (Sandholtz, 1992). Most recent research places these analyses in context, stressing the predominant role of private, largely business actors in setting the substantive agenda (Esser and Noppe, 1996). With numerous functions delegated to EU institutions, the theoretical question arises of the extent to which and the means by which governments can maintain control over the institutions (Pollack, 1997). Here theories of delegation drawn from the study of U.S. politics have proven useful both to provide accounts of institutions such as comitology (controls over delegated executive powers of implementation) and to account for variation in the power of the Commission. The basic insight is that the control of multiple principals (the member states) over supranational agents is imperfect. On this basis some have sought to explain striking differences between the relative autonomy of the ECJ and the more constrained role of the Commission (Moravcsik, 1995). At least three hypotheses concerning the influence of integration on domestic politics follow from the LI view presented above. First, nationstates, whether in the form of judiciaries, executives, legislatures, or administrations, remain privileged representatives of domestic interests.

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Despite the widespread prevalence of the theoretical concept of the EU as a unique “policy network” in which governance is nonhierarchical and governments are only “one actor among many,” there is in fact surprising consensus within the empirical literature, especially among systematic comparative analyses—even in areas like regional and social policy, where strong claims have been made—that the national governments remain the most important actors in nearly all policy areas. Second, consistent with the unitary state “as if” assumption, domestic groups that are powerful in domestic policymaking (such as farmers, environmental groups, or socialist parties) tend to be relatively powerful in European policymaking. Support for this hypothesis appears to be the most consistent empirical finding in the literature on regional policy, regulatory policy, and other areas. Actors that are strongly entrenched, well-organized, and cohesive in domestic politics tend to act effectively in European politics; those with little influence over domestic affairs tend to do poorly— though Europeanization may exaggerate these differences (Marks, 1993; Risse-Kappen, 1996). Third, insofar as integration does alter the domestic balance of power, it disproportionately benefits those domestic groups with preferences closest to the EC median, whereas those with outlying preferences are more likely to find themselves in the minority, resulting in smaller gains or indeed absolute losses. This hypothesis has yet to be adequately tested. Two-level effects and the “transformation of the state.” Recent scholarship has moved beyond these relatively simple LI hypotheses of the domestic effects of cooperation, which might be taken as a “baseline” for analysis. A wide range of intriguing conjectures has been advanced concerning the varied ways in which EU policy processes alter the relative influence and interests of domestic actors in civil society and the state— some with deep implications for the normative and ideological legitimacy of integration. Much of this theory, particularly that drawing on the analysis of “policy networks,” generates fascinating results but in the end seeks to describe the identity of the actors involved and patterns of their activity, rather than to develop causal models of their relative influence (Wessels, 1996; Mazey and Richardson, 1993). Such studies tend to track the number and size of interest groups or interadministrative interactions, but few do more than de-

scribe their possible influence and still fewer explain that influence. Here we focus primarily on explanations of influence. Most theories of influence within the EU were couched initially in terms of whether integration had “strengthened” or “weakened” the “state.” The state does not mean the state as a whole but the executive or government. Weakening/strengthening does not refer to the size of the total scope of the state’s discretion, or in “two-level games” terminology, the size of the domestic “win set.” Clearly integration often involves a narrowing of both de facto and de jure national government discretion. Instead, the dichotomy refers more precisely to increases or decreases in the cost for the government of realizing desired domestic goals (e.g., an expansion of the “win set” in the particular direction of ideal point). Such an increase in the ability to achieve desired policies is of course often feasible only by committing the country internationally to a reduction in overall discretion. No theorist predicts unidirectional change in the relative power of state and societal actors; all concede and most seek to explain variation in the relative power of domestic actors. Some speak of a more open-ended “transformation of the state” (Veränderung von Staatlichkeit) (Risse-Kappen, 1996). The resulting theoretical debates have generated a number of more broad-ranging hypotheses concerning changes induced by integration in the domestic influence of state and societal actors, the substantive scope of EU policy mix, and the balance between deregulation and reregulation. In part the divergence between strengthening and weakening is simply a reflection of differing assessments of economic interdependence. Those who see governments as weakened stress the ways in which higher levels of economic interdependence undermine the effectiveness of state intervention. Higher trade and capital flows, for example, lead firms to threaten to move to lower-cost jurisdictions inside the EU, defeating efforts to raise wages, regulation, and welfare benefits. Similar perverse effects are expected to follow policies that rely on the separation of markets. Those who see governments as strengthened, by contrast, stress the ways in which policy coordination creates net positive-sum benefits—for example, greater economic growth, more export markets, net financial transfers from the EU—that in turn permit the executive to deliver greater domestic welfare. Some argue that the prosperity and pro-

duction structure necessary to sustain the postwar welfare state were sustainable only through international coordination (Milward, 1992). Divergent views of the strength of governments also reflect varying assumptions, conjectures, and theories about multilevel politics. One set of predictions stems from a resource-based theory of politics. In this view, domestic actors benefit when international cooperation generates net transfers of four domestic political resources to them: initiative (agenda control), institutions (formal influence over decisions), information (technical and political), and ideas (control over legitimating ideas). Where connection with the international policy process reduces the cost for a domestic actor to manipulate the agenda position, decisions, information, and legitimation of issues, that actor is, ceteris paribus, strengthened—though this effect may be offset by the loss of sovereignty imposed by a generally unfavorable position in international negotiations (Moravcsik, 1994). Though in theory such induced shifts in influence can benefit any domestic actor, there could be theoretical reasons why these shifts generally benefit sitting governments. Domestic constitutional arrangements generally treat EU policymaking as a matter not of domestic but of foreign policy, in which executives enjoy a stronger initiating role, relatively autonomous decisional powers, direct sources of information, and an unequaled ability to link issues to legitimating ideologies, both “national” and “European.” Executives exploit these powers to construct international institutions that “lock in” their institutional advantages. Empirical studies suggest that many European policies and practices—for example, the European Monetary System, European summitry (the European Council), and the weak role of the EP—were deliberately undertaken in such a way as to maintain and strengthen executive autonomy. Cases of the EU’s serving as a scapegoat for national policies or being exploited as an efficient and legitimate institutional means of achieving certain domestic ends are widely cited through the literature, not least recent efforts to impose fiscal austerity in Italy, Belgium, and Germany. This resource-based model helps explain institutional characteristics of the EU, such as the acknowledged existence of a democratic deficit—a situation in which EU policy is perceived to be under less firm democratic control than domestic policy—which in this view is no

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unintended consequence of integration but a deliberate strategy (Moravcsik, 1994). The existence of considerable cross-issue and cross-national variation is, however, widely acknowledged. It remains unclear whether the domestic gains for governments outweigh the external infringements on sovereignty and autonomy. Societal actors, moreover, may now be slowly clawing back power ceded over the first four decades of the integration process, as suggested by proposals for institutions empowering regions and national parliaments. Most important, not all changes in the balance of initiative, institutional power, information, and ideas favor executives. Integration sometimes triggers a net transfer of initiative, institutional power, information, and ideological legitimacy in favor of other state or societal actors, for example, autonomous technical ministries or transnationally organized interest groups. In such cases, the underlying theory would predict that the domestic influence of such groups would increase, thus reducing domestic governability. The most widely cited example of a “transformation of the state” in which executives are weakened is the increasing constitutional power of the ECJ (Burley and Mattli, 1993; Weiler, 1991). The argument that the ECJ is a better case of neofunctionalist processes than the Commission is now widely accepted. The success of the ECJ is best explained by alliances between institutionally insulated subnational and supranational actors—an approach that has gained wide acceptance as an explanation for the unique development of the EU legal system via Article 177 of the Treaty of Rome. Recent efforts to construct an LI model of legal integration that imposes more than extremely broad constraints remain empirically unsuccessful (Garrett, 1995). This is clearly a case in which integration increased the domestic initiative, decisionmaking autonomy, information, and legitimate ideas in the hands of an actor other than national governments, namely national courts. Some have conjectured that legal integration develops in a symbiotic relationship with political integration (Weiler, 1991). Among those who maintain that governments have consistently been weakened, some base their analysis on different political theory. The EU, it is argued, restricts the ability of governments to manage domestic affairs, because supermajoritarian or unanimous decisionmaking institutions of the EU make it more difficult for each govern-

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ment not only to influence policy but also to pass or reform legislation—at least in areas in which only the EU as a whole has the competence to legislate. The result, some argue, is not only a diminished sense of efficacy for each government individually but also a tendency toward stagnation and logrolling, which leads over time to suboptimal collective policy outcomes—a common prediction of the interlocking politics (Politikverflechtung) approach. High CAP prices are prominently cited as an example (Scharpf, 1988; Sbragia, 1991). This hypothesis, however, has been called into question on empirical grounds. The most obvious reason is that there are very few cases in which majority voting would have led to more “rational” policies (Rieger, 1996). Scharpf himself doubts whether this was actually true of the CAP (Scharpf, 1988). It appears, moreover, that the unanimity rule was in fact exploited by Britain to limit agricultural spending, not by supporters of high spending to increase it. Finally, outsiders like Sweden and Switzerland maintained even higher agricultural subsidies. Important research nonetheless continues in this area. Another line of analysis maintains that EU institutions tend to encourage policies that are market liberalizing in substance and regulatory in form (Majone, 1993a). The EU’s primary focus on market liberalization and regulatory harmonization has given rise to a unique institutional division of labor between the EU and its member states. The EU is a “regulatory state”—that is, it governs by regulation and judicial interpretation, not by taxation and spending. Thus it plays a role somewhat analogous to that played in the United States by independent regulatory agencies backed by an active judiciary and semiautonomous executive. Scholars of U.S. politics term this complex an “independent fourth branch of government” (Majone, 1993b). In this view, the comparative advantages of the EU policy process for regulatory governance are its relative transparency, neutrality, and broad scope, which insulate it from special interest pressures. Only groups with very strong and similar interests across all member governments—such as multinational firms or wheat farmers—can “capture” EU policymaking. The result, according to Majone, is a more efficient, technocratic mode of decisionmaking better able to take account of the “public interest”—that is, the interests of diffuse constituencies like consumers. In this technocratic

view, national and EC policy styles are complementary (Majone, 1993a). Many still think of the EU “regulatory state” as essentially deregulatory, but this appears generally not to be the case. In particular, it has not led, as many once feared, to a “race to the bottom” in which competitive pressures consistently erode regulatory standards. In fact, recent studies show that in many areas of process regulation we also find harmonization at relatively high levels of regulation (Majone, 1993a). More general analyses suggest a middle position: most agreements in the environmental area appear to be at or close to the “lowest common denominator,” but there is little downward pressure on regulatory standards over time (Golub, 1997). One reason is that firms in countries with lower regulatory standards sometimes accept higher regulations if these are required to secure entrance into the domestic markets of richer countries—a dynamic that should theoretically apply to the regulation of products but not production processes (Vogel, 1995). A second reason, which may explain process regulation, is the relatively high standard of living throughout Europe, which means that publics demand and governments provide relatively high levels of regulatory protection. A third reason is that the EU facilitates “policy learning” among national officials by transmitting information and policy ideas to poorer countries when they reach the stage of development at which higher regulatory protection is demanded. Some speculate that “epistemic communities” of regulators constitute a powerful force for policy convergence. The regulatory nature of EU institutions serves as the basis for yet another claim, namely that the EU system systematically undermines redistributive fiscal policies favored by social democrats and promotes fiscal retrenchment now favored by conservatives. The market-oriented nature of the Treaty of Rome renders it nearly impossible for the ECJ to impute a global European right to social welfare or for the EU to pass social welfare policies. It is disproportionately difficult, moreover, for labor to organize. This veto-prone system seems to explain the near total lack of social policies at the European level that have immediate redistributive consequences. An alternative explanation for the lack of a social policy is simply that there is very little convergence of interest between rich and poor countries. Insofar as there is such a consensus, it favors greater privatization of pensions, budgetary austerity, and

labor flexibility, which are seen as necessary to maintain social welfare systems over the long run. Thus, if there is to be any EU cooperation on social welfare, some argue, it is likely to be directed at controlling, not facilitating, social spending. Certainly supporters of fiscal consolidation in countries like Italy and Belgium—countries with large government deficits or decentralized politics—favor market integration and EMU as means of legitimating constraints on consumption and government spending (Leibfried and Pierson, 1996). See also DIFFERENTIATED INTEGRATION; ECONOMIC INTEGRATION THEORY; FEDERALISM; REGULATORY POLICY. Alter, Karen, and Sophie Meunier-Aitsahalia. 1994. “Judicial Politics in the European Community: European Integration and the Pathbreaking Cassis de Dijon Decision.” Comparative Political Studies 26, no. 4 (January), pp. 535–561. Bueno de Mesquita, Bruce, and Frans N. Stokman, eds. 1994. European Community Decision-Making: Models, Applications and Comparisons. New Haven: Yale University Press. Bulmer, Simon. 1986. The Domestic Structure of European Community Policy-Making. New York: Garland. Bulmer, Simon, and Wolfgang Wessels. 1986. The European Council: Decision-Making in European Politics. London: Macmillan. Burley, Anne-Marie, and Walter Mattli. 1993. “Europe Before the Court: A Political Theory of Legal Integration.” International Organization 47, no. 1 (Winter), pp. 41–76. Caporaso, James. 1974. The Structure and Function of European Integration. Pacific Palisades, CA: Goodyear. Deutsch, Karl W. 1954. Political Community at the International Level. New York: Doubleday. Deutsch, Karl W., et al. 1957. Political Community and the North Atlantic Area: International Organization in the Light of Historical Experience. Princeton, NJ: Princeton University Press. Eichenberg, Richard, and Russell J. Dalton. 1993. “Europeans and the European Community: The Dynamics of Public Support for European Integration.” International Organization 47, no. 4 (Autumn), pp. 507–534. Eichengreen, Barry. 1992. Should the Maastricht Treaty Be Saved? Princeton Studies in International Finance, no. 74. Princeton, NJ: Princeton University, Department of Economics. Esser, Josef, and Ronald Noppe. 1996. “Private Muddling Through as a Political Program? The Role of the European Commission in the Telecommunications Sector in the 1980s.” West European Politics 19, no. 3 (July), pp. 547–562.

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—Andrew Moravcsik

Actions by private and public interests play a central role in most accounts of European integration. All accounts acknowledge the role of these interests, acting individually or collectively, as potentially influential players in “low politics” arenas. In “high politics” arenas the contribution of interests is more disputed. High politics involve multiple arenas with multiple players, and political actors such as interest groups are just one of a number of players. In low politics fields, interests can, and do, shape public policy outcomes. In high politics fields, interests contribute more to shaping debate and the preferences of other political ac-

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tors, although the most powerful Eurogroup, the European Round Table of Industrialists (ERT), has been credited with much of the impetus for the single market initiative. Interest representation arises through a plethora of outlets, at national and transnational levels of organization, using a variety of routes and “voice” options. Outlets range from single firms (of which around two hundred have their own base in Brussels) to formal groups to forums no more formal than a regular private dining club. This diversity leads to differences in head counts of the number of Eurogroups. The Commission estimated at the end of the single market program that there were “approximately 3,000 special interest groups of varying types in Brussels, with up to 10,000 employees working in the lobbying sector” (Commission, 1992, p. 4). This means that the number of personnel in the interest representation sector almost matches that of the Commission itself if translation staff are excluded from the latter. However, directory sources of European-level groups indicate around seven hundred Eurogroups, of which two-thirds have a Brussels base. Business groups account for around twothirds of all Eurogroups, public interests (environmental, consumer, social, and citizen) one-fifth, and the professions one-tenth, with the remainder consisting of labor and consumer groups. These interests have not simply responded to the development of EU competences. Two-thirds of all Eurogroups were established before 1980, and half of those located in Brussels were present before the single market period. The Commission, in particular, has played an important role in the development of these groups. Just over one-fifth are in receipt of funding from the European institutions, including 59 percent of all public interest groups (Greenwood and Aspinwall, 1997). At one time, the Commission maintained a policy of talking only to European-level groups. Although this soon proved impractical, it demonstrates the importance placed by the Commission on the presence of these actors. European-level groups provide the remote central institutions with a strategy to overcome the democratic deficit by putting them in touch with grassroots opinion and the opportunity to simplify their dialogue. The relatively small and overloaded Commission has become reliant upon the resources that these groups bring, includ-

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ing information and expertise, the ability to help carry out European-level policies, and the ability of these groups to influence their members. In the early 1990s, the Commission reflected that it “has always been an institution open to outside input. The Commission believes this process to be fundamental to the development of its policies. This dialogue has proved valuable to both the Commission and to interested outside parties. Commission officials acknowledge the need for such outside input and welcome it” (Commission, 1992, p. 3). As predicted by neofunctionalist theory, the Commission has also seen interest groups as a means of expanding the EU’s competence by encouraging member states to pursue Europeanlevel solutions and of protecting achievements in integration. In producer domains this is now almost a historic process, but in social fields it has been possible to witness these developments in very recent years. For instance, in recognition of its lack of competence in the housing field, the Commission established a conference on homelessness with the quite deliberate intention of the establishment of a Eurogroup that would seek the development of EU competence in that regard. A group called the European Federation of National Organizations Working with the Homeless (FEANTSA) emerged from the conference; the Commission has sought to sustain FEANTSA by giving it funds for “observatory” (information collection and dissemination) functions. In the poverty field, the Commission was also responsible for the creation of the European Anti-Poverty Network, which in turn has spawned further specialist networks. Elsewhere, Eurogroups concerned with the elderly, the disabled, one-parent families, and rural issues arose directly from Commission funding programs, and the European Women’s Lobby arose directly from the initiatives of a group of women inside the Commission itself. In territorial fields, the Commission has a dedicated funding program for the establishment of trans-European networks and is increasingly present in the individual regions themselves. The structural funds help to build local interest networks that would otherwise not be present in those countries in which territorial traditions are not strong. Some of the Commission’s “own initiative” structural funds arose from plans developed between territorially based interest groups and the Commission, including one that was partly designed to expose member states for

flouting “additionality” rules in the disbursement of structural funds (McAleavy, 1992). Particularly under conditions of uncertainty, where member-state involvement in the integration process is weak, unclear, and/or divided, networks of interests and supranational institutions possess considerable opportunities to move integration along (Greenwood, 1997). These actors may advance integration by stealth, seeking to ensure that member states do not see issues in terms of “winners” or “losers” (Cram, 1993). In some business sectors, in particular, explanations of integration can only be accounted for by examining the relationship between interests and the Commission. In the pharmaceuticals (Greenwood, 1995) and consumer electronics sectors (Cawson, 1992), the relationship between private interests and the Commission bears all the hallmarks of neocorporatism. It is surprising to note that around two-thirds of public interest groups have a turnover exceeding ECU 100,000 (Greenwood and Aspinwall, 1997) and that over a quarter claim to have more than ten staff. The group with the most resources, the European Council of Chemical Manufacturers Federation (CEFIC), has 70 staff members. Among business groups, a secretariat of twenty is not uncommon. Some groups, such as Greenpeace, Friends of the Earth, the World Wide Fund for Nature, and Amnesty International, can draw from their Brussels policy offices on the resources of hundreds of staff worldwide. Because the European-level offices of such groups are policy offices, they do not suffer from collective action problems that have emerged among some other groups. Two-thirds of all Eurogroups are federations of national associations, with the remainder primarily direct membership structures. The most cumbersome type of structure concerns the European confederations of national confederations of associations, including the Union of Industrial and Employers’ Confederations of Europe (UNICE), the European Trade Union Confederation (ETUC), the European Secretariat of the Liberal, Independent, and Social Professions (SEPLIS), and the European Council for Voluntary Organizations (CEDAG). These have considerable difficulties in platform building and are excessively prone to compromise. On the other hand, the two most coherent and effective cross-sectoral Eurogroups are the ERT and the American Chamber of Com-

merce in the EU (AMCHAM-EU), both of which are direct membership structures that emerged in the 1980s. At the sectoral level, a variety of federations of national federations have proved to be effective actors, such as those in the pharmaceuticals, iron and steel, and chocolate sectors, although there are also federated structures with coherence problems (Greenwood, ed., 1995; Pedler and van Schendelen, 1994). Where problems have arisen, a typical response has been to create a more direct relationship with firms, and a number of “mixed” federated and direct membership structures are now present. Although sectoral direct membership structures have existed since the start of the EC, there has been a tendency in recent years for exclusive, “rich firm club” direct membership structures to develop. Even though these lean structures enjoy the advantages of speedy platform building, they invite competitive interest representation from excluded groups. Increasingly, therefore, more informal structures of (mostly large firm) interests have arisen, ranging from issue alliances to semipermanent meeting forums. The latter can be important network structures, satisfying needs for contacts, information, socialization, reassurance, and generation of ideas. In reality, the rationality of collective action is relatively uncomplicated at the European level because the logic is toward membership. In a relatively uncertain political and economic environment where formal and informal types of information are at a premium, the costs of nonmembership are too high and the costs of membership are relatively low. Nonmembership means that the chance to influence group strategies is lost, a reality that drove the French car manufacturer PSA Peugeot back into membership of the Association of European Automobile Manufacturers (ACEA) after a period outside the group following a dispute over membership of Japanese-dominated European car firms. For national associations, some of whom may have created the Eurogroup in the first instance to satisfy their needs to operate at the European level, officials form a value community in favor of membership. Once again, the costs of nonmembership for national associations include the risk of undermining credibility with their own members owing to an inability to service their European-level needs. In direct membership structures, large firms are accustomed to working together in different

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national regulatory environments, to the extent that antitrust legislation is sometimes needed to keep them apart, particularly in the latter stages of the product cycle as firms adopt defensive postures against outside competition. These players may have learned the benefits of habits and collaboration in membership forums beyond the European level. The logic of the single market demonstrated the need for collaboration, resulting in a wave of alliances, mergers, and acquisitions to enable firms to take advantage of the opportunities presented by operating across national boundaries. Apart from peer pressure toward membership, personnel from large firms simply welcome the opportunity to meet their industry colleagues in order to satisfy a variety of status, social, career, interpersonal, learning curve, and reassurance needs as well as the need to obtain formal and informal market intelligence. For those reasons, economic selective incentives are almost nonexistent as membership services among Eurogroups (Greenwood and Aspinwall, 1997). Much of the recent discussion of the integration process has proceeded without full consideration of the roles that groups and other aggregations of interests perform. Studies of interests can provide detailed insights into the ways in which groups operate as network actors with public authority in the integration process. Such exercises can provide a range of inductive candidate ideas, including the role of the supranational institutions in network building, as agents with autonomous capacities; the transfer of loyalties to the European level; the consequent creation of demand structures for integration, which push the boundaries of integration; the ways in which member states conclude agreements for which they cannot foresee the consequences and the subsequent vacuum and conditions of uncertainty in which network actors of interests and supranational institutions operate, expand, provide ideas for, and exploit; the vacuum left for interests to develop by the “management deficit” of the Commission (Metcalfe, 1992); the contribution of interests to outputs in high politics arenas and outcomes in low politics fields; the ways in which integration proceeds by stealth from such networks; the associated power of rhetoric, leadership, socialization, and ideas as forces in European integration; and the ways in which iterated cooperation among interests and actors in the integration process leads to preference convergence between them.

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See also EUROPEAN ROUND TABLE THEORY.

TRIALISTS; INTEGRATION

OF INDUS-

Cawson, A. 1992. “Interest Groups and Public Policy Making: The Case of the European Consumer Electronics Industry.” In J. Greenwood, J. Grote, and K. Ronit, eds., Organized Interests and the European Community, pp. 99–118. London: Sage. Commission. 1992. An Open and Structured Dialogue Between the Commission and Special Interest Groups. SEC(92)2272 final. Brussels: Commission. Cram, L. 1993. “Calling the Tune Without Paying the Piper? Social Policy Regulation: The Role of the Commission in European Social Policy.” Policy and Politics 21, no. 2, pp. 135–146. Greenwood, J. 1995. “The Pharmaceutical Industry: A European Business Alliance that Works.” In J. Greenwood, European Casebook on Business Alliances, pp. 38–48. Hemel Hempstead: Prentice Hall. ———. 1997. Representing Interests in the European Union. London: Macmillan. Greenwood, J., ed. 1995. European Casebook on Business Alliances. Hemel Hempstead: Prentice Hall. Greenwood, J., and M. Aspinwall. 1997. European Level Collective Action. London: Routledge. McAleavy, P. 1992. The Politics of European Regional Development Policy. Strathclyde Papers on Government and Politics, no. 8. Strathclyde: University of Strathclyde. Metcalfe, L. 1992. “After 1992: Can the Commission Manage Europe?” Australian Journal of Public Administration 51, no. 1 (March), pp. 117–130. Pedler, R., and M.P.C.M. van Schendelen, eds. 1994. Lobbying the European Union: Companies, Trade Associations and Issue Groups. Dartmouth: Aldershot.

Bibliography

—Justin Greenwood

Intergovernmental Conference (IGC)

The acronym IGC, standing for intergovernmental conference, has become a key word in Europe’s political vocabulary over the past years. Formally, IGCs are based on Article N of the Treaty on European Union (TEU), which states that “the government of any Member State or the Commission may submit to the Council proposals for the amendment of the Treaties on which the Union is founded. If the Council, after consulting the European Parliament and, where appropriate, the Commission, delivers an opinion in favor of calling a conference of representatives of the governments

of the Member States, the conference shall be convened by the President of the Council for the purpose of determining by common accord the amendments to be made to those Treaties. The European Central Bank shall also be consulted in the case of institutional changes in the monetary area.” Article N succeeded Article 236 of the Rome treaty and contains the normal procedure for amending the EC and EU treaties. In certain cases (e.g., of accession or association), the treaties may also be modified by unanimous Council decision, that is, without the prior convening of an IGC. Article 236 was first used for the convention relating to the Netherlands Antilles (1962) and thereafter for such cases as the merger treaty (1965), the treaty modifying certain budgetary provisions (1970), and the treaty amending certain provisions of the protocol on the statute of the European Investment Bank (1975). In all these cases an IGC was convened, though usually for a brief period. The IGC for the merger treaty lasted only one day (April 8, 1965), as the actual negotiations had already been conducted in a number of Council meetings. With the negotiations that led to the 1986 Single European Act (SEA), the 1992 TEU, and the 1997 Amsterdam Treaty, IGCs have turned from being a legal formality into big political events that attract a lot of public attention and have a considerable impact on European integration. These three major treaty overhauls may be briefly described by comparing their origins and principal objectives, their preparations, and the course of the negotiations themselves. The 1985 IGC The driving force behind the IGC leading to the SEA was economic in nature: the necessity to create within the EC a true single market. This objective, supported by the national governments, the Commission, and powerful business circles alike, was deemed essential in order to enhance both the internal economic performance of the EC and its international competitiveness vis-à-vis Japan, the United States, and the newly industrializing countries (Moravcsik, 1991). The chief purpose of the IGC was to propose those institutional and procedural changes in the EC treaties that would contribute to the realization of the single market. The decision to convene an IGC under Article 236 was taken by the European Council in Mi-

lan in June 1985, but the drive for reform dated back to the 1970s when institutional improvements were proposed in the Tindemans Report (1975) and the report by the so-called three wise men (1979). These reports were followed by the Genscher-Colombo proposals (1981), but owing to the problem of Britain’s budgetary contribution, among other things, no real progress toward reform could be made, apart from the rather noncommitting Solemn Declaration on European Union issued by the heads of state and government in 1983. A breakthrough came only at the Fontainebleau meeting of the European Council in June 1984. Here a solution was found to the contentious British budgetary question, paving the way for the establishment of an Ad-hoc Committee on Institutional Affairs (the Dooge Committee). The Dooge Committee presented its report, partly influenced by the European Parliament’s Draft Treaty on European Union (1984), in March 1985. Although the European Council did not entirely follow the committee’s recommendations, the Dooge report and the contemporaneous Commission white paper on completing the single market became the principal starting point for the reform debate. Although the European Council’s decision to attempt a major treaty revision was not taken unanimously (the British, Danish, and Greek prime ministers voted against convening an IGC), the negotiations themselves, which started in Luxembourg on September 9, 1985, were conducted in a constructive spirit, as all parties agreed on the main objective of the conference (Dinan, 1994). However, disputes broke out between countries like Germany, Italy, and the Benelux (usually supported by the Commission), on the one hand, which preferred to formulate more ambitious federal goals in such areas as monetary cooperation or the rights of the European Parliament (EP), and the “minimalist” member states, on the other hand, spearheaded by the UK. Nevertheless the UK favored strengthening European Political Cooperation (the member states’ foreign policy coordinating mechanism), which was discussed in a separate working group of the IGC and subsequently codified under Article 30 of the SEA. The negotiations were concluded in Luxembourg on January 27, 1986, and the SEA was signed in February 1986. The 1991 IGCs

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Although the driving force behind the IGC that resulted in the SEA was mainly economic, with only a supplementary role for the necessity to improve foreign policy cooperation, the forces leading to the two subsequent IGCs were predominantly of a political-security nature, despite the centrality of the monetary issue. Two interrelated sets of factors might be distinguished in this regard. One was an internal dynamic that aimed to provide the single market program, initiated by the SEA, with its logical monetary (and social policy) follow-up. This path was largely set out in the Delors Report, with its three-stage approach to Economic and Monetary Union (EMU), which the European Council approved in December 1988. Meeting in Strasbourg a year later, the European Council decided under Article 236 to convene an IGC on EMU (Dinan, 1994). These “internal” considerations became heavily influenced by a second, “external” set of circumstances symbolized by the fall of the Berlin Wall in November 1989, the demise of the Soviet empire, and the imminence of German unification. These events influenced the drive for treaty revision in three ways. First, they accelerated the process of monetary integration, because France wanted to curb the potential power of a reunified Germany by subsuming the mark into a single European currency. Second, they prompted new thinking about the EC’s institutions because, in return for the loss of the mark, Germany required a strengthening of supranationalism. Third, they led to the feeling that the changes in Central and Eastern Europe required closer security cooperation among the EC’s member states. Given that the steady evolution of the internal market also required more cooperation in Justice and Home Affairs, in the course of 1990 the setting was ripe for a major overhaul of the treaties. Accordingly, the European Council decided in June 1990 to convene two IGCs, one on economic and monetary union and the other on political union. Both were formally opened at the European Council in Rome, in December 1990, but negotiations began in January 1991, under the Luxembourg presidency. The two IGCs were conducted in separate tracks: the EMU negotiations were led by the ministers of finance, assisted by their central bankers; the political union negotiations were coordinated by the ministers of foreign affairs, occasionally assisted by representatives of other departments, like justice or home affairs.

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Similarly, their fates were also quite different. The negotiations on EMU built on the highly professional preparations of the Delors Report and its aftermath and proceeded relatively smoothly, with an agreement on the outlines of the EMU paragraphs already reached well before the Maastricht summit of December 1991. By contrast, the political union negotiations had little more than the European Council’s December 1990 mandate to build upon. Security issues and institutional affairs proved particularly contentious (Laursen and Vanhoonacker, 1992). The proposal of the Dutch presidency, which took over chairmanship of the IGC in the second half of 1991, to replace the earlier Luxembourg draft treaty with a radically different, more federal draft treaty, caused a minicrisis (Black Monday, September 30, 1991) and seriously delayed the negotiations. Security was another contentious item, drawing contending proposals from several member states throughout the negotiations. In the event, both the EMU and political union negotiations were concluded at the Maastricht summit (December 9 and 10, 1991), although not without several opting-in and optingout provisions being granted to placate the British in particular.

The 1996–1997 Conference The main purpose of the next IGC was basically to consolidate the acquis communautaire with a view to the further enlargement of the EU to include the Central and Eastern European states, as well as Cyprus and Malta. As such, the central objective was mainly political, with a strong security element, keeping in mind that a solid EU is important not only for the economic well-being of its citizens but also for the stability of Europe at large (Edwards and Pijpers, 1997). The mandate for the 1996–1997 IGC was explicitly contained in the TEU, which included several paragraphs that specified the need for future revision. Subsequent decisions by the member states provided an additional mandate for the IGC. At a meeting in Ioannina in March 1994, the foreign ministers decided to review in particular the system of qualified majority voting. Two months later, the European Council agreed at its meeting in Corfu to form a reflection group with the task of submitting a preparatory report on the next treaty revisions. Chaired by Carlos Westendorp, a senior Spanish diplomat, the reflection group consisted of foreign ministers’ personal representa-

tives, a commissioner (Marcelino Oreja), and two members of the EP (Elmar Brok and Elisabeth Guigou). The reflection group started its work with a symbolic meeting on June 2, 1995, in Messina—where, forty years earlier, foreign ministers had met to relaunch the European integration project—and submitted its report on December 5, 1995. The IGC itself began under the Italian presidency, in Turin, on March 29, 1996, and ended at the concluding summit of the Dutch presidency, in Amsterdam, on June 16 and 17, 1997. The 1996–1997 IGC lasted longer than its predecessors but achieved markedly less. Not only was its agenda more modest, but a climate of public skepticism and political weakness made progress painfully slow. A change of government in Britain raised hopes about a more positive British attitude toward integration in general and about prospects for a breakthrough at the IGC. But coming less than two months before the Amsterdam summit and after twelve months of desultory negotiations, Tony Blair’s arrival on the scene could do little to alter the IGC’s prospects. Earlier, the Irish presidency in the latter part of 1996 had worked hard to move the negotiations along and prepared a draft treaty for the Dublin summit of December 13 and 14. But the Irish avoided the IGC’s most contentious questions: the size of the Commission, weighted voting in the Council, and the relationship between the EU and the Western European Union (WEU). A Dutch presidency more circumspect than in the 1991 IGC, when its radically revised draft treaty caused a crisis in the political union negotiations, attempted to reach a consensus on these and other outstanding procedural and substantive issues. A special summit in Noordwijk, on May 23, 1997, cleared the way for three weeks of frantic behind-the-scenes negotiations before the Amsterdam summit. In the event, in tense, late-night negotiations in Amsterdam on June 17 and 18, EU leaders failed to resolve disputes over the size of the Commission, a new weighting of votes in the Council, and an extension of qualified majority voting. The ensuing Amsterdam Treaty made minor changes to the functioning of the Common Foreign and Security Policy (CFSP) (notably through the establishment of a policy planning and early warning unit), called for closer cooperation between the EU and WEU (but not the eventual merger of both organizations that France and Germany had advocated but that Britain, Den-

mark, and the neutral member states had opposed), incorporated the Schengen agreement into the TEU (while guaranteeing Britain’s right to control its own borders), and included a new title on unemployment. Conclusion Though legally the IGCs are just treaty amendments, the big review conferences of 1985, 1991, and 1996–1997 have gradually become key events in the integration process, with a considerable political impact beyond the often rather technical revisions of treaty paragraphs. The IGCs themselves are part of a larger reform cycle, which starts with a political agreement to pursue institutional reform and ends with the implementation of a new treaty. In between are the successive stages of preparation, agenda setting, negotiating, drafting, treaty formulation, and ratification. As each reform cycle may take about four to five years altogether, it should be realized that the EC/EU has devoted the larger part of the period between the early 1980s and the late 1990s to the political and legal business of treaty reform. The IGCs and related parts of the reform cycle clearly serve some positive functions. They adapt the Community’s instruments and procedures to changing economic, political, or strategic circumstances both within the EU itself and in the broader external environment. They also have important socialization effects, since they involve an ever-widening circle of government departments, central banks, regional authorities, social partners, and lobbies as well as increasing media coverage. Preparations for the 1996–1997 IGC were accompanied by active attempts by the member states and the EU institutions to stir a public debate on the impending negotiations. Another function of the IGCs is to accommodate certain national interests in a changing setting. The pre-TEU IGC, for instance, with EMU as a cornerstone, was essential to allay French concerns over German unification. For its part, Germany at that time demanded stronger European political institutions to underpin the proposed EMU and to support its delicate security position in central Europe. The 1996– 1997 IGC took place in different economic and political circumstances, but it remains true that further deepening of the EU is necessary not only to improve the efficiency of the EU’s institutions but also to further shore up Germany’s position.

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It should also be recognized that the recurrent IGCs and their results draw a lot of attention from the outside world. As an expression of a growing European identity, they seem sometimes to be better appreciated abroad than by Europe’s domestic audience. Finally, we should not forget that the treaty revisions themselves have been rather successful. The core provisions of the SEA (completion of the single market before January 1, 1993) and of the TEU (completion of Economic and Monetary Union) have been implemented satisfactorily. But there are some negative aspects as well. First, the recurrent time-consuming reform cycles tend to become a kind of para-international organization on the fringes of the EU itself and extract issues from the agenda of the EU proper. Second, in addition to the conduct of the EU’s intergovernmental second and third pillars, IGCs tend to insert into the integration process another framework for intergovernmental decisionmaking. Third, institutional reform may also be used to introduce merely cosmetic changes, which camouflage the lack of real progress on integration. Fourth, partly as a result of the deadlines set for the IGCs, agreements often result in awkward compromises, which in their subsequent codified form may easily frustrate European decisionmaking and inhibit a balanced constitutional evolution of the EU (the social protocol is a case in point). Finally, institutional reform will not easily be able to repair certain fundamental problems of the EU, such as its lack of legitimacy or its inadequate foreign policy capacity. See also AMSTERDAM TREATY; SINGLE EUROPEAN ACT; TREATY ON EUROPEAN UNION. Dinan, Desmond. 1994. Ever Closer Union? Boulder: Lynne Rienner. Edwards, Geoffrey, and Alfred Pijpers, eds. 1997. The IGC: 1996 and Beyond. London: Pinter. Laursen, Finn, and Sophie Vanhoonacker, eds. 1992. The Intergovernmental Conference on Political Union. Maastricht: European Institute of Public Administration. Moravcsik, Andrew. 1991. “Negotiating the Single European Act.” In Robert O. Keohane and Stanley Hoffmann, eds., The New European Community. Boulder: Westview Press.

Bibliography

—Alfred Pijpers

Intergovernmentalism

298

Interinstitutional Agreements

In integration theory, intergovernmentalism refers to the supremacy of national governments in the integration process over supranational and other actors. See also INTEGRATION THEORY. Intergroups consist of members of the European Parliament (EP) from different countries and different political groups with a common interest in a particular third country or subject matter. Although they have no formal role in the EP, intergroups can have an important mobilizing function. See also EUROPEAN PARLIAMENT.

Intergroups

The EU often concludes interim agreements in order to implement the trade and aid provisions of international agreements that have mixed (EU and member state) competence—such as partnership and cooperation agreements, association agreements, and Europe Agreements—pending ratification of such agreements. See also CENTRAL AND EASTERN EUROPEAN STATES.

Interim Agreement

The Council of Ministers, European Parliament, and Commission occasionally negotiate interinstitutional agreements among themselves on legal, organizational, and budgetary arrangements in order to run the EU more efficiently. For instance, the interinstitutional agreements in 1988 and 1993 on permitted levels of annual spending over periods of several years facilitated long-term budgetary planning. Interinstitutional agreements are an important means of informal constitution building in the EU. Approximately thirty have been concluded so far.

Interinstitutional Agreements

International Ruhr Authority (IRA)

The International Ruhr Authority (IRA) was set up in April 1949 to supervise coal and steel production in the Ruhr region of Germany. France, a leading member, saw the authority as a means of preventing Germany’s full economic recovery. With the IRA ineffectual and on the point of being

abandoned, Jean Monnet came up with the Schuman Plan, an alternative and ultimately successful proposal to bind the new Federal Republic of Germany into Western Europe. This was the basis for the European Coal and Steel Community, forerunner of the EC and the EU. See also EUROPEAN COAL AND STEEL COMMUNITY. Intervention is the means by which national agencies buy and store surplus production in the Common Agricultural Policy. See also COMMON AGRICULTURAL POLICY.

Intervention

Investiture refers to the procedure, under the terms of the Treaty on European Union, whereby the European Parliament (EP) approves the appointment of the Commission president and the college of commissioners. The new investiture procedure was applied for the first time in 1994. The first part of it—the debate and vote in the EP on the president-designate—was overshadowed by the manner of Jacques Santer’s appointment by the European Council (he was a compromise candidate after Germany rejected Ruud Lubbers, the Dutch prime minister, and Britain rejected JeanLuc Dehane, the Belgian prime minister). Opinion in the EP differed on Santer’s qualifications and suitability for the job and also on the appropriateness of endorsing a candidate selected in such a way. In the event, the EP’s narrow vote for Santer averted a public relations disaster but weakened the president-designate’s stature. The remainder of the appointment procedure—the nomination of commissioners and the EP’s vote on them—included well-publicized, individual hearings for each commissioner-designate (something not expressly provided for in the treaty). The EP’s approval of the college by a large majority undoubtedly enhanced the Commission’s legitimacy, but the entire investiture procedure took too long. Beginning with the debate on Santer’s nomination in July 1994 and ending with the EP’s vote on the commissioners-designate in January 1995, the process lasted nearly seven months in all. See also COMMISSION; EUROPEAN PARLIAMENT.

Investiture

Ireland

Under the terms of the accession agreements with Norway, Sweden, Austria, and Finland, the number of “weighted” votes in the Council of Ministers was due to increase from 76 to 90 following EU enlargement (in the event, Norway did not join, and the total number of votes was reduced to 87). Hitherto, with a total of 76 votes in the Council, the blocking minority was 23; after enlargement, most member states agreed, the blocking minority should be raised to 27 (or 26 following Norway’s decision not to join). But Britain strongly objected and attempted to keep the blocking minority at 23 even in the enlarged EU. Ostensibly, Britain feared being outvoted on sensitive issues; in reality, the government was responding to strong anti-EU sentiment on its own back benches in parliament. A compromise was eventually worked out at a Council meeting in Ioannina, Greece, on March 29, 1994: “If members of the Council representing a total of 23 to 25 votes indicate their intention to oppose the adoption by the Council of a decision by a qualified majority, the Council will do all within its power to reach, within a reasonable time … a satisfactory solution that can be adopted by at least 65 votes.” The Ioannina compromise was largely a face-saving device for the British and had no practical impact on EU decisionmaking. See also DECISIONMAKING PROCEDURES.

Ioannina Compromise

See INTERNATIONAL RUHR AUTHORITY.

IRA

See INDUSTRIAL RESEARCH AND DEVELOPMENT ADVISORY COMMITTEE.

IRDAC

Although a founding member of the Organization for Economic Cooperation and Development and of the Council of Europe, Ireland joined the EC only in 1973. A fundamental change in economic policy from protectionism and import substitution to openness and foreign direct investment provided the basis for Ireland’s initial application in 1961. The timing of Ireland’s application (which coincided with Britain’s), however, reflected not only a new commitment to market liberalization, but also the extent of the country’s existing trade

Ireland

299

dependence on the UK (Britain accounted for 54 percent of Ireland’s external trade). Ireland expected accession to lead to greater economic welfare spurred by a marked rise in output, an expansion and diversification of trade, and generous transfer payments under the Common Agricultural Policy (CAP). In political terms, the prospect of participating fully in EC decisionmaking appealed to a small, hitherto isolated country. On the negative side, concerns about the ability of indigenous industry to compete within the EC, and about loss of sovereignty, were raised in Ireland during the lengthy preaccession period. Fianna Fáil and Fine Gael, the two main political parties, and representatives of employers and farmers strongly advocated membership; the small Labour Party and most trade unions opposed it. In the event, 80 percent of those who voted in the 1972 constitutional referendum approved Ireland’s membership. Irish industry and agriculture underwent considerable adjustment as a result of EC accession, although causality is difficult to prove given the influence of non-EC factors such as globalization and government policies. Since 1973, trade dependence on the UK has been reduced to 27.5 percent of total trade, and trade with the rest of the EU has increased to 30 percent (Department of Foreign Affairs, 1996). Traditional industries such as textiles, clothing, and footwear declined while the electronics and pharmaceuticals industries, buoyed by foreign direct investment, expanded significantly. Such investment was stimulated by access to the EC market and an active inward investment policy. Completion of the single market ushered in further competition and, in the 1990s, posed significant challenges to the insurance, energy, and telecommunications sectors in particular. Agriculture’s share in employment dropped from 27 percent in 1973 to 12 percent in 1995, by which time it accounted for 12 percent of GDP. Farm output and incomes increased, but farm structures have been slow to adapt (a minority of farmers accounted for most of increased output). The Common Fisheries Policy (CFP) had a major impact on Irish fisheries as a result of increased competition and the opening of other member states’ access to Irish territorial waters. Structural difficulties also remain, and the system of total allowable catches imposes tight restrictions on the development of the fisheries sector. In terms of monetary policy, Ireland’s participation in the exchange rate mechanism of the Eu-

300

Ireland

ropean Monetary System (EMS) in 1979 constituted a major departure, as the Irish pound/sterling link was broken. Despite concerns about the impact of currency differentials on trade with the UK, especially in the indigenous sectors, the choice was made in favor of low inflation and low interest rates associated with the EMS. In the 1990s, macroeconomic policy has been shaped by a determination to be among the core countries that form Economic and Monetary Union (EMU). Tight management of public finances and steady reduction in the debt/GDP ratio put the economy on target for early entry. Over time, the Irish per capita GDP has increased from 59 percent of the EU average at the time of EC entry (when there were nine member states) to over 85 percent in 1996. Continuation of this trend would have implications for future levels of EC receipts, as Ireland would exceed the threshold for receipt of structural funds and of cohesion funds. This positive performance conceals the fact that the rate of unemployment, some 15 percent in 1996, remains much higher than the EU average and that the repatriation of profits by foreign-owned firms, dominant in manufacturing industry, inflates growth figures for the Irish economy. Financial transfers under the CAP and structural funds have been substantial. Over the 1973–1995 period, net receipts totaled IR18.45 billion (Department of Foreign Affairs, 1996). In 1995, structural fund receipts accounted for 4.4 percent of Ireland’s GDP. These were mainly used to develop transport infrastructure and to promote employment and training. Politically, EC membership led to a gradual Europeanization of domestic policies and the expansion of legislation such as that on equality, environmental protection, health and safety, competition, and social policy (Keatinge, 1991). Moreover, the move toward comprehensive collective wage agreements between government and the social partners (representatives of trade unions and employers) in the late 1980s facilitated industrial peace and sound management of public finances. Given the tight constraints on fiscal and monetary policies, further consensus is required both in preparations for and participation in EMU. Opinion among the social partners is divided on the question of entry into EMU. There is concern about the possible impact of EMU on peripheral economies, the limited availability of EU funds to deal with asymmetric shocks, and the possibility that Britain’s opt

out could expose the Irish economy to a weakening of sterling. This would have serious repercussions for Irish industry and agriculture, given that over 27 percent of exports—concentrated in labor-intensive sectors—are destined for the UK. Finally, the limited availability of instruments within EMU to deal with such scenarios could place increased pressure on labor market flexibility. In terms of foreign policy, participation in European Political Cooperation (EPC), a mechanism to coordinate member states’ foreign policies, obliged Ireland to deepen its contacts with the outside world. Concerns about loss of sovereignty in this area and the erosion of Irish neutrality surfaced at each stage of formal EC/EU integration. Neutrality, although based on nonmembership of military alliances, is a value-laden concept associated in the public mind with independence, peace, and justice in international affairs. Political sensitivity on this point limits Irish involvement in the Western European Union (WEU) to that of an observer. The government’s 1996 white paper on foreign policy states that Irish participation in WEU peacekeeping operations will be examined on a case-by-case basis and that Ireland is ready to take part in negotiations on a common defense policy. Any involvement in such would be put to the people in a referendum. Public attitudes toward integration have been very positive—referenda on approval of the Single European Act (SEA) and the Treaty on European Union were supported by 70 percent of voters. Such support could be tested, however, were conditions of membership to alter significantly (Sinnott, 1995). In the past, foreign and European policy attracted little attention in the national parliament (Dáil) or senate (Seanad), where the committee system remained weak and underresourced. The Joint Committee on Foreign Affairs and the Joint Committee on European Affairs, established in 1993 and 1995 respectively, now provide important forums for debate. In 1995, the Department of Foreign Affairs organized a series of public seminars when preparing the white paper. An independent Institute for European Affairs (IEA), the first of its kind, was established in 1991 to provide research and analysis. Ireland has launched few strategic initiatives to promote European integration. Instead, Ireland’s approach is characterized by consensus building and brokerage (Scott, 1996). Yet Ireland has made important contributions to integration: through the

so-called Dooge Committee, which prepared the ground for the SEA and was chaired by a former Irish foreign minister; through some of its commissioners; and by presiding over the intergovernmental conference (IGC) in the latter part of 1996. Ireland’s reputation for effective management of the Council presidency, with respect to both internal and external EU affairs, is good. Successive Irish governments have first of all emphasized the principles of solidarity and cohesion as fundamental cornerstones of EU integration. A second major interest is the CAP, given that the size of agriculture in the Irish economy is three times the EU average (National Economic and Social Council, 1992). Third, Ireland has supported a strong and independent Commission. With a representation of only fifteen members of the European Parliament (EP), Ireland has been less enthusiastic about increasing the EP’s powers. These essential interests in the EU were set out in the 1996 white paper on foreign policy. Looking to the 1996–1997 IGC, the white paper underscored the importance of maintaining the institutional balance within the EU, Ireland’s right to nominate a commissioner, and the development of a Europe closer to its citizens. In this context, the last Irish presidency (July–December 1996) identified the fight against unemployment, drugs trafficking, and crime as its priorities. Looking to the future, the Irish government supports EU enlargement, full participation in EMU, and the development of cooperation in the sensitive area of Justice and Home Affairs. Challenges arising from enlargement, and the uncertain security environment in post–Cold War Europe, make it increasingly necessary for Ireland to exercise solidarity with its EU partners. At the same time, the importance of close political and economic links with Britain requires a skillful balance of Ireland’s efforts to stay at the core of integration while maintaining harmonious Anglo-Irish relations. See also TABLE 6; TABLE 10; APPENDIX 2; APPENDIX 3. Department of Foreign Affairs. 1996. Challenges and Opportunities Abroad: White Paper on Foreign Policy. Dublin: Stationery Office. Keatinge, Patrick, ed. 1991. Ireland and EC Membership Evaluated. London: St. Martin’s Press. National Economic and Social Council (NESC). 1992. The Impact of Reform of the Common Agricultural Policy. Dublin: NESC.

Bibliography

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Scott, Dermot. 1996. Ireland’s Contribution to the European Union. Occasional Paper 4. Dublin: Institute for European Affairs. Sinnott, Richard. 1996. Knowledge of the European Union in Irish Public Opinion: Sources and Implications. Occasional Paper 5. Dublin: Institute for European Affairs.

—Anna Murphy

The so-called Isoglucose case was a landmark European Court of Justice (ECJ) ruling in 1980 on the use of the consultation legislative procedure. Under the consultation procedure, the Council of Ministers is the sole decisionmaker but must consult the European Parliament (EP). In the Isoglucose case, the ECJ upheld the EP’s right to be consulted and generally strengthened the EP political position in the EC by nullifying a Council decision that had been taken under the consultation procedure but without the EP’s having been consulted. See also DECISIONMAKING PROCEDURES; EUROPEAN PARLIAMENT.

Isoglucose Case

The symbols of the EU—the burgundy passport, the flag with twelve stars, and the European anthem—are fully accepted by Italians. Earlier in the integration process, however, certain left- and right-wing elements opposed Italy’s involvement and advocated bringing Italy out of either the capitalistic market or the state of restricted national sovereignty into which (according to them) EC membership had brought the country. But with the passing of time, Italians have come to acknowledge the advantage of staying in the EU without reserve. Opinion surveys point out that national identity does not preclude the existence of other identities in Italian people. On the contrary, they imply that, in the mind of the Italians, affection for national symbols goes well with affection for EU symbols. Further insights into Italian feelings about the EU may be derived from an examination of different actors in the integration process, such as interest groups, professional associations, the media, and, of course, the political class.

Italy

Interest Groups

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Three types of economic interest organizations take part in EC policymaking: trade associations, agricultural associations, and trade unions. Such associations are organized transnationally in Eurogroups at the EU level or, in a few cases, have their own offices in Brussels to collect information and lobby. Eurogroups produce official positions involving all their members on EC norms and policies, although a dominant national delegation or a few strong national delegations may take responsibility for formulating the official position of the group. Usually, Italian delegations in large Eurogroups lack the power to formulate the group position. To overcome their weakness, Italian interest groups do what the weaker members of Eurogroups usually do: they put pressure on their own government (at the national level) rather than on the Commission (at the EU level). In such a case, if a national group wants to block or change a proposal of the Commission, it must persuade its government to influence the decision of the Council of Ministers on that proposal, that is, to intervene in the final stage of the EC decisionmaking process, even by threatening to reject the proposal by using the national veto. This strategy, however, is not always possible or successful. Regarding the Common Agricultural Policy, for instance, the Italian government has rarely been able to influence decisions. However, the fault does not lie entirely with the government; agricultural associations also deserve blame for not acting appropriately in the preparatory phase of the negotiations and for not having adequate contacts with the relevant government officials. A limited ability to collect and process information, and to analyze policy options, has strongly conditioned the action of Italian interest groups. As a result, they prefer to act in the traditional way with the national bureaucracy and the governing parties, though such means are not effective in the political-institutional structure of the EU. The situation is no different in the case of such professional associations as those of lawyers, nurses, and so on. In most cases, such associations are not interested in Europe; they react to EU initiatives rather than taking the initiative themselves and pay little attention to the Commission’s annual program, green papers, and white papers.

Education and the Media For a long time, education and research institutions also paid scant attention to the process of

European integration. National curricula could not be modified easily or quickly. The annual celebration of Europe Day (May 9) in primary and secondary schools was an easy but superficial alternative to thinking seriously about the significance of European integration. Like universities elsewhere in the EU, Italian universities have great opportunities to promote teaching and research on European integration. Certain opportunities are exploited; others are not, as a result of the inertia and conservatism of the academic world and the adverse legislative and administrative factors that need to be addressed by the national government. The mass media have given increasing attention to European integration. In the past ten years, the EU has received more coverage than in previous years. However, newspapers have tended to portray European integration as an increasingly unfortunate attempt to create a European federal state. Only recently has the media seemed to appreciate the idea that the EU is a political system to be defined and appraised in its own right and not in reference to a federal goal expressed fifty years ago. Political Parties Generally speaking, Italian political parties are inclined to keep party competition at the national level strongly separate from party action at the EU level. But there are exceptions. The Greens have always exhibited a strong “European look,” focusing their attention on “new politics” issues at the European and national levels and trumpeting this “unitary attitude” as proof of their modernity. On the contrary, although accepting European integration, the party of the traditional right (the late Social Movement; today the National Alliance) has always been careful to keep politics at the national level separate from politics at the EU level. The remaining parties fluctuate between these two tendencies, but in recent years a seeming separation of the state level from the EU level of political competition and growing criticism of ambitious policies—especially Economic and Monetary Union (EMU)—seem to be on the rise in certain Italian parties, especially on the right. The ensuing change of opinion (from an unconditioned to a conditional support for integration) may be explained in two ways. One explanation is at the state level. Following the transformation of the Italian party system in the early 1990s that was caused by rapid political and

institutional change (the crisis of the “first republic” and the new electoral law), the main members of the right-wing coalition (Forza Italia and, to a lesser extent, the National Alliance) started to see integration as an arena for domestic political competition. In particular, they seemed to consider it possible to extend their electoral support by advocating a Thatcherite approach to the EU. The second explanation is at the EU level, where parties have a peculiar “twin organization,” owing to the combination within them of transnational party federations and European Parliament (EP) groups. Each element has different goals and procedures and a different distribution of power and organizational clout among the member parties. The federation aims to expand national party membership by adjusting the different positions of its members; by contrast, the parliamentary group aims to negotiate a unitary voting position on parliamentary resolutions. For that reason party group leaders are ready to compromise, but only to a certain extent. When a member party is small and unnecessary to make or break a parliamentary majority, party group leaders pay little attention to it. National parties with few members in the EP react to such situations with a politics of separation between the national and European levels of governance. From that point of view, in recent years conditions at the EU level have worsened for Italian parties. Apart from Forza Italia, whose members recently merged with deputies of the French rightwing party Movement Républicain Populaire (MPR) to create the Union for Europe (UPE) Group, and the National Alliance, whose deputies have not adhered to any group in the EP, major Italian political parties are members of European party groups with a federal and transnational organization: the Party of the European Socialists (PES); the European People’s Party (EPP); the Liberal, Democratic, and Reformist Group (LDR); and the Greens. These four federative-parliamentary groups have two distinct types of power distribution. The PES and the EPP groups (the two largest in the EP) have a centralized power organization; the LDR and Greens have a diffused-power organization. In the PES group, power is concentrated in the hands of the British Labour and the German Social Democratic parties. Italian Eurodeputies had a degree of power only for a short period after the adhesion to the PES group in 1993 of the Partito Democratico della Sinistra (PDS). That

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power disappeared after the 1994 elections, however, with the collapse of the PDS. Today, Italian deputies are not numerically decisive in the PES group. Similarly, Italy’s delegation in the EPP group was numerically strong in the past but not as strong as the German delegation. Since the collapse of the Italian Christian Democratic party, however, Italian representation in the EPP consists of members of various small parties and makes up only 7 percent of the group. Simply put, Italian members of the EP are unable to influence their party groups because they have been marginalized within the groups themselves. Political Leadership and the Bureaucracy Italian politicians were highly influential in the formation of the European Communities. Statesmen like Alcide De Gasperi and, to a lesser extent, Gaetano Martino exercised real European leadership and were able to find solutions to serious obstacles on the road to integration. Certainly, they have not been the only Italian politicians to make important contributions to the EU’s development. Yet Italy conspicuously lacks a “European class”: it does not have an adequate number of politicians, scientists, businesspeople, and journalists constantly committed to Italy’s full participation in the European political system. The lack of a European class has its roots mainly in the scarce attention given to Europe in Italian universities and is accentuated by Italy’s recent political problems. Moreover, Italy lacks a first-class public administration. The more that European policies deepen, the more the state administration needs to improve its efficiency. Instead, Italy is ill equipped with instruments and procedures to coordinate the actions of different administration branches involved in EU affairs. For a long time there was no ministerial agency to coordinate action in the EU. When it was finally established in 1987 in the form of a Department for Community Affairs, it proved incapable of reconciling the often diverging positions taken by different Italian ministers in Brussels. The autonomy given by the law to Italian ministries and the nature of Italian coalition government, which reinforces bureaucratic autonomy, accounts for this situation. Finally, the Italian parliament takes part in EU affairs when a national parliamentary vote is needed to ratify new treaties or to revise existing treaties and when a national parliamentary law is required to execute directives. Apart from ratifica-

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tion and legislation, parliament may either address the government’s position on EU policies (if there is agreement among parliamentarians to do so) or be consulted on draft legislation in the EU (if the government wants to do so). In order to fulfill these functions satisfactorily, parliament needs a good number of deputies deeply involved in EU affairs, a specialized and permanent committee, and access to relevant and updated information. Yet the Italian parliament is not well equipped in any of these regards: it gives little attention to EU problems; it lacks a specialized, permanent com-

mittee (the special committees of the chamber and the senate do not have the powers of ordinary committees); and it does not have access to adequate information and documentation. Conclusion Italy has experienced considerable political turmoil and change since the early 1990s, as a result of which its role as a leading EU member state is no longer assured. Understandably, the Italian government and people assign great symbolic as well as real importance to the country’s participa-

J The main issue in EU-Japanese relations over the years has been a growing and persistent Japanese trade surplus with the EU. This surplus created protectionist pressures in the EU that led to negotiation of Voluntary Export Restraints (VERs) in a number of areas as well as the imposition of antidumping duties on some Japanese goods entering the EC market. At the same time the European side tried to get alleged Japanese protectionism reduced, first through reduction of tariffs and abolition of quotas, later through elimination of various nontariff barriers (NTBs) to trade. On the European side a number of national quotas remained in force for some Japanese products long after the Common Commercial Policy (CCP) should have been established. Most of these national quotas, allowed under Article 115 of the Treaty of Rome, were only phased out in connection with completion of the single market, which implied abolition of border controls within the EC. In one important case—that of automobiles—preexisting national quotas and VERs were replaced by a Communitywide limit on Japanese cars in the EC market that is to last until 1999.

Japan

Trade and Finance A direct dialogue between the European Commission and Japan started in 1961, with the visit of External Relations Commissioner Jean Rey to Tokyo. The Commission wanted to replace existing national trade policies with a common EC policy as prescribed by the Treaty of Rome. But the question of what to do with sensitive products and safeguard clauses made this a difficult objective within the EC, where national interests diverged.

It was only in July 1970 that the Council of Ministers authorized the Commission to negotiate with Japan, and two rounds of negotiations eventually took place in 1970 and 1971. Japan rejected the Commission’s efforts to include a safeguard clause in a future trade agreement, arguing instead that Article IXX of the General Agreement on Tariffs and Trade (GATT) should be a sufficient safeguard. Finally negotiations were suspended without results (Hanabusa, 1979, p. 6). In the meantime trade between EC member states and Japan had expanded dramatically. Exports from the EC Nine to Japan expanded from $198 million in 1958 to $899 million in 1968, and imports from Japan increased from $241 million to $987 million in the same decade. Overall, however, by 1968 imports from Japan and exports to Japan constituted only about 2 percent of the EC’s imports and exports (Ishikawa, 1990, pp. 15–16). The new economic policy announced by U.S. president Richard Nixon in August 1971 created strains in relations between the EC and Japan. The United States departed from the preexisting fixed exchange rate and put pressure on Japan to restrain exports to the United States. Japan responded in part by trying to diversify exports and open new markets in Western Europe. Accordingly, Japanese exports to Europe increased by 43.8 percent in 1972 and by 33.5 percent in 1973 (Hanabusa, 1979, pp. 6–7). In May 1973 Japan’s foreign minister visited the Commission in Brussels. Here it was agreed that “consultative talks should be held regularly on the major issues of common interest at both ministerial level and the level of experts.” Since then there have been regular official consultations between both sides. An EC delegation (embassy) was officially inaugurated in Tokyo in October 1975; the following year Japan opened a delegation in Brussels (Hanabusa, 1979, p. 7). Establishment of these official channels of communications, however, did not in itself solve the growing trade problems. Indeed, the energy crisis in 1973 added to the strains. From 1975 onward Japan was exporting more than twice as much to the EC as the EC exported to Japan. As a result, protectionism grew in Europe, mainly in the form of demands for VERs. The bulk of Japan’s exports to Europe—radios, tape recorders, television tubes, steel, and cars—came under VERs. In the shipbuilding sector Japan was per-

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suaded to increase prices and cut back on capacity (Wilkinson, 1990, p. 175). The Commission also urged that European access to the Japanese market be improved. Reducing tariffs was one way to ease market access (the Kennedy and Tokyo Rounds of the GATT had already gone a considerable way in that direction). But the Commission now concluded that NTBs, such as government regulations concerning health, safety, and industrial or environmental standards, constituted a greater barrier to access to the Japanese market (Wilkinson, 1990, p. 175). The second oil price increase in 1979 caused renewed economic pressures in the world economy. Again, Japan fared better than Europe, thanks to export-led growth. Exports of cars from Japan to the EC Nine jumped by 29 percent between 1979 and 1980, increasing the Japanese share of the EC market from 7.9 to 11.1 percent (Ishikawa, 1990, p. 24). Inevitably, quantitative restrictions (QRs) and VERs became part of the picture for cars, too. Italy imposed the most restrictive policy, limiting Japanese imports to two thousand cars annually. France followed with an unofficial limit of 3 percent of the market. Even more liberal countries like Britain and Germany imposed limits of around 10 to 11 percent of the market. Only Denmark and Ireland, which had no domestic car production, remained open to Japanese car imports (Ishikawa, 1990, p. 27). Similar trade problems emerged in the electronics sector, including television sets and videotape recorders. Apart from 1982, the trade gap kept increasing during the early 1980s. In 1981, EC Ten imports from Japan amounted to almost $19.5 billion, and exports amounted to $6.6 billion, leaving a deficit of nearly $12.9 billion. By 1985 the deficit had grown to $14.6 billion (Ishikawa, 1990, p. 31). Under these circumstances, in June 1985 the Council invited the Commission to prepare a comprehensive review of EC-Japan relations with recommendations for action. In its report, published the following October, the Commission noted the growing trade deficit with Japan and the concentration of Japanese exports within a number of sensitive sectors. The Commission recommended a comprehensive strategy that would include a genuine opening up of the Japanese market, “moderation” of Japanese exports, and the evolution of balanced industrial, scientific, and technical cooperation. In respect to the Japanese market,

the crux of the problem seemed not so much visible barriers like tariffs or QRs, but less visible barriers, including “the habits and attitudes bred of Japan’s vertically and horizontally integrated industrial, commercial and financial groups” (Commission, 1985, p. 4). The Japanese economy was growing much faster than the EC economy, and Japanese savings were much higher than savings in Europe. The Commission suggested that a better balance between savings and investments in Japan could help, for instance “by capital formation in sectors where there are deficiencies, e.g. residential buildings and public investment.” Looking at the Japanese current payments surplus, the Commission remarked that “the yen has consistently been weak.” Although the yen had appreciated against EC currencies, it was “questionable whether real exchange rates are a valid measure of the general competitive strength of the Japanese economy” (Commission, 1985, pp. 7–8). Looking at some specific problems in the Japanese market, the Commission found the highest remaining barriers in the area of agricultural products. But public procurement and standards, testing, and certification procedures also caused problems. So did the service sector: foreign banks and insurance companies had great difficulties operating in Japan, and it was “practically impossible for foreign lawyers to set themselves up in Japan as consultants.” Finally, the registration of patents and trademarks was extremely slow, and “counterfeiting of European products, particularly luxury goods, continues to be a widespread phenomenon” (Commission, 1985, pp. 18–19). European calls for monetary and fiscal cooperation echoed similar calls from the United States. Eventually joint efforts to reduce the imbalances were agreed by the G5 (the United States, Japan, Germany, Britain, and France) at the Plaza Hotel in New York in 1985 by appreciating the yen in relation to the dollar. Within a year the yen rose 29 percent against the dollar; by 1988 the yen’s value had almost doubled against the 1985 dollar. Because European currencies had also appreciated in relation to the dollar, the change in the yen–European currency rate was less dramatic (Wilkinson, 1990, p. 264). In 1979 the EC introduced legislation for “protection against dumped or subsidized imports” from nonmember countries and adopted a new regulation in 1984. The number of antidump-

ing actions increased substantially during the 1980s, as antidumping in effect became a substitute for other protectionist measures that had become more difficult to apply because of international commitments. Antidumping measures in force against Japan in 1995 included duties against audiotapes in cassettes, ball bearings, electrolyte capacitors, electronic weighing scales, ferroboron, lighters, linear tungsten halogen lamps, microdisks, plain paper photocopiers, television camera systems, and thermal paper (Commission, 1995b). One of the most important questions for third countries in the late 1980s was whether the EC’s single market would be an open, liberal regime or whether it would amount to a Fortress Europe. Sensitive to such concerns, in the fall of 1988 the Commission announced that single market Europe would be a “world partner,” and the European Council reiterated that commitment at its meeting in Rhodes the following December (Laursen, 1991). Could the Community deliver? A test case was that of pre–single market national quotas, of which the member states had a total of 131 affecting Japan at the launch of the single market program. It was mainly the EC’s southern member states who maintained these QRs: Spain had 41, Italy 37, Portugal 23, and France 17. Clearly, a unified frontier-free market would make such national quotas impossible to maintain. In the end the EC succeeded in abolishing national quotas by the end of 1992. But in the case of cars a Community-wide limitation on Japanese imports had to be negotiated. An unsigned gentlemen’s agreement was reached in July 1991, limiting imports of Japanese cars to 1.2–1.3 million per year until 1999, including more generous sublimits than in the preexisting quotas for Britain, France, Italy, Spain, and Portugal. Japanese manufacturers with plants in Europe would be allowed to increase production to 1.2 million cars annually during the same seven-year transition period. These would count as domestic (EC) cars (Sato, 1992, pp. 370–371). In the meantime, various efforts to bring more balance to trade between Japan and the EU met with limited success. Although Japan’s trade surplus fell in 1989 and 1990, it jumped by 52 percent in 1991 to a record ECU 22 billion. The Commission presented its analysis of the problem to the Council in 1992. In marked contrast to its earlier report, the Commission now admitted that

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“in bilateral trade, the reversal of recent trends and the future outlook justifies concern about the possibility of reducing the serious imbalances between the Community and Japan.” The Commission referred to the measures introduced by Japan in 1986 and 1987 to stimulate the economy, which increased domestic demand and fueled rapid growth in 1988 and 1989, leading to a rapid increase in imports. Between 1986 and 1990 Japan’s current account surplus fell by 60 percent to $35.8 billion. Beginning in late 1989, however, the Japanese authorities tightened monetary policy to control inflation, especially of asset prices. This led to falling growth, causing the “bubble economy” to burst. In 1991 Japan’s current account surplus doubled to $72.6 billion. The Commission admitted that “the challenge facing the Community will be to maintain and develop its technical and industrial strength, while participating fully in an open multilateral economic system.” With respect to Japan, much had been achieved in eliminating formal barriers, even if some remained. The Commission concluded that “the most important obstacles are now structural in nature.” Opening the Japanese market would require “a steady haul,” involving appropriate macroeconomic and exchange rate policies, strong implementation of antitrust laws in Japan, industrial cooperation, and trade promotion (Commission, 1992). In March 1995 the Commission sent the Council another communication on EU-Japan relations, which in some ways was more optimistic than previous communications (Commission, 1995a). The Commission claimed to have arrived at a “new and more focused approach,” which was “now producing results.” Comparing the EU’s approach with the more aggressive U.S. approach, the Commission stated directly its opposition to “unilateral trade sanctions [that are] a destabilising factor in world trade.” The Commission welcomed the Trade Assessment Mechanism (TAM), which had been introduced in 1992, and the dialogue on deregulation, which had started in 1994. These instruments were seen as useful in solving some of the remaining market access problems. The Commission proposed the following strategies: use the existing dialogue on competition policy to push for more open competition on the Japanese market, develop industrial cooperation, improve the climate for foreign investments in Japan, and increase Euro-

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pean exports of services. Finally, the parties should “make full use, where appropriate, of the World Trade Organization.”

Investments In early 1960 Japanese investment in Europe was only $3 million, which amounted to 1.1 percent of total Japanese foreign direct investments. By 1968 this had reached $56 million (4 percent of the total); by 1980 the figure was almost $3.9 billion (12.2 percent) (Sekiguchi, 1982, p. 167). The first Japanese investments in Europe were mainly made in support of trading activities and went into distribution and service centers. Japanese banks and insurance companies also established themselves in Europe. The tourist service industry, from airlines to travel agents, quickly followed. A second phase of Japanese investment began in the early 1970s, focusing on manufacturing. Factors influencing such investment included appreciation of the yen, rising wages in Japan, and investment incentives in various European countries. Increasingly, as trade frictions mounted, fear of European protectionism became an additional factor. For instance, investments in car production in Europe were motivated largely by the various limits imposed by several EC member states on imports of Japanese cars (Sekiguchi, 1982, pp. 167–173). As a result, Japanese investments in the EC increased significantly in the second half of the 1980s. Japanese cumulative investments from 1951 to 1989 reached almost $186.4 billion. Of this, some $30.2 billion went to Western Europe compared with about $75.1 billion to the United States (Micossi and Viesti, 1991, pp. 202–203). Japanese investments in the EC were unevenly spread among the member states, with Britain taking the largest share (about a third), followed by the Netherlands and Luxembourg. Economic recession in Japan since 1990 has led to a relative decline in Japanese investments in Europe. By contrast, European investment in Japan has been minimal. Indeed, foreign investments in Japan generally remain very low. It is striking that in 1993 Japanese invested seventeen times more abroad than foreigners invested in Japan (Ministry of International Trade and Industry, 1995, p. 196). Formalized Dialogue and Cooperation On the occasion of the EC-Japan summit meeting in The Hague on July 18, 1991, a Joint Declaration

on Relations Between the European Community and Its Member States and Japan was signed. In the declaration, which followed the adoption of a similar joint EC-U.S. declaration the previous year, both parties affirmed their “common attachment to market principles, the promotion of free trade and the development of a prosperous and sound world economy” and agreed on general principles and objectives of dialogue and cooperation as well as a framework for such dialogue and consultations. The parties would strengthen cooperation “in a fair and harmonious way in all areas of their relations” (Commission, 1991). Some EC member states had wanted to include the words “balance of benefits.” In the end “equitable access” and “comparable opportunities” were the phrases agreed upon. The framework built on the already established consultation mechanisms with regular meetings at various levels. Under the terms of the 1991 declaration, Japan and the EU now hold annual summits at the level of the Japanese prime minister, the Council president, and the Commission president. Conclusion Difficulties in EU-Japan relations have mainly been caused by Japan’s huge trade surplus with Europe. Japanese competitiveness vis-à-vis Europe was first based on low wages, which made Japan competitive in labor-intensive industries. As wages increased, capital-intensive industries, and later knowledge-intensive industries, gave Japan the edge. A successful strategy of export-led growth continued in one area after another. Japan’s competitiveness is now based on product quality and reliability. Recently the situation seems to have eased somewhat. Japan’s trade surplus with the EU fell 6.57 percent in 1993 and 17.75 percent in 1994, but remained high, at ECU 18.48 billion, in 1994. Both sides have tried to reduce barriers to trade, but residual elements of protectionist policies and practices remain. Commission. 1985. Commission Communication to the Council: Analysis of the Relations Between the Community and Japan. COM(85) 574 final. Luxembourg: Office for Official Publications of the European Communities. ———. 1991. Bulletin of the EC, 7/8-1991. Luxembourg: Office for Official Publications of the European Communities. ———. 1992. A Consistent and Global Approach: A Review of the Community’s Relations with Japan.

Bibliography

Communication from the Commission to the Council. COM(92) 219 final. Luxembourg: Office for Official Publications of the European Communities. ———. 1995a. Europe and Japan: The Next Steps. Communication from the Commission to the Council. COM(95) 73 final. Luxembourg: Office for Official Publications of the European Communities. ———. 1995b. Thirteenth Annual Report from the Commission to the European Parliament on the Community’s Anti-Dumping and Anti-Subsidy Activities (1994). COM(95) 309 final. Luxembourg: Office for Official Publications of the European Communities. Hanabusa, Masamichi. 1979. Trade Problems Between Japan and Western Europe. London: Royal Institute of International Affairs. Ishikawa, Kenjiro. 1990. Japan and the Challenge of Europe 1992. London: Royal Institute of International Affairs. Laursen, Finn, ed. 1991. Europe 1992: World Partner? The Internal Market and the World Political Economy. Maastricht: European Institute of Public Administration. Micossi, Stefano, and Gianfranco Viesti. 1991. “Japanese Direct Manufacturing Investment in Europe.” In L. Alan Winters and Anthony J. Venables, eds., European Integration: Trade and Industry, pp. 200–233. Cambridge: Cambridge University Press. Ministry of International Trade and Industry. 1991. White Paper on International Trade, Japan 1994. Tokyo: McGraw-Hill. Sato, Hideo. 1992. “Implications of German Unification for Japan.” In Paul B. Stares, ed., The New Germany and the New Europe, pp. 365–386. Washington, DC: Brookings Institution. Sekiguchi, Sueo. 1982. “Japanese Direct Investment in Europe.” In Loukas Tsoukalis and Maureen White, eds., Japan and Western Europe: Conflict and Cooperation, pp. 166–183. London: Pinter. Tanaka, Toshiro. 1995. “EPC in World Society: The Picture from Japan.” Hogaku-Kenkyo 68 (February), pp. 428–448. Wilkinson, Endymion. 1990. Japan Versus the West: Image and Reality. London: Penguin.

—Finn Laursen

Roy Jenkins was a prominent British Labour politician before becoming president of the European Commission in 1977. Jenkins had been leader of the pro-EC faction in the deeply divided Labour Party during Britain’s 1970–1971 entry negotiations, when the Conservatives were in power. Labour leader Harold Wilson’s support for a national referendum on the issue provoked Jenkins to resign from the party’s front bench. In the run-up to

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the June 5, 1975, referendum that followed Britain’s renegotiation of membership terms, Jenkins chaired the Britain in Europe campaign. In 1976, as François-Xavier Ortoli’s term as Commission president came to an end, the other member states agreed that Britain, a large recent arrival, should nominate the next president. As much to get him out of Britain as in recognition of his impeccable pro-EC credentials, the Labour government chose Jenkins for the job. Having spent his entire career in British politics and with little experience of foreign affairs, Jenkins was a Brussels outsider. Largely because he succeeded the uninspiring Ortoli, Jenkins’ arrival in Brussels aroused inflated expectations. Yet, by his own account, his first year there was a disaster. It soon looked as if Jenkins’ Commission presidency would be as undistinguished as any of his predecessors since Walter Hallstein. Yet three events ultimately set Jenkins’s presidency apart, although two of them had been set in motion before he arrived in Brussels. One was Greece’s accession to the EC, which took place on January 1, 1981. The other was the first-ever direct elections to the European Parliament, which were held in June 1979. Unlike these two events, the third development that characterized Jenkins’s presidency, and helped to get the Community going again, owed a great deal directly to him. This was the European Monetary System (EMS), an initiative to establish a zone of relative monetary stability in a world of wildly fluctuating exchange rates. The EMS, which eventually came into operation in March 1979, was substantially different from what Jenkins had originally envisioned. Nevertheless it was to Jenkins’s credit that a monetary initiative of any kind had been taken in the late 1970s. Without it, the single market program and the relaunch of plans for Economic and Monetary Union in the mid-1980s might not have happened or would certainly have been based on less solid foundations. See also COMMISSION; EUROPEAN MONETARY SYSTEM; UNITED KINGDOM. See JUSTICE AND HOME AFFAIRS.

JHA

A joint action is a legal instrument of the EU in the fields of the Common Foreign and Security

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Joint Research Centers (JRCs)

Policy (CFSP) and Cooperation on Justice and Home Affairs (JHA), that is, in the EU’s second and third pillars. The European Council is responsible for defining “the principles of and general guidelines for the common foreign and security policy” (Article J.8.1); within these guidelines, the Council of Ministers may adopt joint actions (by unanimity or by qualified majority vote if this is agreed to unanimously). A relatively small number of joint actions have so far been taken, dealing mostly with a variety of international security issues. Reflecting the member states’ reluctance to abandon unanimity in the realm of intergovernmental cooperation, no joint action has been taken by qualified majority voting. In Pillar Three, Article K.3.2(b) provides that the Council may take joint actions in the area of Justice and Home Affairs “in so far as the objectives of the Union can be attained better by joint action than by Member States acting individually on account of the scale or effects of the action envisaged” (this is a classic statement of subsidiarity). So far, the Council has taken even fewer joint actions in JHA than in CFSP. See also COMMON FOREIGN AND SECURITY POLICY; JUSTICE AND HOME AFFAIRS.

Joint Research Centers (JRCs) are EU-funded centers and institutes for scientific research and development. JRCs are located in four places—Ispra, Italy; Geel, Belgium; Petten, the Netherlands; and Karlsruhe, Germany. In 1989 they were reorganized into nine units: the Institute for Transuranium Elements (Karlsruhe), the Central Bureau for Nuclear Measurement (Geel), the Institute for Advanced Materials (Petten), and the Environment Institute, Institute for Systems Engineering, Institute of Safety Technology, Institute for Remote Sensing Applications, Institute for Prospective Technological Studies, and the Centre for Information Technologies and Electronics (Ispra). JRCs are administrated by an independent board but are accountable to the Commission.

Joint Research Centers (JRCs)

The JOULE program promotes pure research on the use of nonnuclear energy and renewable energy sources, such as solar energy, windpower, and biomass energy, under the EU’s research and

JOULE

technological development policy. THERMIE, a companion program, promotes the application of such research. JOULE focuses on four areas: the rational use of energy, renewable energy sources, fossil fuels, and the dissemination of energy technology. See JOINT RESEARCH CENTERS.

JRCs

Cooperation on Justice and Home Affairs (JHA) is incorporated in Title VI (the so-called third pillar) of the Treaty on European Union (TEU), which was signed on February 7, 1992, in Maastricht and entered into force on November 1, 1993. Title VI was preceded by a period of purely ad hoc intergovernmental cooperation by the member states of the EC, covering policy areas such as immigration, asylum, policing, and judicial cooperation. For example, in 1976 member states set up the socalled Trevi Group to counter terrorism and to coordinate policing by means of intergovernmental cooperation, without involving either EC or national institutions. With the adoption of the Single European Act in 1987, such purely intergovernmental cooperation acquired a Community objective: the accomplishment of the internal market, including the free movement of persons. The corollary of removing internal border controls within the EU, which has not yet been fully realized despite the expiry of the 1992 deadline, is the development of more intensive interstate cooperation in the fields of asylum, customs, and policing. The Palma Document (1989), which charged the Trevi Group with external border security coordination, stimulated closer Europeanlevel justice and police cooperation, leading ultimately to the inclusion of Title VI in the TEU. Thus, the latter constitutes the culmination of a process of formalizing intergovernmental cooperation and encompasses a permanent structure of working groups and decisionmaking procedures for the areas of “common interest” referred to in Article K.1. As a result of such consolidation and institutionalization, member states have assumed an obligation to cooperate, in contrast with the theoretically “reversible” process of purely ad hoc intergovernmental cooperation that prevailed in the preceding period.

Justice and Home Affairs (JHA)

The institutions of the EU do not function in the same manner in the context of third pillar cooperation as within the context of the first pillar (EC policies and activities). Moreover, the institutional balance prescribed in Article 4 of the EC treaty has no equivalent in the third pillar. It is striking that the central place in the institutional setup provided for in the third pillar is without question reserved to the Council of Ministers. It is within the Council that the “Member States shall inform and consult one another … ” in the areas of the third pillar with a view to coordinating their action. To that end, “they shall establish collaboration between the relevant departments of their administration” (Article K.3[1]). In a strict trias politica model of decisionmaking, the Council would be directly accountable to a democratically elected body of representatives. Moreover, the power to legislate (including the right of initiative) would reside not only with the Council but also with a parliamentary body. Of course a strict separation of powers as in national constitutional systems does not prevail either in the EC system. But the unique system of checks and balances in the EC is assured in part by the fact that the right to initiate legislation is almost exclusively reserved to the Commission. This important guarantee of action in the common interest is damaged by the system of shared initiative with the member states or even, in some instances, the exclusive right of initiative enjoyed by member states that was introduced in the third pillar. Moreover, within the first pillar the European Parliament (EP) is gradually acquiring a power of co-decision (Article 189b) to counterbalance the legislative power of the Council. According to the provisions of Article K.6 in the third pillar, the EP only has the right to be consulted ex post facto. National parliaments have no institutionalized role in this context either. One of the most striking features about intergovernmental cooperation in the context of the third pillar, therefore, is the fact that member states acting within the framework of the Council take decisions in the policy areas referred to in Article K.1 in a “democratic void” and in the context of a decisionmaking system shorn of any notion of separation of powers. Areas previously within the remit of national parliaments and national courts are now being decided upon at the European level behind closed doors, without effective parliamentary input—either European or national—and

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with no effective mechanism to ensure the application of the rule of law. Given the sensitive nature of the subject matters under consideration in the context of third pillar cooperation and the fact that they concern and affect the rights and interests of individuals, the existence of an accountability deficit, a transparency deficit, and a rule of law deficit can be viewed as an insult to democracy. Accountability Deficit In the current institutional setup of the intergovernmental third pillar (i.e., before implementation of the Amsterdam Treaty), a major accountability deficit emerges. The dominant role of the Council in decisionmaking is reinforced by a stratified decisionmaking structure composed of the Committee of Permanent Representatives (see Article K.8 of the TEU and 151 of the EEC treaty), the K.4 Committee, three steering groups, and an enormous number of working groups. Both the steering groups and the working groups are directly accountable to the so-called K.4 Committee (named after Article K.4), there being no direct link between steering groups and working groups. The K.4 Committee, a coordinating committee consisting of senior civil servants, may deliver opinions either at the Council’s request or on its own initiative. At the level of the Council, decisions are formally taken by unanimity. At the lower levels, in the event of an impasse, draft decisions are often forwarded to the next political level in the hope that an agreement can be reached there. For example, this tactic has been used in the working group on police cooperation to obtain an agreement on cooperation between the EU and the European Network of Forensic Science Institutes. The Council (including underlying structures) is supported by a general secretariat in Brussels (Article 151.2), whose main tasks in the third pillar are to support the Council presidency in the various meetings and to function as the logistical backup for a number of clearinghouses, notably the Center for Information, Discussion, and Exchange on Asylum (CIREA), and the Center for Information, Discussion, and Exchange on the Crossing of Borders and Immigration (CIREFI). But the general secretariat is gradually strengthening its own institutional position by expanding its tasks and sometimes taking initiatives independently of the member states, for example, in the field of combating organized crime. As the

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general secretariat is an autonomous body not accountable to any of the other actors in JHA cooperation, this is a serious antidemocratic development. Although for the first time some EC institutions were given specific roles in what had hitherto consisted almost entirely of ad hoc intergovernmental cooperation, the role played by the various other EC institutions in the context of the third pillar has been seriously diluted as compared with their role in the first pillar. Despite the appointment of a commissioner for JHA, who is supported by a task force consisting of European and national civil servants, the Commission’s involvement in JHA is severely curtailed. The Commission enjoys no right of exclusive initiative of proposals for action: with regard to the policy areas enunciated in paragraphs 1–6 of Article K.1, its right of initiative is shared with the member states, and it enjoys no right of initiative whatsoever with regard to the other policy areas. The absence of a right of initiative in the field of judicial cooperation in criminal matters was apparent in the Commission proposal for a convention on the protection of the EU’s financial interests, intended to combat fraud. Due to lack of competence, the Commission did not complete Title III concerning Judicial Cooperation Between Member States, and left the initiative in that regard with the Council. Moreover, the institutional protection guaranteed in the EC system by the provision that Commission proposals can only be amended by unanimity in the Council (Article 189a and c) is entirely absent in the third pillar. In practice it is the member state holding the presidency that has presented the texts and taken the initiatives in the context of third pillar activity, the Commission apparently preferring the tactic of issuing vague “communications” on general policy areas (e.g., drugs and fraud). In 1996, however, the Commission acquired a significant role in the assignment of EC budgets for activities under the third pillar, including activities in the field of customs, police, and traffic in human beings, areas in which the Commission has no role whatsoever according to the provisions of the third pillar itself. It is up to the Council to decide which budget is charged with the operational expenditure of internal cooperation (Article K.8.2). With regard to the accountability of the Council as such to parliamentary bodies, there is a serious deficit. The EP plays no role whatsoever in

the JHA decisionmaking process, simply being informed ex post facto of decisions taken by the Council (Article K.6). As a result, the EP has not been able to take a position on draft proposals or to influence, however informally, the decisionmaking process. The general practice seems to be that the EP gets the relevant documents some days after their adoption and so is confronted with a fait accompli. Even with the adoption of draft conventions (Article K.3), the practice has developed that the Council presidency submits to the EP legislative texts of often important (and controversial) subjects at a very late stage (as happened for example in the case of the European Police Office [EUROPOL] treaty). The EP has the right to address questions and recommendations to the Council and, more important, a budgetary power in the event that the member states decide to finance policy activities out of the EC budget. National parliaments may fulfill an important function in closing the accountability deficit in two ways: first, by effecting an exchange of information with the parliaments of the other member states on third pillar subjects; second, by means of a parliamentary formal assent procedure introduced at the national level. The intensity of these powers may vary from an ex post right to be informed of the measures already taken to the power to bind government ministers with a mandate prior to decisiontaking (as is the Danish situation on EC matters). The Dutch have a procedure whereby, before a vote in the Council, the parliament may instruct the national minister whether or not to agree to a decision under the third pillar that could legally bind the Kingdom of the Netherlands (part of the statutory law of December 17, 1992). Even this potentially far-reaching procedure does not work all that well in practice: owing to translation problems in the EU, documents are almost never available to the Dutch parliament in time (fifteen days in advance) but arrive in general a few days before the Council meeting takes place. Moreover, they are almost never translated into the Dutch language (Curtin and Pouw, 1995, p. 27). The Transparency Deficit The lack of accountability is accentuated by two additional factors (Curtin and Meijers, 1995). First, decisionmaking takes place behind closed doors: meetings of the Council and underlying structures are not open to the public, nor are the

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minutes or supporting documents made available to the public under the rules governing access to documents that operate in other EU areas. Some rather scanty information is, however, provided as to policy programs. In particular since the Irish presidency of the Council in the latter part of 1996, the practice has developed of issuing a multiannual working program for third pillar cooperation. This provides the public with some knowledge of the approach that various presidencies intend to follow for a period of two years. Second, initiatives (draft decisions, conventions, and so on) taken by the presidency have so far never been published, and decisions (K.3 instruments, conventions, and so on) tend to be published a substantial time after the text has been agreed upon. For example, it was only in 1996, some years after many had been taken, that the Council decided to publish a whole list of decisions based on Article K.3 relating to asylum and immigration policy. A resolution on law enforcement requirements, passed on January 17, 1995, was published in the Official Journal in the fall of 1996. Ironically, many such documents had already been released in the press communications of the Council secretariat. In sharp contrast, most Commission proposals in this field are systematically published in the Official Journal and sent immediately to the EP.

terms of Article B of the TEU stressing the EU’s “single institutional framework,” the British government, for example, declared to the upper house of its own parliament (which had stressed the necessity of a role for the ECJ in very unequivocal terms) that “a very strong practical justification would be needed to override [the government’s] basic presumption against involving the Community institutions in an intergovernmental agreement” (letter from the Home Office of May 31, 1995). To confer jurisdiction in regard to third pillar conventions on the ECJ, whose main responsibility and expertise is to uphold and develop Community law is, in this restrictive approach, to risk blurring the important legal distinction between the first pillar and the two intergovernmental pillars. This attitude has resulted in the practice of including, in a separate optional protocol attached to some international agreements (e.g., the EUROPOL Convention, Customs Information System Convention, and Convention on the Protection of the Financial Interest of the EC), a right for the ECJ to give preliminary rulings. A general role for the Court under the third pillar was therefore considered an important reform issue at the 1996– 1997 intergovernmental conference (IGC). (Indeed, the revamped third pillar in the Amsterdam Treaty assigned a larger role to the ECJ and also to the EP.)

The Rule of Law Deficit Article L of the TEU explicitly excludes the European Court of Justice (ECJ) from playing a general supervisory role over decisions taken in the context of the third pillar. The ECJ’s involvement is only possible in the context of K.3 conventions, and even then only pursuant to unanimous agreement among the member states in individual cases (K.3.2[c]). This situation has proved to be one of the most controversial points in practice, with certain member states adopting a strongly dogmatic line to the effect that any involvement whatsoever by the ECJ in the interpretation and/or resolution of disputes arising in the context of K.3 conventions would contaminate the intergovernmental nature of all activity in the third pillar. In other words, it would allow the introduction into the intergovernmental sphere of central tenets of Community law, such as the (expansive) principles of interpretation. Despite the clear possibility that Article K.3 contains for recourse to the ECJ, and the laudatory

Legal Instruments One of the most striking features of the intergovernmental cooperation that has taken place to date is the extreme paucity of instruments actually adopted as provided for in the relevant provisions of the third pillar. The Council clearly prefers to resort to the classic nonbinding instruments of intergovernmental cooperation (resolutions, conclusions, recommendations) rather than to the novel instruments contained in Article K.3, which might putatively be considered as enjoying legally binding effects. The practice appears to be that when the Council, K.4 Committee, and working groups draft proposals, they choose the legal form likely to encounter the least objections from member states. The Council is empowered by Article K.3 (2) to adopt joint positions and promote cooperation contributing to the objectives of the EU, using the appropriate procedures; to adopt joint actions or draw up conventions; and to decide (unanimously) on the application of Article 100c of the

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Rome treaty—visa policy—in the areas referred to in Article K.1 (paragraphs 1–6) of the TEU and to determine the relevant voting conditions relating to it. Although the treaty is silent on the question of the binding nature of forms of cooperation other than “conventions,” such as “joint positions” and “joint actions,” in all cases the product of cooperation under the third pillar is governed by public international law. Accordingly, the question of whether or not an act is legally binding depends upon the intention of the parties and the terms of the act itself.

Fields of Policymaking The subject matter of the third pillar traditionally belongs to the realm of state sovereignty. Government involvement in such areas started during the nineteenth century with policymaking in the fields of crime prevention, border protection, and control over the admission of foreigners to the national territory. Cooperation with other countries in these fields, and in particular the transfer of powers to the EC, was considered highly sensitive. Member states remain attached to their own traditions, values, and policies, a fact acknowledged by the intergovernmental method of policymaking on the nine “matters of common interest” enumerated in Article K.1 of the TEU. The areas listed in K.1 are therefore considered “matters of common interest” to the extent that they do not fall under the competence of the EC. As a result of a highly complex division of powers between the EC and the third pillar, a number of policy fields have a hybrid character in terms of possible legal basis (Community and intergovernmental)—for example, visa policy (Article 100c of the Rome treaty), drug policy (Article 129 of the Rome treaty), and combating fraud (Article 209a of the Rome treaty). Asylum, external borders, and immigration (steering group I). Steering group I is concerned with asylum policy (K.1.1), external borders (K.1.2), and immigration policy (K.1.3), areas that the European Council, meeting in Turin on March 26, 1996, indicated could be transferred to the first pillar with the use of the passerelle (gateway) provision of Article K.9. The Commission’s proposal at the 1996–1997 IGC to transfer these fields to the first pillar suggests that the Commission had dropped its earlier reservations in that regard. Indeed, in its draft treaty of December 5, 1996, the Irish presidency adopted this suggestion to a sub-

stantial extent in a section on the free movement of persons, asylum, and immigration, which was included in the Amsterdam Treaty. Asylum policy has developed along three parallel lines. It started off in 1990 with the signing of the Dublin convention, a treaty that was not ratified for a long time by one laggard: the Irish Republic. Finally, the European Council, meeting in Amsterdam on June 16 and 17, 1997, welcomed the completion of the ratification procedures that allowed the convention to enter into force by September 1, 1997. In practice the most important provision in the Dublin convention is that the country through which an asylum seeker enters the EU remains responsible for processing the asylum request. Application of the Dublin convention will depend on the possibility in practice of tracing asylum seekers in other member states. Accordingly, a draft convention is under discussion that would establish a center for the exchange of fingerprints at the European level (EURODAC). The Council has adopted several other flanking documents to implement the Dublin convention (Official Journal, EC 1996 C 274, pp. 35, 42, 44), such as a document containing means of proof in the framework of the Dublin convention, the form of a laissez-passer for the transfer of an asylum applicant from one member state to another, and a standard form for determining the member state responsible for examining an application for asylum. A second development relating to asylum policy has been the adoption by JHA ministers of several resolutions and conclusions to attempt to counteract the enormous flow of asylum seekers entering the EU in the beginning of the 1990s. A few of the measures, relating to the adoption of minimum requirements for asylum procedures and to bilateral readmission agreements, have been published (Official Journal, EC 1996 C 274, pp. 13, 20, 25). The third development was the decision by immigration ministers, meeting in Lisbon on June 11 and 12, 1992, to establish CIREA, to collect and provide information on asylum legislation and practices in different member states, and to draft common reports concerning the situation in third countries. CIREA reports twice a year to the Council; its second report was published in 1996 (Official Journal, EC 1996 C 274/55). Decisionmaking in the field of external border controls is slowed down considerably by a dispute between Spain and the UK over the status of

Gibraltar. The Commission tried to break the impasse by initiating a new draft convention in 1994 (Official Journal, EC 1994 C 11/8), but no substantial progress has been made. The same problem is also preventing the adoption of the draft European information system convention (closely linked in terms of substance to the draft external border convention). Immigration policy and policy concerning third country nationals can be divided into three separate aspects (see Article K.1, sub 3 a–c). First, with respect to the conditions of entry and movement in the EU of nationals of third countries, there is a clear connection with Article 100c of the Rome treaty, which regulates a few formal aspects of a common visa policy (Official Journal, EC 1995 L 164/1, and Official Journal, EC 1995 L 234/1). The substantive criteria are to be formulated in the context of the third pillar (e.g., the recommendation concerning local consular cooperation regarding visas). Second, the conditions of residence of third country nationals in the territory of a member state, including family reunion and access to employment, have so far been regulated by four resolutions (see Official Journal, EC 1996 274, pp. 3, 7, 10, and Official Journal, EC 1996 C 80/2) that contain, on the one hand, measures on limitations on admission of third country nationals for employment, for purposes of pursuing activities as self-employed persons, and for study purposes, and, on the other hand, measures on the status of third country nationals resident in the EU on a long-term basis. Third, the combating of unauthorized immigration, residence, and work by third country nationals in the territory of the member states has had the attention of the member states since 1994, when they established CIREFI for information exchange concerning illegal border crossing and immigration (Official Journal, EC 1996 C 274, p. 50). In 1994 the Council also adopted a uniform model for the expulsion of third country nationals (Official Journal, EC 1996 C 274, p. 18). As measures adopted in the field of immigration are almost entirely restricted to classic nonbinding instruments, the Council adopted resolutions in 1995 and 1996 on monitoring the implementation of these measures. Combating international crime (steering group II). Steering group II deals with combating drug addiction (K.1.4), combating fraud on an international scale (K.1.5), customs cooperation (K.1.8), and police cooperation for the purposes of preventing and combating terrorism, unlawful

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drug trafficking, and other serious forms of international crime. Police cooperation includes, if necessary, certain aspects of customs cooperation in connection with the organization of an EU-wide system for exchanging information within EUROPOL (K.1.9). Combating drug trafficking and drug addiction was a central theme of the Irish presidency in the last half of 1996. Several decisions taken at that time were so sensitive that they required deliberations at a high political level. Following a Belgian initiative, several decisions were also taken in the field of combating trafficking in human beings and the sexual exploitation of children. The European Council, meeting in Dublin on December 13 and 14, 1996, gave a mandate to reinforce actions to combat international organized crime. As a result, a high level group was established to report on this situation during the Dutch presidency in the first half of 1997. Thus far the most important decision of the Council in combating organized crime is probably the establishment of EUROPOL and the EUROPOL Drugs Unit (EDU) in The Hague. The main function of the EDU is to exchange criminal information between member states through national liaison officers. The future EUROPOL will also have a database containing information and intelligence that can be used, for example, for analysis purposes. This organization is likely to become more and more important in the near future once the EUROPOL convention comes into force. Moreover, EUROPOL has been given a substantive role with respect to a number of recent decisions, for instance, the exchange of information on the chemical profiling of drugs (Official Journal, EC 1996 L 322/5) and the creation and maintenance of a directory of specialized competences, skills, and expertise in the fight against international organized crime (Official Journal, EC 1996 L 342/2). Judicial cooperation (steering group III). Finally, steering group III covers judicial cooperation in civil matters (K.1.6) and criminal matters (K.1.7). To strengthen both areas of cooperation, the Council adopted a joint action concerning a framework for the exchange of liaison magistrates (Official Journal, EC 1996 L 105/1) and the Grotius program of incentives and exchanges for legal practitioners (Official Journal, EC 1996 L 287/3). Cooperation in civil matters on the basis of Article K.1.6 mainly concerns the drafting of conventions. Work is underway on amending the

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EEC execution treaty and on a draft convention simplifying the distribution of judicial documents. Cooperation on the basis of Article K.1.7 has so far been fruitful. Although the drafting of a convention for mutual assistance in criminal matters is a priority, several decisions have already been taken in such areas as the protection of EC financial interests (Official Journal, EC 1995 C 316), individuals who cooperate with the judicial process in the fight against international organized crime (Official Journal, EC 1997 C 10/1), and sentencing for serious illicit drug trafficking (Official Journal, EC 1997 C 10/3). The IGC and Amsterdam Treaty One of the major tasks entrusted to the 1996–1997 IGC was strengthening the EU’s capacity to act in the area of justice and home affairs. There were two main issues for consideration: first, which of the matters covered presently by the third pillar should be transferred to the first pillar; second, what means were there of improving the effectiveness of action for those areas that would remain within the intergovernmental framework of the third pillar. The Amsterdam Treaty accepted that the issues of asylum, visa, immigration policy, and external border controls should be transferred to the first pillar, thereby allowing for the possibility of qualified majority voting in certain circumstances, and a greater role for the EP. In addition, the transparency deficit should be reduced because the Commission’s right of initiative would ensure that draft legislation was at least published in advance of decisionmaking. With regard to those areas not transferred to the first pillar (in particular, criminal law), reform includes measures to address the accountability

gap (informing the EP before decisions are taken; institutionalizing a role for national parliaments); the transparency deficit (publishing draft decisions in the Official Journal as a matter of course and informing parliaments—both national and European—well in advance of final decisionmaking); and the rule of law deficit (giving a general overseer function to the ECJ). Moreover, reform entails clarifying the types of legal instruments that could be adopted in third pillar policy fields and their putative legal effects. Decisionmaking procedures are also simplified, notably by reducing the number of decision making levels. Finally, the Schengen agreement was brought into the acquis communautaire in order to avoid the risk of a further growth of this “parallel system” and in order to bring the progressive elements of Schengen into the EU framework. See also COUNCIL OF MINISTERS; K.4 COMMITTEE; IMMIGRATION POLICY. Curtin, D. M., and H. Meijers. 1995. “The Principle of Open Government in Schengen and the European Union: Democratic Retrogression?” Common Market Law Review 32, pp. 391–442. Curtin, D. M., and J.F.M. Pouw. 1995. “La coopération dans le domaine de la justice et des affaires intérieures au sein de l’Union européenne: une nostalgie d’avant Maastricht?” Revue de Marché Unique Européen 3, pp. 13–34. Dehousse, F., and L. van den Ende. 1996. “Plaidoyer pour la réforme du troisième pilier.” Revue du Marché commun et de l’Union Européenne 403. Muller-Graff, P. C. 1994. “The Legal Bases of the Third Pillar and Its Position in the Framework of the Union Treaty.” Common Market Law Review 31, pp. 493–510.

Bibliography

K Named after the relevant provisions of Pillar Three (Justice and Home Affairs) of the Treaty on European Union (TEU), the K.4 Committee coordinates the work of the Justice and Home Affairs ministers, dealing with terrorism, drug trafficking, and immigration. The K.4 Committee superseded the Group of Coordinators, which had dealt with such issues before their incorporation into the EU. Also under the TEU, the Committee of Permanent Representatives (COREPER) was given final official responsibility for the K.4 Committee’s work. This was unwelcome to the K.4 Committee, as was the attempt to integrate some of the committee’s subordinate working groups. A compromise between COREPER and K.4 coordinators gave the final voice to COREPER on the understanding that in normal circumstances the K.4 Committee’s recommendations would prevail. See also JUSTICE AND HOME AFFAIRS.

K.4 Committee

Building on general EC support for cultural events over many years, the EU launched the KALEIDOSCOPE program in March 1996 to encourage multilateral cooperation (i.e., participation from at least three member states) in creative projects or cultural events as well as improvement of the skills of young creative or performing artists. Most of these activities are on a relatively small scale, with the EU’s contribution (up to 50 percent of the total) having an upper limit of ECU 50,000. Yet some larger-scale activities are also covered, including a number of preexisting projects, such as the European Community Youth Orchestra, the

KALEIDOSCOPE

European City of Culture, and the European Cultural Month. See also CULTURAL POLICY. Formed in 1979, the Kangaroo group is a crossparty group of members of the European Parliament (EP) who share a commitment to market integration and European unity. The group’s name refers to the members’ determination to overcome national barriers to trade. The group was influential in supporting the EP’s Draft Treaty Establishing the European Union (1984) and the subsequent single market program. See also SINGLE MARKET PROGRAM.

Kangaroo Group

To promote greater understanding of EC law and practice and thereby facilitate implementation of the single market program, in 1992 the EC launched the KAROLUS exchange program for national officials responsible for market integration. The program is especially aimed at those working on standards, testing, and certification; public procurement; supervision of banks, insurance companies, and stock exchanges; regulation of transport; operation of statistical programs; and the free movement of persons. See also IMPLEMENTATION; SINGLE MARKET PROGRAM.

KAROLUS

Issued by leaders of the Western European Union (WEU) on May 9, 1994, at a meeting in Kirchberg, Luxembourg, the so-called Kirchberg Declaration established categories of WEU membership and association. The four categories are full members (who are also members of NATO and the EU), associate members (who are also members of NATO but not the EU), associate partners (who are neither NATO nor EU members), and observers (who are also EU but not NATO members). See also WESTERN EUROPEAN UNION.

Kirchberg Declaration

Germany’s longest-serving postwar chancellor and the most influential head of government in the EU,

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Helmut Kohl was born in Ludwigshafen on April 3, 1930. The date and place of birth conditioned much of his subsequent views on Europe. As a teenager he experienced the trauma of the Third Reich and its shaming defeat. Ludwigshafen’s location as a border region on the Rhine also meant that he was caught up in the Franco-German relationship as it developed after 1945. After studying at the University of Heidelberg, Kohl entered political life. He became the youngest member of the state parliament in the Rhineland Palatinate in 1959, the youngest state parliamentary leader in 1963, minister-president in 1969, chairman of the Christian Democratic Union (CDU)/Christian Social Union (CSU) parliamentary party in 1976, and the youngest chancellor in 1982. Somewhat paradoxically, given this record of almost continual success, he was consistently underestimated, especially in comparison to his more obviously brilliant rival, Helmut Schmidt, leader of the Social Democratic Party (SPD) and chancellor of Germany from 1974 to 1982. Helmut Kohl played the central role in securing German unity. His ten-point plan of November 28, 1989, put German unity on the international agenda and established the federal government as the prime actor in the process. Kohl’s most important individual contributions were keeping the continuous support of U.S. president George Bush, negotiating Soviet agreement to continued German participation in NATO, and winning East Germany’s first and last free elections, in March 1990, very convincingly. Kohl was also able to use the fact of unity to accelerate progress toward deeper European integration. After assuming the chancellorship in October 1982, Kohl reestablished European integration as Germany’s central priority, in contrast to the Brandt and Schmidt periods (1969–1982), during which integration had sometimes been eclipsed by Ostpolitik and when Schmidt, in particular, had shown little enthusiasm for supranational solutions. Kohl’s support for supranationalism represented a reversion to the policy of Konrad Adenauer, the first chancellor of the Federal Republic. Kohl signaled the change of policy priorities by visiting Paris and Brussels within a week of his advent to power. Yet in his early years as chancellor, Kohl’s European policy was largely declaratory, as he was preoccupied with the contentious domestic debate on the stationing of Pershing missiles in Germany. However, he used these years to cultivate a close rela-

tionship with French president François Mitterrand. Kohl and Mitterrand were both committed integrationists, who envisioned the Franco-German relationship as the motor of integration. Progress in this direction was initially very slow, given the EC’s intergovernmental character in the early 1980s. Moreover, the first real German initiatives to revive the EC—the GenscherColombo proposals and the resulting Stuttgart Declaration—were identified with the Free Democratic Party, the CDU/CSU’s junior coalition partner. The British budgetary question remained a serious obstacle in the way of further progress, and much effort was devoted to its removal, which Mitterrand finally accomplished at the Fontainebleau summit in June 1984. Kohl and Mitterrand were well aware of British prime minister Margaret Thatcher’s opposition to further integration and, given that unanimity was the norm in EC decisionmaking, had to bide their time and not invest too much effort in launching schemes for deeper integration in the early 1980s. Finally, at the Milan summit in June 1985, a Franco-German proposal was put forward for a draft treaty on European union. Despite its ambitious title, which reflected the European Parliament’s plan of the previous year, it was a fairly modest document that concentrated, like the Stuttgart Declaration, on an extension of European Political Cooperation, the member states’ foreign policy coordinating mechanism. The proposal’s force had in any case been weakened by Germany’s use of a veto in the agriculture council only a month earlier. Considering that the draft treaty envisaged an extension of qualified majority voting (QMV) in the council, the use by Germany of a veto for the first time did much to undermine Germany’s position at the summit. But soon the climate for realizing Kohl’s vision of integration improved dramatically. A major catalyst was the Single European Act (SEA) of 1986, which introduced QMV for a majority of single market program directives. As Kohl anticipated, the use of QMV proved contagious. Thus, although unanimity remained the rule for institutional change, it was now embedded in a Community where majority voting was frequent and the price of isolation potentially high. The capacity of a single state to block progress was thus dramatically reduced. If the SEA provided the potential for further progress, it was the prospect and eventual

achievement of German unity that paved the way for far-reaching change. Kohl’s reaction was to embrace and accelerate unity but also to insist that a united Germany must be anchored in a much more deeply integrated Europe. German unity was accomplished at breathtaking speed between the fall of the Berlin Wall on November 9, 1989, and October 3, 1990. Progress toward anchoring Germany in a deeper Europe began even during the talks on unity. After a short period when Mitterrand appeared to return to a balance-of-power approach, he reached the conclusion that German unity was inevitable and opened the way at the Strasbourg summit in December 1989 for the series of events that led to the convening of intergovernmental conferences (IGCs) on Economic and Monetary Union (EMU) and political union. In the period leading up to the IGCs, Kohl stressed the necessity for progress on political union, especially in terms of the development of a Common Foreign and Security Policy and strengthened powers for the European Parliament. In a speech in Edinburgh in May 1991, Kohl launched the idea of a supranational police agency (EUROPOL) that would be able to operate without hindrance in all the member states in matters such as the fight against organized crime and drug dealing. The outcome of the IGC itself was thus a disappointment to Kohl. Although significant progress was made on EMU, there was little progress on EUROPOL and on political union. In the years since the Treaty on European Union, Kohl has become even more central to European integration, given the demise of Mitterrand, Spanish prime minister Felipe González, and Commission president Jacques Delors. As chancellor of the EU’s easternmost state and the EU’s most experienced statesman, Kohl dominates the politics of European integration in a way that has only been equaled by Charles de Gaulle. Kohl’s primary efforts are now aimed at securing the realization of EMU, a goal to which

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he attaches the greatest importance. Although public opinion in Germany has consistently been unenthusiastic about EMU, opinion polls also report a high level of trust in Kohl’s handling of European policy. To that extent, it is still possible to talk of a permissive consensus in Germany toward the EU, which Kohl is determined to use to achieve a single currency. The failure of the SPD’s ill-conceived attempt to exploit public opposition to EMU in order to defeat the CDU has been taken as an indication that Kohl will probably succeed. Apart from making progress on justice and home affairs, Kohl is also concerned to promote the eastern enlargement of the EU and has elevated German-Polish relations to a personal priority, on a par with the defining Franco-German relationship. In contrast to EMU, however, it seems unlikely that Kohl will be able to use his position as chancellor to see enlargement successfully concluded, given its longer time horizon. Although Kohl will run in the federal election in September 1998, it is likely that, if elected, he will not complete the full four-year term. If he did so, he would have overtaken Bismarck as Germany’s longestserving chancellor. In its core commitment to supranationalism, Kohl’s vision, inherited from Adenauer and sometimes called the Rhineland position, incorporates the impact of Germany’s traumatic history from 1871 to 1945. Yet this vision is increasingly seen to be less self-evident in Germany today than it was in the decades until reunification in 1990. Kohl’s contribution to bringing about German unity is already recognized. On Europe his vision is more contested. Indeed, whether the Federal Republic will cleave to a Rhineland position on Europe will depend in large measure on the realization of EMU. See also GERMANY. —Wilie Paterson

L The so-called Lamers paper was a policy paper of the governing Christian Democratic Union in Germany written by Karl Lamers and Wolfgang Scheuble in September 1994. The paper was controversial because it advocated differentiated integration in the EU and identified the member states that should form the hard core: France, Germany, Belgium, the Netherlands, and Luxembourg (i.e., the EC’s original six member states minus Italy). See also GERMANY.

Lamers Paper

The historical and cultural relationship between Europe and Latin America is long-standing and profound. From the initial “encounters” of Spanish and Portuguese explorers in the late fifteenth century to the present day, each region has been influenced by the activities and aspirations of the other. Latin America inherited from Europe its conception of the nation-state, predominant religious traditions, political and economic philosophies, and legal systems. Demographics have also facilitated greater interregional interaction. In the Southern Cone, Argentina, Uruguay, and Chile have many citizens who trace their ancestry to Italy, Germany, Spain, Portugal, and Britain. Each region is populous enough to constitute an attractive market for the other. The EU encompasses 372 million potential customers; Latin America’s population is even larger, at 445 million (excluding the Caribbean). Finally, in the twentieth century, both European and Latin American states have had to deal with the United States on a number of levels, and at times each has viewed the other as a “counterweight” to U.S. economic and diplomatic influence.

Latin America

These legacies have certainly shaped the economic and political relationship. Europe is Latin America’s second-largest trading partner after the United States. Twenty-three percent of the area’s exports and imports have a European connection. In contrast, the United States is the target of 41 percent of Latin America’s exports and the source of 45 percent of its imports. Latin America is also increasingly attractive to foreign investment. In this regard, Europe is again second only to the United States in levels of investment, with 37 percent of European investment located in the region, compared to 47 percent for the United States. In some cases, European investment outstrips that of the United States, particularly in Argentina and Brazil. Forty percent of Latin American external debt is held by European financial institutions, nearly twice the level held by U.S. banks (Friscia and Simon, 1995). The EU disburses $500 million in development assistance to Latin American countries each year (Smith Perera, 1995, p. 106). Politically and culturally, European socialist, social democratic, and Christian democratic parties have enduring ties with their Latin American counterparts, and there is an expanding web of interregional interaction among a myriad of nongovernmental organizations. Shared affinities, however, have failed to overcome other factors that have reduced the importance of Latin America to EU countries. The economic relationship has been limited by differing levels of development within and between the regions. Moreover, EU preoccupation with its own integrative experiment and its links with former colonies in Africa, Asia, and the Caribbean as well as policies such as the Common Agricultural Policy (CAP) have served to limit Latin America’s access to European markets. On the other side of the Atlantic, nationalist and protectionist orientations of Latin American governments, a lack of export diversification, and the region’s heavy burden of foreign debt have reduced opportunities for trade and investment. In politico-military terms, Europe has often viewed Latin America as falling within the sphere of influence of the United States. As such, European interest has—with few exceptions—been minimal. Given the structural and perceptual asymmetries of the relationship, it is not surprising that its evolution has been ambiguous, sporadic, and frustrating. From its founding in the 1950s, the EC served as both impetus and model for Latin Amer-

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ican integrative efforts. For example, the Central American Common Market (CACM) (1960), the Latin American Free Trade Association (LAFTA) (1960), and the Andean Pact (1969) as well as the Latin American Economic System (SELA) (1975), were designed in part to foster greater cooperation among the Latin American countries themselves and to offset trade diversion from Europe. In the 1950s and early 1960s, Europeans were preoccupied with their own experiment in regional integration, although the EC did express its intention to pursue closer relations with Latin America, and “contact groups” between the Commission and Latin American diplomatic missions in Brussels were established in 1963 (Muniz, 1980, pp. 56–57). This profession of affinity was largely rhetorical, however, as the EC usually favored closer ties with former colonies in Africa and ignored the elements of a “Latin American memorandum,” drafted by the Commission in 1966, that recommended greater coordination of interregional economic ties and more formal mechanisms of consultation between EC representatives and the heads of Latin American missions in Brussels (Mower, 1982, pp. 37–38). During the 1960s and 1970s, the most important dimension of the EC–Latin American relationship was economic, and trade expanded somewhat between the two regions. The unifying efforts of the Latin Americans, particularly through CACM and the Andean Pact, were targets of EC technical and development assistance (Mower, 1982, pp. 38–45). The adoption of the Buenos Aires Declaration in July 1970 was a high-water mark in the evolving relationship. Coupling a Latin American critique of the CAP and EC association policies with a call for an expanded economic and political dialogue, the declaration was embraced by the Council of Ministers. It formed a basis for creation of an EC–Latin American joint committee and negotiation of a series of nonpreferential bilateral agreements with Argentina (1971), Brazil (1973), Uruguay (1973), and Mexico (1975) (Kornat, 1985). The formation of SELA indicated a Latin American desire to facilitate interaction on a regional level. In 1978 and 1979, the Latin American Council, SELA’s supreme body, proposed adoption of a policy toward Europe on a number of political and economic issues (Muniz, 1980, pp. 62–63). This project, however, “dropped into oblivion” before it could influence interregional

relations (Baldinelli, 1986). And indeed, by the end of the decade, the Latin American–EC relationship was characterized as lacking direction and definition (Muniz, 1980). In the 1980s, several factors combined to raise European involvement in the Western Hemisphere. By mid-decade, Latin America owed Western banks and international lending institutions approximately $350 billion; countries such as Mexico and Brazil each owed more than $120 billion. Although European banks (especially those in Britain) held approximately one-third of Latin American debt, the EC generally deferred to repayment proposals put forward by the United States. European support of Latin American debt reduction through export promotion was again largely rhetorical; although the EC extended preferential access to the African, Caribbean, and Pacific (ACP) countries through the Lomé convention, the EU made no special arrangements to larger Latin American countries under the Generalized System of Preferences (GSP). The 1980s also marked deepening EC involvement in issues not directly related to economics. In the 1982 dispute over the Falkland Islands (Islas Malvinas) between Argentina and the UK, the EC supported Britain by condemning Argentina’s occupation of the islands and imposing an economic and arms embargo, which hastened the British victory (Edwards, 1984). As one might imagine, this event soured relations, as Latin Americans felt betrayed by their ostensible “counterweight.” European activity was more forceful and direct in formulating a response to civil conflicts in Central America (Smith, 1995). The view from Brussels was that U.S. support for the contras in Nicaragua, as well as its assistance to a government not known for its sterling human rights record in El Salvador, was, at best, misguided. At worst, Europeans believed that by casting the issue in Cold War terms and asserting that the Central American crisis was “externally” inspired and supported, the United States was risking an escalation of tensions with the Soviet Union, thereby threatening European security. Thus, the EC sought to mediate between the United States and the players in the Central American drama. EC member states and representatives of EC institutions participated in a series of historic meetings with Central American foreign ministers, as well as ministers from the Contadora group (Colombia, Mexico, Panama,

and Venezuela), which culminated in the 1984 San José conference. This dialogue constituted “the first common endeavor of the EC as such within its European Political Cooperation structure” (Boselli, 1985, p. 12). The entry of Spain and Portugal into the EC in 1986 served as a catalyst for expanded European interest in Latin America. Both countries had historic ties to Latin America and could therefore speak for the region within EC institutions. Similarly, both countries had recently abandoned authoritarian political systems and thus could serve as models for democratic transitions in Latin America. One cannot overstate Spain’s role in placing Latin America on the EC’s radar screen and for revising EC institutional orientations and policies in that regard. Madrid’s influence is reflected in the EC’s 1987 review of Latin American policy, the expansion of EC diplomatic missions in the region from four to ten, the acquisition by the EC of observer status at the Organization of American States (OAS), and the formalization of contact with Latin American representatives to annual events. Spain also had a hand in expanding nonpreferential agreements with Latin America as well as in lobbying the EU to extend Lomé concessions to Haiti and the Dominican Republic (Schumacher, 1995, pp. 119–125). Madrid is also the location of the Institute of European–Latin American Relations (IRELA), an organization created by the European Parliament in 1984 to strengthen interregional relations, although it is interesting to note that Spain has not always been an enthusiastic supporter of IRELA’s activities (Wiarda, 1990, p. 165). Obviously, Spain has not been alone in attempting to broaden and deepen interregional ties. Italy and Portugal also have important interests in the region. And no one can discount the diplomatic and economic importance of Germany (van Klaveren, 1994, pp. 89–94). At the end of the 1990s, one question worth pondering is whether or not political and economic reform in Latin America is attractive enough to the EU to offset its preoccupation with consolidating the single market, launching economic and monetary union, enlarging into Central and Eastern Europe, and expanding ties with the Pacific Rim and North Africa. Democratic transformation in Latin America has afforded opportunities for deepening political contacts. Most important perhaps is the continuing political dialogue between the Rio

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Group and the EU following the 1990 Declaration of Rome. Latin American reformism may also enhance economic opportunities for the EU. The wave of privatization, for example, has increased flows of European investment, especially in such sectors as electronics and telecommunications. Furthermore, one indication of European interest in deepening relations with traditional trading partners is the December 1995 cooperation agreement between the EU and MERCOSUR (Southern Cone Common Market), the first ever between two customs unions, and the conclusion of bilateral agreements with Mexico and Chile. These latter arrangements provide EU entrée into other regional groupings, most notably the North American Free Trade Agreement (NAFTA) and the Andean Pact. Even though there are encouraging signs of expanding interregional partnership, there are a number of significant constraints. One is the continued decline in Latin America’s position as a source of imports and a target for exports outside the EU. On the import side, the region’s share has slipped from 8.7 percent in 1965 to 5.2 percent in 1991. Latin America’s share of EU exports shrank from 6.4 percent in 1965 to 4.13 percent in 1991 (Friscia and Simon, 1995, p. 16). Another constraint is a shift in interregional balance of trade. For decades, Europe ran trade deficits with Latin America; in 1993, however, the EU ran an ECU 1.7 billion surplus (Smith Perera, 1995, p. 101). This makes the case for expanded economic relations less clear-cut than in the past and indeed may provoke a protectionist response in the EU, thus eroding positive political gains of recent years. Opinion is divided regarding the single market’s trade-enhancing or trade-diverting effect on Latin America (Simon and Purcell, 1995). Other limitations are the variable speeds and differing geometries of Latin American integration. Given the diversity of institutions and types of economic arrangements, it is difficult for the EU to manage relations on a regional level. Perhaps the potential challenge of a proposed Free Trade Area of the Americas (FTAA) will be a catalyst for new approaches that will create a synergy toward “genuine partnership,” rather than the alternative—and more accurate—characterization of the regions as “distant friends” (Smith Perera, 1995, p. 99). Forty years on, Latin America and the EU continue their “search for direction” (Vellinga, 1995).

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Baldinelli, Elvio. 1986. “Turning the Page Between Latin America and the European Communities.” CEPAL Review no. 30, pp. 87–96. Boselli, Luigi. 1985. “EC Boosts Ties to Latin America: Political and Economic Dialogue Is Institutionalized at Ministerial Level.” Europe no. 252, pp. 12–14. Edwards, Geoffrey. 1984. “Europe and the Falklands Crisis of 1982.” Journal of Common Market Studies 22, no. 4, pp. 295–313. Friscia, A. Blake, and Françoise Simon. 1995. “The Economic Relationship Between Europe and Latin America.” In Susan Kaufman Purcell and Françoise Simon, eds., Europe and Latin America in the World Economy, pp. 5–37. Boulder: Lynne Rienner. Kornat, Gerhard D. 1985. “Europe’s Rediscovery of Latin America.” In Wolf Grabbendorf and Riordan Roett, eds., Latin America, Western Europe, and the US: Reevaluating the Atlantic Triangle, pp. 59–77. New York: Praeger. Mower, A. Glenn. 1982. The European Community and Latin America: A Case Study in Global Expansion. Westport, CT: Greenwood Press. Muñiz, Blanca. 1980. “EEC-Latin America: A Relationship to Be Defined.” Journal of Common Market Studies 19, no. 1, pp. 55–64. Schumacher, Edward. 1995. “Spain and Latin America: The Resurgence of a Special Relationship.” In Susan Kaufman Purcell and Françoise Simon, eds., Europe and Latin America in the World Economy, pp. 113–137. Boulder: Lynne Rienner. Simon, Françoise, and Susan Kaufman Purcell. 1995. “The Impact of Regional Integration on European–Latin American Relations.” In Susan Kaufman Purcell and Françoise Simon, eds., Europe and Latin America in the World Economy, pp. 39–84. Boulder: Lynne Rienner. Smith, Hazel. 1995. European Union Foreign Policy and Central America. New York: St. Martin’s Press. Smith Perera, Roberto. 1995. “Economic Relations Between Latin America and the European Union.” CEPAL Review no. 56, pp. 97–110. van Klaveren, Alberto. 1994. “Europe and Latin America in the 1990s.” In Abraham F. Lowenthal and Gregory F. Treverton, eds., Latin America in a New World, pp. 81–104. Boulder: Westview. Vellinga, Menno. 1995. “The European Community and Latin America: A Search for Direction.” Journal of Third World Studies 12, no. 2, pp. 238–265. Wiarda, Howard J. 1990. “Europe’s Ambiguous Relations with Latin America: Blowing Hot and Cold in the Western Hemisphere.” Washington Quarterly 13, no. 2, pp. 153–167.

Bibliography

—Cleveland R. Fraser

See BALTIC STATES.

Latvia

There are three legal instruments, or forms, in which the Council of Ministers adopts legislative acts: directives, regulations, and decisions. Directives are binding on the member states with regard to the result to be achieved but allow member states to choose the means to achieve that result. Regulations lay down rules and guidelines applicable in their entirety to all member states. A decision is directly binding on the individual or enterprise to which it is applied. See also DECISIONMAKING PROCEDURES.

Legal Instrument

See DECISIONMAKING PROCEDURES.

Legislative Procedures

Legitimacy is a central concept in the Western liberal tradition of government. Legitimacy transforms the exercise of power into acceptable political authority. Although legitimacy and democracy are not synonymous, legitimacy is usually strongest in political systems governed by democratic processes, norms, and constitutional guarantees of fundamental rights and freedoms. Legitimacy relies also on efficiency and the capacity to deliver material and nonmaterial benefits to the citizens of a polity. In any political system, there are tensions between these different components of legitimacy. It can be difficult, for example, to reconcile the demand for democratic processes with efficiency. The legitimacy of the EU and its institutions was not a major problem in the past, when the European project rested on the legitimacy of its member states and the contribution of integration to peace and prosperity in Europe. Since the beginning of the 1990s, however, the legitimacy of the EU is increasingly being questioned in political and scholarly debate on the future of the European project, for a number of reasons. First, European integration has become politicized in a manner that was not evident in the past. The intensification of constitution building in the EU, highlighted by the fact that the 1996–1997 intergovernmental conference (IGC) was the fourth since 1985 but only the sixth since 1951, has placed considerable strain on some national political systems. Denmark’s narrow rejection and France’s narrow acceptance of the Treaty on European Union (TEU) in 1992 demonstrated that political

Legitimacy

leaders could no longer assume that domestic public opinion would go along with their plans for the future constitutional order of the EU. Second, the policy remit of the EU has expanded significantly. The Single European Act (SEA) of 1986 was essentially about market creation and deregulation. The TEU touched on broader and more sensitive terrain with its commitment to a single currency, cooperation on internal security matters, and enhanced external cooperation. It is one thing to make rules about permissible food additives; quite another to frame a common security policy and create a single currency. It was inevitable that the process would become more politicized when the EU touched on traditional attributes of state sovereignty. The consent of the people to a deepening of integration assumed added salience when the EU’s collective ambitions grew. A third reason for the politicization of the European project and the growing debate on legitimacy is the deep-rooted conflict about where the process is going. There is no shared vision of how Western Europe should organize its collaboration to take account of the dramatic changes on the continent since 1989. A number of competing visions jostle for primacy in the system. The vision of Europe as simply an economic space within which traders and bankers are free to exchange goods and services has powerful proponents. A preference for economic Europe but not political Europe is clearly evident in a number of member states. The preference for market integration tends to be accompanied by a desire to protect the nation-state as the primary arena of political order. An alternative vision, promoted most coherently by Commission president Jacques Delors between 1985 and 1994, is of Europe as an organized space bound by ties of social solidarity that go beyond market building. Another variant of the Delors vision is the democratization of the EU by building a polity that goes beyond the state. The mere fact that legitimacy and democracy are central issues in the contemporary debate about the European project highlights the fact that the EU has moved from being predominantly a problem-solving arena to a polity. The EU is breaking free of its economic fetters to confront core issues of political order. The debate has moved beyond relations between different levels of government to the relationship between the EU and Europe’s peoples. Any debate on legitimacy

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in the context of the EU touches on difficult issues of normative political theory. The procedures and processes of democratic government and theoretical discussion of the necessary preconditions for democracy have evolved within the context of the nation state. Rendering structures of governance beyond the nation-state democratic and legitimate raises problems of institutional design, political accountability, and the very nature of political community in contemporary Europe. Democratic theory itself may need to be reassessed because of the growing significance of internationalized governance in the world. National representative democracy rests on a set of institutions and practices that includes regular elections, freedom of speech and the press, the right to vote and run in elections, constitutional guarantees about the conduct of executive power, and the accountability of governments to their electorates largely through national parliaments. Political accountability in the EU is highly problematic. The EU has a very fragmented and opaque range of highly complex decisionmaking rules that gives rise to a weakness of accountability. European law emerges from discussions and negotiations within a myriad of advisory and working committees surrounding the Commission, working parties of the Council of Ministers, European Parliament (EP) committees, and interinstitutional dialogue. Informal politics and backroom deals characterize the process. The Commission, with responsibility for proposing draft legislation, has no direct democratic mandate, although it is answerable to the EP. The Council of Ministers largely meets in secret even when it is passing legislation that will become directly applicable in the member states. Nor is the Council collectively responsible at the EU level. The democratic credentials of the EP are weakened by the low turnout in EP elections (58 percent in the 1994 elections). Integration has also affected national democracy by removing important areas of public policy from within the ambit of national parliaments. All national parliaments have difficulty in holding their national ministers accountable for what they do at a European level. Moreover, the technical nature of much EC legislation tends to enhance the power of the expert over the politician. Most decisions are taken by delegated officials in the myriad of committees surrounding the EU’s institutions. The greater use of qualified majority voting since the SEA means that laws must be implemented in

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national jurisdictions without necessarily receiving the support of national representatives in the Council. There is a weakness of political accountability in the EU system caused by the institutional balance, the technical nature of the decisions, the lack of transparency about how decisions are reached, and the particular weakness of parliamentary control in relation to the Common Foreign and Security Policy, Cooperation on Justice and Home Affairs, and the independence of the proposed European Central Bank. The EU and internationalized governance structures more generally highlight the problem of scale in contemporary governance. Political community based on the nation-state developed on the basis of a relative congruity between bounded territory, the functional tasks of government, and shared identity. This has broken down in the contemporary international system. The tasks of government require the creation of institutional structures and policy regimes beyond the level of the state. The benefits of this, however, may come at the cost of submerging national democracies into larger and less democratic transnational spaces. Citizens are faced with a trade-off between the consequences of integration for their national democracy and the imperative on efficiency grounds of participating in structures that help manage interdependence (Dahl, 1994). It may well be that national democracy in the contemporary world can only be assured if transnational structures are also rendered democratic. This raises issues not just of institutional design but of political community. The EU does not rest on a shared public realm in any meaningful sense of the term. There is no European body politic and a shared political identity (Scharpf, 1996, p. 26). Representative politics is still largely national, a situation that constitutes a barrier to the emergence of a genuinely European political realm. The public space is still largely national. The profusion of policy communities in the EU is not matched by comparable linkages between national political parties and the media, the traditional transmission belts of politics. The German Constitutional Court, in its judgment on the TEU in October 1993, placed considerable emphasis on the need for democracy to go beyond the formal principle of accountability to include “a continuous free debate between opposing social forces, interests, and ideas, in which political goals become clarified and change course and out of which a public opinion emerges which starts to shape a political will.”

Yet there is no shared language that would allow for European-wide public discussion. As the EU moves to a single currency and enhanced international cooperation, the affective dimension of integration is more important. An emphasis only on material benefits will not guarantee continued commitment to the process. As Jacques Delors once remarked, “You don’t fall in love with a common market; you need something else” (quoted in The European, November 3, 1994, p. 13). There is a need to strengthen the public’s identification with the European project so that people feel at home with the EU’s institutions and policies. Feeling at home with transnational institutions requires the development of a political and cultural identity that goes beyond the state. Although Europe cannot create a demos in the national sense, community building is increasingly necessary to the legitimacy of the European project (Laffan, 1996). Democratic legitimization is a central issue of political order in the EU at this stage of its development. However, overcoming the EU’s democratic deficit is problematic in many respects. It requires constitutional reform that enhances political accountability and the visibility of the process in the eyes of Europe’s electorates. The process of constitutional reform itself should be conducted in a far more public manner than in the past, and the consent of Europe’s peoples should be achieved. Moreover, a polity has shallow roots if it does not rest on a shared political identity and realm of some sort. There are enormous political and cultural barriers to the development of a transnational political community and great uncertainty about the kinds of institutional structures and practices that are needed for democratic governance above the level of the state. That said, there are political forces actively engaged in the project to democratize the EU. The glimmer of a European civil society is discernible. Domestic politics are no longer conducted in isolation from the European dimension, and identity is no longer confined to the straitjacket of the nationstate. Political Europe is struggling to join economic Europe in a faltering but definite manner. See also ACCOUNTABILITY; DEMOCRATIC DEFICIT; EUROPEAN PARLIAMENT; NATIONAL PARLIAMENTS. Dahl, R. A. 1994. “A Democratic Dilemma.” Political Science Quarterly 109 (Spring), pp. 23–34.

Bibliography

Laffan, Brigid. 1996. “The Politics of Identity and Political Order in Europe.” Journal of Common Market Studies 34 (March), pp. 81–101. Scharpf, F. W. 1996. “Negative and Positive Integration in the Political Economy of European Welfare States.” In G. Marks, F. W. Scharpf, P. C. Schmitter, and W. Streeck, Governance in the European Union, pp. 15–39. London: Sage.

—Brigid Laffan

Designed “to ensure the implementation of a vocational training policy which will support and supplement the action of the Member States as a means towards realizing an open European area for vocational training and qualifications,” the LEONARDO DA VINCI program has a budget of ECU 800 million covering the 1995–1999 period. LEONARDO has three broad objectives: to sustain the quality of member state’s systems, arrangements, and policies; to support innovative actions on the training market; and to encourage awareness of the “European dimension” of vocational training. See also EDUCATION, VOCATIONAL TRAINING, AND YOUTH POLICY.

LEONARDO DA VINCI

Liberal, Democratic, and Reformist Party

See EUROPEAN LIBERAL, DEMOCRATIC, FORMIST PARTY.

AND

RE-

Liberal intergovernmentalism, a critique of neofunctionalism, was initially presented as a framework for synthesizing theories of foreign economic policy, interstate bargaining, and international regime formation into a coherent account of landmark EU decisions taken under unanimity (such as the Single European Act and the Treaty on European Union), though it can be applied to other types of decisions as well. Liberal intergovernmentalism divides EC decisionmaking into three stages—preference formation, interstate bargaining, and institutional delegation—each of which is explained by a different set of factors. Most variants of liberal intergovernmentalism argue that national preferences reflect the issue-specific pres-

Liberal Intergovernmentalism

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sures to manage economic interdependence, with geopolitical concerns playing a secondary role; bargaining outcomes reflect relative power stemming from the nature and intensity of preferences, with supranational actors playing a secondary role; and institutional delegation reflects the desire for credible commitments, with ideology and technocratic considerations playing secondary roles. See also INTEGRATION THEORY. Liechtenstein took the unusual step in May 1995 of joining the European Economic Area (a close economic accord between the EU and the European Free Trade Association, of which Liechtenstein is a member) even though Switzerland, to which Liechtenstein has close ties, had decided not to join. Liechtenstein has little interest in joining the EU itself, however: the tiny principality would have to change many of its generous tax laws and could not bear the administrative burden of accession. See also EUROPEAN ECONOMIC AREA.

Liechtenstein

LIFE, the EU’s financial instrument for the environment, is the principal source of funding for projects contributing to the development and implementation of the EU’s environmental action program. LIFE II, for the years 1996–1999, also covers projects in Central and Eastern Europe. See also ENVIRONMENTAL POLICY.

LIFE

Launched in 1990, LINGUA (Action Program to Promote Foreign Language Competence in the European Community) is a program to facilitate student and worker mobility in the EU by providing opportunities for language learning directly relevant to education and vocational training. LINGUA encourages bilateral and multilateral cross-border exchange programs, partnerships between institutions, joint educational projects, town and city twinning, and grants for language study. In 1995, LINGUA was brought under SOCRATES, the EU’s all-embracing educational program for 1995–1999. See also EDUCATION, VOCATIONAL TRAINING, AND YOUTH POLICY.

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Lobbying

See INTEREST GROUPS.

Lobbying

Named after the capital of Togo, where the first convention was signed in 1975, the Lomé conventions have represented the flagship of the EU’s global North-South cooperation policy. As a tradeand-aid pact among members of the EU and a group of poor African, Caribbean, and Pacific (ACP) countries, the first Lomé convention was hailed by optimists and pragmatists as the way to build a new relationship between Europe and its former colonies. Lomé I (1975–1980) raised hopes of laying the groundwork for developing a postcolonial partnership. Out of it grew a number of new and even innovative structures that some believed could redress the self-reinforcing asymmetrical relationships between the have and the have-not states. Calls for a New International Economic Order (NIEO) had become the rhetorical touchstone for the demands of the less-developed countries (the Group of 77) in the early 1970s. Lomé I echoed both the demands for an NIEO and some of the then-fashionable responses. Lomé II (1980–1985) and Lomé III (1985– 1990) were attempts to face the development failures of Lomé I and stem the tide of worsening conditions, especially in Africa. Neither the Lomé conventions nor other bilateral or multilateral mechanisms were able to halt the steady economic decline in many ACP states. Since 1975 the EU has spent in excess of ECU 340 billion on behalf of Lomé countries. The seventy ACP states today still assert that past wrongs and recent natural and man-made obstacles justify such generous transfers of resources from Europe. Lomé IV (1990–2000) negotiations reflected a number of fin de siècle realities. The Lomé partners were unwilling to endure the tedious complexity of renegotiating, every few years, an essentially static relationship. Instead they agreed upon a ten-year treaty with a mid-point reevaluation and adjustment of funding. By the mid-1990s some members of the EU indicated a growing desire to bow out of the Lomé arrangements. A deal signed in Mauritius (November 1995) continued to extend some trade-and-aid privileges to the ACP group until the Lomé IV expiration in 2000. However, what in the 1970s looked like the beginnings of a partnership has deteriorated into a hold-

Lomé Convention

ing operation to last out the ten-year Lomé IV agreement, resulting in little more than a set of face-saving gestures for all parties concerned. In 1995 France sought to assure the ACP states that financial aid would continue on a par with previous levels, but French desires faced opposition from other EU members, notably Britain and Germany, who favored reduced assistance. By the mid-1990s the EU had already reduced or suspended assistance and concessions to fifteen ACP countries, among them Nigeria, Zaire, and the Sudan, whose governments were considered undeserving. For the ACP countries still receiving assistance and trade concessions, the final 1995 Lomé compromise adjustments still ensured assistance on a par with previous levels, as well as trade advantages (better terms for farm exports), thereby salvaging some Lomé benefits for ACP participants. The hopes for Lomé partnership in 1970 were vastly different from those of twenty years later. Calls for an NIEO and the optimism about pumppriming development had given way by the 1990s to post–Cold War competition, an expanding EU embracing member states with no historical ties to the ACP countries, donor fatigue in general, and the political chaos and civil conflicts that have ravaged much of Africa. It may be time to lay the Lomé partnership to a fitting rest at the end of the century, but the twenty-five years of experience of that partnership deserve reevaluation before the search begins for new twenty-first-century policies and institutions. From Lomé I’s inception to the twilight years of Lomé IV, the Lomé arrangement has been asymmetrical. The ACP bargaining position for trade and aid did not improve but deteriorated between 1975 and 1995. Throughout this period demands for aid from the EU were made and the Lomé aid spigot remained open, but the resources transferred must be measured against the painful reality that ACP debt doubled in the 1980s and more than half of the ACP states fell under the International Monetary Fund’s structural adjustment program. Without EU aid and loans the circumstances of many ACP states might have been even worse, but it is clear that, at best, the Lomé assistance has been a finger in the dike for many ACP governments. Lomé arrangements are also asymmetric with respect to the comparatively favorable trade access for ACP products in the EU market. Twothirds of the ACP states are dependent on non-

petroleum commodities for their export earnings, but the EU market for ACP raw materials has declined over the past twenty years. So, too, has the ACP market share of EU imports. The potentially advantageous access to the EU market has done little to increase either European demand or the ability of ACP states to take advantage of tariff preferences in the face of competition from nonACP raw materials producers. The Lomé relationship did not and could not overcome the lack of reciprocity between the partners or the worsening asymmetry of the economic circumstances. Innovative structural efforts dating back to Lomé I attempted to develop institutions that would be able, over time, to reduce the inequality between the have and the have-not states. Lomé took seriously NIEO-type concerns about structural asymmetries stemming from the colonial legacy that required affirmative and innovative intervention. Perhaps the most distinctive innovation, dating back to Lomé I, has been the System for the Stabilization of Export Earnings from Products (STABEX) scheme. STABEX was intended to address the chronic problem of unstable (often falling) export revenues for countries overwhelmingly dependent on a single product. Under the scheme, a country dependent on more than a set percentage of export earnings on a list of STABEX commodities such as tea, cocoa, coffee, and cotton would be eligible for financial aid if those earnings fell below a certain level. The system is based on a regularly recalculated dependency threshold for each country in relation to each product listed. Another scheme with similar provisions, the System for the Stabilization of Export Earnings from Minerals (SYSMIN), was subsequently added, extending the STABEX idea to minerals. Not surprisingly, as the price of many primary products declined on the world market in the 1980s, the demands on the schemes exceeded resources. Processing compensation claims was slow, and the ACP countries argued for an expansion of the list of the products that needed to be covered. Critics of the STABEX and SYSMIN schemes have argued that the buffer against the uncertainty of the international market also reduced the motivation to diversify economies to make them less dependent on the export earnings from a limited number of primary products. Over the course of the various Lomé conventions, STABEX and SYSMIN schemes were im-

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proved and updated, but the Lomé promise fundamentally to restructure the economies of ACP states has failed. So, too, have attempts to restructure the international trading system to achieve more diverse economies with fewer discriminatory consequences for the least-developed countries. Plans to compensate disadvantaged economies and provide inducements for domestic economic reform are also heavily dependent on capable, honest governments taking advantage of new opportunities. In many ACP states, funds from the STABEX and SYSMIN schemes wound up in the pockets of corrupt government officials instead of going to producers to compensate them for falling prices and induce them to diversify production. One may conclude that even theoretically useful schemes to address historically wrought structural economic disadvantages in the international marketplace depend on efficient and effective governance in the disadvantaged states. The structure of the Lomé relationship also reinforced, not reduced, the asymmetrical nature of the partnership in political and administrative ways. The disparity between the relatively small number of EU states and the large and growing number of increasingly diverse states (seventy ACP states under Lomé IV) made it difficult to develop consensus and strategy among the ACP members. Similarly disabling has been the small, poorly staffed, and inadequate ACP secretariat. Throughout the Lomé conventions, the EU group has enjoyed a large staff capable of generating aid and trade data and strategic and policy options. Weak ACP negotiations preparation and the absence of a data-based strategy have been the norm throughout the life of Lomé. There has been not only economic disparity between the haves and the havenots but organizational and structural disparities as well. The EU had to reconcile the differing positions on the donor side of France versus Germany, Britain, and others, but the ACP had to reckon with geographical differences between the African and the Caribbean groups—the former dominantly concerned with the size of aid packages and the latter with product entry into the European market—as well as differences between the Anglophone and Francophone African states and their generally weak and ill-prepared bargaining positions. Lack of unity in the ACP group was worsened by the absence of support staff and firstclass preparatory staff work. All too often during

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Lomé renegotiations, the ACP group argued only general principles and philosophies while the EU came to the table with firm positions lodged in statistical analysis. Among the many failures of the Lomé arrangements has been Lomé’s inability to bridge the capacity divide between the have North and the have-not South. In fact, the institutional weakness of many ACP states and the ACP secretariat has reinforced the reality of their unequal capacity and status. Small, weak, administratively disorganized states produced weak bargaining positions for more resources and a more equal partnership. Since 1989 the strong, affluent European states have also largely redefined their interests around domestic concerns and post–Cold War Central and Eastern European interests. Only France is nostalgic about its relationship with Francophone Africa. The most charitable judgment about the Lomé conventions is that they were an interesting but largely failed experiment. Both sides will, no doubt, have to readdress the need for a new EUACP relationship. Moreover, in the twenty-first century, environmental and human rights issues will be intertwined with economic interests. Policymakers of the new century will need to digest Lomé’s overall failure before embarking on new and more effective symmetrical partnerships of mutual benefit between the rich and poor states. —Isebill V. Gruhn

As part of an effort in the early 1980s to give more structure to European Political Cooperation (EPC)—the EC member states’ mechanism to coordinate foreign policy—and to make it more binding and coherent, foreign ministers adopted a report on EPC at a meeting in London on October 13, 1981. The so-called London Report codified and intensified existing practices but also agreed on the need for EPC to become less reactive and more anticipatory in its approach to international developments. Member states had debated the appropriate content of EPC, and the report noted their agreement to discuss in EPC “certain important foreign policy questions bearing on the political aspects of security.” Eventually, the heads of state and government issued a Solemn Declaration on European Union at a summit in Stuttgart, June 17–19, 1983, which ex-

London Report

panded the scope of EPC discussions to “the political and economic aspects of security.” See also EUROPEAN POLITICAL COOPERATION. Luxembourg has significantly influenced four major events in the evolution of European integration: the establishment of the European Coal and Steel Community (ECSC) in 1952 and the beginnings of Franco-German reconciliation, the 1955 Messina conference that led to the 1957 treaties of Rome, the 1969 Werner Plan for monetary union, and the 1992 Treaty on European Union (TEU), particularly the portion on Economic and Monetary Union (EMU). In addition, former Luxembourg prime minister (1974–1979) Gaston Thorn was Commission president between 1981 and 1985, and former prime minister (1984–1995) Jacques Santer became Commission president in 1995. These singular contributions have come from a nation of only 400,000 people having a GDP of ECU 11 billion, less than 0.2 percent of the EU total (EUROSTAT, 1996). Luxembourg’s role has been mainly catalytic. Four factors made it effective: talented and highly experienced statesmen in office at critical moments, unwavering commitment to the ideal of European union, unusual language skills and personal relationships with leaders of France and Germany, and such small size that Luxembourg could neither threaten nor rival any other European country (Trausch, 1996; Haag, 1996; Werner, 1996). During their World War II exile in London, Luxembourg’s leaders, particularly Foreign Minister Joseph Bech (1926–1959), decided to press for new international organizations to promote Franco-German reconciliation and European unification after the war. Bech focused on economic institutions, and the 1948 Benelux customs union was the first result. The EU’s members saw it as a model for all of Western Europe (Werner, 1996). Since then both Luxembourg’s leaders and public have supported European economic union as a means to political union, their ultimate goal. The occasional public doubts about the benefits of “union” all passed quickly. This was the pattern when the Common Agricultural Policy (CAP) boosted consumer prices in the 1960s, when neighboring countries berated Luxembourg for being a tax haven in the 1980s and 1990s, and when resentment surged in Luxembourg in 1992

Luxembourg

over the TEU provision that all citizens of the EU have the right to run and vote in local elections wherever they may reside in the EU (Werner, 1996). When French foreign minister Robert Schuman adopted Jean Monnet’s proposal for a coal and steel community in 1950, Luxembourg foreign minister Bech immediately became a key champion. Bech was the ideal Franco-German interlocutor: he spoke both languages perfectly, he had attended primary and secondary school in Luxembourg with Schuman, and he already knew West Germany’s chancellor Konrad Adenauer well. Beck had a warm gregarious personality, all-night stamina, a long memory, a gift for perceiving common ground, and more experience in his ministerial role than anyone else in Western Europe. He also rigorously kept a low profile befitting his country’s size, yet he always managed to be present at critical meetings. By all accounts, Bech persuaded Schuman and Italy’s prime minister Alcide De Gasperi that Adenauer could be trusted. Bech thus helped to start the long process of FrancoGerman reconciliation and to bring about the 1951 Treaty of Paris, which established the ECSC (Kasel, 1996; Trausch, 1996; Haag, 1996). A by-product of Bech’s role is Luxembourg’s status as one of the three “capitals” of the EU. This began with the “provisional” placement of the ECSC’s institutions in Luxembourg, including what is now the European Court of Justice (ECJ). The sole exception was the ECSC Assembly (today’s European Parliament), which went to Strasbourg because Bech feared that it would overwhelm Luxembourg’s small capital city. Adenauer suggested Luxembourg as a provisional site when the ECSC signatories could not agree on any of the formal candidates: Liège, Nice, and Turin. Later the European Atomic Energy Community (EURATOM), the European Investment Bank, the Court of Auditors, and other EC offices were added to the Luxembourg complex. The ECSC’s and ECJ’s “provisional” status also became permanent. Luxembourg feared the size of the new Commission (modeled on the ECSC’s High Authority), however, and was relieved when Community leaders decided in 1957 to locate the Commission in Brussels (Trausch, 1996; Werner, 1996). Bech’s final key input came in June 1955 when he presided over the Messina conference of ECSC foreign ministers. There he worked closely

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with Belgian foreign minister Paul-Henri Spaak to launch the drafting process that led to the signing of the treaties of Rome in March 1957 and the inauguration of the EEC and EURATOM in January 1958. A decade later, in 1969, French president Georges Pompidou proposed that the EC heads of state and government meet at The Hague on December 1 and 2 to discuss enlarging and deepening the EEC. There the EC leaders asked Luxembourg’s prime minister Pierre Werner to chair a study on Economic and Monetary Union (EMU). Werner was also finance minister and had been publicly advocating monetary union since 1960. The EC failed to act on the subsequent Werner Plan. France did not like forced harmonization of monetary policies, the United States took the dollar off the gold standard, and the 1973 oil shock put further pressure on exchange parities. But in 1979 the EC took a leaf from the Werner book and established the European Monetary System (Werner, 1996). Gaston Thorn became Commission president in 1981 when consensus could not be reached on any member state’s first preference for the position. Thorn’s four years as president marked time. Britain adamantly opposed any progress toward European union, and a deep recession raised further problems. Coming from a small country, Thorn had no great political weight of his own. Although he could invoke his close relationship with Germany’s chancellor Helmut Schmidt, Thorn lacked comparably deep ties with top French leaders (Trausch, 1996). Luxembourg held the EC presidency during the critical formative drafting of the TEU in the first half of 1991, during the intergovernmental conferences (IGCs). The treaty’s structure and most of its substantive content took shape under Luxembourg’s chairmanship. In particular, Luxembourg finance minister (also prime minister since 1995) Jean-Claude Juncker set the agenda, found the formulas, and presided over the sessions that produced the treaty’s text on EMU. The first half of 1991 also saw the dissolution of the Soviet Union, the Warsaw Pact, and the Council for Mutual Economic Assistance (COMECON), as well as the onset of the Gulf War and of events that culminated in war in the former Yugoslavia. As president of the EC’s general affairs (foreign ministers) council at the time, Luxembourg’s foreign minister Jacques Poos

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pragmatically pressed the concept of a common foreign policy both in internal EC councils and in representing the EC and its members to the governments involved in those events. Some observers have argued that no small EU member country will ever again play the special kind of formative role that Luxembourg exercised in the early stages of European integration. They believe that the nature of contemporary problems, the enlarged membership of the EU, changes in EU internal decision rules, and the much greater ease with which European leaders deal directly with each other all render such a role either unnecessary or unworkable. Nonetheless, in 1995 the EU once again made a Luxembourger, Prime Minister Jacques Santer, Commission president after none of the first-choice candidates could win unanimous consent. See also APPENDIX 2; APPENDIX 3.

EUROSTAT. 1996. Statistics in Focus: Economics and Finance 1996–1997. Luxembourg: Office for Official Publications of the European Communities. Haag, Prof. Dr. Émile, historian and director, Athenée de Luxembourg. 1996. Interview by author. Luxembourg. March 25. Haag, Émile, and Émile Krier. 1987. La GrandeDuchesse et son Gouvernement Pendant La Deuxième Guerre Mondial: 1940 l’Année du Dilemme. Esch-sur-Alzette, Luxembourg: RTL Édition. Kasel, Ambassador Jean-Jacques, permanent representative of Luxembourg to the European Union. 1996. Interview by author. Luxembourg. March 24. Trausch, Prof. Dr. Gilbert, director, Robert Schuman Center for European Studies and Research. 1996. Interview by author. Luxembourg. March 29. Werner, Dr. Pierre, former prime minister of Luxembourg. 1996. Interview by author. Luxembourg. March 25.

Bibliography

—Edward M. Rowell

The Luxembourg Compromise of January 1966 ended the so-called Empty Chair Crisis, which had erupted in July 1965 when France walked out of the Council of Ministers over a dispute ostensibly about enhanced supranational power for the Commission and the European Parliament but really about the introduction of majority voting in the Council (due to come into operation in January 1966). The prospect of being outvoted in the Council was anathema to French president Charles de Gaulle, an ardent intergovernmentalist. De Gaulle returned to the negotiation table only after suffering a scare in the presidential election of December 1965, and the crisis was resolved at a meeting of foreign ministers in Luxembourg on January 28–29, 1966. After restating their positions, France and the other member states approved a short declaration, the so-called Luxembourg Compromise, which maintained the principle of majority voting but acknowledged that “when very important issues are at stake, discussions must be continued until unanimous agreement is reached.” The Luxembourg Compromise represented a victory for de Gaulle and a serious setback for the EC. Specifically, it impeded effective decisionmaking in the Council for the next twenty years and undermined the Commission’s authority and initiative. De Gaulle’s insistence on unanimity heightened the member states’ awareness of each other’s special interests and increased their reluctance to call a vote in the Council even when no vital interest was at stake. Only in 1986, when faced with the need to implement the single market program, did the member states decisively tackle the problem of unanimity in the Single European Act. See also EMPTY CHAIR CRISIS.

Luxembourg Compromise

M The European Council concluded the year-long intergovernmental conferences on economic and monetary union and political union at the Maastricht summit on December 9 and 10, 1991. See also TREATY ON EUROPEAN UNION.

Maastricht Summit

The foreign ministers of the EC’s member states signed the Treaty on European Union (TEU) in the southern Dutch town of Maastricht on February 7, 1992. The decisive negotiations finalizing the treaty’s provisions had taken place in the European Council in Maastricht the previous December. Therefore, the TEU is popularly known as the Maastricht treaty. See also TREATY ON EUROPEAN UNION.

Maastricht Treaty

Greece blocked EU recognition of Macedonia’s independence from Yugoslavia, declared in November 1991, on the grounds that the establishment of a sovereign state called Macedonia would encourage Macedonian irredentism (Greece has a province of the same name). As a result, the new state became known as the Former Yugoslav Republic of Macedonia (FYRoM). The EU’s acquiescence in Greece’s hard-line policy toward Macedonia symbolized the disarray and ineffectualness of EU policy toward the former Yugoslavia in the early and mid-1990s. See also GREECE; YUGOSLAVIA.

Macedonia

Harold Macmillan led Britain’s first unsuccessful effort to join the EC. Macmillan, who became

Macmillan, Harold (1894–1986)

prime minister in 1957, advocated Britain’s entry for negative reasons: the Commonwealth seemed an inadequate vehicle through which to promote British influence and prosperity, and the EC was thriving. The decision to apply for Community membership complemented Macmillan’s foreign policy priority: restoring and maintaining the Anglo-American “special relationship.” That meant repairing the damage caused by the Suez crisis of 1956 and cultivating a close friendship first with President Eisenhower (with whom Macmillan had served in North Africa during World War II) and then with President Kennedy, a much younger man. Yet Macmillan’s success in reestablishing close relations with Washington ultimately destroyed his chances of bringing Britain into the EC, as French president Charles de Gaulle distrusted Britain’s Atlanticism and doubted Britain’s commitment to its continental neighbors. Entry negotiations began in 1961 but quickly bogged down in a morass of technical detail. The main sticking points were the Common Agricultural Policy (CAP), Commonwealth access to EC markets, and EC–European Free Trade Association (EFTA) relations. Matters came to a head over Anglo-American relations, when Macmillan and Kennedy signed an agreement in December 1962 allowing Britain to use U.S. Polaris missiles as the delivery system for British nuclear warheads. For de Gaulle, then struggling to develop the French nuclear force, this represented a damning surrender of British sovereignty to the United States. There could have been no more graphic demonstration of Britain’s irreconcilability with de Gaulle’s conception of a “European Europe.” De Gaulle responded dramatically at a press conference on January 14, 1963. In a long, wideranging response to a planted question, de Gaulle cataloged the history of Britain’s role in Europe and concluded by effectively vetoing Britain’s application. The ensuing suspension of entry negotiations undermined Macmillan’s domestic political position. Citing ill health, Macmillan resigned as prime minister in October 1963 but went on to enjoy twenty-three years of robust retirement. See also UNITED KINGDOM. The so-called MacSharry Plan, adopted by the EC in 1992, proposed radical reform of the Common Agricultural Policy (CAP). Named after Ray Mac-

MacSharry Plan

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Sharry, the commissioner for agriculture, the MacSharry Plan tried to reconcile the goals of maintaining high farm incomes and keeping people on the land with the need to reduce agricultural surpluses and abolish trade-distorting export subsidies. MacSharry’s plan angered EC farmers, including his Irish constituents, who fiercely opposed any reform. The plan satisfied the EC’s trading partners (especially the United States), however, and paved the way for a conclusion of the Uruguay Round of the GATT. See also COMMON AGRICULTURAL POLICY. See BOVINE SPONGIFORM ENCEPHALOPATHY.

Mad Cow Disease

See DECISIONMAKING PROCEDURES; QUALIFIED MAJORITY VOTING.

Majority Voting

Franco Malfatti replaced Jean Rey as president of the Commission in 1970. Malfatti’s tenure was undistinguished. Although the EC seemed poised for revival after French president Charles de Gaulle’s resignation in 1969, the Commission remained seriously weakened following the Empty Chair Crisis of 1965–1966. Nor did Malfatti, a former Italian politician and government junior minister, have the stature or enthusiasm to restore the Commission’s confidence. Malfatti dealt the Commission’s prestige a further blow by retiring before the end of his two-year term as president in order to reenter Italian politics. He went on to have a distinguished career in Rome, becoming a senior government minister. See also COMMISSION.

Malfatti, Franco (1927–1991)

A tiny (246 kilometers square) but strategically located Mediterranean island, Malta signed an association agreement with the EC in 1970 and applied for membership twenty-three years later, when the end of the Cold War seemed to remove a strategic impediment to the country’s possible accession. Yet the compatibility between EU membership and Malta’s constitutionally enshrined neutrality and nonalignment is a divisive domestic

Malta

issue, with the Labor Party charging that accession would unduly constrain Malta’s international options. The Nationalist Party, in government when Malta lodged its application, was at pains to emphasize Malta’s acceptance of the EU’s Common Foreign and Security Policy, although it ruled out full Western European Union membership. Concerned about the stability of its southern Mediterranean flank, and eager to build bridges to its North African neighbors, the EU agreed in December 1995 to open accession negotiations with Malta six months after the end of the 1996–1997 intergovernmental conference (IGC). In the meantime, Malta and the EU began a “structured dialogue” to help prepare the country for membership, notably by reforming the key agricultural, fisheries, and financial services sectors. Malta has a higher per capita GDP than that of Greece and Portugal and is well within reach of the Economic and Monetary Union convergence criteria. Nevertheless, as an EU member Malta would hope to benefit from structural funds and other redistributive policies. Although Malta’s population of 376,000 is similar to that of Luxembourg, it is difficult to imagine that Malta would be on a par with Luxembourg institutionally within the EU. Whatever one might think about having a Maltese commissioner, many member states would balk at the prospect of having a Maltese presidency of the Council, with small and inexperienced Malta setting the EU’s agenda and representing the EU internationally. It is uncertain whether a majority in Malta would endorse EU membership in a referendum, which is neither legally obligatory nor (for the Nationalist Party) politically wise. In the event, the October 1996 general election became a referendum on whether or not Malta should join the EU. The Labor Party’s victory resulted in Malta’s application being put in abeyance, much to the quiet relief of many EU officials and politicians. See also MEDITERRANEAN POLICY; TABLE 6. Sicco Mansholt served as a commissioner from January 1958 until January 1973. For the last few months of that time he replaced Franco Malfatti, who retired to reenter Italian politics, as Commission president. Mansholt’s exceptionally long tenure as a commissioner spanned the formation of the European Economic Community in 1958,

Mansholt, Sicco (1908–1995)

the Empty Chair Crisis of 1965–1966, the establishment of the customs union in 1968, the Community’s revival after French president Charles de Gaulle’s resignation in 1969, and the first enlargement in 1973. Mansholt’s greatest contribution to the EC was to implement the Common Agricultural Policy (CAP) and, subsequently, to sound a warning about the CAP’s excesses. Coming from a Dutch farming background and having been agriculture minister in the Netherlands before moving to Brussels, Mansholt had a profound grasp of Europe’s agricultural needs. As vice president of the Commission with responsibility for agriculture, Mansholt convened a conference of Commission officials, member-state delegates, and representatives of farmers’ groups in Stresa, in July 1958, to draw up blueprints for the CAP. Detailed discussions on the CAP’s fundamental principles and procedures continued during the next eighteen months before the Commission submitted a proposal to the Council of Ministers in June 1960. The Council’s approval six months later paved the way for the series of complex and rancorous negotiations that preoccupied the Community in the early 1960s, as the Commission and the member states thrashed out exactly how the CAP would operate. In December 1964 the Council adopted the Mansholt Plan, establishing a fixed price for wheat and feed grains throughout the Community for the farm year beginning July 1, 1967, the date set for frontier-free trade in most agricultural products. By that time Mansholt was concerned about the impact of guaranteed high prices on agricultural production in the EC. He also sought to rationalize the agricultural industry by cutting down on the number of small, inefficient farms. His proposed reforms in that regard made economic but not political sense. Although national governments appreciated the wisdom of his proposals, none was willing to risk the inevitable farmers’ protests. Mansholt left the Commission distrusted by EC farmers for his reform proposals, although his design and implementation of the CAP were the basis of their prosperity in the 1960s and 1970s. See also COMMON AGRICULTURAL POLICY. As Jean Monnet’s right-hand man in the mid1940s and as a vice president of the Commission in the 1960s, Robert Marjolin played an extremely

Marjolin, Robert (1911–1986)

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important part in the origin and early development of the EC. In the immediate postwar years Marjolin worked with Monnet on the French modernization plan before becoming secretary-general of the Organization for European Economic Cooperation. He returned to French public service in 1955. Perhaps Marjolin’s greatest contribution to European integration came in 1955 and 1956, during the intergovernmental conference that led to the establishment of the European Economic Community and European Atomic Energy Community (EURATOM). As an adviser to the foreign minister and a chief French negotiator, Marjolin attempted not only to strike the best bargain for France but also to overcome deep-rooted French hostility to the removal, however gradual, of the protection that French industry then enjoyed. In addition to fighting in France’s corner in the intergovernmental negotiations in Brussels, Marjolin found himself waging a rear guard action at home: what he called in his memoirs the Battle of Paris. Marjolin’s ultimate victory made French participation in the proposed common market possible and therefore secured the EC’s future. Marjolin retired from the Commission in 1967 and turned his extensive experience and considerable ability as an economist to the service of European industry. A decade later he returned briefly to the forefront of European integration as one of the so-called Three Wise Men who, at the suggestion of French president Valéry Giscard d’Estaing, prepared a report on EC reform. Published in 1980, the report made a number of proposals to improve decisionmaking but disappointed Giscard by not going far enough in endorsing a more powerful European Council. Although the report was politely shelved, it influenced future Commission president Jacques Delors, who implemented some of the report’s recommendations in the late 1980s. See also FRANCE. As part of an effort to promote EU exports, in February 1996 the Commission developed a European Market Access Strategy for trade and investment and set up an Action Group on Market Access to field enquiries from businesses regarding trade policy questions. The strategy seeks to improve EU exporters’ access to other markets and to sharpen EU trade policy.

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Marshall Plan

Probably the best-known U.S. international initiative ever, the Marshall Plan was the means by which the United States sent massive economic assistance to post–World War II Europe. The Marshall Plan—or the European Recovery Program, as it was formally called—had many origins and objectives, all of them interconnected. One goal was humanitarian, another was strategic: U.S. economic assistance would stabilize Western Europe politically and undermine indigenous support for communist parties while bolstering Western Europe’s ability to defend itself in the event of a direct Soviet attack. As part of the U.S. strategic approach to Western Europe at the outset of the Cold War, the Marshall Plan also sought to encourage European integration by insisting that the recipient countries formulate a joint approach to aid solicitation and distribution. General George Marshall, the U.S. secretary of state, announced the plan in a commencement address at Harvard University on June 5, 1947. Almost immediately the U.S. administration set about convincing a skeptical Congress that it was in the country’s interests to allocate large-scale assistance to Western Europe. In Western Europe itself the French and British governments took the lead in organizing a multilateral response to the U.S. offer. To meet the U.S. prerequisite for Marshall Plan assistance, the recipient countries established the Organization for European Economic Cooperation (OEEC), an umbrella body to solicit U.S. funds. But the OEEC was too large and diverse to act as an institutional instrument of integration. Its eighteen members varied greatly in size, population, and economic well-being. Perhaps more important, widely differing political cultures and wartime experiences made the prospect of agreement on integration extremely remote. Thus the OEEC failed to live up to U.S. expectations. The Marshall Plan nonetheless played a pivotal role in promoting European integration by indirectly inspiring the Schuman declaration. The Marshall Plan involved the reconstruction of Western Germany as an integral part of the reconstruction of Western Europe, thereby setting the stage for a series of diplomatic decisions that would gradually rehabilitate the former enemy, much to the consternation of Germany’s neighbor to the west. The threat to France’s own economic recovery, let alone intrinsic security, was im-

Marshall Plan

mense. Here was the crisis on which Monnet seized in order to convince first Schuman, and then the dubious French government, that it was imperative for France to accept the inevitability of German economic recovery and make a virtue of necessity by proposing the pooling of French and German production of coal and steel. Thus the Marshall Plan was an important antecedent of the European Coal and Steel Community. See also EUROPEAN COAL AND STEEL COMMUNITY; ORIGINS OF EUROPEAN INTEGRATION (POST– WORLD WAR II). See MONETARY COMPENSATORY AMOUNTS.

MCAs

Part of the new Euro-Mediterranean Partnership launched at a conference in Barcelona on November 28, 1995, MEDA is a financial instrument to support economic development, political stability, and social cohesion in the EU’s southern Mediterranean neighbors (the MED 12). Modeled on Pologne et Hongrie: Actions pour la Reconversion Économique (PHARE) and Technical Assistance for the Commonwealth of Independent States (TACIS)—the EU’s assistance programs for Central and Eastern Europe and the former Soviet Union—MEDA replaces bilateral protocols between the EU and the MED 12. See also MEDITERRANEAN POLICY.

MEDA

A Euro-Mediterranean Partnership is the cornerstone of the EU’s policy toward its Mediterranean neighbors. Launched by the EU and the so-called MED 12 (Algeria, Cyprus, Egypt, Israel, Jordan, Lebanon, Malta, Morocco, Syria, Tunisia, Turkey, and the Autonomous Palestinian territories) at a conference in Barcelona on November 28, 1995, the partnership represents a major effort by the EU to improve its economic and political relations with those nonmember Mediterranean states with which it has association and cooperation agreements. The initiative calls for close cooperation in the fields of politics and security, economics and finance, and social and human affairs. It also sets an ambitious target for a free trade zone between the EU and MED12 by 2010 (Commission, 1995).

Mediterranean Policy

As it was, trade agreements provided for duty-free access to the EU for most of the MED12’s industrial products and concessions for some agricultural produce, and the EU gave substantial financial assistance to the MED 12 in the form of grants and loans. Despite the extent of these arrangements, the EU decided to expand the scope and depth of its ties to the MED12, partly out of dissatisfaction with the results that had so far been achieved by its Global Mediterranean Policy (GMP), which had hitherto been the cornerstone of its Mediterranean policy. The EC’s original Mediterranean policy began in the 1960s in the form of concessionary trade agreements and was expanded to include economic and financial cooperation under the GMP, launched in 1972. Important economic and political considerations underlay this program, including the EC’s desire to check the expansion of Soviet influence in the Mediterranean Basin (Ginsberg, 1983, pp. 161–162). Despite its ambitious framework aimed at bringing Mediterranean countries closer to the EC, several complications prevented fulfillment of the GMP’s goals (Yesilada, 1991, p. 361). First, because of the restrictive nature of the Common Agricultural Policy (CAP), the EC did not make substantial concessions for agricultural imports. Second, despite qualifying for duty-free entry, certain industrial goods (textiles and clothing, shipping, steel, synthetic fibers, paper and paper products, machine tools, and cars) often faced such nontariff barriers as quotas because of the member states’ desire to protect domestic industries. A third concern was the economic and social problem of migrant workers and their status in EC member states. The difficulties faced by the GMP worsened when Greece, Spain, and Portugal, three of the countries covered by it, joined the EC. This resulted in the EC becoming more Mediterranean oriented, especially in the agricultural sector (Tovias, 1990, p. 2). The agricultural produce of these three countries was given direct access to the other member states’ markets, and imports from nonmember Mediterranean countries suffered accordingly (Promfet, 1981; Yannopoulos, 1984). As economic difficulties in the nonmember Mediterranean countries worsened in the 1980s and early 1990s, another undesirable development surfaced in the form of Islamic fundamentalism, which—because of its threat to political stabil-

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ity—increasingly alarmed EC member states. In addition, serious unemployment in the Mediterranean countries meant that more people from North Africa sought refuge in France and Spain. Under these adverse circumstances, European officials began to search for an alternative strategy to meet economic and political challenges in the Mediterranean Basin. Following a series of opinion papers from the Commission, the European Council, at its meeting in Corfu in June 1994, invited the Commission to draft a new strategy for the region. The Commission responded with a proposal to create a huge free trade zone that would span the EU and its North African and Middle Eastern partners (Commission, 1995); this became the basis of discussion at the Barcelona conference. The Barcelona Declaration pledged to establish the putative Mediterranean Free Trade Area and to link it through the EU to another free trade zone with the countries of Central and Eastern Europe. In order to realize this grand design, the EU will need to sign separate free trade agreements with the MED12, and the Mediterranean partners need to sign such agreements with each other. It is hoped that the outcome will check chronic unemployment, promote economic development, and stem Islamic fundamentalism in the region. The EU has association agreements with Israel, Morocco, and Tunisia and initialed an association agreement with Jordan in April 1997. Relations with Cyprus, Malta, and Turkey are stronger, as these countries have applied for EU membership. Indeed, Turkey has a customs union agreement with the EU, and an EU-Cyprus customs union was completed in 1997. Furthermore, the EU has been negotiating association agreements with Egypt and Lebanon, and preliminary talks for such an agreement with Algeria are underway. The EU is eager to begin talks with the Syrian and Palestinian authorities when the time is right. The Barcelona Declaration covers a wide range of issues in EU–MED12 relations. The first area is partnership in political and security relations. In this regard, the participants identified peace, stability, and security in the Mediterranean region as common assets that they pledged to promote and strengthen. Accordingly, they declared their commitment to the following principles and objectives: respect for human rights and fundamental liberties (including freedoms of expression, thought, and association); the equal right of

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people and the right to self-determination; noninterference in each other’s internal affairs; dispute settlement by peaceful means; greater cooperation in the fight against terrorism; stronger regional security through adherence to, and compliance with, international agreements in such areas as the nonproliferation of nuclear, chemical, and biological weapons; and a Middle East free of weapons of mass destruction (nuclear, chemical, and biological) as well as their delivery systems. The declaration added that the signatories should reject arms proliferation by not developing military capacities beyond that needed for defensive purposes. The second part of the declaration called for an economic and financial partnership to achieve three important objectives: intensified efforts for social and economic development, improvement of individuals’ living conditions by raising employment and reducing the economic gap within the Euro-Mediterranean region, and promotion of cooperation and regional economic integration. The main vehicle for this part of the partnership is the establishment of a free trade area, involving the progressive elimination of tariff and nontariff trade barriers on manufactured products and a progressive liberalization of agricultural produce and the services sector. The plan also includes an increase in the EU’s financial assistance to the MED12 countries. Earlier, in June 1995, the European Council in Cannes agreed to an assistance package of about ECU 4.7 trillion to the MED12, spread between 1995 and 1999. The declaration also calls on the European Investment Bank to make loans available to the MED12, in addition to bilateral assistance from EU member states. Cooperation priorities include investment and joint ventures, regional cooperation, fisheries, industry, agriculture, rural development, energy, infrastructure, information technologies and telecommunications, research and development, and protection of the environment (Yesilada, 1997). The third leg of the declaration is partnership in social, cultural, and human affairs. This will involve cooperation in the fields of education and training; social development; migration; media; health care; cultural exchange; youth programs; the fight against terrorism, international crimes, corruption, racism, and xenophobia; and judicial affairs (Commission, 1995). Clearly, the Barcelona Declaration is a grand design that requires the serious commitment of all

parties concerned. In order not to lose momentum, the declaration calls for periodic follow-up meetings of the foreign ministers of the twenty-seven nations to review progress and to agree on actions to achieve the stated objectives. The declaration also foresees a special conference of ministers and leaders from business and finance to discuss ways to boost private sector investments in the MED12. The Commission is responsible for preparing the meetings and following up on them and for developing a work program to implement the declaration through concrete actions. The second Euro-Mediterranean conference of foreign ministers took place in Valetta, Malta, on April 15 and 16, 1997. Ministers reviewed the activities so far undertaken under the Barcelona Declaration and developed guidelines for future cooperation. However, the meeting was overshadowed by the Middle East peace process, not least because it provided an opportunity for discussions between the Israeli and Palestinian delegations. Special Cases: Cyprus and Turkey Cyprus and Malta present no real economic problems as potential EU members. Yet the possible consequences of their membership for voting rights in the Council of Ministers and the representation of small countries in other EU institutions are profound (Redmond, 1993). Before Cyprus joins the EU, however, the island’s political division needs to be addressed. Cyprus has always maintained close relations with the EU and has had an association agreement since 1972. Despite the division of the island into the Greek Cypriot south (which represents the internationally recognized Republic of Cyprus) and the Turkish Cypriot north, the EU had good lines of communications with both sides until the decision of the European Council in June 1994 to open negotiations on Cypriot membership six months after the conclusion of the 1996–1997 intergovernmental conference. Since then, the Turkish Cypriots, supported by the Turkish government, have taken the position of the aggrieved party (Yesilada, 1997). It would be a very serious problem for the EU to open negotiations and admit Cyprus before resolution of the Cypriot crisis. How the EU can solve the Cyprus problem, which the UN and the United States have been unable to resolve since 1963, is beyond comprehension. The EU’s position would be particularly weak because

its accession plans exclude any input from one of the conflicting sides: the Turkish Cypriots. An additional problem with Cypriot accession is the apparent veto that the Turkish Cypriots have. According to the Cypriot constitution (Article 50, Paragraph 1a), Cypriot membership in international organizations in which Greece and/or Turkey are not members requires the consent of both communities on the island. Despite these problems, EU officials have indicated that a perpetuation of partition would not prevent Cyprus’s membership. This suggests that the EU hopes to force the Turkish Cypriots to make concessions in negotiating a settlement on Cyprus. However, the threat also carries the risk of further alienating the Turkish Cypriots and making them more rigid at the negotiating table. If so, the EU may end up with only part of Cyprus as a member and thereby inherit one of the international community’s “unending” conflicts. Turkey’s application for EU membership resulted in a customs union rather than accession. For economic and political reasons, the EU cannot afford to admit Turkey for the foreseeable future. In every respect, Turkey’s macroeconomic indicators are not comparable with those of the EU: inflation is above 80 percent; the budget deficit is excessively high; unemployment is above 12 percent; and purchasing power parity, at $3,617, is unacceptably low (the comparable figure in Greece, the EU’s poorest member state, is $6,367). Economic disparities between the EU and Turkey have grown despite rapid growth of the Turkish economy since the late 1980s. Politically, Turkey’s level of democratic development fails to pass the EU’s test for membership. Moreover, the rising Islamic threat in Turkey worries the EU, especially as the Turkish political parties have failed to form a stable governing coalition. Under these circumstances, the customs union represents a safe compromise between the danger of rejecting Turkey’s application and possibly alienating an important Western ally or of admitting Turkey into the EU and risking huge economic costs that could bankrupt the CAP and regional development funds. Conclusion Despite initial enthusiasm surrounding the Barcelona Declaration, a number of factors threaten to undermine the declaration’s effective-

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ness. First, the MED12 countries view each other with great suspicion and the involvement of an outside actor, like the EU, is unlikely to change that reality. Unless the MED12 countries work together to build confidence and promote trade, existing suspicion, among their citizens and governments will not disappear. Second, the MED12 countries can expect additional complications in their relations with the EU, as three of their members stand to increase their bilateral ties to the EU: Cyprus and Malta could become EU members in the near future, and Turkey has a customs union with the EU. As exports to the EU from these countries gain special preference, aided by increased economic integration between these countries and the EU, the other MED12 countries’ exports to the EU could face even greater obstacles. The EU’s Mediterranean policy includes a complex web of issues that present unique challenges. On the one hand, the Barcelona Declaration represents a new global approach to the region’s problems. On the other hand, however, the EU seems to be repeating its earlier practice of providing preferential treatment to selected MED12 countries at the expense of others. In this case the possible memberships of Malta and Cyprus and the customs union with Turkey could have negative consequences for the other Mediterranean countries’ trade with the EU. Doubtless the objectives of the Barcelona Declaration are commendable, but one cannot help wondering how the EU can successfully pursue so many different priorities and objectives. See also CYPRUS; MIDDLE EAST; TURKEY. Commission. 1995. “Barcelona Conference Establishes a Euro-Mediterranean Partnership.” Press Release. Brussels. November 29. Ginsberg, Roy. 1983. “The European Community and the Mediterranean.” In Juliet Lodge, ed., Institutions and Policies of the European Community. New York: St. Martin’s. Pomfret, Richard. 1981. “The Impact of EEC Enlargement on Non-Member Mediterranean Countries’ Exports to the EC.” The Economic Journal 91 (September), pp. 716–729. Redmond, John. 1993. The Next Mediterranean Enlargement of the European Community: Turkey, Cyprus, and Malta? Aldershot: Dartmouth. Tovias, Alfred. 1990. Foreign Economic Relations of the European Community. Boulder: Lynne Rienner.

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Yannopoulos, George. 1984. “Prospects for the Manufacturing Exports of the Non-Member Mediterranean Countries in a Community of Twelve.” World Development 12, no. 11–12 (December), pp. 1087– 1094. Yesilada, Birol. 1991. “The EC’s Mediterranean Policy.” In Leon Hurwitz and Christian Lequesne, eds., The State of the European Community: Policies, Institutions, and Debates in the Transition Years. Boulder: Lynne Rienner. ———. 1997. “The Mediterranean Challenge.” In John Redmond and Glenda G. Rosenthal, eds., The Expanding European Union: Past, Present, and Future. Boulder: Lynne Rienner.

—Birol A. Yesilada

The term member states refers to the countries of the EU: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden, and the UK.

Member States

On December 15, 1995, the EU signed an interregional cooperation agreement with MERCOSUR, the Southern Cone Common Market (Argentina, Brazil, Paraguay, and Uruguay). The agreement, which includes political as well as economic aspects, signifies MERCOSUR’s growing regional importance and the growing importance of Latin America in global trade. At the first annual ministerial meeting held under the agreement, in Luxembourg on June 10, 1996, both sides emphasized the importance of stepping up cooperation, especially on measures to combat drug trafficking and money laundering and to promote sustainable development and environmental protection. See also LATIN AMERICA.

MERCOSUR

In 1989, as a logical accompaniment to the single market program, the Council of Ministers gave the Commission authority to vet large-scale mergers in the EU to verify the mergers do not violate antitrust laws. The merger control regulation came into force in September 1990 and filled the last great gap in the EC’s competition policy. Because the system established by the regulation calls for

Merger Control

notifications on the basis of turnover thresholds rather than market power, the Commission has approved most mergers reported to it (only the largest mergers are caught). Between September 21, 1990, when the merger regulation entered into force, and June 30, 1996, the Commission received 477 notifications, of which 16 were later withdrawn. The Commission conducted detailed investigations into 26 cases, prohibiting only five of them. See also COMPETITION POLICY. The Merger Task Force is the unit in the Commission’s Competition Policy Directorate General (DG IV) that investigates mergers referred to the Commission under the terms of the 1989 merger control regulation. See also COMPETITION POLICY.

Merger Task Force

The Merger treaty establishing a single Council of Ministers and a single Commission for the three European Communities came into force on July 1, 1967, more than two years after it was signed by the EC’s member states on April 8, 1965. The new Commission began functioning on July 6, 1967; simultaneously the terms of office of the members of the High Authority of the European Coal and Steel Community (ECSC), the Commission of the European Economic Community (EEC), and the Commission of the European Atomic Energy Community (EURATOM) came to an end. Because of French president Charles de Gaulle’s opposition, Walter Hallstein, outgoing president of the EEC Commission, was not nominated to become president of the new, single Commission; instead, Jean Rey became its first president. See also COMMISSION.

Merger Treaty

On June 1–3, 1955, in Messina, Sicily, the foreign ministers of the six member states of the European Coal and Steel Community (ECSC) met to discuss the ECSC’s future in view of Jean Monnet’s decision to resign as president of the High Authority and the future of European integration generally in view of the recent rejection by the French par-

Messina Conference

liament of the European Defense Community treaty. Paul-Henri Spaak, the Belgian foreign minister, had prepared a memorandum on behalf of the Benelux countries suggesting further integration along the lines of Monnet’s idea for an atomic energy organization and Dutch foreign minister Johan Willem Beyen’s idea for a common market. The foreign ministers asked Spaak to form a committee and write a report on future options. The Spaak committee’s deliberations led to the establishment of the European Economic Community (EEC) and the European Atomic Energy Community (EURATOM). Symbolically, the first meeting of the pre-1996 intergovernmental conference Reflection Group took place in Messina on June 2, 1995, on the fortieth anniversary of the original Messina conference. EC policy toward the Middle East, taken as a distinctive geographic area, was not formulated until the early 1970s. Before then, the EC had only established a contractual relationship with Israel dealing exclusively with trade matters, first (1964) on a nonpreferential basis and later (1970) on a preferential basis. A broader approach toward the Middle East, embracing almost all Mediterranean nonmember states, was launched in 1972. This was the so-called Global Mediterranean Policy, which covered economic matters only (basically trade and development assistance). The EC’s first initiative regarding the Middle East itself was launched at about the same time, when, in the wake of the 1973 Middle East war, the member states turned their attention to the Arab-Israeli conflict and attempted to coordinate their foreign policy positions through the mechanism of European Political Cooperation (EPC). Subsequently, one of the EC’s main activities with regard to the Middle East was the Euro-Arab Dialogue (EAD), involving the EC and the twenty member countries of the Arab League. At the first meeting, held on July 31, 1974, it was agreed that a Euro-Arab General Commission and a number of working parties would be set up. But there were no tangible results from the EAD because the two sides had a fundamentally different perception of the procedure’s nature and future: the European side refused to tackle overt political issues, such as Palestinian representation; the Arab side was

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not eager to give specific assurances regarding the supply of oil to European countries. The EAD reached a stalemate in 1978, after the historic Camp David Accords between Israel and Egypt (which resulted in Egypt’s exclusion from the Arab League). The EAD was resumed briefly in 1981 and again in 1989 and 1990, but collapsed in the wake of Iraq’s invasion of Kuwait. Throughout the duration of the EAD, the member states issued declarations through EPC on the Arab-Israeli conflict. These evolved over time in the direction of an increasing recognition of Palestinian rights. Whereas in November 1973 the Palestinians were still considered refugees, albeit with “legitimate rights,” by June 1977 the member states stressed the Palestinians’ “right to a homeland.” The member states’ famous Venice Declaration of June 1980 went several steps further by supporting the right of self-determination for Palestinians and the right of the Palestine Liberation Organization (PLO) to be associated in any negotiation to resolve the conflict. As a kind of consolation to Israel, the Venice Declaration also mentioned the right of all states in the area to live in peace and security, but the declaration went on to criticize Israel’s settlements policy. Moreover, the member states declared their willingness to participate directly in a comprehensive peace settlement. Significantly, the declaration came at the height of the second oil crisis, which followed the downfall of the shah of Iran in early 1979. The timing might also explain a more active approach to the Middle East on the part of the European Council, whose subsequent communiqués proposed solutions to the Middle East conflict that combined carrots (economic aid to the Palestinians) and mainly sticks (in the form of minisanctions against Israel). Before the Venice Declaration, EC aid to the Palestinians was limited to refugee assistance; thereafter a new approach prevailed, characterized by direct assistance from the EC budget for the Palestinian population (including compensation to the Palestinians for the consequences of the Gulf War) and by EC cofinancing with European nongovernmental organizations (NGOs) of Palestinian assistance programs. On the trade side, beginning in 1986 the EC granted preferences directly to the Palestinians, without the latter having to make undue use of the 1975 Israel-EC Free Trade Agreement or having

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to use Israeli export monopolies to market their agricultural products. This change was highly symbolic, because it treated the Occupied Territories (OT) as a separate economic entity (whereas the OT are in fact part of Israel’s customs territory). The EC’s so-called Council Guidelines of 1986, which stated that aid to the Palestinians would be implemented without the EC’s seeking final approval from the Israeli authorities, contained the same political message. Beyond politics, it is also significant that for the first time the EC established a link between peace and economic development in the OT. Sanctions against Israel were used for the first time shortly after the Israeli invasion of Lebanon. In June 1982, EC foreign ministers agreed to defer the signing of the Second Financial Protocol between the EC and Israel and to cancel a ministerial meeting of the Israel-EC Cooperation Council. Israel saw these measures as a violation of an international economic agreement, signed under the Global Mediterranean Policy, which has nothing to do with the Israeli-Arab conflict. Financial cooperation was restored exactly a year later, in June 1983, after Israel agreed to withdraw from Lebanon. In December 1987, in the wake of the intifada (a popular revolt of the Palestinians against Israeli occupation), the European Parliament (EP) voted to defer indefinitely ratification of the Third Financial Protocol of the 1975 EC-Israel agreement. Yet this sanction was short lived: in October 1988, at the fifth attempt, the EP finally agreed to ratify the protocol. The Venice Declaration became the central point of reference for EC policy toward the Middle East. For instance, in 1987 the European Council called for an international conference on the Middle East under UN auspices, on the basis of the Venice Declaration. Again, in June 1989, the European Council reiterated the Venice Declaration, asking explicitly for Palestinian participation in a peace conference. Subsequent declarations stressed the need for Israel to respect human rights in the fight against the intifada. Moreover, at their June 1990 summit in Dublin, the heads of state and government agreed to send a Commission official as an observer to the OT and to double the direct aid programs to the OT by 1992. A new era in EC–Middle East relations opened in the aftermath of the 1991 Gulf War, when the United States and the USSR agreed to sponsor an international peace conference and the EC sought

to become an active participant. Israel reluctantly agreed in June 1991 to EC participation, in return for a promise by the EC to review the 1975 EC-Israel economic agreement. However, the role assigned to the EC by U.S. secretary of state James Baker displeased the Europeans: the EC was to have a kind of “observer status,” its main role being confined to economic development issues. Paradoxically, the ensuing peace conference took place in Madrid, a Community capital. Soon it appeared that the EC’s role would be more significant than initially thought. The peace process was to be handled along two different tracks: a bilateral one dealing with conflict resolution (i.e., “the past”) and a multilateral one dealing with the consolidation of peace (i.e., “the future”). The multilateral track was based on functional economic cooperation, a concept at the core of European integration. Five working groups dealt with economic, social, and environmental issues. In one of these groups, the Regional Economic Development Working Group (REDWG), the EC was in the chair; in another two, dealing with water and the environment, it was a cosponsor. As REDWG was the largest group in terms of participants and possible projects, the EC became a major player in the multilateral track. The Madrid conference and follow-up meetings assumed added importance when it transpired, in late 1993, that Israel and the PLO had been negotiating a secret bilateral agreement (the Oslo process). The international community, including the EC, strongly supported such a development. The EC responded in three ways. First, in early September 1993 the Commission broadened its approach to the Mediterranean to include regional cooperation in the Middle East, embracing the Mashreq countries (Egypt, Jordan, Lebanon, and Syria) and Israel, through a policy of progressive institutionalization. Second, a short time later the newly launched EU announced that, together with the international community, it was about to embark on an ambitious cooperation program to develop the OT economically. Accordingly, the EU pledged ECU 500 million (half of which was to be made available by the European Investment Bank) for the 1994–1998 period, making the EU by far the largest financial donor. This placed the EU at the center of the Ad Hoc Liaison Committee Coordinating International Aid for the Occupied Territories.

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Third, at the REDWG plenary meeting in November 1993, the EU strongly supported the Copenhagen Action Plan, which allocated ECU 9.2 million for an initial list of priority activities and corresponding feasibility studies. In June 1994 the group decided to establish a monitoring committee to allow the “core parties” to play a more direct role in the identification of priorities. In March 1996 the monitoring committee secretariat was transformed into a permanent regional economic institution based in Amman, Jordan, financed and served by the EU. This was a key step in the institutionalization of regional dialogue, a step well understood by the EU, with its history of regional conflict resolution. Equally important, in December 1993 the European Council identified the Middle East as one of five priority areas in which to implement a joint action on the basis of Article J.3 of the Treaty on European Union’s Common Foreign and Security Policy (CFSP). Accordingly, the EU undertook to promote democracy and human rights in the region. Later, in January 1996, the EU agreed to send observers to the elections in the OT. Given its apparently central role in the Middle East peace process, the EU was caught by surprise when the regional actors agreed to hold an economic summit—essentially a huge business forum supported by the United States and Russia—in Casablanca in October 1994. It was there that the idea of creating a Middle Eastern development bank took shape, an idea initially rejected by the EU. The EU was also annoyed by the fact that there was some overlap at the Casablanca summit with items dealt with by the EU-chaired REDWG. It looked to the EU as if the United States and some regional actors were trying to steal the show. Indeed, it can be argued that the Commission’s initiative for a Euro-Mediterranean Partnership, which bore fruit in the Barcelona Declaration of November 1995, was an attempt to counteract what the EU perceived as an increasingly intrusive U.S. role in the one area of the Middle East peace process that the EU had made its own: economic cooperation and development. See also COMMON FOREIGN AND SECURITY POLICY; EUROPEAN POLITICAL COOPERATION; MEDITERRANEAN POLICY.

Allen, David, and Alfred Pijpers, eds. 1984. European Foreign Policy-Making and the Arab-Israeli Conflict. The Hague: Nijhoff. Hollis, Rosemary. 1997. “Europe in the Middle East: Power by Stealth?” International Affairs 73(1): 15–29. Tovias, Alfred. 1990. Foreign Economic Relations of the European Community. Boulder: Lynne Rienner.

Bibliography

Mitterrand, François (1916–1996)

—Alfred Tovias

Milan Summit

The Milan summit in June 1985 was a watershed in the history of European integration. Two main items were on the European Council’s agenda: the Commission’s white paper on the single market and the report of the Ad-Hoc Committee on Institutional Affairs (the Dooge Committee). The heads of state and government quickly approved the white paper, but they argued fiercely over the Dooge Committee’s recommendations for reform of the EC’s institutions and decisionmaking procedure and for an extension of Community competence. Without a curb on unanimity in the Council of Ministers, the European Council realized that the single market program would never be implemented. But British prime minister Margaret Thatcher, Danish prime minister Poul Schlüter, and Greek prime minister Andreas Papandreou resisted the other leaders’ efforts to amend the Treaty of Rome and instead advocated informal arrangements to improve legislative decisionmaking. Finally, Italian prime minister Bettino Craxi forced the issue by calling for an intergovernmental conference (IGC) to negotiate treaty reform, as permitted under Article 236 (EEC treaty). When Thatcher, Schlüter, and Papandreou continued to object, Craxi took the unprecedented step in the European Council of calling for a vote, thus paving the way for the IGC that culminated six months later in the Single European Act. At the time the Milan summit seemed a disaster, with Britain, Denmark, and Greece isolated in the Community; later the summit came to represent a decisive first step on the road to the Community’s revitalization and transformation. See also EUROPEAN COUNCIL; INTERGOVERNMENTAL CONFERENCE; SINGLE EUROPEAN ACT.

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François Mitterrand, president of France from 1981 to 1995, played a decisive role in shaping and accelerating the European integration process. His specific policies toward the EU evolved in response to changing international and domestic contexts, but his fundamental view of Europe remained constant: the EU should serve as a vehicle to protect and enhance France’s European and world position. Mitterrand’s pro-European attitude was apparent yet muted in his early political career. As a member of parliament he voted in favor of the 1957 treaties of Rome but believed that Africa rather than Europe should be at the center of France’s foreign policy (Cole, 1994, p. 117). In the 1960s, he criticized President Charles de Gaulle’s vetoes of Britain’s application for membership in the EC and continued to express support for European integration. In the 1970s, disagreement within the French political left over European integration, coupled with Mitterand’s role as leader of the Socialist Party (PS), led him to avoid a strong pro-European stand, although he was able to link the PS to a moderate pro-European position. In 1981, Mitterrand was elected president on a platform that concentrated on domestic issues such as unemployment rather than on European affairs. Indeed, during the first two years of his presidency, Europe was a secondary issue, as the French government concentrated on implementing Keynesian reflationary policies to stimulate economic growth. At the June 1981 Luxembourg summit, Mitterrand did call for the establishment of a “European social space” (espace social européen) in order to relaunch the European integration process, but his proposal generated little enthusiasm among his European partners. It was only when the French government’s plan to reflate the economy failed dramatically and the French franc was devalued twice that Mitterrand realized the centrality of the European marketplace and the importance of the Franco-German relationship for France’s economic well-being. In 1983, in a crucial decision, Mitterrand announced that the French franc would remain in the European Monetary System, cementing France’s economic Uturn to a conservative fiscal and monetary policy. Moreover, the European dimension became the most important priority of French policy, and Mitterrand became intimately and personally involved in directing France’s European policy.

By 1984, Mitterrand had concluded that France needed actively and assertively to pursue European integration. In his view, a French foreign policy of “grandeur” could only be achieved if backed by the weight of the EC led by France and Germany. The benefits of integration would outweigh the cost of some loss of national autonomy (de Swaan, 1994, p. 16). In January 1984, when France took over the six-month Council presidency, the EC was plagued by a number of divisive problems, including the question of the British contribution to the EC budget, reform of the Common Agricultural Policy (CAP), and the applications of Spain and Portugal to join the EC. By the end of the Fontainebleau summit, held in June 1984, Mitterrand’s personal leadership and willingness to make concessions proved highly successful. The summit had addressed the British budget concerns, agreed to negotiations on Spanish and Portuguese entrance into the EC, and launched the European Strategic Program for Research and Development in Information Technology (ESPRIT) for cooperation in high technology. Last but not least, an ad hoc committee, chaired by Irish senator James Dooge, was soon established to propose institutional reforms. Mitterrand’s 1984 initiatives were largely responsible for creating the momentum necessary to propel the European integration process forward. At the Luxembourg summit in June 1985, the member countries agreed to the Single European Act (SEA), an event that “consolidated Mitterrand’s status as a prime initiator of moves towards closer European integration” (Cole, 1994, p. 127). The SEA not only provided for the completion of the single market by January 1, 1993, but also introduced institutional reforms such as the principle of qualified majority voting for many single market proposals. Although Mitterrand remained firmly committed to an EC controlled by intergovernmental institutions, he demonstrated a willingness to compromise to achieve greater European integration vital to French national interests. In 1988, Mitterrand was reelected president of France in a campaign that stressed the importance of Europe and the need to proceed with Economic and Monetary Union (EMU), a common defense policy, and a Social Charter. However, the details of integration were quickly overshadowed by the astonishing events of 1989 and after: the fall of communism in Central and Eastern Europe, the fall of the Berlin Wall and eventual German

reunification, and the collapse of the Soviet Union. Initially, Mitterrand expressed doubts over German reunification, fearing that it would unfavorably tilt the balance of power in Europe away from France and toward Germany. But as it became clear that rapid German reunification was inevitable, Mitterrand decided that France’s most advantageous policy rested on tying Germany more closely to Europe by accelerating European integration under Franco-German leadership. The result was the 1992 Treaty on European Union (TEU). The TEU was a success largely due to the commitment of Mitterrand and Helmut Kohl, chancellor of Germany. As in the past, Mitterrand opposed any radical moves toward a supranational Europe but was willing to compromise and allow some greater measure of authority to the European Parliament (EP) and the Commission. Mitterrand’s proposal for a Common Foreign and Security Policy (CFSP) was accepted, albeit with reservations, and the Western European Union (WEU) was formally linked to the EU. Finally, and most important, the TEU called for EMU: the establishment of a European Central Bank and a single currency by 1999 at the latest. In Mitterrand’s view, monetary union would undermine the German central bank’s complete control of European monetary policy and give France a voice in such affairs (Cole, 1994, p. 157). Mitterrand’s personal success in shaping the TEU was placed in doubt by his decision to ratify the treaty by a national referendum. The “yes” vote prevailed in the September 1992 referendum by the narrowest of margins (51.04 percent to 48.95 percent), demonstrating that a large section of the French public was apprehensive over Europe’s direction. The TEU represented Mitterrand’s last major European initiative. Parliamentary elections in 1993 led to a second period of cohabitation (a conservative majority in parliament sharing power with a socialist president), which lasted until Mitterrand’s second seven-year term as president of France came to an end in 1995. François Mitterrand’s reputation as one of Europe’s foremost statesmen is assured. He made enormous strides toward achieving his vision for France and Europe based on a strong Franco-German partnership, deeper integration (including EMU), and a Common Foreign and Security Policy. His policies helped create an EU that has changed the political and economic face of Eu-

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rope. But perhaps his greatest legacies are the belief by an overwhelming number of French citizens that the EU is essential to France and the belief by the vast majority of Europeans that the EU is an essential part of their future. See also FRANCE. Cole, Alistair. 1994. François Mitterrand: A Study in Political Leadership. New York: Routledge. de Swaan, Jean-Christophe. 1994. “Mitterrand and the Gaullist Dilemma over European Integration.” International Relations 12, no. 2 (August). Drake, Helen. 1994. “François Mitterrand, France and European Integration.” In Gino Raymond, ed., France During the Socialist Years. Aldershot: Dartmouth Publishing. Favier, Pierre, and Michel Martin-Roland. 1990. La Décennie Mitterrand. Vol. 1, Les Ruptures. Paris: Editions du Seuil. ———. 1991. La Décennie Mitterrand. Vol. 2, Les Epreuves. Paris: Editions du Seuil. Haywood, Elizabeth. 1993. “The European Policy of François Mitterrand.” Journal of Common Market Studies 31, no. 2 (June).

Bibliography

—Pia Christina Wood

Mixed Agreements

Mixed agreements are international agreements that cover areas of both EU and national competence and are therefore signed jointly by the EU and its member states. Examples include the ambitious Europe Agreements, signed in the early 1990s by the EU, its member states, and the Central and Eastern European states. See also CENTRAL AND EASTERN EUROPEAN STATES. The so-called Molitor Group was established in September 1994 under the chairmanship of Bernhard Molitor, a former senior official in Germany’s ministry for economic affairs. Establishment of the group was one of a number of initiatives to promote deregulation and competitiveness in the EU in the aftermath of the single market program. Made up of seventeen independent experts, the group examined the impact of EU legislation in four priority areas—social legis-

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lation, company law, environmental standards for machinery, and food hygiene—and reported to the Commission in July 1995. See also SINGLE MARKET PROGRAM. See ECONOMIC AND FINANCIAL COMMITTEE.

Monetary Committee

Monetary Compensatory Amounts (MCAs)

Monetary Compensatory Amounts (MCAs) were compensatory payments to farmers to bridge the gap between green currencies (artificial exchange rates introduced by the EC in the late 1960s in order to maintain uniform, EC-wide prices in the Common Agricultural Policy) and real exchange rates. See also COMMON AGRICULTURAL POLICY. Jean Monnet, French statesman and “father of Europe,” was the architect, strategist, and driving force of the EC in the early years when its basic features were established. Although a political entrepreneur, not an academic thinker, he was also virtually alone among European founding fathers in seeking to define the values of the new Community. Appreciation of these achievements has been delayed by his anomalous career as a political innovator who was not an elected politician and who therefore acquired the reputation of an éminence grise. Monnet was born in Cognac in west France— the home of brandy—on November 9, 1888, and died ninety-one years later in Bazoches-sur-Guyonne, west of Paris, on March 16, 1979. His father, Jean Gabriel Monnet, of peasant stock, became chairman in 1896 of a cooperative of smallholders originally formed in 1838 to compete with the giants of the brandy industry, the Hennessys and their like. Monnet grew up in a merchant-patrician house but hated school and left at sixteen to learn English by working in the City of London. Two years later, he began to roam the world for the family firm (Europe, North America, Russia, Egypt) with a paternal injunction: “Don’t take books. Nobody can think for you. Look around. Talk to people.” All his life, Monnet valued action through people and practice more highly than theory (though he theorized from his own experiences),

Monnet, Jean (1888–1979)

traveled anywhere in the world at the drop of a hat to advance a cause, and saw politics from the point of view of the citizen rather than the state. Monnet might have remained a businessman had not war drawn him twice into public service. Declared unfit for the military in 1914, he emerged as a close adviser of Etienne Clémentel, who became French minister of trade and posts late in 1915 and remained in government, acquiring ministries until, by 1918, he ran virtually the whole civil economy except finance. Monnet became Clémentel’s agent for allied cooperation in London and took part in setting up in late 1917 the Allied Maritime Transport Executive (AMTE), which controlled the scarcest resource, shipping, and thereby rationed all Allied supplies. One contemporary called the AMTE “the most advanced experiment yet made in international cooperation.” When the League of Nations was set up in 1919, Monnet, only thirty but already a proved force in the field, was appointed deputy secretarygeneral handling economic affairs. Monnet earned a strong reputation at the league but had to leave at the end of 1922 to save the family firm in Cognac. In 1926, he became head of the European office of a major Wall Street investment bank, Blair & Coy; until World War II he worked as a financier, winning and losing a fortune between 1929 and 1932. Even in private business he carried out public operations similar to those at the league: resolving disputes in Upper Silesia and Austria for the league in 1920 and 1921; negotiating loans for Blair in 1927 and 1928 to launch recovery programs in Poland or Romania; and in 1934, as a freelance, conceiving the then outlandish device of joint Chinese-Western ventures to invest in railways and modernize China. In the end, the destructive 1930s negated most of these efforts. Monnet’s life between the wars shaped his later career in at least two respects. One was that, having observed the failure of international cooperation to stop the slump and the slide to war, his European policies after 1945 assumed that cooperation meant nothing unless national vetoes were curtailed. The other was that he forged strong links through two decades of work based in the United States. He was a prewar friend of lawyers like Dean Acheson, John McCloy, John Foster Dulles, and others who were to fashion post-1945 U.S. policies. His insider status with them was a huge unseen asset after the war.

War brought Monnet back into public service more or less where he had left off in 1918. From 1938 to 1943 he strove to nudge the United States into becoming the “arsenal of democracy,” a phrase colleagues like McCloy ascribed to him. His main impact came after the fall of France in 1940, in Washington, when he acted as a senior official in the British Supply Council for war purchases in the United States, though still a French citizen. The United States was nonbelligerent, and isolationist sentiment was strong and vocal. Monnet seems to have suggested to like-minded officials in Franklin Roosevelt’s entourage many, if not most, of the tactics to prepare a Victory Program, involving huge war-winning targets for arms production (100,000 warplanes and the rest to match), despite the isolationists. This strategy paved the way for Roosevelt to be able to launch the program immediately after the United States entered the war. In 1946, a close observer, Lord Halifax, Britain’s wartime ambassador to the United States, wrote that “Monnet was, with such as Harry Hopkins, one of the real architects of our victory.” So it was that in February 1943 Roosevelt, hostile to the Free French leader, General de Gaulle, sent Monnet to Algiers, where the Allies had landed four months before. There Monnet was to give political backbone to General Henri Giraud, the Americans’ favored but inept French leader in North Africa. The idea was to sideline de Gaulle. Monnet had deeply distrusted de Gaulle’s egotism since both had promoted in London in June 1940 the abortive scheme for an AngloFrench Union to keep France in the war. But wedded to the idea of French unity, Monnet realized Giraud had no political backbone to stiffen. So Monnet acted as a marriage broker between Giraud and de Gaulle in forming the French Committee of National Liberation (CFLN) in Algiers in June 1943, of which de Gaulle predictably emerged as sole leader. Monnet sat on the CFLN and from then until 1950 worked on French reconstruction. Monnet negotiated a Lend-Lease agreement with the United States in February 1945—late in the war because of Roosevelt’s continuing suspicion of de Gaulle. Then, in January 1946, backed by de Gaulle, Monnet launched the five-year investment and modernization plan known as the Monnet Plan. Planning was in the air after the liberation as a means of repairing the economic decay of the 1930s and the destruction of wartime

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German occupation. But ministries felt threatened by planning and had already blocked two such attempts, one by Pierre Mendès-France, based on a highly centralized approach. Monnet changed that. He presented planning not as a virtue in itself but as a means of obtaining urgent U.S. aid now that peace had cut off Lend-Lease. He agreed that a plan “will be effective only to the extent that it has been thought through and adopted as their own by a broad enough swathe of the people involved.” Subsequently, “modernization commissions” brought together civil servants, industrialists, labor unions, and diverse experts. Monnet asked for no formal powers but jealously guarded his access to top ministers and to the funds. The Monnet Plan succeeded in tapping the widespread will for renewal in early postwar France, but not without trouble. The Fourth Republic that took over from de Gaulle in 1946, run by a plethora of political parties, produced shifting coalition governments lasting on average six months. Monnet had constantly to renew his courtship of the stage army of revolving premiers and ministers. He succeeded on the whole because he had stable tenure and was a known source of ideas. But the Americans failed to provide dollars in 1946 on the scale he had hoped, and crisis followed in 1947. The situation was saved by the Marshall Plan’s aid. Monnet’s alliance with U.S. aid officials and (less consistently) the French ministry of finance ensured that his investment programs got the lion’s share of dollars. Gradually, by 1950, the Monnet Plan became a perceived source of success in a country widely regarded as the sick man of Europe. France’s growth was not outstanding, but the plan was the vital first step in the country’s reconstruction as a modern industrial state. The position Monnet gained in French policymaking through the plan made possible his major achievement, the launching of the Schuman Plan in 1950. Hitherto, “Europe” had been a big theme for political orators speculating on a new start, notably with Germany, but had not been taken up by government. Now that the Americans, backed by the British, had created the Federal Republic as a Cold War bastion, Germany was soon going to recover sovereignty, and France’s postwar policies of controlling Germany through the International Ruhr Authority were collapsing. A new policy was desperately needed. Robert Schuman, the French foreign minister, provided it on

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May 9, 1950, by proposing a federal-style Community of France and Germany, open to others (in the event, Italy and the Benelux countries) and confined to coal and steel, as a first step to a united Europe. The Schuman Plan was Monnet’s scheme, and he immediately proved himself the driving force and strategist behind it. Monnet made a number of choices, highly controversial at the time, that still shape the EU today. The first was that Franco-German reconciliation demanded equal treatment between the two. The Schuman Plan aimed at collective control not only of the Ruhr but also of French coal and steel. This entailed a commitment to the rule of law applied by common bodies that is familiar in the domestic politics of democracies but in sharp contrast to the traditional balance of power between states. As a policy transforming Franco-German relations, this long antedated the treaty of friendship (Elysée treaty) signed in 1963 by Chancellor Adenauer and President de Gaulle. The second choice was to go ahead with Germany but not with an anti-integrationist Britain, a breathtaking leap only five years after the war. Monnet, a staunch supporter of British membership in the EC, rejected any British veto on action. Integration was launched by a minority of states and has always depended on a leading group. The United States had more than replaced Britain as the guarantor of the new policy. Without active U.S. pressure, notably on the Ruhr magnates, a treaty for the first of the three communities, the European Coal and Steel Community (ECSC), would probably never have been agreed to. The third choice was to limit the federal experiment to coal and steel. The general approach to union had already failed when the Council of Europe was set up in 1949. Monnet argued that it would require practical experience of the ECSC to lead, step by step, to further communities and European federation. His own initial vision of the ECSC was of a kind of European Monnet Plan abstracted from the nation states. When negotiations opened, the Dutch insisted that governments be brought directly into the picture in a Council of Ministers. Within a month, by July 1950, a compromise was reached, and a pattern of Community institutions emerged that remains (despite changes) the essence of the system today. Negotiations to set up the ECSC had hardly begun when, on June 26, 1950, the Korean War broke out, creating fears of a similar war in Europe

over divided Germany. The United States would not position troops in Europe without a Western European defense effort, including Germany. The French were horrified. Monnet, fearing that a West Germany allowed to rearm as a Western ally would have no incentive to accept restraints within a European Community, persuaded the French prime minister, René Pleven, to propose on October 24, 1950, a European Defense Community (EDC) parallel to that for coal and steel. Monnet concentrated on the ECSC, which began operating on August 10, 1952, after a long tussle over decartelization of the Ruhr. Monnet was president of the “first European Government,” the ECSC High Authority. Earlier, on May 27, 1952, the EDC treaty had been signed by the ECSC member states. But an increasingly passionate rejection in French political circles of all German rearmament led to rejection by the French National Assembly of the EDC treaty (already ratified by France’s five partners) on August 30, 1954. The ECSC was weakened by the turmoil. Monnet’s presidency of the High Authority quickly introduced the common market for coal and steel and ended most open trade discrimination rooted in nationalist economic policies but lost the battle to control the steel cartels backed by governments. Boom conditions softened the impact of this defeat, however. The failure of the EDC cast doubt on integration and focused opposition in France to Monnet as the personification of “supranationalism.” He duly left the High Authority on June 10, 1955. Yet the ECSC remained the model for subsequent efforts to “relaunch Europe.” Monnet and PaulHenri Spaak, the Belgian foreign minister, proposed in April 1955 that a new Community for civil nuclear power (the European Atomic Energy Community—EURATOM) should be set up. The Dutch foreign minister, Johan Willem Beyen, and the Germans promoted a broader common market instead. The two proposals were combined and finally led to the signing and ratification of the two treaties of Rome, thanks primarily to a change of government in France that brought in a pro-European socialist, Guy Mollet, as prime minister (1956–1957). Fearing that the common market, in order to succeed, would require more federalism than was politically possible after the EDC fiasco, Monnet concentrated on EURATOM. De Gaulle’s return to power in June 1958 ended Monnet’s ability to “inspire” French gov-

ernments. Having seen the EDC destroyed by a political tidal wave, Monnet had set up a lobby in October 1955, the Action Committee for the United States of Europe (ACUSE), comprising the leaders of all political parties and labor unions of the EC member states except the communists, the Gaullists, and their associates. This unique lobby lasted until Monnet, at age eighty-six, dissolved it in 1975. Tacitly admitting his old underestimation of the common market, Monnet tried from 1958 on to make it the trampoline of political union. A plan for European monetary union was formulated as early as November 1957. Monnet was attracted in 1961 to de Gaulle’s Fouchet Plan for meetings of heads of states, supranationalist though it was. The ACUSE also proposed an “equal partnership” between Europe and the United States before President Kennedy’s famous speech on that theme on July 4, 1962. None of these fructified in Monnet’s day, but his associate, Max Kohnstamm, with a new Action Committee, helped Jacques Delors prepare Economic and Monetary Union (EMU) in the 1980s. The last decades of Monnet’s activity, in politics but outside government, were important in giving expression to, and implanting, the only view of Europe so far that has gone beyond arguments of power or economics. Monnet’s vision of European integration as a way of applying civil and democratic norms of politics to interstate relations under common institutions (“the pillars of civilization”) became more and more explicit from the 1950s on. At the end of Monnet’s life, he dreamed of a book entitled Yesterday the Rule of Force; Today the Rule of Law. This aspect of European integration is confirmed by the eagerness of small states to join a club that enhances their influence and security as against great power directorates. It is sometimes argued that the Community method associated with Monnet is out of date in the present no-man’s-land between economic and political union. Certainly, a full political union implies a unitary system. Monnet’s support for the Fouchet Plan of 1961 and the European Council of 1974, which brought together heads of state and government but not on Community lines, betrayed his own sense of a contrast between the implications for union of “high” and “low” politics. Yet more or less far-reaching schemes such as EMU and the European Police Office still sug-

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gest that the neofunctional approach has potential, notably because overt political union is not in the cards. See also ACTION COMMITTEE FOR THE UNITED STATES OF EUROPE; EUROPEAN COAL AND STEEL COMMUNITY; EUROPEAN DEFENSE COMMUNITY; SCHUMAN, ROBERT. Duchêne, François. 1994. Jean Monnet: The First Statesman of Interdependence. New York: Norton.

Bibliography

—François Duchêne

The traditional “Monnet method” of “integration by stealth” refers to Jean Monnet’s strategy to promote spillover from one economic sector to another and eventually from market integration to political integration. Commission president Jacques Delors used the Monnet method to transform the EC in the late 1980s. However, the Monnet method worked only for economic integration and, largely because of its secretive nature, lost its effectiveness when the single market program began to affect people’s everyday lives. Moreover, the Monnet method proved largely ineffective at promoting spillover from economics to politics. See also MONNET, JEAN.

Monnet Method

The Monnet Plan, officially called the Plan de Modernisation et d’Équipement, helped to modernize and revitalize the French economy in the immediate postwar years and to prepare France for membership in the EC. See also MONNET, JEAN.

Monnet Plan

In the mid-1990s the EU undertook a highly publicized reconstruction and reconciliation effort in Mostar, a city in Bosnia bitterly divided between Croats and Muslims that came to symbolize the failure of EU policy throughout the Balkans. Mostar was destroyed in May 1993 as Bosnia’s Croats turned on the Muslims, their onetime allies against the Serbs, in a bid to carve out a chunk of Bosnia to unite with Croatia. Croat forces expelled thousands of Muslims from the west side

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MRAs

onto the east bank of the Neretva River, and some fifty-five thousand Muslims withstood nine months of hunger and fire that destroyed much of the Ottoman-era east bank, including the sixteenth-century stone bridge for which Mostar was famous. The fighting ended with a U.S.-brokered pact establishing the Muslim-Croat federation. Member states sanctioned the EU administration of Mostar as a Common Foreign and Security Policy joint action and appointed Hans Koschnik, formerly mayor of Bremen, as EU administrator there. As part of a local peace agreement, Koschnik directed an ECU 175 million reconstruction program and began the process of reuni-

fication by establishing a joint city police force (under Western European Union auspices) and a joint government. But Koschnik’s efforts were unavailing, and EU money was poorly spent. Koschnik resigned in July 1996, leaving Mostar’s future in doubt. The EU’s involvement in Mostar was a costly disappointment and an embarrassing symbol of the failure of EU policy toward the former Yugoslavia as a whole. See also YUGOSLAVIA.

MRAs

N See NORTH ATLANTIC COOPERATION COUNCIL.

NACC

The coming into force of the Treaty on European Union (TEU) in November 1993 resulted in extensive constitutional reforms in some member states (notably France and Germany) that amended the role of national parliaments in EU affairs. In Belgium, Spain, Ireland, the Netherlands, and Portugal, special laws and agreements between government and parliament were adopted in order to strengthen parliamentary scrutiny of European affairs. Concomitantly, national assemblies changed their rules of procedure in order to consolidate their capacities relating to European affairs (Masclet and Maus, 1993). These changes occurred in a climate in which public opinion became more critical vis-à-vis the integration process and its achievements. National parliaments saw themselves faced with problems that more and more called their institutional position and procedural function into question. This was a new development, as national parliaments had not been granted a significant role when the Treaty of Rome was signed in 1957. Instead, their involvement in EC affairs had been limited to approving amendments to the treaty and budgetary arrangements. Notwithstanding, national parliaments had been provided with an organic link to the institutional system of the EC in two ways. First, until 1979, members of the European Parliament (EP) were drawn from national parliaments. As a result, interested national parliamentarians had an opportunity (however limited) to get involved in the EC decisionmaking process and to

National Parliaments

establish informal but sometimes effective control mechanisms in their national parliament. Provided they were members of the national parliamentary majority group, these Members of the European Parliament (MEPs) could also influence their own government and its representatives in the Council of Ministers. Second, before the Single European Act (SEA), nearly all important decisions adopted by the Council of Ministers were taken unanimously, thereby giving governments an opportunity to block decisions on grounds of national parliamentary reserve. Consequently, parliaments had at least a formal possibility of influencing decisions at the European level through the control of their respective governments. As a result of the SEA and the TEU, national parliaments are affected by the extension of the range of qualified majority voting in the Council and the formal independence of the directly elected EP from national parliaments. Furthermore, the increasing scope of EU activities is affecting and undermining the traditional legislative function of national parliaments. At the same time, provided they are the “national authorities” to which Article 189 of the Rome treaty leaves the choice of form and methods in order to achieve the results of a directive, national parliaments have a growing role in the transposition of Community secondary legislation. Additionally, the TEU granted national parliaments new approval rights: conventions under Article K.3.2[c], the use of the so-called passerelle (gateway) clause in Article K.9, and the extension of scope in matters regarding the creation of new rights by virtue of citizenship are subject to ratification in the member states. The transfer of national competencies to the European level implies an immediate loss of legislative powers exercised by national parliaments in favor of the Council of Ministers, the Commission, and, to a lesser extent, the EP. Only after the introduction of the so-called cooperation procedure (Article 189c) and the co-decision procedure (Article 189b) did the EP get important rights in the field of EC legislation. Even under the TEU, however, the transfer of national parliamentary powers to the European level has not entailed a transfer of those powers to the EP. As Nothomb pointed out, “the transfer of powers from national to European level has been larger and more rapid than either the strengthening of the powers of the European Parliament or the supervision by na-

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tional parliaments of the development of European legislation” (Nothomb, 1994, p. 12). The loss of original legislative powers may be compensated by an increase in the national parliament’s control function. Following a decision by Germany’s upper house (Bundesrat) in 1957 to create a special EC affairs committee, parliaments in other member states established procedures and institutions in order to scrutinize their governments’ activities in the EC decisionmaking process. Nevertheless, the degree of effective parliamentary scrutiny varies significantly (Laprat, 1995, pp. 4–10; Norton, 1995). Based on proposals by Britain and France during the 1991 intergovernmental conference (IGC), the TEU included a declaration on the role of national parliaments in the EU (Corbett, 1993, pp. 61–62). Accordingly, governments are to ensure “that national parliaments receive Commission proposals for legislation in good time for information or possible examination.” This declaration constitutes a discretionary provision without any legally binding effect other than a welcome source of political debate and conflict between governments and parliaments on the effectiveness of parliamentary accountability in EU affairs. Concerning the scope of scrutiny that results from documents being forwarded to parliaments by their governments, some assemblies have access only to draft legislative proposals issued by the Commission. Parliaments in Denmark, Belgium, the Netherlands, and Germany may also examine green and white papers, recommendations, communications, resolutions of the EP, and acts relating to Economic and Monetary Union (EMU), the Common Foreign and Security Policy (CFSP), and Cooperation on Justice and Home Affairs (JHA). In order to streamline the examination process, some governments transmit not only the original EU documents but also fact sheets including an account of possible consequences of the legal act for the member state’s public authorities, enterprises, citizens, state finances, and the environment. Finally, the monitoring process may be accelerated if parliament receives from the government additional notes explaining the latter’s position on a certain legislative act and information about meetings that take place below the level of the Council, such as of the Antici group or the Committee of Permanent Representatives (COREPER). However, the scope of parliamentary scrutiny may be restricted according to national hierarchies

of norms. This is the case in France, where parliament examines only those proposals for Community acts that include provisions of a “legislative nature,” thus only those acts that, if adopted in France, would form part of the law within the meaning of Article 34 of the constitution. As a result, the French parliament examines only about 15 to 20 percent of the draft proposals sent to it (De Berranger, 1995, p. 423; European Parliament, 1995, p. 32). Effective scrutiny presupposes that parliaments receive draft proposals for legislation in good time. In this connection, some rules governing the parliamentary monitoring process in the handling of European affairs oblige governments to transmit the relevant documents at the earliest possible date. In practice, the timing of scrutiny varies according to the internal management of European affairs on the governmental as well as on the parliamentary level and depending on the implications of parliamentary scrutiny powers for the government’s European policy. If ministers are bound by national parliamentary decisions, governments are politically obliged to forward the relevant documents within a certain period to allow national parliaments to examine them before the relevant Council meeting. In reality, however, parliaments often receive documents only a few days before the Council meets. Finally, the implications of parliamentary scrutiny are different in every national parliament. Even under the TEU, the scrutiny power of some parliaments is strictly limited to information gathering, without much effect on the government’s conduct of European policy. But many national parliaments now aspire not only to know what legislation is pending in the EU but also to affect their government’s stance on it in the Council. In Denmark, ministers get mandates on the basis of which they can negotiate with their partners and participate in any Council decision; they cannot agree to a Council proposal if the process of national parliamentary scrutiny is incomplete. In Britain, Parliament can ask government not to take a decision in the Council until Parliament has had an opportunity to examine the text. Similarly in France, ministers were instructed in July 1994 not to agree to any text in the Council if national scrutiny procedures had not been concluded. Accordingly, if parliament expresses the intention of examining texts of a legislative nature before the Council, the French representatives in the Council

spell out a parliamentary scrutiny reserve that has the effect of suspending the Council decision. This rule also applies to COREPER meetings. National parliaments must constantly adapt and adjust possibilities and arrangements for parliamentary activity in response to new Community legislation. In CFSP and JHA, the EP has no right to colegislate with the Council, which alone defines common positions and adopts joint actions and joint positions. Conventions drawn up under JHA must be ratified only in the national parliaments. National governments and parliaments have always been determined to keep control in the field of justice and home affairs, regarding this as a manifestation of their sovereignty and consequently a topic falling essentially within their field of competence. As for procedural aspects of CFSP and JHA, there is no lack of democracy in an intergovernmental pillar as long as the national legislator is provided with the appropriate instruments to legislate and to control. But practice shows that the participation of some national parliaments in these two areas is rather limited (Maurer, 1995, p. 95). In this respect, the example of the French parliament is illustrative: in June 1994, the national assembly’s newly renamed Delegation for European Union Affairs asked to receive from the government all EU legislative acts having to do with CFSP and JHA. Although the government agreed to transmit documents relating to JHA, it did not respond until October 1995 to the request for draft acts drawn up by the Council in the framework of CFSP. In some member states the role of parliament in the fields of intergovernmental cooperation is much more restricted, with parliaments being informed about progress on CFSP and JHA only if their governments agree to a special demand. On the other end of the spectrum, some parliaments are much more involved: the Danish parliament applies its mandatory procedure in the two intergovernmental pillars. Others, like the Dutch second chamber or the Austrian Nationalrat, may approve the government’s position on proposals issued under the third pillar. Although the role of national parliaments is above all a matter for the particular constitutional organization of each member state, inevitably the question was addressed at the 1996–1997 IGC. Indeed, governments and parliaments forwarded proposals to the IGC on granting the right to national parliaments to petition the European Court

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of Justice when they believe that EC law infringes the division of competence between the EU and the member states or violates the principle of subsidiarity. Another proposal discussed at the IGC had to do with the codification of “parliamentary scrutiny reserves” exercised by some member states in order to allow national parliaments the necessary time to acquaint themselves with a draft act on the Council’s agenda. In the event, the Amsterdam Treaty, which came out of the IGC, included a protocol on the role of national parliaments in the EU. This stipulates that all Commission consultation documents will be “promptly forwarded” to national parliaments, that Commission legislative proposals “shall be made available in good time so that the government of each member state may ensure that its own national parliament receives them as appropriate,” and that a six-week period will elapse between the Commission’s sending a legislative proposal or a proposed JHA measure “in all languages” to the Council and the EP and the Council’s placing the proposal on its agenda for the adoption of an act or a common position. Alongside various unilateral control mechanisms, the EP and national parliaments have carried out different strategies based on interparliamentary cooperation in order to cope with the lack of democratic accountability in the EU. The oldest formula constitutes the Conference of Presidents and Speakers of the Parliaments of the EU, which meets once every six months. Although a welltried instrument, the conference is handicapped in two ways. First, its powers are very limited because some presidents and speakers are not competent to speak either on political issues in an international arena or on behalf of their parliament. Second, although the presidents and speakers attach great importance to interparliamentary control, other commitments prevent them from giving adequate attention to the issue. In November 1989, the speakers’ conference approved setting up a Conference of European Affairs Committees (CEAC) of national parliaments and the EP. This new body meets twice a year in the country holding the Council presidency. In 1991 specific rules of procedure were adopted. These laid down, inter alia, the duration of meetings, their composition and organization, and the fact that decisions must be taken unanimously by those present. It has become a regular practice for the parliament organizing the meeting to distribute in advance a ques-

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tionnaire relating to issues on the agenda. Moreover, CEAC meetings are usually addressed by the prime minister and foreign minister of the country holding the Council presidency, and commissioners sometimes attend. CEAC meetings may help develop a climate of opinion in relation to specific issues. CEAC faces major problems in going beyond questions of a general and institutional nature because of differences in national parliaments over the importance and role of EU affairs committees in the overall parliamentary process and over the powers of such committees in relation to those of specialist standing committees. Nor is CEAC’s composition representative, as most of the delegations are not mandated by their respective assemblies. Consequently, a third instrument of interparliamentary cooperation seems to be more appropriate for a systematic and policy-oriented monitoring process linked to the preparation and application of EC law: since the adoption of the SEA, the EP has invited national parliaments to hold bilateral and multilateral meetings between specialized EP and national committees in order to discuss items of EC legislation under consideration or in the pipeline. Although informal, these meetings have informed opinions expressed by the EP within the framework of the EU’s legislative procedures. They thus contribute implicitly to satisfying the need for more efficiency in the field of EU legislation, in that the EP may be made aware of potential and foreseeable problems in the transposition of proposed directives. Similarly, the specialized committees of national parliaments obtain background information on the possible negotiating strategies and positions of other governments and parliaments. As a result, both kinds of informal interparliamentary cooperation serve equally to program and systematize the parliamentary scrutiny procedures in the parliaments of the EU. In its declaration on the role of national parliaments in the EU, the TEU recognized the importance of interparliamentary control mechanisms. Moreover, as a result of the so-called Assizes held in Rome in November 1990, which brought together 173 national parliamentarians and 85 MEPs in order to adopt a resolution on the IGCs then in progress, another declaration invited both the EP and national parliaments to “meet as necessary as a Conference of the Parliaments.” Although this declaration gave the Assizes a consul-

tative role in the discussion of the “main features of the European Union,” there was only limited enthusiasm for another such conference in the framework of the 1996–1997 IGC. The main reason for this reluctance was that the concerns of parliamentarians from countries such as Britain and France were not reflected in a resolution of the earlier Rome conference, which was passed by majority vote (Shackleton, 1995, p. 173). With regard to EU institutional reform, several ideas were suggested before and during the 1996–1997 IGC to involve national parliaments more fully in the European policy process. The French parliament considered that a European senate or standing interparliamentary committee, made up of an equal number of representatives from each member state, could best represent national parliaments in the EU decisionmaking process. Yet most national parliaments opposed this, arguing that the creation of new bodies would overload the EU’s institutional framework. Instead, several parliaments and governments suggested upgrading CEAC in a pragmatic fashion in relation to the application of the principle of subsidiarity and the functioning of the second and third pillars. As long as CFSP and JHA remain intergovernmental, with the EP having virtually no legislative or consultative role, greater and perhaps even formalized involvement of national parliaments in these pillars is likely to become a realistic option for the strengthening of parliamentary accountability in the EU. However, although stipulating that CEAC “may make any contribution it deems appropriate for the attention of the institutions of the EU,” the Amsterdam Treaty’s protocol on the role of national parliaments made it clear that the conference’s input should be directed primarily at “the establishment of an area of freedom, security and justice which might have a direct bearing on the rights and freedoms of individuals.” See also EUROPEAN PARLIAMENT; LEGISLATIVE PROCEDURES. Corbett, Richard. 1993. The Treaty of Maastricht. Harlow: Longman Information and Reference. De Berranger, Thibaut. 1995. Constitutions nationales et construction communautaire. Paris: Librairie Générale de Droit et de Jurisprudence. European Parliament. 1995. European Affairs Committees of the Parliaments of the Member States. Brussels/Luxembourg: European Parliament.

Bibliography

Laprat, Gérard. 1995. “Parliamentary Scrutiny of Community Legislation: An Evolving Idea.” In Finn Laursen and Spyros A. Pappas, eds., The Changing Role of Parliaments in the European Union. Maastricht: European Institute of Public Administration. Masclet, Jean Claude, and Didier Maus, eds. 1993. Les Constitutions nationales à l’épreuve de l’Europe. Paris: La Documentation Francaise. Maurer, Andreas. 1995. Options and Recommendations for Inter-Parliamentary Cooperation Between the European Parliament and National Parliaments. Study IV/95/20 for the European Parliament, Directorate-General IV. Brussels: European Parliament. Norton, Philip, ed. 1995. National Parliaments and the European Union. Special Issue of Journal of Legislative Studies 1, no. 3. Nothomb, Charles-Ferdinand. 1994. “The Role of National Parliaments and the European Parliament in Building the European Union.” The Brussels Review, no. 4. Shackleton, Michael. 1995. “Inter-Parliamentary Cooperation and the 1996 Intergovernmental Conference.” In Finn Laursen and Spyros A. Pappas, eds., The Changing Role of Parliaments in the European Union. Maastricht: European Institute of Public Administration.

—Andreas Maurer

See NORTH ATLANTIC TREATY ORGANIZATION.

NATO

See NEW COMMUNITY INSTRUMENT.

NCI

Neofunctionalism is a theory of regional integration first advanced by Ernest Haas in the late 1950s. The critical explanatory hypotheses of neofunctionalism focus on the unintended or unexpected feedback of previous integration decisions, termed “spillover.” For Haas, the precise reasons for initiating economic integration, often geopolitical, are relatively unimportant. Once economic integration is launched, however, spillover tends to create two types of pressure for an expansion in the scope or intensity of integration. In economic spillover, social groups demand further economic integration in order to preserve or extend existing gains. In political spillover, integration creates new transnational and supranational actors, who tend on balance to favor greater integration and

Neofunctionalism

The Netherlands

355

are advantageously placed to engineer it. Expectations and values eventually adapt to integration, creating a transnational political community, which in the end legitimates centralized regional governance. See also INTEGRATION THEORY. The Dutch have a reputation for being champions of European integration, or so they think. Occasionally, the Dutch have provided substantial pushes toward integration and cooperation. The 1948 meeting that led to the establishment of the Council of Europe took place in The Hague; the creation of the European Economic Community (EEC) was inspired by a 1955 memorandum by Dutch foreign minister Johan Willem Beyen; Philips, a Dutch multinational company, played an important part in the process leading to completion of the single market; Euromindedness was prominent in the rejected Dutch draft treaty on European Union, submitted during the 1991 intergovernmental conference (IGC); and the Dutch presided over the conclusion of the 1996–1997 IGC. More generally, the Dutch have a decent record when it comes to implementing EC legislation. Nonetheless, Dutch enthusiasm for Europe has been the result of a pragmatic assessment of national interests rather than of an unmitigated commitment to federalism. Indeed, the federal route is quickly dismissed when it may conflict with Dutch interests. Thus, the Netherlands insisted, at the eleventh hour, on adding a Council of Ministers to the institutional structure of the European Coal and Steel Community, if only to protect the Dutch steel industry; it was Dutch foreign minister Josef Luns who for roughly a decade tried to lure Britain into the Community, thus crippling the establishment of a Franco-German directorate; and when it came to foreign policy cooperation, the primary Dutch attitude was one of hesitation at best. In general, when it comes to European integration, Dutch behavior is characterized not by unequivocal federalism but rather by a general and pragmatic disinterest. The major political parties (always governing in coalitions) have been and remain by and large in agreement as to the desirability of European economic integration. The result is that debates in Dutch politics tend to

The Netherlands

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The Netherlands

center on rather abstract, constitutional issues, such as whether or not the powers of the European Parliament (EP) should be increased (most parties routinely answer positively). Attempts to infuse politics into the debate, such as the Labor Party’s position in the 1970s that Europe should be socialist or should not exist, usually are short-lived or stem from the smaller parties on the far right and left of the political spectrum. An interesting recent development, however, is the position taken by the conservative-liberal Freedom and Democracy Party (VVD). Within the VVD (well on its way to becoming the largest party), traditional (if undefined) federalism is somewhat on the wane. Nowadays, the VVD advocates retaining decisionmaking by unanimity in the second and third pillars of the EU as well as an increased use of the principle of subsidiarity and perhaps even the institutionalization of differentiated integration. The VVD’s emerging conception (the party is still divided on the issue) may be partly the result of a fear of losing the country’s traditional Atlantic orientation in matters of security and defense. Since World War II the Dutch have looked toward the United States for security and have proved themselves reluctant to substitute an exclusively European defense arrangement for U.S. protection. A loss of sovereignty, especially in the realm of security and defense policy, could result in a loosening, perhaps even a cutting off, of those traditional transatlantic bonds. Another factor of some importance may be that whereas the Dutch have traditionally benefited from European integration, recent developments (notably reform of the Common Agricultural Policy) have resulted in the Netherlands becoming a net contributor to the EU’s budget. Some calculations suggest that by the year 2000 the Dutch will be the biggest per capita contributors. Thus, an important incentive to advocate European integration may slowly be withering away. But perhaps the most important factor is that previously the Dutch could easily afford to present themselves as federalists. “Ever closer union” was a vague phenomenon, hidden beyond the horizon and never expected to become a reality. With the entry into force of the Treaty on European Union, however, and especially its provisions for Economic and Monetary Union (EMU), the mythical goal of European union has suddenly taken on some distinct features, urging political parties to

engage in a serious debate as to what sort of Europe they want. As a result, federalism may no longer appear a viable option. From this perspective, the VVD is not so much backtracking as arguably becoming the first major Dutch political party to take Europe seriously. Interestingly, even rejection by most other member states of the draft treaty in September 1991 hardly led to a serious reevaluation of Dutch Europolicy. The defeat provoked comments on the quality of Dutch diplomacy (apparently unable to assess the European political climate correctly), and the influence (or lack thereof) of the Dutch on the European scene but did not result in a serious questioning of the wisdom of the more-or-less federalist route. Politicians’ attitudes generally reflect those of the electorate. European integration is by and large regarded as a good thing but not as something to get overly excited about, as indicated both by regular European opinion polls and by the turnout at EP elections (notwithstanding the everincreasing presence of Dutch lobbyists on the European scene). Although a low turnout might indicate a high degree of satisfaction, the more plausible explanation appears to be that it reflects a high degree of disinterest. Perhaps this general lack of interest can partly be explained by historical considerations. Often characterized as a “pillarized” nation, Dutch politics could only proceed through a process of accommodation at the elite level. While the public at large remained tucked away in isolated pillars (e.g., Catholics, Protestants, liberals, and socialdemocrats), their leaders were in constant contact with each other to plan the course of the nation. But this could only work if the public at large remained somewhat indifferent to what the elites agreed to, a condition that correspondingly hinged on the capacity of those elites to turn substantive issues into issues of procedure. As long as fair representation is guaranteed, the Dutch have been raised to believe that the correct, or at least the legitimate, answer to any substantive problem will almost automatically follow. It is no surprise, therefore, that although the pillarized structure has largely been dismantled, Dutch politics in general tend to be sterile, focusing on procedure rather than on substance. Dutch policy toward European integration is no exception. If it is true that Dutch Europolitics are largely shaped by a proper assessment of Dutch interests,

then the underlying problem is to determine what those interests are and what the best way is to pursue those interests. Here, opinions diverge. For some, the fact that the Netherlands is a small nation indicates that, on its own, it would be virtually powerless in today’s world. Hence, the Dutch should seek refuge in supranational structures that at least prevent domination by larger neighbors such as Germany. The somewhat ambivalent stance toward Germany—an important trading partner and monetary anchor, increasingly the focal point of Dutch EU policy, but also still a bit too close for comfort—may also partly explain the traditional Dutch Janus-faced approach to the EU: wanting economic integration in Europe but looking to the United States for security. Dutch reliance on trade and transit suggests that the Dutch are best off endorsing free trade and the international rule of law, as the seventeenth-century jurist Grotius acknowledged. Indeed, an assessment of Dutch national interests points to the advisability of international (not necessarily supranational) structures based on law and free trade. Thus the question remains: which course better suits Dutch interests? The answer hinges on a variety of issues. Perhaps the most urgent one relates to monetary union: should the Dutch continue to support EMU, or should they remain content to stay in the shadow of the German mark? According to some, the latter option is preferable, as monetary union could weaken the mark and thereby hurt the Dutch economy. On another important policy issue, presumably the Dutch have most to gain from the liberalization of the European transport sector. Traditional trading and transit interests have created a comparative advantage in transport, which can only be fully realized once the transport sector has been liberalized. In other policy areas, the benefits of European integration appear less clear-cut, although developments in the financial services sector seem advantageous for the Netherlands. In traditional fashion, however, other issues of supposed political importance relate in fact to matters of procedure, such as decisionmaking and judicial review in the Common Foreign and Security Policy and Cooperation on Justice and Home Affairs and the need for greater transparency in the legislative process. That such issues appear to be the main focus of present Dutch policy toward the EU indicates a recurring preference for procedure over politics. As a prominent Dutch parlia-

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mentarian once observed, “especially in our country, investing in Europe has always meant investing in institutional matters, as a substitute for politics.” Paradoxically, Dutch preoccupation with procedural issues creates the impression of ambitious federalist aspirations. See also APPENDIX 2; APPENDIX 3. Bonnes, Jacqueline. 1994. Uitvoering van EG-verordeningen in Nederland. Zwolle: Tjeenk Willink. Griffiths, Richard T., ed. 1980. The Economy and Politics of the Netherlands Since 1945. The Hague: Martinus Nijhoff. ———. 1990. The Netherlands and the Integration of Europe 1945–1957. Amsterdam: NEHA. Den Hartog, Arthur. 1994. “The Netherlands and the Ratification of the Maastricht Treaty.” In Finn Laursen and Sophie Vanhoonacker, eds., The Ratification of the Maastricht Treaty: Issues, Debates and Future Implications. Maastricht: European Institute of Public Administration. Jansen, Max, and J. K. de Vree. 1988. The Ordeal of Unity. 2d ed. Bilthoven: Prime Press. Klabbers, Jan. 1988. “Nederland en de EPS.” Nieuw Europa 14, pp. 65–69. ———. 1990. “Europese integratie.” In J. van Deth and J. Vis, eds., Politieke problemen, pp. 478–495. Leiden: Stenfert Kroese. ———. 1993. Nederland op Europees peil: De EG na 1992. Leiden: Stichting Burgerschapskunde. ———. 1996. “Netherlands.” In Roger Morgan and Clare Tame, eds., Parliaments and Parties: The European Parliament in the Political Life of Europe, pp. 10–27. London: Macmillan. Wolters, Menno, and Peter Coffey, eds. 1990. The Netherlands and EC Membership Evaluated. London: Pinter.

Bibliography

—Jan Klabbers

During the Cold War, Europe’s neutral states (Austria, Finland, Sweden, and Switzerland) did not apply to join the EC, which the Soviet Union characterized as an economic arm of NATO. Yet Ireland, a nominal neutral, joined the EC and participated in European Political Cooperation, the member states’ foreign policy coordinating procedure. The vastly different historical, geographical, and strategic circumstances of Europe’s other, “real” neutrals, however, precluded their membership in the EC. Only with the end of the Cold War did they apply to join, while at the same time eschewing both NATO and full Western European

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New Approach

Union membership. Austria, Finland, and Sweden joined the EU on January 1, 1995; Switzerland shelved its application after rejection of proposed membership in the European Economic Area in a December 1992 referendum. The EU’s new neutral member states had no difficulty participating in the Common Foreign and Security Policy but remained wary about the possible development of an EU defense policy. Although in post–Cold War Europe neutrality had little practical meaning, it remained a cherished symbol for Austria, Finland, and Sweden. See also AUSTRIA; FINLAND; SWEDEN. See STANDARDS AND CONFORMITY ASSESSMENT.

New Approach

New Commercial Policy Instrument

In 1984, the EC adopted the New Commercial Policy Instrument as a protective device against illicit trade practices that affected EC exports as well as imports. When illicit practices were proved to exist, the instrument allowed the Council of Ministers to introduce various retaliatory actions, including increasing the level of import duties and the application of import quotas. See also COMMON COMMERCIAL POLICY.

New Community Instrument (NCI)

The New Community Instrument (NCI) was introduced in 1977 to supplement the EC’s structural funds, specifically by assisting industrial investment and infrastructural development in association with loans and technical advice from the European Investment Bank (EIB). The NCI was discontinued in 1990.

New Transatlantic Agenda (NTA)

On December 3, 1995, U.S. president Bill Clinton, European Council president Felipe González, and Commission president Jacques Santer signed the New Transatlantic Agenda (NTA) at a U.S.-EU summit in Madrid. The NTA, comprising a set of agreed principles and common concerns, included a Transatlantic Action Plan, a checklist of policy

goals to be pursued by both sides. The agenda and action plan built on the 1990 Transatlantic Declaration but went far beyond it in terms of the range and specificity of commitments undertaken. The program is subject to a rolling process of review and renewal as items are added to and crossed off the action plan. See also U.S.-EU RELATIONS: THE POLITICS OF PARTNERSHIP; U.S.-EU RELATIONS: TRADE AND INVESTMENT. The New Transatlantic Agenda identifies the establishment of a New Transatlantic Marketplace, with few barriers to the movement of goods, services, and capital, as a U.S.-EU objective. See also U.S.-EU RELATIONS: THE POLITICS OF PARTNERSHIP; U.S.-EU RELATIONS: TRADE AND INVESTMENT.

New Transatlantic Marketplace

With the accession of Britain, Denmark, and Ireland to the EC in 1973, the number of member states became nine. Thus Nine was the name by which the EC was sometimes known until the accession of Greece in 1981 (when the Nine became Ten) and the accession of Spain and Portugal in 1986 (when the Ten became Twelve).

Nine

See SINGLE MARKET PROGRAM.

1992 Program

Between 1958 and 1987, during almost thirty years as secretary-general of the Commission, Emile Noël served under Commission presidents Walter Hallstein, Jean Rey, Franco Malfatti, Sicco Mansholt, François-Xavier Ortoli, and Roy Jenkins. Noël played a key role in the EC’s development over three decades: often his clever insights and subtle suggestions cut to the core of a particular problem and helped resolve an otherwise intractable issue. Noël’s formal involvement in European affairs began in the Council of Europe, where he served as secretary of the General Affairs Committee of the Consultative Assembly between 1949 and 1952. For two years after that he directed the secretariat of the Constitutional Com-

Noël, Emile (1922–1996)

mittee of the ad hoc assembly charged with drafting plans for a European Political Community. In the mid-1950s Noël served as chief personal assistant to Guy Mollet, first when Mollet was president of the Consultative Assembly of the Council of Europe and later when he became prime minister of France. Thus Noël was intimately involved in Mollet’s maneuvering during the disastrous Anglo-French military intervention in Suez in 1956. After Noël’s retirement from the Commission, he became president of the European University Institute in Florence. See also COMMISSION. The Commission president is nominated by the European Council, and the other commissioners are nominated by the member states. The nomination and subsequent approval procedures, which may affect the legitimacy of the Commission in particular and the EU in general, are the subject of an on-going political struggle between the European Parliament and the European Council. See also COMMISSION; EUROPEAN PARLIAMENT.

Nomination Procedure

The two categories of EU expenditure are compulsory and noncompulsory. The distinction between them is based on the treaties: compulsory expenditure results necessarily from treaty commitments or from acts adopted in accordance with the treaties, whereas noncompulsory expenditure covers policies and activities not specifically provided for in the treaties. The structural funds are the largest item of noncompulsory expenditure, over which the European Parliament has considerable control. See also BUDGET.

Noncompulsory Expenditure

A nonpaper is an unofficial draft treaty or agreement put on the table (usually by the Council presidency) to move negotiations along. The Luxembourg presidency’s nonpaper, presented during the 1991 intergovernmental conference on political union, is probably the best known such stratagem. See also INTERGOVERNMENTAL CONFERENCE.

Nonpaper

Noordwijk Declaration

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At a meeting in Noordwijk, the Netherlands, on June 19, 1992, Western European Union (WEU) foreign and defense ministers established guidelines for the WEU’s development in light of the recently signed Treaty on European Union. Specifically, the Noordwijk Declaration addressed WEU enlargement, pledged support for conflict prevention and peacekeeping efforts in cooperation with the Organization for Security and Cooperation in Europe and the UN, and announced the establishment of a planning cell for future operations. See also WESTERN EUROPEAN UNION. Established in 1952 to promote regional economic and political cooperation, the Nordic Council has five members (Denmark, Iceland, Norway, Sweden, and Finland) and two institutions (a parliamentary assembly and a ministerial body). After Sweden and Finland joined the EU in January 1995, Iceland and Norway became the Nordic Council’s odd men out: the only Nordic countries not also in the EU. The split between EU and nonEU member states undermined the cohesion and effectiveness of the Nordic Council, especially in the aftermath of Norway’s bitter referendum on EU membership in November 1994.

Nordic Council

North Atlantic Cooperation Council (NACC)

At a summit in Rome in November 1991, NATO leaders agreed to create a North Atlantic Cooperation Council (NACC) as a framework for security cooperation between the Atlantic Alliance, its former Warsaw Pact adversaries, and other European states. The NACC held its inaugural meeting on December 20, 1991, with the participation of twenty-five countries. Following the dissolution of the Soviet Union, which took place on the same day, membership in the NACC was opened to include all former Soviet republics. The NACC holds at least one regular meeting per year, at ministerial level. However, the NACC has been overshadowed and largely supplanted by the Partnership for Peace (PfP) program, established by NATO in January 1994. PfP establishes closer relations between NATO and European states not in NATO, including joint defense planning, military exercises, and permanent facilities for the nonmembers at NATO headquarters in Brussels.

360

North Atlantic Treaty Organization (NATO)

See also NORTH ATLANTIC TREATY ORGANIZA-

TION.

North Atlantic Treaty Organization (NATO)

The North Atlantic Treaty Organization, commonly known as NATO and also known as the Atlantic Alliance, is based on the North Atlantic treaty signed in Washington, DC, on April 4, 1949, by ten Western European countries, the United States, and Canada. The current members of NATO (1998) are Belgium, Canada, Denmark, France, Germany, Greece, Iceland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Turkey, the United Kingdom, and the United States. The Czech Republic, Hungary, and Poland are due to join in 1999, on the fiftieth anniversary of the Washington treaty. Before the Atlantic Alliance was launched in 1949, five West European countries, which were also founding members of NATO, concluded an alliance among themselves through the Brussels treaty in March 1948. Both alliances were conceived as defensive coalitions in response to expansionist behavior in Europe by the Soviet Union during the early Cold War years. The close proximity in the establishment of the two coalitions exemplified a characteristic of the postwar transatlantic relationship: U.S. security guarantees to Europe linked to Europe’s own measures of self-defense and a common Atlantic-level civilian and military institutional framework. The Soviet-supported North Korean invasion of South Korea in June 1950 provoked concern in the West that Moscow was becoming more aggressive and that a stronger NATO posture in Europe was required. The alliance’s response of balanced collective forces, whereby member states contributed military assets to NATO-level organizational and command structures, had far-reaching implications for U.S.–West European relations and for the fledgling European unity movement. In particular, an asymmetry developed whereby major European security issues were dealt with at the Atlantic (NATO) level while economic integration went forward on a European level. Efforts to close the gap by creating a European nucleus in defense proved unsuccessful when the European Defense Community (EDC) treaty was rejected by France in 1954. Shortly afterward the Western European Union (WEU) was established, based on

the Brussels treaty, though it was largely a consultative body and lacked a European-level military command structure. The effect was to reinforce the primacy of NATO in European security matters and to deepen the asymmetry between Atlantic and European institutional and policy levels—an imbalance that continued into the post–Cold War period. During the 1960s strains developed in the alliance as a result of Soviet military advances. Previously NATO had relied on nuclear weapons for deterrence and for retaliation if deterrence failed. Yet the growing U.S. vulnerability to a Soviet nuclear strike eroded the credibility of NATO’s nuclear reliance doctrine and pushed the United States toward a flexible response strategy that envisaged a retaliation by NATO conventional (nonnuclear) forces to a conventional attack by the Soviet-led Warsaw Pact. Some European critics argued that the new strategy weakened deterrence of aggression with conventional forces by implying that NATO nuclear forces were intended primarily to deter a nuclear attack. Nevertheless, following U.S. efforts to reassure its allies, including expanded European participation in NATO nuclear planning, the flexible response strategy was adopted by the Alliance in 1967. Despite the continuing NATO–Warsaw Pact military confrontation, following the Cuban missile crisis (1962) a thaw in the Cold War ensued until the mid-1970s, only briefly interrupted by Soviet military intervention in Czechoslovakia in 1968. NATO’s adjustment to the more favorable East-West climate was signaled by the Harmel Report on the alliance’s future tasks, which affirmed NATO’s twin purposes of defense and détente. Adopted by the alliance in 1967, the Harmel Report undergirded subsequent Western initiatives aimed at stabilizing and eventually ending the Cold War. NATO’s adjustment to changes in East-West relations in the 1960s was buffeted by political turbulence within the alliance. In 1958 French president Charles de Gaulle, a vigorous advocate of his country’s independence and international status, proposed a U.S.-British-French directorate within the alliance that would design political and military strategy for the free world and, if necessary, make decisions on the use of nuclear weapons. The United States opposed this initiative largely because it would have formalized a privileged political role for the three powers and cre-

ated a potentially divisive hierarchy of status within the alliance. Relations with NATO were strained thereafter, and de Gaulle withdrew French forces from NATO’s integrated military command in 1966, though France continued to participate in other alliance activities. France also experienced problems with its European allies over de Gaulle’s proposal in 1961 (the Fouchet Plan) to create a European political union that would develop a common foreign and defense policy alongside the already established EC. Despite lengthy negotiations, the project failed largely because of the other member states’ resistance to de Gaulle’s intergovernmental rather than supranational approach and their suspicions that he sought to elevate French independence to a European level, which could undermine the unity of the Atlantic Alliance. France’s position was somewhat vindicated later on when European Political Cooperation, the EC’s foreign policy coordination procedure that began in the 1970s, and more recent efforts to shape a Common Foreign and Security Policy (CFSP) proceeded essentially on the basis of intergovernmental cooperation. The latent tension between Atlantic and some European approaches to defense surfaced in the 1980s in the context of European efforts to reactivate cooperation in defense through the WEU. Given its status as the only multilateral European body with a mandate in defense, and its already established organization and charter (including a tighter mutual defense commitment than that of NATO), the WEU had obvious advantages. In 1984 the WEU adopted a broad agenda for its deliberations—including defense, arms control, and East-West relations—that paralleled issues also taken up in NATO and that provoked U.S. concerns over the implications of a separate European caucus of NATO members that could rival or challenge U.S. leadership in the alliance. Nevertheless, the WEU’s revival received another boost following the U.S.-Soviet summit in 1986 that launched superpower arms control diplomacy. The summit culminated in agreement to eliminate U.S. and Soviet intermediate-range nuclear forces, most of which were deployed in Europe. Although this arms reduction step generally was viewed positively in Europe, it also underscored Europe’s security dependence on superpower diplomacy. The Cold War had certain anomalous effects on the alliance. On the one hand, different U.S. and European perspectives on dealing with the

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Soviet Union and handling East-West issues in general often generated friction in transatlantic relations. On the other hand, the Cold War milieu and the formidable Soviet military presence in Europe moderated U.S.-European differences so as to preserve the alliance’s political cohesion and defense preparedness. Moreover, Europe’s growing capacity and disposition to act independently on economic matters through the EC contrasted with its continued security dependence on the United States through NATO. The ending of the Cold War, and hence the lessened (or at least altered) importance of NATO as a military coalition, changed the nature of the traditional West European security dependence on the United States. Yet a central role for the alliance as part of the structure for stabilizing and steering Europe’s post–Cold War transition was widely supported on both sides of the Atlantic, not least because of the latent possibility of some future hegemonic ambitions by the Soviet Union (later Russia) or, however remote, by the newly unified Germany as well as because of potential conflict within Europe, for example, in the former Yugoslavia. NATO ministerial and summit meetings in 1991 showed that despite the end of the Cold War, North America remained permanently tied to the security of Europe. The meetings welcomed the emergence of a European identity in security and defense through the WEU but pointedly noted that NATO remained the forum for agreement on policies related to its members’ commitments under the NATO treaty. It was also recognized that transparency and complementarity (nonduplication) should obtain between the Atlantic Alliance and the defense and security policy activities of the WEU and EC member states. The WEU, in particular, was viewed as a bridge between NATO and the newly established EU. Finally, the expectation was expressed that as European defense cooperation in NATO progressed, the European members of the alliance would assume greater responsibility for their own defense. To facilitate this change, in January 1994 NATO leaders innovated the concept of combined joint task forces that envisaged the development of separable but not separate military capabilities that could be used by NATO or the WEU. This new step opened the possibility that European NATO members, acting through the WEU, could utilize NATO military assets for operations in which the United States might choose not to take part.

362

Norway

Further steps to harmonize NATO and European approaches to defense were achieved by agreement that the Eurocorps, a rapid reaction force that became fully operational in 1995, would come under NATO command in time of war if approved by its European contributors. Thus both the NATO-Eurocorps relationship and the agreement on combined joint task forces signaled flexibility in reconciling European and Atlantic approaches to defense. Similarly, in 1995 French policy under President Jacques Chirac aligned more closely with NATO, expanding upon the improvement in French-Alliance relations begun earlier by President François Mitterrand. In particular, France announced that it would return to NATO’s Military Committee, the alliance’s highest military planning body, and that it would become active in NATO deliberations at the ministerial level. Even though the move was prompted by the practical need to coordinate French military activities in Bosnia with those of NATO, the announced longer-range aim was to strengthen the European pillar of the alliance, in particular the WEU. The action also signified French recognition that for the foreseeable future NATO would remain the centerpiece of post–Cold War European security. The ending of East-West military confrontation, the breakup of the Soviet Union, and the spread of democratic movements and economic privatization in Central and Eastern Europe and the former Soviet Union prompted NATO to adopt measures to help stabilize the new situation and to guide Europe’s post–Cold War transformation. In 1992 alliance members endorsed the principle of furnishing military peacekeeping assistance in areas outside NATO’s defense perimeter at the request of the UN. An early application of NATO’s new role came in December 1995 when the alliance assumed the task of safeguarding implementation of an agreed peace plan for Bosnia, including interposing NATO forces between the nascent Croat-Muslim federation and the Bosnian Serbs. The NATO-led forces, numbering some sixty thousand troops from thirty-two countries (including the United States and Russia), represented the largest military operation in the alliance’s history. In 1991 the North Atlantic Cooperation Council was formed to begin regular dialogue on political and security issues between NATO governments and former members of the Warsaw Pact

and states of the former Soviet Union. In a similar move, the January 1994 NATO summit established the Partnership for Peace program, which provided for expansion of NATO relations with former Warsaw Pact and other European states on an individually tailored basis, including joint defense planning, military exercises, and permanent facilities at NATO headquarters in Brussels. Finally, NATO’s most serious issue in the second half of the 1990s was its prospective eastward enlargement to embrace the Central and Eastern European states who desired a security shield and safeguards from any Russian neoimperialist tendencies. Most of these states also desired membership in the EU to further extend and solidify their ties with the West. Although the alliance was committed to the principle of enlargement, whereby admitted states would assume full membership responsibilities, a precise timetable was avoided until the NATO summit of July 1997, when the first of the Central and Eastern European prospective members (the Czech Republic, Hungary, and Poland) were invited to join. At the same time, NATO’s expansion was directly linked to strenuous efforts to allay Russian concerns that enlargement would adversely affect its security. These efforts culminated in the Founding Act on Mutual Relations, Cooperation, and Security signed between NATO and the Russian federation in May 1997. Thus the expansion issue was part of the wider task of devising a viable post–Cold War European-wide security structure that included Russia. See also COLD WAR; WESTERN EUROPEAN UNION; APPENDIX 3. Algieri, Franco, Josef Janning, and Dirk Rumberg, eds. 1996. Managing Security in Europe: The Challenge of Enlargement. Washington: Brookings. Cromwell, William C. 1992. The United States and the European Pillar: The Strained Alliance. New York: St. Martin’s. Gompert, David C., and Stephen Larrabee, eds. 1997. America and Europe: A New Partnership for a New Era. Cambridge: Cambridge University Press. Gordon, Philip, ed. 1997. NATO’s Transformation: The Changing Shape of the Atlantic Alliance. Lanham, MD: Rowman and Littlefield.

Bibliography

—William C. Cromwell

Norway

The explanation for Norway’s aloofness from European integration can be found in the country’s short history of independence (since the dissolution of the union with Sweden in 1905) and in a very young nationalism—nation-building in Norway began only in the nineteenth century and continues today. Geographical location (far from the continent), a dispersed population pattern, and economic independence due to oil revenues are other factors. Moreover, Norwegian foreign policy has a traditional Atlantic orientation (Riste, 1985). By comparison, only in the last three decades has European integration been on the political agenda. Indeed, Norway applied for EU membership because of perceived necessity. Much of the political elite has favored membership for both political and economic reasons, but the electorate has been deeply skeptical of the EU and of any other form of binding international commitment. An emphasis on neutrality and isolationism runs deep in Norwegian history. Instead of strategic considerations, Norwegian foreign policy has been concentrated around trade policy, shipping, and fishing (Lundestad, 1985). Indeed, the dissolution of the union with Sweden was partially based on Norwegian fears of being implicated in “high politics” on the Continent (Riste, 1985). Foreign policy originally took the form of “moral politics”: a missionary attitude that rejected realpolitik and embraced the strong puritan form of Christianity that underlay a strong missionary movement (Mjøset, 1996). A type of secularized missionary zeal in foreign policy, perhaps most typical of the Scandinavian countries, can still be discerned today (Matlary, 1993). Norway’s emphasis on moral rather than strategic considerations resulted in a policy of neutrality during both world wars. Unlike Sweden, however, Norway was invaded by Germany in 1940. As a result, after World War II Norwegians saw foreign policy as being either anchored on the Atlantic connection (free trade and an automatic security guarantee) or based on a much more insecure and volatile European order. Nordic cooperation (shared social-democratic principles, language, and culture) fit well with Atlanticism, and the Nordic states implicitly counted on the security guarantee of the United States and the UK. Norway entered its first formal alliance by joining NATO in 1949, causing a deep rift in the Labor party’s left wing. Although NATO included most

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European (and later EU) states, the Norwegians continued their close relationship with the Americans and the British without developing close connections with either Germany or the Latin countries. Despite its indifference to European integration, Norway has had to confront the issue squarely on five occasions: concerning Marshall Plan assistance in 1948 and 1949 and possible EC/EU membership in 1961, 1967, 1972, and 1994 (Pharo, 1988). With respect to EC membership, French president Charles de Gaulle “saved” Norway in 1963 and 1967 by rejecting British membership. Given that Norway chose to align itself very closely with the UK in almost all foreign policy questions in the postwar period, de Gaulle’s action decided the issue for Oslo (Eriksen, 1977). Britain’s strategy was to counter integration by erecting a free trade area, supported by Norway, the other Nordic states, Switzerland, and Austria. Accordingly, the European Free Trade Association (EFTA) was launched in 1960, but in 1961 Britain nonetheless decided to apply for EC membership. In Norway the Labor government reluctantly followed suit. However, mindful of the split in its ranks on the question of NATO membership, the government declared that the question of EC membership would have to be decided by a referendum. The bitterly divisive 1972 referendum resulted in a “no” vote of 53.3 percent. Norway became the first country to reject EC membership; its close partners, Britain and Denmark, entered the Community. Although the government and most of the political elite had advocated membership, there was resolute resistance from farmers and fishermen, from the left, and from “Christians” and teetotalers—the so-called countercultures located on the periphery of Norwegian society. The political battle—largely about Norwegianness and national identity, the importance of social welfare in a country with a dispersed population pattern, levels of agricultural subsidies, and an aversion to any form of supranationalism—was the fiercest in modern Norwegian history. Once again, the governing Labor party split down the middle. Not surprisingly, European integration remains an extremely emotional issue to this day. Following the referendum, the political elite and the Foreign Office had to formulate Norwegian foreign policy within the parameter of seemingly permanent nonmembership of the EC. By

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the end of 1972 the only consensus was that the question of EC membership should be removed as far as possible from the political agenda. Yet only twenty years later there was a second referendum on membership. In the intervening period public opinion and external conditions had changed, although the latter much more so than the former. Norway had coordinated its foreign policy with EC member states (through European Political Cooperation) and had aligned itself with the EC on a range of economic policy issues. In response to the pull of the single market program, Norway was a founding member of the European Economic Area (EEA), a vehicle for intensive economic cooperation as a prelude to full EC membership. The Labor party once again found itself discussing a possible EC accession; at its annual meeting in 1992 a small majority of delegates voted to apply for membership. In the two years that followed there was much public debate on the issue, and a markedly pro-EU political leadership emerged in the Labor party. However, the referendum in November 1994 again split the country, and membership was rejected, this time by 52.2 percent. The reasons for rejection were remarkably similar to those that prevailed in 1972: center versus periphery, urban versus rural culture and values, secularized people versus Christians. It is striking that major changes in the external environment seem to have had only a negligible impact on Norwegian attitudes toward the EU. Yet it is worth noting that voting along the yes-no axis in both the Swedish and Finnish referenda (in 1994) was similar to that in Norway, the significant difference being that more people live in urban centers in the south of these countries. In sum, Norway’s status as reluctant European was confirmed by the 1994 referendum result. Of course the Nordic states within the EU are

also skeptical about integration, none more so than Denmark. However, both Sweden and Finland seem to understand that political influence in Europe is increasingly premised on participation in the integration process. As a result, the Nordics within the EU are parting ways, adopting individual strategies vis-à-vis Brussels. Likewise, traditional Nordic cooperation in multilateral contexts such as the UN is fast disappearing or has become an empty shell. Today Norway struggles to maintain contact points and some influence with an EU that is oriented primarily toward the east and south. Once again politicians and policymakers are publicly voicing their frustration with this state of affairs, but after the trauma of 1994 there is little probability that the issue of EU membership will appear on the political agenda for a very long time. See also EUROPEAN ECONOMIC AREA; TABLE 6; TABLE 10. Eriksen, K. E. 1977. “Norge I det vestlige samarbeid.” In T. Bergh, Veskt og velstand. Oslo: Universitetsforlaget. Lundestad, G. 1985. “Nasjonalisme and internasjonalisme i norsk utenrikspolitikk: Et fagligprovoserende essay.” Internasjonal Politikk 1, pp. 39–54. Matlary, J. H. 1993. “And Never the Twain Shall Meet: Reflections on Norway, Europe, and Integration.” In I. Damgaard Pedersen, ed., The Nordic Countries and the EU. Copenhagen: CORE. Mjøset, L. 1996. Norge og EU. ARENA Working Paper, no. 16. Oslo: University of Oslo, ARENA. Pharo, H. 1988. “Norge, EF og europeisk samarbeid.” Internasjonal Politikk, no. 6. Riste, O. 1985. “The Historical Determinants of Norwegian Foreign Policy.” In J. J. Holst, ed., Norwegian Foreign Policy in the 1980s. Oslo: Universitetsforlaget.

Bibliography

tracts); and the Annex (debates of the European Parliament).

O See OVERSEAS COUNTRIES AND TERRITORIES.

OCTs

See ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMENT.

OECD

See ORGANIZATION OPERATION.

OEEC

Under the terms of the Treaty on European Union (Article 138e), the European Parliament (EP) may appoint an ombudsman for the duration of its parliamentary term. The ombudsman receives complaints about maladministration from EU citizens and from businesses or associations based in the EU, either directly or through a member of the EP. The ombudsman then conducts an enquiry, tries to resolve the problem, and failing that, sends a recommendation for further action to the EP. Following a protracted dispute between political groups in the EP, Jacob Soederman was elected the first ombudsman on July 12, 1995, and sworn in by the European Court of Justice on September 27, 1995. Soederman received nearly three hundred complaints during his first three months in office. See also EUROPEAN PARLIAMENT.

Ombudsman

FOR

EUROPEAN ECONOMIC CO-

Office for Official Publications of the European Communities

The Office for Official Publications of the European Communities annually publishes nearly two million pages of official EU documentation in eleven languages. Located in Luxembourg, the best-known product of the office is the Official Journal of the European Communities. In an effort to reduce costs and increase public accessibility, the office is publishing a number of CD-ROMs and increasingly uses the Internet.

Official Journal of the European Communities (OJ)

One of the most important publications of the EU, the Official Journal of the European Communities (OJ) is published by the Office for Official Publications of the European Communities, in Luxembourg. The OJ is published in four parts: the L series (EU legislation), the C series (draft legislation and other communications), the S series (supplemental information—notices and public con-

Article 113 of the Treaty of Rome authorizes the Commission to conduct the EU’s international trade negotiations, but the Council approves the Commission’s negotiating mandate and must endorse the final agreement, officially by qualified majority vote but unofficially by unanimity. In addition to endorsing the final agreement, member states exert considerable influence over the Commission’s conduct of international trade negotiations themselves. The so-called 113 Committee (named after Article 113) of member state civil servants meets regularly with Commission officials to approve the Commission’s negotiating strategy and proposals. During the GATT Uruguay Round negotiations, for instance, the 113 Committee met Commission officials weekly in Brussels and sent observers along to the negotiating sessions in Geneva. Although 113 Committee members could not participate in the negotiations themselves, their presence at the sessions ensured that the Commission negotiators stuck to the agreed-upon Council position. Commission negotiators often turned such oversight to the EC’s advantage by pointing out to other GATT negotiators the impossibility of accepting a proposal without first getting member states’ approval. See also COMMON COMMERCIAL POLICY; GENERAL AGREEMENT ON TARIFFS AND TRADE.

113 Committee

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ONP

See OPEN NETWORK PROVISIONS.

ONP

See TRANSPARENCY.

Openness

The Commission’s white paper on the single market program (1985) included a directive on open network provisions (ONP) in the telecommunications area to ensure open access to the public telecommunications infrastructure for equipment and services providers. The directive prohibits public telecommunications networks from restricting access except on grounds of security, data protection, or the need to preserve interoperability. It also provides for a gradual development of mutual recognition of authorizations for services providers. The ONP directive was an early step on the road to the full liberalization of telecommunications, achieved on January 1, 1998. See also TELECOMMUNICATIONS POLICY.

Open Network Provisions (ONP)

The Council of Ministers or the Commission may issue non–legally binding opinions and recommendations to try to influence the actions of member states.

Opinion

EU opposition movements are mobilizations with a significant animus against the project of European integration in its current format. They are to be distinguished on the one hand from the state of public opinion on the EU, as measured, for example, by the Commission’s own Eurobarometer surveys, and on the other from interest group politics at the EU level, even if such actors use actions associated with the repertoire of protest movements. Hence, farmers’ protests against Common Agricultural Policy (CAP) price deals are so routine and endemic to the policy dynamics of a particular sector that they cannot be included as opposition movements. Opposition movements are worthy of attention broadly speaking because they suggest political parameters of transnational governance for liberal democracies. They also indicate the particular

Opposition Movements

functioning of the EU, signaling a break in the environment of permissive consensus that government and party elites enjoyed in conducting European policy, at least until the accession of Britain and Denmark in 1973. The increasing bite of EC decisionmaking and constitutional implications associated especially with the two major reforms of the treaty framework, the Single European Act (SEA) in 1986 and the Treaty on European Union (TEU) in 1992, reinvigorated anti–European integration protest movements. Fragmentation of political communication emanating from Brussels along with the preexisting density of national frameworks means that EU opposition movements express themselves predominantly in the national idiom. Moreover, they are only rarely organizationally independent of other political formations. They are mostly submerged in political parties that espouse a broader agenda of opposition to prevailing policies and institutions at all levels. But subnational territorial identity plays a major role in redirecting opposition from “Brussels” to the national capitals or to other regions. EC opposition movements were restricted to Britain and Denmark until the 1980s, when the rise of a new issue agenda associated with the “new” social movements mounted a kind of fronde against integration. The peace, ecology, and women’s movements are particularly germane to this account. Their candidates failed to win representation in the first directly elected European Parliament (EP) but were successful five years later in 1984, when they formed the Green Alternative Link group, composed of Greens (from Germany and later from France), regionalists (from Flanders, Italy, and the Basque land), and the deputies of the Danish People’s Movement Against the European Community. SEA referenda in Denmark and Ireland in 1986 and 1987, the 1989 EP election, and the Maastricht referenda three years later as well as accession referenda in 1994 in Sweden, Finland, and Austria and EP elections in 1994 and (for the new entrants) in 1995 provided convenient opportunities to rally opposition. The TEU offered a potent source of mass mobilization for another new element of Europe’s political spectrum: the right. Anti-EU polemics became a staple of populist right-wing formations such as the Front National (France), Republikaner (Germany), Vlaams Blok (Flanders), and the Freiheit Partei Österreich (FPÖ, Austria). Moreover,

nonparty anti-Maastricht electoral lists were created to contest the European Parliamentary elections in June 1994 (seven months after the TEU entered into force) in France (Liste pour l’autre Europe led by Gaullist Bernard de Villiers, which included British subject Sir James Goldsmith) and Germany (Initiativ für Europa-gegen Maastricht, led by EU commissioner Martin Bangemann’s sacked chef de cabinet, national-liberal Manfred Brunner). Lending coherence to anti-EU formations are three issue clusters. Right-wing mobilizations in the countries just mentioned thrive primarily on the constructed native/foreign binary opposition. Underlying this symbolism is a defensive position in the face of economic “rationalization” that has left in its wake high rates of unemployment. Unskilled unemployed males are the most likely groups to support this type of opposition. A second set of issues, which can be termed states rights, is primarily localized in Britain and Denmark. Euroskepticism in the UK has significant support in both the Labour and Conservative parties and is rooted in a perceived threat to the independence, prerogatives, and prestige of the state. Similarly, Danish opposition focuses primarily on the perceived erosion of the Danish way of life as a consequence of integration beyond realization of the common market. In contrast to virtually all other EU member states, British opposition encompasses large parts of the mainstream political class in addition to some elements that might otherwise have been available to a rightwing opposition. Ireland offers a variation on this theme. Irish neutrality forced a popular referendum over the SEA in 1987. Despite that, anti-EU opposition has been fairly marginal. Two factors help explain this pattern: first, the relative independence from Britain promised by deeper EU links; second, the massive economic benefits that can be attributed to EU membership. Residual opposition comes in the form of fears that EU law may undermine the moral authority of the Catholic Church. A third group of British opponents, also present to a limited degree in Ireland, brings us around to our third issue cluster: the “new” issues identified earlier in this entry, especially those attached to environmental concerns. In the 1989 EP election, the British Greens won nearly 15 percent of the vote, but it is not clear how deeply opposition to the EC affected their support. The best ex-

Opposition Movements

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ample of Green opposition is Germany, where until about 1991, the party most closely reflecting Germany’s broad and deep social movement sector offered a fundamentalist critique of the EC on the basis of its perceived antiecological and antisocial (i.e., market) design, the remoteness of the Brussels institutions from Europe’s citizens, and the threat to peace the EC ostensibly projected. In contrast to those mobilized by native/foreign or states-rights icons, the Greens primarily draw strength from the highly educated professional strata. Behind all of these tendencies is the failing integrative capacity of mainstream centrist parties of both left and right. The inability of the EC to adjust quickly to the issues associated with the new social movements of the 1980s produced the Greens. The Front National and similar formations speak to the “losers” in economic “modernization,” which is correctly associated with European integration. Both processes produced openings in the competitive party systems of Britain, Germany, Austria, the Benelux countries, France, and Italy. The narrowing scope for effective national economic policies is a leading cause of social democratic decline. In any country with a narrow postindustrial base, the decline of social democracy is associated with disproportionate right-wing success. But the situation is more complicated than that. To the relatively simple left-right hemorrhaging just described, a further mediation must be added: regional identities. Especially under the impact of competitive pressures from the single market and the fiscal austerity programmed by Economic and Monetary Union (EMU), regions in some member states won the freedom to compete for private investment, structural funds, European Investment Bank loans, and the clout to resist transferring own resources to the national government. This new situation loosened central state control over regional governments in Flanders and Catalonia, to take but two examples. Beginning from a Euroskeptical position, Scottish nationalism has reoriented itself, now assigning a positive valence to the EU. The Scottish position can only fuel “states rights” Euroskepticism in the UK. Meanwhile, in what may be the most dramatic case in the run-up to EMU, Umberto Bossi’s Padania movement in Northern Italy implies the disintegration of the Italian state, aimed at northern participation and southern exclusion from EMU.

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Opposition Movements

Beyond the factor of regional identities, the low stability of anti-EU opposition movements is related in other jurisdictions to the eventual responsiveness of Brussels to the new agenda as well as the changing geopolitical situation in Europe. Both factors impacted Germany, producing a fundamentally changed attitude toward the EU by the close of 1993. German unification motivated the Greens to embed Germany in multilateral institutions; the EU’s increasing environmental profile split the nongovernmental organization (NGO) community and encouraged the party to pursue a more pragmatic policy. Meanwhile, in domestic political terms, the Greens wished to differentiate themselves from the populist right (i.e., Brunner’s anti-Maastricht campaign) and the communist successor party. As the member state with the longest record of uninterrupted mobilization against the EU, Denmark stands out as an anomaly and requires additional comment. The Danish People’s Movement Against the European Community and the anti-TEU June 2 Movement comprise a unique extraparliamentary phenomenon. Thematically, the movement is a hybrid of social movement and states rights concerns. Organizationally independent of the parties, prominent members of the Social Democrats, the Socialist People’s Party, the Radicals, and the tiny Communist Party are associated with the movement. The TEU divided the movement between those advocating dissolution of formal ties to the EU and those embracing those ties but willing to go no further, a differentiated position that pushed the nays over the 50 percent barrier in the 1992 referendum and forced the government to negotiate a series of Danish opt outs to EMU, the Common Foreign and Security Policy, and EU citizenship. These positions are consistent with the movements’ recruitment pattern: a broad coalition of (especially unskilled) workers’ organizations and new social movements and disproportionate female participation, reflecting Denmark’s large state service sector (both in terms of jobs and provider of services). In short, in political terms, the Danish phenomenon represents a combination of strong social democracy and strong social movements (postindustrials). Nevertheless, the organizational split in the movement that arose during the TEU ratification campaign, which is reflected in the two main groupings, the People’s Movement and the June 2 Movement, corresponds to the crystalliza-

tion of the postindustrials as an independent force, resembling Green activists in Germany. A dilemma for the People’s Movement consists in resisting populist appeals associated with rightwing parties in Europe. So far, residual social democratic strength and Nordic transnational cooperation, providing an international shoring up of social democratic traditions, have prevented such a development. The anti-integration movement in Denmark is perhaps best interpreted as the legacy of the special circumstances under which politics and policy collided in the 1970s. In all four referenda years—1972 (accession), 1986 (SEA), and 1992 and 1993 (both on the TEU)—parties controlling over 85 percent of the seats in the Folketing (parliament) were in favor of further steps toward integration. But because each step implied a change in Denmark’s constitution, an even higher percentage vote in the Folketing was required in order to avoid a binding referendum. As largest party, the Social Democrats were the key. They have always been split on integration, compelling governments of different hues to take their case to the people in Denmark’s consensus-based political culture. If the EU increases its Green profile, the balance of opposition in the coming years should shift decisively to the populist right. Opinion studies show that high levels of support for integration are strongly associated with length of time as an EU member. If this relationship continues to hold, one should expect convergence of the Swedish opposition on the German pattern, which it resembles more than it does the Danish situation. It seems clear that anti-EU opposition movements compelled responses both within the Brussels institutions as well as in the administrative and constitutional setups of the member states. EC institutions reacted by taking up themes of particular interest to the movements. A significant case in point is environmental policy, where both the Commission and Parliament have been especially active. The activism of the Commission under President Jacques Delors points in the same direction. Environmental NGOs, a primary element of the environmental movement, have modulated their opposition activism in favor of semiregular consultations with the Commission and EP, a practice already foreshadowed by NGO access to national administrations. TEU ratification had direct effects for constitutional reform for closer in-

Organization for Economic Cooperation and Development (OECD)

volvement of national parliaments in EU policymaking and has led to intense discussions on broadening national parliamentary participation. Regarding recent theoretical developments involving European integration more specifically, the patterns of opposition adumbrated here suggest some indirect support for the emergence of a polity with features of multilevel governance. As already indicated, an important theme in EU opposition is the changing valence assigned to the EU by region: from negative to positive in the case of Scotland and from indifferent to positive in such cases as Catalonia, Flanders, and Northern Italy. See also DEMOCRATIC DEFICIT; DENMARK; LEGITIMACY. Cafruny, Alan, and Carl Lankowski, eds. 1997. Europe’s Ambiguous Unity: Conflict and Consensus in PostMaastricht Europe. Boulder: Lynne Rienner. Dalton, Russell. 1995. The Green Rainbow: Environmental Groups in Western Europe. New Haven: Yale University Press. Judge, David, and David Earnshaw. 1994. “Weak European Parliament Influence? A Study of the Environment Committee of the European Parliament.” Government and Opposition 29, no. 2 (Spring), pp. 262–276. Ross, George. 1995. Jacques Delors and European Integration. New York: Oxford University Press.

Bibliography

—Carl Lankowski

An opt out is an exemption from a treaty provision or from a treaty amendment. Britain’s opt out from the social chapter of the Treaty on European Union, between 1993 and 1997, is a striking example. See also DIFFERENTIATED INTEGRATION.

Opt Out

Organization for Economic Cooperation and Development (OECD)

The Organization for Economic Cooperation and Development (OECD) is an international organization for the promotion of economic cooperation among industrialized countries; it is based in Paris, where its founding act, the Convention on the Organization for Economic Cooperation and Development, was signed in 1960. The OECD emerged in 1961 from the transformation of a pre-

369

vious organization, the Organization for European Economic Cooperation (OEEC), into a permanent body of equal partners. After World War II, the OEEC had been entrusted with the administration of the Marshall Plan in order to foster European economic recovery. The United States and Canada, together with the former Marshall aid recipients (Austria, Belgium, Denmark, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, and the UK) became the OECD’s twenty founding members. The former Yugoslavia had a special associate status that ended in 1992. The OECD now has twenty-nine members: Japan, Finland, Australia, and New Zealand joined in the years between 1964 and 1973; a new wave of accessions started in 1994 with Mexico and continued with the Czech Republic (1995) and with Hungary, Poland, and Korea (1996). A number of other Central and Eastern European states are prospective members. Even Russia proposed joining at a meeting of OECD ministers in 1996. The official languages of the OECD are English and French. The EC played an active part in the OECD’s conception and birth. At the adoption of the OECD convention, a special protocol was signed governing OECD-EC relations. The protocol states that the EC’s representation in the OECD “shall be determined in accordance with the institutional provisions” of both organizations’ founding treaties and that the Commission or High Authority “shall take part in the work” of the OECD. Thus the EC (now the EU) is not a full member of the OECD (membership being reserved to national governments), but its status outranks that of a simple observer and can best be described as an “active participant.” Legally, the EU does not contribute to the OECD budget and does not participate in formal decisionmaking. In practice, however, the EU makes substantial ad hoc financial contributions to support particular initiatives and programs. Moreover, its intervention, mediation, and support can be decisive for the adoption of a particular decision. In this entry, phrases such as “member countries” therefore ought to be understood as including the EU, unless otherwise specified. The relationship within the OECD between the EU and its member states is of a particular kind, with the Commission coordinating a common position among the member states. Neverthe-

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Organization for Economic Cooperation and Development (OECD)

less, given the think-tank character of the OECD, the member states and the Commission contribute to the OECD’s analysis and dialogue in a very open spirit. Based on its objectives—to promote economic growth, assist developing countries, and contribute to the expansion of world trade—the OECD’s work covers a vast range of policy fields, ranging from data collection (the monthly OECD Main Economic Indicators are respected references worldwide) to the environment, from public management to agriculture, and from science and technology to international investment. To achieve the OECD’s objectives, governments undertake to exchange information, hold continuous consultations, participate in studies and projects, and collaborate closely. The OECD’s institutional structure is topped by the secretary-general, who is also the chairman of the OECD Council, the organization’s policymaking body. The council, consisting of the ambassadors of the member countries plus the head of the Commission delegation to the OECD, meets weekly. It also meets at the ministerial level once a year, usually in May, shortly before the annual G7 summit. The OECD’s day-by-day work is carried on in a number of specialized committees by the representatives of the member states, supported by a permanent staff of highly qualified researchers and policy analysts. The OECD Council may adopt legally binding decisions, or may issue nonbinding recommendations and resolutions. The annual ministerial meeting ends with the release of a communiqué that expresses the common views of the organization’s members on the most important economic and trade policy issues of the moment and outlines the organization’s direction for the following year. All decisions are taken by consensus, a common feature of intergovernmental organizations. A distinctive characteristic of the OECD, however, is the degree of peer pressure exerted on recalcitrant members to modify their position. Such is the case with the OECD’s core activities: the surveillance of macroeconomic policies carried out through the semiannual Economic Outlook for the membership as a whole and the annual Economic Survey of each member country. The work of the Development Assistance Committee provides another example: here members periodically review both the amount and the nature of their contributions to aid programs and consult

about their assistance policies and practices. But peer pressure can be exerted also in a specific policy field, as in the case of the “crusade” against the tax deductibility of bribes to foreign public officials. During its nearly forty-year existence, the highlights of the OECD work program have changed completely, reflecting major economic changes in its members’ economies and in the global political economy. In the 1960s, a decade characterized by strong economic growth in all member countries, the OECD emphasized monetary and fiscal measures to stabilize total demand. In the 1970s, when the breakdown of the Bretton Woods system and the onset of the oil crises caused deep recession and high inflation, the OECD was forced to react. In 1974, a number of members set up the International Energy Agency, which sought to stabilize the oil market and develop an emergency energy program. In the 1980s, the OECD was increasingly concerned with reducing member countries’ high unemployment rates, coordinating economic policies and forecasts, and analyzing economic development. In the first half of the 1990s, three issues predominated: the fight against unemployment, assistance to economies in transition to the free market, and the “new trade agenda.” First, answering a call from the G7 group of major industrialized countries, the OECD developed a comparative analysis on the causes of unemployment, which remains persistently high even in growing economies. Known as the Job Study, the report also included recommendations for joint OECD and separate country-by-country action. Second, after the collapse of the Soviet bloc, most Central and Eastern European countries and many of the republics of the former Soviet Union established working relations with the OECD in a quest for broad-ranging policy advice as well as technical assistance in specialized fields. The OECD’s experience of reconstructing its own economies after World War II is now used to facilitate the transition of those countries to market economies. Third, in a globalized economy, many policies formerly considered of purely domestic nature present more and more links with various aspects of trade policy. The list includes the environment, competition, labor, and investment. On all of these trade-related subjects, the OECD has broken new ground with studies, seminars, and analysis, which may form the basis for future negotiations

Organization for European Economic Cooperation (OEEC)

in the World Trade Organization (WTO) or in other forums. Indeed, the OECD has often played the role of an international “catalyst and pathfinder,” as the OECD’s 1996 ministerial communiqué put it. One of its best success stories is the extraordinary preparatory work made before the beginning of the Uruguay Round in the area of trade in services. No review of OECD activities would be complete without mention of something that does not appear in the convention but certainly contributes to the OECD’s appeal to national governments and its unique role among international organizations. Thanks to strong support from the OECD secretariat and to the collegiality and flexibility of the OECD’s procedures, on several occasions governments—be they OECD members or not— have found in the organization a preferred forum in which to address sectoral trade issues involving the interests of a limited number of countries. Subsequent negotiations have on occasions led to the completion of legally binding international agreements, including some form of enforcement mechanism. These agreements are sometimes called “hard law,” as opposed to the “soft law” of most traditional OECD activities. For example, an international arrangement was concluded “under the aegis” of the OECD with guidelines aimed at curbing the trade-distorting effects of government-provided export credits. Shipbuilding is another example of an area in which an agreement was negotiated to curb subsidies. Negotiations with a similar objective in the steel sector are still under way. It is worth noting that in all these cases the EU’s member states have negotiated as a single entity, represented by the Commission. More recently, the OECD was chosen to launch the negotiations for the establishment of a Multilateral Agreement on Investment to liberalize and protect foreign direct investment. The mandate for the negotiations specifies that interested non-OECD countries will be regularly informed and given the opportunity to make their views known and that the final agreement will be open for accession to OECD and non-OECD countries alike. In the presence of shared powers, as in this case, both the EU’s member states and the Commission (authorized by the Council to negotiate in areas falling within the EU’s competence) participate in the negotiations.

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Is the OECD still relevant? That question has haunted the organization in the post–Cold War era. Until the late 1980s its detractors dubbed the OECD the “rich men’s club,” to stress the developing world’s exclusion from its well-to-do membership (the OECD’s more charitable critics spoke of “cooperation among like-minded countries”). Later, serious doubts were cast on the OECD’s continued raison-d’être as an intergovernmental talking shop in the new era of “small government.” Yet in the post–Cold War period it seems reasonable to conclude that the OECD has shown more vitality than most bodies of the international family. The OECD remains one of the best sources for economic knowledge and assessment, and its multidisciplinary abilities have borne fruit in opening new ways to consider old as well as new problems. It has developed an “outreach” policy, establishing itself as a valuable interlocutor for countries in transition. It has extended its more visionary reflections to include Asian and Latin American countries in seminars focused on common concerns for the future. Above all, the OECD retains the unique character of an economic institution in which governments can exchange views in a nonconfrontational, nonpartisan way. The need for such a venue has certainly not diminished over the years; indeed, it seems bound to increase at a time of even greater global interdependence. See also ORGANIZATION FOR EUROPEAN ECONOMIC COOPERATION.

—Maria-Francesca Spatolisano

Organization for European Economic Cooperation (OEEC)

The Organization for European Economic Cooperation (OEEC) was established in 1948 to channel Marshall Plan assistance from the United States to the countries of Western Europe. As a condition of sending massive assistance, the United States insisted on a joint European response in order to encourage a prototypical organization for European integration. To meet the U.S. prerequisite, the recipient countries established the OEEC, an organization too large and diverse to act as an institutional instrument of integration. Its eighteen members varied greatly in size, population, and economic well-being. Perhaps more important, widely differing political

372

Organization for Security and Cooperation in Europe (OSCE)

cultures and wartime experiences made the prospect for agreement on integration extremely remote. Thus the OEEC failed to live up to U.S. expectations. Instead, shortly after the EEC began functioning in 1958, the OEEC turned into the Organization for Economic Cooperation and Development (OECD), the Paris-based body for international economic research and analysis. See also MARSHALL PLAN; ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMENT; ORIGINS OF EUROPEAN INTEGRATION.

Organization for Security and Cooperation in Europe (OSCE)

After the end of the Cold War, the Conference on Security and Cooperation in Europe (CSCE) was renamed the Organization for Security and Cooperation in Europe (OSCE). The original CSCE grew out of a Soviet proposal, in the mid-1950s, to convene a conference of European countries to discuss security and economic cooperation with the West. The idea, revived periodically by the Soviet Union, languished largely because the Soviets refused to allow Western Europe’s North American allies to participate in the proposed conference. Only when the Soviets lifted their objection did a conference begin in the early 1970s. Its result was that in Helsinki, in August 1975, the heads of state and government of the thirty-five participating countries (all European countries except Albania plus the United States and Canada) signed the Final Act of the Conference on Security and Cooperation in Europe. The so-called Helsinki Final Act was not an international treaty but a statement of political intent and commitment to bring about peaceful change, to minimize the dangers of miscalculation, and to manage crises and controversies in East-West relations. In three “baskets,” or categories of commitments, the accord covered political, economic, cultural, humanitarian, information, and military confidencebuilding issues. Through the foreign policy coordinating mechanism of European Political Cooperation, the EC member states played a prominent part in the negotiations leading to the CSCE’s Final Act, in numerous follow-up meetings (Belgrade, 1977–1978; Madrid, 1980–1983; Vienna, 1986–1989; and Helsinki, 1992), and in occasional special meetings and conferences. During the renewal of Cold War tensions in the late 1970s and early 1980s, the

CSCE proved invaluable in at least keeping the protagonists at the negotiating table. Moreover, although the CSCE had resulted from a Soviet initiative, it soon rebounded on the USSR because of the emphasis in “Basket 3” on human rights. Citing Basket 3, Western countries and dissident groups in the Soviet bloc pressured the Soviet Union and its allies to curb human rights abuses and set international standards of behavior. Their pressure contributed imperceptibly but enormously to the revolution in Central and Eastern Europe in 1989. Because the CSCE was a creature of the Cold War, there was much speculation in the late 1980s about its ability to survive in the post–Cold War world. The United States had never liked the CSCE, but the European participants saw its potential for peacemaking in a new international system likely to be dominated by nationalist struggles in the former Soviet bloc. In a famous speech in Berlin in December 1989, U.S. secretary of state James Baker identified the CSCE as a pillar of the New Europe. That set the tone for negotiations culminating in the Charter of Paris for a New Europe, signed in November 1990. The charter marked a political and organizational watershed for the CSCE: politically, the CSCE was guaranteed a prominent role in the security architecture of post–Cold War Europe; organizationally, by acquiring institutions of its own, the newly renamed OSCE began to focus its attention on monitoring implementation of domestic and international standards of conduct, rather than merely setting such standards. The disintegration of Yugoslavia and the Soviet Union caused a huge increase in OSCE membership as the newly independent republics applied to join. From a membership of thirty-five in 1990, the OSCE had swollen to fifty-five by 1997. But the disintegration of Yugoslavia and the Soviet Union also tested the OSCE’s capacity to resolve conflict and mediate disputes. The EU works closely with the OSCE to promote stability in Europe. For instance, the EU asked the OSCE to oversee implementation of the European Stability Pact (Balladur Plan); cooperated closely with the OSCE to execute the nonmilitary aspects of the Dayton Peace Accords in Bosnia; and urged Russia to allow the OSCE a role in monitoring and resolving the secessionist war in Chechnya. See also A PEACE AND SECURITY SYSTEM FOR POST–COLD WAR EUROPE: PREVENTING FUTURE “YUGOSLAVIAS”; APPENDIX 3.

Origins of European Integration (Post–World War II)

See EUROPEAN MODEL OF SOCIETY.

Organized European Space

Origins of European Integration (Post–World War II)

One of the most striking historical characteristics of Europe has been its extreme political fragmentation. Throughout the centuries, numerous intellectuals have dreamed of bringing order and unity to this confused mosaic, and many political leaders have sought to achieve such unity through conquest. However, the story of European integration, as it is understood today, essentially begins only in 1945. World War II was itself a catalyst for a renewed interest in European unity. It led to the claim that nationalism and nationalist rivalries, by ending in war, had discredited the independent state as the cornerstone of political organization. The war also bolstered the argument that future peace and stability could best be assured through a comprehensive continental community. However, the new postwar administrations seemed at first to give European unity a low priority, choosing instead to focus on the many problems of national economic reconstruction. Coordination of national economic plans might still have occurred, through various bodies established during the war by the Allies and intended to plan for postwar reconstruction in German-occupied territories; these agencies were mainly concerned with energy and transport resources. In 1947 their obligations and duties were taken over by the Economic Commission for Europe (ECE), a newly established body of the UN. The changed political and economic context of Europe after 1945—notably a marked deterioration in East-West relations—destroyed the basic assumption of the ECE that Europe’s economic problems would be treated on a continent-wide basis. For various reasons, however, that changed context equally led to unity’s surviving as an item on the political agenda within Western Europe. The effective division of Europe in the late 1940s generated alarm in Western Europe and concern about the territorial ambitions of the Soviet Union, ultimately leading to a deep involvement of the United States in Western European affairs. The consequent Cold War—the ideological, political, and diplomatic conflict between the United States and the Soviet Union and between

373

Western and Eastern Europe that was to endure until 1991—was a powerful pressure that propelled Western Europe toward defining itself as an entity with common interests. Equally important was the parlous state of the national economies and a growing feeling that economic recovery could only come about through collaboration between states on development and trade, coupled with external assistance from the United States. The initial moves by governments were limited in scope, with the wartime decision by Belgium, the Netherlands, and Luxembourg to establish a customs union an exception. Benelux came into being in January 1948, and the three members also began to present a common front in international economic and trade discussions. More generally, however, governments were typically more interested in security arrangements and did little more than consider mutual aid treaties of the traditional variety. The only formal agreements to emerge were the 1947 Treaty of Dunkirk between Britain and France and its March 1948 extension in the fifty-year Treaty of Brussels (formally the Treaty of Economic, Social, and Cultural Collaboration and Collective Self-Defense), which was signed also by the Benelux countries and which, after 1954, was to serve as the basis of the Western European Union (WEU). Even though the two treaties listed economic and cultural cooperation as objectives, they were essentially mutual security pacts with promises of reciprocal aid should any one signatory be attacked. Although, in the words of the Brussels treaty, they offered protection against “a renewal by Germany of an aggressive policy,” many believed the pacts had an eye also on possible future Soviet actions. By 1948 the Cold War was in full swing, confirmed by the Soviet imposition of a treaty upon Finland, the Communist takeover of Czechoslovakia, and the Berlin Blockade. The final marriage between Western Europe and the United States, which alone could provide the desired military security, came with the formation of NATO in 1949. NATO was the conclusion of a program of U.S. support first outlined in the Truman Doctrine of March 1947, which pledged U.S. backing for “free peoples who are resisting subjugation.” It provided a protective shield beneath which Western Europe was free to consider its political and economic options without necessarily having to devote time and scarce resources to military defense. At the same time the United States, itself a

374

Origins of European Integration (Post–World War II)

federation, saw nothing inherently flawed in closer integration within Western Europe and, also for its own strategic interests, lent its weight after 1947 to proposals for more intensive integration. Against this backdrop, the idea of a federal Europe began to receive endorsement from a significant number of senior politicians from several countries. The issue became not whether there should be integration but what form it should take. Governments and political parties took their stand on whether this should be only intergovernmental cooperation or something deeper that would embrace an element of supranationality. The various groups pushing for intense integration were brought together in December 1947 in the umbrella International Committee of the Movements for European Unity. The first and most important outcome of its efforts was the Congress of Europe, held in The Hague in May 1948. With over 750 delegates from sixteen countries (including a group from Germany) as well as observers from the United States and Canada, the Congress was too unwieldy to achieve any practical success, not least because it did not speak for or represent governments, despite the presence of many leading politicians. Nevertheless, in calling for a European union or federation with its own institutions, a charter of human rights linked to a European court, a common market and monetary union, the Congress helped place integration more firmly on the agenda and stimulated a process of discussion and debate that culminated in May 1949 in the establishment by ten states of the Council of Europe. The Council was the first postwar political organization in Western Europe. Its structure, consisting of a Committee of Ministers and a consultative Assembly, was a compromise between those countries that had wanted it to be an agency of integration and those, especially Britain, that refused to concede sovereignty and were prepared to accept only voluntary intergovernmental collaboration. Established by the Treaty of Westminster, with permanent offices in Strasbourg provided by France and with English and French as its official languages, the Council had little authority over its members. Its structure and operation were a victory for those who wished only cooperation, not integration; decisions would require the consent of all its members, and in any case it could not enforce its views on reluctant member states. Yet the Council marked a further postwar watershed: it rang down the curtain over the will-

ingness of ardent integrationists to dilute their dreams in order to accommodate reluctant states such as Britain. These political developments were paralleled by activity on the economic front through the introduction of the European Recovery Program, or Marshall Plan. The offer by the United States of economic aid, which because of the dawning Cold War was effectively restricted to Western Europe, was contingent upon collective administration of the relief program, in order to maximize its benefits across all the participants. The United States further insisted that European participants in the program must themselves decide how the resources were to be distributed across the countries involved. These were the basic tasks of the Organization for European Economic Cooperation (OEEC), established in April 1948. The OEEC was primarily concerned with macroeconomic coordination. Thus, like the Council of Europe, it was intergovernmental in nature and only able to operate with the consent of all its members, although it too had to have some permanent institutions to enable it to perform its allotted functions satisfactorily. Although limited in scope and relying very much upon the principle of voluntary cooperation, both the OEEC and the Council of Europe were products of a greater realization in Western Europe of the interdependency of states: that these states, especially against the backdrop of the Cold War, could and probably would prosper or fail together. Both bodies also provided useful training and experience to governments in international collaboration. However, both organizations, in terms of integration and of limiting national sovereignty, operated within the broad yet restricting denominator of intergovernmental cooperation (the lowest common denominator), a situation that could not satisfy those who believed in the imperative of union. If union or a European federation were to become a practical objective, a different path had to be sought, and it had to be accepted that several Western European states would decline to walk down the path, whatever it may be. The radical redirection of effort was provided by the French foreign minister, Robert Schuman, who in May 1950 cut through the tangle in the Western European debate to propose a pooling of coal and steel resources, specifically between France and the newly established Federal Republic of Germany. The scheme was the brainchild of Jean Monnet, the

distinguished French economist and diplomat. Long a supporter of European integration, Monnet had become convinced by his experience after 1945 of heading the French planning commission that no single European country could effectively plan for growth and prosperity by itself. Monnet’s integrationist alternative saw an eventual union being built upon an accumulation of intense collaborative ventures in specific economic sectors. Coal and steel were the logical choice with which to start such a program of sectoral integration, since they were regarded as the foundation of the economy. Monnet’s scheme proved attractive to France because it offered an answer to one of its overriding postwar concerns: how to control Germany. The formation in 1949 of the Federal Republic of Germany had ended the military option of occupation, but the International Ruhr Authority (IRA), set up in April 1949 to supervise coal and steel production in the Ruhr region, had failed to satisfy anyone (including the French, who had originally championed the IRA as a means of preventing Germany’s full economic recovery). With the IRA ineffectual and on the point of being abandoned, Monnet’s ideas offered a better way of binding the new West Germany to external influence while it was still relatively weak. Schuman’s proposal was equally attractive to the West German chancellor, Konrad Adenauer, who saw it as a key element of his policy of tying the Federal Republic firmly to Western Europe economically, politically, and militarily while seeking to rehabilitate his country in Western eyes by reassuring his neighbors that West Germany had at last abandoned the aggressive nationalist stance of the past. The Schuman Plan was therefore not just about coal and steel. It clearly stated that this would be part of establishing “common bases for economic development as a first step in the federation of Europe.” Equally, although all Western European states were invited to participate in discussions on the plan, the Franco-German axis would be central: in response to a question on how many participating countries he thought would be necessary to make the proposed structure viable, Schuman simply stated, “if necessary, we shall go ahead with only two.” The Schuman Plan was the blueprint of the European Coal and Steel Community (ECSC), which was formally established in April 1951 with a membership of six countries (France, Germany, Italy, and the Benelux countries), thus becoming Western Eu-

OSCE

375

rope’s first organization that involved the yielding by its member states of some sovereignty to a supranational authority. Hailed by its drafter, Jean Monnet, as “the first expression of the Europe that is being born,” the ECSC set in motion a groundswell that four decades later would result in the EU. See also COLD WAR; EUROPEAN COAL AND STEEL COMMUNITY; EUROPEAN DEFENSE COMMUNITY; MONNET, JEAN; ORGANIZATION FOR EUROPEAN ECONOMIC COOPERATION; SCHUMAN, ROBERT. Cook, D. 1989. Forging the Alliance, NATO 1945 to 1950. London: Secker & Warburg. Gimbel, J. 1976. The Origins of the Marshall Plan. Stanford, CA: Stanford University Press. Hogan, M. J. 1987. The Marshall Plan. Cambridge: Cambridge University Press. Milward, A. S. 1984. The Reconstruction of Western Europe 1945–51. London: Methuen. Monnet, J. 1978. Memoirs. London: Collins. Stirk, P. M., and D. Willis, eds. 1991. Shaping Postwar Europe. London: Pinter. Urwin, D. W. 1995. The Community of Europe. London: Longman. ———. 1997. A Political History of Western Europe Since 1945. London: Longman. Willis, F. R. 1968. France, Germany and the New Europe 1945–1967. Oxford: Oxford University Press. Zurcher, A. J. 1958. The Struggle to Unite Europe 1940–1958. New York: New York University Press.

Bibliography

—Derek W. Urwin

François-Xavier Ortoli was president of the Commission between 1973 and 1976. Before that he had served in a number of senior French government positions and was finance minister between 1968 and 1969. Despite his experience in French government and his grasp of economics, Ortoli was a poor Commission president. His tenure coincided with a downturn in the EC’s fortunes as the relaunch of the early 1970s gave way to high inflation and unemployment following the oil crisis. Moreover, Ortoli was exceptionally cautious and unwilling to advance the Commission’s interests or agenda. Unusually, he remained in the Commission after his term as president expired, serving as a vice president, first under Roy Jenkins and then under Gaston Thorn. He eventually left the Commission in 1984.

Ortoli, François-Xavier (1925– )

376

Ostpolitik

See ORGANIZATION TION IN EUROPE.

OSCE

FOR

SECURITY AND COOPERA-

When German chancellor Willy Brandt came to power in 1969, he elevated Ostpolitik (a policy of bridge building and reconciliation toward the Soviet Union and its satellite states in Central and Eastern Europe) to a central tenet of German foreign policy. Ostpolitik replaced the inflexible Hallstein Doctrine of nonrecognition of any Western state that recognized East Germany diplomatically. The Christian Democrats, in opposition for the first time in the history of the Federal Republic, denounced Ostpolitik as a sellout of German interests in the East and a threat to Germany’s interests in the West by the new Social Democratic government. Indeed, some of Germany’s allies fretted about the implications of Ostpolitik for Bonn’s commitments to the EC and NATO. Allied and internal Christian Democratic concern about Ostpolitik obliged Brandt to emphasize his support for European integration, which in any event he genuinely espoused. Moreover, Brandt stressed the importance of British accession as a means of reassuring those EC member states fearful of Germany’s resurgence. British prime minister Harold Wilson used Ostpolitik to further his goal of EC entry by arguing that British accession would restrain German nationalist ambition. French president Georges Pompidou also cited Ostpolitik as a reason to enlarge the EC. Thus Ostpolitik was a relevant factor in breaking the deadlock over the EC’s first enlargement. By the same token, once the heads of state and government had decided in principle (at the Hague summit in December 1969) to relaunch the EC, Brandt felt secure enough to make his first overtures to the East. Similarly, Ostpolitik played an important part in the early development of European Political Cooperation (EPC). At the Hague summit Pompidou had suggested that the member states attempt to coordinate their foreign policies. Especially in view of Germany’s new policy toward the East, the heads of state and government quickly grasped the utility of at least an exchange of information on each other’s foreign policies. Accordingly, they appointed Etienne Davignon, a senior Belgian Foreign Ministry official, to prepare a report by

Ostpolitik

mid-1970. The ensuing Davignon Report laid the foundation for EPC. Germany immediately seized on EPC as a means of building an EC-wide base for Ostpolitik. At their first meeting “in EPC”—as distinct from a meeting of the Council of Ministers—coincidentally held in Munich in November 1970 during Germany’s presidency, foreign ministers stressed the importance of EPC as “a potential contribution to détente in Europe.” By that time Ostpolitik was well on track: Germany and the Soviet Union signed a treaty in August 1970 after months of intense and highly complex negotiations, although ratification awaited a Four Power agreement on the status of Berlin. Enjoying only a narrow majority of seats in the German parliament, Brandt was especially vulnerable to continuing Christian Democratic opposition to Ostpolitik, but EPC helped to quell the domestic opposition’s clamor by providing an additional forum in which Brandt could explain his eastern initiative to Germany’s western neighbors. By 1973 Ostpolitik had resulted in treaties between Bonn and Moscow, Warsaw, and Prague; a Four Power agreement on Berlin; and an accord between the two Germanys. The pace of Bonn’s diplomatic offensive in the East slowed down in the mid-1970s but never stopped thereafter, even during the height of the Second Cold War in the early 1980s. On the contrary, in a less visible form Ostpolitik became a fixture of Germany’s foreign policy until reunification in 1990, although for much of that time it was known as Genscherism, after Hans-Dietrich Genscher, Germany’s longserving foreign minister. See also GERMANY. The Treaty on European Union identifies the French overseas departments, the Azores, Madeira, and the Canary Islands as the EU’s outermost regions. Because of their remoteness, small size, difficult topography and climate, and economic dependence on a few products, the EU’s outermost regions are generally depressed and therefore receive substantial development and infrastructure assistance.

Outermost Regions

Overseas Countries and Territories (OCTs)

Overseas countries and territories (OCTs) are colonies or former colonies of the EU’s member states, whose relationship with the EC was originally covered by Articles 131–136 of the Rome treaty. The OCTs are now included in the Lomé convention, the EU’s development assistance program for a large number of African, Pacific, and Caribbean countries. See also LOMÉ CONVENTION. Own resources, the sole source of EU revenue, are funds that originate in the member states but are

Own Resources

Own Resources

377

the property of the EU. Own resources are not supplied by votes in national parliaments but by a unanimous decision of the Council of Ministers, subject to consultation with the European Parliament and to national ratification. The three traditional categories of own resources are import duties, levies on imports of agricultural products, and a percentage of the value-added tax imposed nationally under EU legislation but not identified in the tax paid by consumers. See also BUDGET.

See also COHESION POLICY; SINGLE MARKET PROGRAM.

P See BALLADUR PLAN.

Pact on Stability in Europe

In April 1987 Tommaso Padoa-Schioppa, deputy director-general of the Bank of Italy, submitted a report to the Commission entitled Efficiency, Stability and Equity: A Strategy for the Evolution of the Economic System of the European Community. Commission president Jacques Delors had asked Padoa-Schioppa and six other experts to prepare the report in order to assess the impact on the EC’s economy of the accession of Spain and Portugal and of the single market program. Just as Delors had hoped that it would, the report identified four priorities for the EC: the single market program, a common monetary policy, economic and social cohesion, and an overall macroeconomic strategy. The report focused especially on the “serious risks of aggravated regional imbalances in the course of market liberalization.” Although conceding that the single market could improve opportunities for economic convergence between the EC’s rich north and poor south, in a memorable passage the report warned that “any easy extrapolation of ‘invisible hand’ ideas into the real world of regional economics in the process of market opening measures would be unwarranted in the light of economic history and theory.” Coming only two months after the Commission unveiled the Delors I budgetary package, the Padoa-Schioppa Report played an important part in the ensuing dispute among the member states that ended in a decision at the February 1988 Brussels summit to increase substantially the size of the structural funds for the development of the EC’s poorer regions.

Padoa-Schioppa Report

Papandreou, Andreas (1919–1995)

Andreas Papandreou, prime minister of Greece from 1981 to 1989 and again from 1993 to 1995, was a much maligned figure in the EU. Papandreou’s anti-Americanism, opposition to deeper integration, and intense Greek nationalism infuriated many of his EU counterparts. Under his leadership, Greece became synonymous with obduracy and recalcitrance. Papandreou opposed proposals for closer security cooperation in the early 1980s, voted against holding an intergovernmental conference in 1985, objected to the development of a Common Foreign and Security Policy in the late 1980s, blocked EU recognition of the former Yugoslav republic of Macedonia in the early 1990s, and thwarted the improvement of EU-Turkey relations. Nevertheless Papandreou strongly supported the EU’s cohesion policy, from which Greece benefited financially. Papandreou’s resignation after a long illness in 1995 removed a long-standing irritant in Greece’s relations with its EU partners. See also GREECE. French president Georges Pompidou convened the Paris summit in October 1972 (the European Council did not exist at the time) to set the EC’s agenda in the postenlargement period. The summit is famous—or infamous—for the last sentence of a “solemn declaration” that prefaced the concluding communiqué: “The member states of the Community, the driving force of European construction, affirm their intention before the end of the present decade to transform the whole complex of their relations into a European Union.” This was an extraordinary statement even by the standard of EC rhetoric and illustrated the member states’ high hopes for European integration at the beginning of the 1970s. As the 1970s passed, however, the Community became bogged down in high inflation rates, soaring unemployment, and low economic growth. With nothing remotely resembling European union on the horizon, the Paris declaration served only to highlight the extent of the Community’s disarray by the end of the decade.

Paris Summit

379

380

Paris Treaty

See TREATY OF PARIS.

Paris Treaty

See ASSIZES.

Parliamentary Assizes

Partnership and Cooperation Agreements (PCAs)

Partnership and Cooperation Agreements (PCAs) are a category of EU accords with nonmember states. In terms of economic and political involvement, they are less intense than association agreements (including Europe Agreements) and more intense than Trade and Cooperation Agreements (TCAs). As well as their economic clauses (perhaps aspiring to a free trade area), PCAs include a commitment to principles of human rights and democracy and involve a “structured” political dialogue between the EU and partner state both at the highest ministerial level and at civil servant and parliamentary levels. PCAs are so-called mixed agreements covering both national and EU competences. As a result, they must be ratified both at EU level and by the member states at the national level. The EU has PCAs with most of the former Soviet republics. See also COMMONWEALTH OF INDEPENDENT STATES. At a summit in Brussels in January 1994, NATO leaders announced the Partnership for Peace (PfP) program to build confidence between NATO and the countries of the former Warsaw Pact, NATO’s long-time adversary, and thereby enhance European security. Indeed, the PfP is open to all European countries, including neutral states. Membership involves joint defense planning, military exercises, and permanent high-level contacts between NATO and the other participating states. See also NORTH ATLANTIC TREATY ORGANIZATION.

Partnership for Peace (PfP)

Party Groups in the European Parliament

One of the most direct comparisons between the European Parliament (EP) and democratically elected national parliaments is its reliance upon

party (or parliamentary) groups to organize its daily operation. The party groups’ activities have been described as “Parliament’s life blood” (Westlake, 1994, p. 191). In order to understand the role that party groups play in the operation of the EP, we must first realize that the nature of legislativeexecutive relations among EU institutions does not mirror those at the national level. Consequently, although in the daily business of the EP the EP party groups perform many functions similar to those of their national counterparts, they have other characteristics quite unique as compared to those national counterparts. This entry first describes in general the statutory functions and activities of the party groups and then evaluates the characteristics that make them distinct from national actors. Party Groups’ Importance EP rules permit a party group to be founded by 23 members from one member state, 18 members from two member states, or only 12 from three or more member states (though the exact numbers have shifted slightly over the years). The number of party groups since the first direct elections of 1979 has ranged from eight to eleven. The groups span the ideological spectrum from left to right, with the two largest groups, the group of the Party of the European Socialists (PES) and the Christian-Democratic group of the European People’s Party (EPP), accounting for between 53 percent and 69 percent of seats held in the EP since 1979 (see Table 9). The other groups represented in the EP elected in 1994 are the European Liberal, Democratic, and Reformist Party (EDLR); European United Left/Nordic Green Left, which includes among others the communist parties of France, Greece, and Portugal; the Union for Europe, comprising representatives of Forza Italia and Lega Nord, French Gaullists, Irish Fianna Fáil, members from the Greek Political Spring, and Portuguese center-right politicians; Greens from eight EU member states; European Radical Alliance with some French and Italian radicals, Scottish nationalists, and Spanish and Belgian regionalists; and the Europe of Nations with French and Danish opponents of further European integration and Dutch members from smaller parties. There are also nonattached members of the European Parliament (MEPs), consisting mostly of French and Belgian National Front members, the Italian National Alliance, and the Austrian

Party Groups in the European Parliament Table 9 Group

Number of EP Seats Held by Party Groups, 1979–1999 Abbreviation 1979

1980

1981

1982

1983

1984

1985

40

40

63

38

38

31

31

Christian Democrats CD European People’s Party EPP European Socialists PES European Liberals L Liberals and Democrats LDG Liberal, Democratic, and Reformist ELDR Communists and Allies C European Progressive Democrats EPD European Democratic Alliance EDA Forza Europa FE Union for Europe UFE European Democrats (conservatives) EDG Greens G TCDIGMa Rainbow European Right ER European Radical Alliance ERA Europe of Nations EN Left Unity LUG European United Left EUL Non-Affiliated Total Members of the European Parliament Group

107 113

109 112

117 125

117 124

110 130

109 130

1986

1987

118 172

115 165

44 22

44 22

44 22

48 22

48 22

41 29

43

42 46

44 48

64

63 11

63

12

63 11

63

12

50

50

63

66

9

10

8

10

10

11

410

410

410

434

434

30

34

29

20 16

19 16

20 16

12 20 17

7

6

7

2

434

434

518

518

Abbreviation 1988

1989

1990

1991

1992

1993

1994

1995

1999

44 48

49

49

45

46

44

43

52

50

66

34 29

34 29

34 27

Christian Democrats CD European People’s Party EPP European Socialists PES European Liberals L Liberals and Democrats LDG Liberal, Democratic, and Reformist ELDR Communists and Allies C European Progressive Democrats EPD European Democratic Alliance EDA Forza Europa FE Union for Europe UFE European Democrats (conservatives) EDG Greens G TCDIGMa Rainbow European Right ER European Radical Alliance ERA Europe of Nations EN Left Unity LUG European United Left EUL Europe of Democracies and Differences Non-Affiliated Total Members of the European Parliament

107 113

381

115 165

29

20 16

15

518

121 180

22

14 17

122 180

22

14 17

14 28

14 28

518

518

10

9

128 180

21

15 14

13 29

12

518

162 178

20

28

16 14

13 28

13

518

162 198

20

28

16 14

13 23

518

157 198

26 27 23 19 19

28

27

567

a. Technical Coordination Group for the Defense of the Interests of Independent Groups and Members

Freedom Party. Only the PES and EPP (with the qualified membership of the British Conservative Party) groups are made up of parties from all fifteen of the EU’s member states.

173 217

54

233 180

27

47

20 19

21

33

31

626

42

16 37

626

In terms of the EP’s internal arrangements, the party groups are the key players. They are primarily responsible for selecting the Parliament’s leaders: the president, vice presidents and

382

Party Groups in the European Parliament

quaestors, the committee chairs and vice-chairs, and so on. The groups also set the parliamentary agenda, choose the committee rapporteurs, and decide on the allocation of speaking time. The groups manage their activities with their own EPfunded staff as well as the nonpolitical secretariat of the EP itself. The internal structures of the groups are relatively similar, with a bureau composed of a chair, vice-chair, treasurer, and maybe others. The bureaux take up matters relating to the political positions of a group as well as its administration. Groups are further divided internally by national delegations, and posts within group structures are alloted by the relative size of national delegations, who are also the direct beneficiaries of the funds spent among groups. Final mention regarding the routine work habits of party groups must include their travel schedule. As is well known, the plenary sessions of the EP take place one week each month (except August) in Strasbourg, France. Back in Brussels, a “group week” is set aside when matters relating to the next plenary session are discussed, the group’s own activities are sorted out, and meetings with visiting delegations are hosted. The rest of each month is taken up with EP committee meetings, again usually based in Brussels. The final point to address regarding the importance of the groups to the work of the EP is the interinstitutional relationship between the Parliament and the Council of Ministers. Several procedures govern the legislative process between the EP and the Council, but especially since the Treaty on European Union, a co-decision procedure makes ever more crucial the fact that the EP needs to be able to constitute a qualified majority vote vis-à-vis Council decisions. Although the socialists have been the largest group in the EP for two terms, and the EPP before it, never has one group held a majority of seats. The need for stable coalitions is thus decisive, yet a consistent left or right majority coalition has not developed. Certainly on selected issues the PES has been able to cobble together left majorities, but these have been transitory. This has meant that for the EP to exercise fully its role vis-à-vis the other EU institutions and thereby gain a measure of legitimacy, the two largest groups, the socialists and Christian Democrats, have been obliged to combine forces when special majorities are required (Jacobs, Corbett, and Shackleton, 1995).

Unique Features of Party Groups Interinstitutional relations among the EP, Commission, and Council cannot be described in traditional legislative-executive terms. After all, the EP is not a traditional parliament supporting an elected government (executive) represented by the Commission. Compared to the statutory roles of national parliaments, the EP is much more an advisory body. Nevertheless, the EP’s influence visà-vis the Commission and Council has evolved since implementation of the Single European Act in 1987. It is in this context that the role of the party groups has also developed, as the crucial requirement for a qualified majority vote in the cooperation and co-decision procedures makes clear. However, existing at a level that does not replicate the national arena of politics and with no direct executive to influence, the party groups have characteristics peculiar to their environment. Two general features of party groups make them different from their national counterparts: first, the constraint upon the left-right balance in the Parliament; second, the problem of voting cohesion. The left-right ideological cleavage is apparent in many ways among the EP party groups, at the very least in the labels appropriated by the groups themselves, for example, socialist, liberal, and so forth. However, a clear left-right identity has not so easily been produced in terms of voting patterns. There are two reasons for this. The first is the need for stable majorities in order to operate the cooperation and co-decision procedures. As pointed out earlier, the safest route toward ensuring this majority has been through a PES-EPP combination of forces. Yet the necessity of this tactical arrangement undermines efforts at building either a cohesive left or right bloc in the EP. A second reason for the lack of a left-right identity is a difference of opinion regarding the integration process itself, with ardent federalists and their opponents found in groups on both sides. Voting cohesion is often thought of as a defining characteristic of parliamentary parties. Indeed, a recent study on voting cohesion in the EP states that “analyses of national parliamentary parties frequently focus on their ability to achieve voting majorities. Parliaments and assemblies make authoritative statements by voting on bills and resolutions. This is true in the European Parliament as elsewhere” (Brzinski, 1995, p. 138). Studies have highlighted the fact that voting cohesion among EP

party groups appears to be weak compared to national parliamentary parties. Several factors contribute to this situation. One is that national considerations affect voting patterns within groups. For instance, an issue of notable worth to French interests may oblige French EPP and Union for Europe parliamentarians to abstain or even to vote against the general EPP line. Another factor is the lack of a uniform electoral procedure for EP elections. Arguably variable electoral systems, and thus the nature of linkages with constituents, may result in different behavioral voting patterns between national delegations (Bowler and Farrell, 1993). Despite these factors, which above all point to the relative heterogeneity of EP party groups compared to most national parliaments, the trend since 1989 has been toward more cohesiveness within party groups as more and more policy issues come under the purview of EU competences (Judge, Earnshaw, and Cowan, 1994). Conclusion With the introduction of direct elections in 1979, party groups were thought to be embryonic European political parties. No doubt because of the nature of EU interinstitutional dynamics, notably the lack of EP control over a democratically accountable executive and the influence of national considerations in party group voting patterns and ideological identity formation, the development of true European parties is still an open question. Within the EP itself, though, a party system of sorts has clearly developed, with the two largest groups constituting the core of this system (Bardi, 1996). EP party groups are also intimately tied to national parties—the most crucial link being the nomination of candidates for EP elections by national party leaderships—so that their future development depends to a great extent on changing perspectives about the role of the EP by political elites in the member states themselves. Nevertheless, the increasing activities of the EP and by definition the party groups on issues such as employment policy, environmental policy, and so on means that party groups have the potential to frame policies at a European level. See also EUROPEAN PARLIAMENT; APPENDIX 5. Bardi, Luciano. 1996. “Transnational Trends in European Parties and the 1994 Elections of the European Parliament.” Party Politics 2, no. 1, pp. 99–114.

Bibliography

Passport

383

Bowler, Shawn, and David Farrell. 1993. “Legislator Shirking and Voter Monitoring: Impacts of European Parliament Electoral Systems Upon Legislator-Voter Relationships.” Journal of Common Market Studies 31, no. 1, pp. 45–69. Brzinski, Joanne Bay. 1995. “Political Group Cohesion in the European Parliament.” In Carolyn Rhodes and Sonia Mazey, eds., Building a European Polity? pp. 135–158. Vol. 3 of The State of the European Union. Boulder: Lynne Rienner. Jacobs, Francis, Richard Corbett, and Michael Shackleton. 1995. The European Parliament. 3d ed. London: Cartermill International. Judge, David, David Earnshaw, and Ngaire Cowan. 1994. “Ripples or Waves: The European Parliament in the European Community Policy Process.” Journal of European Public Policy 1, no. 1, pp. 27–52. Westlake, Martin. 1994. A Modern Guide to the European Parliament. London: Pinter.

—Robert Ladrech

Party of the European Socialists (PES)

The Party of the European Socialists is the largest and oldest party group in the European Parliament, drawing members from all member states. See also PARTY GROUPS IN THE EUROPEAN PARLIAMENT. The passerelle (gateway) provision of Article K.9 of the Treaty on European Union (TEU) allows the transfer of competence (responsibility) for certain aspects of justice and home affairs from the intergovernmental third pillar to the supranational first pillar of the EU, subject to unanimity in the Council of Ministers and ratification by the member states. See also JUSTICE AND HOME AFFAIRS.

Passerelle

Although the EU itself does not issue passports, member-state passports have been redesigned to resemble each other: burgundy, with the words “European Union” in the center of the cover and the name of the member state at the bottom of the cover. This change has met some resistance from EU citizens, especially in the more Euroskeptical member states (notably Britain and Denmark).

Passport

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PCAs

The EU’s desire to harmonize the appearance of passports is an effort partly to enhance the EU’s international profile and partly to engender a “people’s Europe,” as recommended by the Adhoc Committee on a People’s Europe (Adonnino Committee) in its 1985 report to the European Council. See PARTNERSHIP AND COOPERATION AGREEMENTS.

PCAs

A Peace and Security System for Post–Cold War Europe: Preventing Future “Yugoslavias”

This entry outlines a peace and security system for post–Cold War Europe within the context of the Organization for Security and Cooperation in Europe (OSCE) that can deal with, among other things, intractable ethnic conflicts such as those that have been occurring in the former Yugoslavia. It also suggests what role(s) the EU can play, or is playing, in this regard. Theoretical Background A number of concepts are relevant to dealing with violent conflict, including the violent ethnic conflicts that have been taking place in post–Cold War Europe. We can distinguish, for instance, between competitive and cooperative approaches to conflict resolution (Deutsch, 1973). Competitive approaches are power based, adversarial, confrontational, and zero-sum (win-lose) in nature, associated with a realpolitik approach to human relations, whereas cooperative approaches are nonpower based, nonadversarial, and positive sum (win-win) in nature, associated with an idealpolitik approach (Sandole, 1993a). We can also distinguish between negative and positive peace (Galtung, 1969). Negative peace is what most people, including diplomats, mean when they address the issue of peace: the absence, prevention, or cessation of hostilities. There is nothing wrong with peace in this sense, but it is not the whole picture. Positive peace, which helps to complete the picture, is the elimination of such structural violence as systems in which members of certain ethnic, religious, racial, and/or other groups have unequal access to economic, political, social, and other resources typically presided

over and enjoyed by members of mainstream groups. The third and final distinction for our purposes here is between so-called track-1 and track2 approaches to conflict resolution. Track 1 deals with governmental, track 2 with nongovernmental mechanisms and processes for responding to conflict (Montville and Davidson, 1982; McDonald and Bendahmane, 1987; Diamond and McDonald, 1991). Track-1 warriors and diplomats typically operate within a realpolitik framework in which they use various kinds and degrees of competitive means for achieving negative peace. The design as well as the implementation of the peace and security system proposed here calls for a shift in that framework: from a unidimensional realpolitik paradigm composed of track-1 competitive approaches to negative peace to a multidimensional system composed of these plus idealpolitik-based, track-2 cooperative approaches to positive peace. Such multidimensionality is inherent in what can be called a new European peace and security system (NEPSS). A New European Peace and Security System NEPSS requires the reframing of existing institutions in Europe and their interrelationships. The most comprehensive and inclusive of these, the OSCE, serves as the basic organizing device. Its fifty-five participating states, “from Vancouver to Vladivostok,” represent all former enemies of the Cold War plus the neutral and nonaligned. When the then Conference on Security and Cooperation in Europe (CSCE) was launched nearly twentyfive years ago, its architects identified what have emerged as three components of overall security: (1) political/military, (2) economic/environmental, and (3) humanitarian/human rights (Bloed, 1993). In the wake of the ending of the Cold War, other existing institutions corresponding to each of these three components have been expanding, or contemplating their expansion, to include former Cold War adversaries in common organizations, processes, and mechanisms, thereby facilitating a “paradigm shift” from national to common security: for example, NATO, the North Atlantic Cooperation Council, Partnership for Peace, and Western European Union in the political/military component; the EU in the economic/environmental component; and the Council of Europe in the humanitarian/human rights component (Sandole, 1993b).

A Peace and Security System for Post–Cold War Europe: Preventing Future “Yugoslavias”

As inclusiveness increases further along these lines, the OSCE could become more effective at proactively exhausting its new early warning, conflict prevention, and crisis management mechanisms before use of the more usual reactive competitive measures is contemplated. There is one major problem with this scenario. As formulated up to this point and as developed thus far, NEPSS is, like its constituent parts, basically an interstate structure, whereas the great majority of conflicts that are occurring worldwide are struggles within states (Van Creveld, 1991; Sollenberg and Wallensteen, 1995). What is needed, therefore, is for OSCE/NEPSS to incorporate mechanisms and processes that would enable them to deal effectively with intrastate conflicts, for example, what might be called integrated systems of conflict resolution networks (Sandole, 1993c). The “integrated systems” component of NEPSS comprises two dimensions: vertical and horizontal. Under the vertical dimension, track-1 and corresponding track-2 mechanisms and processes would liaise and collaborate at—and across—local, societal, subregional, regional, and international levels in order, among other things, to prevent spillover across levels. One premise here is that it is easier to contain and deal with a “fire” at the local level, before it spreads elsewhere. Another is that if sources of conflict are found at different levels, then efforts to deal with conflict must reflect those levels as well. If certain extreme conditions prevail—for instance, if one party to a conflict attempts to impose a genocidal “final solution” on another— then the horizontal dimension should become operational, whereby a “measured” amount of realpolitik may be used, but only as part of a larger, basically idealpolitik strategy, to achieve negative peace as a necessary (but clearly not sufficient) condition of positive peace. As Fisher and Keashly argued, an intervention should initially match the intensity of the conflict and then combine additional “interventions, if necessary, in appropriate sequences, to further de-escalate the conflict” (1991, p. 36). Any use of violence, however, no matter how justifiable on humanitarian or pragmatic grounds, may be counterproductive, resulting in more violence. Nevertheless, NATO bombing of Bosnian Serb positions in August and September 1995 does appear to have played an important role in bringing to Bosnia a negative peace that thus far

385

has been fairly well maintained by the U.S.-led NATO Implementation Force (IFOR) (later known as the Stabilization Force—SFOR) under the Dayton Peace Accords. Thus the negativepeace aspects of Dayton have enjoyed a certain amount of success, but this has not been matched by success along the positive-peace front, even though the EU has been involved in the reconstruction of war-torn Bosnia and the OSCE has been involved in, among other things, running elections. As usual, the international community has been doing what its diplomatic and military practitioners have been trained to do: achieve and maintain negative peace. But in the absence of processes perceived to be leading to positive peace, negative peace in former Yugoslavia is bound to fail. Accordingly, for NEPSS really to get off the ground, to the extent that it can prevent future “Yugoslavias,” it must succeed in the present Yugoslavia. Here, the EU is well positioned to make a difference. It has already, for example, participated in its first ambitious Common Foreign and Security Policy project by helping Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, and Slovakia (the countries involved in the Pact on Stability in Europe—the Balladur Plan) deal with their border and minority problems as necessary conditions of their eventual membership in the EU (Helenius, 1995). In this regard, the EU is doing more than facilitating realization of the OSCE’s economic goals, because its activities in Central and Eastern Europe reflect political/military, environmental, and humanitarian/human rights aspects of security as well. Simply put, with regard solely to the Balladur Plan, the EU’s activities in post–Cold War Europe cut across all three components of the OSCE/NEPSS. Further, the OSCE’s adoption of the Balladur Plan, for evaluation and monitoring of the implementation of agreements and arrangements concerning borders and minorities, represents the kind of interorganizational collaboration that is crucial to NEPSS and to the prevention of future “Yugoslavias.” But against the background of these longerterm objectives, in the short to middle run the EU will have to do more of what it, together with the World Bank, did at a two-day meeting of donor nations in April 1996: galvanize the international community to commit the funds necessary for the

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Permissive Consensus

reconstruction of Bosnia. And to avoid replicating its failure to reunite the Croatian and Muslim sectors of Mostar, the EU must concentrate its attention on the reconciliatory as well as economic infrastructural aspects of reconstruction. Perhaps the EU’s proposed European Civilian Peace Corps can play a role in this regard. Bosnia is a clear case in which negative peace is a prerequisite to positive peace. Without a credible peacekeeping force, generous financial assistance was bound to come to naught. Hence, the EU had to operate on two fronts simultaneously: laboring to keep troops in Bosnia beyond the December 1996 deadline for IFOR’s withdrawal while facilitating the “perceptible” reconstruction of the country, not just to save the Dayton agreement but also to advance the idea of something like an NEPSS to deal with future “Yugoslavias.” Through this and its longer-term activities in post–Cold War Europe, the EU may indeed become “the most important European organization for mitigating ethnic tensions” (Walker, 1991, p. 50). See also COMMON FOREIGN AND SECURITY POLICY; ORGANIZATION FOR SECURITY AND COOPERATION IN EUROPE; YUGOSLAVIA.

Bloed, Arie, ed. 1993. The Conference on Security and Cooperation in Europe: Analysis and Basic Documents, 1972–1993. Dordrecht: Kluwer Academic Publishers. Deutsch, Morton. 1973. The Resolution of Conflict: Constructive and Destructive Processes. New Haven: Yale University Press. Diamond, Louise, and John McDonald. 1991. MultiTrack Diplomacy: A Systems Guide and Analysis. Occasional Paper no. 3. Grinnell: Iowa Peace Institute. Fisher, Ronald J., and Loraleigh Keashly. 1991. “The Potential Complementarity of Mediation and Consultation Within a Contingency Model of Third Party Intervention.” Journal of Peace Research 28, no. 1, pp. 29–42. Galtung, Johan. 1969. “Peace, Violence and Peace Research.” Journal of Peace Research 6, pp. 167–191. Helenius, Harry. 1995. “More Stability in Europe.” OSCE Review 3, no.1, pp. 8–9. McDonald, John, and Diane Bendahmane, eds. 1987. Conflict Resolution: Two Track Diplomacy. Washington, DC: U.S. Department of State, Foreign Service Institute. Montville, Joseph V., and William Davidson. 1982. “Foreign Policy According to Freud.” Foreign Policy, no. 45 (Winter 1981–1982), pp. 145–157.

Bibliography

Sandole, Dennis J.D. 1993a. “Paradigms, Theories, and Metaphors in Conflict and Conflict Resolution: Coherence or Confusion?” In Dennis J.D. Sandole and Hugo van der Merwe, eds., Conflict Resolution Theory and Practice: Integration and Application. Manchester: Manchester University Press. ———. 1993b. “Post–Cold War Peace and Security Systems in Europe: Prospects and Prescriptions.” Peace and the Sciences (March), pp. 5–12. ———. 1993c. “Ethnic Conflict Resolution in the New Europe: A Case for an Integrated Systems Approach.” In Judit Balazs and Hakan Wiberg, eds., Peace Research for the 1990s. Budapest: Hungarian Academy of Sciences. Sollenberg, Margareta, and Peter Wallensteen. 1995. “Major Armed Conflicts.” In SIPRI Yearbook 1995: Armaments, Disarmament and International Security (Stockholm International Peace Research Institute). Oxford: Oxford University Press. Van Creveld, Martin. 1991. The Transformation of War. New York: Free Press. Walker, Jennone. 1991. “European Regional Organizations and Ethnic Conflict.” In Regina Cowen Karp, ed., Central and Eastern Europe: The Challenge of Transition. Oxford: Oxford University Press.

—Dennis J.D. Sandole

Permissive Consensus

Leon Lindberg and Stuart Scheingold, two early theorists of European integration, used the term permissive consensus to describe how “the Community enterprise was seemingly taken for granted [by European publics] as an accepted part of the political landscape.” The permissive consensus began to erode as the EC enlarged (Britain and Denmark were Euroskeptical from the outset) and acquired greater competence, first with the Single European Act and later with the Treaty on European Union (TEU). Indeed, the TEU ratification crisis showed that a permissive consensus no longer existed by the early 1990s. See also DEMOCRATIC DEFICIT; LEGITIMACY. See PARTY OF THE EUROPEAN SOCIALISTS.

PES

At a meeting held in Petersberg, near Bonn, in June 1992, foreign and defense ministers of the

Petersberg Declaration

Western European Union (WEU) endorsed WEU involvement in future conflict prevention and peacekeeping operations (so-called Petersberg tasks or missions). In January 1994 NATO leaders endorsed the idea of combined joint task forces (CJTF), in part to facilitate the conduct of socalled Petersberg tasks. The Amsterdam Treaty, negotiated by the EU member states during their 1996–1997 intergovernmental conference, brought Petersberg operations—defined as “humanitarian and rescue tasks, peacekeeping tasks and tasks of combat forces in crisis management, including peacekeeping”—within the scope of the EU’s Common Foreign and Security Policy. To carry out those operations, the EU would “avail itself of the WEU.” See also COMMON FOREIGN AND SECURITY POLICY; WESTERN EUROPEAN UNION. See PETERSBERG DECLARATION.

Petersberg Tasks

PETRA is a program for the vocational training of young people and their preparation for adult and working life. Begun in 1988, PETRA was designed to complement national vocational youth training programs, promote worker mobility, support the EC’s research and technological development program, and help consolidate the single market. In 1995 PETRA was superseded by LEONARDO DA VINCI, the EU’s current program “to ensure the implementation of a vocational training policy which will support and supplement the action of the Member States as a means towards realizing an open European area for vocational training and qualifications.” See also EDUCATION, VOCATIONAL TRAINING, AND YOUTH POLICY.

PETRA

See PARTNERSHIP FOR PEACE.

PfP

See POLOGNE ET HONGRIE: ACTIONS CONVERSION ÉCONOMIQUE.

PHARE

POUR LA

RE-

Poland

387

The EU has three pillars. Pillar One is the EC, embracing the European Economic Community, the European Coal and Steel Community, and the European Atomic Energy Community. Pillar Two is the Common Foreign and Security Policy, and Pillar Three is Cooperation on Justice and Home Affairs. Pillar One is supranational; Pillars Two and Three are intergovernmental. See also TREATY ON EUROPEAN UNION.

Pillars

Central Europe’s most populous and strategically located country, Poland is poised to become one of the first of the former Soviet-bloc countries to join the EU. Given the nature of East-West relations during the Cold War, the EU’s relationship with Poland is relatively new. As part of the EastWest thaw following Mikhail Gorbachev’s accession to power in the Soviet Union, the EC and Poland signed a trade and economic cooperation agreement on September 19, 1989. Before that, at the July 1989 Paris summit, the G7 countries agreed to launch a program of assistance for Hungary and Poland to support the economic and political reforms rapidly unfolding there. Later in 1989 the Council of Ministers approved the launching of Pologne et Hongrie: Actions pour la Reconversion Économique (PHARE), a Community-funded program of technical assistance to encourage the development of private enterprise and the building of market-oriented economies. The EU and Poland signed a Europe Association Agreement on December 16, 1991, that did not come into force until February 1, 1994. The agreement included the progressive establishment of a free trade area over ten years and a regular political dialogue at the highest levels of government. Pending ratification of the Europe Agreement, Brussels and Warsaw implemented an interim agreement on March 1, 1992, covering the Europe Agreement’s economic and trade provisions. Poland is also implementing a Commission-approved preaccession strategy in order to prepare the country economically and administratively for EU membership. Based on various European Council declarations and a favorable Commission opinion, Poland began accession negotiations in early 1998. The EU is Poland’s main trading partner, and accession should greatly strengthen Poland’s

Poland

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emerging economy. However, the EU is concerned about continued Polish subsidization of industry and about the possible impact of Polish accession on the Common Agricultural Policy (CAP) (Poland has a large farm sector) and on cohesion policy (Poland’s GDP is considerably smaller than the EU average). Without reform of the CAP and cohesion policy, Polish accession could break the EU’s budget. Poland also sees EU membership as a means of strengthening its security vis-à-vis Russia, with which it continues to have a tense relationship. Together with NATO membership in 1999, EU membership early in the next decade will enhance Poland’s economic and political welfare on the EU’s potentially unstable eastern flank. However, EU membership is no panacea: Poland’s unemployment rate is likely to hover around 13 percent for the foreseeable future, and adjustment to Western European economic standards will continue to be painful. See also CENTRAL AND EASTERN EUROPEAN STATES; TABLE 6. Made up of top officials in the foreign ministries of the EU’s member states, the Political Committee prepares meetings of foreign ministers to discuss Common Foreign and Security Policy (CFSP) issues. Officially the Political Committee is under the auspices of the Committee of Permanent Representatives (COREPER), but COREPER rarely amends the Political Committee’s recommendations. See also EUROPEAN POLITICAL COOPERATION; COMMON FOREIGN AND SECURITY POLICY.

Political Committee

See POLITICAL COMMITTEE.

Political Directors

See EUROPEAN POLITICAL UNION.

Political Union

Pologne et Hongrie: Actions pour la Reconversion Économique (PHARE)

Pologne et Hongrie: Actions pour la Reconversion Économique (PHARE) is an EU-funded program

of technical and financial assistance for the Central and Eastern Europe states (CEES) in such areas as environmental protection, infrastructure, nuclear safety, education and training, and business development. At the annual G7 summit in July 1989, the Commission agreed to coordinate aid from the broader G24 (the group of twenty-four most industrialized countries) to Poland and Hungary, which were then attempting to establish postcommunist political and economic systems. Later in 1989 the Council of Ministers approved PHARE to support the economic and political reforms underway there. With the fall of the Berlin Wall in November 1989 and the revolutions in other CEES, the EC was faced with the more demanding task of helping to stabilize the postcommunist order in the entire region. As a result, PHARE was gradually extended to the other Central and Eastern European states in the early and mid-1990s. The following countries receive PHARE support: Albania, Bosnia, Bulgaria, the Czech Republic, Estonia, the Former Yugoslav Republic of Macedonia, Hungary, Latvia, Lithuania, Poland, Romania, and Slovenia. PHARE support now focuses especially on the transport sector, in particular the development of trans-European “corridors.” In 1996 the EU dispensed ECU 1.2 billion through PHARE, making it by far the biggest donor in Central and Eastern Europe. See also CENTRAL AND EASTERN EUROPEAN STATES.

Pompidou, Georges (1911–1974)

Georges Pompidou succeeded Charles de Gaulle as president of France in 1969 and struggled immediately with de Gaulle’s mixed legacy to the EC. Having served as prime minister of France between 1962 and 1968, Pompidou was steeped in Gaullism. When de Gaulle dismissed Pompidou at the height of the student unrest in 1968, relations between them quickly soured. Pompidou exacted sweet revenge by winning the presidential election in 1969 and charting his own European policy. But in one respect at least, Pompidou remained faithful to de Gaulle: he disliked supranationalism and espoused intergovernmentalism. As for enlargement, Pompidou was in a dilemma. For Gaullist diehards, whose support Pompidou could not easily sacrifice, the veto of Britain’s EC mem-

bership application had become sacrosanct. Yet for a growing body of French opinion, and for France’s EC partners, revoking the veto was the only means by which France could possibly retain influence and credibility in the Community. Regardless of his personal and political preferences, there was an obvious objective change in France’s circumstances in the late 1960s that impelled Pompidou toward accepting enlargement. The events of 1968 had enfeebled France economically. Moreover, by the late 1960s Germany was economically resurgent and politically assertive— the new chancellor, Willy Brandt, was about to launch an ambitious initiative (Ostpolitik) toward Eastern Europe and the Soviet Union. The combination of Germany’s growing economic power and rising political confidence made enlargement a more appealing alternative for Pompidou. Together, Britain and France in the West might counterbalance Germany’s increasing weight in the East and establish geopolitical symmetry in the EC. Faced with incipient Western apprehension about the impact of Ostpolitik and domestic pressure for a French initiative in the EC, Pompidou called a special meeting of the heads of state and government for December 1969. The Hague summit—the Netherlands then held the rotating Council presidency—was the first meeting of Community leaders since the tenth anniversary celebration of the Treaty of Rome in 1967. With de Gaulle gone and enlargement once again at center stage, most member states anticipated a decisive breakthrough; in the end, the summit spawned the “spirit of The Hague,” a feeling that the EC was once more on the move. To assuage domestic opinion and split the left-wing opposition, Pompidou called a referendum on EC enlargement in March 1972. Despite a poor turnout, a majority of the electorate endorsed the president’s position, thereby removing the remaining political obstacle to enlargement. In the meantime, the accession negotiations had concluded satisfactorily. Finally, on January 1, 1973, Britain, Ireland, and Denmark joined the EC. Three months previously Pompidou had convened another summit to chart the Community’s agenda in the postenlargement period. But Pompidou did not live long enough to enjoy the fruits of enlargement or to witness the Community’s economic decline in the aftermath of the oil embargo: he died in April 1974. See also FRANCE.

Portugal

389

Portugal joined the EC on January 1, 1986. EC membership was important to the consolidation of Portuguese democracy, which had emerged haltingly after a military coup in April 1974 against an authoritarian regime that had ruled since 1926. Portugal had first tried to join the EC in the early 1960s, but negotiations resulted only in a Special Relations Agreement signed on July 22, 1972. This was embedded in several such agreements signed between the EC and other European Free Trade Association (EFTA) countries. Portugal’s authoritarian regime and colonial wars prevented a close relationship with the EC until after the 1974 revolution and the adoption by Portugal of a democratic regime in April 1976. The minority Socialist government that emerged after the legislative elections of April 25, 1976, under the leadership of Mário Soares, set Portugal’s membership of the EC as a top priority. Portugal’s application, presented by Soares on March 28, 1977, was well received by the Council of Ministers. The ensuing Commission opinion was very positive, drawing attention only to some structural economic problems that Portugal could face in view of accession. Negotiations between Portugal and the EC officially began in Luxembourg on October 17, 1978, although substantive discussions did not get under way until 1980. Between 1980 and 1986 Portugal faced many difficulties in the negotiations. Linking Portugal’s application to that of Spain created considerable delay, because Spain was a larger country and required more institutional adaptation by the EC. In 1978–1979 and 1983–1984, two International Monetary Fund standby credits had to be implemented to stabilize the Portuguese economy. At the same time the EC granted several financial preaccession aid packages to help Portugal prepare for membership. Finally, the treaty of accession was signed on June 12, 1985, in the splendid Mosteiro dos Jerónimos in Belém, near Lisbon. Portugal’s integration into the EC has had a positive spillover effect on the country. The flow of structural funds since 1986 has been an important factor in Portugal’s economic transformation. Between 1986 and 1988 Portugal received around ECU 1.2 billion from the European Regional Development Fund (ERDF) and between 1986 and 1990 received about ECU 2.6 billion in loans from the European Investment Bank (EIB). After the re-

Portugal

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Portugal

form of the structural funds in 1988, the first Common Support Framework (CSF) for the period between 1989 and 1993 totaled about ECU 7.4 billion. These financial transfers were invested in the creation and modernization of economic infrastructures, development of human resources, agricultural and rural development, industrial conversion, and restructuring and regional development. The most recent CSF, for the period 1994 to 1999, more than doubled the EU’s contribution, and Portugal’s priorities were reduced to four: economic modernization, development of human resources, modernization of public infrastructures, and regional development. The whole territory of Portugal is eligible to receive assistance from the ERDF, the European Social Fund (ESF), and the guidance section of the European Agricultural Guidance and Guarantee Fund (EAGGF), all of which are allocated under the Objective 1 criterion (disadvantaged regions) of the structural funds. A first analysis of the impact seems to show that the Portuguese economy has improved vis-àvis the EU’s average per capita GDP (1986: 52 percent; 1992: 56 percent), although economic disparities continue to prevail inside Portugal. Readjustment in targeting the funds to the poorer regions of Portugal (in the interior of Portugal) rather than to the richer regions on the west coast is a priority of the new CSF, which includes a more flexible approach from region to region. The structural funds came at an opportune time for Portugal; its economy was having major difficulties adapting to the single market program. Several industrial firms and the agricultural sector almost collapsed as a result of competition from other EU countries (Eaton, 1994; Syrett, 1994; Eisfeld, 1989). Domestic political institutions needed some time to adjust to EC membership. The most important agency at governmental level became the State Secretary for European Affairs (Secretario de Estado para Assuntos Europeus) attached to the Ministry of Foreign Affairs. The Portuguese government decided to skip the EC presidency in 1986 because it felt that it needed more time to prepare for this task. Accordingly, the first time that Portugal presided over the Council was in the first half of 1992, when Foreign Minister João de Deus Pinheiro dealt with several difficult issues, such as reform of the Common Agricultural Policy, ratification of the Treaty on the European

Union (TEU), the UN conference on the environment, and the outbreak of war in Bosnia. The Assembly of the Republic (AR), Portugal’s national parliament, kept a low profile in EC affairs until 1992. Tense executive-legislative relations, a dearth of direct information coming from the European institutions, and lack of professionalization by members of parliament were major obstacles for earlier involvement by the AR in monitoring the translation of EC legislation into national law. This changed in 1994 with the adoption of a law assuring monitoring by the AR of the process of European integration. In December 1992 the Portuguese constitution was revised to meet the requirements of the TEU (Portugal’s third constitutional change in two decades) (Magone, 1995). Portugal sends one commissioner to Brussels (in the Santer Commission, former foreign minister João de Deus Pinheiro is responsible for relations with the African, Caribbean, and Pacific states and with South Africa). In the European Parliament (EP), Portugal originally nominated twenty-four members but now sends twenty-five members to Strasbourg. However, Euro-elections are not very significant in Portugal, generally reproducing almost the same party structure as in local and national elections. Turnout in elections to the EP is low by national election standards. The Portuguese Socialist Party (PS) is a moderate, social democratic party and a member of the socialists group in the EP. The Social Democratic Party (PSD), known as the “most Portuguese” of the political parties, is a social liberal party and a member of the European Liberal, Democratic, and Reformist group in the EP. Both parties are extremely pro-European. By contrast, the communist Democratic Unitary Coalition is skeptical of the process of European integration in general and of the TEU in particular. The populist People’s Party (PP) was originally a Christian democratic party that supported European integration. But electoral decline in the 1980s and early 1990s led to the emergence of a new leader, Manuel Monteiro, who adopted a more nationalistic position and rejected the TEU because of its restriction of national sovereignty (Magone, 1996c). Not surprisingly, the European People’s Party (the Christian Democrats in the EP) subsequently expelled Monteiro’s People’s Party. Generally, a majority of the Portuguese are pro-European. Nevertheless the euphoria of the

1980s has been replaced by a more down-to-earth mood in the 1990s. A recent Eurobarometer survey gave some hints about the present attitude of the population toward European integration: 63 percent were hopeful about the new EU; 46 percent thought EU membership a good thing as against 14 percent who thought it a bad thing; 63 percent of Portuguese supported European unification, and 58 percent thought that Portugal had benefited from European integration; a majority expected that a single currency would be possible by the turn of the century; 62 percent expected a common defense policy to become reality by 2010; about 47 percent described themselves as being both Portuguese and European, whereas 44 percent responded that they had only a national identity; a tiny minority (4 percent) considered themselves to be European first and Portuguese second; only 1 percent had a European identity alone (Commission, 1995, pp. 4–5, 26–27). See also TABLE 6; APPENDIX 2; APPENDIX 3. Commission. 1995. Eurobarometer: Public Opinion of the European Union, 43, Autumn. Luxembourg: Office for Official Publications of the European Communities. Eaton, Martin. 1994. “Regional Development Funding in Portugal.” Journal of the Association for Contemporary Iberian Studies 7, no. 2, pp. 36–46. Eisfeld, Rainer. 1989. “Portugal in the European Community 1986–1988. The Impact of the First Half of the Transition Period.” Iberian Studies 18, no. 2, 1989, pp. 156–165. Lopes, José da Silva, ed. 1993. Portugal and EC Membership Evaluated. London: Pinter. Magone, José M. 1995. “The Portuguese Assembleia da Republica: Discovering Europe.” Journal of Legislative Studies 1, no. 3, pp. 151–165. ———. 1996a. The Changing Architecture of Iberian Politics (1974–92): An Investigation on the Democratic Structuring of Democratic Political Systemic Culture in Semiperipheral Southern European Societies. New York: Mellen University Press. ———. 1996b. European Portugal: The Difficult Road to Sustainable Democracy. Basingstoke: Macmillan. ———. 1996c. “Portugal.” In Juliet Lodge, ed., The 1994 Elections to the European Parliament, pp. 147–156. London: Pinter. Syrett, Stephen. 1994. “Local Power and Economic Policy: Local Authority Economic Initiatives in Portugal.” Regional Studies 28, no. 1, pp. 53–67.

Bibliography

—José M. Magone

Preliminary Ruling Procedure

391

The European Council decided in principle in Copenhagen in June 1993 to enlarge the EU. One year later, at the Corfu summit, the European Council invited the Commission “to make specific proposals as soon as possible for the further implementation of the Europe Agreements [with the Central and Eastern European countries] and the decisions taken by the European Council in Copenhagen.” On the basis of this request, the Commission produced several documents that became the basis for the preaccession strategy adopted by the European Council in Essen in December 1994. The strategy has two main parts: preparation for participation in the internal market and structural relations. The former is based on a white paper, Preparation of the Associated Countries of Central and Eastern Europe for Integration into the Internal Market of the Union, adopted by the Commission on May 3, 1995. The white paper lists the EU legislation that applicant countries should try to adopt. Structural relations means a program of meetings of environment, transport, justice, foreign, and other ministers of the EU and the associated states as well as annual meetings of heads of state and government on the margins of an EU summit. See also CENTRAL AND EASTERN EUROPEAN STATES.

Preaccession Strategy

Preferential Trade Agreements (PTAs)

Preferential Trade Agreements (PTAs) are the least intense form of economic accord between the EU and a nonmember state. See also COMMON COMMERCIAL POLICY. The preliminary ruling procedure (Article 177 of the Treaty of Rome), a mechanism by means of which individuals can ensure member state compliance with EC law, has radically transformed the EU’s legal system. The procedure works as follows: an individual argues before a national court that a national law or policy conflicts with EC law; if there is a question about the meaning of the EC law, the national judge can make a “preliminary ruling reference” to the European Court of Justice (ECJ) asking for an interpretation of the EC law. The parties in the case are allowed to sub-

Preliminary Ruling Procedure

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Presidency

mit arguments to the ECJ, as are EU institutions and national governments; the ECJ’s advocate general suggests to the Court what it should do, based on an analysis of the arguments, EC case law, and the laws in question; the ECJ issues its decision, and the national judge applies the ECJ ruling to the case at hand. Alternatively, the national court can resolve the dispute on its own, based on previous ECJ jurisprudence. A number of landmark ECJ rulings in the 1960s transformed the preliminary ruling system into a powerful instrument of European integration. Individuals raised legal questions that the Commission and member states never would have asked, allowing the ECJ to expand the reach and scope of EC law in the national realm. Because of national court references to the ECJ, national governments found their ability to keep national policy issues out of the EC legal realm to be significantly diminished. The preliminary ruling system also made ECJ decisions enforceable, reducing a significant political threat against the ECJ: noncompliance. National courts became key intermediaries in the EC legal system and a significant source of political leverage for the ECJ against national governments. See also EUROPEAN COURT OF JUSTICE.

There are a number of presidencies in the EU, notably the Council of Ministers and European Council presidency, the Commission presidency, the European Parliament presidency, and the European Court of Justice presidency. Of these, the Council of Ministers and Commission presidencies are the most prominent and, arguably, the most important. However, the term EU presidency or simply presidency usually refers to the Council presidency. The Council presidency rotates every six months, although no longer in alphabetical order. The 1998–2002 rota is as follows: the UK, first semester 1998; Austria, second semester 1998; Germany, first semester 1999; Finland, second semester 1999; Portugal, first semester 2000; France, second semester 2000; Sweden, first semester 2001; Belgium, second semester 2001; Spain, first semester 2002; Denmark, second semester 2002. Italy, Ireland, the Netherlands, and Luxembourg held the presidency during the four six-month semesters of 1996 and 1997.

Presidency

The country in the presidency chairs Council and sub-Council (i.e., the Committee of Permanent Representatives, the Political Committee, working group, and special committee) meetings and hosts the European Council at least once during the sixmonth period in office (usually in the closing weeks). Apart from chairing meetings, the presidency’s responsibilities include achieving consensus and brokering deals in the Council in order to enact legislation; launching strategic policy initiatives; acting as an EU spokesperson; representing the EU internationally; managing the Common Foreign and Security Policy and Cooperation on Justice and Home Affairs; and coordinating member states’ positions at international conferences and negotiations in which the EU participates. See also COUNCIL OF MINISTERS; EUROPEAN COUNCIL; TABLE 1; TABLE 7; APPENDIX 7. The presidency conclusions are the conclusions of a Council meeting or European Council as drafted by the country holding the rotating presidency. See also COUNCIL OF MINISTERS; EUROPEAN COUNCIL.

Presidency Conclusions

The principle of proportionality refers to the scale or effect of a proposed EU action and is usually invoked to curb the accumulation of additional authority at the EU level. Article 3b of the Treaty on European Union, which defines subsidiarity, also embraces proportionality by declaring that “any action of the Community shall not go beyond what is necessary to achieve the objectives of the Treaty.” Similarly, Article K.3.2(b) stipulates that the Council may take joint action in the area of justice and home affairs “in so far as the objectives of the Union can be attained better by joint action than by Member States acting individually on account of the scale or effects of the action envisaged.” See also SUBSIDIARITY.

Proportionality

A protocol is an addendum to a treaty, used either to clarify or to qualify the treaty’s contents, that is legally binding (although only on those member states that have agreed to the protocol). At the Maastricht summit in December 1991, member

Protocol

states moved the social chapter, to which Britain objected, into a Social Protocol of the Treaty on European Union, which the other eleven signed. Generally, member states use protocols to assuage domestic opinion and/or score domestic political points. The Amsterdam Treaty included thirteen

Public Health Policy

393

protocols, ranging from animal welfare (a cherished British concern) to the role of national parliaments in the EU. See also AMSTERDAM TREATY; TREATY ON EUROPEAN UNION.

Q See QUALIFIED MAJORITY VOTING.

QMV

The Quad consists of meetings of EU, U.S., Japanese, and Canadian officials to discuss multilateral trade issues.

Quad

The office of quaestor is a leadership position in the European Parliament, selected by the party groups. See also EUROPEAN PARLIAMENT; PARTY GROUPS IN THE EUROPEAN PARLIAMENT.

Quaestor

Qualified Majority Voting (QMV)

Legislative decisions are taken in the Council of Ministers by either unanimity or qualified majority voting (QMV). QMV is a more efficient means of decisionmaking, but can be politically costly for sovereignty-conscious member states. French president Charles de Gaulle’s efforts to block implementation of a treaty provision for the widespread use of QMV was the root cause of the Empty Chair Crisis in 1965 and 1966, after which unanimity remained the norm in Council decisionmaking. However, the difficulty of achieving unanimity brought EC legislation almost to a halt and prompted member states to stipulate in the Single European Act

(1986) that QMV would be used for a majority of decisions necessary to complete the single market program. Subsequent treaty reforms confirmed the trend toward a more general use of QMV. When QMV applies, the voting weights of the member states are as follows: Germany, France, Italy, and the UK have 10 votes each; Spain, 8 votes; Belgium, Greece, the Netherlands, and Portugal, 5 votes each; Austria and Sweden, 4 votes each; Denmark, Finland, and Ireland, 3 votes each; and Luxembourg, 2 votes (for a total of 87 votes). For legislative proposals to be adopted by a qualified majority, there must be at least 62 votes in favor (hence 26 votes constitute a blocking minority). Three other points should be noted about QMV rules. First, under the Social Protocol of the Treaty on European Union (TEU), which involved legislative decisions being made without British participation between 1993 and 1997 (when Britain opted into EU social policy), a qualified majority constituted 52 votes. Second, under the so-called Ioannina Compromise, to which the Council agreed in 1994 to accommodate British and Spanish concerns about proposed changes to the size of the blocking minority following EU enlargement, “if members of the Council representing a total of 23 to 25 votes indicate their intention to oppose the adoption by the Council of a decision by a qualified majority, the Council will do all within its power to reach, within a reasonable time . . . a satisfactory solution that can be adopted by at least 65 votes.” Finally, efforts at the 1996–1997 intergovernmental conference to give the four larger member states (Britain, France, Germany, and Italy) more clout became a major sticking point at the Amsterdam summit on June 16 and 17, 1997. In the event, the heads of state and government maintained the status quo, but in a legally binding protocol on enlargement, the Amsterdam Treaty links increasing the number of votes for larger member states to agreement by them to give up their second commissioner. The eventual reweighting of votes will also entail a recalculation of qualified majority and the blocking minority. See also DECISIONMAKING PROCEDURES; APPENDIX 2.

395

R See ADVANCED COMMUNICATIONS TECHNOLOGIES EUROPE.

RACE FOR

RAPHAEL is an EU program for the years 1996–2000 in the field of cultural heritage, covering architecture, archaeology, museums, collections, and archives. The program funds a large number of conservation projects (with maximum EU support of ECU 150,000, representing not more than half the cost). See also CULTURAL POLICY.

RAPHAEL

RAPID is an EU database giving daily coverage of EU activities as presented by the institutions and their press releases. RAPID is run by the spokesman’s service of the Commission.

RAPID

A rapporteur is a member of the European Parliament (EP) responsible for drafting and presenting a report to a parliamentary committee and later to a plenary session of the EP. EP reports are generally known by their rapporteur’s names.

Rapporteur

Ratification is the process by which EU accession treaties, treaty amendments, and other international agreements become law. Ratification procedures differ from member state to member state

Ratification

and from agreement to agreement. In some cases, a popular referendum is necessary. See also INTERGOVERNMENTAL CONFERENCE. The term ratification crisis refers to the political crisis in the EC caused by the Danish electorate’s narrow rejection of the Treaty on European Union (TEU) in a referendum in June 1992. The crisis deepened when French voters approved the treaty by the narrowest of margins in a referendum in September 1992. At the Edinburgh summit in December 1992, the European Council agreed to a number of Danish opt outs from the treaty, which Danish voters endorsed in a second referendum in May 1993, thereby ending the immediate crisis. In a broader sense, however, the ratification crisis was about the EU’s political legitimacy and has continued into the late 1990s. See also INTERGOVERNMENTAL CONFERENCE; TREATY ON EUROPEAN UNION.

Ratification Crisis

The Commission is responsible for ensuring that member states fulfill their EU obligations and may bring recalcitrant member states before the European Court of Justice (ECJ). First, however, the Commission issues a formal “reasoned opinion” to a national government outlining why it considers the member state to be in violation of the treaty. The Commission usually gives the member state two months to comply, and most cases end at that stage. See also COMMISSION; EUROPEAN COURT OF JUSTICE.

Reasoned Opinion

The Council of Ministers or the Commission may issue non–legally binding recommendations to try to influence the actions of member states.

Recommendation

Referenda have become an integral and important part of the European integration process. Whether constitutionally mandated or politically inspired, they have been used to decide whether or not to join or stay in the EC/EU (Ireland, Denmark, and Norway in 1972; Britain in 1975; Greenland in 1982; and Austria, Finland, Norway, and Sweden in 1994)

Referenda

397

398

Reflection Group

Table 10 EU-Related Referenda Country France

UK Denmark Ireland Norway

Austria Finland Sweden Greenlandb

Date

Apr. 23, 1972 Sep. 20, 1992 June 5, 1975 Oct. 2, 1972 Feb. 27, 1986 June 2, 1992 May 18, 1993 May 28, 1998 May 10, 1972 May 26, 1987 June 18, 1992 May 22, 1998 Sep. 25, 1972 Nov. 28, 1994 June 12, 1994 Oct. 16, 1994 Nov. 13, 1994 Feb. 23, 1982

Question

Enlarge EC?a Ratify TEU? Stay in EC? Join EC? Ratify SEA? Ratify TEU? Ratify TEU? Ratify Amsterdam? Join EC? Ratify SEA? Ratify TEU? Ratify Amsterdam? Join EC? Join EU? Join EU? Join EU? Join EU? Leave EC?

% Turnout 60.0 70.0 64.6 89.9 74.8 82.9 71.4 83.3 70.9 44.1 57.0 56.2 79.2 89.0 81.0 74.0 82.0 85.0

a. 7% of the ballots were spoiled. b. Greenland became a member of the EC as part of Denmark (see Table 6).

and to ratify major treaty revisions (Ireland and Denmark with respect to the Single European Act in 1986; Ireland, Denmark, and France with respect to the Treaty on European Union [TEU] in 1992; and Denmark again with respect to the TEU in 1993). During the 1990s, referenda have given voters an opportunity to express their growing disillusionment with European integration. Thus, it was no coincidence that the 1992 Danish referendum triggered the TEU ratification crisis and that the later French referendum greatly exacerbated the situation. Yet, despite their obvious risks for political elites, referenda have become a key instrument to combat the EU’s democratic deficit. See TABLE 10; see also DEMOCRATIC DEFICIT; LEGITIMACY.

At its meeting in Corfu on June 24 and 25, 1994, the European Council decided to form a reflection group to prepare the ground for the 1996–1997 intergovernmental conference (IGC) and suggest possible treaty revisions. Chaired by Carlos Westendorp, Spain’s secretary of state of EU affairs, the reflection group consisted of foreign ministers’ personal representatives, a commissioner (Marcelino Oreja), and two members of the European Parliament (Elmar Brok and Elisabeth Guigou). The reflection group started its work with a symbolic meeting on June 2, 1995, in Messina, where forty years earlier foreign ministers had met to relaunch the European integration project, and submitted its

Reflection Group

% Yes 61.0 51.05 67.2 63.5 56.2 49.3 56.7 55.1 83.0 69.9 69.0 61.7 46.5 47.2 66.6 52.9 52.3 74.9

% No

32.0 48.95 32.8 36.5 43.8 50.7 43.3 44.9 17.0 30.1 31.0 38.3 53.5 52.8 33.4 47.1 47.7 26.1

report on December 5, 1995. Despite a large number of submissions from the member states and EU institutions, the report contained few novel ideas and reflected prevailing pessimism about the IGC’s prospects. The IGC itself began under the Italian presidency, in Turin, on March 29, 1996, and ended on June 16 and 17, 1997, at the Amsterdam summit, where the heads of state and government negotiated the final provisions of the Amsterdam Treaty. See also AMSTERDAM TREATY; INTERGOVERNMENTAL CONFERENCE. See JUSTICE AND HOME AFFAIRS.

Refugee Policy

EU regional policy seeks to reduce spatial disparities, regenerate old industrial areas, and assist rural development. The European Regional Development Fund (ERDF) is the main instrument for carrying out regional policy. Regional policy and the ERDF are part of the EU’s structural policy (the means by which the EU promotes social and economic cohesion). See also COHESION POLICY.

Regional Policy

A regulation is an EU legislative instrument laying down rules and guidelines applicable in their entirety to all member states.

Regulation

Regulatory Policy

The first European regulatory measure—a directive on “the approximation of the rules of the Member States concerning the coloring matters authorized for use in foodstuffs intended for human consumption”—was adopted by the Council of Ministers on October 23, 1962. The enormous quantitative and qualitative growth of EC regulations during the following three decades represents a major theoretical puzzle for the student of European integration. In fact, aside from competition rules and other measures necessary for the integration of national markets, few regulatory policies of a positive character are explicitly mentioned in the Treaty of Rome. Environmental protection, for example, is not mentioned there, and occupational safety and health was identified as an area in which the Commission should only promote close cooperation among the member states. Environmental policy provides a striking illustration of the stupendous growth of European regulations. Between 1967 and 1987, when the Single European Act (SEA) finally recognized the competence of the EC to legislate in this area, well over one hundred directives and regulations were introduced by the Commission and approved by the Council. (Directives are addressed only to member states and are binding only as to the result to be achieved; regulations lay down general rules that are binding in their entirety both at the European and at the national levels.) Today European environmental regulation includes more than two hundred pieces of legislation, and in many member states the corpus of environmental law of EC origin outweighs that of purely domestic origin. Aggregate statistics convey the same impression of an almost exponential growth of the number of directives and regulations produced by the Brussels authorities, on average, each year. Thus, by 1970 the average was 25 directives and 600 regulations per year; by 1975 this figure had risen to 50 and 1,000, respectively; then between 1985 and the early 1990s, the EC produced 80 directives and about 1,500 regulations per year. To compare: in 1991, the European authorities issued 1,564 directives and regulations as against 1,417 pieces of legislation (laws, ordinances, decrees) issued by the French authorities, so that by now the EU introduces into the corpus of French law more rules than the national authorities themselves. Moreover, it is estimated that only 20 to 25 percent of the legal texts applicable in France are

Regulatory Policy

399

now produced by the government without any previous consultation in Brussels (Conseil d’État, 1993). An analogous situation prevails in all the other member states. Reporting such statistics, the French Conseil d’État speaks of “normative drift” and “luxuriating legislation,” doubting that any government could have foreseen, let alone wished, such a development. It also points out, however, that the same member states that deplore the “regulatory fury” of the Brussels authorities are among the major causes of regulatory growth with their demands for European interventions in the most varied areas of economic and social regulation. This schizophrenic attitude of the national governments is only a part of the puzzle to be explained. Equally surprising, especially from an intergovernmentalist perspective, is the fact that the growth of European regulations has been not only quantitative but also qualitative. Since the SEA introduced qualified majority voting for a number of important policy areas, European rules have often been more advanced than those of all or most member states. Among the best-known examples of such “upgrading” are the 1989 directive regulating exhaust emissions for small cars (Jacobs, Corbett, and Shackleton, 1995); a group of important health and safety at work directives approved in 1989 and 1990 (Eichener, 1992; Majone, 1993); Directive 89/48 that creates, for the first time in Europe, a single market for the regulated professions; Directive 92/54 on general product safety; and several recent directives in the field of telecommunications. Indeed, a good deal of the regulatory effort of the Commission in the last years has been aimed at promoting competition and technological innovation in this strategic field. The most important telecommunications directives follow from the 1987 green paper on the development of the common market for telecommunications services and equipment. This highly innovative document marked a turning point in European telecommunications policy, providing the first road map toward a competitive market in an area traditionally dominated by national monopolies. The widening and deepening of regulatory policymaking in those areas is all the more remarkable when compared with other policy areas (such as transport, energy, and social policy) that have remained largely undeveloped, even though they appear in the founding treaties. This highly

400

Regulatory Policy

selective expansion of EU competences suggests that the structural characteristics of different policy fields should receive more attention than has been given to them so far. For our purposes it is sufficient to distinguish between regulatory policies and policies that require the direct expenditure of public funds. The distinction is important because budgetary constraints have only a limited impact on policymaking: the real costs of regulations are borne not by the agencies but by the individuals, firms, or governments that have to comply with the regulations. On the other hand, the size of nonregulatory direct-expenditure programs is determined by budgetary appropriations and, ultimately, by the level of tax revenues. This structural distinction is even more significant at the European than at the national level, since not only the economic but also the political and administrative costs of implementing European rules are borne, directly or indirectly, by the national governments. A second factor to be kept in mind is the small size of the EU budget. Despite a significant growth in recent years, this budget represents only 2.4 percent of all the public sector spending of the member states and less than 1.3 percent of the gross domestic product of the EU. Moreover, almost 70 percent of total appropriations consists of compulsory expenditures for the Common Agricultural Policy and other redistributive programs. What remains is not enough to support large-scale initiatives in such politically appealing fields as industrial policy, research and development, or infrastructural policy. Given such constraints, the best strategy for the Commission to use to increase its influence was to expand the scope of its regulatory activities: regulatory policymaking puts a good deal of power in the hands of the Brussels authorities while circumventing the tight budgetary constraints imposed by the member states. However, given that the Commission proposes but the Council disposes, why were the member states, always so keen to preserve their sovereignty, willing to delegate such extensive regulatory powers to the Commission? In many cases, such delegation was neither envisaged by the founding treaties nor strictly necessary for the proper functioning of the common market. To answer this question we must consider another characteristic of regulatory policymaking. Regulation consists of applying the general principles stated

in a formal document (a statute or an international convention) to particular, and often rapidly changing, circumstances, and this entails a good deal of discretion in implementing the principles. Without supranational control, regulatory discretion can easily be abused by national governments in order to protect domestic interests. But when it is difficult to observe whether governments are making an honest effort to enforce a regulatory agreement, that agreement is not credible. Hence the delegation of regulatory powers to a supranational authority such as the Commission is best understood as a means whereby the member states commit themselves to regulatory strategies that would not be credible in the absence of such delegation (Gatsios and Seabright, 1989; Majone, 1996). Looking at the question from another angle, the way those powers are used to achieve ambitious regulatory objectives can be explained in terms of the policy entrepreneurship of the Commission (Majone, 1996). For about two decades the Commission has used its regulatory powers mainly to harmonize national laws, regulations, and standards by means of directives. However, despite considerable progress, by the early 1980s it became clear that the attempt to harmonize a continuously expanding body of national rules was bound to fail. To overcome the limitations of the old approach based exclusively on harmonization, the 1985 white paper on the completion of the internal market introduced a new strategy with the following elements: mutual recognition of national regulations and standards, restriction of harmonization at the European level to laying down essential health and safety requirements binding on all member states, and the gradual replacement of national product specifications by European norms. In essence, the white paper proposed a conceptual distinction between matters in which harmonization is essential and those in which it is sufficient that there be mutual recognition of the equivalence of various requirements laid down under national law. Notice that although mutual recognition does not involve the transfer of regulatory powers to the European level, except for the regulation of essential requirements, it nevertheless restricts the freedom of action of national governments, which after the Cassis de Dijon judgment can no longer prevent the marketing within their borders of a product lawfully manufactured and marketed in another member state.

In many policy areas the combination of mutual recognition and strict regulation of essential safety requirements has proved quite effective not only in speeding up the EC regulatory process but also in improving the quality of national regulations. A good example is Directive 89/48, already mentioned, on the mutual recognition of professional degrees and diplomas. Unlike the older directives in this area, the new directive does not attempt to harmonize the length and subject matters of professional education or even the range of activities in which professionals can engage. Instead, it specifies the methods by which the member states can compensate for such differences. The way the methods are applied by national authorities may be appealed in the courts of the host country. This directive not only lays the foundation of a European market for the regulated professions but also creates incentives for raising the level of professional education throughout the EU. This is because the citizens of a country that does not adequately regulate a certain profession are at a competitive disadvantage if they wish to use their professionals skills beyond the national borders. In fact, some countries have already taken actions to improve the quality of professional education in such areas as dentistry and nursing (see, for example, Zilioli, 1989). Other important applications of the new strategy are in the area of banking and financial services and of telecommunications. Thus, the current approach to banking regulation is based on four principles: harmonization of essential standards for prudential supervision, mutual recognition of the way in which each member state applies those standards, home country control and supervision of financial institutions operating in other member states, and a single license for credit institutions granted by the home country and valid throughout the EU. The essential (harmonized) requirements necessary and sufficient to achieve mutual recognition of authorizations and supervisory schemes are spelled out by the important Second Banking Coordination Directive 89/646 and by two narrower directives about own funds and solvency ratios (Directives 89/299 and 89/647, respectively). A similar regulatory philosophy inspires the two directives on life and nonlife insurance approved in 1992 and Directive 93/22 on investment services. The basic idea is that any supplier of financial services legally established in one member state may pursue his or

Regulatory Policy

401

her professional activity in all other member states, provided he or she follows EU rules and those of the home country. Harmonization of telecommunications standards is achieved by the Common Technical Regulations (CTRs), which are mandatory norms to be developed by the European Telecommunications Standards Institute (ETSI). Again, terminal equipment satisfying the CTRs can circulate freely throughout the EU on the basis of the mutual recognition of type approval granted by a member state. As these examples show, the new strategy has been successfully applied in a number of important policy areas, but there have been cases in which the member states themselves have rejected mutual recognition in favor of centralized solutions. This attitude shows that the credibility problem, which arguably is the reason for the delegation of extensive regulatory powers to the European level, still persists. An illuminating example is provided by the regulation of new medical drugs. By the 1970s the Commission had attempted to introduce mutual recognition of toxicological and clinical trials conducted according to standardized EC procedures. Under the socalled multistate drug application procedure (MSAP), a company that had received a marketing authorization from a national regulation could ask for the recognition of that approval by at least five other member states. However, the procedure did not work well, even in the simplified form introduced in 1983: actual decision times were much longer than those prescribed by the relevant directives, largely because national regulators continued to raise objections against each other almost routinely (Kaufer, 1990). Finally, the Commission, strongly supported by the European pharmaceutical industry, proposed a centralized approval procedure, which would be compulsory for all new high-technology products, and the establishment of a European Agency for the Evaluation of Medicinal Products to conduct the necessary tests. Both proposals were accepted by all member states in 1993. An analogous development may take place in telecommunications. Support for a European Telecommunications Agency grew among political and industrial leaders in Europe because it was felt that the supervisory machinery available was insufficient to guarantee that the new EU regulations in this important field were being implemented in good faith by all the national au-

402

Regulatory Policy

thorities. The task of the new agency would be less to implement directly European telecommunications law than to monitor the implementation of this law by the national regulators (Ehlermann, 1995). Thus, the current situation is characterized by conflicting tendencies. On the one hand, the principles of subsidiarity and mutual recognition are beginning to produce effects in terms of more decentralized decisionmaking and regulatory competition among the member states. On the other hand, basic prudential and safety requirements continue to be strictly regulated at the European level, and there is a growing demand for more effective supervision, either by the Commission or by independent European agencies, of the implementation of European rules by national authorities. We have also seen that in some cases the member states have expressed a preference for centralized regulations in order to avoid the risks and delays inherent in mutual recognition. A variety of equilibrium solutions could in theory emerge from such a situation, but there are indications that the most likely solution will take the form of transnational networks including both European and national regulators. Such a structure is already taking shape in the field of competition policy regulation. The Commission’s directorategeneral for competition (DG IV) recently initiated a decentralization project with the long-term goal of having one competition statute applied throughout the EU by a network of national competition authorities, national courts, and DG IV itself. Direct links already exist between Commission inspectors and national regulators as regards any investigation carried out by DG IV. Moreover, a high level of harmonization of national competition laws has already occurred spontaneously, and national competition authorities are becoming more professional and increasingly jealous of their independence. Professionalization and independence are indeed essential to the viability of the network model. Professionals are oriented by goals, standards of conduct, and cognitive beliefs that derive from their professional community, giving them strong reasons for maintaining their reputation in the eyes of fellow professionals and for resisting interference and directions from political outsiders. Political independence is important because basic ideological differences concerning, for example, the role of competition principles in

economic policy are likely to persist between the member states. Such differences are much less pronounced among competition regulators from different countries, just as the commitment to price stability tends to be stronger among different central bankers than among politicians from the same country. Similar, if less advanced, developments can be observed in other regulatory areas. A related example is the emerging pattern of coordinated partnership between the Statistical Office of the European Communities (EUROSTAT), and the national statistical offices of the member states (McLennan, 1995). There is no reason why, given the right conditions, the network model could not be extended to all areas of economic and social regulation and indeed to all administrative activities where mutual trust and reputation are the key to greater effectiveness. See also C OMMON MARKET; COMPETITION POLICY; ENERGY POLICY; ENVIRONMENTAL POLICY; IMPLEMENTATION; SINGLE MARKET PROGRAM; STANDARDS AND CONFORMITY ASSESSMENT. Conseil d’État. 1993. Rapport 1992. Paris: Documentation Française. Ehlermann, Claus Dieter. 1995. “Harmonization Versus Competition Between Rules.” European Review 3, no. 4, pp. 333–342. Eichener, Volker. 1992. Social Dumping or Innovative Regulation? Process and Outcomes of European Decision-Making in the Sector of Health and Safety at Work Harmonization. EUI Working Paper, SPS 92/28. Florence: European University Institute. Gatsios, Kristos, and Paul Seabright. 1989. “Regulation in the European Community.” Oxford Review of Economic Policy 5, no. 2, pp. 37–60. Jacobs, Francis, Richard Corbett, and Michael Shackleton. 1995. The European Parliament. 3d ed. London: Cartermill International. Kaufer, Erich. 1990. “The Regulation of New Product Development in the Drug Industry.” In Giandomenico Majone, ed., Deregulation or Re-regulation? Regulatory Reform in Europe and the United States. London: Pinter. McLennan, William. 1995. “Working Together as Partners in European Statistics.” In Mario Crescenzi, ed., European Statistics in Perspective. Rome: ISTAT. Majone, Giandomenico. 1993. “The European Community Between Social Policy and Social Regulation.” Journal of Common Market Studies 31, no. 2. ———. 1996. Regulating Europe. London: Routledge. Zilioli, Chiara. 1989. “The Recognition of Diplomas and Its Impact on Education Policies.” In Bruno de

Bibliography

Research and Technological Development (RTD) Policy

Witte, ed., European Community Law of Education. Baden-Baden: Nomos.

—Giandomenico Majone

Report on European Institutions See THREE WISE MEN.

Research and Technological Development (RTD) Policy

One of the great paradoxes of the EU is that, despite its internationally acknowledged scientific excellence, it launches fewer new products, services, and processes than its main competitors in the global economy. In other words, the EU is innovating less—and less well—at a time when innovation is becoming a driving force in economic competitiveness. This state of affairs, which is the result of a number of structural obstacles (a complex legal and regulatory environment; insufficient investment; excessive separation between research, industry, and training; and so on), is a serious handicap to European business and society, not least because of its impact on employment. A recent Commission green paper identified numerous obstacles to innovation and included about 130 concrete proposals to stimulate innovation in Europe and hence improve the competitiveness of European industry. Intended to provoke wide-ranging debate within member states, the green paper is part of the Commission’s preparatory work for the next framework program for research and technological development (RTD) policy in the EU. Framework programs are the main instrument of RTD policy. In accordance with Article 189b of the Treaty on European Union (TEU), the framework program is now adopted by the European Parliament (EP) and the Council of Ministers using the co-decision procedure, whereas decisions on specific research programs (under the auspices of the framework program) are taken according to the simple consultation procedure (Article 130i[4]). The TEU further stressed that the “Community shall have the objective of strengthening the scientific and technological bases of Community industry and encouraging it to become more competitive at international level” and that “the Community and the Member States shall

403

coordinate their … activities so as to ensure that national policies and Community policy are mutually consistent.” These provisions of the TEU built on the legal basis in the original treaties for action in the field of RTD: Article 55 of the European Coal and Steel Community treaty (research in the coal and steel sector); Articles 4–11 of the European Atomic Energy Community treaty (nuclear research); and Articles 41 (agriculture) and 235 (other areas, in particular nonnuclear energy and general research policy) of the European Economic Community treaty. Subsequent legal bases for the conduct of RTD policy include a Council resolution of January 14, 1974, on the coordination of national policies and the definition of projects of interest to the Community in the fields of science and technology; provisions of the Single European Act (SEA), which gave the Community a new and explicit basis for RTD policy; and a large body of secondary legislation. Since the SEA, which came into force in 1987, the Community’s main objective with respect to RTD has been the development of a common policy in important areas such as new technologies, energy, the environment, and raw materials. National policies or research activities at the Community level should be coordinated with seven goals. The first is to eliminate unwarranted duplication of effort in national programs (this would entail improved dissemination of results among, in particular, small and mediumsized enterprises, which would be an advantageous cost-benefit factor, and the coordination of national programs). The second goal is to improve the efficiency, or reduce the cost, of national and Community projects by sharing tasks or, possibly, by pooling resources, and the third is gradually to harmonize procedures for the formulation and implementation of Community research policy. Promoting the creation of a single market (through the formulation of uniform specifications and standards) and thereby helping to overcome scientific and technical barriers in Europe is the fourth goal. The fifth goal is to promote suitable research projects concerning transfrontier problems (e.g., the environment and public health), and the sixth is to reduce the worrisome gap that exists between the research potential and specific results achieved by member states. The seventh goal, to be achieved by means of a common research strategy with increased

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Research and Technological Development (RTD) Policy

funding, is to maintain or restore Europe’s international competitiveness with the United States and Japan, thereby helping to reduce unemployment in the Community through innovations and new technologies. This objective complements the research cooperation initiative known as EUREKA, launched in 1985 and involving numerous third countries (although the Commission participates in EUREKA activities, EUREKA is not itself a Community project).

Present State of RTD Policy On April 26, 1994, the Council and the EP adopted the EC’s fourth framework program for research and technological development and demonstration (1994–1998) and the European Atomic Energy Community (EURATOM) framework program for research and training. The initial budgets allocated to these two framework programs were approximately ECU 11 billion and ECU 1.3 billion, respectively, totaling ECU 12.3 billion for both. On March 25, 1996, the Council and the EP adopted a decision (No. 616/96/EC) modifying the budget on account of the accession of Austria, Sweden, and Finland to the EU. As a result, the maximum overall amount of the fourth framework program now stands at ECU 11.8 billion and for the EURATOM framework program at about ECU 1.4 billion. This brings the overall maximum budget for both programs to about ECU 13.1 billion. The modification of the financial amount does not alter the technical and scientific objectives, priorities, or activities in the various areas of the specific programs. The additional funds will be allocated in a linear fashion across the program’s four themes: research, technological, and demonstration projects; cooperation with third countries and international organizations; dissemination and optimization of results; and stimulation of training and mobilization of workers. However, the significance and importance of the common research policy should not be assessed solely or even primarily in the light of budgetary resources. Equally important, the review at the Community level of national and common research policies, which is carried out every two years, has in itself led to notable progress regarding the formulation and coordination of national policies. The RTD framework program is to be implemented by means of specific programs in each

area of activity. Distinctions must be drawn, depending on who finances and carries out the project, between the following types of RTD projects: (1) direct projects, carried out by the Joint Research Centers (JRCs)—of which there are four, located in Ispra, Italy; Geel, Belgium; Petten, the Netherlands; and Karlsruhe, Germany—and entirely financed by the EU; (2) indirect projects, carried out by groups of research workers, laboratories, and universities of the member states, and partly financed by the EU; and (3) concerted projects, also carried out by groups of research workers, laboratories, and universities of the member states but not financed by the EU (except for coordination). The EP has repeatedly stressed that the RTD framework program budget is still far too small to meet the challenges of the 1990s, notably improving Europe’s competitiveness especially vis-à-vis the United States and Japan. This restricted funding is particularly regrettable since there is a danger that the individual RTD projects will be inadequately funded and that the necessary “critical mass” will not be reached. At the same time, most of the projects contained in the framework program are regarded as indispensable to ensure that Europe is not outstripped, by the United States and Japan in particular, in the field of international technological innovation. Only in this way can Europe’s international competitiveness—its most important guarantee of independence, prosperity, and employment—be secured in the medium term. Outlook The adoption of the framework program and of important sectoral research programs represents a significant step toward the strategic reorientation of EU research policy. Whereas previously the energy sector was undoubtedly the focus of EU research, the EU’s efforts are now directed more toward industrial competitiveness in order to enable the EU to keep pace with the United States, Japan, and the newly industrialized countries and to improve the employment situation by encouraging innovation. The EUREKA initiative will also provide additional impetus for research cooperation in Europe. However, as the EP has been constantly stressing in recent times, it is essential to step up RTD efforts at the EU level, since only in this way can Europe’s place in the field of technological innovation be assured and the necessary conditions created to safeguard Europe’s political and eco-

nomic independence and its social and cultural identity. The EU is making a greater effort to assist economic transformation in the countries of Central and Eastern Europe, not least by enabling their partial participation in Community RTD programs. Also, under the TEU, consideration is being given to establishing an industrial policy (Title XIII, Article 130) through a closely coordinated RTD policy (Articles 130a–130e, Title XV, and Articles 130f–130p in particular). In addition, detailed discussions are taking place on the revision of RTD policy to develop a fifth framework program. Apart from the challenge of supporting scientific and technological development with substantial funding, EU framework programs also face a radically changed social and cultural environment, generally known as the postindustrial society. The driving force behind the ever-quickening change is, of course, a combination of information and communication technology. Europe is having greater difficulty than the new industrialized countries, or even than the United States, coping with this new networked world and global social structure. The Asian era (as the twenty-first century is often characterized) is the outcome not only of Asia’s growing demographic weight but also of its ability to accept a new technological culture; indeed, to make new technology a trademark of its culture. This being so, Europe must itself make an effort if it is not to become merely an observer of its own decline. Science, technology, culture, and social policy must be perceived as a whole. Europe must accept change as a challenge if it is still to have a chance to shape the transition to a postindustrial society. It is therefore important for socioeconomic issues as well as cultural and ethical questions to be discussed in the context of research policy. Europe needs something like a Europe-wide debate on technology, involving all interested parties. European civilization of the twenty-first century can emerge only from a critical analysis of what appears to be a largely selfperpetuating technological revolution. Thus, it is of considerable strategic importance that the Commission fully use the resources at its disposal for socioeconomic development. In particular, a possible European technology assessment network, which makes such a public dialogue possible, must at last be put forward. See also INDUSTRIAL POLICY.

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—Peter Palinkas See FRAMEWORK PROGRAM FOR RESEARCH TECHNOLOGICAL DEVELOPMENT.

Research Framework Program

AND

In July 1967 Jean Rey, a Belgian politician, became the first president of the combined Commission of the European Communities (following implementation of the merger treaty uniting the Communities’ institutions). During his years as Commission president (1967–1970), the EC slowly recovered from the shock of the Empty Chair Crisis (1965 and 1966) and, after Charles de Gaulle’s resignation as president of France in 1969, prepared for its first enlargement. Yet Rey was unable to raise the Commission’s self-confidence or improve its fortunes. Indeed, his presidency was the first in a series of undistinguished Commission presidencies that ended more than a decade later, when Commission president Roy Jenkins began to assert his authority. See also COMMISSION.

Rey, Jean (1902–1983)

Right of establishment refers to the right of businesspeople, under Articles 52–58 of the Rome Treaty, to set up operations in other member states. However, until completion of the single market program, national regulation of industry and commerce was a considerable obstacle to the right of establishment. See also SINGLE MARKET PROGRAM.

Right of Establishment

Since a dialogue was institutionalized by the Rome Declaration of December 1990, the EU and the Rio Group (Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Panama, Paraguay, Peru, Uruguay, and Venezuela) have held annual ministerial meetings, which observers from Central America and the Caribbean also attend. Discussions cover political and economic issues, ranging from human rights and political pluralism to market access and investment opportunities. See also LATIN AMERICA.

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Royaumont Process

Until the end of the Cold War, the EC had had a longer and deeper relationship with Romania than with any other Soviet-bloc country (with the exception of East Germany, which for obvious reasons was a special case). This was due to Romania’s supposedly “independent” foreign policy, although domestically Romania under Nicolai Ceaus¸escu was a hard-line Stalinist state. The EC began to upgrade its relations with Romania by opening talks in April 1987 for a trade and economic cooperation agreement, but negotiations were suspended in July 1989 because of Ceaus¸escu’s repression. Following the revolution and Ceaus¸escu’s execution in December 1989, the EU resumed relations with Romania, culminating in the signing of a Europe (association) Agreement on February 1, 1993, which entered into force two years later for an unlimited period. The agreement provided for free trade and was a forerunner of possible accession. Romania also received Pologne et Hongrie: Actions pour la Reconversion Économique (PHARE) assistance. However, Romania’s pace of economic liberalization and political reform has been slow. Economically, Romania has reoriented its foreign trade toward the West, with exports to and imports from the EU now accounting for over 55 percent of the total. But in other areas of economic reform and restructuring, Romania lags far behind the socalled fast-track transition countries in Central and Eastern Europe (notably the Czech Republic, Hungary, and Poland). Agriculture still contributes a higher proportion of GDP (20 percent) and employs a larger proportion of the workforce (35 percent) than in any of the other former Soviet satellites. Most ominous of all, privatization is proceeding extremely slowly in Romania (the private sector share of GDP is estimated at less than 50 percent, well below that in neighboring countries). Politically, democracy in Romania is fragile. In retrospect, the 1989 revolution looks more like a palace revolution than a radical change of regime. Authoritarianism and intolerance pervade the political establishment. As a result of Romania’s economic and political problems, EU membership seems unlikely in the near future, despite strong French support for Romania’s immediate accession. Yet Romania’s relegation to a second tier of Central and Eastern European states with respect to EU and NATO

Romania

membership could exacerbate the country’s regression. The challenge for the EU is to nudge Romania toward meaningful and lasting reform while keeping the door open to membership in the not too distant future. See also CENTRAL AND EASTERN EUROPEAN STATES. The Royaumont process to promote stability and good neighborliness in southeast Europe was launched by the EU, Russia, the United States, and southeast European states at a conference in Royaumont, France, on December 12, 1995, to complement the Dayton Accords for peace in the former Yugoslavia. The Royaumont declaration calls for the process to be put in the hands of the Organization for Security and Cooperation in Europe, as was the earlier, similar Stability Pact for Europe (Balladur Plan) for Central and Eastern Europe as a whole. See also YUGOSLAVIA.

Royaumont Process

The main lines of EU policy toward Russia since the start of 1992 have dovetailed very closely with those of the United States. The larger member states of the EU have, indeed, coordinated their Russian policies mainly through other forums rather than within the EU itself: notably within the Group of Seven industrialized countries (G7), NATO, and the International Monetary Fund (IMF) as well as through bilateral discussions with each other and with the United States. Issues that might seriously divide the Western alliance, such as how to respond to a conflict between Russia and Ukraine, would tend to divide the EU also. The principal stated goals of the EU’s Russian policy have been summarized in the Commission’s report of May 1995, The European Union and Russia: The Future Relationship (Commission, 1995), and the Council’s Strategy on EURussia Relations, published in November 1995. The EU’s main emphasis has been to assist internal changes within Russia: in particular, a combination of strengthening internal stability and promoting the development and consolidation of human rights, democracy, and a capitalist market. These goals have been presented as largely con-

Russia

gruent with each other and have been interpreted as requiring support for the government of President Yeltsin in its efforts to transform the political and economic system within the country. To encourage these internal changes, the EU has used the diplomacy of conditionality: steps to draw Russia into the political, economic, and security structures of the West have been made conditional upon progress toward the internal changes championed by the Western powers. The EU has possessed four main instruments for pursuing this approach: its capacity to give symbolic support to the Yeltsin government within Russia; its great importance as a market and as a source of capital; its aid instruments, especially the Technical Assistance for the Commonwealth of Independent States (TACIS) program; and its ability to exert influence on the Russian government’s behalf in other international institutions and with the United States. Within this general policy framework the EU nevertheless has had distinct concerns, both political and economic. Russia’s foreign policy, notably toward Central and Eastern Europe, is a matter of direct and major importance for the member states of the EU (especially Germany). Maintaining good relations with Moscow while integrating the Visegrad states (Poland, Hungary, the Czech Republic, and Slovakia) into Western institutions has therefore been an important aim of the EU, and of Germany in particular. The EU and its member states also have important economic interests at stake in their relations with Russia. Russia is a far more important source of supplies for the EU—notably energy and especially gas as well as minerals and raw materials—than for the United States or Japan. Russia also could become a very important market for EU goods and investment. In the energy sector the EU has attempted to play a leading role in efforts to establish a new international regime, via its initiative for a European Energy Charter. Political Relations Since the Gorbachev Period When the Soviet Union broke up at the end of 1991, President Mikhail Gorbachev left a legacy of links between the USSR and the EC. One of Gorbachev’s first acts as general secretary had been to indicate to the Italian presidency of the European Council in the spring of 1985 that he wished to place relations with the EC on a new ba-

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sis. In the summer of 1988 a breakthrough came with a joint declaration of mutual recognition between the EC and the Soviet-dominated Council for Mutual Economic Assistance (CMEA). In February 1989 formal discussions between the USSR and the EC began within the framework of European Political Cooperation (EPC), the member states’ foreign policy coordinating mechanism. In the hectic circumstances of East Germany’s terminal crisis in December 1989, the USSR and the EC signed a Trade and Cooperation Agreement (TCA). A separate agreement on trade in textiles was also initialed between the two parties at the same time (Official Journal, 1990). The following year France and Germany gained support within the European Council for the Commission to bring forward proposals for a more far reaching agreement, envisaging a future free trade regime between the USSR and the EC. The EC also sought, without success, to encourage the United States and Japan to take positive steps over Soviet membership of the GATT. But these plans and other initiatives from the Dublin summit in June 1990 and the Rome summit in December 1990 were stalled by EC reluctance to move significantly out of step with U.S. policy toward the Soviet Union and then by the crisis leading to the Soviet Union’s disintegration in 1991. The Commission responded to the collapse of the USSR by offering, in January 1992, to negotiate new cooperation treaties with the former Soviet republics. Meanwhile the terms of the 1989 TCA were extended to the new republics, including the Russian Federation, individually through an exchange of letters in 1993. In 1991, the EC had already approved an aid program for the USSR before the latter’s collapse, and at the start of 1992 this program came on stream for Russia and then for other members of the Commonwealth of Independent States (CIS) under the acronym of TACIS. TACIS has continued up to the present as a grant program for assisting the domestic transformation of the Russian economy and polity. Between 1991 and 1995 ECU 2.268 billion was granted for over 2,200 TACIS projects, more than half of which involved Russia. In July 1996 a further ECU 2.224 billion was approved by the Council for the CIS and Mongolia from 1996 to the end of 1999. This aid program is tied to EU conditionality, enabling the EU to suspend assistance at any moment in case

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of a violation of a key component of cooperation, especially on democracy and human rights. Since 1992, the EU has envisioned the continent as organized upon two pillars: the EU in the West and the Russian Federation in the East. This view, first articulated by Commission president Jacques Delors during his visit to Moscow in 1993, has often been repeated. For example, in its May 1995 report on Russia the Commission declared that the time had come for the EU and Russia to recognize “their historical vocation as the two principal European powers and, in the common interest, [seek] to develop the close and mutually enriching partnership which will reflect their political, social and economic significance” (Commission, 1995). This vision, of course, omits the role of the United States as a European power and evades both the weakness of the EU in the military-security field and the importance of the security dimension in EU-Russian relations. In reality, the United States continues to lead the EU’s member states in the main lines of their security and political policies toward Russia, doing so in close consultation with Germany and other NATO members. And even in the field of economic relations with Russia and the other former Soviet republics, the EU has followed the judgments of the IMF in deciding the pace of normalizing relations. But the two-power concept indicates two core ideas in the EU’s Russian policy: first, that Russia’s destiny is not to become a member of the EU, but to remain separate; second, an implicit acceptance of Russia’s special role and status within the CIS. The EU has so far rejected the idea that other CIS republics such as Ukraine or Belarus could eventually become EU members and has thus implicitly envisaged them as associating themselves with the Russian Federation. Of the former Soviet republics, only the Baltic states have been offered the prospect of EU membership. These concepts have been expressed through the distinction between treaties of association (known as Europe Agreements), which the EU has offered to former Soviet-bloc countries that may at some future date accede to the EU (the Baltic states), and Partnership and Cooperation Agreements (PCAs) for Russia and other CIS republics. The distinction between association agreements for Central and Eastern European countries and PCAs for the newly independent states (including

Russia) has more to do with political realities and choices than with economics. The Council of Ministers agreed on a negotiating mandate for the PCAs in July 1992, and the Commission was authorized to open negotiations in October of that year. During the negotiations for a PCA in April 1993 the Russian government persuaded the EU to modify its initial negotiating position by including the prospect of moving toward a free trade regime by the end of the 1990s (Commission, 1993a, 1993b). This gives Russia an incentive to develop its political and economic relationship with the EU. Agreement on moving toward a free trade regime would depend both on Russia’s acceptance of World Trade Organization (WTO) obligations and on political considerations. In November 1993 the Russian government won a further concession: a stipulation in the PCA that 1998 would be a deadline for an EU decision on establishing a free trade regime (Commission, 1993c). The PCA with Russia was signed at the Corfu summit in June 1994 (Commission, 1994). It is a mixed agreement involving not only EU institutions but also the EU member states. Accordingly, it requires ratification by all the individual governments of the EU as well as by the European Parliament (EP) and the Russian parliament. Because of the difficult and protracted ratification process, the trade and trade-related aspects of the PCA, which cover purely EC competencies, were incorporated into a separate interim agreement. This was signed by the two parties in July 1995 and was ratified in December 1995. It came into force in February 1996. The PCA and the interim agreement allow for unilateral suspension in the event that either party considers that the other has broken a major element in the agreement, thereby allowing the EP explicitly to raise the possibility of suspending agreements with Russia in the event of human rights violations or the failure to respect democratic procedures. The EU could also suspend the agreements in response to what it considered a break with the principles of a market economy. Regular political dialogue between the EU and the Russian Federation began in 1993. On November 11, 1993, a month before Russia’s elections, a summit meeting between the EU and the Russian government took place in Moscow. This was followed by the signing of a joint declaration between the two parties in Brussels on December 9, 1993, envisaging twice-yearly meetings be-

tween Russia’s president and the presidents of the Commission and the European Council as well as other regular political discussions at lower levels (Commission, 1993d). The EU and its main member states have sought to demonstrate their particularly favorable attitude toward Russia’s joining important Western international institutions. Despite Russia’s brutal conduct of the war in Chechnya, the EU supported Russia’s entry into the Council of Europe, which took place in February 1996. Germany and France have supported Russia’s membership of the G7 (now referred to as the G7 plus 1 or the G8), and the EU has on occasion declared its support for Russia’s early entry into the WTO. The EU’s general stance on the Chechnya conflict was to urge an end to fighting and a negotiated solution while recognizing Russia’s legal sovereignty over the territory. The EU criticized violations of human rights during the conflict and also sought to persuade Russia to allow the Organization for Security and Cooperation in Europe (OSCE) a role in monitoring and resolving the conflict. Concern over Russian policy in Chechnya, expressed particularly strongly in EP resolutions of January and June 1995, delayed the process of moving from the signing of the PCA with Russia to the signing and implementation of the interim agreement. In March 1995, during a visit to Moscow, the Council presidency made progress on the interim agreement dependent on the Russian government’s taking four steps on the conflict: allowing a permanent OSCE presence, allowing access for humanitarian aid, implementing a cease-fire, and making efforts to find a political solution. Economic Relations Economic relations between the EU and Russia during the 1990s have been heavily marked by Russia’s continuing economic crisis as well as by the highly unstable institutional context within the country. Nevertheless, Russia dominates trade between the CIS and the EU, contributing the bulk of CIS exports to the EU and absorbing the bulk of CIS imports from the EU. The trade balance between the EU and Russia has remained strongly in Russia’s favor, partly because of the importance of Russian energy exports to the EU and partly because of the still low levels of effective demand in Russia’s internal market. Russia’s most important trade partner within the EU is Germany, with Italy

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some way behind and other EU member states much further down the field. Within the energy sector, Russian gas exports are likely to continue to play an especially important role. Russia possesses 35 percent of total world gas reserves, tightly controlled by a single company, Gazprom. The EU is by far the most important export market for Russian gas, and the share of gas in the West European energy market may double by 2010. Germany imports the largest amounts of Russian gas: 25.8 billion cubic meters (bcm) in 1993, as against 13.8 bcm for Italy and 11.6 bcm for France. In 1994 31 percent of total German gas consumption came from Russia, 72 percent of Austrian consumption, and 27 percent of Italian consumption. On the initiative of the Dutch government in 1991, the EU sought to establish a new international regime for regulating the energy markets across the continent, through a so-called European Energy Charter, which was eventually signed on December 17, 1994. The EU’s hope was that the charter might provide a strong framework for enabling West European capital to acquire a large role in developing and exploiting Russia’s energy assets. The initial high hopes for the charter have subsequently been scaled down, partly as a result of disagreements within the West, but a legal basis has been established for regulating some aspects of economic relations in the energy field. On the EU side, there has been frustration over some aspects of Russian economic policy. The Russian government’s attitude toward the provision of Western financial services within Russia has been criticized as too restrictive. More generally, the Russian authorities have been seen as failing to provide a sufficiently secure and open framework for foreign direct investment. There has also been criticism of protectionist impulses on the Russian government’s part in trade relations. For its part, the Russian government has generally regarded the EU’s approach to strengthening trade relations with Russia as too restrictive. It has been particularly critical of the EU’s reluctance to recognize Russia as a full-fledged market economy and of the (related) tough antidumping instruments that the EU possesses against Russian exports. It has also viewed EU barriers to imports of such products as Russian textiles and steel as too restrictive. For the EU the interim agreement, which came into force on February 1, 1996, should give

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improved access to the Russian market for specific products such as cars and beverages, curtail a whole range of quantitative import restrictions against EU products, and reinforce the protection of intellectual property rights for EU economic operators. For Russia, the interim agreement should reduce some quantitative restrictions against exports to the EU (though not necessarily in textiles and steel) and restrict the use of antidumping instruments. Finally, the interim agreement establishes most-favored-nation status for trade relations while allowing Russia to offer some preferential trade terms to other CIS republics. See also CENTRAL AND EASTERN EUROPEAN STATES; COMMON FOREIGN AND SECURITY POLICY. Commission, 1993a. Bulletin EC 3-1993. Luxembourg: Office for Official Publications of the European Communities, p. 61. ———. 1993b. Bulletin EC 4-1993. Luxembourg: Office for Official Publications of the European Communities, p. 59.

Bibliography

———. 1993c. Bulletin EC 11-1993. Luxembourg: Office for Official Publications of the European Communities, p. 71. ———. 1993d. Bulletin EC 12-1993. Luxembourg: Office for Official Publications of the European Communities, p.103. ———. 1994. Bulletin EC 6-1994. Luxembourg: Office for Official Publications of the European Communities. ———. 1995. The European Union and Russia: The Future Relationship. EC(COM) 223 95. Luxembourg: Office for Official Publications of the European Communities. Official Journal. 1990. No. L 68,15/3/1990. Luxembourg: Office for Official Publications of the European Communities.

—Peter Gowan

S Sakharov Prize for Freedom of Thought

The European Parliament established the Sakharov Prize in 1985 to be awarded annually for work in the field of East-West relations, notably on human rights. Launched by the Luxembourg Declaration of November 1984, the San José dialogue involves annual ministerial meetings between the EU and the San José Group (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama) plus Colombia, Mexico, and Venezuela as “cooperating countries” and Belize as an observer. The meetings cover a wide range of economic and political issues, focusing especially on efforts to promote democracy and development in Central America. See also LATIN AMERICA.

San José Dialogue

See SAN JOSÉ DIALOGUE.

San José Group

Jacques Santer, a former prime minister of Luxembourg, succeeded Jacques Delors as president of the Commission in January 1995. Like Delors, Santer is a Eurofederalist, but he is much less assertive and ambitious than Delors. Santer’s prepresidency got off to a bad start: a fractious debate and narrow vote of approval in the European Parliament in July 1994 did little to enhance his authority (parliamentarians were angry at the

Santer, Jacques (1937– )

manner of Santer’s selection rather than dissatisfied with Santer himself). During the debate, Santer expressed a wish “to become a strong President at the head of a strong, coherent, determined Commission.” Santer was quick to point out that coming from the EU’s smallest member state would not prevent him from becoming a strong president. Yet being a Luxembourger put definite limits on Santer’s leadership. Moreover, in the wake of the Treaty on European Union ratification crisis, the European Council was unlikely to nominate a Commission president in the mold of Delors. Nevertheless Santer was an experienced prime minister with the potential to become a reasonably forceful president. During his visits to member state capitals before assigning portfolios, Santer made the statements expected of a president-designate about imperviousness to national lobbying. In the event, he allocated portfolios according to most member states’ wishes, with the exception of reducing the scope of Sir Leon Brittan’s responsibilities for external economic relations. Thus, with one relatively easy act, he curbed a potential rival in the Commission and sent a signal to Britain, the least Commission-friendly government. As Commission president, Santer faced a number of challenges: absorbing the EU’s enlargement (Austria, Finland, and Sweden became members in January 1995, the same month that Santer became president), developing a preaccession strategy for the Central and Eastern European states, devising a new EU-Mediterranean partnership, preparing for Economic and Monetary Union (EMU), and preparing for and participating in the 1996–1997 intergovernmental conference (IGC). In general, Santer’s goal as president was to replace the Commission’s current image of ambition and intrusiveness, personified by Delors, with that of discretion and pragmatism. The key to Santer’s success, both symbolically and substantively, was to make subsidiarity meaningful, consult and inform as widely as possible, encourage deregulation and competitiveness, complete the single market, promote EMU, fight fraud in the EU, and put the Commission’s house in order. Santer also attempted to take an important new initiative. In a speech to the European Parliament on January 31, 1996, he proposed a Confidence Pact on Employment among employers, trade unions, and governments to boost jobs in the EU not only by completing the single market but

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also by curbing state aid, strengthening education and training, and promoting small businesses. During the next three months, Santer toured EU capitals, talking to employers and trade unions to win their support, and held a roundtable conference in Brussels in April with more than seventyfive representatives of employers’ and trade union organizations. Santer also tried to persuade member states to allow surplus EU funds to be diverted into the proposed Trans-European Networks (TENs), multi-billion-dollar road, rail, and telecommunication projects that have become a symbol of EU public investment as well as a means of strengthening communications links inside the single market. But national governments, led by Britain and Germany, refused to back Santer’s expensive TENs initiative at the June 1996 Florence summit. Santer’s inability to secure TENs funding and engender enthusiasm for the confidence pact signaled a political setback for the Commission president. Yet, given the difficult circumstances of the late 1990s, with Europe emerging from a deep recession, public opinion generally skeptical about integration, and the Commission’s image and influence greatly diminished, Santer has been a remarkably effective Commission president. By sticking to first principles while eschewing the political limelight, Santer has gradually rebuilt the Commission’s credibility, confidence, and authority during one of the most difficult periods in the Commission’s history. See also COMMISSION. See SPECIFIC ACTIONS FICIENCY.

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VIGOROUS ENERGY EF-

One of the major principles of the EU’s single market is the abolition of all internal border controls in order to allow for the completely free movement of people between and among member states. The socalled Schengen agreement was negotiated in June 1985 in Schengen, a small town in Luxembourg near the German and French borders, by Belgium, the Federal Republic of Germany, France, Luxembourg, and the Netherlands. The accord was to lead toward the abolition of the then-existing border controls among the five signatory states. Among

Schengen Agreement

the goals of the agreement were to ease personal travel across the frontiers, reduce the checks on commercial travel to a minimum, establish some common rules for visa and asylum policies, and reinforce cooperation on issues such as drugs, arms, terrorism, fiscal fraud, illegal immigrants, and the right of hot pursuit by police across national frontiers. The agreement was scheduled to be signed on December 15, 1989, and enter into force on January 1, 1990—three years before the principle of open borders was to have been applied across the entire EC at the end of 1992. However, on December 14, 1989, Germany called off the signing ceremonies, saying it wanted more time to study how the agreement would affect the rights of East Germans wanting to travel in the other four Schengen countries (this was less than a year before German reunification). It appeared that the German government stated in public only what the other four signatories had privately thought; no country was quite ready to do away with border controls. The concerns expressed in late 1989 called into question the entire viability of the 1992 open border objective. The Netherlands, for example, stated that it could not accept Luxembourg’s insistence on excluding matters of fiscal fraud from the police cooperation scheme (the Dutch argued that Luxembourg was attempting to protect its offshore banking activities). Luxembourg’s position was that it would agree to compromise its banking secrecy and give details to national authorities in other countries only in those specific cases in which suspected tax evaders had been formally indicted and were facing a trial. Luxembourg simply refused to accept any scheme to exchange personal financial data as a matter of course. Belgium expressed dissatisfaction with the envisaged police computer network, fearing that it would violate individual rights of privacy. The French were not satisfied with the clauses concerning the freedom of movement of migrant workers: as East Germans migrated to West Germany, they could have displaced the Turkish immigrants who, in the absence of border controls, could freely have entered France. The Benelux countries were wary lest open borders between the two Germanys, coupled with the Schengen agreement, would mean that other nationalities in East Germany (the Poles especially) would then be able to move freely to the West. Not surprisingly, therefore, the Schengen agreement did not enter into force on January 1,

1990, but the five states agreed to reopen negotiations and signed a supplementary agreement (Schengen II) on June 15, 1990. Schengen II spelled out the conditions and guarantees for implementing the free movement arrangements. Comprising some 142 articles, the agreement entailed the amendment of certain national legislation and was subject to ratification by each of the national parliaments. The main content of Schengen II dealt with the very complex issue of a common asylum policy for the five countries. Schengen II laid down rules specifying which member states are responsible for dealing with which asylum applications. These rules are based on the principle of “first handling”: the country that first handles a refugee’s application for asylum remains responsible for that person. The responsible state agrees to take back any refugee who stays in any other state that is party to the agreement. Every asylum decision by one member state is also binding for all the other countries. Supranational supervision of the agreement’s implementation was not provided for in Schengen II, and there was thus no institution that could settle disputes between the national authorities in this area. Accordingly, it was assumed that under Schengen II a country would reject an asylum application as quickly as possible rather than risk a lengthy dispute with another country about responsibilities for individual refugees. Since the signing of Schengen II by the original five countries, Italy (November 1990), Spain and Portugal (November 1991), Greece (November 1992), and Austria (April 1995) have also acceded. The agreement was originally scheduled to enter into force on January 1, 1993, contingent upon ratification by the original five countries; of these, only France and Luxembourg had ratified by January 1, 1993 (Portugal and Spain had also ratified, but Belgium, Germany, the Netherlands, and Italy had not). Schengen II’s failure to enter into force as planned highlighted the real problems in arriving at a harmonized European asylum policy. It was not until April 1, 1995, that a threemonth “trial” application of Schengen I and II began; full implementation started three months later. Internal border controls are now entirely lifted between six of the seven Schengen signatory countries, opening an era of genuine free travel and movement for millions of persons when crossing the internal borders. The benefits to air

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travelers, who can move within “Schengenland” without customs or passport checks, are readily apparent. The six participating countries are Belgium, the Netherlands, Luxembourg, Germany, Portugal, and Spain. Invoking internal security concerns, France decided to avail itself of a safeguard clause in the agreement that allowed the temporary continuation of passport controls. Nevertheless, France’s neighbors are still entitled under the agreement to use police hot pursuit onto French territory. Other signatory states (Italy, Greece, and Austria) still have to complete specific physical arrangements necessary for the strengthening of security controls at external borders in order to make possible Schengen’s applicability. Denmark, Finland, and Sweden (three EU member states), along with Iceland and Norway (non-EU members), were granted observer status in April 1996. All five countries are members of a long-standing Nordic passport-free zone that, according to a protocol on Denmark in the 1997 Amsterdam Treaty, is compatible within the framework of a wider European cooperation on the free movement of persons. Although Schengenland consists of countries that also belong to the EU, the Schengen agreement was not originally an EU agreement. Recognizing this, the Commission attempted to fold the principles of the Schengen agreement into the EU proper. Thus, the Commission brought forth three proposals to achieve its long sought after goal of complete free movement. The first proposal spelled out the scope of the ban on controls and formalities at internal frontiers. It confirmed that all persons, whatever their nationality, would be covered by the abolition of controls at the internal borders. This proposal also provided for the abolition of passport controls at airports and seaports inside the single market (an obvious reference to the UK). The second Commission proposal aimed to coordinate member state legislation in order to give third country nationals lawfully on the territory of a member state the right to travel to any other member state. The social aspect of this measure was considerable: several million foreign residents, including members of EU citizens’ families, would be able to visit other member states without having to undergo any border crossing controls. This would obviously encourage tourism, increase cross-frontier purchases of

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goods and services, and improve popular awareness of the EU’s existence. Finally, the third proposal sought to remove from existing national legislation any requirement that identity documents be presented when crossing an internal frontier. These proposals, subject to difficult and lengthy decisionmaking procedures, have in effect been overtaken by the Amsterdam Treaty, which incorporates the Schengen agreement into the TEU (while granting a British and Irish opt out) and commits the continental EU member states to open their internal borders by 2004. See also IMMIGRATION POLICY; JUSTICE AND HOME AFFAIRS. —Leon Hurwitz

Schengen Information System (SIS)

The Schengen Information System (SIS) is a database maintained by the countries that are party to the Schengen agreement for the free movement of people. The database—located in Strasbourg— contains information on aliens, individuals wanted for extradition, people considered a threat to public order or national security, missing persons, and objects wanted for evidence in criminal proceedings. See also SCHENGEN AGREEMENT. Helmut Schmidt, chancellor of Germany between 1974 and 1982, was surprisingly ambivalent about the EC. On the one hand, he strongly supported the Community as a means of promoting Western Europe’s economic prosperity and international influence (especially vis-à-vis the United States); on the other hand, he had little time for the Commission and implicitly reinforced intergovernmentalism. During the late 1970s, Schmidt and French president Valéry Giscard d’Estaing ran the Community like a personal fiefdom, largely through the European Council, Giscard’s brainchild. The Commission was weak and demoralized, and the other heads of government lacked their French and German counterparts’ knowledge of economics and grasp of international affairs. The FrancoGerman alliance, personified by the friendship between Giscard and Schmidt, was the sole motor of Community momentum. Going well beyond the

Schmidt, Helmut (1918– )

framework of the 1963 Elysée treaty, Giscard and Schmidt, both former finance ministers, got together often for dinner, spoke at least weekly on the telephone, and caucused regularly on the fringes of multilateral meetings. The European Council proved especially useful in bringing Schmidt’s initiative for a European Monetary System (EMS) to fruition. At the Bremen summit in July 1978, Schmidt’s forceful chairmanship contributed to a general acceptance of the monetary proposal, although Britain’s unwillingness to participate in the future EMS became obvious. The EMS is also an example of the strength of the Franco-German alliance and of the Giscard-Schmidt friendship. Without Giscard’s backing, Schmidt’s initial idea for an EMS would not have succeeded; with French backing, it was assured success. Schmidt was alarmed about perceived U.S. weakness on diplomatic and security issues as well as in financial affairs. Personally and politically, Schmidt despised U.S. president Jimmy Carter, whom he blamed for many of Europe’s problems in the late 1970s. This led Schmidt to try to bolster the EC as a powerful pillar within NATO. Even after the change of administration in Washington, when Ronald Reagan came to office, Schmidt continued to advocate a strong European counterbalance to the United States in the alliance. Hans-Dietrich Genscher, Schmidt’s foreign minister, attempted to introduce a security and defense dimension into the EC in the early 1980s, but to no avail. Schmidt’s considerable influence on international politics and economics came to an abrupt end in 1982, when shifts in his governing coalition suddenly robbed him of enough parliamentary support to stay in power. Thereafter Schmidt joined Willy Brandt as one of Germany’s leading elder statesmen, writing and lecturing mostly about international affairs. See also GERMANY. French political leader, distinguished jurist, and foreign minister, Robert Schuman is regarded as the EU’s patron saint. Born in Luxembourg of French parents on June 29, 1886, when very young he returned with his family to his father’s home in the German-speaking part of the province of Lorraine, which Germany had annexed in 1871.

Schuman, Robert (1886–1963)

Schuman received a German education in Metz; attended the universities of Bonn, Berlin, and Munich, where he was known as a brilliant student; and earned a doctorate in law at Strasbourg. In 1910 he began practicing law in Metz and was accredited to the Court of Appeals. Schuman served in the German army during World War I. Schuman began his distinguished political career after the war when Lorraine was restored to France under the Treaty of Versailles. A devout Roman Catholic and passionate advocate of democracy, he joined the Catholic Popular Democratic Party. In 1919 Schuman was elected to the French parliament, where he remained for forty years. Because of his French upbringing and German education, he had special knowledge of both countries’ languages, cultures, and history. As a politician and lawyer, he specialized in German problems, especially those raised by the return of Alsace-Lorraine to France. From 1928 to 1936 he was president of the Alsace-Lorraine Commission of the Chamber of Deputies. He was also a member of the parliamentary finance commission for seventeen years and in 1940 became its president. In 1939 he was assigned the task of helping relocate the evacuees from Alsace and Lorraine who feared a German advance. He served as undersecretary of state for refugees in the Paul Reynaud government formed in March 1940 but refused to serve under Marshal Pétain, who established the collaborationist Vichy regime in July 1940. In August 1940 Schuman returned to Metz, where he publicly condemned the expulsions of the French population of Lorraine. His outspoken criticism made him one of the first political leaders to be arrested and imprisoned by the Gestapo. In 1942 he escaped with the help of the Resistance movement and for the duration of the war led a clandestine existence by hiding in orphanages, convents, and churches. During the war years Schuman took part in the propaganda activities of the underground and played an important role in the creation of the Popular Republican Movement that after 1945 replaced his former party as the major organ of French Christian democracy. A respected, determined politician, Schuman played a key role in postwar French governments. Elected to the Constituent Assembly in October 1945, he was again appointed chairman of the finance commission. As finance minister under the governments of Georges Bidault and Paul Ramadier in 1946 and 1947, Schuman advocated an

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austerity program and supported the Monnet Plan for economic modernization, despite his initial fears that it would be too inflationary to succeed. As part of its anti-inflation program, the Ramadier government maintained a wage freeze. By November of 1947, however, a widespread series of strikes inspired by the communist-dominated Confédération Générale du Travail resulted in Ramadier’s resignation. After Leon Blum’s cabinet failed to win the necessary assembly vote, President Vincent Auriol requested Schuman to form a government. Having won assembly approval in late 1947, the new Schuman government—the seventh government since the liberation of France in 1945—stood firm against the communist challenge, enforced stringent economic measures, and enabled the fledgling Fourth Republic to survive its first great crisis. When Schuman was forced to resign on June 20, 1948, after only seven months in office, his successor, André Marie of the Radical Socialist Party, named him minister of foreign affairs (Rioux, 1987, pp. 126–131, 158–160). Schuman made his greatest contributions to Franco-German reconciliation and European unity when he provided stability and continuity for French policy as French foreign minister in ten successive governments from July 1948 to December 1952. This deeply religious bachelor had been one of the leading Frenchmen in the movement for European political integration. Indeed, one of his first acts as foreign minister was to invite the representatives of France, Britain, and the Benelux countries to a conference in the fall of 1948 on the creation of a European assembly. During the Soviet blockade of Berlin, Schuman demonstrated his deeply held belief in the importance of FrancoGerman reconciliation when he appealed for the gradual unification of Europe. In October 1948 he became the first high-ranking Paris official to visit the French occupation zone of Germany since the end of the war. When, in November 1948, he strongly protested an Anglo-American decision to leave the ownership of the economically and strategically vital Ruhr mines to a newly established German government, the United States and Britain invited France to help them find a solution. In exchange for abandoning controls on German steel production, France was conceded a place on the International Ruhr Authority under terms of the London agreements of 1948. Schuman’s most important contribution to European unity came on May 9, 1950, when he pro-

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posed that Germany and France put their coal and steel industries under joint management. Schuman, who understood the need for moral rehabilitation to help Germany become truly democratic, changed the course of European history by offering a practical, concrete way for two bitter enemies to begin the process of reconciliation (Rioux 1987, pp. 142–143). The Schuman Declaration arose out of the critical nature of Franco-German relations in 1949 and early 1950. Tension between the Western powers and the Soviet Union had gradually increased with the breakdown of negotiations on the German question in April 1947, the communist coup in Czechoslovakia in February 1948, and the Berlin Blockade. With the explosion of the first Soviet atomic bomb in September 1949 and repeated threats from the Kremlin, the status of Germany became a major stake in East-West rivalry. From the time of the Marshall Plan onward, the United States began to view Germany’s economic recovery and rearmament as essential for a world power balance. Accordingly, Secretary of State Dean Acheson pressured Schuman in September 1949 to develop a policy that would reintegrate Germany into the Western concert (Duchêne, 1994, pp. 182–190). French officials were acutely aware of other problems posed by Germany. By 1950, the need for a Saar settlement was urgent, as the new German chancellor, Konrad Adenauer, resisted French economic annexation there. Moreover, the system of restraints imposed by France on German steel production was under constant pressure from Bonn’s demands to increase output. Schuman made his first official trip to Bonn to rally French domestic support behind his policy of détente. When the French foreign minister demanded that Germany cede France a fifty-year lease over the disputed Saar territory in return only for future concessions, Adenauer abruptly ended the discussions. It was Jean Monnet who, seeing the need for a new French policy toward a revitalized Germany, developed the plan presented to Schuman on April 29. Secretly adopting it, Schuman acted quickly to secure the consent of Premier Georges Bidault, sidestepped officials of the foreign ministry and of the industries involved, avoided consulting parliament, and ignored the British. After winning cabinet approval on the morning of May 9 and receiving the enthusiastic support of Acheson and Adenauer, Schuman announced his bold proposal to the public in a crowded press conference at the foreign ministry that afternoon, the day

before the tripartite foreign ministers conference in London (Dinan, 1994, pp. 21–23; Duchêne, 1994, pp. 190–202; Rioux, 1987, p. 142). Schuman seized Monnet’s daring idea as an opportunity to advance his personal goal of promoting reconciliation between France and Germany and to provide a framework for the integration of Germany into the West. Although many French politicians were shocked by the radical policy reversal, official French opinion had swung in favor of an economic accord with Germany. Willing (in Schuman’s words) to sacrifice national sovereignty for the common good, France invited its neighbors to join in this venture. Schuman proposed “to place Franco-German production of coal and steel under common ‘higher authority,’ within a framework of an organization open to the participation of the other countries of Europe.” He proclaimed that the ensuing economic solidarity would make any war between France and Germany “not merely unthinkable, but materially impossible.” Schuman saw the “common bases for economic development as a first step in the federation of Europe,” from which would come the realization that the “fusion of interests,” indispensable to the establishment of a common economic system, would “be the leaven from which may grow a wider and deeper community between countries” (Fontaine, 1990, pp. 43–46). The Schuman Declaration became a force for change. Schuman wisely appointed Monnet to lead the negotiations to translate the proposal into a detailed plan governed by a treaty. Schuman took responsibility for the difficult maneuvers over the Saar, carried the policy inside the government, and stood firm against the opposition of the steelmakers. Negotiations began on June 20, 1950, with France, Italy, the Benelux countries, and Germany all accepting supranationality as the basis for the talks. The German delegation, an equal partner in the negotiations, was headed by Walter Hallstein, a distinguished law professor and a future president of the European Commission, tapped by Monnet. The British declined to participate because they refused to commit themselves to a supranational High Authority and had no national interest in reordering their policies around Germany. The negotiations ended in December 1950 with a treaty instituting the European Coal and Steel Community (ECSC). The treaty mandated a single market in coal and steel, free of customs duties and other trade restrictions

and administered by a High Authority, a supranational body with executive power. It also created a Council of Ministers, a Common Assembly, and a Court of Justice. German refusal to decartelize the Ruhr, a condition set by the French and Americans, delayed the signing of the treaty. Once the Germans gave in to U.S. pressure, however, the treaty was signed in Paris on April 18, 1951, and finally ratified by all six nations on December 13, 1951. The ECSC came into being in August 1952 in Luxembourg, with Monnet installed as the High Authority’s first president (Duchêne, 1994, pp. 207–210; Gillingham, 1991, pp. 137–150). Schuman’s distinguished term as foreign minister ended in December 1952. He supported the Pleven Plan, the proposal for a European Defense Community signed by the ECSC’s six member states in May of that year, and regarded its rejection by the French parliament in August 1954 as a major setback for European integration. Schuman returned to government as justice minister in 1955 and was elected the first president of the joint assembly of the ECSC, the European Economic Community, and the European Atomic Energy Community on March 19, 1958. Schuman served as a member of the European assembly (forerunner of the European Parliament) until his resignation, for health reasons, in 1963. His book, Pour l’Europe, was published a few days after his death on September 4, 1963, at the age of seventyseven. Schuman’s astute and courageous leadership served as a force for stability, reconciliation, and peaceful change in France and in Europe. He gained French approval of Monnet’s bold initiative, which provided a diplomatic breakthrough in Franco-German relations and enabled Germany to reenter Europe. By facilitating the transformation of the Schuman plan into the ECSC, he helped lay the cornerstone of the EU (Gillingham, 1991, pp. 155–158; Duchêne, 1994, pp. 207–225; Dinan, 1994, pp. 29–30). See also EUROPEAN COAL AND STEEL COMMUNITY; MONNET, JEAN. Dinan, Desmond. 1994. Ever Closer Union? Boulder: Lynne Rienner. Duchêne, François. 1994. Jean Monnet: The First Statesman of Interdependence. New York: Norton. Fontaine, Pascal. 1990. Europe: A Fresh Start; The Schuman Declaration 1950–1990. Luxembourg: Of-

Bibliography

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fice for Official Publications of the European Communities. Gillingham, John. 1991. Coal, Steel, and the Rebirth of Europe, 1945–1955. Cambridge: Cambridge University Press. Poidevin, Raymond. 1986. Robert Schuman: homme d’État, 1886–1963. Paris: Imprimerie Nationale. Rioux, Jean-Pierre. 1987. The Fourth Republic, 1944–1958. Cambridge: Cambridge University Press.

—Sherrill Brown Wells

May 9, the date in 1950 when French foreign minister Robert Schuman proposed the pooling of French and German coal and steel resources, is celebrated annually as Schuman Day or Europe Day. See also SCHUMAN, ROBERT.

Schuman Day

See SCHUMAN, ROBERT.

Schuman Declaration

The European Parliament (EP) has the formal right of scrutiny in the EU. This covers both the budget and the policymaking process. Thus the EP can ask questions (orally and in writing) of the Commission and the Council, grill commissioners and national ministers in individual parliamentary committees, draw up annual reports in particular policy areas, pass urgent resolutions on current political topics or human rights issues, hold public hearings on controversial issues, and set up temporary committees of inquiry. The EP has the power to dismiss the Commission as a whole (but has never done so) and can take a case before the Court of Justice. See also EUROPEAN PARLIAMENT.

Scrutiny

See SINGLE EUROPEAN ACT.

SEA

See SOUND TIVE.

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Single Currenty

See ECONOMIC AND MONETARY UNION: TOWARD A SINGLE CURRENCY.

Single Currency

The Single European Act (SEA) of 1986 was a milestone in the transformation of the EC, although to contemporaries its magnitude was uncertain. In retrospect, the SEA is credited with launching the single market program, greatly extending the EC’s competence, and laying the groundwork for Economic and Monetary Union (EMU). Yet at the time, the SEA seemed a disappointing result of the historic intergovernmental conference (IGC) in 1985 to negotiate treaty reform. Nor was there consensus that treaty reform was necessary at that stage of the EC’s development. Whereas all member states agreed on the importance of the single market program, a minority (Britain, Denmark, and Greece) argued that a commitment on the national governments’ part to the use of qualified majority voting (QMV) in the Council with respect to single market legislation would suffice to enact the Commission’s single market blueprint. However, the majority of member states wanted to send a signal both to the minority and to the outside world that the EC was definitely on the move again. Especially after the plethora of initiatives in the early 1980s to revive the EC’s fortunes—the GenscherColombo proposals, the Stuttgart Declaration, the European Parliament’s Draft Treaty Establishing the European Union, and the Ad-hoc Committee on Institutional Affairs (the Dooge Committee)— and in view of the imminence of another Mediterranean enlargement (Spain and Portugal joined in January 1986), most member states agreed that an IGC was warranted. The IGC began in September 1985 and ended at the Luxembourg summit in December. It produced a single treaty (the Single European Act) to extend the Community’s power to new fields, strengthen its institutional framework, and formalize European Political Cooperation (EPC) by amending the Treaty of Rome. The SEA committed the EC to six objectives: completion of the single market program by December 31, 1992, increased economic and social cohesion, a common scientific and technological policy, further development of the European Monetary System (EMS), the emergence of a European social dimension, and coordinated action on the environment. These

Single European Act (SEA)

clear-cut tasks were linked in the SEA’s preamble to the ultimate goal of European union. The SEA also extended majority voting to cover most of the proposed single market legislation, in order to ensure that directives would not be unduly delayed in the Council of Ministers. Another notable institutional innovation was the introduction of a “cooperation procedure” to extend the European Parliament’s legislative authority. Finally, Title III of the SEA provided a constitutional basis for EPC, although the Community’s foreign policy capacity was not greatly enhanced. Member states signed the SEA in early 1986, with a view to ratifying it before the end of the year so that it could come into effect in January 1987. The Danish parliament voted down the SEA on January 21, 1986, but a majority of Danes endorsed the SEA in a referendum on February 27. The Irish government delayed ratification until December 1986, after which a challenge to the SEA’s constitutionality by a private citizen necessitated a referendum. The successful outcome of the Irish referendum in May 26, 1987, allowed the SEA to be implemented throughout the Community six months later than planned, on July 1, 1987. The SEA’s relatively weak institutional reforms disappointed many supporters of Eurofederalism and supranationalism. Nevertheless the SEA gave a huge boost to the Commission’s morale and provided the necessary institutional momentum to implement the single market program, which in turn reinvigorated the movement for European integration. British prime minister Margaret Thatcher’s reaction to the SEA best indicates its actual impact. At first Thatcher was scornful of the SEA, proclaiming that it would make little difference to the Community. Subsequently, as the Community grew stronger and the SEA triggered renewed interest in EMU, Thatcher and other Euroskeptics denounced it as the root of all evil. See also ECONOMIC AND MONETARY UNION: POLITICAL ISSUES; QUALIFIED MAJORITY VOTING; SINGLE MARKET PROGRAM. The single market program was an undertaking by the EC to eliminate the barriers that existed to the free movement of goods, services, capital, and people among the member states. Launched in 1985, the program was to have been concluded by

Single Market Program

the end of 1992. For that reason the effort to complete the single market was popularly known as the “EC 1992 program.” Origin Following the successful forging of a customs union in the early years of its existence, the EC encountered increasing difficulties during the 1970s and into the 1980s in developing a single market free of internal barriers. An array of barriers between the member states impeded business operations, and these were increasingly recognized as contributing to the serious economic problems facing the EC: indifferent growth and high unemployment as well as increasingly strong competition from outside Europe. As a result, by the early 1980s pressures were mounting within the EC institutions and the private sector to address in a comprehensive and systematic fashion the problems created by the “incomplete” internal market. Thus, the circumstances were right when Jacques Delors assumed the presidency of the Commission in 1985 with the avowed goal of rekindling the flagging spirits of the Community and relaunching it in the direction of integration. He selected the single market program as the major vehicle for that purpose. Delors’s major collaborator in drawing up the single market program and in moving it forward was Lord Cockfield, a former British minister who joined the Commission at the same time and was given responsibility for the single market. The Delors-Cockfield partnership was critical to the ultimate success of the program—Delors provided the intellectual and political leadership; Cockfield produced the details and pushed the program forward with fierce determination. However, before the single market program could be launched, a major institutional change was necessary. One of the main reasons for the EC’s inability to remove barriers during the 1970s and 1980s had been the pervasiveness of unanimous voting in the Council of Ministers. Thus, the entry into force of the Single European Act in 1987, which introduced qualified majority voting in the Council on single market issues, was a crucial factor in making the EC 1992 program possible. The 1985 White Paper The single market strategy was contained in a white paper issued by the Commission and endorsed by the Council in June 1985. The white pa-

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per explained the background for the undertaking, enumerated the obstacles to the four freedoms (free movement of goods, services, capital, and people within the Community), and identified the types of action necessary to overcome these obstacles. The legislative program to accomplish these objectives ran to about three hundred measures, some already under consideration and others to be developed (Commission, 1985) The barriers subject to removal were divided into three categories: physical, technical, and fiscal. Physical barriers related to the movement of goods and individuals across member state borders. Technical barriers included the lack of uniformity among member state technical standards, restrictive public procurement practices, restrictions on the free movement of labor and the professions, the absence of a common market for services, restrictions on capital movements, differing regimes for intellectual and industrial property, and differences among member state laws regarding the operation of companies. Fiscal barriers related to value-added and excise taxes. The two key elements of the single market program were its comprehensiveness and its specific timetable. The program consisted of a comprehensive package of issues on which action was to be taken, with no room for exceptions. For each of these issues a deadline was set for every stage of the legislative process, culminating in final action (either adoption of a regulation by the Council or legislative transposition of a directive by the member states) no later than the end of 1992. The white paper represented a major step forward in the economic integration of the EC and served as the main focus of the EC’s activities during the eight-year period from its inauguration in 1985 to the deadline of 1992. It also served as the centerpiece to the revival of the spirits of the EC, which entered a phase of Europhoria that most importantly and fortuitously for the prospects for 1992 coincided with an economic upturn. Despite the comprehensiveness of the single market program, a number of sectors important (if not critical) to the establishment of a single market were not included. Economic and monetary union and the establishment of a single currency were viewed as too far reaching to be proposed at the same time, but they soon proceeded on a separate track. Similarly, it was deemed preferable to deal separately with the vast set of issues involv-

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ing the deregulation and liberalization of telecommunications. It was recognized that member-state opposition would prevent the establishment of an EC energy regime for the foreseeable future, and environmental issues were addressed only marginally. In addition, the Commission, and particularly Jacques Delors, believed the single market program would not obtain the necessary political support unless it were accompanied by measures to protect and promote the interests of workers in the EC; hence, efforts were undertaken to adopt a “social action agenda” (i.e., a comprehensive social policy). Finally, a critical element in obtaining the agreement of the less-developed member states was a decision to double the appropriation of funds to these countries under the EC’s structural adjustment programs. This was intended to promote economic and social cohesion by accelerating the poorer member states’ development, thereby enabling them to cope better with the increased competition that was expected from the removal of internal barriers in the EC.

Achievements By the end of 1992 the EC had adopted about 95 percent of the measures envisaged under the single market program. As of 1997 only a handful of single market issues remained unresolved—those for which the member states could not achieve the necessary compromises to permit adoption of proposals by the Council. Despite their small number, the proposals that remained outstanding, such as the proposed regulation for a European company statute and the establishment of a value-added tax regime based on payment in the country of origin rather than the country of destination, represented a significant setback to the single market objective. In any event, an assessment of the results of the single market program must take account of the fact that the adoption of EC legislation is only the first step. Although regulations automatically have the force of law in the member states, directives (accounting for about 80 percent of EU legislation) must be transposed into legal form in the member states. By 1997 the member states had transposed more than 90 percent of the required measures. However, the measures for which transposition had been completed varied among the member states, so that only 60 percent of the single market directives had been transposed by all member states. Thus, in certain sectors a signifi-

cant amount of legislation still awaited full implementation, notably in public procurement and insurance. The main reasons for delays in transposition are the technical complexity of legislation and procedural problems relating to member-state decisionmaking processes (Commission, 1996c). Moreover, the assessment of the extent to which barriers have been removed and free movement enhanced must be qualitative as well as numerical (Calingaert, 1996). There have been conspicuous successes and there are areas where the EU is still moving in the right direction; but in other areas more needs to be done, and in some progress has been limited. Successes. Controls have been removed on the physical movement of goods at EU internal borders. Capital movements have been fully liberalized, thereby increasing capital flows and further integrating financial markets. Moving in the right direction. The principle of a single operating license has been established for financial services. The license is granted in the home country, which exercises the main regulatory supervision, and is valid for the entire EU. Such a regime is in operation for banks; a parallel one for insurance companies came into effect later but has already resulted in increased competition; investment services were added as of 1996. The final legislative package of measures liberalizing air transportation was implemented in 1997, eliminating the remaining restrictions on EU carriers regarding frequency and routing of flights within the EU and government price-setting restrictions. However, the benefits accruing from this legislation are partially offset by certain other limitations on the carriers’ operations, particularly by reduced availability of and government control over slot allocations at major airports. Restrictions on road transportation between member states have also been virtually eliminated. A major change as a result of the single market program was to replace efforts to legislate specific European technical standards with a system whereby “essential requirements” are set in various product categories that must be adhered to in the development of European product standards by the private sector, coordinated by the European standards bodies. In other areas, detailed requirements continue to be legislated at the EU level, and for products not covered by EU harmonization legislation, mutual recognition of member state standards by the other member states pre-

vails. Significant progress has been made, though much remains to be done. The harmonization of veterinary and plant health controls is largely completed. Mutual recognition of professional qualifications has been largely established, with the onus for nonrecognition placed on the objecting member state. However, problems of implementation remain. Considerable progress has been made in harmonizing measures protecting intellectual property: the establishment of an EU trademark, a European Trademark Office, and a number of measures in the copyright field. However, several measures remain pending, including the legal protection of industrial designs and biotechnology products. More needs to be done. The development of the necessary structures for, and practice of, mutual recognition of testing and certification of products is proceeding slowly. Comprehensive legislation has established a transparent, nondiscriminatory regime for procurement by government agencies and private bodies operating on the basis of special or exclusive rights granted by governments. The scope of this legislation is vast, as are the potential economic consequences in a sector hitherto characterized by pervasive protectionism. Although change is clearly underway, progress is bound to be slow. Although the right of member state citizens to residence anywhere in the EU has been established, some controls remain on people crossing member state borders. The major force for liberalization exists outside the formal EU framework. It is the Schengen agreement, under which thirteen member states (all except Britain and Ireland), plus Iceland and Norway, agreed to eliminate all border controls. However, three members have not been able to participate and a fourth, France, has refused to implement its provisions. The Amsterdam Treaty incorporated the Schengen agreement into the EU while retaining the British and Irish opt outs. Minimum levels of value-added tax have been established (resulting in a narrowing of the spread of rates), and an interim, more simplified and more business friendly system has been introduced. However, the member states have not agreed on a definitive tax system based on payment of the tax in the country of origin rather than the country of destination (avoiding the necessity, as at present, of distinguishing between “domestic sales” and “exports” to the EU), because of concern over the possible loss of tax revenues.

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Limited progress. Although some measures have been adopted relating to company law and taxation to facilitate cross-border operations by firms, several major legislative proposals remain blocked, mainly because of long-standing controversy over proposals to permit workers to participate in firms’ decisionmaking processes. Despite the original intention to reduce substantially the differences among excise tax rates, a more modest arrangement established minimum rates, maintaining the principle of payment in the country of purchase. Assessment The single market program was a major event in the development of the EU and a major step in the direction of European integration. On balance it was clearly a success. Substantial progress has been made in eliminating barriers, and a process of change has been unleashed—both in terms of the rules of the marketplace and, equally important, the attitudes of economic operators—so that results will build on one another. However, it is difficult to ascribe economic benefits with any precision. Although economic integration theory generally assumes that a reduction in barriers to trade and the factors of production results in a higher level of economic activity than would otherwise have been the case, economic developments in the EU since 1985 have, of course, been the result of many factors, not solely the single market program. Nonetheless, indications of positive effects are contained in the sharp increases registered during the period in direct inward investment and in merger and acquisition activity. Similarly, flows of intra-EU trade appear to have been positively affected by the reduction of barriers (Buigues and Sheehy, 1995). In 1996 the Commission issued an assessment, based on a comprehensive analysis by independent experts, that concluded that the single market program had produced significant (but not massive) benefits, including 1.1 to 1.5 percent higher income, 300,000 to 900,000 more jobs, 1 to 1.5 percent lower inflation, 2.7 percent higher investment, intensified intra-EU trade, greater economic convergence among EU regions, and an ECU 5 billion reduction in road and other transport costs (Commission, 1996a, 1996b). Beyond the White Paper Despite its formal conclusion date of December 31, 1992, and the efforts made to meet that deadline,

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SIS

the single market program was and remains a continuing and evolving process. It was recognized from the outset that not all measures necessary to the establishment of a genuine single market would be in place by that date and that circumstances affecting the single market would change over time. However, the focus of activity at the EU level has shifted away from the legislative program. Proposals for new legislation have dropped off sharply since 1990, both because the fund of necessary measures had become exhausted and because of the introduction of subsidiarity, requiring that legislative action be taken by the EU only if its objectives cannot be achieved by the member states. As a result, the Commission has undertaken a program of simplification and consolidation of existing legislation and withdrawal and revision of pending proposals. Actions at the EU level have thus concentrated increasingly on ensuring the effective functioning of the single market. A key element is enforcement, which takes three forms. (1) The Commission has oversight over member-state compliance with the treaties and legislation, including the proper transposition of single market directives. In cases of perceived noncompliance, the Commission can call for remedial action, institute formal proceedings, and as a last resort, refer cases to the European Court of Justice (ECJ). The Commission has carried out this function diligently. (2) Competition policy has been an integral component of the single market by preventing noncompetitive behavior and practices by companies and governments. Since 1985 the Commission has actively exercised its enforcement powers to prevent restrictive agreements and abuses of dominant positions, to ensure that proposed mergers and acquisitions do not abuse dominant positions, and to keep state aid, often highly sensitive politically, within the limits prescribed in the treaty. (3) The ECJ has rendered decisions and established legal precedents that have protected and extended economic integration. Although in recent years the ECJ has tended toward increased caution in its decisions affecting single market issues, all three channels of enforcement can be expected to continue to play active, important roles in preserving and building on the single market program. However, the future of the single market program depends increasingly on actions at the member-state level. In the first instance, that relates to proper transposition of EU directives, an area in

which much improvement is needed. In a more general sense, the key factor will be the extent to which member state authorities and officials will work together and, in particular, will develop sufficient confidence in each others’ systems and enforcement mechanisms to accept regulation and enforcement by other member states, since the basis for much of the single market program—formally or otherwise—is mutual recognition of actions taken elsewhere in the EU. Although the Commission has undertaken a number of programs to accelerate such cooperation, the results are likely to be felt only over a long period. Thus, the single market program should be seen as a continuing process, launched through a formal, comprehensive program of legislative measures covering a specific period (1985–1992), but in fact having no set end point in time or substance. The momentum set in motion will contribute to increasing economic integration. New initiatives are less likely than incremental action, and it will probably never be possible to determine that the single market is “complete.” In fact, although the process will undoubtedly bring an increasing degree of integration, some areas will experience more integration than others, and some will probably remain largely outside the scope of the single market effort. See also COMMON MARKET; COMPETITION POLICY; ECONOMIC AND MONETARY UNION: TOWARD A SINGLE CURRENCY; SCHENGEN AGREEMENT. Buigues, Pierre, and John Sheehy. 1995. “The Internal Market Program: The Impact on European Integration.” Document II/133/95. Brussels: Commission. Calingaert, Michael. 1996. European Integration Revisited: Progress, Prospects and U.S. Interests. Boulder: Westview. Commission. 1985. Completing the Internal Market. COM(85) 310. Luxembourg: Office for Official Publications of the European Communities. ———. 1996a. The Impact and Effectiveness of the Single Market. COM(96)520. Luxembourg: Office for Official Publications of the European Communities. ———. 1996b. The Single Market and Tomorrow’s Europe. Luxembourg: Office for Official Publications of the European Communities. ———. 1996c. “Single Market Cannot Deliver Full Benefits Without Better Implementation.” MEMO/ 96/100.

Bibliography

—Michael Calingaert

SNB

See SCHENGEN INFORMATION SYSTEM.

SIS

The Six refers to the six original member states of the EC: France, Germany, Italy, Belgium, the Netherlands, and Luxembourg.

Six

Since the breakup of Czechoslovakia in December 1992, the Czech Republic has remained in the first rank of EU candidate countries, but Slovakia has slipped behind. Despite having had a Europe Agreement in force since February 1, 1995, and having applied for membership on June 27, 1995, Slovakia’s turbulent politics and sluggish economic reforms suggest that EU accession is unlikely in the foreseeable future. This was borne out by the Commission’s opinion of July 1997 on Slovakia’s application. See also CENTRAL AND EASTERN EUROPEAN STATES; TABLE 6.

Slovakia

Slovenia was the first of the former Yugoslav republics to declare independence. After a brief military confrontation, Serbia allowed Slovenia to go its own way (Slovenia did not have a significant Serbian population), and the EU recognized Slovenia in January 1992. By virtue of its ethnic homogeneity and relatively high level of economic development, Slovenia is the most stable of the ex-Yugoslav republics. However, a longstanding territorial dispute between Italy and Slovenia delayed the development of EU-Slovenia relations, and a Europe (association) Agreement was signed only on June 10, 1996. Making up for lost time, Slovenia applied for EU membership on the same day. Given its sound economic performance and stable democracy, Slovenia stands a good chance of early EU membership, not least because of strong support from Austria and Germany and a favorable Commission opinion in July 1997. See also YUGOSLAVIA; TABLE 6.

Slovenia

Small and Medium-Sized Enterprises (SMEs)

423

Stung by criticism that the single market program was for the benefit only of big business, in the late 1980s the Commission developed a strategy to help small and medium-sized enterprises (SMEs) to avail themselves of the benefits of market integration and overcome some of the obstacles of EU regulation. Thus, the Commission introduced a multiannual program for SMEs (the third program, from 1997 to 2000, was adopted in 1996) and launched a number of initiatives such as the Business Cooperation Network (BC-Net), a confidential network promoting contact and cooperation between small businesses; the Business Cooperation Center (BCC) for nonconfidential contacts; and the European Information Centers, offices throughout the European Economic Area that provide information and assistance to SMEs. More broadly, the Commission emphasized the economic importance of SMEs in its 1993 white paper, Growth, Competitiveness, and Employment, and its 1995 Confidence Pact on Employment. See SMALL AND MEDIUM-SIZED ENTERPRISES.

SMEs

The end of the Bretton Woods system in August 1971 and the subsequent “float” of major currencies against each other endangered market integration and economic cohesion in the EC. Accordingly, in April 1972 member states launched the “snake,” a regime to keep fluctuations between their currencies within a 2.5 percent margin inside the “tunnel” established during the Smithsonian talks of December 1971 to repair the damaged international monetary system. For the next three years the EC’s currencies wiggled in and out of the snake, with the mark, buoyed by Germany’s low inflation and large trade surplus, pushing through the top and the pound, franc, and lira, weakened by their countries’ high inflation and large trade deficits, falling through the bottom. By the mid-1970s, widely diverging inflation rates and economic performances in the member states completely undermined the snake and ended the EC’s first experiment with Economic and Monetary Union, the so-called Werner Plan.

Snake

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Soames Affair

See also ECONOMIC AND MONETARY UNION: TOWARD A SINGLE CURRENCY; EUROPEAN MONETARY SYSTEM. See SPECIAL NEGOTIATING BODY.

SNB

The Soames Affair, a diplomatic incident between France and Britain, takes its name from a meeting in Paris in February 1969 between Christopher Soames, the British ambassador, and French president Charles de Gaulle. In the meeting, de Gaulle spoke of possible British membership in a broader and weaker EC, directed by Britain, France, Germany, and Italy, that would form the nucleus of an association of Western European states independent of the United States. De Gaulle’s vague proposal seemed motivated by recent foreign policy setbacks and by a belated realization of Germany’s growing economic and political power within the EC. According to the British record, de Gaulle suggested to Soames that Britain and France pursue the proposal bilaterally before consulting other countries. Furious over de Gaulle’s two previous vetoes of Britain’s EC membership application and suspecting a French diplomatic trap, the British Foreign Office released a record of the de Gaulle–Soames conversation to a number of European posts, which in turn informed their host governments. This incensed de Gaulle, who accused the British of indiscretion and breach of trust. Whether or not de Gaulle had changed his mind about British membership in the EC, the Soames Affair ensured that enlargement would not happen as long as he remained in power.

Soames Affair

As a complementary initiative to the single market program, Commission president Jacques Delors promoted the idea of a Social Charter to ensure that workers in the EC would benefit as much as employers from a fully functioning single market. In support of his position, Delors harked back to the preamble of the Treaty of Rome, which listed as one of the EC’s objectives “the economic and social progress” of the member states and the “constant improvement of the living and working

Social Charter

conditions of their peoples.” In June 1988, at the Hanover summit, the European Council emphasized the importance of the single market’s social dimension. Based on contributions from the European Parliament and the Economic and Social Committee, in October 1989 the Council of Ministers completed a draft Charter of Fundamental Social Rights for Workers, a declaration of principle that defined the European model of society. The issue became extremely controversial because some politicians, especially British prime minister Margaret Thatcher, argued that the Social Charter would nullify the single market’s gains by pushing up labor costs. Thatcher made her case at the Strasbourg summit in December 1989, where the other Community leaders adopted, in the form of a declaration, the text of the Council’s Social Charter. The European Council noted that the Commission had formulated an Action Program and invited it to submit precise proposals for legislation. The Action Program and the Social Charter covered such areas as pay, better living and working conditions, social security, freedom of association and collective bargaining, health protection and workplace safety, and, most controversial of all, information, consultation, and worker participation in managing a company. The Social Charter was not legally binding but indicated the intention of eleven of the twelve member states to incorporate legislation on the areas covered by it as the single market program progressed. At the Maastricht summit in December 1991, John Major, Britain’s new prime minister, maintained his predecessor’s opposition to the Social Charter and succeeded in removing it from the body of the Treaty on European Union (TEU). Instead, the other member states signed a legally binding protocol to the treaty, agreeing to use existing institutions and decisionmaking procedures to pursue social policy. However, under Tony Blair, Major’s successor, Britain decided to accede to the social policy provisions of the 1997 Amsterdam Treaty and to accept directives that had already been agreed upon under the social protocol of the TEU. See also SOCIAL POLICY. The social dialogue involves negotiations among the EU’s “social partners” (employers’ and workers’ representatives) to reach agreement on social

Social Dialogue

policy initiatives. A social dialogue may begin when the Commission announces that it intends to act in a specific social area and asks the social partners to negotiate as a substitute for legislation. If the negotiations are successful, the Council of Ministers can give the ensuing contract the force of law. By contrast, if the talks break down, the Council may proceed with legislation of its own, not necessarily to the social partners’ liking. The Council first used this implicit “negotiate or we will legislate” threat in 1994, to enact the long-delayed European Works Councils. The social partners got the message: soon thereafter, on the contentious parental leave issue, the first genuine European “collective agreement” was concluded. See also SOCIAL POLICY. See SOCIAL POLICY.

Social Dimension

See PARTY OF THE EUROPEAN SOCIALISTS.

Socialist Group

The European Trade Union Confederation (ETUC), the Union of Industrial and Employers’ Confederations of Europe (UNICE), and the European Center for Public Enterprise (CEEP) are known collectively as the “social partners.” They participate in the social dialogue—negotiations among themselves to reach agreement on social policy initiatives—and advise the Commission on other relevant legislative proposals. See also SOCIAL POLICY.

Social Partners

Social policy primarily deals with issues related to employment, including measures to ensure the free movement of labor and measures to protect the quality of working life. According to Giandomenico Majone, “social policy” should more correctly be called “social regulation” because it consists of programs that balance economic efficiency with concerns for the quality of life and is not intended to replace welfare programs in the member states (Majone, 1993, p. 168). Social policy has three objectives: full and better employment, improvement of living and working condi-

Social Policy

Social Policy

425

tions, and greater participation of the social partners in the economic and social decisions of the EU (Springer, 1992). Social policy is a shared competence (i.e., responsibility for it is shared between the EU’s institutions and the member states), but the principle of subsidiarity provides an uncertain guide to the appropriate activities of each actor. During the 1980s, British prime minister Margaret Thatcher forcefully argued against the EC’s usurping national prerogatives in social policy. Jacques Delors, president of the Commission, opposed her with an equally strong argument that Europeans share social values and that the EC must protect and enhance those values. Controversy about national and EC prerogatives came to a head at the Maastricht summit in December 1991, when British opposition to the proposed Treaty on European Union’s social policy provisions threatened to wreck the intergovernmental conference. At the last minute, Prime Minister John Major accepted the offer of a British opt out from the treaty’s social policy provisions or, more precisely, a social policy opt out from the treaty itself, whereby the other eleven member states agreed to a separate protocol on social policy attached to the treaty. However, under Tony Blair, Major’s successor, Britain decided to accede to the social policy provisions of the 1997 Amsterdam Treaty and to accept directives that had already been agreed upon under the social protocol of the TEU. Legal Basis and Decisionmaking The legal basis for social policy is found in numerous passages in the basic treaties. In the Treaty of Rome (1957), these include Articles 48 through 51 (dealing with the free movement of workers) and Title III on Social Policy, which consists of three key articles: Article 117 empowers the Commission to promote close cooperation among the member states in social policy; Article 118 states that health and safety, vocational training, labor law and working conditions, employment, and social security are encompassed in social policy; and Article 119 gives working women the right to equal pay for equal work. Although not specifically addressing social policy, a number of other treaty provisions (e.g., Article 54g and Article 100) have served as the basis for directives related to social policy. The treaty also established the European Social Fund (Articles 123 to 128) to

426

Social Policy

provide financing for training and relocation programs for displaced workers. The Single European Act (SEA) made few changes in social policy. It did, however, provide for the adoption of health and safety directives by a qualified majority vote in the Council of Ministers (Article 118a). Directives for social policy had previously required unanimity in the Council, which was the greatest obstacle to the development of Community social policy. The Treaty on European Union (TEU) both expanded and complicated the legal basis for social policy. The relevant provisions are included in the Protocol on Social Policy and the Agreement on Social Policy attached to the treaty. These enable the Council (without British participation between 1993 and 1998) to adopt directives that are applicable throughout the EU. Most proposed directives may be adopted by a qualified majority vote (the required number of votes being adjusted between 1993 and 1998 to reflect Britain’s opt out). Proposals dealing with sensitive national concerns, such as social security, require the unanimous consent of all members (initially with the exception of the British government). The treaty also established a procedure by which the social partners—the European Trade Union Confederation, the Union of Industrial and Employers’ Confederations of Europe, and the European Center for Public Enterprise—may adopt agreements. Under this procedure, the Commission submits the social partners’ agreement to the Council, which may, on the basis of a qualified majority vote, make the agreement binding. That procedure was used for the first time in 1995 to negotiate an agreement on parental leave. The social partners also have the right to be consulted on all proposals dealing with social policy. Social policy includes numerous subsections such as equality programs to protect the rights of working women, health and safety standards, training programs, and worker information and consultation policies. The scope and direction of social policy are generally set forth in five-year action programs or framework agreements, which are implemented primarily by directives.

Development of Social Policy The history of social policy shows little activity in the 1960s. During the 1970s, social policy became more prominent and more controversial. The first framework agreement was accepted in 1974. A full-

scale policy for working women started with the adoption of two directives dealing with equal pay and equal treatment. The Commission began to draft a policy on employee participation in the workplace but did not finish the task until the works council directive was adopted in June 1994 by the Council, acting under the provisions of the social protocol. The social activism of the 1970s gave way to a quieter era in the 1980s. Late in the 1980s, however, two important documents, The Social Dimension of 1992 and the Charter of Fundamental Social Rights for Workers (Social Charter), were adopted in response to concerns about the social consequences of the single market program. This marked a renewed commitment to social policy, although a commitment tempered by economic realities. The TEU opened new possibilities for social policy, but economic concerns continue to overshadow social objectives: in the 1990s, employment became the number one priority. The Social Charter stands as the hallmark of EU social policy (Commission, 1989). It is a declaration of principle and defines the European social model, which rests on the pillars of social Catholicism and social democracy that characterize European social values. The Social Charter sets out twelve types of social rights, including rights for persons not in the workforce—such as the elderly—and rights for the employed. The most controversial rights include those on industrial democracy and collective bargaining at the Community level. In the TEU, member states (initially with the exception of Britain) agreed to “continue along the path laid down in the 1989 Charter.” The Commission is centrally involved in social policy. Its Directorate-General for Employment, Social Affairs, and Education (DG V) drafts legislative proposals and influential studies, such as the annual series Employment in Europe. The Council has been much less interested in and much less receptive to social policy than the Commission. Similarly, the European Council only occasionally takes a position on social policy, such as at its meeting in Madrid in December 1995 when it declared rather grandly that “job creation was the principal social, economic and political objective of the EU and its Member States.” The European Parliament (EP) is an advocate of social policy whose role has been strengthened by the TEU. Within the EP, the group of the Party of the European Socialists and the group of the European People’s Party (Christian Democrats) fre-

Sound and Efficient Management Initiative (SEM 2000)

quently cooperate in support of social policy proposals. The social partners are also important social policy actors. Indeed, under the terms of the TEU and an earlier agreement to establish a social dialogue, they have a quasi-official or corporatist role in formulating social policy.

Conclusion Social policy has developed incrementally in response to interests prevailing in different eras of European integration but has generally been overshadowed by economic priorities. Social policy is neither comprehensive nor coherent; it primarily complements national policies while expressing European ideals of social justice. The proper role of the EU in creating social policy has not, and perhaps cannot, be defined. Such a lack of definition causes hotly contested claims between those who want to preserve national prerogatives in social policy and those who believe that EU social policy is an essential component of European integration. The TEU removed major obstacles to the development of social policy, but economic problems and market demands have so far taken precedence over commitment to social policy in the 1990s. It is hardly surprising that for economic, political, and ideological reasons controversy continues to trouble the development of social policy at the European level. See also DELORS, JACQUES; REGULATORY POLICY; SINGLE MARKET PROGRAM. Commission. 1989. Community Charter of Fundamental Social Rights. COM (89) 248. Luxembourg: Office for Official Publications of the European Communities. Majone, Giandomenico. 1993. “The European Community Between Social Policy and Social Regulation.” Journal of Common Market Studies 3, no. 2 (June). Springer, Beverly. 1992. The Social Dimension of 1992. New York: Greenwood.

Bibliography

—Beverly Springer

During the 1991 intergovernmental conference on political union it was obvious that British prime minister John Major wanted no change in the EC’s social policy mandate. At the Maastricht summit in December, social policy turned out to be the final sticking point, as Major refused to accept even

Social Protocol

427

the most minimal changes in the draft social chapter of the proposed treaty to allow the talks to conclude. Using German chancellor Helmut Kohl as an intermediary, Commission president Jacques Delors proposed instead appending a Social Protocol to the treaty, which would allow the other member states to move forward without Britain on an extended range of social policy matters. Thus the Protocol on Social Policy empowered the others, acting together, to use the EU’s infrastructure to implement aspects of the 1989 Social Charter. Under Tony Blair, Major’s successor, Britain decided to accede to the social policy provisions of the 1997 Amsterdam Treaty and to accept directives that had already been agreed upon under the social protocol of the TEU. See also SOCIAL POLICY. SOCRATES is a program designed to encourage innovation and improve the quality of education through closer cooperation between educational institutions in the EU. Covering the years 1995–1999 and with a budget of ECU 1 billion, SOCRATES combines a number of new and preexisting initiatives, including the European Community Action Scheme for the Mobility of University Students (ERASMUS), the Action Program to Promote Foreign Language Competence in the European Community (LINGUA), and distance learning. See also EDUCATION, VOCATIONAL TRAINING, AND YOUTH POLICY.

SOCRATES

Solemn Declaration on European Union

At their summit in Stuttgart on June 17–19, 1983, the heads of state and government adopted a Solemn Declaration on European Union to proclaim the EC’s international identity and the member states’ determination to coordinate their foreign policy more closely in European Political Cooperation (EPC). Known also as the Stuttgart Declaration, the Solemn Declaration grew out of the Genscher-Colombo Proposals, an initiative by German foreign minister Hans-Dietrich Genscher and Italian foreign minister Emilio Colombo in November 1991 to reform the EC’s institutions and policies.

428

Sound Financial Managment Group

Sound and Efficient Management Initiative (SEM 2000)

The Sound and Efficient Management Initiative (SEM 2000) is one of a number of recent efforts to improve control of the EU budget, 80 percent of which is administered by the member states themselves. See also FRAUD.

Sound Financial Management Group

The Sound Financial Management Group was established on the initiative of the Commission to help improve financial control in the EU. Chaired by the commissioner responsible for the budget, the group includes personal representatives of the finance ministers of the member states. Having been endorsed by the European Council at its summit in Madrid in December 1995, the group met for the first time in March 1996. See also FRAUD. Relations with South Africa constitute one of the most enduring and most successful foreign policy areas of the EU. Beginning in the 1970s, the policy has straddled the informal and formal periods of European Political Cooperation (EPC), constituted one of the first “joint actions” of the Common Foreign and Security Policy (CFSP) and in the latter half of the 1990s has developed into a bilateral Cooperation Agreement encompassing trade, development, and human rights. Consequently, relations with South Africa represent an excellent case-study by means of which to explore the transition of foreign policy objectives as well as demonstrate the interrelated nature of the EU’s external relations. As the following account illustrates, lack of clarity between the EU’s Pillar One (EC) and Pillar Two (CFSP) activities adds to policy complexity, not policy efficiency: to compound this, decisionmaking by unanimity tends to lead to a foreign policy based upon the lowest common denominator. During the 1977–1984 period, the EC adopted by consensus a twin-track policy under the framework of EPC. First, in response to the apartheid regime and European domestic pres-

South Africa

sures, in 1977 the EC adopted a Code of Conduct for European firms with subsidiaries operating in South Africa. The Code was intended to negate discrimination by providing for desegregation, higher wage rates, and fringe benefits for black workers. Its impact was modest given that at its peak fewer than 200,000 workers were covered by its provisions, which many employers were reluctant to implement fully. The code was eventually abandoned in 1993. Second, the EC sought to end neighboring countries’ economic dependency on South Africa, largely by supporting regional integration through the Southern African Development and Cooperation Conference. However, success here was marginal at best, and with the transition to democracy in South Africa in the mid-1990s the objective was abandoned. This policy consensus, albeit of a lowest common denominator kind, began to fragment with the escalation of civil unrest in South Africa during the mid-1980s. The question of sanctions split the EC into the majority that favored extensive sanctions against Pretoria and the minority (Britain, Germany, and Portugal) that opposed sanctions on principle. Eventually a consensus was forged that saw the EC introduce modest sanctions (after concerted global pressure). But these sanctions were symbolic rather than punitive. Trade in Krugerrands and in certain iron and steel products (worth just 3.5 percent of bilateral trade) was suspended and “new investments” discouraged; the UN ban on oil was upheld, and military, cultural, and technological cooperation ended. In addition, the EC launched Special Programs for the Victims of Apartheid, whose funding grew from a modest ECU 10 million to ECU 110 million before the multiracial elections of 1994, after which funding was switched to a more general reconstruction and development program. With the release of Nelson Mandela from imprisonment in February 1990, the EC began the difficult process of redirecting its foreign policy from sanctions toward the creation of normal bilateral relations. Over the next three years sanctions were progressively lifted as South Africa moved toward democratic constitutional reform. Just as with their imposition, sanctions had to be removed by consensus; again, there were divisions between member states over the appropriate speed of doing so. In November 1993 South Africa was selected as one of the first five CFSP joint actions. The

untested and experimental nature of CFSP meant that South Africa therefore became more than simply a question of policy effectiveness; it became a test case for the success of the CFSP itself. The joint action had three separate elements: election monitoring, development assistance, and the establishment of a long-term cooperation framework. Just as was the case with sanctions under EPC, there were divisions within the member states on the appropriate scope of these measures. Election monitoring was an innovation for the EU and, given its untried nature, proved worthwhile despite some organizational problems. A total of 307 election observers were deployed, plus a further 112 advisers and security personnel with funding totaling almost ECU 10 million. The EU has since become increasingly involved in this type of international activity, complementing the role played by the UN. Development assistance built on the experience of the earlier Special Programs, with a fiveyear (1994–1999) commitment of ECU 110 million per annum to fund projects throughout the country. The major areas covered are education and training, agriculture, good governance, rural health, and local community development. Establishing a longer-term bilateral relationship has been the most difficult challenge and one that has been undertaken outside the scope of joint action. Although initial progress was made with the signing of a cooperation agreement in October 1994 and the granting of Generalized System of Preferences (GSP) status, negotiations about closer economic relations soon stalled. Indeed, by the end of 1997 the final framework for relations still remained contentious. Two elements were involved. The first was South Africa’s possible inclusion in the Lomé convention: when full membership was declined, a unique association status was concluded whereby South Africa became a signatory to a limited range of Lomé privileges. Second, the EU proposed a free trade area between the two economies, although once again certain exceptions were suggested in order to protect the South African side. Negotiations began in 1996 on the basis of the EU’s draft agreement. In conclusion, South Africa is no longer simply an EPC and CFSP agenda item but has become a subject of economic and political external relations governed by normal bilateral frameworks. Over the past two decades the political context of EU–South Africa relations has evolved fundamen-

Spaak, Paul-Henri (1899–1972)

429

tally. However, the economic context may continue to sour an otherwise positive relationship. See also COMMON FOREIGN AND SECURITY POLICY; EUROPEAN POLITICAL COOPERATION. Holland, Martin. 1988. The European Community and South Africa. London: Pinter. ———. 1995a. “Bridging the Capability-Expectations Gap: A Case Study of the CFSP Joint Action on South Africa.” Journal of Common Market Studies 33, no. 4 (December), pp. 556–572. ———. 1995b. European Union Common Foreign Policy: From EPC to CFSP Joint Action and South Africa. London: Macmillan.

Bibliography

—Martin Holland

Spaak, Paul-Henri (1899–1972)

Paul-Henri Spaak’s nickname, “Mr. Europe,” attests to his leading role in the postwar movement for European integration. Before the war, Spaak had been prominent in Belgian politics, having served as a government minister since 1935, including a brief spell in 1938 and 1939 as Belgium’s first Socialist prime minister. While in government Spaak had championed Belgium’s neutrality and sought to keep his country out of the coming conflagration. But Belgium’s ignominious capitulation in May 1940 and the ensuing four years of German occupation, which Spaak spent in exile in London, radically altered his international outlook. Thereafter Spaak was a firm believer in both international alliances and European integration. In the immediate postwar years, Spaak was variously prime minister and foreign minister of Belgium, sometimes simultaneously. At the same time, he became increasingly prominent on the European scene, first as chairman of the newly founded Organization for European Economic Cooperation, then as president of the Consultative Assembly of the Council of Europe. He was also a leading supporter of the Schuman Plan to establish the European Coal and Steel Community and the Pleven Plan to establish the ill-fated European Defense Community. Spaak’s greatest contribution to the EC came when he chaired the intergovernmental conference (IGC), launched after the Messina Conference in

430

Spaak Report

June 1955, to draft plans for further European integration. Spaak was well suited by reputation, temperament, and conviction to direct the difficult negotiations. As chairman of the IGC, which opened in Brussels on June 26, 1955, but began in earnest in the fall, Spaak steered the work of the various committees and subcommittees that drafted specific parts of the final proposal. Spaak’s report, presented to his fellow foreign ministers at a meeting in Venice in May 1956, proposed that the two objectives of sectoral (atomic energy) integration and wider economic integration (a common market) be realized in separate organizations, with separate treaties. The Venice foreign ministers’ meeting marked the end of the first stage of a protracted process of intergovernmental negotiations, which culminated in the signing of the Treaties of Rome in March 1957, establishing the European Atomic Energy Community and the European Economic Community. Spaak continued as Belgian foreign minister well into the 1960s, interrupted by a spell as secretary-general of NATO between 1957 and 1961. His later years as foreign minister and as a leading advocate of European integration were marred by a series of clashes with French president Charles de Gaulle, first over de Gaulle’s veto of Britain’s EC membership application in 1963, then over the Empty Chair Crisis of 1965–1966. Dejected by de Gaulle’s cavalier treatment of his EC partners, preoccupied in the early 1960s with Belgium’s problems in the Congo, and increasingly distracted by his country’s linguistic quarrels, Spaak left public office for the last time in 1966. See also BELGIUM. See SPAAK, PAUL-HENRI.

Spaak Report

As a result of General Franco’s victory in the Spanish Civil War and his support for the Fascist regimes in Germany and Italy, Spain took no part in the international agreements on political and economic cooperation at the beginning of the post–World War II era. Spain was not invited to participate in the creation of the UN and indeed was censured by the new international organization in 1946. The country had no representation at the founding of the International Monetary Fund

Spain

(IMF) and the World Bank; nor was it admitted to the Organization for European Economic Cooperation (OEEC), the Council of Europe, or the three European Communities. In the immediate postwar years, Spain was excluded across the board from the process of European cooperation and integration. Only gradually did Spain become less isolated. The military and economic cooperation agreement signed with the United States in September 1953 was instrumental in the country’s admission to the UN in December 1955 and to the OEEC—later the Organization for Economic Cooperation and Development (OECD)—as a full member in January 1959. A stabilization plan later that year transformed the Spanish economy, marking the end of national economic autarky and the beginning of economic cooperation with the rest of the world. The changing political climate prompted Spain to seek closer links with the EC. A substantial volume of trade with the EC, and the EC’s implementation of the Common Agricultural Policy, were the main reasons why Spain sought a rapprochement. In February 1962 the Spanish government wrote to the Council presidency stating its wish to negotiate an association agreement that could lead to the country’s eventual accession. Spain’s approach met a hostile reaction from the European movement in general and from political groups and trade unions in particular, who firmly opposed the entry of a dictatorship into the EC. The 1962 congress of the European Movement adopted a resolution supporting this position, and the EC did not respond to the Spanish government’s letter. In June 1964 Spain wrote again with a proposal for negotiations only on economic matters, with no preconditions. In a spirit of pragmatism on both sides, negotiations took place and led to the signing of a preferential trade agreement (PTA) between Spain and the EC in June 1970. The PTA’s ultimate aim was to set up a freetrade zone or a customs union at the end of a lengthy two-phase period, a fundamental requirement of the GATT regulations on preferential trade agreements. The obligations laid down by the PTA were asymmetrical: the EC reduced its average tariffs on industrial products by 65 percent (three-quarters of this reduction to be implemented in the first fifteen months) and Spain by 25 percent over the six-year period agreed to for

the first phase. In agricultural trade Spain obtained tariff concessions for $262 million of its exports (out of a total of $365 million); at the same time, tariff concessions in the other direction were virtually nonexistent (Bassols, 1995). This agreement provided a great boost to the Spanish economy, and although it contained no explicit political commitment for the country’s entry to the EC, it permitted real economic integration via the expansion of trade and paved the way for Spain’s formal accession at a later date. Between 1970 and 1984 the volume of Spain’s exports to the EC grew in real terms by 355 percent; the Community received 49 percent of Spain’s total exports in 1984, compared with 36 percent in 1970 (although it should be noted that the number of EC member states increased from six to ten during those years). Over the same period, Spain’s imports from the EC grew by 109 percent, representing 33.4 percent of the total in 1984 as compared with 32.9 percent in 1970. This unequal evolution of exports and imports meant that Spain’s trade deficit in 1970 (at the time of the signing of the PTA) had turned into a trade surplus by 1984. Spain presented its application for EC membership in July 1977, two years after Franco’s death and soon after the first democratic elections. Spain’s application was supported unanimously throughout the nation by all political parties represented in parliament, by public opinion, and by employers’ associations and trade unions. This unanimity was due largely to the symbolic appeal that the idea of Europe held for the Spanish: political freedom, democracy, and the end of the isolationism that the country had endured since the loss of its empire. The negotiations that began formally on February 5, 1979, proved to be long and complicated. One of the main obstacles to Spain’s entry was the reticent attitude of the French, who were concerned about competition from Spain’s Mediterranean agricultural products. Another was the demand expressed by many countries that Spain join NATO. Negotiations with the EC were completed in March 1985, and the treaty of accession was signed on June 12, 1985. Following its ratification Spain joined the EC on January 1, 1986. In the treaty of accession, Spanish industry obtained advantageous treatment. With the exception of tariffs on certain sensitive areas, for example, cars and iron and steel products, tariffs on Spanish industrial exports were to be phased out over seven

Spain

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years, whereas those on EC exports to Spain were to be dismantled over a longer period. On the other hand, Spain had to make considerable concessions in agriculture and fishing, sectors in which the country held a competitive advantage. Costs and Benefits of Membership Ten years on, the positive impact of EU membership on the Spanish economy can be seen in terms of improved foreign trade and inward investment and in both nominal convergence—the criteria for Economic and Monetary Union (EMU)—and real convergence—the income gap and unemployment. However, two points should be borne in mind: (1) during those ten years, both Spain and the other member states experienced periods of expansion (1986–1990), recession (1991–1993), and expansion again (since 1994); and (2) fundamental changes in the process of European integration affected Spain even more than most member states. Specifically, the single market program constituted a greater challenge to the Spanish economy (as far as liberalizing was concerned) than the commitments undertaken at the time of EC membership, and EMU poses a serious challenge to Spain in its efforts to match the economic performance of the more advanced member states. With respect to trade, liberalization opened Spain not only to the European market but to the rest of the world as well. This was true for imports as well as exports. Indeed, a marked growth of imports in all sectors of the economy affected the trade balance (Spain’s trade deficit reached 3 percent of GDP in 1992). This imbalance was heavily influenced by the overvaluation of the peseta between 1989 and 1992 but was corrected with three devaluations in 1992 and 1993, which reduced the trade deficit in terms of GDP in 1994 and 1995. The trade deficit was also compensated for by direct foreign investment, mainly from other member states, which reached its peak in 1993 (accounting for 1.44 percent of GDP and 22.1 percent of gross capital formation in that year). Just under 44 percent of direct investment was in industry, and 54 percent was in service sectors, principally in finance (Duce, 1995). In 1995, Spain did not meet any of the nominal convergence criteria for EMU. Accordingly, in 1996 Spain prepared a convergence plan that aimed to bring the country inside the limits for participation in EMU by 1999. Although Spain made a great effort in this direction, the fact that it

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Spain

met none of Maastricht’s nominal convergence criteria as recently as 1997 indicated that adaptation to EMU has been and will be a laborious process. If we measure real convergence in terms of Spain’s per capita GDP and employment rate in relation to the EU’s, it is striking that between 1985 and 1991 Spain’s GDP came close to the EU average (before being adversely affected by the currency crisis of 1992–1993), whereas unemployment in Spain skyrocketed (rising to 22.8 percent in 1995). Spain’s unemployment is the highest in the EU; indeed, it is almost twice the EU average. Lack of flexibility in the Spanish labor market means that firms wishing to improve their productivity and compete in the EU marketplace and beyond must do so by reducing manpower and replacing it with machinery. On the positive side, in the ten years since entry Spain has enjoyed a net transfer of EU funds (with the sole exception of 1986), mainly from the structural and cohesion funds. In the 1990–1994 period the balance in Spain’s favor varied between 0.5 and 0.7 percent of the country’s GDP. Overall, entry to the EU has helped modernize the Spanish economy, but the cost of the adaptation process has been high in many sectors, which have had to face increased competition. The effect of this competition can be seen in the higher rise of imports over exports. The substantial levels of investment from abroad, especially from within the EU, have stimulated domestic investment, increased income, and contributed to updating production capacity. From the perspective of nominal convergence, the results have been insufficient; as for real convergence, progress has been limited in terms of income and negative in terms of employment. However, the results might have been better had the country’s economic policy been more suited to the needs of the export sectors. Conclusion Spain’s active participation in the process of European integration began with the negotiation of the Treaty on European Union (TEU) and with the enlargement of the EU from twelve to fifteen members. During the 1991 intergovernmental conference, Spain proposed the concept of EU citizenship and the introduction of a cohesion fund to help poorer member states meet the criteria for EMU. During the 1994 enlargement negotiations, Spain

obtained a number of concessions concerning fishing (increased access to fishing grounds and reduction of the transition period for Spanish fishing to January 1, 1996) and, together with Britain, negotiated the Ioannina agreement on the size of the blocking minority (with respect to qualified majority voting) after enlargement. Spain also won a reduction of some of the transition periods established in the accession agreement: apart from fishing policy, the time limit for the free circulation of Spanish vegetables and fruits was reduced by three years, and the limit for the free circulation of Spanish workers by one year. Other important Spanish contributions include greater EU cooperation with Latin America and with the Mediterranean nonmember states. Political dialogue with Latin America has been institutionalized; cooperation agreements have been set up with practically all Latin American countries, and a trade agreement has been signed with MERCOSUR (the Southern Cone Common Market). EU development assistance for Latin America increased from ECU 37 million in 1985 to ECU 367 million in 1995. The Euro-Mediterranean Conference, held under the Spanish presidency in Barcelona in November 1995, reinforced political dialogue and the prospect of creating a free trade zone in the entire Mediterranean region. Under the terms of the Barcelona agreement, EU aid for the Mediterranean nonmember states will practically double between 1996 and 2000, reaching a total of ECU 5 billion. Despite these achievements, there is as yet little understanding in Spain of what the EU really means. Except in sectors in which EU policies have caused problems (for instance, in fishing and in some agricultural sectors), the average citizen’s perception of his or her relationship with the EU is limited. This situation will change with time as the idea of collective identification with the EU begins to take hold. In the meantime, a number of factors are contributing to this general development: daily business with other enterprises in the EU, student exchanges with other universities in the EU, participation in numerous EU projects, and the positive impact of structural policy. See also TABLE 6; APPENDIX 2; APPENDIX 3; APPENDIX 7; APPENDIX 8. Bibliography

Bassols, Raimundo. 1995. España en Europa: Historia de la Adhesión a la CE, 1957–1985. Madrid: Cámara de Comercio. Dluhosch, Barbara. 1996. On the Fate of Newcomers in the European Union: Lessons from the Spanish Experience. Working Paper 9603. Madrid: Bank of Spain. Duce, Maitena. 1995. “El impacto de la integración en la UE sobre la inversión internacional directa en España.” Papeles de Economía Española, no. 63, pp. 192–208. Galy, Michael, Gonzalo Pastor, and Thierry Pujol. 1993. Spain: Converging with the European Community. Occasional Paper 101. Washington, DC: International Monetary Fund. Ministerio de la Presidencia. 1995. España en la Unión Europea. Diez años desde la firma del tratado de Adhesión. Madrid: Imprenta Nacional del Boletín Oficial del Estado. Tamames, Ramón. 1994. La Unión Europea. Madrid: Alianza Editorial.

—Joaquim Muns

The controversial European Works Council Directive includes a provision for the formation within transnational companies of a Special Negotiating Body (SNB) on the initiative of employee representatives or management. The SNB is designed to negotiate either an information and consultation procedure or a full-fledged European Works Council within the company.

Special Negotiating Body (SNB)

Specific Actions for Vigorous Energy Efficiency (SAVE)

Specific Actions for Vigorous Energy Efficiency (SAVE) is an EU program to promote energy efficiency, reduce consumption, and encourage the convergence of member state energy policies. SAVE I (1991–1995) and SAVE II (1996–2000) include initiatives to establish technical standards and specifications relating to energy conservation, develop information networks to help coordinate member-state actions and policies, and improve the production and supply of electricity. See also ENERGY POLICY. In 1979, Commission president Roy Jenkins asked Dirk Spierenburg, a Dutch diplomat and a former

Spierenburg Report

Spinelli, Altiero (1907–1986)

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member of the European Coal and Steel Community’s High Authority, to chair a committee on reform of the Commission. In September of that year, Spierenburg presented a report entitled “Proposals for Reform of the Commission of the European Communities and Its Services.” The socalled Spierenburg Report made a number of timely proposals, including reducing the number of commissioners, rationalizing Commission portfolios, and improving communication and coordination among the Commission’s directorates-general (departments). Despite Jenkins’s enthusiasm for the report, few of its recommendations were ever adopted. Indeed, the 1996–1997 intergovernmental conference grappled with many of the issues addressed by Spierenburg nearly twenty years earlier. See also COMMISSION. Altiero Spinelli, a former commissioner (1970– 1976) and member of the European Parliament (EP), was a leading European federalist. His involvement in the movement for European integration began during World War II, when he was exiled to the Italian island of Ventotene for his antifascist activities. There, in 1940 and 1941, Spinelli drafted a manifesto for a “free and united Europe.” Following his release after Mussolini’s ouster in 1943, Spinelli founded the European Federalist Movement in Milan. He then traveled secretly to Switzerland for a meeting of European Resistance representatives. Out of that meeting, held in Geneva in June and July 1944, came the Draft Declaration of the European Resistance, which included a call for a “Federal Union among the European peoples.” In the postwar years, Spinelli became a leading figure in the European movement. At home in Italy, he pursued a political career in the Action Party, of which he was a founding member and secretarygeneral until 1962. In the mid-1960s he founded and directed the prestigious Institute for International Affairs in Rome before becoming an adviser to the Italian foreign minister in the late 1960s. In 1970 Spinelli became a commissioner, but he left Brussels unexpectedly in 1976 to join the EP as an independent Communist. Not only was his political affiliation surprising—Spinelli had broken with communism as early as 1937—but his decision to become a member of the then relatively

Spinelli, Altiero (1907–1986)

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SPRINT

powerless EP seemed unwise. But Spinelli was positioning himself to become an influential figure in the first directly elected Parliament. Indeed, he interpreted the results of the first direct elections, held in June 1979, as a mandate to launch a constitutional revision of the EC. He and like-minded Europarliamentarians became known as the Crocodile Group, because of their habit of meeting in the Crocodile Restaurant during plenary meetings of the EP in Strasbourg. The Crocodile Group pressed successfully for the establishment in the EP of an Institutional Affairs Committee, which in turn wrote the Draft Treaty Establishing the European Union that was passed by the whole house on February 14, 1984. Although Spinelli tended to be idealistic and unrealistic, the Draft Treaty was a pragmatic document that sought to shame the member states into reviving the EC’s flagging institutional framework. To a great extent, Spinelli’s tactic worked. It coincided with a number of related developments—the Genscher-Colombo proposals, the recent accession of Greece and the impending accession of Spain and Portugal, and growing interest in European business circles for the establishment of a single market—that together accounted for the EC’s resuscitation in the mid1980s, a resuscitation epitomized by the Single European Act. See STRATEGIC PROGRAM TECHNOLOGY TRANSFER.

SPRINT

FOR

INNOVATION

See SYSTEM FOR THE STABILIZATION EARNINGS FROM PRODUCTS.

STABEX

OF

AND

EXPORT

At the Dublin summit of December 13 and 14, 1996, Germany successfully pushed the other member states to approve a tough budgetary agreement—the Stability and Growth Pact—for the future euro zone that threatens near automatic penalties for countries running excessive budget deficits (above 3 percent of GDP). Germany had wanted automatic penalties to apply but softened its position slightly in the face of stiff French opposition.

Stability and Growth Pact

Nevertheless Theo Waigel, Germany’s finance minister, claimed after the summit that the pact was a credible signal that the euro would be a hard currency. Under the pact, euro countries running an excessive deficit will be exempt from penalties in the event of a natural disaster or if they experience a drop in GDP of at least 2 percent over a year (such a recession has happened only thirteen times in any of the member states over the past thirty years). In cases where GDP falls between 0.75 and 2 percent, finance ministers will have discretion as to whether to impose penalties. Penalties consist of an interest-free deposit of a fixed amount with euro-zone authorities, representing 0.2 percent of GDP, and a variable amount determined by the extent to which the recalcitrant member state exceeded the 3 percent ceiling. The total amount could be as much as 0.5 percent of GDP. If the deficit remains excessive, the deposit becomes a fine at the end of two years. Although necessary to signal the member states’ commitment to a strong euro, the pact demonstrates the potential divisiveness of Economic and Monetary Union (EMU), both before and after the launch of Stage 3 (the irrevocable fixing of exchange rates). France resisted the pact before and during the Dublin summit because it reinforces the impression that EMU is imposing a “fiscal straitjacket” that is destroying jobs. Indeed, France’s new Socialist prime minister sought to reopen discussion of the pact at the Amsterdam summit on June 16 and 17, 1997, but succeeded only in having the European Council adopt a separate resolution on growth and employment stressing the member states’ determination to keep employment firmly at the top of the political agenda of the EU. Also, the European Council decided to hold an extraordinary meeting in Luxembourg on November 21 and 22, 1997, to review initiatives concerning jobcreation, small and medium-size enterprises, a new Competitive Advisory Group, and so on. These concessions to the French government made it possible for the European Council to adopt a resolution on implementation of the pact and to get on with its main task at the Amsterdam summit: concluding the Amsterdam Treaty. See also ECONOMIC AND MONETARY UNION: TOWARD A SINGLE CURRENCY.

Standards and Conformity Assessment

Stability Pact (for Central and Eastern Europe) See BALLADUR PLAN.

Standards and Conformity Assessment

Product standards play an essential role in ensuring free circulation of goods within the single European market. Industries develop voluntary standards through member-state and European standards bodies such as the European Standards Committee (CEN) and the European Electrotechnical Standards Committee (CENELEC) to ensure product quality and compatibility. In addition, governments mandate some technical product standards (e.g., for automobiles) to protect consumer and worker health and safety. When these standards are inconsistent or incompatible across member states, they create technical barriers to trade. The Treaty of Rome generally prohibits technical barriers to trade except for legitimate health and safety reasons. Traditionally, the Commission attempted to deal with these exceptional categories through approximation or harmonization of member-state standards to produce single mandatory EC standards, ultimately adopting over two hundred directives setting out uniform individual product standards. This proved a slow and cumbersome process, however. As a result, technical trade barriers tended to proliferate as memberstate regulation outpaced EC harmonization. Moreover, member-state rules such as product identity standards for traditional foodstuffs (e.g., the centuries-old German rules limiting permissible ingredients in beer or Italian regulations mandating use of durum wheat in pasta), although only tenuously related (if at all) to health or safety concerns, further fragmented the market. In February 1979, a landmark Court of Justice (ECJ) decision gave the Commission the means to resolve this vexing problem. The Court struck down a prohibition on imports of Cassis de Dijon, a French liqueur, into Germany, which had claimed that the liqueur did not meet national requirements for minimum alcohol content. The ECJ held that Germany could not discriminate against products from other member states that met basic health and safety standards set in those states, thus reading into the treaty a requirement

435

for mutual recognition of health, safety, and other technical standards. The Commission recognized in this important principle a new means of eliminating the backlog of work in the area of sectoral harmonization and of freeing the internal market from the growing burden of technical barriers resulting from member-state product regulation. In its 1985 white paper on completing the single market, the Commission outlined a new strategy for eliminating technical barriers to trade. Included in the new strategy were (1) mutual recognition by member states of each others’ health and safety regulations, ensuring the free circulation in the EC of products meeting any member state’s basic requirements; (2) Community technical rules for certain products (e.g., toys, medical devices) laying down essential health and safety requirements binding on all member states; and (3) a gradual shift of the standards-making process from national standards bodies to European organizations such as CEN and CENELEC, ending the proliferation of national standards and simplifying the market for producers and consumers alike. Under this “new approach,” the Commission shifted its energies from the task of laying down detailed technical standards (except in some areas such as the automotive sector) to laying out general “essential requirements” that products must meet in order to circulate freely. Member states would be prohibited from going beyond these essential requirements in their national legislation. Manufacturers may demonstrate compliance in three ways: (1) by proving that their product meets the essential requirements themselves, (2) by demonstrating compliance with a national standard elaborating on the requirements in the relevant directive, or (3) by demonstrating compliance with a European Norm (EN) pertaining to those requirements. As a practical matter, most producers choose to demonstrate compliance through adherence to a national standard or EN. The task of developing ENs to complement the new-approach directives fell to the established EC-wide standards bodies CEN and CENELEC as well as to the European Telecommunications Standards Institute (ETSI), a new body established to develop standards for the telecommunications and information technology sectors. Conformity assessment—procedures for determining whether products in fact meet the re-

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Standing Committee on Agricultural Structures

quired standards, such as testing and certification—is a critical element of the system. Here, too, member state practices have varied greatly. For example, certain products would be subject to governmental approval in certain countries and not in others; likewise, some governments would allow companies to do their own testing, whereas others would require results from an independent laboratory. As a corollary to the new-approach method of regulating products, the Commission developed rules for demonstrating conformity to new-approach directives or the pertinent European or national standards. This so-called global approach laid down a number of methods for demonstrating conformity, based largely on the degree of risk posed to the consumer by potentially faulty products. For example, producers of relatively simple products such as toys may state their compliance through a “manufacturers’ declaration of conformity.” At the other end of the scale, complex and risky devices such as heart pacemakers are subject to more elaborate means of assessing conformity, involving government-approved testing and certification bodies. Under this approach, any directive laying out essential product requirements must also specify the steps producers must take to show compliance with these requirements. Each member-state government must produce a list of so-called notified bodies whose testing and certification of products are deemed acceptable to ensure conformity to a given directive. These bodies can include government agencies, quasi-public organizations, or private laboratories, depending on the country and the product. Products passed by these bodies may bear the CE mark (where the directive allows that) and are ensured free circulation within the single market. Even though this system simplified matters for internal producers, it raised problems for imported goods, some of which had previously entered the market on the basis of approvals in the EU markets under agreements between third countries and individual member states. The Commission therefore opened negotiations with non-EU governments to try to arrive at sector-specific Mutual Recognition Agreements (MRAs) under which the EU would allow imported products approved in their home countries to be sold freely in their domestic markets without having to undergo further conformity assessment, and the non-EU governments would do the same for EU products. Although the Commission has reached agreements

on some products with some trading partners (e.g., Singapore), negotiation of MRAs with the United States, among others, has proved arduous and time consuming, in part because of vastly different and often incompatible approaches taken to product regulation in such areas as the role of public versus private bodies, statutory requirements for domestic government approval, or specific criteria for approval. In some sectors, such as pharmaceuticals, some governments have undertaken efforts to establish the groundwork for uniform approval criteria; however, such efforts require enormous technical preparation and are likely to bear fruit only over the medium to long term. See also REGULATORY POLICY; SINGLE MARKET PROGRAM.

Standing Committee on Agricultural Structures

The Standing Committee on Agricultural Structures was established in 1962, with the launch of the Common Agricultural Policy (CAP), to prepare meetings of the council of agriculture ministers. As part of an effort to emphasize rural development rather than simply income support within the CAP, the committee changed its name in 1988 to the Committee on Agricultural Structures and Rural Development (STAR). See also COMMON AGRICULTURAL POLICY. See COMMITTEE ON AGRICULTURAL STRUCTURES AND RURAL DEVELOPMENT.

STAR

Under the EU’s competition policy, governments are generally prohibited from subsidizing industries and enterprises (i.e., providing state aids), thereby giving them an unfair advantage in the European marketplace. See also COMPETITION POLICY.

State Aids

Statistical Office of the European Communities (EUROSTAT)

The Statistical Office of the European Communities (EUROSTAT) is a unit within the Commission charged with collecting and publishing statis-

tics on a wide range of social and economic issues, primarily for use by the Commission itself. EUROSTAT’s product is highly reputable and widely disseminated in EU publications and databases. Strasbourg is known as the home of the European Parliament (EP), although the EP holds only some of its plenary sessions (lasting usually four days each month) there. In the late 1940s, the founding states of the Council of Europe decided to locate its assembly in Strasbourg, a frequently foughtover city on the border between France and Germany. This was intended both to keep the assembly away from a national capital and to symbolize European reconciliation. Later, the founding members of the EC followed suit and placed the EP there also. As the EC revived and flourished in the 1980s, many Europarliamentarians regretted the choice of Strasbourg, located over two hundred miles from the Commission and Council of Ministers’ Secretariat in Brussels, as the Parliament’s seat. For them, Strasbourg came to symbolize not Franco-German reconciliation but the obscurity and relative unimportance of their own institution. See also EUROPEAN PARLIAMENT.

Strasbourg

Strategic Program for Innovation and Technology Transfer (SPRINT)

The Strategic Program for Innovation and Technology Transfer (SPRINT) ran from 1989 to 1994, under the auspices of the EC’s research and technological development program. SPRINT’s significance was more political than technological: it helped build confidence and cooperation between the Commission and European manufacturers in the high-technology sector and contributed to the positive climate in which the single market program was launched. Representatives of national governments and farmers’ organizations met in Stresa, Italy, in July 1958 to launch the Common Agricultural Policy (CAP). See also COMMON AGRICULTURAL POLICY.

Stresa Conference

Structural Dialogue

437

See COHESION POLICY; STRUCTURAL POLICY.

Structural Funds

Structural policy is one of the means by which the EU promotes cohesion: the goal of reducing economic and social disparities between developed and underdeveloped regions. The EU’s three redistributive structural funds are the European Social Fund (ESF), the European Regional Development Fund (ERDF), and the guidance section of the Common Agricultural Policy’s European Agricultural Guidance and Guarantee Fund (EAGGF). The European Investment Bank (EIB) and part of the European Coal and Steel Community’s budget are additional instruments with structural policy objectives. Structural policy developed slowly in the EC’s history but received a significant boost when Greece, Spain, and Portugal—countries whose economic level was well below the EC average— joined in the 1980s. As part of an implicit bargain struck in relation to the single market program between the richer and poorer member states, the Single European Act (1986) contained a commitment to economic and social cohesion. Accordingly, in February 1987 the Commission proposed reform of the structural funds and a doubling in real terms of the resources available through them (this was a key element of what later became known as the Delors I budgetary package). Having agreed in February 1988—after a bitter political battle—to double the combined size of the structural funds, in December 1988 the Council radically revised the EC’s structural policy by introducing a number of new principles and procedures and strengthening existing ones. For instance, new functional and geographic concentrations restricted structural fund assistance to five priorities: assisting regions whose development is lagging (Objective 1); assisting declining industrial areas (Objective 2); combating longterm unemployment (Objective 3); adjusting the workforce to industrial changes (Objective 4); and adjusting agricultural structures (Objective 5). The post–Treaty on European Union Delors II budgetary package (1992) included an additional, substantial increase in the size of the structural funds and introduced new priorities for regions dependent on fishing (Objective 5[a]-fisheries) and support for certain rural areas (Objective 5

Structural Policy

438

Stuttgart Declaration

[b]). As a result of the accession of Finland and Sweden, the EU created another new priority (Objective 6) for the development of regions in those countries with very low population densities. In its Agenda 2000 report of July 1997 on enlargement, policy reform, and the budget, the Commission proposed reducing the structural fund objectives from seven to three: a strengthened Objective 1, a redefined Objective 2, and a new Objective 3 (developing a strategy for human resources). See also COHESION POLICY. As part of a preaccession strategy to facilitate enlargement of the EU, the European Council, meeting in Essen in December 1994, decided to launch a “structured dialogue” between the EU and the associated states of Central and Eastern Europe. The structured dialogue is implemented through a program of meetings of environment, transport, justice, foreign, and other ministers, as well as annual meetings of heads of state and government on the margins of a European Council. See also CENTRAL AND EASTERN EUROPEAN STATES.

Structured Dialogue

See SOLEMN DECLARATION ON EUROPEAN UNION.

Stuttgart Declaration

Federalism apart, there is no idea in European integration studies that has sparked and sustained debate on such a scale as subsidiarity. This is not coincidental, as the two concepts are closely related. Subsidiarity guides federalism and is fostered by it. Subsidarius helps those bound together by foedus. The Roman Catholic Church developed a social doctrine of subsidiarity, whereby society should give help (subsidium) to its weaker members but take care to preserve their self-respect and autonomy (Pope Leo XIII’s 1891 Rerum Novarum, quoted in O’Brien and Shannon, 1995). Writing from the heart of fascist Italy in 1931, Pope Pius XI warned: “just as it is wrong to withdraw from the individual and commit to a group what private enterprise and industry can accomplish, so too it is an injustice, a grave evil and a disturbance of the right order, for a larger and a higher association to arrogate to itself functions

Subsidiarity

which can be performed efficiently by smaller and lower societies” (O’Brien and Shannon, 1995). Subsidiarity therefore carries the connotation of solidarity among different classes of society—a concept that influenced, among others, the leftwing Catholic Jacques Delors, who became Commission president in 1985 (Grant, 1994). Although the term subsidiarity itself was rarely used in English or French, the rich discourse among federalist thinkers such as Mill, Proudhon, and Marc about how the state should exercise its functions at the lower level was informed by the principle of subsidiarity. It may be argued that the British contributed mainly to the idea of liberal democracy and the French mainly to nationhood, but it was the Germans who focused on the role of the citizen, individually and collectively, in the building of the state. Subsidiaritätsprinzip suggests that there are mutual and comprehensive obligations between the state and the individual on behalf of the whole society, and these can be written down. In modern Germany, “neo-liberalism, Roman Catholic social doctrine and the Protestant social ethic have each drawn on the concept of subsidiarity” (Wilke and Wallace, 1990, p. 16). The German Basic Law (constitution) does not use the term, but the relationship between the Länder (states) and the federal government cannot be understood without it. Subsidiarity and European Integration Once the scale and scope of European integration had moved beyond the customs union and commercial policy, with common policies for coal, steel, and agriculture, the EC began to take on a discernible constitutional character. By the mid1970s French president Charles de Gaulle was long gone and Britain had joined the Community. The Community, by then equipped with its financial own resources and new regional and social policies and planning direct elections to the European Parliament (EP), had begun to contemplate Economic and Monetary Union (EMU). An enquiry was set up, under the chairmanship of the federalist Belgian prime minister Leo Tindemans, to look into the question of institutional reform. In its submission to Tindemans, the Commission proposed that a new constitution should be drawn up to found “European Union.” It continued: “European Union is not to give birth to a centralizing super-state. Consequently, and in accordance with the principe de subsidiarité, the Union will be

given responsibility only for those matters which the Member States are no longer capable of dealing with efficiently. . . . Hence, the competence of the Union will be limited to what is assigned to it, meaning that its fields of competence will be specified in the Act of Constitution, other matters being left to the Member States. . . . Of course, in deciding on the Union’s competence, application of the principe de subsidiarité is restricted by the fact that the Union must be given extensive enough competence for its cohesion to be ensured” (Commission, 1975, pp. 10–11). This was the first official usage of subsidiarity by the Commission, which went on to explain that—as in German Basic Law (Articles 71 and 72)—there were three types of competence: exclusive, concurrent, and potential. With concurrent powers, the union “would assert its authority only when it felt the need”—by acting only with regard to certain aspects or by passing outline legislation with actions specified for the union and for member-state governments, leaving the latter free to act in all unspecified matters. In a telling coda, the Commission asked how consistency was to be assured between EU and national-level action: “The answer is that Union law takes precedence over national law. Clearly, coordination between the two types of action cannot be provided simply by legal texts or by establishing procedures: it must rest at any given time on the balance of the political forces involved” (Commission, 1975, p.11). The Tindemans Report suggested that the building of European union required the adoption of four criteria to determine change: authority, efficiency, legitimacy, and coherence. It did not repeat the term subsidiarity, nor did it go as far as the Commission in seeking the exercise of massive new powers at the Union level. But Tindemans still expected that the Union would seize the initiative when it found member states performing ineffectively and inefficiently (Commission, 1976). The Tindemans Report was followed by the MacDougall Report on fiscal federalism, which identified three criteria for assessing the involvement of the EC: economies of scale; transnational effect; and political, economic, and social cohesion—although the term cohesion was not used until the Single European Act (SEA) in 1986. MacDougall favored transfers of resources between member states and regions, orchestrated

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where necessary by the Community, rather than the development of a large-scale public finance capability at the European level (Commission, 1977). The high tide of the federal project, so far, was the EP’s Draft Treaty Establishing the European Union in 1984, whose chief inspirer was the veteran Italian federalist Altiero Spinelli. It was here, in the preamble, that subsidiarity was used for the first time in English: “Intending to entrust common institutions, in accordance with the principle of subsidiarity, only with those powers required to complete successfully the tasks they may carry out more satisfactorily than the States acting independently.” This means, effectively, that the powers of the EU are subsidiary to those of the member states. Spinelli, indeed, who had been imprisoned by Mussolini, saw subsidiarity as the way to check overweening central authority. Articles 11 and 12 of the Draft Treaty sought to define each of the wide competences of the union as either exclusive, concurrent, or potential. Where the treaty conferred concurrent competence, member states could continue to act until the union did so; the union could act only where it could do so “more effectively” and particularly where the action had cross-border effects. (The term virtual competence is perhaps a more accurate expression in English than concurrent.) The union’s first action in a new field would take the form of an organic or framework law under whose auspices member states would then act to carry out union law (Capotorti et al., 1986). The SEA was a lesser creature than the EP had proposed but represented, nevertheless, a qualitative leap forward in the federalization process. It assigned major new competences to the EC, set the objective of EMU, and in many cases prescribed decisionmaking in the Council by qualified majority vote. Although the term was not used, the growing influence of the principle of subsidiarity was plain to see, notably in Article 130r.4 on environment policy, which stated that the EC “shall take action … to the extent to which the objectives … can be attained better at Community level of the individual Member States.” Concerned about the implications of the single market program and about the growing diversity of the enlarging EC, Delors set up an enquiry under the distinguished federalist Tommaso Padoa-Schioppa. The ensuing report applied the

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principle of subsidiarity rigorously and recommended systemic reforms in the direction of greater decentralization of EC policies, more selectivity in the choice of EC responsibilities, and stronger powers for EC institutions in some key areas such as monetary policy, competition, and budgetary control (Commission, 1987). Relentless harmonization should be checked, even in social policy, except where there is clear transnational spillover; EC action should occur only on the basis of a cost/benefit analysis; and the EC should frame member states’ actions but not replace them.

The Treaty on European Union The next step, at the instigation of Delors, was to write subsidiarity into the Treaty on European Union (TEU), which also established EU citizenship and a Committee of the Regions to formalize consultation with regional and local authorities. During the 1991 intergovernmental conferences, Valéry Giscard d’Estaing had produced a report for the EP in which he attempted to spell out the distinction between exclusive and shared competence. He succeeded only in demonstrating the complexity of the European integration process, the rapidly expanding scope of the acquis communautaire, and the essential ambiguity of subsidiarity (Giscard d’Estaing, 1990). In the event, the TEU followed the Commission’s more pragmatic approach: Article 3b states that “the Community shall act within the limits of the powers conferred upon it by this Treaty and of the objectives assigned to it therein. In areas which do not fall within its exclusive competence, the Community shall take action, in accordance with the principle of subsidiarity, only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States and can therefore, by reason of the scale or effects of the proposed action, be better achieved by the Community. Any action by the Community shall not go beyond what is necessary to achieve the objectives of the Treaty.” As well as a definition of subsidiarity, therefore, Article 3b contains a reaffirmation of the traditional principle of assigned competence and a fresh definition of proportionality. The implied tendency to decentralization is reinforced by Article A of the preamble of the treaty, which says that “decisions are taken as closely as possible to the citizen.” Article B appears to seek to spread the

application of the “principle of subsidiarity as defined in Article 3b” to the achievement of all the objectives of the EU. In addition, Article K.3.2(b) provides that the Council may take joint action in the area of justice and home affairs “in so far as the objectives of the Union can be attained better by joint action than by Member States acting individually on account of the scale or effects of the action envisaged.” What is curious is that the second sentence of Article 3b appears to apply subsidiarity only to areas of concurrent competence, whereas the principle of proportionality or intensity of action (the third sentence) applies also to the exclusive competence. The inherent ambiguity of subsidiarity is compounded because, despite the now commonplace nature of the political distinction between the two, there is no explicit distinction drawn anywhere in the Treaty of Rome in legal terms between exclusive and nonexclusive competence. Moreover, the European Court of Justice (ECJ) has tended to take the view that the EC enjoys full competence in the pursuit of the objectives of the treaties and that flanking policies, such as environmental or labor market policies, are too closely linked to the achievement of those objectives, notably the creation of the single market, to be anything other than virtually exclusive too (Toth, 1994). This raises the question: is subsidiarity really anything other than a useful rhetorical device? There is at present a problematic dislocation between what politicians and lawyers think that subsidiarity may be (as well as several different political and legal interpretations), but these divergences should be shrunk over time by decentralization measures within the EU that are deepening its federal character, on the one hand, and by some clearheaded case law, on the other hand (Emiliou, 1994). Article 3b is justiciable by the ECJ because it falls under the auspices of the EC (i.e., within the first pillar of the TEU). But subsidiarity is a general principle of Community law and not directly applicable, and the Court can be expected to try to avoid detailed judgements that turn solely on an interpretation of the second sentence of Article 3b of the TEU. Subsidiarity is a useful political expedient, but it makes sense in practical terms only when considered together with competence and proportionality. Subsidiarity is not about the allocation of competences but about how they should be exercised; and it does not affect the balance between

the EU institutions but only between EU and member-state authorities. And despite much wishful thinking to the contrary, Article 3b refers only to the EU and member-state governments and cannot be applied to regional and local government without further treaty amendment to that effect. After the treaty had been signed, and on the basis of a draft from the Commission, the European Council, meeting in Edinburgh in December 1992, set out guidelines about how Article 3b should be applied and also related it to the newly fashionable concept of transparency (Duff, 1993). An Amsterdam Treaty protocol on “the application of the principles of subsidiarity and proportionality” incorporated the Edinburgh texts, although subsidiarity had already been articulated in all the EU’s interinstitutional agreements, and its application certainly affects the behavior of the Commission, where self-restraint in drafting new legislation now prevails, and the Council, where all drafts are being put to the subsidiarity test. Some draft measures have even been withdrawn, although there has been no large-scale repatriation of EC law, as many nationalists had hoped. In summary, the principle of subsidiarity, applied to the EU, should serve to reassure member states and citizens about their rights. It is a powerful normative concept, and it may be expected to become an even stronger influence on the evolution of the EU as decentralization proceeds, especially within the big, old states of France, Spain, and the UK. Intriguingly, subsidiarity may have to be treated even more variably as the integration process itself differentiates between a federal core of member states and an outer tier. See also COHESION POLICY; FEDERALISM; TREATY ON EUROPEAN UNION. Capotorti, Francesco, Meinhard Hilf, Francis G. Jacobs, and Jean-Paul Jacqué. 1986. The European Union Treaty: Commentary on the Draft Adopted by the European Parliament. Oxford: Clarendon Press. Commission. 1975. Report on European Union. Bulletin of the EC, S/5-1975. Luxembourg: Office for Official Publications of the European Communities. ———. 1976. European Union: Report by Mr Leo Tindemans to the European Council. Bulletin of the EC, Supplement 1/1976. Luxembourg: Office for Official Publications of the European Communities. ———. 1977. Report of the Study Group on the Role of Public Finance in European Integration (Mac-

Bibliography

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Dougall Report). 2 vols. Luxembourg: Office for Official Publications of the European Communities. ———. 1987. Efficiency, Stability and Equity: A Strategy for the Evolution of the Economic System of the European Community (Padoa-Schioppa Report). Luxembourg: Office for Official Publications of the European Communities. Duff, Andrew, ed. 1993. Subsidiarity Within the European Community. London: Federal Trust. Emiliou, Nicholas. 1994. “Subsidiarity: Panacea or Fig Leaf?” In David O’Keefe and Patrick M. Twomey, eds., Legal Issues of the Maastricht Treaty. London: Wiley Chancery Law. Giscard d’Estaing, Valéry. 1990. The Principle of Subsidiarity. Report of the Committee on Institutional Affairs of the European Parliament, A3-163/90. Brussels: European Parliament. Grant, Charles. 1994. Delors: Inside the House that Jacques Built. London: Nicholas Brealey. O’Brien, David J., and Thomas A. Shannon. 1995. Catholic Social Thought: The Documentary Heritage. Mary Knoll, NY: Orbis Books. Toth, A. G. 1994. “A Legal Analysis of Subsidiarity.” In David O’Keefe and Patrick M. Twomey, eds., Legal Issues of the Maastricht Treaty. London: Wiley Chancery Law. Wilke, Marc, and Helen Wallace. 1990. “Subsidiarity: Approaches to Power-sharing in the European Community.” RIIA Discussion Papers 27. London: Royal Institute of International Affairs.

—Andrew Duff

Summit

Meetings of the EU’s heads of state and government, plus the Commission president, are known as summits. Since the launch of the European Council in 1974, summits are synonymous with meetings of the European Council. Summits take place at least twice a year (at the end of the rotating, six-monthly Council presidency) and in exceptional circumstances can be convened on short notice. See also EUROPEAN COUNCIL; APPENDIX 8. Supranationalism is a process by which national governments share sovereignty with transnational institutions whose laws and policies are binding on those governments. Majority voting by national representatives in order to make decisions, an executive authority and parliamentary body independent of national control, and an independent

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Sutherland Report

court whose jurisprudence is binding at the national level are the most important and distinctive features of a supranational organization. The EU is a hybrid of supranationalism and intergovernmentalism, with Pillar One (the EC) being primarily supranational and Pillars Two and Three (the Common Foreign and Security Policy and Cooperation on Justice and Home Affairs) being almost exclusively intergovernmental. See also INTEGRATION THEORY. In 1964 the European Court of Justice (ECJ) established the doctrine of the supremacy of EC law over national law with its landmark Costa v. Enel decision. Together with the doctrine of direct effect, the doctrine of supremacy transformed EC law into a powerful mechanism to challenge the compatibility of national law with EC law, thereby involving the ECJ in national policy debates. See also EUROPEAN COURT OF JUSTICE.

Supremacy of EC Law

In April 1992, the Commission asked an ad hoc committee, chaired by former commissioner Peter Sutherland, to develop a strategy to ensure the proper functioning of the internal market after January 1, 1993. Released in October 1992, the Sutherland Report advocated a number of broad initiatives—such as more transparency and greater enforcement—that could apply not only to the internal market but also to general EC legislation. The report also stressed the importance of subsidiarity, noting the need for balance between maximizing the role of national and local authorities and avoiding fragmentation of the single market. In December 1992, the Commission responded by promising to follow many of the report’s guidelines and adjuring member states to improve their administrative infrastructures in order to facilitate enforcement of the single market. Specifically, the Commission promised to publish an annual report on the internal market, make more systematic use of green papers to publicize contemplated legislation, and consult more with interested parties. Making good on its promise, the Commission adopted its first annual report on the single market (1993) on March 14, 1994.

Sutherland Report

See also SINGLE MARKET PROGRAM. Sweden joined the EU on January 1, 1995, after decades of aloofness and vacillation. This longstanding attitude vis-à-vis Europe has at least two intertwined roots, one geographic and the other historical. Sweden’s semi-insular position on the northern periphery of the continent has helped to keep it at arm’s length from European affairs since the Congress of Vienna in 1815, and this separation in turn fostered a tradition of noninvolvement in continental conflicts stretching from the early nineteenth century to the end of the Cold War. Since most Swedes have viewed this policy of neutrality as the major reason why the country has been spared the ravages of war, it was for a long time difficult to be enamored of the idea of participating in closer European integration. To this should be added a new strategic situation following World War II, when Sweden found itself wedged between the emerging two superpowers, one of which faced Sweden at close range across the Baltic Sea. Rather than counteracting this latent threat by joining NATO (as Norway and Denmark did), Sweden once more chose neutrality, now redefined in terms of the Cold War situation and a strong military defense posture. This, too, was perceived to hinder any close integrative links to a Europe dominated by NATO and covered by the U.S. security umbrella. Even though these factors contributed to its aloofness toward Europe, Sweden is at the same time a small and highly industrialized country heavily dependent on international trade and free access to foreign markets and technology. In the 1960s, when the country’s economy still seemed strong enough to support growth rates sufficiently healthy to sustain its generous welfare system, the economic arguments still spoke against closer European integration. By the early 1970s this situation had changed, and the wealth and welfare theme contributed increasingly to the more vacillating—indeed, positive—attitude toward Europe expressed, for example, by Olof Palme when he became prime minister. However, the neutrality argument was still allowed to trump the imperatives of economics and trade, and Sweden instead opted for a free trade agreement with the EC while remaining a member

Sweden

of the European Free Trade Association (EFTA). This situation lasted until the latter part of the 1980s when a new political debate on membership ensued, in the face of Sweden’s increasing dependence on European trading partners heading toward a single market and closer union and in view of the rapidly changing security map of Europe. This reconsideration of Sweden’s relationship to Europe culminated in October 1990 when, in an economic crisis package presented to parliament, the Social Democratic government suddenly announced its intention to seek membership in the EC. As a result both of acute economic stress and the end of the Cold War, public opinion had at this point shifted radically in favor of such a move, and neutrality was no longer viewed as an insuperable problem. The high tide of pro-European sentiments did not last into the post-Maastricht period, although the November 13, 1994, referendum on membership produced a clear majority (52.3 percent) in favor. With the governing Social Democrats split down the middle, the right-of-center parties played a pivotal role in the referendum’s outcome. Sweden’s 1995 elections to the European Parliament further underlined this increase in public disenchantment: the turnout was exceptionally low for Sweden (40 percent), and the anti-EU parties did exceedingly well, winning almost half of the Swedish seats in Strasbourg. This protest vote and subsequent polls indicating only a quarter of the population in favor of membership reflect a general disappointment with developments since Sweden’s application: the economic situation has not improved notably (at the same time Sweden is a net contributor to the EU and will most probably remain so), unemployment rates have remained exceptionally high (although still slightly below the EU average), and the welfare system continues to be rolled back as the Swedish government tries very seriously to reduce the country’s record budget deficits and public debt. All in all, the downward turn of Sweden’s standard of living has continued despite membership, and Sweden is today one of the poorer EU countries in terms of per capita GDP, compared to having been the wealthiest of the current fifteen EU member states. The issue of neutrality has resurfaced once again as a fundamental problem, even though Sweden, by fully accepting the provisions of the Treaty on European Union (TEU), has acquiesced

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in the Common Foreign and Security Policy (CFSP). Sweden also has observer status in the Western European Union (WEU) and is active within NATO’s Partnership for Peace. Future possible participation in Economic and Monetary Union (EMU) has also become increasingly controversial, although the present government continues to defend its commitment to it (whereas two out of three Swedes want a referendum on this issue). Sweden has joined neither the European Monetary System nor the Schengen agreement on the free movement of people. The Swedish government’s views on the future of European integration are reflected in its report to the Swedish parliament in preparation for the 1996–1997 intergovernmental conference (IGC), which stressed the following goals: to improve the democratic legitimacy of the EU, particularly by increasing transparency and by bringing the national parliaments and governments of the member states into closer contact with EU decisionmaking; to work for the enlargement of the EU, especially with regard to the three Baltic states; and to improve cooperation between member states on a number of crucial social issues such as industrial productivity, employment, crime prevention, and detection, as well as environmental matters. The government is not well disposed toward either federalist tendencies in Brussels or an à la carte Europe and on European security issues favors a continuation of intergovernmental cooperation, although Sweden has become somewhat more flexible about allowing the veto within the second pillar (CFSP). During the IGC, the government favored strengthening the so-called Petersberg agenda (participation in peacekeeping and humanitarian missions) but opposed proposals that would have undermined the balance between large and small states within the Community. It is impossible, after only three years of membership, to predict how a country that kept to itself for almost two centuries will adapt to closer integration in Europe. However, it is clear that the tendency to remain aloof remains strong and tenacious, and as post-TEU polls have so clearly indicated, the Swedish people have yet to overcome their deep-rooted vacillation in the face of the opportunities and challenges posed by an even stronger and enlarged EU. See also EUROPEAN ECONOMIC AREA; TABLE 6; TABLE 10; APPENDIX 2; APPENDIX 3.

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Switzerland

Miles, Lee, ed. 1996. The European Union and the Nordic Countries. London: Routledge.

Bibliography

—Walter Carlsnaes

In the 1950s, Switzerland did not want to join the EC. Instead, Switzerland preferred a free-trade area within the Organization for Economic Cooperation and Development (OECD) framework. Accordingly, in 1960 Switzerland was a founding member of the European Free Trade Association (EFTA). Britain’s impending accession to the EC in the early 1970s had a profound effect on Switzerland and the other remaining EFTA members, who signed agreements with the EC in 1972 to remove tariffs and quotas on industrial goods. Fifteen years later the single market program posed an even greater challenge to Switzerland. In order to deter new membership applications at a time when the Community was attempting to deepen rather than widen, the Commission proposed that the EFTA countries join the EC member states in a new European Economic Area (EEA). This would give the EFTA countries most of the benefits of the single market without actually giving them full EC membership. Yet the proposed EEA disappointed Switzerland in three important respects: it was based solely on EC law; it could create a kind of minisupranational organization within the EFTA pillar of the EEA; and it would not de facto allow any country to opt out of future EC directives pertaining to the EEA. Dissatisfied with the EEA offer, in June 1992 Bern applied for full EC membership. Apart from an understandable desire to overcome the proposed EEA’s drawbacks by acquiring full EC decisionmaking capabilities, Switzerland was motivated by three main objectives: to adapt to the changing, post–Cold War international environment; to meet the challenge of deeper integration inherent in the recently negotiated Treaty on European Union (TEU); and to keep pace with the other EFTA countries wanting to join the EC. The issue soon became moot, however. Contrary to the advice of a large majority of economic, political, and trade union leaders, 50.3 percent of the electorate (and approximately three-quarters of the cantons) rejected EEA membership in a refer-

Switzerland

endum on December 6, 1992. To compensate for this setback, the Swiss government began to negotiate a series of bilateral agreements with the EU covering roughly the EEA agenda. Not surprisingly, the most contentious questions concerned sensitive domestic political issues: the free movement of people and truck transit through the Alps. The Reluctant Swiss Apart from specific events and developments that have affected EU-Swiss relations in recent years, a number of underlying factors negatively influence Swiss attitudes toward European integration and make it unlikely that Switzerland will soon reactivate its membership application. These are Swiss nationalism, neutrality, economic particularism, and the weakness of the central state. The ethos of European integration rejects excessive nationalism. In the 1950s and 1960s, while the rest of Western Europe attempted to come to terms with excessive nationalism, Swiss nationalism reached its zenith. This had to do mainly with the so-called lessons of history; specifically, the lessons of World War II, when the Swiss developed exaggerated myths about “earth,” armed neutrality, citizenship, and (in an effort to distinguish themselves as much as possible from neighboring Germany) the distinctiveness of the Swiss-German dialect. Moreover, tremendous economic growth and relatively low levels of unemployment fostered Swiss feelings of national superiority. Under the circumstances, European integration seemed alien to Switzerland’s identity and had little practical appeal. Yet this masks an interesting paradox: Frenchspeaking Swiss (20 percent of the population) express one of the most pro-EU feelings in the world. No less than 75 percent of French-Swiss supported joining the EEA. This is a reaction against the perceived economic and political domination of the country by the Euroskeptical German-Swiss. French-speaking Switzerland’s pro-Europeanism crosses political, economic, and social cleavages; even French-speaking bankers, conservative politicians, and farmers want Switzerland to join the EU. During the Cold War, most Swiss were convinced that by staying out of the international organizations and alliances, Switzerland could increase its prosperity, enhance its security, and maintain its domestic political stability. Armed neutrality came to be interpreted in a fundamentalist way. Significantly, Switzerland joined the

System for the Stabilization of Export Earnings from Products (STABEX)

nonpolitical Council of Europe only in 1963 and overwhelmingly rejected UN membership in a referendum in 1986. In the post–Cold War period, most Swiss remain skeptical about the EU as an alternative to Switzerland’s traditional international orientation. Nor are they sympathetic to the idea of anchoring any German effort toward international normalization in an EU framework. Most Swiss are also doubtful about the Franco-German axis being a genuine element of stabilization in Europe. Although most economic sectors want at least partial integration into the single market, more business people than elsewhere in Europe do not want full EU membership. Two particular features of the Swiss economy help to account for that. The first is a relatively important “offshore economy” that generally wants to avoid too much harmonization with the EU. Switzerland has been transformed by some multinational companies and banks into a safe haven of “special” legislation. These interests fear a possible EU interventionist and bureaucratic spillover into Switzerland. The second feature is that of hyperprotected, cartelized, and subsidized pressure groups who want to keep their privileges. For instance, farmers (Europe’s most cosseted) fear accession to the Common Agricultural Policy, which would offer them fewer and smaller subsidies than Switzerland’s existing farm policy. Other economic interest groups do not like the idea of the opening of public procurement, adoption of EC competition laws, and the dismantling of tariff and, especially, nontariff barriers with the rest of Europe. The government wants Switzerland eventually to join the EU but is unable to convince a majority of the electorate. Compared to other European countries, Switzerland has a weak bureaucracy and state apparatus. This can be explained largely by the conjunction of two factors: (1) confederation (or cantonization) that divides Switzerland into twenty-six governments and parliaments and results in a decisive fragmentation and diffusion of political power (especially in rural German-speaking areas, whereas the central state is often perceived as a somewhat foreign body), and

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(2) direct democracy, which also weakens the central state. There is no other country where direct democracy is so powerful, even at a national level. In order to avoid being outvoted in a popular referendum, the government must strive for the largest consensus on any issue. Inevitably in a direct democracy, joining a supranational organization (in Switzerland, even the EEA is considered as such) necessitates a referendum. To win approval, the government needs a double majority; one of the electorate as a whole and one of the cantons. As there are many relatively underpopulated, conservative, anti-EU German-speaking cantons, it will always be difficult in Switzerland to get popular support for ratifying treaties linked to European integration. See also EUROPEAN ECONOMIC AREA; TABLE 6; APPENDIX 2; APPENDIX 3; APPENDIX 7; APPENDIX 8. Schwok, René. 1991. Switzerland and the European Common Market. New York: Praeger.

Bibliography

—René Schwok

See SYSTEM FOR THE STABILIZATION EARNINGS FROM MINERALS.

SYSMIN

OF

EXPORT

System for the Stabilization of Export Earnings from Minerals (SYSMIN)

Under the Lomé convention, the System for the Stabilization of Export Earnings from Minerals (SYSMIN) scheme—modeled on the earlier System for the Stabilization of Export Earnings from Products (STABEX) scheme—financially assists participating African, Caribbean, and Pacific countries whose earnings from mineral exports fall below a certain level, which is based on a regularly recalculated dependency threshold for each country in relation to each mineral listed. See also LOMÉ CONVENTION.

See TRADE AND COOPERATION AGREEMENTS.

TCAs

T

Technical Assistance for the Commonwealth of Independent States (TACIS)

See TRANSATLANTIC BUSINESS DIALOGUE.

TABD

See TECHNICAL ASSISTANCE FOR WEALTH OF INDEPENDENT STATES.

TACIS

THE

COMMON-

See TOTAL ALLOWABLE CATCHES.

TACs

See TRANSATLANTIC DECLARATION.

TAD

See TRANSATLANTIC FREE TRADE AREA.

TAFTA

See COMMON AGRICULTURAL POLICY.

Target Price

Task Force for Human Resources, Education, Training, and Youth

The Commission’s Task Force for Human Resources, Education, Training, and Youth ran a number of important EU programs, notably ERASMUS (to facilitate student exchange), LINGUA (to promote language acquisition), and TEMPUS (to encourage student exchange between the EU and the countries of Central and Eastern Europe), before being incorporated into Directorate-General XXII of the Commission.

In early 1992 an EC assistance program called Technical Assistance for the Commonwealth of Independent States (TACIS) became operational for Russia and subsequently for the other members of the Commonwealth of Independent States (CIS)—the former Soviet republics. This program had originally been designed for the Soviet Union. Between 1991 and 1995 the EU allocated ECU 2.268 billion to over twenty-two hundred TACIS projects, more than half of which involved Russia. TACIS projects range from restructuring state enterprises to developing services and education and seek to promote economic reform and facilitate the difficult transition to democracy. In July 1996, the Council of Ministers approved a further ECU 2.224 billion for assistance to the CIS and Mongolia from 1996 to the end of 1999. The EU may suspend TACIS under certain circumstances, such as human rights violations in the recipient states. See also RUSSIA. After a century of state domination, the telecommunications sector in Europe is facing the challenge of privatization and competition with the liberalization of voice telephony and network operation in 1998 (with extended transition periods for Greece, Ireland, Luxembourg, Portugal, and Spain). The telecommunications sector is of strategic importance to the whole economy because new technologies offer new communication options, and improved telecommunications could reduce information and transaction costs in the whole economy. Faster and cheaper information will facilitate the creation of more productive company networks across countries. Thus modern telecommunications not only reinforce the role of markets but also allow firms to become more decentralized and flexible. As empirical evidence in Germany shows, telecommunications stimulate economic growth by facilitating information flow and communication among firms (Jungmittag and Welfens, 1996). The importance of telecommunications for economic development has been em-

Telecommunications Policy

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448

Telecommunications Policy

phasized in many recent studies (e.g., Wellenius et al., 1993). For decades, the telecommunications sector in Europe was the preserve of national monopolies. Policymakers believed that falling average costs in network operation implied a natural monopoly, because the fastest growing company will enjoy advantages in efficiency that will allow it to overtake all rivals and create a monopoly (Welfens, 1995). Traditional monopoly behavior is inefficient, however; under monopoly conditions, the size of the network and the volume of calls are much smaller than they would be in a competitive market. The social optimum will lead to a deficit if price is set equal to marginal costs (which are lower than average costs). Two-part tariffs are a solution to this problem without state subsidies. Two-part tariffs consist of a unit price p ( p equal to marginal costs) and a fixed access charge, payment of which is required for buying consumption units at a constant price p. In economic terms, prices for various telecommunications services should be above marginal costs and inversely proportional to the demand elasticities while taking due account of the budget constraint of the network operator (Mitchell and Vogelsang, 1991). But it is doubtful that national telecommunications firms ever applied such economically rigorous pricing rules; the price structure was generally distorted by political forces. For example, the politically popular concept of universal services and uniform prices was characteristic of the telecommunications network, on the grounds that telecommunications is part of the basic infrastructure that government should provide. Therefore, the usual pattern for state telecommunications monopolies was that prices were below cost in local telephony but above cost in long distance and international telephony. In effect, this forced business users to subsidize household users. Uniform prices for telephone rental again led to massive cross subsidization, this time in favor of the countryside, where the rental charge often did not cover the greater cost of maintaining the network. Uniform prices were considered to mimic the law of one price under market competition, but in reality there were large international price differentials, especially in transatlantic telephony. For example, after the introduction of long-distance competition in the United States in 1984, outgoing transatlantic calls from the United States were much

cheaper than outgoing calls from EC member states. Traditional and New Views of Telecommunications Although the state monopoly was the traditional European solution to competition and pricing problems in this sector—and there are arguments in favor of such a policy, based on economies of scale and of density in operation of a fixed-line network—economists believe that there is in fact no natural monopoly in the field of telecommunications services. From an economic perspective the most efficient solution to these problems would be separation of network operation and telecommunications services, coupled with an end to the traditional operating monopoly through entry into the market of new network operators. With traditional technologies newcomers had to reach complex interconnection agreements with the dominant state-owned operator in order to gain access to the network. Progress in mobile telephony allows operators to bypass existing networks by using new digital transmission technologies (GSM, CDMA, or DECT). However, use of these technologies raises the problem of allocating scarce radio frequencies, a problem that ensures a continued government role in the future. Even in the absence of legal prohibitions or obstacles, entry into the sector is not easy for newcomers. The telecommunications sector is characterized by global competition, the dynamics of high-technology industry, and high capital intensity. Large capital requirements make a stable regulatory framework necessary. High sunk costs— specific investment costs that cannot be recovered when going out of business—give established network operators a substantial advantage over new entrants. Thus newcomers can enter successfully only if they command sufficient technological or special cost advantages (e.g., they already own potential rights of way). A stable regulatory framework is essential to encourage newcomers to commit the large amounts of capital required to enter the sector. In Western Europe, however, better technology means that the capital costs of operating a network are now falling. For example, rural households can be connected more cheaply via wireless transmission techniques. Thus even in relatively sparsely populated countries such as Sweden or Finland, several competing network operators

could profitably coexist. Although cross subsidization for political reasons has been the norm in Europe, prices for all groups can fall if competition and hence productivity growth are strong (in Britain real telecommunications prices have declined over 30 percent since privatization of the sector). Thus arguments against retaining the traditional monopoly sector become even stronger as the underlying technology improves. The Commission has launched several studies and initiatives to stimulate competition in this crucial industry. Most notable are the Commission’s 1993 white paper, Growth, Competitiveness and Employment, and the Bangemann Group report, Europe and the Global Information Society, which recommended that member states liberalize the telecommunications sector by “opening up to competition infrastructures and services still in the monopoly area.” Finally, a 1995 Commission green paper, Liberalization of Telecommunications Infrastructure and Cable Television Networks, envisaged a broader range of concrete steps toward liberalization. The green paper raised key questions for telecommunications to be addressed in any future regulatory framework: How can universal service be developed? How much will it cost, and who should pay for it? How should problems of interconnection and interoperability be handled? What restrictions or conditions should government place on licenses? How can a fair competitive environment be ensured? How can infrastructure competition create employment? How should Europe address the shift in employment in telecommunications? How can Europe ensure comparable and effective access to global markets? Finally, what are the broader societal effects of the information society? The liberalization of network operation and services in 1998 will likely result in an enormous increase in competition (Welfens and Graack, 1996). The green paper suggested that regulation should largely remain at the national level. This means that, given the direction of new technology, national regulators will have to focus not only on traditional telecommunications networks but also on sectors not covered by the green paper, such as the cable television sector and electricity sectors. The green paper emphasized that “in the future any regulatory framework for infrastructure must be sufficiently flexible to meet the challenges thrown up by the existing convergence of

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telecommunications, information technology and broadcasting.” This approach recognizes that the switch to digitization of information, pictures, and music will blur the lines between traditionally separate markets. However, the green paper did not really address the competition problems raised by entry of energy networks, for example, into the telecommunications business. Alternative Networks and Potential Market Entrants Potential alternative infrastructures in the telecommunications business include terrestrial networks, cable television networks, cellular systems, satellite systems, electricity companies, and railway companies that have firm internal networks and extensive rights of way. Appropriately enhanced, internal corporate networks could be opened to the general public after 1998. Cable television networks could in principle provide an ideal platform for newcomers to enter the telecommunications market unless the dominant operator itself owns the cable network, as in Germany and Portugal. In principle the cable television network can be one full-range alternative infrastructure in the telecommunications business. However, Italy, Greece, and Portugal face some problems in the short term because of low coverage. New market entrants could also emerge from the electricity and railway companies that operate large international networks. Once upgraded and extended, such networks could be marketed for public telephony. For example, by adding fiberoptic cable to the network of posts and lines for electricity transmission and by installing appropriate switches, hardware, and software to run the network, electricity grid companies can enter the trunk and local markets with relatively small marginal costs. The same applies to internal networks belonging to banks and multinational companies. In principle, digitization would allow these networks to transmit voice and other “bits of information” for third parties. Local access is, of course, a main problem for newcomers, but new wireless technologies facilitate bypassing the dominant operator. The alternative to a wireless bypass or alternative terrestrial network is to use leased lines from the dominant operator; in this case, the terms of interconnection agreements would be crucial to the success of the newcomer.

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Interconnection charges are an unresolved problem that can discourage competition and reinforce inefficiencies in the telecommunications business, especially where newcomers must reach agreement with dominant network operators. One option is to develop and enforce basic interconnection pricing rules via regulation; a more effective one would be growth of competition among network operators through entry of potential rivals such as energy grid companies, cable television companies, and other new terrestrial operators. Resale of capacity by holders of leased lines will add an important new element of competition. Britain has allowed the resale of capacity for national and international transmission, and in 1996 the government extended licenses for newcomers in international telephony.

Regulatory Framework and Regulatory Policy To ensure a competitive market (possibly even one favoring new entrants) and maximum economic benefit from new telecommunications technology, the future regulatory framework will have to cover the following areas: (1) numbering plans that ensure number portability so that consumers may switch freely from one telecommunications company to another (in France the regulator—independent since 1997—proposed a new scheme whereby the telecommunications user can determine the long-distance company by the first digit so that access to that company’s operator is possible on a call-by-call basis), (2) pricing rules that favor cost-oriented pricing and technological progress (e.g., via price caps), (3) interconnection rules that cover both technical protocols and the price of access to a network, (4) universal service obligations that must be defined and financed (e.g., from tax receipts, on the basis of market shares or from access charges), (5) frequency allocation in the case of mobile telephony, (6) technical regulations to ensure interoperability of networks, and (7) rules for consumer protection. Moreover, in order to achieve a fully competitive market, regulators must have appropriate powers and structure. For example, regulated industries are subject to the problem of regulatory capture, that is, industry representatives find ways to influence legislation and regulation to stifle competition and allow rent-seeking (profiteering) by the regulated parties (Posner, 1974; Stigler, 1975). This need not always be the case; in a departure from European experience, Britain’s Con-

servative government used its regulatory powers to achieve and maintain competition in a market initially dominated by one operator. Hence the British Office of Telecommunication (OFTEL) implemented asymmetric regulation that imposed more constraints on the dominant operator than on newcomers. Regulatory bodies should also be politically independent so that credible rules can be enforced. Similar principles of regulatory policy must be adopted in all EU countries. One forum for developing common principles of regulation might be the Organization for Economic Cooperation and Development (OECD), which has become increasingly interested in the telecommunications sector (Ypsilanti and Kelly, 1993). EU and national regulators have already begun to grapple with the specific regulatory requirements listed above. EU regulation provides a framework within which national regulators can operate in accordance with national and EU law and the principles of the single market. Competition in the presence of a dominant operator is only possible if there are clear interconnection rules and if open network provisions (ONP) are implemented. Since the 1980s the Commission has emphasized the principle of ONP. In 1996 the EU adopted the position that national authorities cannot refuse licenses for telecommunications operators except in four cases: (1) to give a licensee access to a radio frequency for mobile telephony or in the event of a temporary shortage of numbers; (2) to give a licensee access to private or public land; (3) to enforce universal service obligations; (4) to ensure interconnection in the case of a dominant fixed network operator. The ONP Committee, chaired by a Commission official and composed of representatives from all member states, is a major EU regulatory authority. ONP Committee decisions are taken by qualified majority voting but can be vetoed by the Commission. However, the Council of Ministers in turn may overrule the Commission. The ONP Committee seeks to ensure interoperability and hence functions as an arbiter in problems arising from the EU’s ONP leased-lines directive. The UK has set the pace for incentive regulation in the EU. In order to avoid problems created in the United States (i.e., overinvestment in capital and insufficient innovation) when regulators used a theoretical appropriate “rate of return” on investment to set prices for dominant suppliers, the British regulator OFTEL set a price cap for a bundle of network activities or services. Specifically,

prices are allowed to grow at the same rate as the retail price index minus the anticipated productivity growth rate, which was initially estimated at 3 percent but raised to 7.5 percent in 1995. In setting initial prices, OFTEL also had to take into account the need to rebalance existing tariffs to bring them into line with actual costs. Another aspect of pricing policy, the accounting system for international calls, is also likely to be revised soon, as the United States is increasingly dissatisfied with the current situation. As competition has reduced international charges within the United States relative to high monopoly prices in Europe, more transatlantic calls originate in the United States than in Europe. This has led to a “trade surplus” for European operators. Not only do European operators reap the benefits of higher prices for calls originating in Europe; under the current international payments system, they can charge U.S. network operators for completing the calls at the European end, thus profiting from the increased volume of calls resulting from lower U.S. prices. There is no doubt that the U.S. government will put much pressure on EU member countries to open up telecommunications markets for U.S. network operators and to accept new international accounting rates that are less biased against the United States. Privatization and Foreign Investment Privatization is an important issue in Europe. The UK pioneered competition in the telecommunications sector in 1984, using a duopoly approach. But in 1995 British Telecommunications (BT), the former monopoly operator, still held about 85 percent of the British market. Since then newcomers from the cable television sector (including U.S. companies Nynex, Cablecomms, and Bell Cablemedia, which joined forces with Cable and Wireless) have increasingly moved into the telecommunications business. This move was possible because digitization has blurred traditional market demarcation lines between video, audio, and voice transmission, reinforcing competition in telecommunications. Although the Netherlands, Denmark, and Spain (Telefonica) followed Britain’s lead in the mid-1990s, Germany and France were more hesitant. Germany will not privatize more than one third of its market; France envisages a gradual privatization of up to 49 percent until 1999. Governments hope to generate large revenues from privatizing state monopolies, but trade unions often resist heavily, fearing job losses. Privatization in-

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creases pressure on management to achieve a competitive return on investment. This may cause loss of jobs but also fosters the development of new value-added services as well as entry into new foreign markets. In the long run, privatization should lead to an integrated EU market in which distance costs become irrelevant. Foreign direct investment in telecommunications increased rapidly in the 1990s when many U.S. “Baby Bells” became active in European mobile telephony or joined EU operators willing to enter neighboring markets. Both BT and France Telecommunications/Deutsche Telekom joined forces with U.S. partners (MCI and Sprint, respectively). AT&T has formed a joint venture with Unisource, a consortium including Swiss PTT, Dutch KPN, Swedish Telia, and Spanish Telefonica. One major reason for creating broad international consortia is that clients, especially multinational companies, want one-stop shopping in telecommunications. U.S. telecommunications operators interested in entering EU markets have used these new joint ventures to press for liberalization in Britain, Germany, and France—above all to ensure that the dominant operator would give newcomers nondiscriminatory access to local networks. As the GATT Uruguay Round agreements include a new chapter on services—including value-added telecommunications services—the World Trade Organization (WTO) is monitoring the deregulation process in many countries. A special Negotiating Group on Basic Telecommunications was created in the WTO to deal with specific problems of the telecommunications sector (including foreign direct investment) after the completion of the Uruguay Round. The International Telecommunications Union (ITU), long the dominant multilateral organization in the sector (e.g., setting international accounting rates), is thus increasingly being undermined. With EU telecommunications liberalization, such accounting rates will be replaced with interconnection charges negotiated in the market. In Central and Eastern Europe, where there was a large excess demand for telecommunications in the communist era, the sector is undergoing a rapid transformation (Welfens, 1992; Welfens and Yarrow, 1996; Schenk, Muller, and Schnoring, 1995). Central and Eastern European states that have concluded agreements with the EU will be subject to EU competition rules (Hoekman and Mavroidis, 1995). Therefore EU deregulation will

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strongly influence Central and Eastern Europe also. Moreover, besides U.S. firms, the main foreign investors in the region are from EU countries, most notably Deutsche Telecommunications, Dutch PTT, Tele Denmark, BT, and Finnish Telecommunications. The integration of Western, Central, and Eastern Europe will partly be achieved on the basis of a new modern international telecommunications network. See also EUROPEAN TELECOMMUNICATIONS STANDARDS INSTITUTE.

Hoekman, B. M., and P. C. Mavroidis. 1995. “Linking Competition and Trade Policies in Central and East European Countries.” In L. A. Winters, ed., Foundations of an Open Economy, pp. 111–153. London: Center for European Policy Research. Jungmittag, A., and P.J.J. Welfens. 1996. Telekommunikation, Innovation und die langfristige Produktionsfunktion: Theoretische Aspekte und Kointegrationsanalyse für die Bundesrepublik Deutschland. Discussion Paper, no. 20. Potsdam: European Institute for International Economic Relations/University of Potsdam. Mitchell, B. M., and I. Vogelsang. 1991. Theory of Telecommunication Pricing. Discussion Paper, no. 65. Bad Honnef: WIK. Posner, R. 1974. “Theories of Economic Regulation.” Bell Journal of Economics and Management Science 5, no. 3, pp. 335–357. Schenk, K.-H., J. Muller, and T. Schnoring, eds. 1995. Mobile Telecommunications: Emerging European Markets. Boston: Artech House. Stigler, G. J. 1975. The Citizen and the State: Essays on Regulation. Chicago: University of Chicago Press. Welfens, P.J.J. 1992. Market-Oriented Systemic Transformations in Eastern Europe. New York: Springer. ———. 1995. “Telecommunications and Transition in Central and Eastern Europe.” Telecommunications Policy 19, no. 7, pp. 561–577. Welfens, P.J.J., and C. Graack. 1996. Telekommunikationswirtschaft. Heidelberg: Springer. Welfens, P.J.J., and C. Yarrow, eds. 1996. Telecommunications and Energy in Transforming Economies. International Dynamics, Deregulation and Adjustment in Network Industries. Heidelberg: Springer. Wellenius, B., et al. 1993. Telecommunications: World Bank Experience and Strategy. World Bank Discussion Paper, no. 192. Washington, DC: World Bank. Ypsilanti, D., and T. Kelly. 1993. Fostering Telecommunications Development: The Role of the OECD. In C. Steinfield, J. M. Bauer, and L. Caby, eds., Telecommunications in Transition, pp. 118–139. London: Sage.

Bibliography

—Paul J.J. Welfens

Television Without Frontiers

The so-called Television Without Frontiers directive (Directive on the Coordination of Certain Provisions Laid Down by Law, Regulation or Administrative Action in Member States Concerning the Pursuit of Television Broadcasting Activities) was a controversial Commission initiative to encourage the production of European films and television programs and to protect European languages and culture from the impact of the U.S. entertainment industry. Thus, Article 4 of the directive stipulated that “where practicable and by appropriate means,” broadcasters should reserve a majority proportion of their transmission time (excluding news, sports events, games, advertising, and teletext services) for European works. See also AUDIOVISUAL POLICY.

Temporary Committee of Enquiry

The Treaty on European Union formally recognized the European Parliament’s right to establish temporary committees of inquiry, thereby strengthening the Parliament’s powers of scrutiny and control. The first such committee investigated transit fraud—smuggled goods and forged documents—in the EU. See also EUROPEAN PARLIAMENT. See TRANS-EUROPEAN MOBILITY SCHEME FOR UNIVERSITY STUDENTS.

TEMPUS

After the accession of Greece to the EC in 1981, the nine member states became ten. Thus the EC was often referred to as the Ten between 1981 and 1986, when Spain and Portugal joined and the Ten became the Twelve.

Ten

See TRANS-EUROPEAN NETWORKS.

TENs

Thatcher, Margaret (1925– )

See TREATY ON EUROPEAN UNION.

TEU

Margaret Thatcher, the former British prime minister (1979–1990), is famous—or infamous—for her opposition to the Treaty on European Union (TEU) of February 1992, especially its provisions for Economic and Monetary Union (EMU). As the newly elevated Baroness Thatcher of Kesteven, Thatcher seized every opportunity in late 1992 to denounce the treaty and rally Conservative opinion against its ratification in the UK. Thatcher’s forceful stand against the TEU was the culmination of a long-simmering political, philosophical, and ideological dispute with Brussels. As a stout defender of national sovereignty, Thatcher disliked the Commission’s federalist agenda and the EC’s supranational ambition. She is often compared to French president Charles de Gaulle: both were ardent nationalists, and both resolutely opposed the Community’s increasing encroachment on their countries’ sovereignty. Yet there are obvious differences between them. The most striking is their contrasting attitude and behavior toward the United States. De Gaulle resented the hegemony of the United States in the alliance and did everything possible to assert French and European independence of Washington. His attempt to bring about a Europe of the States, in contradistinction to a divided continent under the wings of the two superpowers, and his break from NATO in 1966 are legendary. By contrast, Thatcher deliberately cultivated the Anglo-American “special relationship” and struck up a warm friendship with President Ronald Reagan. Thatcher formulated her policy toward Europe largely in relation to her policy toward the United States. She strove to become Washington’s most trusted ally and favored interlocutor on transatlantic economic, diplomatic, and military affairs. The EC played a prominent role throughout Thatcher’s political career. In 1975 she made her maiden speech as leader of the Conservative opposition in the House of Commons on the thenburning issue of Britain’s renegotiation of accession terms and a referendum on continued membership. In typically strident tones, Thatcher argued against a constitutionally unprecedented

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referendum; in view of the Labour government’s decision to hold a referendum in any case, she argued in favor of Britain’s remaining in the Community. Both positions appeared paradoxical in 1992, but only the first one was. In 1992 Thatcher repudiated her earlier stand and called for a referendum in Britain on the TEU. Yet she remained true to her original support for EC membership. What she objected to in 1992, as in the past, was not an international organization dedicated to implementing common economic policies but the federalism inherent in European integration, which had received a big boost in the late 1980s under Commission president Jacques Delors. Renegotiation of EC membership terms was to have resolved the contentious issue of Britain’s budgetary contribution to Brussels. Instead, the 1975 renegotiation was a cosmetic exercise intended to assuage British public opinion and hold the pro- and anti-EC sides of the Labour Party together. Moreover, Britain’s favorable transition terms disguised the extent of its unfair budgetary situation. By the time Thatcher came to power in May 1979, however, the enormity of the budgetary anomaly was glaring. Compared to other member states, Britain imported far more manufactured goods and agricultural produce from outside the EC and paid more in import duties and agricultural levies into the Community’s coffers. On the other hand, because Britain had a highly efficient agricultural sector, the country received little from the Common Agricultural Policy (CAP), which accounted for over 70 percent of Community expenditure. Although Thatcher’s EC counterparts conceded the inequity of Britain’s case, the so-called British Budgetary Question soon became the most heated and controversial issue in the Community. Thanks largely to Thatcher’s obduracy, intransigence, and complete disregard for diplomatic convention, the dispute lasted five years and dominated fifteen European Councils before being resolved at the Fontainebleau summit in June 1984. Despite the debilitating effect of the budgetary question, Thatcher played a prominent part in the EC’s revival in the mid-1980s. An unswerving champion of deregulation and economic liberalism, she persistently advocated completion of the Community’s long-awaited internal market. Accordingly, she strongly supported the Commis-

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sion’s white paper on the single market and pushed hard for implementation of the program. Like almost everyone else at the time, Thatcher never expected the single market program to revive the movement for deeper European integration. She was lukewarm about the Single European Act—a constitutional change deemed necessary for passage of single market legislation—lest it strengthen the Commission’s power and foster further supranationalism. She especially feared a renewal of interest in EMU, a logical corollary of a single market. That put her on a collision course with Delors, who enthusiastically espoused EMU not only because of its intrinsic merit but also because of its potential for promoting European integration. Thatcher’s opposition to Delors and all he represented culminated in her famous speech at the College of Europe in Bruges in September 1988, a brilliant harangue against an “identakit” Europe and a socialist, centralized Community. Yet Thatcher found herself fighting a rear guard action in Brussels and London against Delors’s plans for EMU. The key issue became Britain’s participation in the exchange rate mechanism (ERM) of the European Monetary System (EMS). Thatcher promised to join the ERM but only at the most propitious moment for Britain. Her cabinet colleagues pressed for ERM participation in 1988 and 1989, both to strengthen the pound and to signal the country’s commitment to EMU. Combined with a bitter domestic dispute over a new method of taxation, controversy over ERM poisoned relations in the government. More self-righteous than ever, Thatcher became increasingly unpopular and isolated. Once Thatcher’s senior cabinet ministers realized that her continuing support for the hugely hated new tax meant that the Conservative Party could not win another election under her leadership, they launched a palace revolution. In November 1990 she lost the party leadership and, consequently, the prime ministership. Thatcher’s opposition to EMU had contributed to her downfall. Deeper European integration was never popular in Britain, but Thatcher’s strident opposition to it, at a time of increasing domestic recession, began to alienate even her own supporters. John Major, her successor, distanced himself from Thatcher by striking a constructive note on Community affairs (initially at least). At the Maastricht summit in December 1991, Major won safeguards for Britain on EMU

and an opt out of the Social Charter. Yet at home, sulking on the backbenches of the House of Commons, Thatcher decried what she saw as Major’s sellout. Thereafter, she continued her hectoring from the greater political distance of the House of Lords, reveling in the government’s discomfiture during the TEU ratification crisis and the deepening rift between Euroskeptics and Euromoderates in the Conservative Party. See also UNITED KINGDOM. THERMIE is the application (market-oriented) side of the nonnuclear energy research program under the aegis of the EU’s research and technological development policy (JOULE, a companion program, promotes pure research on nonnuclear energy). THERMIE includes projects to advance or implement innovative energy techniques, processes, or products for which the research and development plan has been completed; dissemination of information on innovative energy technologies; and support for small and medium-sized enterprises. THERMIE is managed by the Commission’s Directorate-General XVII.

THERMIE

Nonmember states of the EU are known as third countries.

Third Countries

The EU is built on three pillars: the EC (Pillar One), the Common Foreign and Security Policy (Pillar Two), and Justice and Home Affairs (Pillar Three). See also JUSTICE AND HOME AFFAIRS; PILLARS; TREATY ON EUROPEAN UNION.

Third Pillar

Gaston Thorn succeeded Roy Jenkins as Commission president in 1981, serving for four years before handing over to Jacques Delors in January 1985. Before coming to Brussels, Thorn had been a government minister in Luxembourg since 1969, including a period as prime minister between 1974 and 1979. Thus, from the perspective of the Council of Ministers, Thorn had a sound knowledge of how the EC worked (or didn’t work).

Thorn, Gaston (1938– )

Moreover, between 1959 and 1969 he had been a member of the European Parliament. Yet Thorn was a disappointment as Commission president. He failed to maintain the momentum that Jenkins had developed and in retrospect was completely overshadowed by his successor, Jacques Delors. Even in his own Commission, Thorn appeared to have less influence and ambition than Etienne Davignon, whose name, rather than Thorn’s, is often used to identify the 1980–1984 Commission. After his departure from Brussels, Thorn went into international banking. See also COMMISSION; LUXEMBOURG. Barend Bushevel, a former Dutch prime minister; Edmund Dell, a former British government minister; and Robert Marjolin, a former vice president of the Commission, were the “three wise men” asked by French president Valéry Giscard d’Estaing (with the European Council’s approval) in December 1978 to draft a report on reform of the EC’s institutions. Setting a fine example of bureaucratic efficiency, the wise men stuck to their mandate, tight timetable, and limited budget and, to the surprise of the heads of state and government, presented their report on time, a month before the Dublin summit of November 29 and 30, 1979. At the summit, Giscard noted with pleasure the report’s criticism of the Commission and endorsement of the European Council. Beyond that, Giscard did not delve too deeply. After all, the report also criticized successive Council presidencies for lack of direction (France’s presidency, in the first half of 1979, had been particularly poor). Nor did Giscard like the report’s emphasis on a lack of political will as the main obstacle to the EC’s development. Thus, after a perfunctory discussion of it at the Dublin summit, the three wise men’s Report on European Institutions joined two similar reports drafted at the same time (the Tindemans Report and the Spierenburg Report) in the EC’s archive.

Three Wise Men

At a summit in Paris on December 9 and 10, 1974, the heads of state and government—motivated by a sense of obligation rather than enthusiasm— asked Leo Tindemans, prime minister of Belgium and a committed Eurofederalist, to prepare a report

Tindemans Report

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on European union. Tindemans toured EC capitals, interviewed numerous EC and member state officials, and presented his conclusions in January 1976. The so-called Tindemans Report focused less on the lofty goal of a federal Europe than on the urgent need to reform existing EC institutions (e.g., reduce the number of commissioners, replace unanimity with qualified majority voting, lengthen the six-month Council presidency) and extend Community competence (notably in the field of foreign policy and security). The report’s most controversial aspect was an exploration, but not specifically an endorsement, of a “two-speed Europe,” with differing rates of integration in the EC depending on the will and ability of each member state. Smaller member states disliked the prospect of a first- and second-class EC, and the larger member states—with the exception of Germany and Italy—fretted about a further loss of sovereignty. French president Giscard d’Estaing took the lead and stifled the report with the kind of bureaucratic asphyxiation that Tindemans had so bitterly complained about: the heads of government asked their foreign ministers to consider the report; the foreign ministers asked their senior officials to do so; the senior officials reported on the report to their foreign ministers; the foreign ministers reported on the report’s report to the European Council in The Hague on November 29 and 30, 1976; and the European Council let the matter drop. Total Allowable Catches (TACs) are the centerpiece of a system of conservation and management (“balanced exploitation”) of fish stocks that is in turn a key element of the EU’s Common Fisheries Policy. The scientifically determined TACs specify annually the quantity of each of the main species that can be caught, which is then divided among the member states. TACs are supplemented by various complementary measures such as restrictions on net mesh size and temporary fishing bans at certain times, in various areas, and on taking particular species. The system is enforced by member states supervised by a small EU fisheries inspectorate. See also COMMON FISHERIES POLICY.

Total Allowable Catches (TACs)

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Trade and Cooperation Agreements (TCAs)

Although tourism has a major impact on the EU’s economy (employing nine million people and accounting for 5.5 percent of the GDP) and is affected by regional, consumer, environment, and transport policies, the EU does not have a well-developed tourism policy. In April 1996, the Commission proposed its first multiannual (1997– 2000), EU-level, tourism program (called PHILOXENIA) to replace a small number of preexisting tourism initiatives that had met with little success. The PHILOXENIA proposal brought out the latent division between EU member states over tourism policy: citing subsidiarity and efficiency, the majority want to keep EU involvement to a minimum; hoping for financial support, the minority (notably Greece, Italy, Luxembourg, and Ireland) want tourism to become a full-fledged EU policy area.

Trade and Cooperation Agreements (TCAs)

Trade and Cooperation Agreements (TCAs) are a category of EU accords with nonmember states. In terms of economic and political involvement, they are the least intense and intrusive, aiming only for the development and diversification of trade relations and the promotion of economic and commercial cooperation. The EC signed one of these so-called first generation agreements with the USSR in December 1989 and extended its terms to cover Russia and the other former Soviet republics after the USSR’s collapse in December 1991. Most of the TCAs with the former Soviet republics and the Central and Eastern Europe states (CEES) were upgraded first to Partnership and Cooperation Agreements and later (in the case of the CEES) to association (Europe) Agreements. See also CENTRAL AND EASTERN EUROPEAN STATES; RUSSIA. See COMMUNITY TRADEMARK OFFICE.

Trademark Office

See NEW TRANSATLANTIC AGENDA.

Transatlantic Agenda

Transatlantic Business

The Transatlantic Business Dialogue (TABD) is an unprecedented venture in government-business partnership that tackles issues relating to the world’s most important economic relationship: that between the United States and the EU. The TABD has no formal structure and no official secretariat, nor is it a new institution or simply another business organization designed to influence policymakers. Rather, the TABD is a private-sector force designed to respond to the new reality of trade—namely, that companies are functioning globally and that their involvement in the making of international trade policy is a natural outgrowth of such globalization. The TABD has been called an “experiment in entrepreneurial diplomacy” (Levine, 1996) in which U.S. and European business leaders at the chief executive officer (CEO)–level work together to develop common objectives. Those objectives are jointly communicated to senior-level U.S. and EU officials who, in turn, work together with business to develop “smart” policy with the ultimate goal of benefiting both economies through improved competitiveness and the creation of new jobs. The idea of a business-driven transatlantic dialogue was launched at a meeting sponsored by the EU Committee of the American Chamber of Commerce in Brussels on December 15, 1994, by U.S. secretary of commerce Ron Brown. Considering the importance of the U.S.-EU economic relationship, Brown had come to the conclusion that traditional government-to-government communication was no longer enough. He reasoned that because business is the practitioner of international commerce, business leaders are best positioned to see the practical effects of trade policy and therefore should be consulted in the policymaking process. Brown met Commission vice president Sir Leon Brittan and commissioner for industry Martin Bangemann to develop the idea. The three then sent a joint letter to eighteen hundred U.S. and European companies and business associations in order to gauge business interest. Based on the responses to the letter, the Commission and the Department of Commerce produced a summary analysis and determined that sufficient interest existed to warrant a high-level business-government conference on transatlantic trade relations. Brown, Brittan, and Bangemann agreed to hold the con-

Dialogue (TABD)

ference in Seville, Spain, under the Spanish Council presidency in November 1995. The business responses also determined the four working group topics that the Seville conference would address: standards, certification, and regulatory policy; trade liberalization; investment; and relations with third countries. The Seville conference was a great success. Led on the U.S. side by Xerox CEO Paul Allaire and Ford Motor Company CEO Alex Trotman and on the European side by BASF CEO Jürgen Strube and Goldman Sachs International chairman Peter Sutherland, the transatlantic business community worked together effectively to produce a joint document that included seventy recommendations on practical ways to reduce impediments to trade. The collaborative climate between the European and U.S. business executives became known as the “Spirit of Seville.” The conference’s concluding declaration stated that the goal of the TABD “is to encourage the political leaders to analyze the competitive situation on both sides of the Atlantic to ensure that laws and regulations converge wherever possible to allow market forces to accelerate economic growth and job creation and improve international competitiveness.” Government officials paid serious attention to the Seville recommendations, many of which were incorporated into the New Transatlantic Agenda (NTA) and the U.S.-EU Action Plan approved by U.S. president Bill Clinton, Commission president Jacques Santer, and Spanish prime minister Felipe González at the U.S.-EU summit in December 1995. The Seville conference cochairs decided that new institutions were unnecessary to pursue the TABD. Instead, they would tap the trade expertise of interested companies and harvest the capabilities of existing organizations already working on transatlantic relations. Accordingly, the Seville recommendations were organized into fifteen issue groups, with issue managers assigned on both sides of the Atlantic to steer the business community’s interest in these areas. For instance, the first issue group, the Transatlantic Advisory Committee on Standards, Certification, and Regulatory Policy (TACS), is further divided into sectors such as automotive, pharmaceutical, electronics, telecommunications, and information technology. At the TABD Steering Committee meeting in Brussels in May 1996, issue managers submitted a

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progress report that developed the Seville recommendations into concrete proposals for government action and outlined business expectations. Key categories and goals include:

Standards, Certification, and Regulatory Policy: Further regulatory cooperation to remove costly barriers caused by differing standards and regulatory policy; conclusion of the mutual recognition agreements. WTO Issues: Continued commitment to the multilateral process and priority attention to be given to the full implementation of the Uruguay Round commitments and, in addition, progress toward China’s accession to the World Trade Organization. Information Technology Agreement (ITA): Commitment to the successful outcome of ITA negotiations by December 1996, extended to the maximum number of countries and products. Intellectual Property: Full and complete implementation by the United States, the EU, and the EU’s member states of the Agreement on Trade Related Aspects of Intellectual Property and accelerated implementation of the agreement by key third-country markets. International Business Practices: Commitment to implement promptly the 1994 and 1996 Organization for Economic Cooperation and Development recommendations, including the elimination of tax deductibility of bribes and the criminalization of bribery. Small and Medium-Sized Enterprises: Development and implementation of a small business initiative to include a new information system and a program to assist small businesses to explore trade opportunities and facilitate joint ventures and export financing. Investment and Research and Development: Commitment to open investment regimes, including the principles of national treatment of investors and investments.

The Libertad (Helms-Burton) Act and similar U.S. measures against Iran and Libya largely overshadowed the June 1996 and subsequent U.S.-EU summits. As a result, the TABD was one of the few positive elements on the transatlantic agenda of the June 1996 meeting. At a lunch during the summit hosted by U.S. secretary of commerce Mickey Kantor and attended by President

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Santer and Charlene Barshefsky, acting U.S. trade representative, CEOs urged both sides to act quickly to implement the joint business proposals as outlined in the progress report. Political leaders obtained a better view of private-sector commercial objectives and frustrations with certain trade policies; the CEOs obtained a clearer understanding of the political realities facing policymakers. The TABD has provided the private sector with a seat at the table in shaping the future of the transatlantic marketplace. The U.S. government and the Commission already have indicated their desire for the TABD process to continue. At a press conference following the TABD steering committee meeting in Brussels on May 23, 1996, Undersecretary of Commerce Stuart Eizenstat noted that “the TABD has influenced government decision-making on both sides of the Atlantic. It has become deeply enmeshed and embedded into the U.S. government decision-making process on a whole range of regulatory, trade, and commercial issues … [and] has had a truly remarkable impact in our country, in the Transatlantic dialogue, and multilaterally” (Eizenstat, 1996). For its part, business is willing to continue the dialogue if the United States and EU can prove that action will follow. The TABD’s annual conferences (the most recent of which took place in Rome on November 6 and 7, 1997) provide an opportunity to refocus official attention on privatesector priorities for transatlantic trade policy. Future developments will show whether this “experiment in entrepreneurial diplomacy” is truly worthwhile. If it is, the TABD may well become a model for other trading relationships. See also U.S.-EU RELATIONS: THE POLITICS OF PARTNERSHIP. Eizenstat, Stuart. 1996. “Statement at the TABD Press Briefing.” Brussels (May 23). Levine, Norman. 1996. “A Trans-Atlantic Bargain.” Journal of Commerce (May 10), p. 6A.

Bibliography

—Selina Jackson

On November 20, 1990, U.S. president George Bush, European Council president Giulio Andreotti, and Commission president Jacques Delors

Transatlantic Declaration (TAD)

signed a Declaration on U.S.-EC Relations—the so-called Transatlantic Declaration (TAD)—at a U.S.-EC summit in Washington. The TAD signaled a changing U.S.-EC relationship in the context of a new, and as yet uncertain, post–Cold War international system. As well as obvious commercial reasons for a more formal relationship, the declaration included a new factor: “the accelerating process by which the EC is acquiring its own identity … in foreign policy and in the domain of security.” The TAD established a framework for regular consultations (including six-monthly U.S.EC summits) to enable both sides to “inform and consult each other on important matters of common interest, both political and economic, with a view to bringing their positions as close as possible, without prejudice to their respective independence.” The TAD was later augmented by the New Transatlantic Agenda. See also U.S.-EU RELATIONS: THE POLITICS OF PARTNERSHIP. The term Transatlantic Economic Area was used in 1995 to describe a possible new political and economic arrangement between the United States and EU. U.S.-EU negotiations culminated in December 1995 in the less ambitious New Transatlantic Agenda, which included a commitment to closer economic cooperation.

Transatlantic Economic Area

Transatlantic Free Trade Area (TAFTA)

In 1995, at a time of changing U.S.-EU relations, a number of leading U.S. and European officials called for a Transatlantic Free Trade Area (TAFTA). Concerned about a seeming drift in transatlantic relations, their motives were political rather than economic. Although a TAFTA proved premature, U.S.-EU negotiations culminated in December 1995 in the New Transatlantic Agenda, which included a commitment to closer economic cooperation. See also U.S.-EU RELATIONS: TRADE AND INVESTMENTS.

Trans-European Mobility Scheme for University Students (TEMPUS)

As part of the Pologne et Hongrie: Actions pour la Reconversion Économique (PHARE) program of assistance to the Central and Eastern European states (CEES), in 1990 the EC launched the TransEuropean Mobility Scheme for University Students (TEMPUS) to promote educational exchanges between the EC and the CEES. TEMPUS I ran from 1990 to 1994; TEMPUS II covers the period 1994 to 1998.

Trans-European Networks (TENs)

The Treaty on European Union (TEU) included a new title (Title XII, Articles 129b–d) on Trans-European Networks (TENs) in the areas of transport, telecommunications, and energy infrastructure. By facilitating better access in the EU to markets and employment, promoting competitiveness and growth, and improving links to peripheral regions, TENs are intended to develop the single market and further economic and social cohesion. In his 1993 white paper, Employment, Growth and Competitiveness, Commission president Jacques Delors mentioned TENs as important instruments to promote growth and combat unemployment in the EU. At the December 1994 Essen summit, the European Council committed itself to establishing the TENs and identified fourteen priority rail networks and motorways, such as a high-speed train link between Erfurt and Nuremberg in Germany and a road-rail tunnel through the Brenner Pass. Jacques Santer (Delors’s successor) put the TENs at the forefront of his Commission presidency, based partly on the 1994 commitment, which he had given as Luxembourg’s prime minister. TENs also became a symbolic centerpiece of Santer’s job-creating initiative, the proposed Confidence Pact on Employment. However, the TENs soon not only became bogged down in technical disputes such as the interoperability of signaling standards but also were derailed by their excessive cost. Funding through the structural funds, cohesion fund, loans from the European Investment Bank, and guarantees from the specially created European Investment Fund could cover only a small part of the projected ECU 1.8 billion cost. To make up the large shortfall, Santer proposed using more than ECU 1 billion of surplus funds from the EU farm budget. Santer came close to winning support for reordering budget priorities at the Florence summit in June 1996. Ultimately he failed to

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do so because of member-state opposition to large public spending projects at a time of financial retrenchment that was partly the result of the convergence criteria for Economic and Monetary Union (EMU) and partly of the unexpected cost of compensating farmers for losses as a result of the bovine spongiform encephalopathy beef crisis. Despite Santer’s apparent abandonment of the TENs after the Florence summit, he continued to fight for his original action plan on employment, although employers and trade unions were skeptical of the pact’s usefulness. Santer’s inability to secure TENs funding and engender enthusiasm for the confidence pact was a political setback for the Commission president. See also TRANSPORT POLICY.

Translation Center for Bodies of the European Union

Situated in Luxembourg as part of an EU-wide agreement on the location of EU agencies, centers, and institutions, the EU Translation Center for Bodies of the European Union began functioning in December 1994. The center, which serves most EU entities, was established to reduce costs in the EU by avoiding replication of resources and minimizing the expansion of logistical support services such as terminology, documentation and libraries, and computer and telmatics units. Although linked to the Commission, the center has a separate legal personality, administration, and budget. In response to a perceived crisis of legitimacy in the EU, and in an effort to close the “democratic deficit,” EU institutions have promised greater openness and transparency in the conduct of their business. In particular, at an interinstitutional conference in Luxembourg on October 25, 1993, the Council, Commission, and European Parliament (EP) issued a declaration on democracy, transparency, and subsidiarity that promised to make the institutions more open and thereby easier for ordinary citizens to understand. The Council agreed to take the following steps:

Transparency

• • •

open some meetings to the public publish records and explanations of its voting publish common positions

460 • • • •

Transport Policy

improve information for the press and the public on its work and decisions improve general information on its role and activities simplify and consolidate legislation in cooperation with the other institutions provide access to its archives.

The Commission agreed to do the following: • • • • • • • • • • • • • • • •

undertake wider consultations before presenting proposals issue more green and white papers publish in the Official Journal brief summaries of impending proposals, with a deadline for parties interested in submitting comments publish work and legislative programs in the Official Journal include in its annual legislative program plans for the consolidation of EU legislation provide easier public access to documents improve knowledge of existing databases and their accessability, including improving the relay networks prepare an interinstitutional yearbook giving details of each institution’s organizational chart speed publication of documents in all EU languages adopt a new and more prominent information and communication policy enhance coordination of information activities both inside and outside the Commission adopt measures to facilitate the public’s understanding of Commission business provide a suitable response to requests from the media improve the treatment of phone, mail, and personal contacts between citizens and the Commission encourage self-regulation by interest groups by asking them to draft a code of conduct and a directory create a database on interest groups, which could be used by the public and by EU officials.

Finally, the EP confirmed the public nature of its committee meetings and plenary sessions. Despite these declarations, for procedural reasons the Council, especially, has been slow to

open up. Indeed, the limits of the agreement were soon tested when Britain’s Guardian newspaper took the Council to court for failing to hand over the minutes of certain meetings. The European Court of Justice (ECJ) ruled in 1995 in favor of the British paper and imposed on the Council the obligation to justify decisions not to release material of this kind. The ECJ’s ruling coincided with the accession to the EU of Sweden and Finland, countries with strong traditions of openness in public life. As part of the effort to bring the Union closer to its citizens, the Amsterdam Treaty included a chapter on transparency, which gives “any citizen of the Union, and any natural or legal person residing or having its registered office in a member state . . . a right of access to European parliament, Council and Commission documents. . . . ” See also DEMOCRATIC DEFICIT; LEGITIMACY. Although envisaged in the treaties of Paris and Rome and the subject of many Commission proposals, a common transport policy (CTP) has proved an elusive goal for much of the EU’s history. Blueprints for such a policy have generally comprised a mixture of harmonization and liberalization: coordination of investments and common rules of the game would allow for lower logistical costs while an integrated open market would deliver competitive benefits. However, the pervasiveness of government intervention in national transport markets and public ownership of many transport industries meant that relatively little was achieved. Given the economic bias of the treaties it is not surprising that the main focus of transport policy was regarded as the inland transportation of goods. Road, rail, and river were regarded as the main conduits for intra-Community trade, and questions of maritime and air transport were explicitly—if temporarily—excluded under Article 84 of the Rome treaty. Throughout the 1960s various attempts made to promote a CTP—normally involving gradual liberalization of markets and a harmonization of fiscal, social, and technical conditions—came to very little (only a few proposals were agreed to in the road haulage and railway sectors, and these had little impact on transport operators or consumers). The enlargement of the Community slowed the debate in the 1970s as the range of interests to be accommodated widened. The lack of progress in

Transport Policy

agreeing on Community policies for the transport sector was such that in 1983 the European Parliament decided to take the Council of Ministers to the European Court of Justice (ECJ) on the grounds that it had failed to act on its treaty obligations. The ECJ’s judgment obliged the Council to move more substantially on a common policy, particularly in those areas where transport services needed to be opened up to intra-Community competition. The ECJ’s ruling underpinned the Commission’s decision to make transport one of the priorities of the single market initiative. The 1985 white paper outlined a number of initiatives designed to open up transport services: the end of quotas on transport of goods by road, freedom of services for road passenger transport, cabotage rights in freight transport by road and inland waterway, and liberalization of sea and air transport services. In addition, the Commission sought liberalization of frontier controls to permit freer flow of transport and a harmonization of indirect taxation regimes that impinged on the transport industries. Spurred by the Court’s ruling and strengthened by a new willingness to use competition rules if all else failed, the Commission made considerable progress on transport policy in the second half of the 1980s (though the pace of reform was—by any standard other than the Community’s—still very slow). By 1997 the introduction of market forces to the transport sector was almost complete. (1) In the air transport sector, full liberalization took place in spring 1997, and policy is now concentrated on ensuring that free competition is possible and that congestion at airports and in airspace is limited. The Commission has also sought to play a role in liberalizing markets with external partners. (2) In the shipping sector, the liberal orientation of maritime policy has been strengthened with greater competition policy controls on the industry and fewer attempts to support the sector through subsidies and protection. (3) In the inland waterways sector, the focus has been on reducing surplus capacity and limiting market sharing arrangements. (4) In the road haulage sector, much of the process of market opening had been finalized by the mid-1990s, but with only a modest impact on competition. (5) In the rail sector, liberalization has progressed more slowly, with the emphasis on the separation of infrastructure and services and on greater accounting transparency. Competition was restricted initially to freight transport and international passenger trans-

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port. Although the Commission has proposed an extension of market opening (including competition for franchises on local services), there is little chance of agreement in even the medium term. Market liberalization has never been the only objective of European transport policy, however, and other elements began to gain a higher profile in the late 1980s, in particular infrastructural questions and the impact of transport on the environment. The infrastructural issue—addressed outside of the CTP framework for many years through the application of structural funds to poorer member states and regions—came to the fore with the initiative on Trans-European Networks (TENs). Transport is by far the most important network industry in the program, though telecommunications and energy are also covered. The TENs initiative was designed to improve linkages between and within member states and received endorsement in the Treaty on European Union. Transport research policy has been geared toward streamlining new networks and promoting new transport technologies, though finances have been limited. Liberalization and TENs have generally been seen as at odds with the other major trend in European transport policy: protection of the environment. Although environmental considerations have been invoked in connection with European transport policy for a number of years, it was only in the mid-1990s that the issue was taken seriously. In 1992 a Commission white paper, The Future Development of the Common Transport Policy, shifted the development of transport policy toward the environment. Introducing the concept of “sustainable mobility,” the white paper indicated that with an open transport market in place, the focus of policy would shift toward dealing with the social and environmental dimensions. According to the Commission, the policy priorities now cover five main themes: the development and integration of the EU transport system, safety in transport, environmental protection, social protection, and external relations. The first fruits of the white paper—proposals for road pricing and improved access to public transport (the so-called citizens’ network)—have surfaced, though it is unclear how they can be translated into effective Community policies. The past ten years have seen more of the Commission’s proposals on transport translated into policy, particularly in the area of market liberalization, but it remains debatable whether taken together the various EU initiatives constitute a

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CTP. Even in their own right there are grounds for questioning the effectiveness of policy: liberalization of air transport has been severely compromised by the granting of substantial state aids to a number of government-owned airlines, and the TENs program was held up by disputes between the Community institutions. The tensions between different programs—between the competition ethos of liberalization and the planning ethos of the TENs, and between the growth-led perspective of TENs and the sustainability of environmental policy—make it hard to reconcile the conflicting objectives inherent within EU transport policy. See also TRANS-EUROPEAN NETWORKS.

Abbati, C. 1987. Transport and European Integration. Brussels: Commission. Commission. 1992. The Future Development of the Common Transport Policy. COM(92)494. Luxembourg: Office for Official Publications of the European Communities. ———. 1995. Citizens Network Community. COM(95)601. Luxembourg: Office for Official Publications of the European Communities. Erdmenger, J. 1983. European Community Transport Policy: Toward a Common Transport Policy. Aldershot: Gower. Whiteleg, J. 1988. Transport Policy in the EEC. London: Routledge.

Bibliography

—Francis McGowan

See TREATY OF ROME.

Treaties of Rome

See MAASTRICHT TREATY.

Treaty of Maastricht

Signed in Paris on April 18, 1951, by representatives of France, Germany, Italy, Belgium, the Netherlands, and Luxembourg, the Treaty of Paris established the European Coal and Steel Community (ECSC). The treaty mandated a common market in coal and steel, to be administered by a High Authority, a novel supranational executive. It also created a Council of Ministers, a Common Assembly (the future European Parliament), and a Court of Justice. The ECSC began operating in August

Treaty of Paris

1952, with its headquarters in Luxembourg. The treaty is due to expire in 2002. See also EUROPEAN COAL AND STEEL COMMUNITY; SCHUMAN, ROBERT. Although there are two treaties of Rome, one establishing the European Economic Community (EEC) and the other the European Atomic Energy Community (EURATOM), the Treaty of Rome generally refers to the former. The EEC originated in a proposal in 1952 by Johan Willem Beyen, foreign minister of the Netherlands, to abolish quotas and tariffs on intra-Community trade, establish a joint external tariff, unify trade policy toward the rest of the world, devise common policies for a range of socioeconomic sectors, and organize a single internal market. The Beyen Plan survived the defeat of the proposed European Defense Community (EDC) in August 1954 and was a point of departure for the intergovernmental conference (IGC) in 1955 and 1956 to relaunch European integration. The proposed common market was particularly contentious in France, with its history of protectionism and subsidization. Only by winning a concession from France’s partners to include clauses in the proposed treaty guaranteeing assistance to France’s overseas possessions (the future Lomé convention) and embracing agriculture in the common market (the future Common Agricultural Policy) did the French parliament agree to a continuation of negotiations. The IGC eventually ended in a series of high-level meetings in February 1957. The preamble of the draft treaty was far less flamboyant than that of its European Coal and Steel Community (ECSC) predecessor, referring only to the signatories’ determination “to lay the foundations of an ever closer union among the peoples of Europe.” The treaty itself outlined the essential principles of the common market: the free movement of goods, persons, services, and capital; a customs union and common external tariffs; and various Community policies (e.g., agriculture, transport). The EEC’s institutional framework emulated that of the ECSC but included a stronger Council of Ministers and a correspondingly weaker Commission (because of the odium attached to supranationalism in the wake of the EDC debacle, the name Commission replaced the

Treaty of Rome

more pretentious High Authority of the ECSC in the Treaty of Rome). The EEC was to share an assembly (the future European Parliament) with the ECSC and EURATOM. Representatives of France, Germany, Italy, Belgium, the Netherlands, and Luxembourg signed the two treaties at an elaborate ceremony in Rome on March 25, 1957. Treaty ratification was problematic in France and Germany. In France, the problem was posed not by concerted Gaullist and Communist opposition (as was the case in 1954, when the French assembly rejected the EDC treaty) but by the government’s fall during the early summer. Jean Monnet’s Action Committee for a United States of Europe was instrumental, if not decisive, in ensuring swift and successful ratification in France of the Treaty of Rome. First, the Action Committee pressed for early ratification in the German parliament. The committee’s influence helped win the support of the Social Democratic Party, which had previously opposed both the ECSC and the EDC. With German ratification secure, the Action Committee turned its attention to the French National Assembly, where a comfortable majority endorsed the treaty on July 9, 1957. By the end of the year, the six signatories had ratified the treaty, allowing the EEC to begin operating on January 1, 1958. The treaty has been amended numerous times, most significantly by the Single European Act (1986), the Treaty on European Union (1992), and the Amsterdam Treaty (1997). See also EUROPEAN ECONOMIC COMMUNITY.

Treaty on European Union (TEU)

Agreed to in the southern Dutch city of Maastricht during the early hours of December 11, 1991, signed there on February 7, 1992, and coming into force on November 1, 1993, the Treaty on European Union (TEU) is one of the most complicated and controversial elements in the history of European integration. Its significance, roots, contents, effectiveness, and public acceptability are all deeply problematic. The TEU’s comprehensive aspirations, together with the political responses it provoked, justify those who see it, rather than the Single European Act (SEA), as the most far reaching and comprehensive constitutional change in the EC’s history. The TEU is important, above all, for its endorsement of Economic and Monetary Union

Treaty on European Union (TEU)

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(EMU). Equally, it made the process of European integration more politically salient than ever before. Yet if there is broad agreement on these facts, there is deep discord about their meaning. Politically, the two main contending interpretations see the TEU as a rupture with the past. The view associated with then British prime minister John Major sees the TEU as a victory for intergovernmentalism, whether over the menace of excessive supranationalism (Crawford, 1993) or over the integrity of the acquis communautaire (Curtin, 1993). The contrary interpretation, urged by Sir James Goldsmith and other Euroskeptics, views Maastricht as the triumph of a virtually full-fledged European federation over previous traditions of democratic states agreeing on loose economic coordination, whether laissez-faire or social democratic in nature (Guildhaudis, 1993, pp. 117–136). The TEU is thus a many-faceted phenomenon. As well as being a historical event it is a symbol of a deep underlying ideological argument about the nature and direction of the European enterprise, a series of written changes to the primary law of the EC, and the enactment of wide-ranging changes to the way the European enterprise is organized and operates. This multifaceted nature has greatly affected how the TEU has been applied, esteemed, and interpreted. Even today there is little agreement or certainty about it, with very contradictory readings in different countries, most of which can find some justification within the treaty itself. However, the weight of opinion sees the treaty as essentially an intricate but uncertain compromise between the competing aspirations and imperatives of the time (Church and Phinnemore, 1995). The TEU therefore has a Januslike nature: centralized, ideological, and radical in its EMU provisions; evolutionary and more statist in its political stipulations (Dyson, 1994). Origins The TEU had its earliest roots in spillover from the single market project, which was seen as needing a single currency to consolidate it (Cloos et al., 1993). This led to the April 1989 Delors Report on EMU, on the basis of which the European Council decided in December 1989 to convene a new intergovernmental conference (IGC) on EMU. By then, however, the fall of the Soviet empire and the likely unification of Germany added new factors to the equation: notably the determination of German chancellor Helmut Kohl and French president

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François Mitterrand to ensure that an enlarged Germany would be Europeanized and, through new EC structures, amenable to French influence (Baun, 1996). Their ideas were widely discussed and technically developed in the summer of 1990. Final decisions about the start of negotiations on European political union (EPU) as well as EMU were taken in late October at a difficult summit in Rome. The argument for EPU was reinforced by the revelation of European weakness during the 1990–1991 Gulf crisis and subsequent war. It was hoped that the onset of the Yugoslav crisis later in 1991 might be the springboard for creating a more effective international presence, especially as the SEA had, in any case, provided for a review of European Political Cooperation (EPC), the member states’ foreign policy coordinating mechanism. The move to EPU was also strongly supported by those in the European Parliament (EP) and in the Commission who felt that the SEA had not gone far enough. This showed itself in the perhaps unfortunate decision to have separate talks on economic and political union. Both IGCs initially consisted of monthly meetings at ministerial and official levels. Although the negotiations were essentially intergovernmental and guided by the presidency, they were not wholly secret (Corbett, 1993). The EMU talks, involving the Commission, Monetary Committee, and central bankers, were the easier of the two and proceeded on the basis of a Commission draft put on the table on December 15, 1990. Key issues concerned the details and timing of the strategy laid down in the Delors Report. By May the idea of an opt out helped to ease British reservations, making an agreement possible. Only a few issues were left to resolve at Maastricht itself. On EPU, because there had been much less preparation, there was far less agreement in the IGC about either agenda or substantive issues (Laursen and Vanhoonacker, 1992). Little progress was made until the Luxembourg presidency put on the table an informal proposal in April 1991 for a three-pillar structure (the socalled temple approach), which most member states accepted. Thus, despite opposition from the Commission and the EP, the Luxembourg draft became the basis of a formal proposal on June 20. However, the inclusion of a commitment to a “federal goal” reawakened British opposition. Talks faltered over the summer and did not resume until late September, when the Dutch pres-

idency misguidedly produced a new proposal based on a single or “tree” structure, which most member states rejected at a heated foreign ministers meeting on the so-called Black Monday, September 21, 1991. The Dutch had to go back to the Luxembourg proposals in October and November, but time had been wasted even though the IGC was already running to try and catch up. Tempers flared, and despite more frequent meetings, a large number of issues were left undecided when the European Council met in Maastricht in December 1991. The Dutch prime minister, Ruud Lubbers, managed to resolve the outstanding issues after some hard and secretive late night bargaining, especially with Kohl and Major, involving deals on social policy opt outs for Britain and on tough EMU convergence conditions. The questionable pressure to finish the process at Maastricht meant that the texts were unpolished. They were refined, but not consolidated, until they were signed by foreign ministers on their return to Maastricht on February 10, 1992 (a meeting that also served as the requisite IGCs for European Coal and Steel Community and European Atomic Energy Community treaty revisions). The final product signed in Maastricht was a sprawling and unraveling document, 61,351 words long. It comprised a preamble and seven titles, each divided into many chapters, parts, and sections, linked by a continuous series of articles (from A to S), many of which were actually amendments to the differently numbered articles of the existing treaties. Thus Article G, or Title II, accounted for 30 percent of the TEU, with its eighty-six amendments to the Rome treaty. Accordingly, the TEU could not be followed without reference to the text of the existing treaties. Therefore the TEU was an emendation and expansion within a revised structure and not a complete rewriting of the treaties. The result was a style that many have found arcane, boring, and impenetrable. The TEU is also variable in tone, oscillating between simple principles and immensely detailed policy statements (as with EMU). The treaty proper was also followed by seventeen explanatory protocols and thirty-four nonbinding interpretative declarations. The whole thing was subsequently consolidated with the Rome treaties and further amended by the 1994 accession treaties and the 1997 Amsterdam Treaty.

Treaty on European Union (TEU)

The TEU makes wide-ranging changes to the EC’s quasi constitution. Central to these is the creation of an overarching new body, the EU, which subsumes the EC itself. The latter was made the largest of three pillars that support the European Council, the pediment of the temple. The other two pillars are intergovernmental organizations for the Common Foreign and Security Policy (CFSP) and Cooperation on Justice and Home Affairs (JHA). The Social Protocol and EMU can also be regarded as pillars of a sort, the latter because of the independence of the European Central Bank (ECB). The EU has clear aims and characteristics: acceptance of the acquis communautaire, maintenance of its external identity and security, and the upholding of democracy, human rights, and national identities. This involves the acceptance of subsidiarity (the principle that, outside its own competences, the EU should only act when such action cannot be undertaken more effectively by the member states, and then only in measured ways) and the creation of EU citizenship. The EU is guided by the European Council, works with a single institutional framework, and seeks consistency in its operation. The TEU also redefined the status and operation of the EC, which is now a subsidiary body of the EU; membership in the EC comes with membership in the EU. Yet the EC is also the enabler and motor of the EU. The EPU and EMU accords also meant considerable internal alterations to the EC as such. Specifically, EPU changed the EC in five main ways. (1) The EC is now required to respect subsidiarity and to apply EU citizenship. (2) The EC’s institutional structure and balance are altered and clarified, with recognition of the Committee of Permanent Representatives (COREPER) and the Council secretariat, full institutional status for the Court of Auditors, creation of an Ombudsman and a Committee of the Regions, and altered roles for the Commission and the Economic and Social Committee. Most significantly, the EP’s powers have been enhanced to include involvement in the appointment of the Commission. (3) Decisionmaking procedures are altered, with more qualified majority voting linked to the EP’s new, initially limited, rights of legislative co-decision under Article 189b. (4) The EC’s operations are subject to new budgetary and constitutional conContents

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trols, including allowing the European Court of Justice (ECJ) to fine defaulting member states. The EC’s judicial organization was also refined. (5) Some EC policy responsibilities were enhanced, notably cohesion, the environment, and research. New competences were also added in aspects of consumer protection, culture, development, education, public health, and Trans-European Networks. In social policy, because of British objections, some action was relegated to a special procedure laid down in Protocol 14. This allowed the other member states, acting together, to use the EC infrastructure to implement the 1989 Social Charter. Other aspects of social policy were also underlined by protocols, as were other detailed aspects of EPU. Basically, however, the EC remains supranational. The EMU changes were, and remain, more dramatic. They include a new stress on coordinating and monitoring national economic performance and policies together with redistribution to mitigate regional differences, so as to assist the realization of EMU. The latter involves a scheduled move, open to those member states that meet the convergence conditions, to a monetary union with a single currency, administered by the ECB and the European System of Central Banks (ESCB). Britain and Denmark have been allowed to opt out of this process should they so choose. This is detailed in the protocols, as are the rules governing the various monetary institutions and processes. The CFSP is a key element of the new EU, replacing EPC. It extends external initiative and responsibility by providing a new policy instrument of common actions in support of more clearly defined policy ends and positions (Holland, 1995). The EU’s general positions are decided intergovernmentally, although the Commission is associated with them; qualified majority voting is possible in implementing common actions. However, the ECJ is largely excluded because the CFSP is not part of the Community. CFSP also looks toward the possible development of a common defense policy and even a common defense. In the interim an enlarged Western European Union (WEU) is to serve as the EU’s security arm, details of which are laid down in a series of declarations (signifying their intergovernmental origins). As a result, the TEU brought security into the mainstream of European integration. There is also a separate intergovernmental pillar for JHA, dealing with asylum, cross-border

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problems, customs, drugs, fraud, immigration policy, judicial cooperation, and police coordination. JHA cooperation operates through methods similar to those available in the second pillar, plus intergovernmental conventions, and is underlined by a series of declarations. Finally, the TEU included a commitment to further treaty review, which formed the basis of the 1996–1997 IGC and the ensuing Amsterdam Treaty.

Ratification Maastricht differed from previous treaty changes in the way that it embodied conflicting views about integration. These exploded into the public domain when the process of ratification was halted by the Danish electorate’s rejection of the TEU in a referendum on June 2, 1992 (Laursen and Vanhoonacker, 1995). Despite a successful referendum in Ireland in June, the TEU’s fortunes were further undermined in late September 1992 when the currency markets forced the lira and sterling out of the Exchange Rate Mechanism of the European Monetary System and when, after a bruising campaign, the French electorate approved the treaty in a referendum on September 20, 1992, by only the narrowest of margins (less than 2 percent). Although most other countries ratified easily enough and a solution to the Danish crisis, agreed to at the Edinburgh summit on December 11 and 12, 1992, was approved in a second referendum on May 18, 1993, the crisis worsened in Britain. Euroskeptics held up parliamentary hearings for months and twice nearly brought the government down before ratification was achieved. Even then there were further problems with a new exchange rate crisis in August 1993 and a challenge in the German Constitutional Court, which ruled on October 12, 1993, that the TEU was compatible with the country’s constitution. Although the extent of opposition can be exaggerated, ratification showed that the permissive consensus that had buoyed European integration in the past could no longer be relied upon. Worried by the treaty’s implications and by domestic political and economic difficulties, public opinion began to query the integration project. In this debate on integration, held at a difficult time, the TEU became the symbol of what was wrong with Europe in some quarters. And as opposition to the treaty became increasingly militant, elites failed to respond to the chal-

lenge. When, many months late, the treaty unceremoniously entered into force, it did so in an atmosphere of bitterness. Conclusion Overall the TEU has resulted in a certain rationalization of existing practices while opening the way for future constitutional developments. The reflection group of foreign ministers’ personal representatives, which prepared the 1996–1997 IGC, saw the TEU’s innovations as the creation of an ongoing EU; an attempt to bring European integration closer to the citizens, regions, and states; an enhanced capacity for policy activity; a reaffirmation of the importance of cohesion; the beginnings of a European foreign policy; concern for social security against crime and drugs; and, especially, a commitment to monetary integration and a single currency (Reflection Group, 1995). Set against these achievements are three serious weaknesses: (1) the EU’s complexity, impenetrable language, and lack of transparency; (2) failure to achieve the IGC’s original aims of greater accountability, consistency, democratization, financial control, and subsidiarity (Piris, 1994); and (3) deficiencies in the treaty’s innovations (Dashwood, 1996). In particular, the manifold decisionmaking procedures have proved problematic; several institutions feel they did not get the decisionmaking capacity that they need to do their job; and there have been difficulties in reconciling the three compartmentalized pillars with their different working methods. Finally, the non-EC structures have neither delivered effective policy and action nor made the EU sufficiently intergovernmental to satisfy those who wish to roll back “Brussels.” Thus the TEU’s suitability for an enlarging EU, capable of meeting the challenges of the twenty-first century, is questionable. See also ECONOMIC AND MONETARY UNION: POLITICAL ISSUES; ECONOMIC AND MONETARY UNION: TOWARD A SINGLE CURRENCY; EUROPEAN POLITICAL UNION. Baun, M. J. 1996. An Imperfect Union. Boulder: Westview. Church, C. H., and D. Phinnemore. 1995. European Union and European Community: A Handbook and Commentary on the 1992 Maastricht Treaties. 2d ed. London: Prentice Hall.

Bibliography

Cloos, J., G. Reinesch, D. Vignes, and J. Weyland. 1993. Le Traité de Maastricht. Brussels: Bruyant. Corbett, R. 1993. The Treaty of Maastricht. London: Longman. Crawford, M. 1993. The Economics and Politics of Maastricht. London: Macmillan. Curtin, D. 1993. “The Constitutional Structure of the Union: A Europe of Bits and Pieces.” Common Market Law Review 30, pp. 17–69. Dashwood, A., ed. 1996. Revising Maastricht. London: Sweet & Maxwell. Dyson, K. 1994. Elusive Union. London: Longman. Guildhaudis, J. F. 1993. L’Europe en transition. Paris: Montchrestien. Holland, M. 1995. The EU’s Common Foreign and Security Policy. London: Macmillan. Laursen, F., and S. Vanhoonacker, eds. 1992. The Intergovernmental Conference on Political Union. Maastricht: Nijhoff. ———. 1995. The Ratification of the Maastricht Treaty: Issues, Debates and Future Implications. Maastricht: Nijhoff. Piris, J.-C. 1994. “After Maastricht: Are the Community Institutions More Efficacious, More Democratic and More Transparent?” European Law Review 19, no. 5, pp. 449–487. Reflection Group. 1995. Report of the Reflection Group. Bulletin EC 12-1995. Luxembourg: Office for Official Publications of the European Communities.

—Clive Church

Trevi Group

The so-called Trevi Group of senior officials from member states’ ministries for justice and home affairs coordinated intra-EC cooperation to combat terrorism, drug traffic, organized crime, and illegal immigration before the Treaty on European Union (TEU) incorporated these activities into the third pillar of the EU. See also JUSTICE AND HOME AFFAIRS. Originally the troika was an arrangement whereby each Council presidency, at all levels of government, was assisted by its immediate predecessor and successor (in the presidential rota) in the conduct of the Common Foreign and Security Policy (CFSP). Before the CFSP was launched in November 1993, the troika helped conduct European Political Cooperation, CFSP’s predecessor. The Amsterdam Treaty abolished the old troika and in-

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Turkey

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stituted a new one for the conduct of CFSP: the Council presidency (assisted by the next country in line), the high representative (Council secretary-general), and the Commission president (or other senior commissioner). See also COMMON FOREIGN AND SECURITY POLICY. Historically, Turkey’s relationship with Europe has been turbulent and antagonistic. However, for many years Turkey has proclaimed and pursued a “European vocation.” The first shift in this direction was in 1856 when Turkey was accepted into the Concert of Europe after fighting on the side of France and Britain in the Crimean War. The second, and more significant turning point, was the reform program of Turkey’s modernizing leader, Kemal Atatürk, in the 1920s. Key elements of this program included the adoption of the European (Gregorian) calendar, the Swiss Civil Code, and the Italian Penal Code and the disestablishment of the state religion and adoption of the European (Latin) alphabet. The purpose was modernization through Westernization (more narrowly defined as Europeanization). Turkey joined the League of Nations after World War I and was most upset when it was excluded from French foreign minister Aristide Briand’s proposal at the league in 1929 for a European union. Turkish foreign policy after World War II continued in the same vein, with Turkey joining the Organization for Economic Cooperation and Development (OECD) in 1948, the Council of Europe in 1949, and NATO in 1952. It is therefore not surprising that Turkey has always showed great interest in European integration and has pursued a close relationship with the EU since its beginnings. In fact EC-Turkey relations can conveniently be divided into five phases: optimism (1960s), crisis (1970s), standstill (1980s), progress (early and mid-1990s), and uncertainty. Turkey’s initial approach to the EC took the form of a request for an association agreement and mirrored a similar application by Greece. However, negotiations with Turkey were delayed by an antidemocratic coup, as a result of which the Ankara Agreement was not signed until September 12, 1963 (and did not become effective until December 1, 1964). It consisted of three stages: (1) a preparatory stage of five to nine years, in-

Turkey

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Turkey

volving EC concessions for Turkey’s four principal agricultural exports (tobacco, raisins, dried figs, and hazelnuts) and the provision of ECU 175 million of loans over five years; (2) an ensuing transitional stage of twelve to twenty-two years, during which time the EC and Turkey would align economic policies and move to a customs union; and (3) a final stage, at the end of the transitional stage, that could involve full EC membership, although no timetable was specified for this. The purpose of the preparatory stage was to allow Turkey time to ready itself, through appropriate economic measures, for the creation of a customs union and for full EC membership in the longer term. However, although there is some controversy over this, it should be noted that EC accession appears to have been set out not as an automatic progression but rather as a possibility (or objective) to be examined when and if Turkey was ready. A subsequent agreement was necessary to fill in the details of the transitional stage (the additional protocol was agreed on November 3, 1970, and became effective on January 1, 1973). Its main provisions were the introduction of free movement of labor and capital between the EC and Turkey from the twelfth to the twenty-second years of the transitional stage, closer alignment of economic policies, and a (second) financial protocol. As with the right to automatic accession in the initial agreement, there have been different interpretations of the agreed-upon timing of the implementation of the commitment to introduce free labor movement. However, the optimism of the 1960s was replaced by crisis in the 1970s. Turkey did not use the preparatory stage to strengthen its economy, and the association agreement broke down economically in the mid-1970s. There was fault on both sides: Turkey was pursuing an economic strategy based on import substitution that was essentially incompatible with association; equally, the EC was reluctant to implement fully its concessions to Turkey in the face of enhanced competition for its own producers. In any case, the agreement was finished off politically by the 1980 military coup in Turkey and was effectively suspended thereafter. The restoration of democracy and subsequent formal Turkish application for full EC membership in 1987 did not trigger any immediate developments. The 1980s were therefore a period of standstill, and further progress had to

wait until the Commission issued its formal opinion on the Turkish application on December 20, 1989. In fact, the opinion was tantamount to a rejection of Turkey, although it did not close the door entirely but proposed four specific measures: completion of the customs union; the resumption and intensification of financial cooperation; the promotion of industrial and technological cooperation; and the strengthening of political and cultural links. In effect, this amounted to a revised and improved association agreement. The opinion echoed many of the arguments that make up the generally accepted assessment of the Turkish case for EU membership, which cover four types of issues: economic, political, strategic, and cultural. According to the Commission, Turkey scores positively only in the strategic area. In the economic sphere, there are many concerns. Turkey is large and relatively poor and would expect to be a substantial beneficiary from the EU budget. It would make heavy demands on the structural funds and, because of its large agricultural sector, on the Common Agricultural Policy. More generally, Turkey is inflation prone and debt ridden, with low levels of productivity and low social standards, but high levels of industrial protection. Obviously, Turkey could not participate in Economic and Monetary Union in the foreseeable future. Finally, the movement of Turkish workers into the EU (free or otherwise) and the presence of existing Turkish migrants continue to be a source of EU-Turkish friction. On the internal political front, there is anxiety about the intentions of the Islamic Welfare Party, which was in a coalition government in 1996– 1997. More specifically, although the Turkish government would strongly defend its human rights record and point out that significant legal and constitutional reforms have been undertaken in recent years, the perception remains, in Europe and elsewhere, that there are still major deficiencies. In particular, Turkey’s treatment of its Kurdish minority has been a source of unease. Moreover, general lack of respect for human rights is allegedly widespread in Turkey and has attracted much condemnation in the European Parliament over the years. Turkey also faces an external political problem in the shape of its very difficult relationship with Greece. The most obvious manifestation of this is the so-called Cyprus problem, the resolution of which was seen for some time as a

prerequisite to Turkish accession. The importance of this is now less clear following the EU’s commitment to begin accession negotiations with (Greek) Cyprus. However, it is certain that GrecoTurkish animosity will continue over Cyprus and, more generally, in the Aegean Sea over the demarcation of territorial waters, the continental shelf (and mineral rights), and air space disputes. The Greeks seemingly remain hostile to Turkey’s joining the EU and have frequently blocked various financial protocols directed toward Turkey. The third negative area concerns cultural issues, particularly religion. European unease has its basis in the historical enmity between Europe and the Ottoman Empire; in the modern era, this uneasiness takes the form of anxiety about the rise of the Islamic Welfare Party and the more extreme shift toward Islamic fundamentalism in some other parts of the Mediterranean region. Turkey resents such an attitude, reasoning as a secular state that feels there are significant Muslim minorities in some existing EU members and that a yardstick is being applied to Turkey that has not been, and is not being, applied to any other prospective member. Finally, there is the strategic perspective, which is considered to be in Turkey’s favor. Traditionally Turkey’s value has mainly stemmed from its role as protector of NATO’s eastern Mediterranean flank, specifically against the threat of Soviet expansion out of the Black Sea. The demise of the Soviet Union made this less important but was offset by the outbreak of the Gulf War, which increased Turkey’s importance as an ally and base for the EU and the rest of the Western alliance in the Middle East. Furthermore, Turkey now plays a key role as a model of a secular, democratic, Islamic state for the formerly Soviet, central Asian republics. Turkey has thus presented the EU with something of a dilemma. Economic and political factors in principle, and Greek attitudes in practice, make it difficult for the EU to welcome Turkey as a full member in the immediate future. However, strategic considerations and general acceptance of Turkey’s eligibility make outright rejection impossible. Although Turkish accession is not immediately in prospect, it finally proved possible to es-

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tablish an EU-Turkey customs union, applicable to industrial goods only, as of January 1, 1996. The agreement also made reference to intellectual property rights and rights of establishment and relaunched and extended economic cooperation, financial cooperation, and political dialogue. The customs union will take time to become fully effective, and there have been early problems in some sectors (especially steel and secondhand machinery), but the early signs are encouraging. Increased European competition appears to have driven down Turkish prices, and European investment in Turkey continued at record levels in 1996 and 1997. It remains to be seen whether the Turkish economy can sustain a customs union with the EU in the longer term, although the political situation in Turkey is probably a greater threat to the stability of EU-Turkey relations. There is a spectrum of possibilities. Optimistically, Turkey may successfully implement the customs union with the EU and the prominance of the Islamic Welfare Party in Turkish political life may do little to change Turkey’s behavior and foreign policy stance. Pessimistically, the customs union may run into difficulties and an Islamic party, if returned to power, could behave in ways that justify EU concern. In the former case, the EU will find it increasingly difficult to reject Turkey’s application definitively, especially after it has begun to absorb the Central and Eastern European states in the middle of the next decade. In the latter case, Turkish accession will become a more distant possibility even than it seemed during the crisis provoked by the European Council’s decision, taken at the December 1997 Luxembourg summit, to defer action on Turkey’s application. Of course, the reality may well lie somewhere between these extremes, but one thing is certain: the EU cannot delay indefinitely pronouncing on Turkey’s future. See also MEDITERRANEAN POLICY; TABLE 6. Redmond, John. 1993. The Next Mediterranean Enlargement of the European Community: Turkey, Cyprus, and Malta? Aldershot: Dartmouth.

Bibliography

—John Redmond

1995 by the merger of Forza Europe, an Italian center-right party, and the European Democratic Alliance, an already existing group of center and center-right parties, including the Gaullists. The UFE describes itself as “Euro-realistic,” taking a case-by-case approach to European issues and avoiding extreme Euroskepticism or Eurofederalism. It is the third largest group in the EP. See also PARTY GROUPS IN THE EUROPEAN PARLIAMENT.

U

Union of Industrial and Employers’ Confederations of Europe (UNICE)

See UNION FOR EUROPE.

UFE

See COMMONWEALTH OF INDEPENDENT STATES.

Ukraine

See UNITED NATIONS.

UN

Some decisions in the EU—especially those relating to the Common Foreign and Security Policy and Cooperation on Justice and Home Affairs— require unanimity in the Council of Ministers. Although there has been a trend toward qualified majority voting in the Council in order to enact legislation (institutional changes in the Single European Act, the Treaty on European Union, and the Amsterdam Treaty were definite moves in that direction), the Council likes, if possible, to act unanimously. No member state wants to be outvoted, and ministers generally prefer to play by the old rules, treating the Council as a club rather than a legislature. See also DECISIONMAKING PROCEDURES.

Unanimity

See UNION

UNICE

OF INDUSTRIAL AND

FEDERATIONS OF

EUROPE.

EMPLOYERS’ CON-

The Union for Europe (UFE) party group in the European Parliament (EP) was formed in July

Union for Europe (UFE)

The Union of Industrial and Employers’ Confederations of Europe (UNICE) is a powerful pressure group representing business interests in the EU. Founded in 1958, UNICE has a large secretariat in its well-funded Brussels headquarters. UNICE’s priorities are market liberalization and deregulation. Not surprisingly, it strongly opposes social policy. Together, UNICE, the European Trade Union Confederation, and the European Center for Public Enterprise make up the EU’s “social partners” with whom the Commission negotiates draft social and economic policy legislation. See also SOCIAL POLICY. For some years after World War II successive British governments continued to think of their country as a world economic and political power and as a result showed no interest in joining in the experiments in European integration that were being pioneered by the six original member states of the EC. However, by the start of the 1960s the Conservative government of Harold Macmillan had come to the conclusion that Britain ought to apply for EC membership. This was for two reasons: the Six were achieving higher rates of economic growth than the UK, and the government was concerned about the efforts of French president Charles de Gaulle to organize the EC into a political entity under French leadership. Britain’s first application for membership, submitted on August 9, 1961, was vetoed by de Gaulle on January 14, 1963; Britain’s second application, submitted on May 10, 1967, suffered the same fate only four days later. It was not until after de Gaulle’s retirement that Britain managed to

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negotiate entry, under the leadership of its genuinely pro-European prime minister, Edward Heath. Membership was very controversial, particularly within the British Labour Party, which after losing the 1970 election to Heath almost split apart on the issue. Harold Wilson, the Labour Party leader, retained unity by a compromise: he declared that Labour supported entry to the EC but not on the terms negotiated by the Conservative government. When he returned to office in 1974, Wilson set about renegotiating the terms of entry and eventually presented the new terms to the British people in a constitutionally unprecedented referendum in June 1975. This produced a surprisingly large majority in favor of continued membership: 67.2 percent against 32.8 percent on a 64.6 percent turnout. The referendum result, however, did not mark the end of serious differences with the other member states, and Britain rapidly established a reputation for itself as an awkward partner in the EC (George, 1994). James Callaghan, who succeeded Wilson as Labour prime minister in 1976, refused to take sterling into the exchange rate mechanism of the European Monetary System in 1979; and toward the end of his premiership, as the transition period of membership drew to a close, the government began to complain about the size of Britain’s contribution to the EC budget, even though this had been one of the issues that had been renegotiated in 1974–1975. Callaghan’s successor, Margaret Thatcher, made the budget contributions the central issue of her relations with the EC from the time of her election in May 1979 until she managed to obtain a permanent annual rebate for the UK at the Fontainebleau meeting of the European Council on June 25 and 26, 1984. During that time she adopted an aggressive and confrontational tone with her EC partners and did not hesitate to block progress on other items of business in order to press her case for a rebate. Once the budgetary issue was settled, the British government became more cooperative, particularly over the agreement on the single market, a project that was ideologically compatible with the Conservative government’s free-market approach to economic affairs. However, Thatcher set herself at odds with most of the other member states by her rejection of the need for a social dimension to the single market. This she expressed most forcibly in her infamous Bruges speech in September 1988.

Thatcher also rejected the argument that in order to complete the single market it was necessary to move to a single currency. On this issue, such was her strength of personal feeling that she made statements that were more rejectionist than was the official position of the government, and this led to the resignation of her deputy prime minister, Sir Geoffrey Howe. His resignation speech constituted a blistering attack on the prime minister’s approach to the EC, which he argued was damaging the economic interests of British business. Wounded by this attack, Thatcher failed to win reelection to the leadership of the Conservative Party on the first ballot and resigned in November 1990 to clear the way for her chosen successor, John Major. Although Major declared at the start of his premiership that he intended to put Britain “at the very heart of Europe” (Major, 1991), he soon found himself operating with a small majority in Parliament and facing constant pressure from a significant minority of his own members of Parliament who supported the positions taken up by his predecessor. The most fundamental of these was a rejection of federalism, which in the UK was defined as further loss of sovereignty by the member states and further centralization of decisionmaking in Brussels. Discontent in the Conservative Party soon came to center on the Treaty on European Union (TEU), negotiated in 1991 and implemented on November 1, 1993. The government argued that the treaty should be seen as a success for British diplomacy, and certainly a case can be made out for this interpretation. The more far reaching federalist proposals were not accepted at the Maastricht summit on December 9 and 10, 1991, where the negotiations were concluded. The three-pillars structure of the TEU, with the Common Foreign and Security Policy (Pillar Two) and Cooperation on Justice and Home Affairs (Pillar Three) forming intergovernmental pillars separate from the EC (Pillar One), fitted with the general British view. In addition, Major negotiated opt outs for the UK from the social chapter of the treaty and from the provisions on automatic movement to a single currency. However, this interpretation convinced neither the newly ennobled Lady Thatcher, who described the TEU as “a treaty too far,” nor her supporters in the parliamentary Conservative Party, and in the face of a constant barrage of criticism the government became increasingly negative in

its statements about the EU. It is important to recognize, however, that the position of the Conservative government on the social dimension was based on its economic analysis of what was necessary for a competitive economy, that refusal to commit itself to a single currency reflected the indecision of British industry and the City of London on the matter, and that the advocacy of a “Europe of nation-states” as against any more federalism was a long-standing position. In other words, it is possible to overstate the extent to which policy was driven by short-term domestic political considerations. For that reason also, despite the new Labour government’s opt in to the Social Charter, Britain under Tony Blair may not adopt a radically new approach toward the EU. Political and Constitutional Effects of Membership Membership in the EU fundamentally transformed British party politics. As described above, the Labour Party almost broke apart over the issue in the 1970s, and a group of leading pro-Europeans in the party, led by former Commission president Roy Jenkins, did break away to form the Social Democrat Party (SDP) in 1980. The split allowed the anti-EC faction to gain the ascendancy, and the 1983 election manifesto committed Labour to withdraw Britain from membership of the EC. However, this was seen as one element in the convincing defeat of the party in the election, and led to a reassessment after Neil Kinnock became leader. That process was helped by Thatcher’s rejection of a social dimension to the single market. The fact that Commission president Jacques Delors and a majority of the leaders of other member states argued strongly for a social dimension convinced many Labour supporters that the EC was on their side after all. Research showed widespread support among Labour Party members for the EC (Seyd and Whiteley, 1992). After his narrow election defeat by Major in 1992, Kinnock resigned as leader of the Labour Party and in January 1995 became one of Britain’s two commissioners. His successor, John Smith, died suddenly in June 1994 and was succeeded by Tony Blair, who exploited the growing divisions within the Conservative Party over Europe by presenting his party as the more European while at the same time maintaining an equivocal stance toward EMU.

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However, though dissent in the parliamentary Labour Party—desperate to return to office—was subdued, and despite support for the EC in the party membership, research among Labour backbench members of Parliament in 1995 showed a higher level of skepticism about further European integration than the leadership would like to admit (Baker et al., 1996). This further suggests that the Labour government, which came to office in May 1997, might be more guarded in its enthusiasm for the EU than some of Britain’s European partners might hope. The effect of membership on the Conservative Party was potentially even more devastating. Traditionally the party of nationalism, under Edward Heath the Conservative Party declared itself the party of Europe. But Thatcher stressed the nationalist aspect of the party’s identity, and doing so involved her in repeated attacks on the loss of sovereignty involved in membership of the EC. Although John Major tried to moderate the tone, he found himself under tremendous pressure to resist further European integration from a parliamentary party in which the position of his predecessor had a large measure of support (Ludlam, 1996). What made this element more troublesome for Major was the support that it could attract among Conservative Party members in the country (Whiteley, Seyd, and Richardson, 1994) and among the traditionally pro–Conservative Party sections of the press. One reason why membership was so controversial in the UK was that the constitutional effects of membership were more far reaching than for most member states. The British constitutional doctrine of the sovereignty of parliament was superseded by a European constitutional doctrine that EC law took precedence over national law wherever they came into conflict (Steiner, 1992). For a country that prided itself on its unbroken history of constitutional evolution, this implication was difficult to accept. Economic Effects Membership in the EU led to a reorientation of the pattern of British trade. Whereas in 1958 Britain’s trade with the other eleven states that in 1994 formed the EU accounted for 22 percent of total UK trade, by 1994 this had reached 53 percent (Northcott, 1995, p. 199). However, within this overall pattern, the UK ran a substantial trade deficit with the rest of the EU. This fact was

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sometimes used to argue that the trade effects of membership had been negative. However, it is more plausible to argue that the deficit was the consequence of British industry’s failing to take advantage of the opportunities offered by membership of the common market. There was a considerable inflow of foreign investment to the UK after membership, which was an important source of employment and which would almost certainly not have occurred had the UK been outside of the EU. Also, the financial services sector flourished in a way that might not have been possible outside of the EU, and it stood to benefit further from the liberalization of financial services under the single market program (Bulmer, George, and Scott, 1992, pp. 252–253). Conclusion The UK has not adapted easily to EU membership. The effects of membership on the political system were extremely disruptive; and the same can be said for the effects of domestic politics on the attitude of successive British governments to the EU. However, the degree of economic integration of the UK into the EU was such by the late 1990s that only at the political extremes were there still advocates of disengagement. See also TABLE 6; TABLE 10; APPENDIX 2; APPENDIX 3.

Baker, D., A. Gamble, S. Ludlam, and D. Seawright. 1996. “A ‘Rosy’ Map of Europe? Labor Parliamentarians and European Integration: Initial Survey Results.” Paper presented at the annual conference of the Political Studies Association (UK). Bulmer, S., S. George, and A. Scott, eds. 1992. The United Kingdom and EC Membership Evaluated. London: Pinter. George, S. 1994. An Awkward Partner: Britain in the European Community. 2d ed. Oxford: Oxford University Press. Ludlam, S. 1996. “Backbench Rebellions. Europe: The Specter Haunting Conservatism.” In S. Ludlam and M. J. Smith, eds., Contemporary British Conservatism, pp. 98–120. Basingstoke: Macmillan. Major, J. 1991. “The Evolution of Europe.” Conservative Party News (March 11), p. 13. Northcott, J. 1995. The Future of Britain and Europe. London: Policy Studies Institute. Seyd, P., and P. Whiteley. 1992. Labor’s Grass Roots: The Politics of Party Membership. Oxford: Clarendon Press. Steiner, J. 1992. “Legal System.” In S. Bulmer, S. George, and A. Scott, eds., The United Kingdom and

Bibliography

EC Membership Evaluated, pp. 124–137. London: Pinter. Whiteley, P., P. Seyd, and J. Richardson. 1994. True Blues: The Politics of Conservative Party Membership. Oxford: Oxford University Press.

—Stephen George

The EU is not a member of the United Nations (UN), but member states try to coordinate their positions in the UN General Assembly (where the Council presidency speaks on behalf of the EU) and on the UN Security Council, of which Britain and France are permanent members and Germany may become a permanent member (although without the right to veto). Many of the EU’s common positions and joint actions in the Common Foreign and Security Policy are formulated on the basis of UN Security Council resolutions. EU development policy is also formulated and implemented in close association with UN specialized agencies and programs, notably the UN Food and Agriculture Organization (of which the EU has been a member since 1991), the UN Conference on Trade and Development, the UN Industrial Development Organization, and the World Food Program. In addition, the member states coordinate their positions in the UN Economic Commission for Europe. See also COMMON FOREIGN AND SECURITY POLICY; APPENDIX 3.

United Nations (UN)

U.S.-EU Relations: The Politics of Partnership

The United States has been both crucial in the broadest sense to the evolution of European integration and a major factor in its specific development. In the early days of the European Coal and Steel Community, the support of the Americans and the relationship between the stabilization of Western Europe and the onset of the Cold War gave the European project a distinct flavor. The Treaty of Rome, although it gave no formal role to Washington in the establishment of the European Economic Community (EEC), was profoundly influenced by the leadership of the United States, both of the postwar Western economy and of the Cold War alliances. At each succeeding stage of European evolution, this combination of U.S. economic leadership and of the structures of the Cold

War has been felt. But it has been felt in changing ways, as the role of the United States in the global political economy has altered and as the relationship between the Americans and a changing Europe has been transformed. A central theme in the “politics of partnership” is thus the ways in which the changing U.S. position and that of the developing EU have intersected, creating political opportunities and political costs, and arguably leading in the 1990s to a new form of partnership that encapsulates a series of transformations (Featherstone and Ginsberg, 1996; Peterson, 1996; Smith and Woolcock, 1993). Alongside this process of change, however, has gone a great deal of continuity in a number of areas: the impact of U.S. domestic concerns, the implications of U.S. leadership and its expressions, and the effects of the broader political and economic structures of the Western and the global systems. For the purposes of this entry, the changing relationship is dealt with in four major phases: the formative pre-1970 period, the transition years 1970–1990, the transformations of 1990–1995, and the “new partnership” of the late 1990s. The aim is to identify both the central components of change and the elements of continuity in the relationship. To the 1970s Initial U.S. support for European integration arose from a number of roots. Crucial to it in general was the identification of the European integration process with the stabilization and the defense of the West. The Marshall Plan and NATO were in this sense the two halves of a more or less well-formulated strategy that aimed at the political and economic reconstruction of the West European economies and their security against the Soviet threat. Although there was an early intention to withdraw U.S. forces from Europe, later reversed in the face of the evident inability of the West Europeans to defend themselves, it was never the case that an economic withdrawal could either have been contemplated or achieved. The U.S. stake in Western Europe and in the recovery of its economies was central to the ways in which successive administrations maintained their commitment to the integration process. It also meant that there was a “private” corporate commitment as well as an explicit governmental commitment to the process. Not only this, but the establishment of the EC in the late 1950s meshed (sometimes a

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little awkwardly) with the consolidation of the Bretton Woods system and with the continuing desire to share the burdens of international economic as well as political leadership (Smith, 1994). It was hoped, not least by the Kennedy administration, that the EC would form the European end of a new Atlantic partnership. But when the president pronounced this in his so-called declaration of interdependence (July 1962), the European response was less than clear. Through the 1960s, the attempt to build a new Atlantic community came up against two crucial forces of resistance: first, the desire of France in particular to emphasize the role of the EC as a base for a separate European identity; second, the shift in international economic power that saw the EC increasingly operating as a rival, or at the very least an awkward partner, for the United States. As a result, by the end of the 1960s there was increasing potential for tension and even open conflict within the Atlantic partnership (Calleo and Rowland, 1973; Calleo, 1970). Partnership and Rivalry, 1970–1990 It was during the 1970s that the twin forces of political change and economic friction came to dominate the U.S.-EC relationship. Although at the level of business and investment there was a continuing growth of interdependence and interpenetration, at the level of political alignments and economic structures there was a growing set of tensions. The most explicit political and economic challenges combined tests of U.S. leadership and European resolve. In the political sphere, the endgame in Vietnam and the escalation of tensions in the Middle East created European suspicions of the nature of U.S. leadership while also convincing at least some Americans that the Europeans could never effectively provide support for the security of the West. Thus, Vietnam fostered the fear that U.S. leadership could not be relied upon, combining interventionism with an eventual and costly retreat. The situation in the Middle East, and particularly the October 1973 war, created the further suspicion that U.S. priorities could destabilize areas much closer to home for many Europeans. In both cases, Washington came to the conclusion that the Europeans themselves could not be trusted to give consistent material support. Although the development by EC member states in the early 1970s of European Political Cooperation (EPC), a foreign policy coordinating mechanism, was given

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considerable significance by Europeans themselves, it could easily be seen by Washington as a cover for European inaction and special pleading (Chace and Ravenal, 1976; Kolodziej, 1981). This impression was given much greater force in Washington by the onset of the “new Cold War” in the late 1970s and early 1980s. The focus of renewed U.S.-Soviet tension on crises outside Europe and on the deployment of new nuclear missiles in Europe itself created a potent mix of pressures. The EC was ill equipped to deal with these: several of its member states were reluctant to jeopardize economic interests by taking sides in regional conflicts, and others were distinctly uneasy about the ways in which the deployment of intermediate-range nuclear forces on their soil was taken as a test of their loyalty to the Reagan administration. The results of these tensions were ambiguous: on the one hand, member states continued to develop their diplomatic cooperation through EPC and through a revived focus on the Western European Union (WEU) in the mid-1980s; on the other hand, they were divided and pressured by U.S. policies aimed at influencing the broader shape of Europe. By the time the “great transformation” of 1989 and after arrived, there was thus still no definitive resolution of the transatlantic tensions (Smith, 1984; Calleo, 1987; Alting von Geusau, 1983; Freedman, 1983). These tensions, though, were not purely political. The Vietnam War and the Middle East conflict, followed by the “new Cold War,” were economic as well as security or diplomatic events, and they played a major role in precipitating the collapse and the reshaping of the international economic order. Although it could be argued that the central political transformation occurred after the mid-1980s, the major economic restructuring began with the loss of U.S. economic confidence during the 1960s and the eventual “Nixon shock” of August 1971. The effective devaluation of the dollar and the collapse of the system of fixed exchange rates led to a period of increasing economic friction in which the waning leadership of the Americans came up against the challenge of both the EC and Japan. As a result, in the United States there was a resurgence of demands for protection, both of declining industries and of new technologies. In the EC, there was a series of often defensive moves to create buffers against an unstable dollar and the U.S. role as a “predatory hegemon.” This meant that the early 1980s were

more than a period of escalating diplomatic tensions: the emergence in the EC of the single market program and the European Monetary System were ways of expressing a new European economic identity. The interplay of this economic restructuring with the political and security tensions already mentioned formed the leitmotiv of the mid-1980s and laid the basis for a substantial transformation of relations in the early 1990s (Calleo, 1987; Smith, 1992). The 1990s: A Great Transformation? Just as the Cold War and the “new Cold War” had been both political/security and economic events in transatlantic relations, so was the process of transformation that was focused dramatically by the removal of the Berlin Wall and the collapse both of the Soviet bloc and of the USSR itself. The initial emphasis was naturally on the ways in which the political reordering of Europe created both challenges and opportunities for the United States and the EC. For the Americans, the effective disappearance of the central adversary created a paradox: there was pressure to dismantle the Cold War at home and abroad, but this did not mean an easy retreat into domestic preoccupations and the enjoyment of a “peace dividend.” Instead, it appeared to create new risks and dangers arising from the status of the United States as the only superpower. The logical response was to search for new structures in which the responsibility for world order might be shared and in which the security of Europe in particular could be safeguarded to a greater extent by European efforts. This was a hope that had run through much of the Cold War period, but now it appeared closer to realization. The EC had, after all, spent a good deal of time and effort attempting to establish its own diplomatic identity, and now the opportunity existed for a new sharing of responsibility. Such was the thrust of many speeches by U.S. policymakers, particularly President George Bush and Secretary of State James Baker, in the immediate aftermath of the liberation of Central and Eastern Europe (Smith, 1992; Smith and Woolcock, 1993). The EC’s response was less than clear or coordinated. Despite the aim of creating new levels of political union and the core of a Common Foreign and Security Policy, the EC and its member states were found wanting in the face of post–Cold War crises. The Gulf crisis and war of 1990–1991 created splits within the Community and exposed

the inability of several members to take up a more interventionist line. More telling still was the inability of the EC to deal effectively with the onset and escalation of the conflict in former Yugoslavia during 1991 and 1992. Initial declarations that this was the “hour of Europe” rang hollow in light of disunity over the recognition of former Yugoslav republics and the inability to mount an effective diplomatic effort. Criticism of these shortcomings has to allow for the fact that any diplomatic effort in former Yugoslavia would have been difficult to sustain and for the EC’s success in producing successive peace plans, many of which later found expression in the November 1995 Dayton Accords. But the fact remains that from a U.S. point of view the Europeans were unable to apply the necessary military muscle to focus the parties’ minds on negotiation as opposed to the use of force (Smith and Woolcock, 1993). The big security issues may have found the EC wanting, but this conceals a significant set of developments in U.S.-EC and then U.S.-EU relations during the early 1990s. In November 1990, the EC and the United States agreed to the Transatlantic Declaration (TAD), which set out a series of principles and frameworks for the evolution of the relationship. This led in the following five years to a major expansion of what might be termed the “infrastructure” of U.S.-EU relations, with networks and working groups emerging in a range of both political and economic arenas. Everything from competition policy and technical standards to regional conflicts and environmental initiatives became the target of this extended diplomacy, and the Clinton administration from 1993 on gave consistent support to the emergence of an expanded and institutionalized transatlantic relationship. The EU was also able to establish a significant role in what might be termed the “civilian” aspects of developments in Central and Eastern Europe: the coordination through the so-called G24 of technical and economic assistance and the broader encouragement of stable government and economic practices. The EU could offer what the United States in many ways could not: the immediacy of economic aid and the carrot for some of eventual membership (Peterson, 1996; Smith and Woolcock, 1993). At the same time as the United States and the EU were feeling their way into a new relationship in respect to security and diplomacy in Europe, the economic relationship was both intensifying and experiencing elements of transformation. The

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process of continuous negotiation in the context of the GATT and then the World Trade Organization (WTO), as well as on a bilateral basis, meant that the economic relationship was becoming more effectively institutionalized. This did not mean there were fewer disputes—the early 1990s saw intense frictions over such areas as public procurement, air transport, and telecommunications—but it did mean that in an increasing range of issues there were growing levels of communication and trust in the procedures. This was true not only at the governmental or U.S.-EU level but also at the private level, with the increasing interpenetration and mutual engagement of U.S. and European business. The single market program in this way provided a considerable focus for new patterns of interaction between the “public” and the “private” faces of U.S.-EU relations, with the emphasis on problem solving and management as much as on confrontation (Smith and Woolcock, 1994). Toward a New Partnership? By the mid-1990s, it could thus be argued that the ingredients for a new U.S.-EU partnership were in place. Although there were frictions, suspicions, and disappointments in the field of diplomacy and security, the emerging relationship between the United States and the EU in the context of a reformed NATO, the WEU, and the Organization for Security and Cooperation in Europe (OSCE) was one in which a “multi-institutional” partnership could in principle be managed. The division of labor between institutions, for example in the context of the Dayton Accords for former Yugoslavia, might cause tensions but was comprehensible and increasingly institutionalized. In the economic sphere, the increasing range of networks, working groups, and institutions both at the transatlantic and at the global levels could be seen as the basis for a new transatlantic marketplace, in which the United States and the EU encountered each other both in the governmental and in the private arena. This did not mean that all problems could be eliminated: the intense interdependence and interpenetration of the United States and the EU meant that there would always be frictions and disputes. What it did mean was that increasingly these problems were handled in the context of relatively settled rules and expectations. The most explicit formal manifestation of these developments came in 1995, with the nego-

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tiation of the New Transatlantic Agenda and the Transatlantic Action Plan between the United States and the EU. These documents, signed in Madrid on December 3, 1995, contained both a set of agreed-on principles and common concerns and a wide-ranging list of joint actions to be taken by the parties. In many ways, they consolidated and expanded the relationships established under the umbrella of the TAD over the previous five years, but they went far beyond the TAD in terms of the range of specificity of the commitments undertaken. The program was to be subject to a rolling process of review and renewal as items came onto and left the agenda. The net result of these developments in the political, economic, and security fields was that by the late 1990s, a complex and highly institutionalized transatlantic relationship could be discerned. Some, such as German foreign minister Klaus Kinkel, were led on this basis to call for the development of a Transatlantic Free Trade Area (TAFTA), and there was evidence of a good deal of bottom-up intensification of the relationship as the result of corporate restructuring and alliances. Disputes, though, persisted, in the context of the WTO and in the context of the U.S.-EU-Japan triangle as well as in bilateral relations. The intensity and dynamism of the U.S.-EU partnership mean that this will be the trend for the foreseeable future: an increasingly complex and institutionalized relationship in which processes of conflict management and of “competitive cooperation” remain central, but one in which the political and security dimensions will link inexorably with the economic interests of the partners. See also U.S.-EU RELATIONS: TRADE AND INVESTMENT. Alting von Geusau, F., ed. 1983. Allies in a Turbulent World: Challenges to U.S. and West European Cooperation. Lexington, MA: D.C. Heath. Calleo, D. 1970. The Atlantic Fantasy. Baltimore: Johns Hopkins University Press. ———. 1987. Beyond American Hegemony: The Future of the Western Alliance. New York: Basic Books. Calleo, D., and B. Rowland. 1973. America and the World Political Economy. Bloomington: Indiana University Press. Chace, J., and E. Ravenal, eds. 1976. Atlantis Lost: The United States and Europe After the Cold War. New York: New York University Press.

Bibliography

Featherstone, K., and R. Ginsberg. 1996. The United States and the European Union in the 1990s: Partners in Transition. London: Macmillan. Freedman, L., ed. 1983. The Troubled Alliance. London: Heinemann. Kolodziej, E. 1981. “Europe: The Partial Partner.” International Security 5, no. 3 (Winter 1980–1981). Peterson, J. 1996. Europe and America in the 1990s: Prospects for Partnership. London: Routledge. Smith, M. 1984. Western Europe and the United States: The Uncertain Alliance. London: Allen and Unwin. ———. 1992. “‘The Devil You Know’: The United States and a Changing European Community.” International Affairs 67, no. 1 (January). ———. 1994. “The United States and Western Europe: Empire, Alliance and Interdependence.” In A. McGrew and P. Lewis, eds., The United States in the Twentieth Century: Empire. London: Hodder and Stoughton. Smith, M., and S. Woolcock. 1993. The United States and the European Community in a Transformed World. London: Pinter. ———. 1994. “Learning to Cooperate: The Clinton Administration and the European Union.” International Affairs 69, no. 3 (July).

—Michael Smith

U.S.-EU Relations: Trade and Investment

The United States and the EU have long been each other’s largest trading partner and the world’s two largest traders. Their trade relationship has provided leadership to the rest of the world; multilateral trade agreements have never been concluded in practice without a prior bilateral deal between the United States and the EU. The most striking characteristic of the U.S.-EU trade relationship is the equality that both partners have enjoyed from the start. Unlike the situation in the foreign policy realm, in which the EU has never had an effective international personality, the EU has seized an equal voice in trade negotiations with the United States since the beginning of the Kennedy Round (1964–1967) of the GATT. As a result, many disputes have mired the U.S.-EU trade relationship, especially agricultural trade conflicts. Quiet years in the bilateral relationship and the conclusion of the New Transatlantic Agenda in 1995 followed the peak of U.S.-EU trade frictions during the Uruguay Round (1986–1993) of the GATT, but disputes resurged in the late 1990s. A Crucial Relationship

Together the United States and the EU account for 30 percent of world trade and 60 percent of the world’s GDP. They were each other’s largest trading partner until 1994, when Canada became the top importer and exporter for the United States. The EU and the United States also are each other’s largest foreign direct investment partners. In 1996 trade flows between the EU and the United States were at a record $270 billion, with EU exports to the United States of $142.7 billion and U.S. exports to the EU of $127.5 billion. The United States accounted for 19.6 percent of total EU trade, and the EU was responsible for 20.4 percent of total U.S. trade. Germany is the EU’s biggest individual exporter to the United States (28 percent of total), and Britain is the EU’s biggest importer of U.S. goods (23 percent of total). Over 80 percent of U.S. exports to the EU are manufactured goods, mainly aircraft, machinery, and motor vehicles; the remainder consists of agricultural products, fuel, and raw materials. The leading EU exports to the United States are also primarily machinery, motor vehicles, and other manufactured products. The U.S.-EU trade relationship is fairly balanced. The United States has traditionally run a modest trade surplus with the EU, except in the period 1984–1989 and since 1993. In 1996 the EU trade surplus with the United States was $12.2 billion, up from $8 billion in 1995. The United States still has a sizable surplus with the EU in the area of services. Main Sources of Trade Tensions The U.S.-EU trade relationship was relatively cordial until the early 1980s, except for the so-called chicken war in 1963 and a few skirmishes over tax legislation in the 1970s. Security imperatives tamed U.S. complaints about the discriminatory practices associated with the formation of the Common Market, at a time when the EC was building its trade negotiating strength in GATT. Transatlantic trade conflicts sharply increased in the early 1980s, however, as the United States moved away from liberal trading practices in response to its declining place in the world economy. The foremost source of U.S.-EU trade frictions from the U.S. point of view has been the European practice of subsidizing production and exports, which has led to full-fledged bilateral conflicts in agriculture, steel, and civil aircraft.

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The United States has also often denounced the EU nontariff barriers to trade that have hampered U.S. exports in sectors such as building, telecommunications, and broadcasting. The successive enlargements of the EU to new members have also triggered U.S.-EU trade disputes, such as the conflict over feed grains after the Spanish and Portuguese accession in 1986. For the 1995 enlargement of the EU (when Austria, Finland, and Sweden joined), the United States demanded compensation in advance, since tariffs were expected to increase on over $4 billion in trade with these countries. Finally, the tariff preferences granted by the EU to the African, Caribbean, and Pacific (ACP) countries have also created trade frictions with the United States, as in the still unresolved and increasingly bitter dispute about bananas. Until the 1980s the United States was always the plaintiff in bilateral trade disputes, whereas the EC fought to preserve the status quo. As the U.S. government engaged in a more aggressive trade policy based on unilateral retaliation, the EU launched complaints of its own against U.S. trade practices. The main source of U.S.-EU trade disputes from the European point of view has been the U.S. efforts to open foreign markets through unilateral measures, such as Section 301 of the 1974 U.S. Trade Act and the Super 301 provision of the 1988 Omnibus Trade Act, which allow the United States to impose unilateral punitive sanctions or retaliation on goods from another country without prior consultation of GATT. The EU has often countered U.S. attacks against its trade policy by in turn denouncing protectionist U.S. practices, such as the “Buy American” legislation in the case of the government procurement dispute and military research support in the case of the civil aircraft conflict. Negotiation, litigation, and retaliation are the main dispute settlement procedures, but they can be long and costly. When bilateral negotiations failed, the United States and the EU could file a lawsuit in the GATT; now they can use the dispute resolution mechanism of the World Trade Organization (WTO). For two decades the United States was the main user of GATT litigation, but in the early 1980s the EC retaliated by taking legal action in the GATT against discriminatory U.S. trade practices. Threatened or actual retaliation, which targeted specific products and countries of an amount equivalent to the estimated trade loss as a result of the practice under attack, were also

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used extensively either before litigation or when one party (most often the EC) refused to take the results of GATT legal action into account, such as in the oilseeds case. Some disputes have gone on for many years, such as the hormones case that lingered for almost a decade until finally being resolved in July 1996. These U.S.-EU disputes are costly because they damage the climate of the relationship, they can have consequences on products that were not involved in the original dispute, and they often prevent liberalization to the rest of the world.

Predominance of Agricultural Trade Conflicts Trade disputes between the United States and the EU have always been particularly hostile in the field of agriculture. Indeed, despite the overwhelming place of manufactured goods in U.S.-EU trade, the bulk of transatlantic trade conflicts since 1963 has involved agriculture. In most cases the Common Agricultural Policy (CAP) was the target of the complaint. This imbalance between the intensity of the conflicts and the real importance of the trade can be explained both by the high political priority traditionally assigned to farmers in Europe and the United States and by the blatant agricultural trade distortions produced by the CAP, whose elaborate scheme of variable levies for import protection and export subsidies artificially inflated European agricultural production and increased competition for U.S. products not only in the European market but also in third countries. The so-called chicken war was the first trade dispute between the United States and the EC. It arose in 1963 because implementation of the CAP had drastically increased tariffs on poultry in Germany, the biggest poultry market for the United States. The United States refused to accept the concessions offered by the EC and instead retaliated by withdrawing some of its own concessions, which the Community contested. A GATT panel determined that the United States could withdraw concessions in the amount of $26 million, which it did, but apparently to no effect, as the EC continued to implement a highly protectionist CAP. The Kennedy Round of the GATT generated the second transatlantic trade dispute. A central U.S. goal in the multilateral negotiation was to get fair access for U.S. agricultural exports in Europe, which at the time represented 40 percent of U.S. exports to the EC. In a fierce battle sustained in

part by French president Charles de Gaulle’s “empty chair” policy, the EC revealed its tough bargaining capabilities by resisting U.S. attempts to cancel the EC variable levy system and obtain a reduction in agricultural trade barriers to preintegration levels (Preeg, 1970). The United States sought again to limit an ever-expanding CAP in the Tokyo Round (1975–1979) but once more failed to reduce the EC’s variable levies and export subsidies. The U.S.-EU trade relationship in agriculture deteriorated severely in the 1980s as a consequence of a worldwide agricultural recession. The CAP had turned the EC into a net exporter, which dumped its surpluses on world markets through the use of export restitutions, sending world prices down and reducing U.S. export shares. The bilateral conflict escalated in 1985 when the United States retaliated against the CAP by implementing its own farm support measures through the Export Enhancement Program. This U.S.-EU “subsidy war” proved extremely costly, however. In 1986, U.S. and EC domestic agricultural support programs were estimated to cost about $25 billion each. The Uruguay Round opened in 1986 after long, conflictual prenegotiations over whether to include agricultural liberalization on the agenda. The United States went on the offensive in 1987 by calling for a complete elimination of all subsidies in agriculture by the year 2000. The EC, by contrast, tried to defend the fundamental principles of the CAP. The wide gap separating the U.S. and EC positions on agriculture led to a long stalemate in the multilateral negotiations and almost resulted in the failure of the Uruguay Round altogether at the Brussels ministerial meeting of December 1990, originally intended to close the round. Negotiations between the United States and the EC accelerated after the formal adoption by the EC of the internal CAP reform in May 1992 but again broke down until the United States decided to superimpose the dispute over oilseeds, in which two GATT panels had ruled against the EC. It was in the context of intense bilateral hostility, with a massive U.S. trade retaliation pending, that the so-called Blair House agreement was signed by the United States and EC on November 20, 1992, finally enabling multilateral negotiations to resume in other sectors. The agreement provided for a 20 percent reduction in internal price support over six years, a reduction of export subsidies by

21 percent in volume and 36 percent in budget over six years, and a “peace clause.” A separate deal on oilseeds was also concluded. After months of virulent opposition from the French government, on the grounds that EC negotiators had exceeded their mandate in concluding the Blair House agreement, the United States and the EU eventually renegotiated specific elements of the deal in December 1993. The EU improved its offer on several important points, such as an extension of the peace clause, a longer timetable for cutting subsidized farm exports, and changes in the reference period used for the cuts. U.S.-EU tension over farm policy has lessened considerably since the conclusion of the Uruguay Round and the CAP reform, which reduced the amount of farm surplus the EU exports onto the world market. However, new disputes are arising over regulatory issues such as slow EU approval of genetically modified varieties of grains. Other Subjects of U.S.-EU Trade Frictions The U.S.-EU trade relationship has been more amicable in other sectors, though not totally free from sometimes intense friction, such as during the steel crisis in the early 1980s or the dispute over reciprocity in banking in 1988 and 1989. Although the United States and the EU joined forces against third countries to promote trade liberalization in many industrial and “new” sectors, several disputes were also addressed during the Uruguay Round. Civil aircraft. The success of the European Airbus consortium, fueled since its creation in 1967 by massive support from its partner governments, provoked a major U.S.-EU trade dispute in the mid-1980s. After years of mutual accusations, negotiations, and litigation, the United States and the EU finally concluded a bilateral agreement on civil aircraft in July 1992 that prohibits production subsidies, caps direct government support for development of a new aircraft, and increases transparency of government activity in civil aircraft. Public procurement. A bilateral dispute on public procurement started in 1990 after the EU adopted the so-called Utilities Directive, which gave a 3 percent price preference to European bidders. The U.S. government demanded that U.S. companies be exempted from the preference, but EU negotiators used it as a bargaining chip in order to obtain changes in the even more discriminatory U.S. procurement policy. During the signing

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of the Uruguay Round in April 1994, the United States and the EU finally concluded difficult negotiations with a partial agreement on procurement (excluding telecommunications) that covers construction and services in five key utilities sectors and applies to central governments as well as to regions and in certain cases large cities. Broadcasting. In 1989 the EU adopted the Broadcasting Directive, requiring that a majority of entertainment transmission time be reserved for programs of European origin “where practicable.” The United States placed the EU under Section 301’s “priority watch list” because of the resulting barriers to entry for U.S. television programs. After a much publicized U.S.-EU conflict in the last months of the Uruguay Round, the broadcasting dispute was left unresolved. A New Transatlantic Partnership? The signing of the Uruguay Round Final Act in Marrakech on April 14, 1994, dampened trade frictions between the United States and the EU. Yet still unsettled are the issues of telecommunications, procurement, broadcasting, and a new dispute on the EU import regime for bananas from non-ACP countries, which has involved GATT litigation and Section 301 procedures. Nevertheless, the bilateral environment seemed far better in 1996, following conclusion of the New Transatlantic Agenda on December 3, 1995, with its joint action plan, and talk of a Transatlantic Free Trade Area merging the world’s two largest regional trade pacts. The Commission prepared a “Blueprint for deeper transatlantic ties,” and corporate representatives from the United States and the EU came together to launch the Transatlantic Business Dialogue. Despite this strengthened bilateral cooperation emphasizing shared economic goals, trade frictions between the United States and the EU again increased in 1996 and 1997. Particularly salient was the dispute about the extraterritorial provisions of U.S. legislation. Recent U.S. laws, notably the Libertad (Helms-Burton) Act and the Iran-Libya Sanctions Act, penalize foreign companies doing business with countries considered as sponsors of terrorism (Cuba, Iran, and Libya). Although the EU made clear that it supports the goal of fighting terrorism, it renewed its criticisms that the United States was resorting to unilateral actions to resolve foreign policy disputes and that national security was being used as a disguised

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form of protectionism. A WTO panel was formed in early 1997 to examine the legality of the U.S. action, but the United States announced its decision to boycott the panel proceedings on the grounds of national security. Although the EU had agreed that an amicable settlement of the dispute was preferable to WTO sanctions, it passed the retaliatory “antiblocking” legislation that forces EU companies to disobey U.S. legislation and inform the Commission if they lose business because of the U.S.-imposed sanctions. As in the beginning of their trade relationship, the U.S. and the EU are still on an equal footing when it comes to trade disputes and negotiations. However, as the balance between trade and security interests shifts, and both the United States and the EU increase their trade ties with other regions of the world, the transatlantic trade relationship is bound to evolve, possibly moving away from center stage but being even more acrimonious.

See also GENERAL AGREEMENT ON TARIFFS AND TRADE; TRANSATLANTIC BUSINESS DIALOGUE; U.S.EU RELATIONS: THE POLITICS OF PARTNERSHIP. Baldwin, Robert E., Carl B. Hamilton, and André Sapir, eds. 1988. Issues in U.S.-EC Trade Relations. Chicago: University of Chicago Press. Commission. 1997. Annual Report on United States Barriers to Trade and Investment. Luxembourg: Office for Official Publications of the European Communities. Preeg, Ernest H. 1970. Traders and Diplomats: An Analysis of the Kennedy Round of Negotiations Under the General Agreement on Tariffs and Trade. Washington, DC: Brookings.

Bibliography

—Sophie Meunier

See DIFFERENTIATED INTEGRATION.

Variable Geometry

V The so-called Val Duchesse process began in 1985 when the Commission convened a meeting at the chateau Val Duchesse, on the outskirts of Brussels. The meeting brought together the social partners— the Union of Industrial and Employers’ Confederations of Europe (UNICE), the European Trade Union Confederation (ETUC), and the European Center of Public Enterprises—to encourage them to launch a “social dialogue” and thereby participate in EC social policy formulation. Thanks largely to social policy provisions of the Single European Act and the Treaty on European Union, the intensity of the social dialogue has greatly increased, as have the composition and the subject matter of working parties, consisting of Commission, employer, and employee representatives, set up as part of the Val Duchesse process. See also SOCIAL POLICY.

Val Duchesse Process

The EC chose value-added tax (VAT) as the model turnover tax for the common market because it does not artificially distort industrial structures and facilitates the detection and prevention of illicit export subsidies. Cross-border shopping gave rise to distortions, but ended when VAT rates were harmonized as part of the single market program. VAT is one of the EU’s own resources, that is, a small percentage (reducing from 1.4 to 1 percent in 1999) of VAT receipts goes directly to the EU’s coffers (although the EU’s percentage is not identified in the tax paid by consumers). See also BUDGET.

Value-Added Tax (VAT)

See VALUE-ADDED TAX.

VAT

Following the Hague summit on December 1 and 2, 1969, the Commission asked Georges Vedel, a French expert, to chair a committee and draft a report on the role of the European Parliament (EP) in a changing EC. The ensuing Report of the Working Party Examining the Problem of the Enlargement of the Powers of the European Parliament (the Vedel Report) recommended considerably more legislative power for the EP, greater Commission accountability to Parliament, and closer ties between the EP and national parliaments. Although the Vedel Report was prophetic in the long term (at least with respect to the EP’s legislative power and scrutiny of the Commission), its recommendations were too radical for the EC in the early 1970s and were not acted upon. See also EUROPEAN PARLIAMENT.

Vedel Report

The Venice Declaration of June 1980 supported UN Security Council resolutions 242 and 338 on the Palestinians’ right to self-determination and the right of the Palestine Liberation Organization (PLO) to be associated in any negotiation to resolve the Middle East conflict. The declaration was a milestone in the development of European Political Cooperation (the member states’ foreign policy coordination mechanism) and in the history of EC-Arab and EC-Israeli relations. See also EUROPEAN POLITICAL COOPERATION; MIDDLE EAST.

Venice Declaration

The Visegrad Group is an informal name for Poland, Hungary, the Czech Republic, and Slovakia. With the exception of Slovakia, these countries are poised to join NATO and the EU in the near future. See also CENTRAL AND EASTERN EUROPEAN STATES.

Visegrad Group

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Vredeling Directive

Popularly known by the name of Henk Vredeling, the commissioner for social affairs, the infamous draft Vredeling Directive of 1980 proposed expanding workers’ information and consultation rights in multinational companies. Whereas previous proposals relating to information and consultation in the workplace had largely followed current member-state practices, the Vredeling Directive went well beyond existing provisions at the national level by requiring multinationals to

Vredeling Directive

give employees details of the company’s entire operations, including those outside the EC. Lingering Eurosclerosis and resurgent neoliberalism pushed social policy onto the back burner in the early 1980s, and the draft directive languished. Indeed, the proposal showed how politically out of touch the Commission had become not only on the issue of worker participation but also on social policy in general. See also SOCIAL POLICY.

W

divergence made nonsense of the 1980 target date and consigned the Werner Plan to history. It was only in the late 1980s that EMU resurfaced, this time under the radically different circumstances of the successful single market program and a push toward political union. See also ECONOMIC AND MONETARY UNION: TOWARD A SINGLE CURRENCY; EUROPEAN MONETARY SYSTEM. The origins of the Western European Union (WEU) go back to March 1948 when Britain, France, and the three Benelux countries signed a Treaty of Economic, Social, and Cultural Collaboration and Collective Self-Defense in Brussels. This was the founding document of the Brussels Treaty Organization, also known as the Western Union. After the French parliament’s rejection of the proposed European Defense Community (EDC) in August 1954, the Western Union organization became the new foundation for a framework of European defense cooperation. In October 1954, the Brussels treaty was modified and enlarged to include the Federal Republic of Germany (FRG) and Italy, and the organization was henceforth known as the Western European Union. WEU’s Article V stipulates that all member states will afford “all the military and other aid and assistance in their power” in the event of an armed attack in Europe against one of them. WEU’s collective defense commitment is therefore, on paper, more binding than that of the North Atlantic Treaty (which, in its Article 5 calls for “such action as it deems necessary, including the use of armed force” in the event of an attack). However, as WEU member states agreed from the outset to work closely with NATO and recognized “the undesirability of duplicating the military staffs of NATO” (Article IV), the WEU has not established its own integrated military command structure and headquarters, and hence its credibility as a collective defense alliance has remained in doubt. Until the WEU’s reactivation in the 1980s, the organization had led a dormant existence. During the Cold War, NATO was the principal framework used by West Europeans to organize their defense efforts in close cooperation with their transatlantic allies. In 1960, the WEU’s social and cultural responsibilities were transferred to the Council of Europe. The WEU—which until 1992 had its head-

Western European Union (WEU)

The Warsaw Pact was the Cold War alliance of Soviet-bloc countries, named after the Warsaw Treaty of Friendship, Cooperation, and Mutual Assistance, signed on May 14, 1955. The organization was dissolved in 1992.

Warsaw Pact

At their summit on December 1, 1969, as part of an effort to deepen European integration at a time of impending enlargement, the EC’s heads of state and government asked Pierre Werner, prime minister of Luxembourg, to prepare a report on Economic and Monetary Union (EMU). In October 1970, Werner presented an ambitious seven-stage plan to achieve EMU within ten years by means of institutional reform and closer political cooperation. The plan glossed over contending French and German emphases on monetary measures and economic policy coordination by proposing parallel progress in both spheres. But differences between Paris and Bonn soon emerged over the plan’s scope and the pace at which it should be implemented. Although a firm supporter of monetary policy coordination, French president Georges Pompidou was loath to take any measure likely to advance supranationalism in the Community. German chancellor Willy Brandt and the other Community leaders, by contrast, saw the Werner Plan as an ideal opportunity to accelerate closer integration. Accordingly, at the Paris summit on October 19 and 20, 1972, the heads of state and government called for EMU by 1980. Despite their seeming optimism, the Werner Plan soon became a victim of the sclerosis that beset the EC in the 1970s. High inflation and growing economic

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quarters in London, before moving it to Brussels— was given the limited task of verifying the nonproduction of certain categories of armaments in West Germany. During its early phase, the WEU was useful for promoting the integration of West Germany into the Atlantic Alliance and for restoring confidence among the West European countries in the aftermath of World War II; until 1973, when Britain joined the EC, the WEU was also considered a useful liaison between Britain and the EC on matters concerning European integration. In the 1980s, the development of European Political Cooperation (the EC member states’ foreign policy coordination mechanism) revived the debate on Europe’s security and defense identity (ESDI). WEU foreign and defense ministers decided during a meeting in Rome in October 1985 to relaunch the WEU, declaring that “better use should be made of WEU, not only to contribute to the security of Western Europe, but also to improve the common defense of all countries of the Atlantic Alliance.” Following the Rome Declaration, the WEU Council was also reactivated and thereafter held two meetings a year at the level of foreign and defense ministers. This was followed by the adoption of another declaration, the Platform on European Security Interests, in The Hague in October 1987. The Hague Platform set out general guidelines for the WEU’s future program of work, basically to give a security dimension to the process of European integration and to reinforce Europe’s influence in the Alliance and in the conduct of East-West relations. In the late 1980s, the WEU continued its modest revival as a relevant forum for European defense cooperation. Portugal and Spain applied to join the WEU in 1988, and the WEU’s Secretariat-General was enlarged. In 1988, the first joint military operation coordinated by the WEU (clearing the Gulf waters of mines) took place, and on the basis of this experience the WEU became more prominently involved in coordinating the operations of its member states during the Gulf War of 1990 and 1991. At that time, the WEU also played a part in the coordination of military and logistic support operations in order to afford assistance to the Kurdish populations of Iraq. If the WEU for decades resembled a “sleeping beauty,” it was definitely “kissed awake” in the early 1990s by two “princes”: the EU and NATO. The Treaty on European Union (TEU), implemented in 1993, laid the foundation for a

Common Foreign and Security Policy (CFSP), which also referred to the “eventual framing of a common defense policy, which might in time lead to a common defense” (Article J.4.1). Thus, for the first time, the WEU became an integral part of the process of European integration embodied by the EU. The Hague Platform had already stated that “the construction of an integrated Europe will remain incomplete as long as it does not include security and defense,” but until the TEU, security and defense had been carefully excluded from the formal mechanisms of European integration. A declaration on WEU appended to the TEU specified that “WEU member states agree on the need to develop a genuine European security and defense identity. . . . The WEU will be developed as the defense component of the EC and as a means to strengthen the European pillar of the Atlantic Alliance.” The declaration also called for the development of the operational role of the WEU and invited those EU member states that had not already done so to accede to the WEU (or else to become observers). The WEU responded quite promptly to these challenges, and in the Petersberg Declaration of June 1992, WEU member states pledged their support for conflict prevention and peacekeeping missions under the aegis of the WEU. The organization’s operational role was strengthened by the creation of a Planning Cell (which, among other things, prepares contingency plans for the employment of forces under WEU auspices and acts as a de facto headquarters in an emerging crisis), a Satellite Center (which has been set up at Torrejon near Madrid), and an Institute for Security Studies in Paris. The WEU’s enlargement also took shape rapidly: Norway, Iceland, and Turkey (as European NATO members but EU nonmembers) became WEU associate members; Austria, Denmark, Ireland, Finland, and Sweden (as EU members, but—with the exception of Denmark— NATO nonmembers) are now observers; and the Central and Eastern European states and the three Baltic states, which have signed Europe Agreements with the EU and therefore have a good chance of joining the EU in due course, are now associate partners. Finally, Greece (as an EU member state and a NATO member) acceded to the WEU as a full member in 1995. All these different categories of membership offer a variety of rights and obligations, but only

full members of WEU are covered by the security guarantee of Article V. The main advantage of the WEU’s enlargement has been that it now brings together regularly all countries involved in the creation of an ESDI; a possible drawback is that it has become even more difficult than before to come to quick and determined decisions. The second “prince” kissing the WEU wide awake has been a changing NATO. At the NATO summit of January 1994, the Alliance gave its full support for the development of an ESDI, with the EU and WEU as the main tools. NATO proclaimed that the transatlantic link would be reinforced by the strengthening of the European pillar of the Alliance and that it would enable the European allies to take more responsibility for managing their security and defense. President Clinton clearly noted that although Europe remains the core of U.S. security concerns, the “new security must be found in Europe’s integration,” with an important role for both the EU and the WEU. NATO further endorsed the concept of Combined Joint Task Forces (CJTF) that would, among other things, make the collective assets of the Alliance available for WEU-led operations in the context of the CFSP. With the stroke of a pen, this would provide the WEU with the military capabilities to conduct its Petersberg tasks in cases where the United States would not be willing to become engaged. The trend toward the WEU’s constituting a strong European pillar within a reformed NATO was further reinforced by the NATO foreign ministers at their June 1996 meeting in Berlin. For the time being the WEU aims to be able to plan and control a “Petersberg operation” at up to the level of a military corps. To reach such a level of capability, the WEU is developing an exercise program aimed at the coordination of forces and political/military control of (limited) operations. The WEU gained useful experiences for such missions during the Yugoslav war, where it was involved in monitoring the compliance of shipping (including search actions) in order to enforce UN sanctions against Serbia and Montenegro in the Adriatic (jointly with NATO in Operation Sharp Guard). A WEU police and customs operation to support the implementation of UN sanctions has been conducted jointly with Romania, Bulgaria, and Hungary, and the WEU also sent a small group of police experts to Mostar in support of an unsuccessful EU-led operation to establish local government in that Bosnian city.

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The WEU has also stepped up its efforts to coordinate defense and armaments cooperation among its members. Apart from the Planning Cell, WEU chiefs of defense staff now meet at least twice a year. A Western European Armaments Group (WEAG) has been set up within the WEU and is attempting to open up the European defense equipment market, the aim being that European armed forces should be equipped with identical or interoperable equipment. An armaments secretariat has been established within the WEU’s Secretariat-General, and the creation of a European armaments agency is under study. The end of the Cold War has provided the WEU with the opportunity to become the focal point of the emerging ESDI. The WEU’s position as the hinge between the EU and NATO stresses its importance as a link between both organizations but at the same time makes its situation particularly unpredictable. Intense negotiations to revise the EU-WEU relationship took place during the 1996–1997 intergovernmental conference (IGC). Two basic options were identified by WEU member states: first, a reinforced partnership between an autonomous WEU and EU; second, a merger (be it immediate or over time) of both organizations. For a variety of reasons, Britain, Denmark, Ireland, Sweden, Finland, and Austria support the former option; other EU-WEU member states are predisposed (with varying degrees of enthusiasm) toward the latter choice. A full EU-WEU merger would certainly have resulted in institutional tidiness, strengthened the EU’s diplomatic clout, and achieved greater coherence in Europe’s action in the foreign, security, and defense policy fields. In the event, Britain, Denmark, and the neutrals blocked French and German efforts at the decisive Amsterdam summit on June 16 and 17, 1997, to merge the EU and WEU. Although the Amsterdam Treaty permits the EU to use the WEU to conduct Petersberg tasks on its behalf, the treaty also contains a watered-down commitment to the eventual development of a common EU defense policy. As the natural link between the EU’s CFSP and NATO, the WEU will continue to play an important role in Europe’s emerging security framework in the years ahead. Further cooperation in the security and defense fields on a European level will continue because of shared geopolitical reasons and declining defense budgets. For the time being, however, NATO will remain the leading player, since it draws in the Americans, has the required

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military assets and infrastructure, and has tried and tested procedures for collective action. The unpredictability of the domestic and foreign policy course of Russia only adds to the Europeans’ need to ensure the continued involvement of the United States in guarding Europe’s ultimate security. With the creation of a CJTF arrangement between the WEU and NATO, and France’s shift toward closer military cooperation with NATO, it has become very unlikely that the WEU will become a nucleus for a European army, especially as West Europeans lack the political will as well as the financial resources to set up a parallel military structure alongside NATO. Thus, the WEU will remain the platform par excellence for the formation of an ESDI, preparing coordinated responses (and, if needed, additional operational capabilities) to crises on the EU’s periphery. By its very nature this will take time, and it is certainly overly optimistic to assume that this process will be completed within the next few years. The 1996–1997 IGC and the ensuing Amsterdam Treaty should therefore not be seen as a “moment of truth” but as, it is to be hoped, one further, very important, step toward the development of a mature and powerful Europe in which the WEU’s role will become further defined. See also COMMON FOREIGN AND SECURITY POLICY; FRANCE, GERMANY, AND POST–COLD WAR EUROPE; NORTH ATLANTIC TREATY ORGANIZATION; APPENDIX 3.

Bloed, Arie, and Ramses A. Wessel, eds. 1994. The Changing Functions of the Western European Union: Introduction and Basic Documents. Dordrecht: Nijhoff. Chaen, Alfred. 1990. The Western European Union and NATO: Strengthening the Second Pillar of the Alliance. Washington, DC: Atlantic Council. Cromwell, William C. 1992. The United States and the European Pillar: The Strained Alliance. New York: St. Martin’s. Gompert, David C., and Stephen Larrabee, eds. 1997. America and Europe: A New Partnership for a New Era. Cambridge: Cambridge University Press. Gordon, Philip, ed. 1997. NATO’s Transformation: The Changing Shape of the Atlantic Alliance. Lanham, MD: Rowman and Littlefield. van Ham, Peter. 1995. “The Development of a European Security and Defense Identity.” European Security 4, no. 4 (Winter).

Bibliography

—Peter van Ham

A white paper is a Commission document setting out proposed legislative initiatives. However, the term is often used to refer to the Commission’s famous June 1985 publication outlining the legislative steps necessary to achieve a single market in the EC by the end of 1992. Officially entitled Completing the Internal Market, the white paper caught the attention of businesspeople and politicians and generated enough momentum to get the single market program off the ground. It was endorsed in the Single European Act of 1986 and played a pivotal part in the EC’s revival and transformation at the end of the 1980s. See also SINGLE MARKET PROGRAM.

White Paper

In 1967, as prime minister of Britain, Harold Wilson presented his country’s second application for EC membership. Wilson was equivocal about joining the Community, but like Harold Macmillan in the early 1960s, Wilson saw no feasible alternative. In 1975, again as prime minister (after an interlude during which Edward Heath, the Conservative Party leader, brought Britain into the EC), Wilson fulfilled an election pledge and renegotiated the terms of Britain’s accession. The renegotiations lasted eleven months, dominated two EC summits, and were an early indicator of what a difficult member state Britain would be. Again in fulfillment of an election pledge, Wilson called a referendum (held on June 5, 1975) on whether or not Britain should stay in the EC, based on the renegotiation terms. The result was a vote in favor of continued membership (67.2 percent for, 32.8 percent against, and a 67 percent turnout), but the conduct of the renegotiation, and of the referendum itself, perpetuated ambivalence in Britain about EC membership—an ambivalence that Wilson personified. See also UNITED KINGDOM.

Wilson, Harold (1916–1995)

Consisting of member-state and Commission officials, working groups scrutinize draft EU legislation on behalf of the Committee of Permanent Representatives (COREPER). There are approximately two hundred working groups altogether: some meet two or three times during any sixmonth Council presidency; others with less work

Working Groups

to do or with less political momentum behind them meet perhaps only once or twice a year. If the working groups can agree or are near agreement so that COREPER can then adopt the proposal at its weekly meetings, the proposal becomes an “A” point and is adopted without discussion by the Council. If the working group cannot agree, COREPER will attempt to make a decision. Failing that, the Council itself will discuss the proposal. See also COMMITTEE OF PERMANENT REPRESENTATIVES; COUNCIL OF MINISTERS.

World Trade Organization (WTO)

Trade is the lifeblood of the European economy. Almost twelve million European jobs depend directly on exports, and as the world’s largest trade grouping, the EU on its own accounts for more than one fifth of total global trade in goods. As it has been from the earliest moments of European integration, therefore, the promotion of free trade is one of the main aims of the EU. Trade liberalization took a major step forward with the conclusion of the Uruguay Round of the GATT in April 1994, producing an agreement that substantially liberalizes trade in a number of areas. But perhaps the crowning achievement of the Uruguay Round was the creation of the World Trade Organization (WTO), which came into being on January 1, 1995. The origins of the WTO go back as far as 1947, well before the EU existed. The United States, very much the dominant player at that time, proposed a GATT to encapsulate tariff negotiations held after the war. The United States also proposed setting up an International Trade Organization. This was agreed to internationally but was not subsequently approved by the U.S. Congress in the 1950s. The GATT thereby became, by default, both an international trade agreement and a temporary organization with rules governing international trade. This “temporary” arrangement, however, was to last for almost fifty years. The GATT oversaw successfully a great expansion of international trade in the postwar period. Moreover, a flexible approach to the rule by which all decisions had to be reached by consensus helped to keep the organization together. But the problems of using the GATT to govern the increasingly complex world trading system were be-

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coming more and more obvious by the late 1980s. The consensus approach often meant that problems had to be sidestepped. The internal workings of the GATT were slow and provided many opportunities for delay. The GATT was difficult to amend, which in turn led to the growth of side agreements, binding only on those parties that chose to accept their provisions. Use of the dispute settlement system, which had evolved in an ad hoc way over the years into a generally effective multilateral sanctions regime, could be blocked by the consensus principle. Perhaps most important of all, the rules of the world trading system were starting to outgrow the institutional mechanisms of the GATT, which applied only to goods and not to services or intellectual property. From a European perspective, services and intellectual property formed a crucial element of the single market, and it was time to extend new disciplines in these areas at the multilateral level. In the meantime, such “new trade issues” as the environment, competition, labor standards, and investment were crowding onto the world trade stage and also needed to be considered in their own right. For all these reasons, when the issue came up at an early stage of the Uruguay Round negotiations, the EU supported the concept of a new international trade organization to act as a successor to the GATT. The idea surfaced for the first time publicly at the December 1990 Brussels GATT ministerial meeting, and a draft charter for a new organization appeared in the so-called Dunkel draft agreement of 1991. In the final hours of the negotiations at the end of 1993, the fledgling organization was renamed the World Trade Organization (at the urging of the United States), and the proposal was finally accepted at Marrakech in April 1994 at the close of the Uruguay Round. The WTO transforms the GATT organization into a permanent, global-scale trade body. It consolidates a number of different trade accords, some of which were reached in the Uruguay Round, some before. The WTO therefore has a much wider remit than its predecessor. This includes the old GATT (now called GATT 1994, to take account of changes agreed to in the Uruguay Round); the new General Agreement on Trade in Services (GATS); the Trade-Related Aspects of Intellectual Property Rights (TRIPs) and TradeRelated Investment Measures (TRIMs) agreements; the four plurilateral agreements in govern-

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ment procurement, civil aviation, meat, and dairy products; and the Dispute Settlement Understanding (DSU). As an organization, the WTO enjoys equal status with other major international economic organizations, notably the International Monetary Fund and the World Bank, and trade is thereby finally elevated to its true level in the international economic pantheon. The WTO is a much more important political forum than the GATT, with biennial ministerial meetings and plenty of scope for greater political input more generally. The operation of the multilateral trade system meshes well with the EU’s common commercial policy. Trade policy is formed in what is best described as a constant exchange between the Commission and the Council of Ministers. For example, the Commission made recommendations to the Council on negotiating positions in the Uruguay Round; the Council authorized these, and the Commission negotiated in liaison with the so-called 113 Committee, made up of representatives from the member states. This committee, named after the relevant Treaty of Rome article, operates as an advisory “sounding board” for the Commission and as a means of transmitting information to and from the member states. Final decisions ultimately rest with the Council, but because the Council operates under qualified majority voting rules in this area, no one member state (at least formally) can block a final deal. In the case of the Uruguay Round, the Commission proposed (with the agreement of the Council) that the necessary legislation to ratify the final agreements should be agreed by unanimity, which was duly achieved. Overall, division of responsibilities (or “competence”) between the member states and the EU as a whole is a complex subject (for example, the member states themselves are members of the WTO). However, in the WTO, as in trade negotiations generally, the Commission acts on behalf of the EU as a whole. The key test of an international organization such as the WTO is perhaps its effectiveness in settling disputes. In the GATT, the operation of the consensus principle was undermining the effectiveness of dispute settlement. Especially before 1986, a party that had infringed the rules could both block the formation of a dispute settlement panel (to examine the case) and—in the event that the panel did meet—could block adoption of the report by the GATT Council. Such

blocking maneuvers did not occur very often, because the countervailing political pressures were often substantial. But the very possibility of blockage damaged the credibility of the whole procedure. A number of GATT “contracting parties” (as GATT members were known), including both the Europeans and the Americans, felt that the time had come for fundamental reform, notwithstanding the fact that both had succumbed to the temptation to block the process from time to time (the Europeans felt particularly exposed in the agricultural area). From a European perspective, another major problem was the intrinsic legal quality of some of the panel reports. But perhaps the most crucial factor was the development of the Section 301 family of legislation in the United States (particularly in the 1988 Omnibus Trade Act), with its potential for unilateral imposition of U.S. policy against others. Without an effective dispute settlement procedure, the EU argued, the United States would have greater incentive to employ Section 301, seeking to act unilaterally as both judge and jury in settling its disputes. Moreover, it did not escape European notice that a more effective dispute settlement procedure could itself be used to tackle unilateral U.S. action of this kind. The DSU of the WTO is a carefully crafted compromise. It combines what is now a virtually judicial procedure for settling disputes with an innovative safety valve. The procedures of the Dispute Settlement Body (DSB) are streamlined and expedited; for example, there is now a strict timetable and automatic adoption of judgments by WTO panels. The safety valve to which a losing party can appeal is the new Appellate Body, made up of leading figures from the world of international commercial law, with an independent secretariat, which should also go some way to rectifying EU concerns about the quality of past panel reports. Finally, even the decision of the Appellate Body can be overturned, but only by unanimity in the General Affairs Council. The result is that there is now a more solid, adequate, and enforceable set of rules that will help make international trade both more transparent and more predictable. By cutting tariffs by almost 40 percent and tackling old sectors such as agriculture and textiles, as well as opening up new areas such as intellectual property and services, the Uruguay Round showed that the multilateral route to trade liberalization remains a successful one. Indeed, it

was agreed at Marrakech in 1994 to tackle a substantial package of further work in the future. In the Commission’s view, the world trade community should now begin the preparatory work with a view to launching a new phase of trade negotiations before the end of the century. But what areas should the new negotiations cover? The key approach is to find ways for improved market access. The international trade community is already tackling trade barriers, and in some areas (such as industrial tariffs) the work is proceeding faster than originally planned. Discussions have begun in other sectors, such as information technology products, to go beyond the Uruguay Round. There is much more work to do in the services sector. Although the door to further liberalization was opened in the Uruguay Round, contracting parties must now work to ensure that the liberalizing commitments match the importance of this sector. And work must continue on the new trade issues.

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Overall, the WTO has a critical role to play as the motor of continued trade liberalization. In the years to come, the new organization will be seen as one of the most important results of the Uruguay Round. Without doubt, the EU will continue to play a major role in the conduct of its affairs. See also GENERAL AGREEMENT ON TARIFFS AND TRADE; U.S.-EU RELATIONS: TRADE AND INVESTMENT. Paemen, H., and A. Bensch. 1995. From the GATT to the WTO: The European Community in the Uruguay Round. Leuven: Leuven University Press. Van Dijck, Pitou, and Garrit Faber, eds. 1996. Challenges to the New WTO. The Hague: Kluwer.

Bibliography

—Hugo Paemen

See WORLD TRADE ORGANIZATION.

WTO

Y The Yaoundé convention, a development assistance agreement between the EC and seventeen African states and Madagascar (all former colonies of EC member states), was signed in 1964. In 1975, it was incorporated into the Lomé convention, which extended the geographical scope of the EC’s development assistance program to include Caribbean and Pacific, as well as African, ex-colonies. See also LOMÉ CONVENTION.

Yaoundé Convention

In order to overcome recent strains in U.S.-EC relations and influence the development of European Political Cooperation, Henry Kissinger, the U.S. national security adviser, decided to designate 1973 the “Year of Europe.” While unveiling his grandiose scheme, which included a call for a New Atlantic Charter, Kissinger appealed for closer cooperation on trade, defense, and foreign policy issues. Most Europeans responded unfavorably, seeing in Kissinger’s initiative a bid to assert U.S. hegemony under the cloak of a better transatlantic bargain. Kissinger’s distinction between a regional role for Europe and global responsibilities for the United States seemed especially condescending. Far from reassuring European opinion, Kissinger merely exacerbated relations with the EC, and the much-vaunted Year of Europe came to nothing. See also U.S.-EU RELATIONS: THE POLITICS OF PARTNERSHIP.

Year of Europe

Under the auspices of the EU’s education policy, Youth for Europe is a program to promote youth

Youth for Europe

exchanges, training courses, and seminars for educators as well as collaboration between member states on youth policy issues. The current program, Youth for Europe III, runs from 1995 to 1999. See also EDUCATION, VOCATIONAL TRAINING, AND YOUTH POLICY. How ironic that the twentieth century should end almost as it began: with war in Sarajevo precipitated by Serb nationalism and threatening world peace and stability. In 1914, Bosnian Serb Gavrilo Princip’s assassination of Austrian archduke Francis Ferdinand and his wife was the pretext for World War I. At century’s end, Serbian president Slobodan Milosevic’s pretensions to a Greater Serbia resulted in “ethnic cleansing” and massive population resettlements of Croats and Bosnian Muslims from Serb-occupied territories, which again led to war in the Balkans. The war in Bosnia was not a civil war but a war of aggression by Serbia. It is a myth that “ancient ethnic hatreds” in Bosnia were bound to flare up after the collapse of communism. Milosevic, aided by Bosnian-Serb leader Radovan Karadic, pursued a clear strategic aim to create a new Yugoslavia in name but a greater Serbia in reality. As the European Council concluded: “Although all parties have contributed, in their own way, to the present state of affairs, by far the greatest share of the responsibility falls on the Serbian leadership and the Yugoslav army controlled by it” (Commission, 1995, p. 20). The EU has been closely involved in the latest Balkan conflict, acting as mediator, broker, and putative peacekeeper. The conflict was an early test of the EU’s Common Foreign and Security Policy (CFSP) and an opportunity for the fledgling EU to assert itself internationally. However, the Balkan conflict has been not only disastrous for the region itself but also damaging for the EU. Far from curtailing or ending hostilities, the EU’s actions may even have escalated the war in the Balkans. Only when the United States decided to become militarily involved did the fighting stop. In terms of transatlantic relations and foreign policy generally, as well as domestic self-confidence, the Yugoslav war was a serious setback for the EU.

Yugoslavia

Chronology of the Conflict While the EC was still in the process of negotiating economic “sticks” and “carrots” with Yu-

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goslav prime minister Markovic in the spring and summer of 1991, the consensus holding the country together collapsed on June 23 under Slovene and Croat pressure for secession. As Yugoslavia disintegrated into ethnic conflict, EU concern about the situation was overshadowed by concern about the disintegrating Soviet Union. No one was willing to risk antagonizing Russia with the suggestion that military intervention in Yugoslavia was a possibility. As war grew more bitter through the summer of 1991, the EC and the UN launched a joint effort to achieve a cease-fire and an agreement among all Yugoslav republics. In August, after the failure of a first EC peacekeeping mission, the EC gave Serbia until November 5 either to agree to its plan for an association of sovereign Yugoslav republics or face economic sanctions and the possible recognition of Croatia and Slovenia. Also, the European Council asked the Western European Union (WEU) to draw up plans for a possible peacekeeping operation. During fall 1991, German foreign minister Hans-Dietrich Genscher pressed his EC colleagues to recognize Slovenia and Croatia immediately and to consider recognizing Bosnia and Macedonia. Historically Germany had been allied with Croatia, and there was a sizable Croat minority in Germany itself. At a tense General Affairs (foreign ministers) Council meeting on December 15, the other member states acquiesced in German pressure and agreed to recognize Slovenia and Croatia in mid-January 1992, despite French and British objections (in the event Germany announced unilateral recognition of the two states on December 18). In early 1992 the member states remained divided over whether to recognize Bosnia and Herzegovina but adopted the minimalist line of undertaking to recognize any republic that sought independence, provided it respected human rights, minority rights, and existing borders and cooperated with the EC and UN. The EC did not recognize Macedonia, however, because of Greek objections to the name of the proposed new state, which was also the name of a Greek province. The UN Protection Force (UNPROFOR), established in February 1992, was to be an interim arrangement to bring about the conditions for peace and security within the framework of the EC-sponsored Conference on Yugoslavia. UNPROFOR quickly enlarged its mandate, how-

ever, to support humanitarian efforts by the UN High Commissioner for Refugees (UNHCR) and to provide security for humanitarian missions. By 1994 European countries provided half of UNPROFOR’s forces, with almost 12,800 soldiers coming from the EC member states (6,200 French, 2,400 British, 1,306 Danish, 1,080 Dutch, 995 Spanish, and 808 Belgian). On March 1, 1992, Bosnia-Herzegovina voted for independence. It was ironic that the Helsinki Accords of 1975 should have become the incompatible basis for both the “self-determination” of the Bosnians, which drove them to fight to get out of Serbia’s control, and the “territorial integrity” of the Serbs, which drove them to fight to keep Yugoslavia together. Thus Bosnia’s declaration of independence precipitated a retaliatory declaration of independence the following day by the self-styled Serbian Republic, with its own parliament and army (in reality a branch of the Yugoslav National Army). On April 7, the EC recognized Bosnia. In the meantime, on January 11, 1992, a commission of inquiry under Robert Badinter, set up by foreign ministers to consider the contentious question of diplomatic recognition, recommended recognition of Macedonia as soon as it satisfied essential democratic and human rights preconditions and suspension of the recognition of Croatia. At the European Council in Lisbon on June 26 and 27, 1992, the heads of state and government stated their determination “to help the peoples of the former Yugoslavia, and reiterated that the EC Conference on Yugoslavia, chaired by former British foreign secretary Lord Carrington, was the only forum capable of ensuring a durable and equitable solution to the outstanding problems of the former Yugoslavia” (Commission, 1995, p. 21). At the London conference in August 1992, British prime minister John Major called for “pressure” against the Serbs, but French president Mitterrand refused to permit military intervention, not wanting “to add war to war” (Gnesoto, 1994, p. 5). At the EC foreign ministers’ meeting in Brussels on December 27, 1992, it was agreed to seek UN authority for new sanctions, including the physical sealing of Serbia’s frontiers, cutting off all postal and telecommunications contacts, and removing Serbia and Montenegro from all international bodies. In early 1993, the EC and UN envoys put forth another plan negotiated with Bosnian Serbs, Croats, and Muslims (but accepted only by the

Serbs) that would divide Bosnia into ten autonomous provinces under a weak central government. Later, in April, EC foreign ministers agreed to rely on tougher economic sanctions rather than resorting to such military actions as air strikes that would destroy Serb supply lines but could also destroy humanitarian aid routes to beleaguered Muslims. Also, the EC proposed taking steps to exclude Yugoslavia from all international organizations, and member states planned to freeze Serbian accounts in their banks (accounts that the Frankfurter Allgemeine Zeitung commented “have been empty for some time”). During the summer of 1993, “the unitary, confederal solution contained in the [EC-UN] peace plan was de facto abandoned . . . and replaced by the new [EC-UN partition] plan. Despite protestations to the contrary . . . all were ready to recognize the fait accompli of territorial gains made by the Serbs and Croats in Bosnia. The method was mediation and impartiality in negotiations” (Gnesotto, 1994, p. 4). During the political and military stalemate that followed, senior diplomats from the United States, Russia, France, Germany, and Britain (the so-called Contact Group) met in Geneva at a UN-EU–sponsored International Conference on the Former Yugoslavia and sought to establish a single, coherent international policy on the Bosnian war. The new initiative that followed in spring 1994 provided for a four-month cease-fire and a 51 percent:49 percent partition favoring the Bosnian-Croat Federation. The Bosnian Serbs’ rejection of the plan prompted Serbia’s beleaguered Milosevic to cut ties with his erstwhile Bosnian Serb allies. On February 7 and 8, 1994, the Council of Ministers published a declaration on Bosnia calling for a meeting of the NATO Council at the earliest possible stage. Article J.4 (1) of the TEU, which provides the EU with the authority to request WEU intervention on the EU’s behalf, was ignored because the WEU did not have the resources for such an undertaking. New cease-fires and successive attempts at negotiation failed during the following eighteen months. For reasons not of its own creating, UNPROFOR continued to lose effectiveness and credibility. In November 1995, in frustration, the United States convinced all parties involved in the conflict to travel to Dayton, Ohio, far from the media and from domestic political pressure. Eventually U.S. assistant secretary of state Richard Holbrook brokered a settle-

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ment. On December 15, 1995, UNPROFOR was replaced by the Implementation Force (IFOR), and the UN’s military command was replaced by NATO. On December 16, NATO’s supreme commander in Europe, George Joulwan, authorized sixty thousand NATO troops to enter Bosnia. IFOR kept the peace in Bosnia during the next twelve months, then was replaced by the Stabilization Force (SFOR) when its mandate expired in December 1996. The IFOR and SFOR missions to monitor and enforce compliance with the Dayton Accords were divided into two parts: one military, under NATO command; the other civil (dealing with issues such as reconstruction and governance), under EU and Organization for Security and Cooperation in Europe (OSCE) auspices. Among other things, the EU was to provide major funding, the OSCE to manage elections called for in the accords. Speaking in February 1996, NATO secretary-general Javier Solana stated that the NATOled operation in Bosnia demonstrated how the alliance had adapted its forces and policies to the requirements of the post–Cold War world while continuing to provide collective security and defense for its members. Clearly, NATO’s success meant that, in practice, the EU’s European Security and Defense Identity (ESDI) would not develop primarily around the WEU (as indicated in Article J.4 of the TEU) but around NATO. Apart from country-wide peacekeeping efforts, the EU became directly involved in a highly publicized reconstruction and reconciliation effort in Mostar, a city in Bosnia bitterly divided between Croats and Muslims, which came to symbolize the failure of EU policy throughout the Balkans. Member states sanctioned the EU administration of Mostar as a CFSP joint action (under Article J.3 of the TEU) and appointed Hans Koschnik, formerly mayor of Bremen, as EU administrator there. As part of a local peace agreement, Koschnik directed a $200 million reconstruction program and began the process of reunification by establishing a joint city police force and a joint government. But Koschnik’s efforts to reconcile both sides further alienated local opinion, and EU money was poorly spent. Koschnik resigned in July 1996, leaving Mostar’s future in doubt. Indeed, the city’s unification is overdue according to the Dayton timetable. The EU’s involvement in Mostar has been a costly disappointment and an embarrassing symbol of the failure of EU policy toward the former Yugoslavia.

496

Yugoslavia

U.S.-EU Relations The United States and the EU have had many differences regarding ex-Yugoslavia: some tactical, some strategic and fundamental. At the outset they disagreed about what role, if any, the United States should have. Initial European arrogance was summed up in an oft-quoted statement made in June 1991 by Jacques Poos, Luxembourg’s foreign minister and president of the Council of Ministers, that “this is the hour of Europe.” Later, when the Europeans sought active U.S. involvement in the conflict, it seemed that the United States did not see engagement in Europe as a vital interest. On the other hand, it appeared that the Europeans were incapable of handling a major European crisis by themselves. Among many differences was the European contention that U.S. secretary of state Baker gave the Serbs a “green light” to use force to keep Yugoslavia together when he traveled to Belgrade on June 21, 1991, warned Yugoslav leaders of the “dangers of disintegration,” and announced that the United States would not recognize secessionist republics (Dinan, 1994, p. 485). Germany’s insistence on recognizing Croatia and Slovenia was another bone of contention between the Americans and Europeans and among the Europeans themselves. Karsten Voigt, foreign policy spokesman for Germany’s opposition Social Democratic Party, declared that the question was not what effect recognition had “but whether the status quo in Yugoslavia could be maintained. . . . The main problem was that Baker . . . believed the status quo could be kept, and the Americans stuck with that for far too long. . . . The American mistake was one of analysis; the German mistake was one of tactics” (Oberdorfer, 1993). EU negotiator David Owen commented that the war in Bosnia would have been over in 1995 if President George Bush had been reelected in 1992. Instead, he claimed, newly elected President Clinton had opposed the EU-UN peace plan, with the result that fighting had been prolonged. Clearly, one of the major reasons why the international community was unable to halt the conflict in former Yugoslavia for several years was that the Allies were divided across the Atlantic on how best to bring it to an end. Meanwhile, the parties to the conflict were able to exploit Allied differences to suit their own purposes and thereby continue the war. Even as IFOR’s mandate came to an end, the United States and EU disagreed on

how best to help Bosnia, with the United States maintaining that the Bosnians should be given arms to defend themselves against possible Serb incursions and the Europeans maintaining, equally stridently, that giving weapons to the Bosnians would inflame the conflict and result in renewed war, not peace. Tentative Lessons A number of tentative conclusions and lessons can be reached based on EU policy toward Yugoslavia and on international involvement in the Yugoslav conflict generally. The Yugoslav experience demonstrates the difficulty of developing a common defense policy for the EU. Yugoslavia has also shown that great care must be taken in crafting CFSP, lest member states find themselves committed to policies and objectives that they (or their constituents) cannot support. CFSP will not develop automatically, the consequence of simple spillover from the economic to the political spheres of integration, in the way that functionalists once thought that it would. Instead, CFSP’s success will require explicit national commitment. The Yugoslav experience shows that Britain, France, and Spain probably will shoulder most of Western Europe’s military burden. Despite real and perceived differences on defense policy and on policy toward the WEU and NATO, military action, once taken, will draw France and Britain together, rather than drawing France and Germany together, as might have been expected. Active U.S. involvement in European security affairs continues to make the crucial difference between the success and failure of European security initiatives. IFOR and SFOR are a resounding confirmation of the value of the transatlantic link and of NATO. At the same time, there are markedly different perspectives on defense and security on the two sides of the Atlantic. NATO’s role in European security has been enhanced, the UN’s role has been diminished, and the WEU’s role has been circumscribed within NATO. Because of NATO’s preeminence, and the WEU’s necessarily subordinate role, the role of the United States in European defense policies will increase, not decrease, raising challenging questions about the future of U.S.-EU relations. Perhaps ex-Yugoslavia is not a good test case for European defense; indeed, bad cases make bad law. Perhaps the war came too soon, before it was

possible to develop a common European position, let alone a CFSP. Arguably, individual memberstate problems loom too large politically to develop a feasible CFSP or may be insurmountable. Perhaps Yugoslavia really is not as strategically important as some have claimed, and the EU member states should accept that. However, one lesson of the Yugoslav debacle is incontrovertible: lack of resolve to use force against aggressors merely encourages further aggression. See also A PEACE AND SECURITY SYSTEM FOR POST–COLD WAR EUROPE: PREVENTING FUTURE “YUGOSLAVIAS.” Commission. 1995. The European Councils: Conclusions of the Presidency, 1992–94. Luxembourg: Office for Official Publications of the European Communities.

Bibliography

Yugoslavia

497

Dinan, Desmond. 1994. Ever Closer Union? An Introduction to the European Community. Boulder: Lynne Rienner. Gnesotto, Nicole. 1994. Lessons of Yugoslavia. Paris: Institute for Security Studies, Western European Union. Newhouse, John. 1993. “No Exit, No Entrance.” New Yorker (June 28). Oberdorfer, Dan. 1993. “UN Halts Most Bosnian Relief.” Washington Post (February 18), p. A29. Santer, Jacques. 1996. “The European Union’s Security and Defense Policy: How to Avoid Missing the Rendez-vous.” NATO Review 43, no. 6 (November), pp. 12–16. Zimmermann, Warren. 1995. “The Last Ambassador: A Memoir of the Collapse of Yugoslavia.” Foreign Affairs (March/April), pp. 1–20.

—J. Bryan Collester

ABBREVIATIONS AND ACRONYMS AC

Advisory Committee

BSE

Bovine Spongiform Encephalopathy

ACP

African, Caribbean, and Pacific

CACM

Central American Common Market

ACEA ACUSE AER

Association of European Automobile Manufacturers Action Committee for the United States of Europe

Assembly of European Regions

BT

CAG

Acquired Immunodeficiency Syndrome

CAP

AMTE

Allied Maritime Transport Executive

CCP

AR

Assembly of the Republic

AIDS

AMCHAM-EU American Chamber of Commerce in the European Union APEC

ASEAN AT&T BCC bcm

BC-Net

Benelux BEUC BLEU

Asia Pacific Economic Cooperation

Association of Southeast Asian Nations American Telephone and Telegraph

Business Cooperation Center billion cubic meters

CASA CCC

CD-ROM CDU

CEAC

CEDAG

CEDEFOP

Business Cooperation Network

CEEP

European Bureau of Consumers’ Unions

CEFIC

Belgium, the Netherlands, and Luxembourg

Belgian-Luxembourg Economic Union

CEES

CEI

British Telecommunications Competitiveness Advisory Group

Common Agricultural Policy

Construcciones Aeronauticas S.A. Consumer Consultative Committee

Common Commercial Policy Compact Disk–Read Only Memory

Christian Democratic Union

Conference of European Affairs Committees

European Council for Voluntary Organizations European Center for the Development of Vocational Training European Center of Public Enterprise

Central and Eastern European States

European Council of Chemical Manufacturers Federation Central European Initiative

499

500

CEN

Abbreviations and Acronyms

European Standards Committee

CENELEC

European Electrotechnical Standards Committee

CET

Common External Tariff

CFI

Court of First Instance

CEO

CFCs CFLN CFP

CFSP

CIREA CIREFI CIS

CJTF

Chief Executive Officer

Chlorofluorocarbons

French Committee of National Liberation

CTMO

Center for Information, Discussion, and Exchange on the Crossing of Borders and Immigration

Commonwealth of Independent States Combined Joint Task Forces

Committee of Family Organizations in the Community

COMECON

COMETT COR

COREPER

CORINE

CSCM

Center for Information, Discussion, and Exchange on Asylum

Common Foreign and Security Policy

COFACE COM

CSCE

CSFs

Council for Mutual Economic Assistance

COM

COST

Common Fisheries Policy

CMEA CO2

COSAC

Carbon Dioxide Commission

Common Organization of the Market

Council for Mutual Economic Assistance

Community Action Program in Education and Training for Technology Committee of the Regions Committee of Permanent Representatives

Coordinating Information on the Environment

CSU CTP

CTRs

DASA

Conférence des organes specialisés dans les affaires communautaires

European Cooperation in the Field of Scientific and Technological Research Conference on Security and Cooperation in Europe Conference on Security and Cooperation in the Mediterranean Community Support Frameworks

Christian Social Union

Community Trademark Office

common transport policy

Common Technical Regulations

Daimler-Benz Aerospace

DG

Director/DirectorateGeneral

DSU

Dispute Settlement Understanding

DSB

EAD

Dispute Settlement Body Euro-Arab Dialogue

EAGGF

European Agricultural Guidance and Guarantee Fund

EBS

Europe by Satellite

EBRD

EC

ECB ECE

ECHO ECIR ECIS

European Bank for Reconstruction and Development

European Community

European Central Bank

European Commission for Europe European Community Humanitarian Office

European Center for Industrial Relations European Center for Infrastructural Studies

ECJ

European Court of Justice

ECS

European Company Statute

ECOFIN ECSAs ECSC ECU EDC

Council of Economic and Finance Ministers

European Community Studies Associations European Coal and Steel Community European currency unit

European Defense Community

EDF

European Development Fund

EDU

EUROPOL Drugs Unit

EDIG

European Defense Industry Group

EEA

European Economic Area

EEC

European Economic Community

EEA

EEIG

EFTA EIB

EICs EIF

ELDO

ELDR

EMEA EMI

EMS

EMU ENs

European Environment Agency

European Economic Interest Grouping European Free Trade Area/Association

European Investment Bank European Information Centers

EP

EPC EPP

EPU EPU

ERASMUS ERDF ERM

ESC

ESCB ESDI ESF

ESPRIT

ETUC

European Monetary System

Economic and Monetary Union European Norms

European Payments Union European Political Union

European Community Action Scheme for the Mobility of University Students European Regional Development Fund

Exchange Rate Mechanism

European Surveillance Authority

European Liberal, Democratic, and Reformist Party

European Monetary Institute

European People’s Party

ESA

ESA

ETSI

EU

EUI

EURATOM EUREKA EURES

501

European Political Cooperation

European Round Table of Industrialists

ETC

European Agency for the Evaluation of Medicinal Products

European Parliament

ERT

European Investment Fund

European Launch Development Organization

Abbreviations and Acronyms

European Space Agency Economic and Social Committee

European System of Central Banks

European Security and Defense Identity European Social Fund

European Strategic Program for Research and Development in Information Technology European Topic Center

European Telecommunications Standards Institute European Trade Union Confederation European Union

European University Institute European Atomic Energy Community European Research Coordination Agency

European Employment Services

502

Abbreviations and Acronyms

EUROCOOP

European Community of Consumer Cooperatives

IBC

Integrated Broadband Communication

EUROSTAT

Statistical Office of the European Communities

IEC

International Electrotechnical Committee

EWL

European Women’s Lobby

EUROPOL EWCs

European Police Office

European Works Councils

FCMA

Friendship, Cooperation, and Mutual Assistance Treaty

FEANTSA

European Federation of National Organizations Working with the Homeless

FDI

FRG FPO FTA

FTAA

FYRoM G7 G8 G24

Foreign Direct Investment

Federal Republic of Germany Liberal Party

Free Trade Area

Free Trade Area of the Americas Former Yugoslav Republic of Macedonia Group of Seven Most Industrialized Countries

Group of Seven Most Industrialized Countries plus Russia Group of Twenty-Four Most Industrialized Countries

GATS

General Agreement on Trade in Services

GCC

Gulf Cooperation Council

GATT

General Agreement on Tariffs and Trade

GDP

Gross Domestic Product

GNP

Gross National Product

HDTV

High-Definition Television

GMP

GSP HR

Global Mediterranean Policy

Generalized System of Preferences

High Representative

IEA

IFOR

Institute for European Affairs Implementation Force

IGC

Intergovernmental Conference

IMPs

Integrated Mediterranean Programs

IMF

IRDAC IRA

IRELA ISO ITA

ITO

JHA

International Monetary Fund Industrial Research and Development Advisory Committee

International Ruhr Authority Institute of European–Latin American Relations International Standards Organization

Information Technology Agreement

International Trade Organization Justice and Home Affairs

JRCs

Joint Research Centers

LDR

Liberal, Democratic, and Reformist Group

LAFTA

LI

LINGUA MAGP MCAs MED MEP

MFN

Latin American Free Trade Association Liberal Intergovernmentalism

Action Program to Promote Foreign Language Competence in the European Community Multi-Annual Guidance Program

Monetary Compensatory Amounts Mediterranean

Member of the European Parliament Most-Favored Nation

MPR

MRAs

MSAP

NACC

NAFTA

Movement Républicain Populair

Mutual Recognition Agreements

Multistate Drug Application Procedure North Atlantic Cooperation Council

North American Free Trade Agreement

NATO

North Atlantic Treaty Organization

NEPSS

New European Peace and Security System

NCI NF

New Community Instrument Neofunctionalism

NGO

Nongovernmental Organization

NTA

New Transatlantic Agenda

NIEO NTB OAS

OCTs

OECD OEEC

OFTEL

OJ

New International Economic Order Nontariff Barrier

Organization of American States Overseas Countries and Territories

Organization for Economic Cooperation and Development Organization for European Economic Cooperation British Office of Telecommunication

Official Journal of the European Communities

ONP

Open Network Provisions

OSCE

Organization for Security and Cooperation in Europe

OPEC

OT

OVP

PASOK

Organization of Petroleum Exporting Countries Occupied Territories

Conservative Party

Socialist Party of Greece

PCAs PDS PES PfP

PHARE PLO PP PS

PSD

PSOE

Abbreviations and Acronyms

503

Partnership and Cooperation Agreements Partito Democratico della Sinistra

Party of the European Socialists Partnership for Peace

Pologne et Hongrie: Actions pour la Reconversion Économique Palestine Liberation Organization People’s Party

Socialist Party

Social Democratic Party Socialist Party of Spain

PTAs

Preferential Trade Agreements

RACE

Advanced Communication Technologies for Europe

REDWG

Regional Economic Development Working Group

RTD

Research and Technological Development

QMV R&D RPR

SAVE SDI

SEA

SEDOC SELA

SEM 2000 SEPLLS

Qualified Majority Voting

Research and Development

Rally for the Republic

Specific Actions for Vigorous Energy Efficiency Strategic Defense Initiative Single European Act

European System for the International Clearing of Vacancies and Applications for Employment Latin American Economic System Sound and Efficient Management

European Secretariat of the Liberal, Independent, and Social Professions

504

SFMG

Abbreviations and Acronyms

Sound Financial Management Group

TEU

Treaty on European Union

SIS

Schengen Information System

TRIMs

Trade-Related Investment Measures

SNB

Special Negotiating Body

SFOR SMEs SPD SPO

STABEX STAR

SYSMIN

Stabilization Force

Small and Medium-Sized Enterprises Social Democratic Party Social Democrats

System for the Stabilization of Export Earnings from Products Committee on Agricultural Structures and Rural Development

System for the Stabilization of Export Earnings from Minerals

TABD

Transatlantic Business Dialogue

TACs

Total Allowable Catches

TACIS

TACS TAD

Technical Assistance for the Commonwealth of Independent States Transatlantic Advisory Committee on Standards, Certification, and Regulatory Policy Transatlantic Declaration

TAFTA

Transatlantic Free Trade Area

TAS

Technical Advisory Service

TAM

TCAs

TEMPUS TENs

Trade Assessment Mechanism

Trade and Cooperation Agreements

Trans-European Mobility Scheme for University Students

Trans-European Networks

TFHR

TRIPs

TRNC UFE UK UN

UNCED

UNCTAD UNHCR UNICE

UNPROFOR

Task Force for Human Resources

Trade-Related Aspects of Intellectual Property Rights

Turkish Republic of Northern Cyprus Union for Europe United Kingdom United Nations

UN Conference on Environment and Development UN Conference on Trade and Development UN High Commissioner for Refugees

Union of Industrial and Employers’ Confederations of Europe UN Protection Force

UPE

Union for Europe

VAT

Value-Added Tax

USSR VER

Union of Soviet Socialist Republics Voluntary Export Restraint

VRA

Voluntary Restraint Agreement

VVD

Freedom and Democracy Party

WEU

Western European Union

VSTF WEAG WTO

Very Short Term Financing Facilities

Western European Armaments Group World Trade Organization

CHRONOLOGY

May 9 French foreign minister Robert Schuman, in a historic declaration at the Foreign Ministry in Paris, calls for the pooling of Franco-German coal and steel production in a new supranational organization open to all European countries.

1950

June 20 France convenes an intergovernmental conference (IGC), held in Paris and chaired by Jean Monnet, to implement the Schuman Plan and organize the proposed European Coal and Steel Community (ECSC). October 24 French prime minister René Pleven announces a plan for German remilitarization under the aegis of a European Defense Community.

April 18 Treaty establishing the ECSC is signed in Paris by representatives of France, Germany, Italy, Belgium, the Netherlands, and Luxembourg (the Six).

1951

May 27 The Six sign the Paris treaty establishing the European Defense Community. The treaty includes an article calling for a supranational political authority to direct the putative defense organization.

1952

August 10 The ECSC begins operating in Luxembourg. September 10 The ECSC Common Assembly holds its first sitting in Strasbourg.

August 30 The French National Assembly refuses to ratify the European Defense Community treaty.

1954

October 23 The 1948 Brussels treaty is amended to establish the Western European Union and facilitate German membership in NATO. May 5 Germany joins NATO.

1955

June 1–2 At the Messina conference, foreign ministers of the Six ask Belgian foreign minister Paul-Henri Spaak to form a committee and prepare a report on future options for European integration. June 26 The Six convene an IGC in Brussels to discuss the Messina proposals.

May 29 At a meeting of foreign ministers of the Six in Venice, Paul-Henri Spaak presents a report proposing that the dual objectives of sectoral (atomic energy) integration and wider economic integration (a common market) be realized in separate organizations, with separate treaties.

1956

March 25 Treaties establishing the European Economic Community (EEC) and the European Atomic Energy Community (EURATOM) are signed at the capitol in Rome.

1957

505

506

Chronology

January 1 The EEC and EURATOM are launched.

1958

January 7 Walter Hallstein becomes the first president of the EEC Commission.

July 3–11 A conference in Stresa lays the foundations for the Common Agricultural Policy (CAP).

January 1 First steps are taken in the progressive elimination of customs duties and quotas in the EC.

1959

December 19–20 The Council of Ministers approves the basic principles governing the CAP.

1960

July/August Ireland (July 31), Britain (August 9), and Denmark (August 10) apply to join the EC.

1961

November 2 The French government submits a draft treaty (known as the Fouchet Plan) establishing a political union of the Six.

January 1 The Community begins the second stage in the establishment of a common market.

1962

April 17 The Fouchet Plan collapses at a meeting of foreign ministers, primarily over disagreement about Britain’s role. April 30 Norway applies for membership in the Community.

May 15 The Six decide a second time to speed up establishment of the common market.

January 29 Accession negotiations with Britain end at the insistence of the French government; negotiations with the other applicant countries are also suspended.

July 20 Association convention between the EC and seventeen African states and Madagascar is signed in Yaoundé, Cameroon. June 1 Yaoundé convention enters into force.

1964

April 8 The Six sign the merger treaty, fusing the executives of the EEC, the ECSC, and EURATOM, thereby establishing a single Council and a single Commission of the European Communities.

1965

July 1 Beginning of the so-called Empty Chair Crisis.

January 1 The EEC enters the third and final stage of the common market transitional period.

1966

January 28–29 Resuming its special meeting in Luxembourg, the Council agrees on the Luxembourg Compromise, ending the Empty Chair Crisis.

May The governments of Britain (May 10), Ireland (May 11), and Denmark (May 11) submit new applications to join the Communities.

1967

July 1 The merger treaty enters into force.

1963

July 6 The new joint Commission of the European Communities takes office, with Jean Rey as president.

January 22 France and Germany sign a Treaty of Friendship and Reconciliation in Paris (the Elysée Treaty).

November 27 French president Charles de Gaulle again vetoes Britain’s membership application by restating that the UK is not ready to join the EC.

January 14 At a press conference, French president Charles de Gaulle effectively vetoes British membership by declaring that the UK is not ready to join the EC.

July 25 Norway makes a second application to join the EC.

December 19 The Council fails to reach agreement on new negotiations with the applicant countries. July 1 The customs union is completed eighteen months ahead of the schedule prescribed by the Treaty of Rome: customs duties between member states are removed, and the common customs tariff replaces national customs duties in trade with the rest of the world.

1968

July 23 Following French president Charles de Gaulle’s resignation in April 1969, the Council resumes examination of the membership applications from Britain, Ireland, Denmark, and Norway.

1969

December 1–2 A summit of the heads of state and government in The Hague agrees to relaunch the EC.

December 31 The twelve-year transitional period provided for in the Rome treaty for the establishment of the common market ends. June 30 Negotiations with the four applicant countries formally open in Luxembourg.

1970

July 2 A new Commission, composed of nine members and presided over by Franco Malfatti, takes office.

October 7–8 A committee chaired by Luxembourg prime minister Pierre Werner presents a report (the Werner Plan) on Economic and Monetary Union (EMU). October 27 Foreign ministers of the Six, meeting in Luxembourg, adopt the Davignon Report on European Political Cooperation (EPC). November 19 First meeting of foreign ministers in EPC. January 1 The second Yaoundé convention and Arusha agreement enter into force.

1971

Chronology

507

January 22 Treaty and related documents concerning the accession to the EC of Britain, Denmark, Ireland, and Norway are signed in Brussels.

1972

March 21 Introduction of the currency “snake.”

September 25 In a referendum in Norway on EC membership, a majority votes against; the Norwegian government asks the Community for a free trade agreement instead of accession. October 19–21 The heads of state and government of the enlarged EC hold a conference in Paris (the Paris summit).

1973

January 1 the EC.

Britain, Denmark, and Ireland join

July 3–7 The Conference on Security and Cooperation in Europe (CSCE) opens in Helsinki.

October 6–21 Following the Yom Kippur War, Arab oil-producing countries announce that oil exports to certain Western countries will be cut or stopped. The Organization of Petroleum Exporting Countries (OPEC) decides to raise oil prices substantially.

December 14–15 The heads of state and government of the member states confer in Copenhagen (the Copenhagen summit). April 1 The new Labour government in Britain asks for a renegotiation of Britain’s membership terms.

1974

July 31 The Euro-Arab Dialogue opens in Paris.

September 14 At the invitation of French president Valéry Giscard d’Estaing, the heads of state and government and the president of the Commission meet for informal talks at the Elysée and decide to launch the European Council. December 9–10 The heads of state and government hold a summit in Paris.

508

Chronology

March 10–11 The European Council holds its inaugural meeting in Dublin and concludes the renegotiation of Britain’s membership terms.

May 28 The treaty and related documents concerning Greece’s accession to the EC are signed in Athens.

1975

1979

June 5 In a constitutionally unprecedented British referendum, a large majority votes in favor of remaining in the Community.

June 7–10 First direct elections to the European Parliament.

June 12 Greece applies to join the EC.

July 22 A treaty strengthening the budgetary powers of the European Parliament and setting up a Court of Auditors is signed in Brussels. August 1 In Helsinki, the Final Act of the CSCE is signed by the thirty-five participating states. December 29 Belgian prime minister Leo Tindemans submits his report on European Union.

April 1 A convention between the EC and fortysix African, Caribbean, and Pacific (ACP) states, signed in Lomé on February 28, 1975, enters into force.

1976

March 28 Portugal applies for EC membership.

1977

July 1 A customs union is achieved in the enlarged Community. July 28 Spain applies for EC membership.

July 6–7 At the Bremen summit, the European Council approves a Franco-German plan to set up a European Monetary System (EMS).

1978

December 4–5 The European Council, meeting in Brussels, agrees to set up the EMS based on a European currency unit (ECU). The EMS comprises an exchange and intervention mechanism, credit mechanisms, and a mechanism for the transfer of resources to less prosperous Community countries. Eight member states decide to participate fully in the EMS. Britain opts to remain outside the exchange rate mechanism (ERM) of the EMS.

October 31 The second ACP-EC convention governing cooperation between the EC and fifty-eight African, Caribbean, and Pacific countries is signed in Lomé. November 29 At the Dublin European Council, the new British government asks for resolution of the British budgetary question, thus provoking a five-year-long crisis in the Community.

October 1 A cooperation agreement between the EC and the Association of Southeast Asian Nations (ASEAN) comes into operation.

1980

January 1 Greece becomes the tenth member of the Community. The second ACP-EC convention, signed in Lomé on October 31, 1979, comes into operation.

1981

July 7–9 On the initiative of Altiero Spinelli, the European Parliament decides to set up an institutional affairs committee to draft amendments to the existing treaties. November 6 and 12 The German and Italian governments submit to the other member states, to the European Parliament, and to the Commission a Draft European Act (the Genscher-Colombo proposals).

June 30 The presidents of Parliament, the Council, and the Commission sign a joint declaration on improving the budgetary procedure.

1982

January 25 After six years of negotiations, agreement is reached on a common fisheries policy.

1983

June 17–19 At the European Council in Stuttgart, the heads of state and government sign the Solemn Declaration on European Union. December 4–6 The European Council fails to issue a communiqué at its meeting in Athens.

February 14 By a large majority, the European Parliament adopts the Draft Treaty Establishing the European Union, prepared by its Committee on Institutional Affairs.

1984

February 28 The Council adopts a decision that sets out a European Strategic Program for Research and Development in Information Technology (ESPRIT). June 14–17 Second direct elections to the European Parliament.

June 25–26 At the Fontainebleau summit, the heads of state and government resolve the British budgetary question and agree to reform the CAP. They also decide to set up an ad hoc committee on institutional affairs, chaired by former Irish foreign minister Jim Dooge, to consider amending the Treaty of Rome (the Dooge Committee). December 8 The third ACP-EC Convention on cooperation between the Community and sixty-five African, Caribbean, and Pacific countries is signed in Lomé.

February 1 Greenland leaves the Community but remains associated with it as an overseas territory.

1985

March 9 The Dooge Committee recommends that the member states convene an IGC to negotiate reform of the Treaty of Rome.

June 12 Instruments of accession of Spain and Portugal are signed.

June 14 The Commission publishes its white paper on completing the internal market. The document details the measures necessary to re-

Chronology

509

move all physical, technical, and fiscal barriers between the member states by the end of 1992.

June 28–29 The European Council, meeting in Milan, decides to convene an IGC to draft revisions to the Treaty of Rome.

December 2–3 Based on the work of the IGC, the European Council, meeting in Luxembourg, agrees on reform of the Community’s institutions designed to improve their efficiency, extend the Community’s competence, and provide a legal framework for cooperation on foreign policy. December 16 EC foreign ministers encapsulate the proposed reforms in the Single European Act (SEA). January 1 Spain and Portugal join the EC.

1986

January 17–18 Foreign ministers sign the SEA. May 1 The third ACP-EC convention comes into operation.

September 15–20 In Punta del Este, Uruguay, ministers of ninety-two countries agree to a new round of multilateral trade negotiations under the GATT.

February 15 In a communication entitled The Single Act: A New Frontier for Europe, the Commission sets out the conditions for attaining the objectives of the SEA, including proposals to complete agricultural reform and double the “structural funds” to promote cohesion in the EC (known as the Delors I budgetary package).

1987

April 14 Turkey applies for EC membership.

May 26 A referendum in Ireland approves a constitutional amendment that clears the way for ratification of the SEA. July 1 The SEA enters into force.

510

Chronology

September 12 At an informal meeting in Nyborg, Denmark, EC finance ministers adopt measures to strengthen the EMS. February 11–13 The European Council, meeting in Brussels, ends nearly a year of budgetary wrangling and approves the Delors I package.

1988

June 27–28 The European Council, meeting in Hanover, reappoints Jacques Delors as Commission president and appoints a committee, to be chaired by Delors, to look into and propose specific steps that would lead to EMU. September 20 In a speech at the College of Europe in Bruges, British prime minister Margaret Thatcher sharply criticizes the accelerating pace of European integration, attacks the Brussels bureaucracy, and condemns moves toward EMU. December 8 Representatives of the governments of the member states appoint a new Commission.

April 12 The Delors Committee presents its report on EMU (the Delors Plan).

1989

June 15–18 Third direct elections to the European Parliament.

June 26–27 The European Council, meeting in Madrid, unanimously adopts the Delors Plan.

July 14–16 At the G7 summit in Paris, U.S. president George Bush asks the Commission to coordinate Western economic assistance for Hungary and Poland.

July 17

Austria applies for EC membership.

November 19 An extraordinary European Council in Paris discusses events in Central and Eastern Europe, including prospects for German unification.

December 8–9 At a European Council meeting in Strasbourg, the heads of state and government call for an IGC to draw up the necessary amend-

ments to the Treaty of Rome for implementation of EMU. The council also adopts the Charter of Fundamental Social Rights for Workers (the Social Charter) and reaffirms the Community’s international role, especially in relation to developments in Central and Eastern Europe.

December 15 The fourth ACP-EC convention is signed in Lomé by the Community, its member states, and the African, Caribbean, and Pacific countries.

December 19 Representatives of the Community and the European Free Trade Association (EFTA) agree to start formal negotiations to conclude a general agreement on closer cooperation between both organizations. February 8 The Commission sets up an emergency committee to deal with imminent German unification and the absorption of East Germany into the EC.

1990

February 27 The United States and the EC agree to formalize relations by holding regular meetings between both sides’ presidents. April 19 In a letter to Irish prime minister and European Council president Charles Haughey, French president François Mitterrand and German chancellor Helmut Kohl launch an initiative to achieve political union and EMU by 1993.

April 28 The European Council, meeting in a special summit in Dublin, instructs EC foreign ministers to produce proposals on European Political Union (EPU) for the next European Council in June.

May 29 The charter for the European Bank of Reconstruction and Development is signed in Paris. June 19 The Schengen Agreement, which calls for the eventual removal of border controls between the signatory states, is signed by the Benelux countries, Germany, and France.

June 25–26 The European Council, meeting in Dublin, agrees to convene an IGC on EPU to parallel the planned IGC on EMU.

July 4 Cyprus applies for EC membership.

July 16 Malta applies for EC membership.

October 3 Germany unifies. Britain joins the exchange rate mechanism of the EMS. October 27–28 At a special European Council in Rome, member states (except Britain) commit themselves to launch the second stage of EMU on January 1, 1994.

November 19–21 At a special summit in Paris, the thirty-four members of the CSCE sign the Charter of Paris for a New Europe. November 20 The U.S.-EC Transatlantic Declaration is signed in Washington, D.C.

December 14–15 The European Council, meeting in Rome, formally launches the IGCs on EPU and EMU. December 20 Foreign ministers from the EC and the Rio Group of Latin American countries sign the Declaration of Rome to develop closer economic and political links.

March 13 The Commission adopts a Community support framework for structural assistance to the five new German states and eastern Berlin.

1991

April 15 The European Bank for Reconstruction and Development begins operating in London. June 28–29 The European Council, meeting in Luxembourg, approves the draft treaty prepared by the Luxembourg presidency.

July 1 Sweden applies for EC membership.

September 7 The EC-sponsored peace conference on Yugoslavia opens in The Hague.

September 30 Black Monday: at a decisive foreign ministers’ meeting, ten of the EC’s twelve member states reject an ambitious draft treaty on political union, prepared by the Dutch presidency.

Chronology

511

October 21 The Council agrees on the establishment of a European Economic Area (EEA).

December 9–10 The European Council, meeting in Maastricht, settles on a draft Treaty on European Union—TEU (the Maastricht Treaty). December 16 The EC signs Europe Agreements with Poland, Hungary, and Czechoslovakia.

January 15 The EC recognizes the independence of Slovenia and Croatia.

1992

February 7 Representatives of the EC member states sign the TEU in Maastricht.

February 12 In a communication entitled From the Single Act to Maastricht and Beyond: The Means to Match Our Ambitions, the Commission introduces a new five-year budget package (Delors II). March 18 Finland applies for EU membership.

May 2 The EC and the EFTA member states sign a treaty establishing the EEA.

May 21 Agriculture ministers agree to reform the CAP by moving away from price supports toward more direct farm subsidies; cereal prices are cut immediately. May 26 ship

Switzerland applies for EU member-

June 2 In a referendum, the Danish electorate rejects the TEU by a margin of less than 2 percent, throwing the treaty’s future into doubt.

June 27–28 At the European Council meeting in Lisbon, the heads of state and government reappoint Commission president Jacques Delors to an unprecedented fifth two-year term but fail to reach agreement on the Delors II budgetary package. September 16 Black Wednesday: facing one of its worst financial crises since World War II, Britain responds to sterling’s plummeting

512

Chronology

value on the world markets by suspending its participation in the ERM of the EMS, a move that precipitates a major currency crisis among the EC member states. Italy withdraws the lira from the ERM the same day.

September 20 In a national referendum, French voters approve the TEU by a slim majority (51.05 percent). October 16 An extraordinary meeting of the European Council in Birmingham, England, to discuss the TEU ratification crisis and the recent EMS crisis is overshadowed by domestic political events in the UK.

November 25 Norway applies for EU membership.

December 6 In a referendum, a majority in Switzerland rejects ratification of the EEA agreement, thereby effectively shelving Switzerland’s EC membership application. December 11–12 Hoping to sway public opinion in Denmark and facilitate a second referendum there on the TEU, the European Council, meeting in Edinburgh, agrees to a number of Danish opt outs from the treaty. January 1 The single market program is (almost) completed.

1993

February 1 Accession negotiations with Austria, Finland, and Sweden open in Brussels. A Europe Agreement and interim agreement are signed with Romania.

March 8 A Europe Agreement and interim agreement are signed with Bulgaria.

April 5 Accession negotiations with Norway open in Luxembourg.

May 18 In a second referendum, Danish voters approve the TEU.

June 21–22 Meeting in Copenhagen, the European Council announces that associated countries in Central and Eastern Europe will be ad-

mitted to the EU as soon as they satisfy the requisite political, economic, and administrative criteria.

August 2 Following a renewed currency crisis, finance ministers agree to widen the ERM currency bands to 15 percent. October 12 The German constitutional court rules that the TEU is compatible with the German constitution, thereby paving the way for the treaty’s implementation. November 1 The TEU enters into force, and the EU comes into being.

December 5 The Commission publishes its white paper on growth, competitiveness, and employment.

December 15 Agreement is reached in Geneva to conclude the Uruguay Round of the GATT. January 1 Stage Two of EMU begins, and the European Monetary Institute is established. The agreement establishing the EEA enters into force.

1994

March 9–10 The Committee of the Regions holds its inaugural session in Brussels.

March 29 At an informal meeting on the Greek island of Ioannina, foreign ministers reach a compromise on rules for qualified majority voting, thereby opening the way for enlargement. March 30 Accession negotiations with Austria, Finland, Sweden, and Norway end in Brussels. March 31 Hungary applies for EU membership. April 5 Poland applies for EU membership.

April 15 The final act of the Uruguay Round of the GATT is signed in Marrakech, Morocco. May 25 The European Investment Fund is established.

May 26–27 The inaugural conference for the European Stability Pact (Balladur Plan) takes place in Paris. June 9–12 Fourth direct elections to the European Parliament.

June 12 In a referendum, a majority of Austrians approves EU membership.

June 24–25 The European Council meets in Corfu and signs accession agreements with Austria, Finland, Sweden, and Norway.

July 15 At an extraordinary meeting of the European Council in Brussels, Luxembourg’s prime minister Jacques Santer is nominated to replace Jacques Delors as Commission president. July 21 Using its newly acquired authority to approve the European Council’s nominee for Commission president, the European Parliament narrowly endorses Jacques Santer. October 16 In a referendum, a majority in Finland approves EU membership. November 13 In a referendum, a majority in Sweden approves EU membership.

November 28 In a referendum, a small majority in Norway rejects EU membership.

December 9–10 Meeting in Essen, the European Council agrees on a strategy to bring the Central and Eastern European states closer to the EU and reiterates its determination to conclude a Euro-Mediterranean partnership.

December 17 The European Energy Charter is signed in Lisbon.

December 20 The Council concludes Europe Agreements with Romania, Bulgaria, the Czech Republic, and Slovakia.

January 1 Austria, Finland, and Sweden join the EU. The World Trade Organization comes into being.

1995

Chronology

513

January 12–16 Exceeding its newly acquired authority to approve the new Commission, the European Parliament holds confirmation hearings for individual commissioners. January 18 The European Parliament approves the new Commission. January 23 The Santer Commission begins its five-year term. February 1 The Europe Agreements with Romania, Bulgaria, the Czech Republic, and Slovakia enter into force.

February 25–26 The Commission hosts a G7 ministerial conference on the information society in Brussels. March 21 The European Stability Pact (Balladur Plan) is adopted in Paris.

May 10 The Commission publishes a white paper on integrating the associated countries of Central and Eastern Europe into the internal market. June 2–3 The reflection group of foreign ministers’ personal representatives, established to prepare for the 1996–1997 IGC, holds its inaugural meeting on the fortieth anniversary of the Messina conference. June 12 Europe Agreements are signed with the three Baltic states (Latvia, Lithuania, and Estonia). June 15 A Europe Agreement is initialed with Slovenia. June 22 Romania applies for EU membership.

June 26–27 The European Council meets in Cannes, focusing its attention on EMU and the fight against unemployment. October 27 Latvia applies for EU membership.

November 28 Estonia applies for EU membership. The Barcelona Declaration is adopted by

514

Chronology

the EU Fifteen and the so-called Med 12 countries at the end of the Euro-Mediterranean conference.

December 3 U.S. president Clinton, European Council president González, and Commission president Santer sign the New Transatlantic Agenda and joint action plan at a summit in Madrid. December 5 The reflection group of foreign ministers’ personal representatives, established to prepare for the 1996–1997 IGC, presents its final report. December 12 bership.

Lithuania applies for EU mem-

December 13 After a contentious debate, the European Parliament gives its assent to the EU-Turkey customs union.

December 14 The Dayton peace plan for the former Yugoslavia is signed in Paris. December 15–16 The European Council meets in Madrid.

December 16 Bulgaria applies for EU membership.

January 17 The Czech Republic applies for EU membership.

1996

March 1–2 The Euro-Asia summit takes place in Bangkok.

March 27 In response to the British government’s announcement earlier in the month of a possible link between bovine spongiform encephalopathy (BSE), a disease affecting cattle, and Creutzfeldt-Jakob disease, a human brain condition, the EU bans exports of beef from Britain to other EU member states or elsewhere in the world.

March 29 The IGC opens at a special European Council in Turin but is overshadowed by the BSE crisis.

June 10 Slovenia applies for EU membership.

June 21–22 The European Council, meeting in Florence, resolves the dispute with Britain over BSE. June 30 The EU and Andean Community sign a joint declaration on political dialogue.

October 5 At a special European Council in Dublin, the heads of state and government discuss the IGC and look forward to its conclusion in June 1997. October 14 Finland joins the ERM of the EMS.

November 25 Italy rejoins the ERM of the EMS. December 9–13 First World Trade Organization ministerial conference takes place in Singapore.

December 13–14 The European Council, meeting in Dublin, approves the Irish government’s outline draft treaty for the IGC, adopts a declaration on employment, and reaches agreement on the post-EMU stability and growth pact. April 9 The office of the European Ombudsman is officially inaugurated.

1997

May 6 Britain’s new Labour government announces its intention to sign the social chapter at the Amsterdam summit in June, thus signaling a positive approach toward the EU.

May 23 At an extraordinary summit in Noordwijk, the Netherlands, the heads of state and government declare their determination to conclude the IGC at the Amsterdam summit in June.

June 9 At a finance ministers’ meeting in Luxembourg, the new French socialist government signals its dissatisfaction with the proposed Stability and Growth Pact, thereby throwing the IGC and EMU timetables into doubt. June 16–17 The European Council, meeting in Amsterdam, adopts a resolution stressing the member states’ commitment to implementation

of the Stability and Growth Pact and, at French insistence, adopts a separate resolution on growth and employment. The European Council also concludes the IGC and finalizes the Amsterdam Treaty.

July 16 The Commission presents Agenda 2000, a detailed strategy for reforming EU policies, funding EU activities, and enlarging EU membership early in the twenty-first century. Agenda 2000 includes the Commission’s opinions on the ten Central and Eastern European countries’ membership applications. October 2 Foreign ministers of the EU’s member states sign the Amsterdam Treaty. November 20–21 The European Council holds a special jobs summit in Luxembourg to help tackle unemployment in the EU.

December 12–13 The European Council, meeting in Luxembourg, endorses the Commission’s recommendation to begin accession negotiations with Cyprus, the Czech Republic, Estonia, Hungary, Poland, and Slovenia in March 1998.

March 12 The inaugural meeting in London of the European Conference of the heads of state and government of EU member and applicant states is marred by Turkey’s refusal to participate.

1998

March 16

Greece joins the ERM of the EMS.

March 25 In separate reports mandated by the TEU, the Commission and the European Monetary Institute recommend eleven member states for participation in stage 3 of EMU.

March 31 Accession negotiations begin in Brussels with Cyprus, the Czech Republic, Estonia, Hungary, Poland, and Slovenia.

May 2 A special council at the level of the heads of state and government decides which member states will participate in stage 3 of EMU. June 15–16 Cardiff.

The European Council meets in

Chronology

515

June 30 The European Central Bank is launched in Frankfurt.

October 24–25 At an informal meeting in Pörtschach, Austria, the Heads of State and Government discuss EU institutional reform.

November 4 The Commission issues its first annual progress report on enlargement. December 11–12 in Vienna.

The European Council meets

January 1 Stage Three of EMU begins with the launch of the euro and the pursuit of a common monetary policy by eleven member states.

1999

March 16 The Santer Commission resigns following release of a damning report on corruption and mismanagement by a committee of “wise men.”

March 24–26 Meeting in Berlin, the European Council concludes negotiations on Agenda 2000 and nominates Romano Prodi to succeed Jacques Santer as Commission president. May 1

The Amsterdam Treaty enters into force.

June 3–4 Meeting in Cologne, the European Council discusses Yugoslavia’s acceptance of terms to end the war in Kosovo and launches a new security and defense policy initiative. June 10–13 Fifth direct elections to the European Parliament. September 17 fice.

The Prodi Commission takes of-

October 15–16 The European Council holds a special session in Tampere, Finland, to discuss Justice and Home Affairs.

December 10–11 Meeting in Helsinki, the European Council decides to begin accession negotiations with the remaining applicant countries early in 2000 and recognizes Turkey as a candidate for EU membership.

APPENDIXES

Appendix 1

Overview of Institutional Change, 1958–2000a

Number of member states Number of official languages Number of commissioners Number of European Parliamentarians Number of votes in the Council of Ministers Threshold for qualified majority voting Number of judges in the European Court of Justice Number of judges in the Court of Auditors Number of representatives in the Economic and Social Committee Number of representatives in the Committee of the Regions a. Last changes were made in 1995.

1958 6 4 9 142 17 12 6 – 102 –

1973 9 6 13 198 58 41 9 – 144 –

1981 10 7 14 434 63 45 11 10 156 –

1986 12 9 17 518 76 54 13 12 189 –

1995 15 11 20 626 87 62 15 15 222 222

517

518

Appendix 2

Appendix 2 Member State

Austria Belgium Denmark Finland France Germany Greece Ireland Italy Luxembourg Netherlands Portugal Spain Sweden UK

Total

National Representation in EU Institutions as of 2000 Votes Council of Ministers

Number of Commissioners

Seats in European Parliament

Judges in Court of Justice

87

20

626

15

4 5 3 3 10 10 5 3 10 2 5 5 8 4 10

1 1 1 1 2 2 1 1 2 1 1 1 2 1 2

21 25 16 16 87 99 25 15 87 6 31 25 64 22 87

1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

Appendix 3 Appendix 3 Member State

Austria Belgium Denmark Finland France Germany Greece Ireland Italy Luxembourg Netherlands Portugal Spain Sweden UK

Member States in International Security Organizations NATO

No Yes (1949) Yes (1949) No Yes (1949) Yes (1955) Yes (1949) No Yes (1949) Yes (1949) Yes (1949) Yes (1949) Yes (1982) No Yes (1949)

WEU

Observer (1995) Full (1954) Observer (1995) Observer (1995) Full (1954) Full (1954) Full (1995) Observer (1995) Full (1954) Full (1954) Full (1954) Full (1995) Full (1986) Observer (1995) Full (1954)

OSCEa Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes

519

UN Security Council No No No No Yes No No No No No No No No No Yes

a. The EU’s member states were founding members (1975) of the Conference on Security and Cooperation in Europe (CSCE), forerunner of the Organization for Security and Cooperation in Europe (OSCE).

520

Appendix 4

Appendix 4 1958

Evolution of Commission Directorates-General, 1958–1999

DG I External Relations

DG II Economic and Financial Affairs DG III Internal Market DG IV Competition DG V Social Affairs

DG VI Agriculture DG VII Transport DG VIII Overseas Countries and Territories DG IX Administration

1960s–1970s

DG III Industrial Affairs

DG VIII Development Aid DG IX Personnel and Administration DG X Information DG XI External Trade

DG XII General Research and Technology DG XIII Dissemination of Information

DG XIV Internal Market and Approximation of Legislation DG XV Joint Research Centers DG XVI Regional Policy DG XVII Energy DG XVIII Credits and Investment DG XIX Budgets DG XX Financial Control

Appendix 4 1980s DG III Internal Market and Industrial Affairs DG V Employment, Industrial Relations, and Social Affairs DG VIII Development

DG X Information, Communication, and Culture DG XI Environment, Nuclear Safety, and Civil Protection DG XII Science, Research, and Education DG XIII Telecommunications, Information

DG XIV Fisheries DG XV Financial Institutions and Company Law DG XVII Energy Policy DG XVIII Credit and Investments

DG XXI Customs Union and Indirect Taxation DG XXII Coordination of Structural Policy DG XXIII Enterprise Policy, Distributive Trades, Tourism, and Cooperatives

521

1990sa

DG I External Economic Relations DG IA External Political Relations DG II Economic and Social Affairs DG III Industry

DG X Information, Communication, Culture, and Audiovisual

DG XII Science, Research and Development, Joint Research Centre DG XIII Telecommunications, Information Market and Exploitation of Research

DG XV Internal Market and Financial Services DG XVI Regional Policies and Cohesion DG XVII Energy

DG XXII Education, Training, and Youth DG XXIII Enterprise Policy, Distributive Trades, Tourism, and Cooperatives DG XXIV Consumer Policy

a. See also Table 4, p. 66, for the Prodi Commission Directorates-General.

522

Appendix 5

Appendix 5

1965 1973 1976 1979 1984 1989 1994 1995

1953 erals (L).

Chronology of EP Party Groups’ Development

The original three groups included Christian Democrats (CD), European Socialists (ESP), and Lib-

The French Gaullists split from the Liberals to form the European Democratic Union (EDU).

The British Conservatives form the basis of the European Conservative Group (ECG). Members of the Irish party, Fianna Fáil, join the EDU, which changes its name to the European Progressive Democrats (EPD). The Communist Group (C) is formed. Liberals change their name to the Liberal and Democratic Group (LDG).

The first direct elections are held. CD changes its name to the European People’s Party (EPP). ECG changes its name to the European Democratic Group (EDG). The EDG later join the EPP. The Technical Coordination and Defense of Independent Groups and Members (TCDIGM) is formed. The Technical Group of the European Right (ER) is formed by France’s National Front and the Italian Socialist Movement. TCDIGM combines with the Greens and the Leftists to form the Rainbow Group. LDG changes its name to Liberal, Democratic, and Reformist Group (ELDR) after the Portuguese Social Democrats join the Group. EPD changes its name to the Group of the European Democratic Alliance (EDA). Separate Green Group (G) is formed from the Rainbow Group. Left Unity Group (LUG) is formed; reunites communists and leftist allies.

Forza Europa (FE) is formed (Italian-based group). ER changes its name to the European Radical Alliance (ERA). LUG changes its name to the European United Left (EUL). Europe of Nations (EN) group is formed. Twentyseven nonattached members (NAM). Forza Europa and the European Democratic Alliance merge to form the Union for Europe Group (UFE). 1999 Democrats.

Appendix 6

EPP changes name to Group of the European People’s Party (Christian Democrats) and European

European Parliament Directorates-General

DG 1

Presidency

DG 3

Information and Public Relations

DG 2 DG 4 DG 5 DG 6 DG 7 DG 8

Committees and Delegations Research

Personnel

Administration

Translation and General Services Finance and Financial Control

522

Appendix 5

Appendix 5

1965 1973 1976 1979 1984 1989 1994 1995

1953 erals (L).

Chronology of EP Party Groups’ Development

The original three groups included Christian Democrats (CD), European Socialists (ESP), and Lib-

The French Gaullists split from the Liberals to form the European Democratic Union (EDU).

The British Conservatives form the basis of the European Conservative Group (ECG). Members of the Irish party, Fianna Fáil, join the EDU, which changes its name to the European Progressive Democrats (EPD). The Communist Group (C) is formed. Liberals change their name to the Liberal and Democratic Group (LDG).

The first direct elections are held. CD changes its name to the European People’s Party (EPP). ECG changes its name to the European Democratic Group (EDG). The EDG later join the EPP. The Technical Coordination and Defense of Independent Groups and Members (TCDIGM) is formed. The Technical Group of the European Right (ER) is formed by France’s National Front and the Italian Socialist Movement. TCDIGM combines with the Greens and the Leftists to form the Rainbow Group. LDG changes its name to Liberal, Democratic, and Reformist Group (ELDR) after the Portuguese Social Democrats join the Group. EPD changes its name to the Group of the European Democratic Alliance (EDA). Separate Green Group (G) is formed from the Rainbow Group. Left Unity Group (LUG) is formed; reunites communists and leftist allies.

Forza Europa (FE) is formed (Italian-based group). ER changes its name to the European Radical Alliance (ERA). LUG changes its name to the European United Left (EUL). Europe of Nations (EN) group is formed. Twentyseven nonattached members (NAM). Forza Europa and the European Democratic Alliance merge to form the Union for Europe Group (UFE). 1999 Democrats.

Appendix 6

EPP changes name to Group of the European People’s Party (Christian Democrats) and European

European Parliament Directorates-General

DG 1

Presidency

DG 3

Information and Public Relations

DG 2 DG 4 DG 5 DG 6 DG 7 DG 8

Committees and Delegations Research

Personnel

Administration

Translation and General Services Finance and Financial Control

Appendix 7 Appendix 7 Member State

Belgium Germany France Italy Luxembourg Netherlands Belgium Germany France Italy Luxembourg Netherlands Belgium Germany France Italy Luxembourg Netherlands Belgium Germany France Italy Luxembourg Netherlands Belgium Germany France Italy Luxembourg Netherlands Belgium Denmark Germany France Ireland Italy Luxembourg Netherlands United Kingdom Belgium Denmark Germany France Ireland Italy

523

Rota of the Presidency of the Council of the European Union (Council of Ministers) Semester

1st 1958 2nd 1958 1st 1959 2nd 1959 1st 1960 2nd 1960 1st 1961 2nd 1961 1st 1962 2nd 1962 1st 1963 2nd 1963 1st 1964 2nd 1964 1st 1965 2nd 1965 1st 1966 2nd 1966 1st 1967 2nd 1967 1st 1968 2nd 1968 1st 1969 2nd 1969 1st 1970 2nd 1970 1st 1971 2nd 1971 1st 1972 2nd 1972 1st 1973 2nd 1973 1st 1974 2nd 1974 1st 1975 2nd 1975 1st 1976 2nd 1976 1st 1977 2nd 1977 1st 1978 2nd 1978 1st 1979 2nd 1979 1st 1980

Member State

Luxembourg Netherlands United Kingdom Belgium Denmark Germany Greece France Ireland Italy Luxembourg Netherlands United Kingdom Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Portugal United Kingdom Denmark Belgium Greece Germany France Spain Italy Ireland Netherlands Luxembourg United Kingdom Austria Germany Finland Portugal France Sweden Belgium Spain Denmark Greece

Semester

2nd 1980 1st 1981 2nd 1981 1st 1982 2nd 1982 1st 1983 2nd 1983 1st 1984 2nd 1984 1st 1985 2nd 1985 1st 1986 2nd 1986 1st 1987 2nd 1987 1st 1988 2nd 1988 1st 1989 2nd 1989 1st 1990 2nd 1990 1st 1991 2nd 1991 1st 1992 2nd 1992 1st 1993 2nd 1993 1st 1994 2nd 1994 1st 1995 2nd 1995 1st 1996 2nd 1996 1st 1997 2nd 1997 1st 1998 2nd 1998 1st 1999 2nd 1999 1st 2000 2nd 2000 1st 2001 2nd 2001 1st 2002 2nd 2002 1st 2003

524

Appendix 8

Appendix 8 Date

Summits of the Heads of State and Government, 1961–1999

Feb. 10–11, 1961 July 18, 1961 May 29–30, 1967

Dec. 1–2, 1969 Oct. 19–20, 1972 Dec. 14–15, 1973 Sep. 16, 1974 Dec. 9–10, 1974 Mar. 10–11, 1975 July 16–17, 1975 Dec. 1–2, 1975 Apr. 1–2, 1976

July 12–13, 1976 Nov. 29–30, 1976 Mar. 25–26, 1977 June 29–30, 1977 Dec. 5–6, 1977 Apr. 7–8, 1978

July 6–8, 1978 Dec. 4–5, 1978 Mar. 12–13, 1979

June 21–22, 1979 Nov. 29–30, 1979 Apr. 27–28, 1980 June 12–13, 1980 Dec. 1–2, 1980 Mar. 23–24, 1981

June 29–30, 1981 Nov. 26–27, 1981 Mar. 29–30, 1982 June 28–29, 1982 Dec. 3–4, 1982 Mar. 21–22, 1983 June 17–19, 1983 Dec. 4–6, 1983 Mar. 19–20, 1984 June 25–26, 1984 Dec. 3–4, 1984 Mar. 29–30, 1985 June 28–29, 1985 Dec. 2–3, 1985 June 26–27, 1986 Dec. 5–6, 1986 June 29–30, 1987 Dec. 4–5, 1987 Feb. 11–13, 1988 June 27–28, 1988 Dec. 2–3, 1988

Council Presidency

Location

France Germany Belgium

Paris Bonn Rome

France France Ireland

Paris Paris Dublin

Netherlands Netherlands Denmark

The Hague Paris Copenhagen

Italy Italy Luxembourg

Brussels Rome Luxembourg

UK Belgium Denmark

London Brussels Copenhagen

Netherlands Netherlands UK

Germany Germany France France Ireland Italy

Brussels The Hague Rome

Bremen Brussels Paris

Strasbourg Dublin Luxembourg

Italy Luxembourg Netherlands

Venice Luxembourg Maastricht

Belgium Denmark Germany

Brussels Copenhagen Brussels

Netherlands UK Belgium

Germany Greece France France Ireland Italy

Luxembourg London Brussels

Stuttgart Athens Brussels

Fontainebleau Dublin Brussels

Italy Luxembourg Netherlands

Milan Luxembourg The Hague

Germany Germany Greece

Brussels Hanover Rhodes

UK Belgium Denmark

London Brussels Copenhagen

Prime Minister/President Charles De Gaulle Konrad Adenauer Aldo Moro

P.J.S. De Jong Georges Pompidou Anker Joergensen

Valéry Giscard d’Estaing Valéry Giscard d’Estaing Liam Cosgrave Aldo Moro Aldo Moro Gaston Thorn

J. M. Den Uyl J. M. Den Uyl James Callaghan

James Callaghan Leo Tindemans Anker Joergensen

Helmut Schmidt Helmut Schmidt Valéry Giscard d’Estaing Valéry Giscard d’Estaing Jack Lynch Francesco Cossiga Francesco Cossiga Pierre Werner A.A.M. Van Agt A.A.M. Van Agt Margaret Thatcher Wilfried Martens Wilfried Martens Poul Schluter Helmut Kohl

Helmut Kohl Andreas Papandreou François Mitterrand François Mitterrand Garret FitzGerald Bettino Craxi Bettino Craxi Jacques Santer R.F.M. Lubbers

Margaret Thatcher Wilfried Martens Poul Schluter

Helmut Kohl Helmut Kohl Andreas Papandreou

Appendix 8

525

Accomplishment/Significance

Discuss de Gaulle’s proposals for European political union Discuss de Gaulle’s proposals for European political union Celebrate tenth anniversary of Rome Treaty Agree to enlarge and relaunch EC Agree to achieve European union by 1980 Fail to agree on response to oil crisis

Hold informal get-together Reach breakthrough on Britain’s budgetary contribution; decide to launch the European Council Hold first European Council; agree on new terms for Britain’s EC membership Discuss direct elections to the EP Agree on direct elections to the EP Discuss Tindemans Report

Agree on number and distribution of seats in the directly elected EP Attack Japan’s trade policy Set up Trevi group for police cooperation Restructure European Council meetings Discuss EMU Agree on new dates for direct elections to the EP Approve Franco-German plan for EMS Agree on operational details of EMS Agree to launch EMS on March 13, 1979

Discuss energy policy and economic convergence Begin British budget dispute; consider report of Three Wise Men Continue British budget dispute Discuss international tension (Middle East and Afghanistan) Discuss international tension (Middle East and Poland) Discuss economic and social situation

Discuss economic and social situation and U.S.-EC relations Discuss Mediterranean enlargement Celebrate twenty-fifth anniversary of Rome treaty Oppose U.S. embargo on Soviet gas pipeline equipment Discuss development of internal market Make progress on Mediterranean enlargement

Sign Solemn Declaration on European Union Fail to issue communiqué Fail to resolve British budget dispute

Resolve British budget dispute Achieve breakthrough in Mediterranean enlargement Agree on Integrated Mediterranean Programs

Decide to hold IGC Conclude IGC Agree to cooperate on illegal drug interdiction

Call for completion of the single market Discuss Delors I budget package Fail to approve the Delors I budget package

Approve the Delors I budget package Appoint Jacques Delors to chair committee on EMU Call for transport infrastructure

(continues)

526

Appendix 8

Appendix 8 Date

continued

June 26–27, 1989 Nov. 19, 1989 Dec. 8–9, 1989 Apr. 28, 1990 June 25–26, 1990 Oct. 27–28, 1990

Dec. 13–15, 1990 Apr. 8, 1991 June 28–29, 1991 Dec. 9–10, 1991 June 26–27, 1992 Oct. 16, 1992 Dec. 11–12, 1992 June 21–22, 1993 Oct. 29, 1993 Dec. 10–11, 1993 June 24–25, 1994 July 15, 1994

Dec. 9–10, 1994 June 26–27, 1995 Dec. 15–16, 1995 Mar. 29, 1996 June 21–22, 1996 Oct. 5, 1996

Dec. 13–14, 1996 May 23, 1997 June 16–17, 1997

Nov. 20–21, 1997 Dec. 12–13, 1997 May 2, 1998 June 15–16, 1998 Oct. 24–25, 1998 Dec. 11–12, 1998 Mar. 24–26,1999 June 3–4, 1999 Oct. 15–16, 1999

Dec. 10–11, 1999

Council Presidency

Location

Spain France France

Madrid Paris Strasbourg

Italy Luxembourg Luxembourg

Rome Luxembourg Luxembourg

UK Denmark Belgium

Edinburgh Copenhagen Brussels

Ireland Ireland Italy

Netherlands Portugal UK

Belgium Greece Germany Germany France Spain Italy Italy Ireland

Ireland Netherlands Netherlands

Dublin Dublin Rome

Maastricht Lisbon Birmingham

Brussels Corfu Brussels Essen Cannes Madrid

Turin Florence Dublin

Dublin Noordwijk Amsterdam

Luxembourg Luxembourg UK

Luxembourg Luxembourg Brussels

Germany Germany Finland

Berlin Cologne Tampere

UK Austria Austria

Finland

Cardiff Pörtschach Vienna

Helsinki

Prime Minister/President Felipe Gonzalez François Mitterrand François Mitterrand Charles Haughey Charles Haughey Giulio Andreotti Giulio Andreotti Jacques Santer Jacques Santer

R.F.M. Lubbers Anibal Cavaco Silva John Major

John Major Poul Nyrup Rasmussen Jean-Luc Dehaene Jean-Luc Dehaene Theodoros Pangalos Helmut Kohl Helmut Kohl Jacques Chirac Felipe Gonzalez Romano Prodi Romano Prodi John Bruton John Bruton Wim Kok Wim Kok

Jean-Claude Juncker Jean-Claude Juncker Tony Blair Tony Blair Viktor Klima Viktor Klima

Gerhard Schröder Gerhard Schröder Paavo Lipponen Paavo Lipponen

a. Summits generally take place in the country holding the Council presidency, although occasionally they are held in another member state. “Prime Minister/President” refers to the holder of the Council presidency.

Appendix 8 Accomplishment/Significance

Adopt Delors Report on EMU Discuss implications of revolution in Central and Eastern Europe Decide to hold an IGC on EMU Discuss possibility of German unification Decide to hold an IGC on EPU Discuss forthcoming IGCs Launch IGCs Discuss implications of Gulf War Negotiate IGCs

Conclude IGCs Fail to agree on Delors II budget package Discuss TEU ratification crisis Agree to Danish opt outs from TEU Agree in principle to eastern enlargement Discuss implementation of TEU

Discuss white paper on growth and employment Sign accession agreements with Austria, Finland, Norway, Sweden Nominate Jacques Santer as Commission president Agree to strategy for eastern enlargement Discuss criteria for eastern enlargement Discuss New Transatlantic Agenda Launch IGC Resolve BSE crisis Confirm IGC timetable

Discuss outline draft treaty; agree on EMU stability pact Agree to conclude IGC at Amsterdam summit Conclude IGC (finalize Amsterdam Treaty) Special jobs summit Set enlargement schedule; discuss EMU Select countries to participate in stage three of EMU Discuss Agenda 2000 and employment Discuss EU institutional reform Discuss Agenda 2000 and employment

Conclude Agenda 2000 and nominate Romano Prodi as Commission president Discuss end of Kosovo war and launch new security and defense policy initiative Discuss Justice and Home Affairs Discuss enlargement

527

528

Appendix 9

Appendix 9

Directorates-General of the Council of the European Union (Council of Ministers)

Directorate-General B Directorate-General C Directorate-General D Directorate-General E Directorate-General G Directorate-General H Directorate-General J

Appendix 10

Directorate-General A Administration, Protocol Agriculture-Fisheries Internal Market, Customs Union, Industrial Policy, Telecommunications, Information Society Research, Energy, Transport External Relations Directorate-General F Relations with the European Parliament, Economic and Social Committee and Committee of the Regions, Institutional Affairs, Budget and Staff Regulations, Information Policy, Public Relations Economic and Financial Affairs, Economic and Monetary Union Justice and Home Affairs Directorate-General I Protection of the Environment and of Consumers, Civil Protection, Health, Foodstuffs Legislation Social Policy, Social Dialogue, Regional Policy and Economic and Social Cohesion, Education and Youth, Culture, Audiovisual Media

Special Committees of the Council of the European Union (Council of Ministers)

Committee of Permanent Representatives (COREPER) Economic and Financial Committee Political Committee (Pillar Two Coordinating Committee) Article 36 Committee (Pillar Three Coordinating Committee) Article 133 Committee (Trade Policy Coordinating Committee) Special Committee on Agriculture Standing Committee on Employment Budget Committee Scientific and Technical Research Committee (CREST) Education Committee Committee on Cultural Affairs Select Committee on Cooperation Agreements Between Member States and Third Countries Energy Committee Standing Committee on Uranium Enrichment

528

Appendix 9

Appendix 9

Directorates-General of the Council of the European Union (Council of Ministers)

Directorate-General B Directorate-General C Directorate-General D Directorate-General E Directorate-General G Directorate-General H Directorate-General J

Appendix 10

Directorate-General A Administration, Protocol Agriculture-Fisheries Internal Market, Customs Union, Industrial Policy, Telecommunications, Information Society Research, Energy, Transport External Relations Directorate-General F Relations with the European Parliament, Economic and Social Committee and Committee of the Regions, Institutional Affairs, Budget and Staff Regulations, Information Policy, Public Relations Economic and Financial Affairs, Economic and Monetary Union Justice and Home Affairs Directorate-General I Protection of the Environment and of Consumers, Civil Protection, Health, Foodstuffs Legislation Social Policy, Social Dialogue, Regional Policy and Economic and Social Cohesion, Education and Youth, Culture, Audiovisual Media

Special Committees of the Council of the European Union (Council of Ministers)

Committee of Permanent Representatives (COREPER) Economic and Financial Committee Political Committee (Pillar Two Coordinating Committee) Article 36 Committee (Pillar Three Coordinating Committee) Article 133 Committee (Trade Policy Coordinating Committee) Special Committee on Agriculture Standing Committee on Employment Budget Committee Scientific and Technical Research Committee (CREST) Education Committee Committee on Cultural Affairs Select Committee on Cooperation Agreements Between Member States and Third Countries Energy Committee Standing Committee on Uranium Enrichment

Appendix 11 Appendix 11

Renumbered Articles, Titles, and Sections of the Treaty on the European Union

Previous Numbering

New Numbering

Title II Article G

Title II Article 8

Title I Article A Article B Article C Article D Article E Article F Article F.1* Title III Article H Title IV Article I

Title V† Article J.1 Article J.2 Article J.3 Article J.4 Article J.5 Article J.6 Article J.7 Article J.8 Article J.9 Article J.10 Article J.11 Article J.12 Article J.13 Article J.14 Article J.15 Article J.16 Article J.17 Article J.18

529

Title I Article 1 Article 2 Article 3 Article 4 Article 5 Article 6 Article 7 Title III Article 9

Title IV Article 10 Title V Article 11 Article 12 Article 13 Article 14 Article 15 Article 16 Article 17 Article 18 Article 19 Article 20 Article 21 Article 22 Article 23 Article 24 Article 25 Article 26 Article 27 Article 28

Previous Numbering

New Numbering

Title VIa‡ Article K.15* Article K.16* Article K.17*

Title VII Article 43 Article 44 Article 45

Title VI† Article K.1 Article K.2 Article K.3 Article K.4 Article K.5 Article K.6 Article K.7 Article K.8 Article K.9 Article K.10 Article K.11 Article K.12 Article K.13 Article K.14

Title VII Article L Article M Article N Article O Article P Article Q Article R Article S

Title VI Article 29 Article 30 Article 31 Article 32 Article 33 Article 34 Article 35 Article 36 Article 37 Article 38 Article 39 Article 40 Article 41 Article 42

Title VIII Article 46 Article 47 Article 48 Article 49 Article 50 Article 51 Article 52 Article 53

Source: Conference of the Representatives of the Governments of the Member States, Treaty of Amsterdam. *New Treaty of Amsterdam article †Title amended by the Treaty of Amsterdam ‡New Treaty of Amsterdam title

530

Appendix 12

Previous Numbering

Appendix 12 Renumbered Articles, Titles, and Sections of the Treaty Establishing the European Community

Part One Article 1 Article 2 Article 3 Article 3a Article 3b Article 3c* Article 4 Article 4a Article 4b Article 5 Article 5a* Article 6 Article 6a* Article 7 (repealed) Article 7a Article 7b (repealed) Article 7c Article 7d* Part Two Article 8 Article 8a Article 8b Article 8c Article 8d Article 8e Article 9 Article 10 Article 11 (repealed)

Chapter 1 Section 1 (deleted) Article 12 Article 13 (repealed) Article 14 (repealed) Article 15 (repealed) Article 16 (repealed) Article 17 (repealed) Section 2 (deleted) Article 18 (repealed) Article 19 (repealed) Article 20 (repealed) Article 21 (repealed) Article 22 (repealed) Article 24 (repealed) Article 25 (repealed) Article 26 (repealed) Article 27 (repealed) Article 28 Article 29 Chapter 2 Article 30 Article 31 (repealed) Article 32 (repealed) Article 33 (repealed) Article 34 Article 35 (repealed)

New Numbering Part One Article 1 Article 2 Article 3 Article 4 Article 5 Article 6 Article 7 Article 8 Article 9 Article 10 Article 11 Article 12 Article 13 — Article 14 — Article 15 Article 16 Part Two Article 17 Article 18 Article 19 Article 20 Article 21 Article 22 Article 23 Article 24 —

Chapter 1 — Article 25 — — — — — — — — — — — — — — — Article 26 Article 27

Chapter 2 Article 28 — — — Article 29 —

Previous Numbering

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Title II Article 38 Article 39 Article 40 Article 41 Article 42 Article 43 Article 44 (repealed) Article 45 (repealed) Article 46 Article 47 (repealed)

Title II Article 32 Article 33 Article 34 Article 35 Article 36 Article 37 — — Article 38 —

Article 37

Title III Chapter 1 Article 48 Article 49 Article 50 Article 51

Chapter 2 Article 52 Article 53 (repealed) Article 54 Article 55 Article 56 Article 57 Article 58 Chapter 3 Article 59 Article 60 Article 61 Article 62 (repealed) Article 63 Article 64 Article 65 Article 66

Chapter 4 Article 67 (repealed) Article 68 (repealed) Article 69 (repealed) Article 70 (repealed) Article 71 (repealed) Article 72 (repealed) Article 73 (repealed) Article 73a (repealed) Article 73b Article 73c Article 73d Article 73e (repealed) Article 73f Article 73g Article 73h (repealed) Title IIIa‡ Article 73i* Article 73j*

Article 31

Title III Chapter 1 Article 39 Article 40 Article 41 Article 42 Chapter 2 Article 43 — Article 44 Article 45 Article 46 Article 47 Article 48 Chapter 3 Article 49 Article 50 Article 51 — Article 52 Article 53 Article 54 Article 55 Chapter 4 — — — — — — — — Article 56 Article 57 Article 58 — Article 59 Article 60 —

Title IV Article 61 Article 62

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Title IV Article 74 Article 75 Article 76 Article 77 Article 78 Article 79 Article 80 Article 81 Article 82 Article 83 Article 84

Title V Article 70 Article 71 Article 72 Article 73 Article 74 Article 75 Article 76 Article 77 Article 78 Article 79 Article 80

Section 2 (deleted) Article 91 (repealed)

— —

Article 73l* Article 73m* Article 73n* Article 73o* Article 73p* Article 73q*

Title V Chapter 1 Section 1 Article 85 Article 86 Article 87 Article 88 Article 89 Article 90 Section 3 Article 92 Article 93 Article 94

Chapter 2 Article 95 Article 96 Article 97 (repealed) Article 98 Article 99

Chapter 3 Article 100 Article 100a Article 100b (repealed) Article 100c (repealed) Article 100d (repealed) Article 101 Article 102 Title VI Chapter 1 Article 102a Article 103 Article 103a Article 104

Article 64 Article 65 Article 66 Article 67 Article 68 Article 69

Title VI Chapter 1 Section 1 Article 81 Article 82 Article 83 Article 84 Article 85 Article 86 Section 2 Article 87 Article 88 Article 89

Chapter 2 Article 90 Article 91 — Article 92 Article 93 Chapter 3 Article 94 Article 95 — — — Article 96 Article 97

Title VII Chapter 1 Article 98 Article 99 Article 100 Article 101

Appendix 12

Previous Numbering

New Numbering

Chapter 2 Article 105 Article 105a Article 106 Article 107 Article 108 Article 108a Article 109

Chapter 2 Article 105 Article 106 Article 107 Article 108 Article 109 Article 110 Article 111

Article 104b Article 104c

Chapter 3 Article 109a Article 109b Article 109c Article 109d

Chapter 4 Article 109e Article 109f Article 109g Article 109h Article 109i Article 109j Article 109k Article 109l Article 109m

Title VIa‡ Article 109n* Article 109o* Article 109p* Article 109q* Article 109r* Article 109s*

Title VII Article 110 Article 111 (repealed) Article 112 Article 113 Article 114 (repealed) Article 115 Article 116 (repealed) Title VIIa‡ Article 116*

Title VIII Chapter 1§ Article 117 Article 118 Article 118a Article 118b Article 118c Article 119 Article 119a Article 120 Article 121 Article 122

Article 103 Article 104

Chapter 3 Article 112 Article 113 Article 114 Article 115

Chapter 4 Article 116 Article 117 Article 118 Article 119 Article 120 Article 121 Article 122 Article 123 Article 124 Title VIII Article 125 Article 126 Article 127 Article 128 Article 129 Article 130 Title IX Article 131 — Article 132 Article 133 — Article 134 —

Title X Article 135

Title XI Chapter 1 Article 136 Article 137 Article 138 Article 139 Article 140 Article 141 Article 142 Article 143 Article 144 Article 145

Previous Numbering

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Chapter 3 Article 126 Article 127

Chapter 3 Article 149 Article 150

Chapter 2 Article 123 Article 124 Article 125

Title IX Article 128

Title X Article 129

Title XI Article 129a

Title XII Article 129b Article 129b Article 129c Title XIII Article 130

Title XIV Article 130a Article 130b Article 130c Article 130d Article 130e

Title XV Article 130f Article 130g Article 130h Article 130i Article 130j Article 130k Article 130l Article 130m Article 130n Article 130o Article 130p Article 130q (repealed) Title XVI Article 130r Article 130s Article 130t

Title XVII Article 130u Article 130v Article 130w Article 130x Article 130y

Part Four Article 131

Chapter 2 Article 146 Article 147 Article 148

Title XII Article 151 Title XIII Article 152

Title XIV Article 153 Title XV Article 154 Article 155 Article 156 Title XVI Article 157

Title XVII Article 158 Article 159 Article 160 Article 161 Article 162 Title XVIII Article 163 Article 164 Article 165 Article 166 Article 167 Article 168 Article 169 Article 170 Article 171 Article 172 Article 173 — Title XIX Article 174 Article 175 Article 176

Title XX Article 177 Article 178 Article 179 Article 180 Article 181

Part Four Article 182

531

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New Numbering

Part Five Title I Chapter 1 Section I Article 137 Article 138 Article 138a Article 138b Article 138c Article 138d Article 138e Article 139 Article 140 Article 141 Article 142 Article 143 Article 144

Part Five Title I Chapter 1 Section I Article 189 Article 190 Article 191 Article 192 Article 193 Article 194 Article 195 Article 196 Article 197 Article 198 Article 199 Article 200 Article 201

Article 132 Article 133 Article 134 Article 135 Article 136 Article 136a

Section 2 Article 145 Article 146 Article 147 Article 148 Article 149 (repealed) Article 150 Article 151 Article 152 Article 153 Article 154 Section 3 Article 155 Article 156 Article 157 Article 158 Article 159 Article 160 Article 161 Article 162 Article 163

Section 4 Article 164 Article 165 Article 166 Article 167 Article 168 Article 168a Article 169 Article 170 Article 171 Article 172 Article 173 Article 174

Article 183 Article 184 Article 185 Article 186 Article 187 Article 188

Section 2 Article 202 Article 203 Article 204 Article 205 — Article 206 Article 207 Article 208 Article 209 Article 210 Section 3 Article 211 Article 212 Article 213 Article 214 Article 215 Article 216 Article 217 Article 218 Article 219

Section 4 Article 220 Article 221 Article 222 Article 223 Article 224 Article 225 Article 226 Article 227 Article 228 Article 229 Article 230 Article 231 (continues)

532

Appendix 12

Appendix 12 Previous Numbering

(continued)

Article 175 Article 176 Article 177 Article 178 Article 179 Article 180 Article 181 Article 182 Article 183 Article 184 Article 185 Article 186 Article 187 Article 188

Section 5 Article 188a Article 188b Article 188c

Chapter 2 Article 189 Article 189a Article 189b Article 189c Article 190 Article 191 Article 191a* Article 192 Chapter 3 Article 193 Article 194 Article 195 Article 196 Article 197 Article 198

Chapter 4 Article 198a Article 198b Article 198c Chapter 5 Article 198d Article 198e

Title II Article 199 Article 200 (repealed) Article 201 Article 201a Article 202 Article 203 Article 204 Article 205

New Numbering Article 232 Article 233 Article 234 Article 235 Article 236 Article 237 Article 238 Article 239 Article 240 Article 241 Article 242 Article 243 Article 244 Article 245 Section 5 Article 246 Article 247 Article 248 Chapter 2 Article 249 Article 250 Article 251 Article 252 Article 253 Article 254 Article 255 Article 256 Chapter 3 Article 257 Article 258 Article 259 Article 260 Article 261 Article 262 Chapter 4 Article 263 Article 264 Article 265 Chapter 5 Article 266 Article 267 Title II Article 268 — Article 269 Article 270 Article 271 Article 272 Article 273 Article 274

Previous Numbering

New Numbering

Part Six Article 210 Article 211 Article 212 Article 213 Article 213a* Article 213b* Article 214 Article 215 Article 216 Article 217 Article 218 Article 219 Article 220 Article 221 Article 222 Article 223 Article 224 Article 225 Article 226a (repealed) Article 227 Article 228 Article 228a Article 229 Article 230 Article 231 Article 232 Article 233 Article 234 Article 235 Article 236 Article 237 (repealed) Article 238 Article 239 Article 240 Article 241 (repealed) Article 242 (repealed) Article 243 (repealed) Article 244 (repealed) Article 245 (repealed) Article 246 (repealed)

Part Six Article 281 Article 282 Article 283 Article 284 Article 285 Article 286 Article 287 Article 288 Article 289 Article 290 Article 291 Article 292 Article 293 Article 294 Article 295 Article 296 Article 297 Article 298 — Article 299 Article 300 Article 301 Article 302 Article 303 Article 304 Article 305 Article 306 Article 307 Article 308 Article 309 — Article 310 Article 311 Article 312 — — — — — —

Article 205a Article 206 Article 206a (repealed) Article 207 Article 208 Article 209 Article 209a

Final Provisions Article 247 Article 248

Article 275 Article 276 — Article 277 Article 278 Article 279 Article 280

Final Provisions Article 313 Article 314

Source: Conference of the Representatives of the Governments of the Member States, Treaty of Amsterdam. *New Treaty of Amsterdam article †Title amended by the Treaty of Amsterdam ‡New Treaty of Amsterdam title §Chapter amended by the Treaty of Amsterdam

TABLES INCLUDED IN THE ENTRIES 1

Commission Presidents, 1958–2000

57

3

Commissioners and Their Portfolios, 1958–2000

61

2 4 5 6 7 8 9

10

Commissioners per Member State, 1967–2000 Commission Directorates-General, 1999–

60 66

EC/EU Member States, 1957–2002

167

Presidents of the European Parliament

214

Chronology of Enlargement

European Parliament Committees

Number of EP Seats Held by Party Groups, 1979–1999 EU-Related Referenda

168 215 381 398

533

THE CONTRIBUTORS Karen J. Alter Smith College

Deirdre Curtin University of Utrecht

Martin Baldwin-Edwards The Queen’s University Belfast

Claudio D’Aloya Council Secretariat Brussels

Fulvio Attina University of Catania

Christos Bourdouvalis Augusta State University Alan W. Cafruny Hamilton College

Michael Calingaert Guest scholar, The Brookings Institution, and the Institute of European Studies Free University of Brussels C. J. Carey Court of Auditors (retired) Luxembourg Walter Carlsnaes Uppsala University

Clive Church University of Kent at Canterbury

Peter Curwen Sheffield Hallam University

Desmond Dinan George Mason University and Netherlands Institute of International Relations Clingendael François Duchêne Journalist and Monnet biographer Andrew Duff The Federal Trust London

Geoffrey Edwards Pembroke College Cambridge University Gerda Falkner University of Vienna

J. Bryan Collester Principia College

Jonathan Faull European Commission Brussels

William Cromwell American University

Alan Forrest Council Secretariat Brussels

Maria Green Cowles Center for German and European Studies Georgetown University

Kevin Featherstone University of Bradford

535

536

The Contributors

Cleveland R. Fraser Furman University

Jan Klabbers University of Amsterdam

John Gillingham University of Missouri–St. Louis

Brigid Laffan University College Dublin

Stephen George University of Sheffield

Roy H. Ginsberg Skidmore College

Erik Goldstein University of Birmingham

Peter Gowan University of North London Justin Greenwood Robert Gordon University

Isebill V. Gruhn University of California at Santa Cruz Clifford Hackett Jean Monnet Council Washington, D.C.

Nick Hækkerup Faculty of Law University of Copenhagen Martin Holland University of Canterbury

Leon Hurwitz Cleveland State University

Selina Jackson Tenneco

Francis Jacobs European Parliament Secretariat Brussels

Olli-Pekka Jalonen Tampere Peace Research Institute University of Tampere Hugo M. Kaufmann European Union Studies Center City University of New York

Robert Ladrech University of Keele

Carl Lankowski American Institute for Contemporary German Studies Johns Hopkins University Pierre-Henri Laurent Tufts University

Finn Laursen Thorkil Kristensen Institute South Jutland University Center Salvatore Lombardo Siena College José M. Magone University of Hull

Giandomenico Majone European University Institute Florence Janne Haaland Matlary University of Oslo

Andreas Maurer Institute for European Politics Bonn Francis McGowan University of Sussex

Kathleen R. McNamara Princeton University

Elizabeth Meehan The Queen’s University Belfast Sophie Meunier University of Chicago Monica Mezzadri Council Secretariat Brussels

Alexander Moens Simon Fraser University

Andrew Moravcsik Center for European Studies Harvard University Joaquim Muns University of Barcelona

Anna Murphy University College Dublin Philip Myers College of Europe Bruges

Brent F. Nelsen Furman University

Michael Nentwich Austrian Academy of Sciences Sir William Nicoll Council Secretariat (retired) Brussels

Neill Nugent Manchester Metropolitan University

Hugo Paemen EU Ambassador to the United States Peter Palinkas European Parliament Secretariat Luxembourg Wilie Paterson Institute for German Studies University of Birmingham Alan Butt Philip University of Bath

Alfred Pijpers Netherlands Institute of International Relations Clingendael John Pinder The Federal Trust London

Franciska Pouw Ministry of Justice The Netherlands

The Contributors

Hjalte Rasmussen Faculty of Law University of Copenhagen

John Redmond University of Birmingham

Glenda G. Rosenthal Institute on Western Europe Columbia University

George Ross Brandeis University and Harvard University Edward M. Rowell Former U.S. Ambassador to Luxembourg Trevor Salmon University of Aberdeen

Dennis J.D. Sandole George Mason University Alberta Sbragia University of Pittsburgh René Schwok European Institute University of Geneva

Michael Shackleton European Parliament Secretariat Brussels Michael Smith Loughborough University

Maria-Francesca Spatolisano European Commission Brussels

Beverly Springer American Graduate School of International Management Dennin Swann Loughborough University Ron Tiersky Amherst College

537

538

The Contributors

Alfred Tovias The Hebrew University of Jerusalem

Helen Wallace Sussex European Institute

Peter van Ham George C. Marshall European Center for Security Studies Garmisch Partenkirchen

Paul J.J. Welfens Potsdam University

Derek W. Urwin University of Aberdeen

Sophie Vanhoonacker European Institute of Public Administration Maastricht John Van Oudenaren The Library of Congress Washington, D.C.

Anthony Wallace George Mason University

J.H.H. Weiler Harvard Law School

Sherrill Brown Wells George Washington University Wolfgang Wessels University of Cologne

Pia Christina Wood Old Dominion University

Birol A. Yesilada University of Missouri–Columbia

INDEX Accession, 1, 118, 166–169; of Austria,18–19,166, 202, 206, 298, 411, 479, 512; of Central and Eastern European States, 37–40,166–169; criteria for, 1, 38, 167; of Denmark, 80, 166, 184, 194, 197, 202, 259, 272, 296, 306, 312, 352, 359, 360, 364, 366, 389, 506, 507; of Finland, 166, 202, 206, 234–235, 298, 411, 437, 460, 479, 511, 513, 514; of Greece, 46, 166, 185, 204, 256, 309, 333, 334, 337, 437, 452, 508; of Ireland, 80, 166, 184, 299, 389, 506–507; of Portugal, 46, 54, 59, 80, 166, 185, 204, 344, 418, 434, 437, 508–509; of Spain, 46, 54, 59, 80, 166, 185, 204, 255, 344, 418, 430–431, 434, 437, 441, 508, 509; of Sweden, 166, 202, 226, 298, 411, 479, 511, 512; Treaty, 1; of United Kingdom, 4, 80, 166, 184, 197, 263, 299, 333, 366, 389, 424, 506, 507. See also Enlargement Accountability, 1–2; of Commission, 2, 59–64; of Council of Ministers, 1–2, 103–105; of European Parliament, 2, 214 Acheson, Dean, 2, 180, 346, 416 ACP. See African, Caribbean, and Pacific countries Acquis communautaire, 1, 2, 10, 38, 147, 167, 197, 236, 296, 316, 440, 463, 465 Acquis politique, 2 Action Committee for the United States of Europe (ACUSE), 3–4, 178, 252, 348–349, 463 Action Group on Market Access, 4, 325 Act of Trujillo, 10 ACUSE. See Action Committee for the United States of Europe Additionality, 5, 48. See also Cohesion policy Adenauer, Konrad, 5–6, 282, 318; and Elysée Treaty, 162, 238, 252, 348; and European Defense Community, 196; and Alcide de Gasperi, 121–123; and Charles de Gaulle, 162, 238, 252, 348; and Fouchet Plan, 237; and launch of European integration, 180–181, 183, 210, 261, 331, 375, 416; and Jean Monnet, 180–181 Ad-hoc Committee on a People’s Europe. See Adonnino Committee Ad-hoc Committee on Institutional Affairs. See Dooge Committee Ad-hoc Group on Immigration, 6, 69, 259

Ad Hoc Liaison Committee Coordinating International Aid for the Occupied Territories, 342 Adonnino, Pietro, 7. See also Adonnino Committee Adonnino Committee, 7, 110, 384 Advanced Communications Technologies for Europe (RACE), 7 AER. See Assembly of European Regions Aérospatiale, 7, 11, 223 African, Caribbean, and Pacific (ACP) countries, 7, 33, 79, 80, 137, 187, 196, 322, 328–330, 390, 479, 481, 508, 509, 510. See also Lomé Convention Agencies. See Community agencies Agenda 2000, 7, 23, 40, 50, 68, 169, 437, 515 Airbus, 7–8, 91, 200, 275 À la carte integration, 8. See also Differentiated integration Albania, 166, 372, 388 Algeria, 23, 123, 336, 337 Allaire, Paul, 457 Allied Maritime Transport Executive (AMTE), 346 Alps, 87 Alsace Lorraine, 415 Amato, Giuliano, 144 American Chamber of Commerce in the EU (AMCHAM-EU), 292, 456 Amnesty International, 292 Amsterdam Summit (June 1997), 8, 59, 121, 142, 145, 229, 244, 269, 296, 314, 319, 398, 434, 514–515 Amsterdam Treaty, 7, 8–10, 226, 464, 465; and budget, 30–31; and Commission, 56, 57, 58, 59, 67; and Common Foreign and Security Policy, 84, 107, 387; and cultural policy, 113; and decisionmaking, 2, 13, 45, 100, 104, 118, 119, 120, 211, 212, 213, 395, 471; and environmental policy, 171; and European Parliament, 2, 211, 216; and flexibility, 139; and fraud, 245; and health policy, 263; and Justice and Home Affairs, 314, 316; and national parliaments, 354; negotiation of, 294, 296, 355, 398, 434, 514–515; and protocols, 393; ratification of, 136; and Schengen Agreement, 269–270, 413–414; and social policy, 43, 225, 424, 425, 427; and

539

540

Index

subsidiarity, 440; and transparency, 460; and Western European Union, 487, 488 AMTE. See Allied Maritime Transport Executive Andean Community, 10, 514 Andean Pact, 10, 322 Andreotti, Giulio, 11, 458 Angola, 83 Animal welfare, 9, 393 Ankara Agreement, 467 Anthem, 11 Antici Group, 11, 70 APEC. See Asia Pacific Economic Cooperation “A” Point, 11, 105 Arab-Israeli conflict, 342–343 Arab-Israeli War (1973), 218, 228, 341 Arab League, 175, 341 Argentina, 321, 322, 405 ARIANE, 11, 111 Ariane rocket, 11, 213 Arianspace, 11 ARION, 11 ARISTEION, 12, 111 Armenia, 90 Article 113 Committee. See 113 Committee Article 189b Procedure. See Co-Decision Procedure Article 189c Procedure. See Cooperation Procedure ASEAN. See Association of Southeast Asian Nations Asia, 12, 41, 405 Asia-Europe Meeting, 12, 41, 514 Asia Pacific Economic Cooperation (APEC), 12, 13 Assembly of European Regions (AER), 12 Assembly of the Republic (Portugal), 390 Assent procedure, 12, 13, 119 Assizes, 13, 354 Association agreements, 13, 21. See also Europe agreements Association of European Automobile Manufacturers, 293 Association of Southeast Asian Nations (ASEAN),13–14, 41, 79, 155, 508 Asylum, 9, 141, 175, 311, 313, 314, 413 AT&T, 451 Atatürk, Kemal, 467 Atlantic alliance. See North Atlantic Treaty Organization Atlas-Centuar rocket, 11 Attali, Jacques, 178 Audiovisual Guarantee Fund, 14, 17 Audiovisual policy, 14–18 Audit board, 18, 107 Auriol, Vincent, 415 Australia, 12, 13, 369 Austria, 18–20; accession of , 38, 166, 202, 206, 298, 404, 411, 479, 512; and Central European Initiative, 40; and Common Foreign and Security Policy, 84; and decisionmaking,120, 395; and environmental policy, 171–172; and European Economic Area, 197, 199; and European Free

Trade Association, 201; and federalism, 231; and infringement, 278; and national parliament, 19, 353; neutrality of, 84, 357–358; and opposition to EU, 367, 369; and presidency, 392; referendum in, 9, 366, 513; and Schengen Agreement, 413; and Slovenia, 423; and Western European Union, 486–487 Austria-Hungary, 121 Austrian Freedom Party, 366, 381 Azerbaijan, 90

Baby Bells, 451 Badinter, Robert, 494 Bahrain, 259 Baker, James, 342, 372, 476 Balkans, 493–497. See also Bosnia; Greece; Yugoslavia Balladur, Edouard, 21, 31, 144, 222, 240 Balladur Plan, 21, 39, 372, 385, 406, 513 Baltic Council, 21 Baltic Sea Region Initiative, 21 Baltic states, 21–23, 37, 38, 88, 136. See also Estonia; Latvia; Lithuania Bangemann, Martin, 367, 456 Bank for International Settlements, 68 Bank of France, 45, 125 Barcelona Declaration, 23–23, 115, 337–339, 343, 432, 513 Barshefsky, Charlene, 457 Basic Law (Germany), 5, 196, 254, 438–439 Basle-Nyborg Reform, 208 BCC. See Business Cooperation Center BC-NET. See Business Cooperation Network Beck, Joseph, 330 Belarus, 40, 89–90 Belize, 411 Belgium, 24–25; and Benelux, 25, 78, 113, 137, 269, 295, 367, 373, 375, 415, 416, 485; and Brussels Treaty, 142; and Common Market, 85; and decisionmaking, 120, 395; and Economic and Monetary Union, 147, 149; and environmental policy, 171; and Eurocorps, 175; and European Defense Community, 196; and European Monetary System, 208; and European Political Community, 217; and implementation, 272; and infringement, 278; and Joint Research Centers, 404; and launch of European integration, 179, 183, 373, 429–430, 462, 505; and national parliament 351–352; and North Atlantic Treaty Organization, 360; and Organization for Economic Cooperation and Development, 369; and Schengen Agreement, 412; and Western European Union, 485 Belgium-Luxembourg Economic Union (BLEU), 24 Bell Cablemedia, 451 Benelux, 25, 78, 113, 137, 269, 295, 367, 373, 375, 415, 416, 485 Berlaymont, 26 Berlin blockade, 373, 415–416 Berlin Wall, 6, 36, 166, 319, 344, 476

BEUC. See European Bureau of Consumers’ Unions Beveridge, William, 231 Beyen, Johan Willem, 26, 182, 341, 348, 355, 462 Beyen Plan, 26, 182, 462 Bidault, Georges, 415, 416 Birmingham Summit (October 1992), 71, 512 Black Monday, 26, 295, 464, 511 Black Wednesday, 26, 511 Black Sea, 469 Blair, Tony, 296, 424, 425, 426, 473 Blair House Agreement, 250, 480–491 BLEU. See Belgium-Luxembourg Economic Union Blum, Leon, 415 Boeing, 7 Bolivia, 10, 405 Bosch, 220 Bosnia, 40, 56, 117, 241, 244, 257, 349, 385–386, 388, 487, 493, 494–496. See also Yugoslavia Bossi, Umberto, 367 Bovine Spongiform Encephalopathy (BSE), 26–26, 75, 98, 216, 514 Brandt, Willy, 27, 252, 253, 263, 376, 389, 414, 485 Brazil, 321, 322, 405 Bremen Summit (July 1978), 185, 207, 414, 508 Bretton Woods System, 146, 148, 149, 150, 157, 248, 370, 423, 475 Breydel, 26, 27 Briand, Aristide, 231, 467 Britain. See United Kingdom British Aerospace, 7 British Telecommunications (BT), 451 Brittan, Leon, 27–28, 411, 456 Brok, Elmar, 222, 296, 298 Brown, Ron, 456 Bruges Group, 28 Brunei, 12, 13 Brunner, Manfred, 367, 368 Brussels, 28, 65, 382 Brussels-Capital Region, 25 Brussels Summit (February 1988), 48, 73, 74, 130, 379 Brussels Summit (October 1993), 91 Brussels Treaty (March 1948), 28, 142, 360, 373, 485, 505 Brussels Treaty (July 1975), 107–109 BSE. See Bovine Spongiform Encephalopathy BT. See British Telecommunications Budget, 28–31, 359, 377, 400, 439; and Court of Auditors, 2; and Common Agricultural Policy, 73, 75, 237, 250; and Common Foreign and Security Policy, 84–85; and cultural policy, 110; and decisionmaking, 120; and Delors I, 129, 437; and Delors II, 130, 437; and Denmark 136; and energy policy, 164; and European Parliament 131; and fraud, 2, 30, 113, 194, 245, 411; and Justice and Home Affairs, 312; and Netherlands, 356; and Sound and Efficient Management Initiative, 427; and Sound Financial Management Group, 428; and Trans-European Networks, 459; and

Index

541

United Kingdom, 237, 294, 318, 344, 453, 472, 509 Buenos Aires Declaration, 322 Bulgaria, 22, 31, 36–37, 40, 166, 385, 388, 487, 413, 514. See also Central and Eastern European States Bundesbank, 31–32, 126, 145, 150, 207, 253 Bundesrat, 132, 233, 234, 352 Bundestag, 132 Bureau, 32, 382 Burgenland, 19 Burma, 12, 14 Burundi, 89 Bush, George, 11, 58, 318, 458, 476, 496 Bushevel, Barend, 455 Business Cooperation Center (BCC), 423 Business Cooperation Network (BC-NET), 423

Cabinet, 33, 58–59, 64–65 Cable and Wireless, 451 CACM. See Central American Common Market CAG. See Competitiveness Advisory Group Callaghan, James, 472 Camp David Accords, 175, 341 Canada, 12, 33–35, 82, 155, 257, 264, 360, 372, 374, 479 Canada–United States Free Trade Agreement, 34 Canary Islands, 376 CAP. See Common Agricultural Policy Carbon Dioxide (C02) Tax, 35, 166, 259 Cartagena Agreement, 10 Carter, Jimmy, 207, 414 Cassis de Dijon Case, 35, 86, 193, 400, 435 Catalonia, 367, 369 Catholic Church, 367, 438 CCP. See Common Commercial Policy CDU. See Christian Democratic Union CEAC. See Conference of European Affairs Committees Ceaus˛escu, Nicolai, 406 Cecchini, Paolo, 35. See also Cecchini Report Cecchini Report, 18, 35–36, 47 CEDEFOP. See European Center for the Development of Vocational Training CEES. See Central and Eastern European States CEFIC. See European Council of Chemical Manufacturers Federation CEI. See Central European Initiative CE Mark, 36, 436 CEN. See European Standards Committee CENELEC. See European Electrotechnical Standards Committee Center for Information, Discussion, and Exchange on the Crossing of Borders and Immigration (CIREFI), 311, 315 Center for Information, Discussion, and Exchange on Asylum (CIREA), 311, 314 Center for Information Technologies and Electronics, 310 Central America, 322, 411

542

Index

Central American Common Market (CACM), 322 Central and Eastern European States (CEES), 36–40; accession of, 37–40,166–169; and Agenda 2000, 7, 23, 40, 50, 68, 169, 437, 515; and Balladur Plan, 21; and Baltic States, 22–23; and Bulgaria, 22, 31, 36–37, 40, 166, 385, 388, 487, 413, 514; and Central European Initiative, 40; and cohesion policy, 51; and Common Agricultural Policy, 76; and Czech Republic, 37, 40, 59, 115, 166, 169, 360, 362, 369, 385, 388, 406, 407, 416, 483, 511, 513, 514, 515; and Europe Agreements, 13, 22, 23, 31, 37, 38, 40, 167, 176, 298, 345, 406, 423, 456, 511, 512; and Hungary, 22, 36–37, 40, 58, 59, 126, 166, 169, 268, 360, 362, 369, 385, 388, 406, 407, 483, 487, 510, 511, 515; and Mediterranean policy, 23; and Poland, 21, 22, 36–37, 40, 58, 59, 126, 166, 169, 360, 362, 369, 385, 387–388, 406–407, 412, 483, 510, 511, 515; and Romania, 22, 36–37, 40, 166, 385, 388, 405, 487, 513; and Slovakia, 37, 40, 115, 385, 407, 423, 483, 513; and Slovenia, 22, 40, 59, 166, 169, 218, 242, 388, 423, 494, 511, 514, 515 Central Bureau for Nuclear Measurements, 310 Central European Initiative (CEI), 40 CET. See Common External Tariff CFP. See Common Fisheries Policy CFSP. See Common Foreign and Security Policy Chaban-Delmas, Jacques, 125 Charlemagne Prize, 121 Charter of Fundamental Social Rights for Workers. See Social Charter Charter of Paris for a New Europe, 22, 40, 511 Chechnya, 102, 409 Chernobyl, 83, 165 Cheysson, Claude, 44 Chile, 12, 321, 323, 405 China, 11, 12, 40–42 Chirac, Jacques, 145, 239, 240, 243, 362 Christian Democrat Group. See European People’s Party Christian Democratic Party (Italy), 121, 303 Christian Democratic Union (CDU), 5, 27, 162, 252, 318, 321, 376 Christian Social Union (CSU), 318 Churchill, Winston, 42, 101, 210 Cinema. See Audiovisual Policy CIREA. See Center for Information, Discussion, and Exchange on Asylum CIREFI. See Center for Information, Discussion, and Exchange on the Crossing of Borders and Immigration CIS. See Commonwealth of Independent States Citizenship, 8, 42–44, 132, 188, 271, 440 CJTF. See Combined Joint Task Forces Clappier, Bernard, 45 Clémentel, Etienne, 346 Clinton, Bill, 17, 358, 457, 477, 487, 496, 514 Closeness, 45, 132

CMEA. See Council for Mutual Economic Assistance Cockfield, Arthur, 185, 419 Co-Decision Procedure, 45, 88, 96, 102, 111, 119, 210– 213, 216, 233, 237, 245, 351, 465 COFACE. See Committee of Family Organizations in the Community Cohesion Fund, 45, 50, 204, 255 Cohesion Policy, 46–51, 129, 387, 437. See also Regional Policy, Structural Policy Cold War, 36, 51–55, 102, 122, 125, 126, 158, 176, 202, 216, 238, 240, 241, 251, 334, 336, 347, 357–358, 360–363, 372, 373, 376, 384, 442, 444, 474–476, 485 College of Europe, 510 Collegiality, 56, 56, 59 Colombia, 10, 322, 405, 411 Colombo, Emilio, 251, 427 COM. See Common Organization of the Market Combined Joint Task Forces (CJTF), 10, 56, 84, 387, 487–488 COMECON. See Council for Mutual Economic Assistance COMETT. See Community Action Program in Education and Training for Technology Comitology, 56–57, 120 Commission, 57–68, 183, 517, 518, 520–521; accountability of, 2, 59–64; and Amsterdam Treaty, 10, 56, 57, 58, 59, 67; and audiovisual policy,14–18; and Belgium, 24; and Berlaymont, 26; and Bovine Spongiform Encephalopathy crisis, 26–27; and Breydel, 27; and Brussels, 28; and budget, 30–31, 129, 245; and Cabinets, 33, 58–59, 64–65; and carbon dioxide tax, 35, 259; and Central and Eastern European States, 36–39, 115, 176, 247, 391; and China, 40–41; and cohesion policy, 47–51, 91; and collegiality, 56, 59; and comitology, 56–57; and Committee of the Regions, 70–71; and Common Agricultural Policy, 72–76; and Common Commercial Policy, 76–80; and Common Foreign and Security Policy, 83–85; and Commonwealth of Independent States, 89; and competition policy, 86–88, 92–95, 340; and consumer policy, 98–99; and Council of Ministers, 102–106; and Court of Auditors, 107–109; and cultural policy, 110–113; and decisionmaking, 11, 102, 117–121, 325; and Jacques Delors, 125–129; and democratic deficit, 131–134; and Economic and Monetary Union, 143–152, 157; and education policy, 159–160; and empty chair crisis, 104, 123, 162–163, 261–262; and energy policy, 164; and enlargement, 1, 166–169; and environmental policy, 170–173; and European Community law, 191–194; and European Investment Bank, 203–204; and European Parliament, 57–59, 210–214, 298; and Greece, 256; and immigration policy, 269–270; and implementation, 271–273; and industrial policy, 275–277; and investiture,

298; and Italy, 301–302; and Japan, 305–308; and Justice and Home Affairs, 311–316; and lobbying, 291–293; and Emile Noel, 353–359; and Organization for Economic Cooperation and Development, 369–371; presidency of, 57–59, 125–129, 309, 334, 375, 405, 411–412, 454–455; and regional policy, 12, 70–71; and regulatory policy, 399–402; and research and technological development policy, 224, 402–405; resignation of, 60, 68; and Russia, 407–408; and single market program, 91, 221, 275, 294–295, 344, 419–422, 442; and social policy, 425–427; and Spierenberg Report, 433; and subsidiarity, 439–441; and telecommunications, 449; and transparency, 105, 460; and transport policy, 460–462; and Treaty on European Union, 463–466 Committee for Proprietary Medicinal Products, 176–177 Committee for Veterinary Medicinal Products, 177 Committee of Central Bank Governors, 68, 144, 146, 208 Committee of Family Organizations in the Community (COFACE), 98 Committee of Permanent Representatives (COREPER), 11, 68–70, 71, 105, 162, 184, 239, 352, 353, 388, 465, 488–489 Committee of the Regions (COR), 70–71, 43, 70–71, 133, 153, 440, 465, 512, 517 Committee on Agricultural Structures and Rural Development (STAR), 71, 436 Committee on Institutional Affairs, 110, 141, 508, 509 Committee on a People’s Europe. See Adonnino Committee Common Agricultural Policy (CAP), 71–76, 88, 284, 287, 298; and budget, 67, 73, 75, 96, 126, 129, 177, 237, 250, 344, 400, 509; and Central and Eastern European States, 38–39, 387; and cohesion policy, 46, 219; and Common Fisheries Policy, 81; and decisionmaking, 120, 212, 288, 436; and Denmark, 135; development of, 78, 72, 123, 183, 238, 283, 335, 437, 462, 506; and empty chair crisis, 162–163, 261; and environmental policy, 75–76; and European Agricultural Guidance and Guarantee Fund, 177, 390; and European Free Trade Agreement, 201; and European Monetary System, 255; and France, 238; and General Agreement on Tariffs and Trade, 77, 128, 249–250, 480–481; and Ireland, 236, 299–300; and Italy, 302; and Latin America, 321, 322; and MacSharry reforms, 39, 128, 333–334, 511; and Monetary Compensatory Amounts, 148, 258, 346; and Netherlands, 356; protests against, 366; and Spain, 430; and Standing Committee on Agricultural Structures, 71, 436; and Switzerland, 445; and Turkey, 468; and United Kingdom, 263, 453, 509 Common Commercial Policy (CCP), 76–80, 91, 119–120, 127, 212, 305

Index

543

Common Customs Tariff. See Common External Tariff (CET) Common External Tariff (CET), 77, 78, 85, 154, 183, 198 Common Fisheries Policy (CFP), 81–83, 269, 299, 455 Common Foreign and Security Policy (CFSP), 83–85, 167, 454; and acquis politique, 2; and Amsterdam Treaty, 9–10; and Austria, 19; and Balladur Plan, 21, 23; and Belgium, 24; and budget, 30–31; and Central and Eastern European States, 39; and China, 41; and Commission, 57, 66, 67; and contact group, 99; and COREU, 100; and Council of Ministers, 102, 105; and Cyprus, 114; and decisionmaking, 69, 88, 97, 98, 102, 105, 117, 118, 120, 132, 309–310, 352, 353, 354, 471; and European Council, 188; and European Court of Justice, 194; and European Economic Area, 197; and European Parliament, 132, 212, 216; and Finland, 235; and France, 240, 241, 345; and Greece, 379; and Gulf War, 259; High Representative for, 8, 107, 244, 466; and human rights, 266; and Middle East, 343; and Netherlands, 357; and neutrality, 358; and 1991 intergovernmental conference, 127, 186, 218, 219, 295, 508; and 1996–1997 intergovernmental conference, 264, 296; and North Atlantic Treaty Organization, 361; and Petersberg Declaration, 387; and presidency, 392; and South Africa, 428; and Sweden, 443; and Treaty on European Union, 225, 464, 465, 508; and Troika, 467; and Western European union, 486–487; and Yugoslavia, 349, 385–386, 493–497 Common Market, 85–88, 479 Common Organization of the Market (COM), 88 Common position, 88 Common Technical Regulations (CTRs), 88, 225 Commonwealth, 202, 263, 333 Commonwealth of Independent States (CIS), 88–90, 137, 187, 407–408, 410, 447 Community Action Program in Education and Training for Technology (COMETT), 90, 161 Community agencies, 90, 401–402, 459 Community Support Frameworks (CSFs), 48, 91, 389–390 Community Trademark Office (CTMO), 91, 421 Company law, 91 Competence, 91–92, 380, 425 Competition policy, 68, 86, 92–95, 340, 359, 402 Competitiveness Advisory Group (CAG), 95, 221, 276 Compulsory expenditure, 29–30, 95–96 Concentric circles, 96 Conciliation Committee, 96, 213 Concorde, 275 Confédération Générale du Travail (CGT), 415 Conférence des organes spécialisés dans les affaires communautaires (COSAC). See Conference of European Affairs Committees (CEAC)

544

Index

Conference of European Affairs Committees (CEAC), 96, 97, 353, 354 Conference of Parliaments of the European Community. See Assizes Conference of Presidents and Speakers of the Parliaments of the European Union, 95, 96–97, 353 Conference on Security and Cooperation in Europe (CSCE), 41, 97, 219, 234, 384–385, 507, 508, 511. See also Organization for Security and Cooperation in Europe Conference on Security and Cooperation in the Mediterranean (CSCM), 97 Conference on the Human Environment, 170 Confidence Pact on Employment, 97, 411, 459 Congo, 430 Congress of Europe, 42, 97, 101, 210, 355, 374 Congress of Vienna, 442 Conseil d’État, 191, 399 Consensus, 97. See also Decisionmaking Conservative Party (UK), 228, 263, 367, 381, 453–454, 472, 473 Construcciones Aeronauticas S.A., 7 Constructive abstention, 84, 97–98 Consultation procedure, 98, 119, 301 Consumer Committee, 98 Consumer Consultative Committee (CCC), 98 Consumer policy, 98–99 Consumer Policy Service, 98 Consumer protection, 10 Contact group, 99, 495 Contadora Group, 322 Convention for the Prevention of Marine Pollution from Land-Based Sources, 173 Convention on Settlement, 270 Convention on the Protection of the Marine Environment of the Baltic Area, 173 Convergence, 99. See also Economic and Monetary Union Convergence criteria, 99–100, 431, 464. See also Economic and Monetary Union Cooperation procedure, 88, 100, 119, 351 Coordinating Information on the Environment (CORINE), 100 Copenhagen Action Plan, 342 Copenhagen Report, 100 Copenhagen Summit (April 1978), 207 Copenhagen Summit (December 1987), 130 Copenhagen Summit (June 1993), 1, 22, 38, 167, 391, 412 COR. See Committee of the Regions Core group, 96, 262, 321. See also Differentiated Integration COREPER. See Committee of Permanent Representatives COREU, 100, 217 Corfu Summit (June 1994), 22, 337, 338, 391, 398 CORINE. See Coordinating Information on the Environment

Correspondents. See Group of Correspondents Corsica, 46 COSAC. See Conference of European Affairs Committees COST. See European Cooperation in the Field of Scientific and Technological Research Costa Rica, 411 Costa v. Enal Case, 192 Coudenhove-Kalergi, Richard Nicolaus, 100–101, 209, 231, 278 Council for Mutual Economic Assistance (CMEA; COMECON), 36, 37, 101, 331, 407 Council of Baltic Sea States, 21 Council of Economic and Finance Ministers (ECOFIN), 143, 144, 146, 204, 208, 229 Council of Europe, 11, 18, 97, 101–102, 188, 210, 235, 278, 299, 355, 358, 374, 384, 467, 485 Council of Ministers, 102–106, 140, 232–233, 517, 518, 523, 528; accountability, 1; and Belgium, 25; and Bovine Spongiform Encephalopathy crisis, 26–27; and budget, 28–31, 67; and citizenship, 43; and Commission, 65, 68, 211–216; and Committee of Permanent Representatives, 68–70; and Committee of the Regions, 71; and Common Agricultural Policy, 72–76; and Common Commercial Policy, 76; and Common Foreign and Security Policy, 83–85, 72–74; and Common Market, 86; and competition policy, 86, 92–95; and Council of Economic and Finance Ministers, 101, 143,144, 146, 204, 208, 229; Council Secretariat, 84, 106–107, 107–108; and decisionmaking, 2, 12–13, 69–70, 88, 96, 97, 98, 100, 117–121, 138, 301, 325; and democratic deficit, 133; and Economic and Social Committee, 153; and education policy, 160; and empty chair crisis, 104, 162–163, 261–262, 322; and enlargement, 1–2, 36–40, 166–169; and European Investment Bank, 203, 204; and European Parliament, 382; and General Affairs Council, 90, 217, 247, 490, 494; and Justice and Home Affairs, 311–316; origin of, 181, 183, 355, 417; presidency of, 217, 259, 392; and research and technological development policy, 7, 403–405; and single market program, 419–422; and transparency, 105, 459; and Treaty on European Union, 463–466; and weighting of votes, 10, 59 Council of the European Union. See Council of Ministers Council Secretariat, 84, 106–107, 107–108 Court of Auditors, 2, 18, 30, 107–109, 213–214, 245, 272, 508, 517 Court of First Instance, 109, 193–194, 272 Craxi, Bettino, 343 Creutzfeldt-Jakob disease, 26, 98, 514 Crimean War, 467 Croatia, 40, 117, 218, 242, 251, 349, 493–484, 493–494, 511 Crocodile Club, 109–110, 141, 433

CSCE. See Conference on Security and Cooperation in Europe CSCM. See Conference on Security and Cooperation in the Mediterranean CSFs. See Community Support Frameworks CSU. See Christian Social Union CTMO. See Community Trademark Office CTRs. See Common Technical Regulations Cuba, 481 Cuban missile crisis, 241 Cultural policy, 14–18, 110–113, 452, 397 Customs Information System, 194 Customs 2000 Program, 113 Customs Union, 76, 77–78, 79, 113, 147, 154, 183, 198, 274, 507, 508 Cyprus, 23, 38, 113–115, 166, 167, 175, 296, 336, 337, 338, 339, 468–469, 511, 515 Czechoslovakia, 22, 36–37, 52, 115, 360 Czech Republic, 37, 40, 59, 115, 166, 169, 360, 362, 369, 385, 388, 406, 407, 416, 483, 511, 513, 514, 515. See also Central and Eastern European States

Dáil, 300 Damlier-Benz Aerospace, 7 Danish People’s Movement Against the EC, 366, 367 Dassonville Case, 172 Davignon, Etienne, 117, 185, 217, 220, 224, 275, 376, 454. See also Davignon Report Davignon Report, 117, 376, 507 Dayton Accords, 84, 99, 117, 257, 372, 385, 406, 477, 495, 514 De Bondini, Alexandre, 3 Decision, 117 Decisionmaking, 117–121; and Amsterdam Treaty, 8, 10; and Commission, 57–68; and Council of Ministers, 102–106; and empty chair crisis, 162–163; and European Economic Area, 198–199; and European Parliament, 12, 15, 16, 210–216; and integration theory, 284–285, 327; and Ioannina Compromise, 298–299; and national parliaments, 352; and qualified majority voting, 24, 104–105, 119, 120, 124, 126, 131, 239, 253, 318, 325, 395, 418; and Single European Act, 2, 97, 104, 131, 211, 213, 272, 275, 325, 351, 354, 382, 395; and social policy, 424–425; and Treaty of Rome, 45, 123–124; and Treaty on European Union, 2, 97, 118, 471 Declaration of Human Rights, 266 Declaration of Rome, 511 Declaration on Fundamental Rights and Freedoms, 188 Declaration on the Hierarchy of Community Acts, 264 De Clercq, Willy, 101 De Deus Pinheiro, João, 390 Deepening, 121 Defense policy, 10 De Gasperi, Alcide, 5, 121–122, 303, 331

Index

545

De Gaulle, Charles, 123–124, 438; and Konrad Adenauer, 6, 162, 238, 252, 348; and empty chair crisis, 54, 69, 104, 123, 162–163, 184, 261–262, 279, 332, 334, 335, 395, 405, 430, 480, 506; and Fouchet Plan, 237; and Walter Hallstein, 69, 123, 183, 261–262, 340, 453; and Jean Monnet, 251, 347, 349; and North Atlantic Treaty Organization, 360–361; and Georges Pompidou, 388; and Quebec, 33; and Soames Affair, 424; and Margaret Thatcher, 453; and United Kingdom, 45, 201, 263, 333, 424, 471 Dehane, Jean-Luc, 298 Dekker, Wisse, 220 De Larosière, Jacques, 178 Dell, Edmund, 455 Delors, Jacques, 57–60, 125–129, 368; and audiovisual policy, 17; and Leon Brittan, 28; and cohesion policy, 46–48; and cultural policy, 112; and Delors I, 47, 49, 58, 67, 73, 126, 129–130, 219, 379, 437, 510; and Delors II, 49–50, 74, 128, 129, 130, 437; and Delors Committee, 126, 144, 145, 510; and Delors Report, 49, 126, 127, 130, 144, 150, 151, 157, 185, 186, 463–464; and Economic and Monetary Union, 144–145, 150; and European Economic Area, 197; and federalism, 231, 239; and management of Commission, 65, 68; and Russia, 407; and Jacques Santer, 57–60, 411; and single market program, 125–126, 221, 232, 349, 419–420, 424, 438, 439, 510; and social policy, 9, 206, 227, 325, 326, 424, 425, 427, 473; and Margaret Thatcher, 453–454; and Transatlantic Declaration, 11, 458 Delors I, 47, 49, 58, 67, 73, 126, 129–130, 219, 379, 437, 510 Delors II, 49–50, 74, 128, 129, 130, 437 Delors Committee, 126, 144, 145, 510 Delors-Oslo Process, 197 Delors Plan. See Delors Report Delors Report, 49, 126, 127, 130, 144, 150, 151, 157, 185, 186, 463–464 Democratic deficit, 104, 128, 130–134, 266 Democratic Unitary Coalition (Portugal), 390 Denmark, 134–137; accession of, 166, 184, 194, 197, 202, 259, 272, 296, 306, 312, 352, 360, 364, 366, 389, 506, 507; and Baltic Council, 21; and Common Fisheries Policy, 81; and decisionmaking, 120, 395; and differentiated integration, 138; and Economic and Monetary Union, 127, 465; and environmental policy, 35, 171; and European Monetary System, 208; and intergovernmental conferences, 343; and neutrality, 442; and Nordic Council, 359; and North Atlantic Treaty Organization, 442; opposition to European Union, 366–369, 380; and Organization for Economic Cooperation and Development, 369; referenda in, 128, 186, 226, 324, 366, 368, 397–398, 418, 466, 511; and Schengen Agreement, 413; and Single European Act, 190, 418; and telecommunications policy, 451–452; and transparency, 105; and Treaty on

546

Index

European Union, 233; and Western European Union, 486–487 Derogation, 1, 137 Deutsch, Karl, 278, 279 Deutsche Telekom, 451, 452 Development policy, 137, 264 De Villiers, Bernard, 367 DeVilliers List, 227 Dien Bien Phu, 195 Differentiated integration, 2, 95, 137–140, 236; and flexibility, 10, 139, 236 Dillon Round, 81, 85, 248 Dini, Lamberto, 115 Direct effect, 140, 192. See also European Court of Justice Direct elections to the European Parliament, 2, 4, 19, 140, 184, 210–211, 309, 325, 356, 367, 438, 443, 509, 510, 513 Directive, 140 Directorate-General, 140 Dispute Settlement Body, 490 Dispute Settlement Understanding, 490 Dominican Republic, 323 Dooge, James, 140, 509. See also Dooge Committee Dooge Committee, 7, 140–141, 237, 294, 343, 344, 418, 509 Dooge Report, 295 Double-Price System, 141 Draft Declaration of the European Resistance, 210, 433 Draft European Act. See Genscher-Colombo Proposals Draft Treaty Establishing the European Union, 110, 140, 141, 184, 185, 211, 225, 232, 295, 418, 433–434, 439, 509 Drugs, 314, 316, 467 Dual Mandate, 141, 351 Dublin Convention, 141–142, 269, 314 Dublin Summit (June 1990), 173, 189, 342, 407 Dublin Summit (December 1996), 40, 76, 216, 229, 296, 315, 434 Dulles, John Foster, 6, 346 Dunkirk Treaty, 142, 373

EAD. See Euro-Arab Dialogue EAGGF. See European Agricultural Guidance and Guarantee Fund East Germany, 6, 27, 37, 50, 126, 152, 251, 252, 376, 405, 412, 510 East Timor, 12, 14 EBRD. See European Bank for Reconstruction and Development EBS. See Europe By Satellite EC. See European Community ECB. See European Central Bank ECE. See Economic Commission for Europe ECHO. See European Community Humanitarian Office ECIR. See European Center for Industrial Relations

ECIS. See European Center for Infrastructure Studies ECJ. See European Court of Justice ECOFIN. See Council of Economic and Finance Ministers Economic and Financial Committee, 143 Economic and Monetary Union (EMU), 143–152; and Austria, 19; and Edouard Balladur, 31; and Belgium, 25; and Cohesion Fund, 45, 46, 49; and Common Agricultural Policy, 254–255; and Common Commercial Policy, 76; and convergence criteria, 99–100, 133, 431, 459, 464; and Council of Economic and Finance Ministers, 101; and Cyprus, 114; and decisionmaking, 118; and Jacques Delors, 58, 125–127, 129; and Delors Report, 49, 126–127, 130, 144, 150, 151, 157, 185, 186, 463–464, 510; and Denmark, 127, 135–136, 456; and differentiated integration, 139; and European Central Bank, 13, 68, 143, 144, 147, 157, 179, 185, 224, 228, 240, 294, 326, 465; and European Council, 188–189; and European Monetary Institute, 32, 68, 127, 145, 151, 179, 206, 214, 515; and European Monetary System, 206–209; and European Parliament, 212, 216; and European System of Central Banks, 145, 224, 229, 465; and enlargement, 167; and Exchange Rate Mechanism II, 229; and Finland, 235; and France, 144–145, 149, 151, 207–209, 434; and Germany, 143–146, 149, 151, 207–209, 252, 434; and Greece, 258; and integration theory, 156–157, 283, 288, 349; and Ireland, 300; and Italy, 302, 303; and Helmut Kohl, 319; and national parliaments, 352; and Netherlands, 356; and 1991 intergovernmental conference, 295–296, 344–345, 511; and Jacques Santer, 411; and Single European Act, 418; and single market program, 153, 154, 419, 454; Stability and Growth Pact, 434, 514–515; and subsidiarity, 438, 439; and Sweden, 443; and Margaret Thatcher, 453; and Treaty on European Union, 32, 99, 127, 130, 132, 138, 144–152, 157, 207, 463–466; and unemployment, 9, 205; and United Kingdom, 26, 138, 185, 262, 367, 465; and Werner Plan, 144, 148, 149, 151, 157, 184, 330, 331, 423, 485, 507 Economic and Social Cohesion. See Cohesion Policy Economic and Social Committee (ESC), 28, 70, 71, 153, 424, 517 Economic Commission for Europe (ECE), 153, 373 Economic convergence. See Convergence Economic integration theory, 153–158 ECS. See European Company Statute ECSAs. See European Community Studies Associations ECSC. See European Coal and Steel Community ECSC Consultative Committee. See European Coal and Steel Community Ecu, 159. See also European Currency Unit ECU. See European Currency Unit

Ecuador, 10, 405 EDC. See European Defense Community EDF. See European Development Fund Edinburgh Summit (December 1992), 45, 50, 73, 130, 136, 186, 206, 221, 226, 440, 466, 512 EDIG. See European Defense Industry Group Education policy, 159–161 EEA. See European Economic Area; European Environment Agency EEC. See European Economic Community EEIG. See European Economic Interest Grouping EFTA. See European Free Trade Association Egypt, 23, 79, 175, 336, 337, 341, 342 EIB. See European Investment Bank EICs. See European Information Centers EIF. See European Investment Fund Eisenhower, Dwight, 177 Eizenstat, Stuart, 458 ELDR. See European Liberal, Democratic, and Reformist Party El Salvador, 322, 411 Elysée Treaty, 6, 123, 162, 162, 238, 252, 254, 348, 414, 506 Emblem. See Flag EMEA. See European Agency for the Evaluation of Medicinal Products EMI. See European Monetary Institute Employment, 9, 97, 200–201, 411, 459 Employment Pact. See Confidence Pact on Employment Empty chair crisis, 69, 73, 123, 162–163, 184, 261–262, 332, 334, 335, 395, 405, 430, 480, 506 EMS. See European Monetary System EMU. See Economic and Monetary Union Energy Charter, 163, 166, 407, 409, 513 Energy policy, 163–166, 310, 433, 454 England, 46, 71. See also United Kingdom Engrenage, 166 Enlargement, 80, 166–169. See also Accession ENs. See European Norms Enterprise policy. See Small and Medium-Sized Enterprises Environmental Action Program, 205 Environmental policy, 19, 163–166, 170–174, 201, 327, 399, 439–440, 462; and Common Agricultural Policy, 75–76; and Environmental Action Program, 205; and European Environment Agency, 100, 170, 171, 201, 272, 273; and European Environment Information and Observation Network, 170; and European Investment Bank, 204–205; and Single European Act, 170, 419 Environment Institute, 310 EP. See European Parliament EPC. See European Political Community; European Political Cooperation EPP. See European People’s Party EPU. See European Payments Union; European Political Union

Index

547

Equal Opportunities Council, 193 ERASMUS. See European Community Action Scheme for the Mobility of University Students ERDF. See European Regional Development Fund Erhard, Ludwig, 5 ERM. See Exchange Rate Mechanism ERM II. See Exchange Rate Mechanism II ERT. See European Round Table of Industrialists ERTA Case, 173 ESA. See European Space Agency; European Surveillance Authority ESC. See Economic and Social Committee ESCB. See European System of Central Banks ESDI. See European Security and Defense Identity ESPRIT. See European Strategic Program for Research and Development in Information Technology Essen Summit (December 1994), 23, 38, 169, 221, 391, 438, 459, 513 Estonia, 21–23, 59, 166, 169, 515. See also Baltic States ETSI. See European Telecommunications Standards Institute ETUC. See European Trade Union Confederation EU. See European Union EUI. See European University Institute EURATOM . See European Atomic Energy Community EUREKA. See European Research Coordination Agency EURES. See European Employment Service Euro, 141, 175, 156. See also Economic and Monetary Union Euro-Arab Dialogue (EAD), 175, 341 Euro-Arab General Commission, 341 Eurobarometer, 366 Eurochambers. See European Association of Chambers of Commerce and Industry EURO-COOP. See European Community of Consumer Cooperatives Eurocorps, 84, 361–362 Eurocracy, 57, 64–65, 68, 106 EURODAC, 141, 175, 314 Eurogroups, 291–293, 301 Euro-Mediterranean Partnership, 24, 97, 175–176, 336, 343, 411, 432, 513 EUROPA, 176 Europe Agreements, 22, 23, 31, 37, 38, 40, 167, 176, 298, 345, 406, 423, 456, 511, 512. See also Association Agreements; Central and Eastern European States European Agency for the Evaluation of Medicinal Products (EMEA), 176–177, 271–272 European Agricultural Guidance and Guarantee Fund (EAGGF), 48, 67, 73, 75, 88, 177, 437 European Anti-Poverty Network, 292 European Association of Chambers of Commerce and Industry (Eurochambers), 177 European Atomic Energy Community (EURATOM),

548

Index

177–178; and Action Committee for the United States of Europe, 4; and Brussels, 28; and Council of Ministers, 102; and energy policy, 163–164; establishment of, 505–506; and European Investment Bank, 204; and Robert Marjolin, 335; and Merger Treaty, 179, 340; and Messina Conference, 340–341; and Jean Monnet, 346–348; and research and technological development policy, 403–404; and Paul-Henri Spaak, 24, 429–430; and Treaty of Rome, 462–463 European Audiovisual Conference, 15 European Bank for Reconstruction and Development (EBRD), 37, 126, 178, 510, 511 European Bureau of Consumers’ Unions (BEUC), 98 European Center for Industrial Relations (ECIR), 178 European Center for Infrastructure Studies (ECIS), 179, 221 European Center for Public Enterprises (CEEP), 425, 426, 471, 472, 483 European Center for the Development of Vocational Training (CEDEFOP), 179 European Central Bank (ECB), 13, 68, 143, 144, 147, 179, 157, 185, 224, 228, 240, 294, 326, 465 European City of Culture, 179, 317 European Coal and Steel Community (ECSC), 179–182; and Action Committee for the United States of Europe, 3; and Konrad Adenauer, 6; and Austria, 18; and Brussels, 28; and Cold War, 53; and Common Market, 77, 86; and Council of Ministers, 103; and Etienne Davignon, 117; and Alcide de Gasperi, 121–122; development of, 182–183; and energy policy, 163–164; establishment of, 505; and European Court of Justice, 191, 193; and federalism, 232; and Walter Hallstein, 261; and High Authority, 264; and Luxembourg, 330; and Marshall Plan, 336; and Merger Treaty, 340; and Jean Monnet, 346–347; and research and technological development policy, 403; and Schuman Plan, 252, 375, 416–417; and Treaty of Paris, 462; and United States, 336, 474 European Coal and Steel Community (ECSC), 28, 121, 182, 331 European Commission. See Commission European Committee for Standardization. See European Standards Committee European Communities. See European Community European Community (EC), 153, 162, 182–186. See also European Economic Community European Community Action Scheme for the Mobility of University Students (ERASMUS), 160, 187, 427, 447 European Community Humanitarian Office (ECHO), 41, 137, 187 European Community of Consumer Cooperatives (EURO-COOP), 98

European Community Studies Associations (ECSAs), 187 European Company, 187, 227 European Company Statute (ECS), 187 European Conference, 515 European Confidence Pact on Employment. See Confidence Pact on Employment European Convention for the Protection of Human Rights and Fundamental Freedoms, 188, 265–268, 278 European Convention on Human Rights, 43, 191, 192 European Cooperation in the Field of Scientific and Technological Research (COST), 188 European Council, 184, 188–191, 254; and Commission, 58–60; and Common Foreign and Security Policy, 83–84; and enlargement, 166–169; and environmental policy, 170–173; and European Parliament, 211; and European Political Cooperation, 217; launch of, 4, 254, 414, 441 European Council of Chemical Manufacturers Federation (CEFIC), 292 European Court of Human Rights, 102, 191 European Court of Justice (ECJ), 191–194, 517, 518; and audiovisual policy, 14; and budget, 30; and Cassis de Dijon Case, 35, 86, 193, 400, 435; and Commission, 59, 60, 65, 68; and Common Commercial Policy, 250; and Common Foreign and Security Policy, 83, 465; and Common Market, 86; and Competition Policy, 94; and Council of Ministers, 106; and Court of First Instance, 109; and Dassonville Case, 172; and differentiation, 137; and direct effect, 140, 192; and environmental policy, 172–173; and ERTA Case, 173; and European Council, 190; and European Economic Area, 197, 199, 202, 224; and European Parliament, 417; and European Police Agency, 216; and EUROPOL Drugs Unit, 228; and Francovich v. Italy Case, 194, 273; and human rights, 265–267; and immigration policy, 269, 270; and implementation, 271–273; and infringement procedures, 277; and integration theory, 283, 284, 285, 287, 288; and Isoglucose Case, 98, 119, 212, 301; and Justice and Home Affairs, 313; origins of, 232; and preliminary ruling, 191, 192, 193, 272, 301; and reasoned opinion, 397; and single market program, 422; and subsidiarity, 440; and supremacy of European Community law; 441–442; and transport policy, 460–461; Van Gend en Loos case, 42, 140 European Cultural Month, 317 European Currency Unit (ECU), 150, 175, 208, 508. See also Hard ECU European Defense Community (EDC), 195–196; and Alcide de Gasperi, 121–122; and European Defense Community Assembly, 195; failure of, 3, 6, 26, 28, 181–182, 217, 232, 340, 417, 463, 505;

and Pleven Plan, 417; and Western European Union, 485 European Defense Community Assembly, 195 European Defense Industry Grouping (EDIG), 196 European Democratic Alliance, 471 European Development Fund (EDF), 30, 196 European District, 28 European Economic Area (EEA), 18, 79, 126, 167, 197–200, 202, 224, 269, 327, 358, 364, 423, 443, 444, 445, 511 European Economic Community (EEC), 200, 182–186; and Action Committee for the United States of Europe, 4; and Beyen Plan, 26, 355; and Brussels, 28; and Cold War, 53–54; and Common Agricultural Policy, 71; and Common Market, 85; and Council of Ministers, 102, 104; development of, 182–186; and energy policy, 163; establishment of, 505–506; and European Atomic Energy Community, 177–178; and European Coal and Steel Community, 179–181; and European Court of Justice, 191; and European Free Trade Association, 201; and federalism, 232; and General Agreement on Tariffs and Trade, 248; and Robert Marjolin, 335; and Merger Treaty, 179, 340; and Messina Conference, 340–341; and Jean Monnet, 346–348; and research and technological development policy, 403; and Paul-Henri Spaak, 24, 178, 429–430; and Treaty of Rome, 462–463; and United States, 474 European Economic Interest Grouping (EEIG), 91, 200 European Economic Space (EES), 197, 202 European Economic Stability Pact. See Stability and Growth Pact European Electrotechnical Standards Committee (CENELEC), 200, 223, 434–435 European Employment Service (EURES), 200–201 European Energy Charter. See Energy Charter European Environment Agency (EEA), 100, 170, 171, 201, 272, 273 European Environment Information and Observation Network, 170 European Federalist Movement, 433 European Federation of National Organizations Working with the Homeless, 292 European Free Trade Area. See European Free Trade Association European Free Trade Association (EFTA), 18, 79, 126, 197, 201–202, 224, 263, 269, 327, 333, 363, 442, 443, 510, 511 European Information Centers (EICs), 202, 423 European Investment Bank (EIB), 14, 37, 46, 47, 178, 202–206, 294, 331, 342, 358, 367, 437, 459 European Investment Fund (EIF), 204, 206, 459, 512 European Launch Development Organization, 223 European Liberal, Democratic, and Reformist Party (ELDR), 206, 303

Index

549

European Market Access Strategy. See Market Access Strategy European Model of Society, 206, 325 European Monetary Cooperation Fund, 148 European Monetary Fund, 207, 208, 262 European Monetary Institute (EMI), 32, 68, 127, 145, 151, 179, 206, 214, 515 European Monetary System (EMS), 206–209; and Common Agricultural Policy, 254–255; and Jacques Delors, 125, 128; and Economic and Monetary Union, 146–152; and Exchange Rate Mechanism, 26, 31, 99, 138, 150, 152, 156, 157, 159, 207–209, 228–229, 454, 466, 512; and Finland, 235; and France, 344; and Germany, 31; and Valéry Giscard d’Estaing, 254–255; and Greece 515; and integration theory, 287; and Ireland, 299; and Roy Jenkins, 309; launch of, 309, 254–255, 414, 508; and 1992–1993 crises, 145, 146, 152, 157, 185, 466; and Helmut Schmidt, 414; and Single European Act, 418; and United Kingdom, 26, 138, 185, 472; and United States, 476 European Movement, 209–210, 282, 430 European Network of Forensic Science Institutes, 311 European Norms (ENs), 200, 223 European Parliament (EP), 210–216, 517, 518, 522; and Bovine Spongiform Encephalopathy, 27; and budget, 28, 29–31, 67, 131, 210, 211, 212, 213, 245; and bureau, 32; and Central and Eastern European States, 37, 39; and cohesion, 47, 48; comitology, 56–57; and Commission, 57–60, 65–68, 210–214, 298, 411, 417; and Committee of the Regions (COR), 71; and Committee on Institutional Affairs, 110, 141, 508, 509; and Common Foreign and Security Policy, 83, 212, 216; and Council of Ministers, 102–104, 210–214; and Court of Auditors, 107–109; and decisionmaking, 12–13, 16, 45, 49, 96, 100, 117, 210, 211, 212, 213, 216, 301, 351; and Declaration of Human Rights, 266; and democratic deficit, 131–134; and direct elections, 2, 4, 19, 135, 140, 184, 210–211, 309, 325, 356, 367, 438, 443, 509, 510, 513; and Draft Treaty Establishing the European Union, 110, 140, 141, 184, 185, 211, 225, 232, 295, 418, 433–434, 439, 509; and dual mandate, 141; and environmental policy, 170; establishment of, 183; and Europe Agreements, 176; and European Community law, 191–194; and European Council, 190, 211; and federalism, 232–233, 278; and Justice and Home Affairs, 212, 216, 311–313; and intergroups, 297; and Ireland, 300; and Israel, 342; and national parliaments, 13, 96, 99, 351–355, 483; and ombudsman, 214, 365, 465, 514; and party groups, 216, 471, 522; and rapporteur, 397; and research and technological development policy, 403; and Russia, 408–409; and Sakharov Prize, 411; and social policy, 426; and Strasbourg,

550

Index

436–437; and transparency, 460; and Treaty on European Union, 464–466; and Turkey, 468–469 European Parliamentary Union, 101 European Payments Union, 216 European People’s Party (EPP), 216, 426 European Police Office (EUROPOL), 9, 194, 216–217, 272, 312–314, 315, 319, 349 European Political Community (EPC), 182, 195–196, 217, 232, 358 European Political Cooperation (EPC), 217–219; and acquis politique, 2; and Cold War, 55; and Committee of Permanent Representatives, 69; and Common Foreign and Security Policy, 83; and Conference on Security and Cooperation in Europe, 264, 372; and Copenhagen Report, 100; development of, 184–185, 252; and Davignon Report, 117; and Euro-Arab Dialogue, 175; European Political Union, 465; and GenscherColombo proposals, 251, 318; and Group of Correspondents, 259; and human rights, 266; and Ireland, 236, 300; and Latin America, 323; and London Report, 330; and Middle East, 175, 341–343; and neutrality, 357; and Norway, 364; and Ostpolitik, 376; and Russia, 407; and Single European Act, 418; and Solemn Declaration on European Union, 427; and South Africa, 428; and Troika, 467; and United States, 476, 483; and Venice Declaration, 341–342, 483; and Western European Union, 486; and Year of Europe, 493 European Political Union (EPU), 219, 463, 465, 510 European Recovery Program (ERP). See Marshall Plan European Regional Development Fund (ERDF), 27, 46, 48, 67, 82, 219, 398, 437 European Research Coordination Agency (EUREKA), 219–220, 403–404 European Rights Foundation, 266 European Round Table of Industrialists (ERT), 95, 179, 220–222, 226, 275, 291, 292 European Secretariat of the Liberal, Independent, and Social Professions (SEPLIS), 292 European Security and Defense Identity (ESDI), 56, 83, 84,85, 175, 222–223, 251, 486–488, 495 European Social Fund (ESF), 46, 67, 82, 223, 425, 437 European Space Agency (ESA), 11, 223, European Space Center, 11, 223 European Stability Pact. See Balladur Plan European Standards Committee (CEN), 200, 223–224, 434–435 European Strategic Program for Research and Development in Information Technology (ESPRIT), 117, 224, 344 European Surveillance Authority (ESA), 199, 224 European System for the International Clearing of Vacancies and Applications for Employment (SEDOC), 201 European System of Central Banks (ESCB), 145, 224, 229, 465

European Telecommunications Standards Institute (ETSI), 88, 225, 435 European Topic Centers, 201 European Trade Union Confederation (ETUC), 98, 225, 292, 425, 426, 471, 483 European Trade Union Institute, 225 European Union (EU), 225–226 European United Left, 380 European University-Industry Forum, 221 European University Institute (EUI), 178, 226, 359 European Women’s Lobby (EWL), 26–227, 292 European Works Councils (EWCs), 126, 127, 187, 227, 425, 433 European Youth Orchestra, 317 Europe by Satellite (EBS), 227 Europe Day, 227, 302, 417 Europe of Nations Group, 380 Europe of the Regions, 228 EUROPOL. See European Police Office EUROPOL Drugs Unit, 228, 315 Eurosclerosis, 78, 148, 228, 227, 275, 484 Euroskeptic, 227, 228, 367–368, 454, 463, 466, 471, EUROSTAT. See Statistical Office of the European Communities Euro-X, 228. See also Economic and Monetary Union Euro Zone, 228. See also Economic and Monetary Union EWCs. See European Works Councils EWL. See European Women’s Lobby Exchange Rate Mechanism (ERM), 26, 31, 99, 138, 150, 152, 156, 157, 159, 207–209, 228–229, 454, 466, 512 Exchange Rate Mechanism II, (ERM II), 229 Export Enhancement Program, 480 External Frontiers Convention, 229, 269

Falklands War, 322 Fascism, 210 Federalism, 231–234, 278, 433–434, 438–441, 443 Federal Republic of Germany. See Germany Fianna Fáil, 299, 380 Fiat, 220 Financial control, 2 Financial services, 420 Financial Times, 178 Fine Gael, 299 Finland, 234–236; accession of, 166, 202, 206, 234–235, 298, 411, 437, 460, 479, 511, 512, 513, 514; and Baltic Council, 21; and Central and Eastern European States, 38; and cohesion policy, 50; and Common Foreign and Security Policy, 84; and decisionmaking, 120, 395; and environmental policy, 171–172; and European Economic Area, 197, 199; and European Monetary System, 514; neutrality of, 235, 357–358, 364; and Nordic Council, 359; and Organization for Economic Cooperation and Development, 369; and presidency, 392; referendum in, 234, 366, 513;

and Schengen Agreement, 413; and transparency, 133, 460; and Western European Union, 486, 487 Fishler, Franz, 75 FitzGerald, Garret, 236 Flag, 236, 301 Flanders, 25, 367, 369 Flanking Measures, 236 Flexibility, 10, 139, 236 Florence Summit (June 1996), 26, 185, 236–237, 257, 459 Fontainebleau Declaration, 160 Fontainebleau Summit (June 1984), 7, 140, 141, 294, 344, 453, 472, 509 FORCE, 161 Ford Motor Company, 457 Forestry, 75, 237 Former Yugoslav Republic of Macedonia. See Macedonia Fortress Europe, 237, 249, 307 Forza Europa, 471 Forza Italia, 302–303, 380 Fouchet, Christian, 237. See also Fouchet Plan Fouchet Plan, 24, 237, 217, 239, 349, 361, 506 Founding Act on Mutual Relations, Cooperation, and Security, 262 Four Freedoms, 237. See also Single Market Program Framework Program for Research and Technological Development, 160, 213, 237–238, 275, 403–405. See also Research and Technological Development Policy France, 238–244; and Bank of France, 45, 125; and Canada, 33; and cohesion policy, 46; and Cold War, 52–54; and Common Commercial Policy, 76, 78, 80; and Common Foreign and Security Policy, 84; and Common Market, 85–86; and contact group, 99; and core group, 96, 321; and Council of Ministers, 104; decisionmaking, 120, 121, 395; and Charles de Gaulle, 123–124; and democratic deficit, 131–132; and Dunkirk Treaty, 142; and Economic and Monetary Union, 9, 144–145, 149, 151, 207–209, 434; and empty chair crisis, 69, 73, 123, 162–163, 184, 261–262, 332, 334, 335, 395, 405, 430, 480, 506; and Eurocorps, 175; and European Bank for Reconstruction and Development, 178; and European Coal and Steel Community, 179; and European Court of Justice, 194; and European Defense Community, 3, 6, 195–196, 217, 417, 463, 505; and federalism, 231–232; and Fouchet Plan, 237; and Gaullism, 3, 4, 54, 241, 462; and Germany, 3–4, 5–6, 240–244, 344–345; and human rights, 265; and industrial policy, 274–275; and infringement, 278; and intergovernmental conferences, 239, 241, 244, 249, 352; and Japan, 306–307; and Lomé Convention, 328–330; and François Mitterrand, 343–345; Monnet Plan, 179, 180, 181, 251, 335, 347, 349, 415; and national parliament, 195, 196, 217, 351, 352, 354, 463; and North Atlantic

Index

551

Treaty Organization, 360–362; and opposition to EU, 367; and Organization for Economic Cooperation and Development, 369; and origins of European integration, 81,183, 238, 375, 415–416, 462–463, 505; and presidency, 392; referenda in, 240, 398, 512; and Schengen Agreement, 412–413; and subsidiarity, 441; and Western European Union, 485, 487; and World War II, 346–347 Francovich v. Italy Case, 194, 273 Frankfurter Allgemeine Zeitung, 495 Fraud, 2, 30, 113, 194, 245, 411 Free Democrats, 318 Freedom and Democratic Party (Netherlands), 356 Free French, 180, 347 Free Trade Area (FTA), 154, 197, 198 Free Trade Area of the Americas (FTAA), 323 Freiheit Partei Österreich. See Austrian Freedom Party French Committee of National Liberation (CFLN), 347 French Modernization Plan. See Monnet Plan Friendship, Cooperation, and Mutual Assistance Treaty, 234 Friends of the Earth, 292 FTAA. See Free Trade Area of the Americas Functionalism, 245, 278

G5, 306 G7, 36, 221, 247, 254, 277, 370, 387, 388, 406, 409, 510, 513 G8, 247, 409 G24, 36, 247, 388, 477 G77, 328 Garrett, Geoffrey, 280 GATT. See General Agreement on Tariffs and Trade Gaullism, 3, 4, 54, 241, 462. See also De Gaulle, Charles Gaullists, 380 Gazprom, 409 General Affairs Council, 90, 217, 247, 490, 494 General Agreement on Tariffs and Trade (GATT), 76–80, 247–250, 489–491; and China, 41; and Common Agricultural Policy, 74, 128, 480–481; and Common Commercial Policy, 77–78; and competition policy, 94; Dillon Round of, 81, 85, 248; and Elysée Treaty, 162; and European Parliament, 213; and European Round Table of Industrialists, 222; and Generalized System of Preferences, 79; and Japan, 305; Kennedy Round of, 8, 78, 81, 85, 248, 306, 480; and Partnership and Cooperation Agreements, 89; and Preferential Trade Agreements, 430; and Russia, 407; Tokyo Round of, 81, 85, 248, 306, 480; and United States, 477–480; Uruguay Round of, 14, 17, 74, 80, 81, 85, 222, 239, 248, 334, 365, 371, 451, 478, 480–481, 489–491, 509, 512; and World Trade Organization, 489–491 General Agreement on Trade in Services (GATS), 17, 489

552

Index

Generalized System of Preferences (GSP), 22, 79, 80, 322, 429 Genscher, Hans-Dietrich, 144, 145, 218, 250–251, 376, 414, 427, 494 Genscher-Colombo Proposals, 140, 141, 185, 218, 251, 294, 418, 427, 434, 508 Georgia, 90 German Central Bank. See Bundesbank German Constitutional Court, 43, 254, 326, 466 German Democratic Republic. See East Germany Germany, 251–254; and Konrad Adenauer, 5–6; and Willy Brandt, 27; and budget, 130; and Bundesbank, 31–32; and Central and Eastern European States, 37; and cohesion policy, 46–50; and Cold War, 52–53; and Common Foreign and Security Policy, 84; and Commonwealth of Independent States, 90; and contact group, 99; and core group, 96, 262, 321; and Council of Ministers, 104; and decisionmaking, 120, 121, 138, 395; and Charles de Gaulle, 123–124; and democratic deficit, 132; and Economic and Monetary Union, 143–146, 149, 151, 156, 207–209, 287, 434; and environmental policy, 171–172; and Eurocorps, 175; and European Coal and Steel Community, 179; and European Court of Justice, 35, 194; and European Defense Community, 195–196; and European Parliament, 211; and European Police Agency, 216, 217; and federalism, 231, 232, 295, 438; and financial services, 88; and Fouchet Plan, 237; and France, 3–4, 5–6, 240–244, 344–345; founding of Federal Republic, 5, 375; and G7, 247; and General Agreement on Tariffs and Trade, 249, 250; and Walter Hallstein, 261–262; and human rights, 265, 266; and immigration, 269; and implementation, 272; and infringement, 278; and intergovernmental conferences, 343; and Israel, 5; and Japan, 306; and Joint Research Centers, 404; and Helmut Kohl, 317–319; and Latin America, 323; and Lomé Convention, 328–330; and Marshall Plan, 336; and national parliament, 351, 352; and North Atlantic Treaty Organization, 360; and Organization for Economic Cooperation and Development, 369; and origins of integration, 183, 238, 251–252, 462, 505; and Ostpolitik, 27, 54, 250, 252, 261, 375, 389; rearmament of, 6, 28, 195–196; and Russia, 407–409; and Schengen Agreement, 412–413; and Helmut Schmidt, 414; and Slovenia, 423; and South Africa, 428; and Switzerland, 444; and telecommunications policy, 447–452; and Trans-European Networks, 97; and Treaty on European Union, 253–254, 297; unification of, 54–55, 126, 186, 209, 219, 241, 253, 282, 295, 297, 318–319, 344–345, 368, 463, 510, 511; and United States, 479–480; and Yugoslavia, 494 Gibraltar, 229, 269, 314

Giraud, Henri, 347 Giscard d’Estaing, Valéry, 150, 184, 207, 243, 253, 254–255, 256, 318, 335, 414, 440, 455 Global Approach, 435 Global Mediterranean Policy, 337, 341–342 Goldman Sacks International, 457 Goldsmith, James, 367, 463 González, Felipe, 17, 45, 49, 50, 130, 255, 358, 457, 514 Gorbachev, Mikhail, 101, 251, 387, 407 Gradin, Anita, 245 Greece, 256–258; accession of, 166, 185, 204, 256, 309, 333, 334, 337, 437, 452, 508; and cohesion policy, 45–50; and Cyprus, 113; and decisionmaking, 120, 395; and energy policy, 169; and environmental policy, 171–172, 273; and European Center for the Development of Vocational Training, 179; and European Council, 190; and European Monetary System, 515; and infringement, 278; and Integrated Mediterranean Programs, 278; and North Atlantic Treaty Organization, 360; and Organization for Economic Cooperation and Development, 369; and Andreas Papandreou, 379; and Schengen Agreement, 413; and Single European Act, 418; and telecommunications policy, 447; and tourism policy, 456; and Western European Union, 486; and Yugoslavia, 494 Green Alternative Link, 366 Green currencies, 258 Greenland, 258–259, 397, 509 Green paper, 259, 449 Green Party (Germany), 172 Greenpeace, 292 Greens, 302, 366, 367, 368 Group of coordinators, 259 Group of correspondents, 259 Guardian, 133, 460 Guatemala, 411 Guigou, Elisabeth, 296, 398 Guigou Report, 144 Gulf Cooperation Council, 259 Gulf War, 175, 218, 259, 342, 464, 476–477, 486 Guyana, 223 Gyllenhammar, Pehr, 220 Gymnich Meeting, 217, 259,

Haas, Ernest, 279, 280, 283, 355 Hague Congress. See Congress of Europe Hague Platform, 261, 486 Hague Summit (December 1969), 27, 148, 184, 217, 263, 376, 507 Haiti, 83, 88, 323 Halifax, Lord, 347 Hallstein, Walter, 69, 123, 183, 253, 261–262, 340, 358, 416, 506 Hallstein Doctrine, 376 Hanover Summit (June 1988), 130, 424 Hard core, 262. See also Differentiated integration

Hard ECU, 262 Harmel Report, 360 Harmonization, 177, 193, 198, 420–421, 435 Haughey, Charles, 510 Havana Charter, 248 HDTV. See High-definition television Health policy, 9, 262–263 Heath, Edward, 263–265, 472, 488 Helms-Burton Act. See Libertad Act Helsinki Accords. See Helsinki Final Act Helsinki Final Act, 22, 40, 54, 264, 372, 494 Helsinki II. See Charter of Paris for a New Europe Hierarchy of Norms, 264 High Authority, 3, 103, 178, 179, 180, 181, 183, 191, 232, 264, 331, 340, 348, 369, 416, 417, 433, 462 High-definition television (HDTV), 220 High Level Group of Experts on the Common Foreign and Security Policy, 264 High Representative (for the Common Foreign and Security Policy), 84, 107, 244, 466 Historical institutionalism, 283–284 Hoffmann, Stanley, 280, 282 Holbrook, Richard, 257, 495 Honduras, 411 Hong Kong, 12, 41 Hopkins, Harry, 347 Horizon 2000, 137, 264 House of Commons, 453 House of Lords, 109, 454 Howe, Geoffrey, 472 Human rights, 8, 22, 40, 41, 43, 133, 167, 188, 265–268, 411, 465 Hungary, 22, 36–37, 40, 58, 59, 126, 166, 169, 268, 360, 362, 369, 385, 388, 406, 407, 483, 487, 510, 511, 515. See also Central and Eastern European States

IBC. See Integrated Broadband Communication Iceland, 21, 197, 198, 200, 201, 269, 359, 360, 413, 421, 486 IFOR. See Implementation Force IGC. See Intergovernmental Conference IMF. See International Monetary Fund Immigration policy, 9, 141, 229, 269–271, 313, 314, 315 Implementation, 68, 271–273, 422 Implementation Force (IFOR), 84, 385–386, 495–496 IMPs. See Integrated Mediterranean Programs Indonesia, 12, 13 Industrial policy, 274–277 Industrial Research and Development Advisory Committee (IRDAC), 277 Information society, 277 Infringement procedures, 272–273, 277–278 Institute for Advanced Materials, 310 Institute for European Affairs, 300 Institute for International Affairs, 433 Institute for Prospective Technological Studies, 310

Index

553

Institute for Remote Sensing Applications, 310 Institute for Transuranium Elements, 310 Institute of European–Latin American Relations (IRELA), 323 Institute of Safety Technology, 310 Integrated Broadband Communication (IBC), 7 Integrated Mediterranean Programs (IMPs), 46 Integration Theory, 278–291 Interest Groups, 291–294 Intergovernmental Conference (IGC), 118, 167, 294–297; 1950 IGC, 505; 1955–1956 IGC, 28, 178, 429, 462, 505; 1985 IGC, 47, 141, 185, 294–295, 343, 379, 418, 509 1991 IGC, 12, 13, 31–32, 58, 70, 71, 125, 126, 127, 144, 145, 146, 151, 186, 216, 218, 221, 225, 251, 259, 262, 295–296, 319, 331, 352, 354, 355, 356, 359, 432, 463–464, 466, 510–511; 1996–1997 IGC, 8, 13, 25, 30, 38, 58, 84, 104–105, 113, 115, 121, 131, 137, 139, 167, 168, 169, 216, 221, 226, 235, 236, 241, 244, 253, 264, 270, 296–297, 300, 301, 313, 314, 324, 334, 353, 354, 355, 387, 398, 411, 433, 443, 477–488, 513, 514 Intergovernmentalism, 105, 118, 139, 297, 280 Intergroups, 297 Interim agreement, 297–298 Interinstitutional agreements, 298 International Committee of the Movements for European Unity, 374 International Electrotechnical Committee, 200, 224 International Energy Agency, 370 International Monetary Fund (IMF), 90, 149, 178, 328, 389, 406, 430, 490 International Ruhr Authority (IRA), 298, 347, 375, 415 International Standards Organization (ISO), 224 International Telecommunications Union, 451 International Trade Organization (ITO), 248, 489 Internet, 176, 277 Intervention, 298 Intifada, 342 Investiture, 298 Ioannina Compromise, 121, 296, 298–300, 395, 512 IRA. See International Ruhr Authority Iran, 341, 457, 481 Iran-Libya Sanctions Act, 481 Iraq, 341 IRDAC. See Industrial Research and Development Advisory Committee IRELA. See Institute of European–Latin American Relations Ireland, 299–301; accession of, 197, 166, 184, 299, 389, 506–507; and cohesion policy, 45, 46, 49, 130; and Common Agricultural Policy, 299–300; and Common Fisheries Policy, 81; and Common Foreign and Security Policy, 84; and decisionmaking, 120, 395; and environmental policy, 171, 273; and European Court of Justice, 193; and European Monetary System, 208; and Garret FitzGerald, 236; and immigration policy, 269; and infringement, 278; and national

554

Index

parliament, 351; and neutrality, 218, 236, 300, 357, 367; and Organization for Economic Cooperation and Development, 369; and presidency, 140, 392; and referenda, 300, 366, 367, 397–398, 418, 509; and Schengen Agreement, 412, 414; and telecommunications policy, 447; and tourism policy, 456; and United Kingdom, 299–301; and Western European Union, 486, 487 Islamic Welfare Party (Turkey), 468–469 ISO. See International Standards Organization Isoglucose Case, 98, 119, 212, 301 Israel, 5, 23, 175, 213, 336, 337, 341 Italy, 301–304; and Giulio Andreotti, 11; and Central European Initiative, 40; and cohesion policy, 46; and Common Market, 85–86; and Conference on Security and Cooperation in the Mediterranean, 97; and core group, 262, 321; and decisionmaking, 120, 395; and Alcide de Gasperi, 121–122; and Economic and Monetary Union, 147, 151, 152, 287; and environmental policy, 171–172; and European Defense Community, 195–196; and European Monetary System, 207–208; and federalism, 231, 295; and G7, 247; and General Agreement on Tariffs and Trade, 249; and human rights, 265; and infringement, 278; and Japan, 80, 306, 307; and Joint Research Centers, 404; and North Atlantic Treaty Organization, 360; and Organization for Economic Cooperation and Development, 369; and origins of European integration, 416; and presidency, 144, 392; and Schengen Agreement, 413; and tourism policy, 456; and Western European Union, 485 ITO. See International Trade Organization

Japan, 12, 33, 35, 41, 80, 185, 220, 224, 274, 276, 293, 294, 305–309, 369, 395, 403, 404, 407, 476, 478 Jenkins, Roy, 149, 184, 185, 207, 309, 358, 375, 405, 433, 454, 473 JHA. See Justice and Home Affairs Joint Action, 309–310, 314, 428 Joint EU-U.S. (Transatlantic) Action Plan, 17, 358, 457, 477, 514 Joint Research Centers (JRCs), 64, 310, 404 Jordan, 23, 79, 342, 343 Jospin, Lionel, 240 JOULE, 310 JRCs. See Joint Research Centers Justice and Home Affairs (JHA), 310–316; and Amsterdam Treaty, 8, 316; and Commission, 57; and Committee of Permanent Representatives, 67; and Council of Ministers, 102, 105; decisionmaking, 117, 118, 120, 311–316, 357, 471; and Dublin Convention, 141–142, 269, 314; and European Council, 188, 189; and European Court of Justice, 194; and European Economic Area, 197; and European Parliament, 132, 212; and European Police Office, 216–217; and

External Frontiers Convention, 229, 269; and Group of Coordinators, 259; and human rights, 266; and immigration policy, 6, 269–271; and K.4 Committee, 69, 259, 311, 313, 317; and national parliaments, 352–354; and passerelle, 383; and presidency, 392; and Treaty on European Union, 186, 219, 225, 295, 387, 464–465; and Trevi Group, 69, 259, 310, 467; and United Kingdom, 216, 314, 472 Jumbo Council, 250 Juncker, Jean-Claude, 331 June 2 Movement, 368

K.4 Committee, 69, 259, 311, 313, 317 KALEIDOSCOPE, 111, 179, 317 Kangaroo Group, 317 Kantor, Mickey, 457 Karadic, Radovan, 493 Karamanlis, Konstantinos, 256 KAROLUS, 317 Kazakstan, 89, 90 Kennedy administration, 475 Kennedy Round, 78, 81, 85, 248, 306 Keohane, Robert, 280 Keynesianism, 125, 208, 344 Kiesinger, Kurt, 262 Kinkel, Klaus, 478 Kinnock, Neil, 473 Kirchberg Declaration, 317 Kissinger, Henry, 493 Klaus, Vaclav, 115 Kohl, Helmut, 317–319, 251–253; and budget, 130; and cohesion policy, 48, 50; and Jacques Delors, 58, 127; and Economic and Monetary Union, 144, 145, 185, 186, 240; and enlargement, 166; and European Political Union, 219; and federalism, 232; and German unification, 55, 186; and François Mitterrand, 253; and Treaty on European Union, 127, 427, 463, 464 Kohnstamm, Max, 3, 4 Korea, 12, 13, 41, 195, 276, 369 Korean War, 6, 195, 348, 360 Koschnik, Hans, 349–350, 493 Krag, Jens Otto, 135 Kuchma, Leonid, 90 Kuwait, 259, 341 Kyrgyzstan, 90 Labour Party (Ireland), 299 Labour Party (Malta), 334 Labour Party (UK), 118, 228, 303, 309, 367, 453, 472, 473 Lafarge Coppée, 220 Lamers, Karl, 321 Lamers Paper, 321 Languages, 211 Latin America, 79, 187, 321–324, 432, 511 Latin American Economic System (SELA), 322 Latin American Free Trade Association (LAFTA), 322

Latvia, 21–23, 385, 388. See also Baltic States League of Nations, 209, 278, 346 Lebanon, 23, 79, 336, 337, 342 Legal instrument, 324 Lega Nord, 380 Legitimacy, 2, 134, 226, 324–327 Lend Lease, 347 Leo XIII, 438 LEONARDO DA VINCI, 85, 161, 327, 387 Liberal, Democratic, and Reformist Party. See European Liberal, Democratic, and Reformist Party Liberal intergovernmentalism, 280–281, 282–288, 327 Liberal Party (Austria), 18 Libertad Act, 457, 481 Libya, 457, 481 Liechtenstein, 197, 202, 327 LIFE, 327 Liikanen, Erkki, 245 Lindberg, Leon, 283, 386 LINGUA, 160, 327, 427, 447 Lisbon Summit (June 1992), 50, 130, 494, 511 Lithuania, 21–23, 166, 385, 388, 514. See also Baltic States Lobbying, 291–294. See also Interest Groups Lockheed Martin, 11 Lomé Convention, 7, 30, 79, 137, 187, 322, 323, 328–330, 376–377, 429, 462, 493, 508 London Report, 218, 330 Long March rocket, 11 Lothian, Lord, 231 Lubbers, Ruud, 163, 298, 464 Luns, Joseph, 237, 355 Luxembourg, 330–332; and Belgium-Luxembourg Economic Union, 24; and Benelux, 25, 78, 113, 137, 269, 295, 367, 373, 375, 415, 416, 485; and Brussels Treaty, 28, 142; and citizenship, 43; and Common Market, 85; and decisionmaking, 120, 395; and Economic and Monetary Union, 149; and empty chair crisis, 262; and establishment of European Community, 183, 373, 505; and Eurocorps, 175; and European Coal and Steel Community, 179; and European Defense Community, 195; and European Monetary System, 208; and European Parliament, 211; and European Political Community, 217; and infringement, 278; and 1991 intergovernmental conference, 464; and Organization for Economic Cooperation and Development, 369; and presidency, 392; and Jacques Santer, 411–412; and Schengen Agreement, 412–413; and Robert Schuman, 414–415; and telecommunications policy, 447; and Gaston Thorn, 454–455; and tourism policy, 456; and Western European Union, 485 Luxembourg Compromise, 69, 104, 124, 162–163, 184, 239, 262, 332, 506 Luxembourg Declaration, 202, 411 Luxembourg Process, 197

Index

555

Luxembourg Summit (December 1997), 228, 434, 469 Lyonnaise des Eaux, 221

Maastricht II, 8 Maastricht Summit (December 1991), 45, 49, 127, 130, 145, 186, 187, 218, 295–296, 333, 392, 424, 425, 427, 454, 463, 472, 511 Maastricht treaty, 333. See also Treaty on European Union Macedonia, 40, 257, 333, 379, 388, 494 Macmillan, Harold, 201, 263, 282, 333, 471, 488 MacSharry, Ray, 333–334 MacSharry Plan, 333–334 MacSharry Reforms, 39, 73–74, 333–334 Madagascar, 506 Mad cow disease. See Bovine Spongiform Encephalopathy Madeira, 376 Madrid Peace Conference, 342 Madrid Summit (December 1995), 21, 31, 167, 169, 175, 205, 428, 514 Madrid Summit (June 1989), 130, 144, 151, 185 Maghreb, 79 MAGP. See Multi-Annual Guidance Program MAI. See Multilateral Agreement on Investment Majone, Giandomenico, 288, 425 Major, John, 26, 186, 187, 227, 264, 424, 425, 427, 454, 463, 464, 472, 494 Majority voting. See Decisionmaking; Qualified majority voting; Unanimity Malaysia, 12, 13 Malfatti, Franco, 334, 358, 507 Malta, 24, 38, 166, 167, 175, 296, 334, 336, 337, 338, 339, 511 Mandela, Nelson, 428 Mansholt, Sicco, 183, 334–335, 358 Mansholt Plan, 335 Marie, André, 415 Marjolin, Robert, 45, 76, 183, 261, 335, 455 Market access strategy, 335 Marshall, George, 336 Marshall Plan, 48, 52, 53, 121, 130, 216, 336, 347, 363, 369, 371, 374, 475 Martino, Gaetano, 303 Mauritius, 328 MCAs. See Monetary Compensatory Amounts McCloy, John, 180, 181, 346 McDonnell Douglas, 8 McDougall Report, 439 MCI, 451 Meade, James, 77 MED 12, 24, 97, 175, 336–339 MEDA, 336 MEDIA, 14–18 MEDIA II, 111 Mediterranean Free Trade Area, 24, 175 Mediterranean policy, 203–205, 336–340 Member states, 340. See also Austria; Belgium; Denmark; Finland; France; Germany; Greece;

556

Index

Ireland; Italy; Luxembourg; Netherlands; Portugal; Spain; Sweden; United Kingdom Mendès-France, Pierre, 347 MERCOSUR, 323, 340, 432 Merger Control, 340 Merger policy, 68, 87, 93 Merger Task Force, 68, 340 Merger Treaty, 69, 340, 506 Messina Conference, 4, 182, 201, 330, 331, 340, 429, 505 Mexico, 12, 155, 322, 323, 405, 411 MFN. See Most-favored nation Middle East, 83, 184, 189, 217–219, 228, 258, 341–343, 337, 469, 475, 476, 483 Middle East War. See Arab-Israeli War Milan Summit (June 1985), 11, 141, 185, 189, 190, 294, 343, 509 Mill, John Stuart, 438 Milosevic, Slobodan, 494, 495 Mitrany, David, 245, 278–279 Mitsotakis, Konstantinos, 256 Mitterrand, François, 343–345; and Charles de Gaulle, 124, 162; and Jacques Delors, 125, 127; and Draft Treaty Establishing the European Union, 232; and federalism, 232; and Economic and Monetary Union, 144, 145, 185; and European Bank for Reconstruction and Development, 178; and European Monetary System, 150; and European Parliament, 239; and European Political Union, 219; and European Round Table of Industrialists, 220; and Fontainebleau Summit, 7, 236; and Germany, 240–243; and Felipe González, 253; and history of European integration, 238; and Helmut Kohl, 253, 318; and North Atlantic Treaty Organization, 362; and Single European Act, 239; and single market program, 239; and Treaty on European Union, 127, 239, 463; and Yugoslavia, 494 Mixed agreements, 345 Moldova, 89, 90 Molitor Group, 345 Mollet, Guy, 348, 359 Monetary Committee, 69, 464 Monetary Compensatory Amounts (MCAs), 258, 346 Mongolia, 89, 447 Monnet, Jean, 238, 346–349; and Dean Acheson 2; and Action Committee for the United States of Europe, 3–4; and Konrad Adenauer, 6; and European Atomic Energy Community, 177, 182, 341; and European District, 28; and federalism, 231–232; and High Authority, 264, 340; launch of European Coal and Steel Community, 179–181, 374–375; and Monnet Method, 24, 129, 279; and Monnet Plan, 125, 179, 180, 181, 251, 335, 347, 349, 415; and Schuman Plan, 2, 179, 180, 195, 252, 261, 298, 331, 347–348, 375, 416, 429; and Paul-Henri Spaak, 3; and United States, 346

Monnet method, 166, 349 Monnet Plan, 179, 180, 181, 251, 335, 347, 349, 415 Monod, Jérôme, 221 Monteiro, Manuel, 390 Montenegro, 487 Montreal Protocol, 170, 173 Moravcsik, Andrew, 280 Morocco, 24, 82, 213, 249, 271, 336, 337 Moscow Memorandum, 18 Mostar, 83, 349–350, 495. See also Yugoslavia Most-favored nation (MFN), 22, 41, 77, 248 Movement Républicain Populaire (MRP), 196, 303, 415 MRAs. See Mutual Recognition Agreements MRP. See Movement Républicain Populaire Multi-Annual Guidance Program (MAGP), 82 Multi-Fibre Agreement, 85 Multilateral Agreement on Investment (MAI), 371 Multi-speed Europe, 138. See also Differentiated integration Multistate drug application procedure, 401 Mussolini, Benito, 121, 231 Mutual recognition, 35, 39, 401, 422, 435 Mutual Recognition Agreements (MRAs), 436 NACC. See North Atlantic Cooperation Council NAFTA. See North American Free Trade Agreement National Alliance (Italy), 302, 380 National Assembly, 195, 196, 217, 463 National Economic Development Organization, 275 National Front (Belgium), 380 National Front (France), 380 Nationalist Party (Malta), 334 National parliaments, 13, 19, 96, 132, 214–215, 351–355, 393, 483 Nationalrat, 19, 353 NATO. See North Atlantic Treaty Organization Nazi Germany, 5 NCI. See New Community Instrument Nenni Socialists, 3 Neofunctionalism, 279, 282, 355 Netherlands, 355–357; and Benelux, 24, 25, 78, 113, 137, 269, 295, 367, 373, 375, 415, 416, 485; and Beyen Plan, 26, 182, 462; and Black Monday, 26, 511; and Brussels Treaty, 142; and budget, 356; and citizenship, 43; and cohesion policy, 50–51; and Common Market, 85; and decisionmaking, 120, 395; and democratic deficit, 131–132; and Economic and Monetary Union, 149; and empty chair crisis, 262; and Energy Charter, 163, 409, 513; and environmental policy, 35, 171; and establishment of the European Community, 183; and European Coal and Steel Community, 179; and European Defense Community, 195; and European Political Community, 317; and European Monetary System, 208; and federalism, 231; and Fouchet Plan, 24; and Germany, 357; and implementation, 272; and infringement, 278; and intergovernmental conferences, 26, 355, 464, 511; and Joint Research Centers, 404; and Justice

and Home Affairs, 312; and national parliament, 351–352; Organization for Economic Cooperation and Development, 369; and origins of European integration, 393, 505; and presidency, 26, 186, 296, 511; and Schengen Agreement, 412–413; and telecommunications policy, 451; and Western European Union, 485 Netherlands Antilles, 294 Neutrality, 357–358; Austrian, 18–19, 357–358; and Common Foreign and Security Policy, 84; Irish, 218, 236, 300, 357, 367; Finnish, 235, 357–358; Swiss, 18, 357–358, 444; Swedish, 357–358 New approach, 435 New Atlantic Charter, 493 New Commercial Policy Instrument, 358 New Community Instrument (NCI), 358 New Deal, 181, 245, 279 New Democracy Party (Greece), 256 New European Peace and Security System (NPSS), 384–386 New Transatlantic Agenda (NTA), 17, 85, 223, 358, 457, 458, 477, 478, 514 New York University, 101 New Zealand, 12, 13, 263, 369 Nicaragua, 411 Nigeria, 83, 88 Nine, 358 1992 Program. See Single Market Program Nixon Shock, 34, 149, 305, 476 Noël, Emile, 358–359 Nomination procedure, 359 Noncompulsory expenditure, 29–30, 95 Non-governmental organizations (NGOs), 214, 341, 367, 368 Nonpaper, 359 Non-Tariff Barriers (NTBs), 78, 79, 86, 87, 305–306. See also Single Market Program Noordwijk Declaration, 359 Nordic Council, 21, 138, 359 North American Free Trade Agreement (NAFTA), 34, 155, 323 North Atlantic Cooperation Council (NACC), 359, 384 North Atlantic Treaty, 142 North Atlantic Treaty Organization (NATO), 360–362, 384, 430; and Austria, 19; and Baltic States, 23; and Bosnia, 385–386; and Canada, 33; and Central and Eastern European States, 483; and Combined Joint Task Forces, 56; and Common Foreign and Security Policy, 84; enlargement of, 55, 167; establishment of, 2, 6; and European Defense Community, 195–196; and European Security and Defense Identity, 223; and France, 124, 241, 242, 244, 453; and Germany, 6, 27, 252, 318, 376, 414, 505; and Greece, 257; and Italy, 121–122; and North Atlantic Cooperation Council, 359; and neutrals, 357; and Norway, 363; origins of, 373; and Partnership for Peace, 380; and Poland, 388; and Russia, 406; and Spain, 355, 431; and Sweden, 442–443; and

Index

557

Turkey, 467, 469; and Western European Union, 261, 317, 386, 485–488; and United States, 475, 477; and Yugoslavia, 385–386, 495–496 Northern Ireland, 71 Northern Italy, 367, 369 North Sea, 81, 82 Norway, 362–364; and Baltic Council, 21; and Common Fisheries Policy, 81; and Economic and Monetary Union, 149; and environment policy, 201; and European Economic Area, 197–198; membership application of, 184, 506, 507, 512; and Nordic Council, 359; and North Atlantic Treaty Organization, 360, 442; and Organization for Economic Cooperation and Development, 369; referenda in, 363–364; and Schengen Agreement, 421; and Western European Union, 486 NPSS. See New European Peace and Security System NTA. See New Transatlantic Agenda NTBs. See Non-tariff barriers Nuclear Nonproliferation Treaty, 83 NYNEX, 451

OAS. See Organization of American States Occupied Territories, 341. See also Palestine OCTs. See Overseas Countries and Territories “Ode to Joy,” 11 OECD. See Organization for Economic Cooperation and Development OEEC. See Organization for European Economic Cooperation Office for Harmonization in the Internal Market: Trademarks, Designs, and Models. See Community Trademark Office Office for Official Publications of the European Communities, 365 Office of Telecommunications (OFTEL), 450–451 Official Journal of the European Communities (OJ), 108, 200, 313, 316, 365 OFTEL. See Office of Telecommunications Olivetti, 220 Oman, 259 Ombudsman, 214, 365, 465, 514 Omnibus Trade Act, 490 113 Committee, 67, 69, 78, 365, 490 Open Network Provisions (ONP), 366, 450 Open Network Provisions Committee, 450 Openness. See Transparency Opinion, 366 Opposition movements, 136, 366–369 Opt out, 138, 369 Oreja, Marcelino, 296, 398 Organization for Economic Cooperation and Development (OECD), 247, 299, 369–371, 372, 430, 443, 450, 467 Organization for European Economic Cooperation (OEEC), 18, 52, 53, 76, 335, 336, 369, 371–372, 374, 429, 430

558

Index

Organization for Security and Cooperation in Europe (OSCE), 39, 167, 234, 235, 264, 359, 372, 384–385, 406, 409, 477, 495, 519 Organization of American States (OAS), 323 Organization of Petroleum Exporting Countries (OPEC), 507 Organized European Space. See European Model of Society Ortoli, François-Xavier, 179, 309, 358, 375 OSCE. See Organization for Security and Cooperation in Europe Oslo Peace Process, 342 Ostpolitik, 27, 54, 250, 252, 261, 375, 389 Outermost regions, 376 Overseas countries and territories (OCTs), 376–377 Owen, David, 496 Own resources, 29, 131, 377

Pact on Stability in Europe. See Balladur Plan Padania, 367 Padoa-Schioppa, Tommaso, 379, 439. See also Padoa-Schioppa Report Padoa-Schioppa Report, 47–48, 379 Palestine, 24, 175, 341–342 Palestine Liberation Organization (PLO), 341–342, 483 Palma Doctrine, 310 Palme, Olaf, 442 Panama, 322, 405, 411 Pan Europa, 100, 209, 210 Papandreou, Andreas, 256–257, 343, 379 Papandreou, Vaso, 256 Papua New Guinea, 12 Paraguay, 405 Paris Peace Conference, 121 Paris Summit (October 1972), 219, 225, 379, 485, 507 Paris Summit (December 1974), 188, 217, 507 Paris Treaty. See Treaty of Paris Parliamentary assizes. See Assizes Partnership and Cooperation Agreements (PCAs), 88–90, 380, 408–409 Partnership for Peace (PfP), 235, 362, 380, 384, 443 Party groups in the European Parliament, 206, 227, 380–383, 522 Party of the European Socialists (PES), 303, 380–382, 383, 390, 426 Pasqua, Charles, 243 Passerelle, 270, 351, 383 Passport, 383–384 PCAs. See Partnership and Cooperation Agreements Peacekeeping, 56, 384–386 People’s Party (Portugal), 390 Permissive consensus, 386 Pershing missiles, 318 Peru, 10, 405 PES. See Party of the European Socialists Pétain, Philippe, 415 Petersberg Declaration, 386–387, 486 Petersberg tasks, 10

PETRA, 161, 387 Peugeot, 293 PfP. See Partnership for Peace PHARE (Pologne et Hungrie: Actions pour la Reconversion Économique), 21, 36–37, 168, 177, 257, 336, 387, 388, 406, 458 Philippines, 12, 13 Philips, 220, 355 PHILOXENIA, 456 Pillars, 387. See also Treaty on European Union Pius XI, 438 Platform on European Security Interests. See Hague Platform Pleven, René, 195, 217, 348, 505. See also Pleven Plan Pleven Plan, 417 Pöhl, Hans-Otto, 126 Poland, 21, 22, 36–37, 40, 58, 59, 126, 166, 169, 360, 362, 369, 385, 387–388, 406–407, 412, 483, 510, 511, 515. See also Central and Eastern European States Polaris missiles, 333 Political committee, 217, 218, 388 Political spring (Greece), 380 Political Union. See European Political Union Pologne et Hungrie: Actions pour la Reconversion Économique (PHARE), 21, 36–37, 168, 177, 257, 336, 387, 388, 406, 458 Pompidou, Georges, 124, 184, 239, 253, 261, 263, 331, 376, 379, 388–389, 485 Poos, Jacques, 331, 496 Popular Republican Movement. See Movement Républicain Populaire Portugal, 389–391; accession of, 79, 80, 166, 185, 204, 344, 418, 434, 437, 508–509; cohesion policy, 45–50, 79, 130; and Common Fisheries Policy, 82; and decisionmaking, 120, 395; and Economic and Monetary Union, 152; and environmental policy, 171–172, 272; and European Free Trade Agreement, 201; and European Monetary System, 208; and European Parliament, 380; and infringement, 278; and Mediterranean policy, 337; and national parliament, 351; and North Atlantic Treaty Organization, 360; and Organization for Economic Cooperation and Development, 369; and presidency, 14, 392; and relations with Latin America, 321–323; and Schengen Agreement, 413; and single market program, 307; and South Africa, 428; and telecommunications policy, 447, 449; and Western European Union, 486 Preaccession strategy, 391. See also Central and Eastern European States Preferential trade agreements (PTAs), 391, 430–431 Preliminary ruling, 191, 192, 193, 272. See also European Court of Justice Presidency, 392. See also Council of Ministers; European Council Prodi, Romano, 57–58, 60, 64, 68, 515, 527 Proportionality, 392, 440

Protocol, 392–393 Proton rocket, 11 Proximity. See Closeness PTAs. See Preferential trade agreements

Qatar, 259 QMV. See Qualified majority voting QRs. See Quantitative restriction Quaestor, 382, 395 Qualified majority voting (QMV), 24, 104–105, 119, 120, 124, 126, 131, 239, 253, 318, 325, 395, 418; and empty chair crisis, 162–163; and Ioannina Compromise, 298–299; and Amsterdam Treaty, 8, 10 Quantitative restriction (QRs), 77, 78, 80 Quebec, 33

RACE. See Advanced Communications Technologies for Europe Rally for the Republic (RPR), 243 Ramadier, Paul, 415 RAPHAEL, 111, 397 RAPID, 397 Rapporteur, 382, 397 Ratification, 397 Ratification crisis, 28, 38, 50, 57, 98, 125, 128, 186, 209, 226, 258, 264, 324, 325, 327, 386, 397–398, 411, 453, 511, 512 Reagan, Ronald, 414, 453 Reagan administration, 476 Reasoned opinion, 397 Recommendation, 397 REDWG. See Regional Economic Development Working Group Referenda, 45, 397–398, 472; in Austria, 9, 366, 513; in Denmark, 128, 134–136, 186, 226, 324, 366, 368, 397–398, 418, 466, 511; in Finland, 234, 240, 398, 512; in France, 240, 398, 512; in Greenland, 259; in Ireland, 300, 366, 367, 397–398, 418, 509; in Norway, 363–364; in Sweden, 364, 366, 442–443; in UK, 397, 508 Reflection group, 139, 270, 296, 398, 466, 514 Refugee policy, 141–142, 269, 314. See also Justice and Home Affairs Regional Economic Development Working Group (REDWG), 342–343 Regional policy, 46, 398, 425. See also Cohesion policy Regulation, 398 Regulatory policy, 399–402 Report on European Institutions. See Three Wise Men Republikaner Party, 366 Research and Technological Development (RTD) policy, 156, 224, 237–238, 275–276, 285, 403–405, 437 Research Framework Program. See Framework Program for Research and Technological Development Resistance movement, 210, 231

Index

559

Rey, Jean, 305, 334, 340, 357, 405, 506 Reynaud, Paul, 415 Richardson, Keith, 222 Right of establishment, 405 Rio Earth Summit, 172 Rio Group, 323, 405, 511 Robbins, Lionel, 231, 245, 298 Romania, 22, 36–37, 40, 166, 385, 388, 405, 487, 513. See also Central and Eastern European States Rome Declaration, 486 Rome Summit (December 1990), 144, 295, 407 Rome Treaty. See Treaty of Rome Roosevelt, Franklin, 347 Royal Commission on Environmental Policy, 171 Royaumont Process, 406 RPR. See Rally for the Republic Ruhr, 180, 181, 182, 298, 348, 415, 417 Russia, 21, 83, 89, 99, 102, 233, 242, 247, 362, 369, 388, 406–410 Rwanda, 83, 88 Saar, 416 Saint-Gobain, 220 Sakharov Prize for Freedom of Thought, 411 Sanctions, 428 San José Declaration, 323 San José Dialogue, 411 San José Group, 411 Santer, Jacques, 411–412; and allocation of portfolios, 28, 60; appointment of, 57, 58, 298, 330, 332, 513; and Leon Brittan, 28; and budget, 245; and Confidence Pact on Employment, 97; and European Parliament, 213; and New Transatlantic Agenda, 358, 514; resignation of, 58, 515; and Transatlantic Business Dialogue, 457; and Trans-European Networks, 97, 459 SAR. See Special Administrative Region of Hong Kong Saudi Arabia, 259 SAVE. See Specific Actions for Vigorous Energy Efficiency Scheingold, Stuart, 386 Schengen Agreement, 8, 138, 269, 296, 316, 412–414, 421, 510 Schengen II Agreement, 413 Schengen Information System (SIS), 414 Scheuble, Wolfgang, 321 Schlüter, Poul, 343 Schmidt, Helmut, 150, 185, 207, 254, 318, 414 Schumacher, Kurt, 252 Schuman, Robert, 2, 6, 45, 77, 121, 179, 180, 227, 238, 331, 374, 375, 414–417, 505. See also Schuman Day; Schuman Declaration; Schuman Plan Schuman Day, 417 Schuman Declaration, 45, 227, 232, 336, 416 Schuman Plan, 179, 180, 195, 252, 261, 347–348, 375, 429 Scotland, 46, 71, 367, 380. See also United Kingdom

560

Index

Scrutiny, 214, 417 SDI. See Strategic Defense Initiative SEA. See Single European Act Seanad, 300 SEDOC. See European System for the International Clearing of Vacancies and Applications for Employment Séguin, Philippe, 243 SEM 2000. See Sound and Efficient Management Initiative Serbia, 83, 88, 117, 423, 487, 493–496 Seville Conference, 456–457 SFOR. See Stabilization Force Simitis, Kostas, 256, 257 Simplification, 133 Singapore, 12, 13 Single currency. See Economic and Monetary Union Single European Act (SEA), 418, 436; and cohesion policy, 47, 437, 439; comparison with Amsterdam Treaty, 10; and decisionmaking, 2, 97, 104, 131, 211, 213, 272, 275, 325, 351, 354, 382, 395; and Economic and Monetary Union, 144, 148; and education policy, 160; and environmental policy, 75, 170, 205, 399; and European Parliament, 1, 211, 213; and European Political Cooperation, 218, 464; and France, 239, 344; and Germany, 253, 318; and integration theory, 280–281, 327; and Justice and Home Affairs, 310; negotiation of, 11, 294–295, 419, 509; origin of, 141, 185, 188, 189, 221, 222, 237, 434, 488; ratification of, 135, 366, 367, 398, 418; and research and technological development policy, 403; and Schengen Agreement, 269; and social policy, 43, 425, 483 Single Market Program (SMP): and Cecchini Report, 35–36, and cohesion policy 47; and Common Market, 85; and company law, 91; and Jacques Delors, 125–126, 232; and Economic and Monetary Union, 146, 147, 152, 153, 154, 454; and energy policy, 165; and European Free Trade Association, 79; and European Political Union, 219; and European Round Table, 221; and Fortress Europe, 237; and France, 344–345; and Monnet method, 349; negotiation of, 185, 186, 225, 294–295, 512; and Padoa-Schioppa report, 379; and Jacques Santer, 411–412; and Single European Act, 98, 418; and Sutherland Report, 447; and Switzerland, 444; and telecommunications, 450; and Treaty on European Union, 463; and United Kingdom, 453 SIS. See Schengen Information System Six, 423 Slovakia, 37, 40, 115, 385, 407, 423, 483, 513. See also Central and Eastern European States Slovenia, 22, 40, 59, 166, 169, 218, 242, 388, 423, 494, 511, 514, 515. See also Central and Eastern European States Small and medium-sized enterprises (SMEs), 177, 202, 423, 457

SMEs. See Small and medium-sized enterprises Smith, John, 473 Smithsonian Agreement, 149, 423 SMP. See Single Market Program Snake, 149, 150, 206, 423 SNB. See Special Negotiating Body Soames, Christopher, 424. See also Soames Affair Soames Affair, 424 Soares, Mário, 210, 389 Social chapter, 187, 344, 369 Social Charter, 126, 186, 225, 227, 344, 424, 426, 454–455, 473, 510 Social Democratic Party (Austria), 18 Social Democratic Party (Denmark), 136, 368 Social Democratic Party (Germany), 3, 196, 252, 254, 303, 318, 496 Social Democratic Party (Portugal), 390 Social Democratic Party (Sweden), 443 Social Democratic Party (UK), 473 Social dialogue, 424–425 Social dimension. See Social Policy Socialist Party (France), 344 Socialist Party of Greece (PASOK), 256 Socialist Party (Portugal), 390 Socialist Party of Spain (PSOE), 255 Socialist People’s Party (Denmark), 368 Social partners, 414, 425 Social policy, 43, 46, 395, 420, 425–427, 465, 483; and Amsterdam Treaty, 9; and social dialogue, 424–425; and social partners, 414, 425; and social protocol, 43, 118, 127, 297, 392, 395, 426, 427, 465; and Treaty on European Union, 43, 118, 225, 424, 426–427 Social protocol, 43, 118, 127, 297, 392, 395, 426, 427, 465 SOCRATES, 12, 160–161, 187, 327, 427 Soederman, Jacob, 365 Solemn Declaration on European Union, 110, 141, 160, 218, 225, 251, 294, 318, 330, 427, 418, 509 Sound and Efficient Management Initiative (SEM 2000), 245, 427 Sound Financial Management Group, 245, 428 South Africa, 83, 189, 390, 428–429 Southern African Development and Cooperation Conference, 428 Soviet Union, 415–416; and Austria, 18; and Baltic States, 21; and Central and Eastern European States, 36; and Cold War, 51–55, 122, 158, 195, 209, 241, 251, 336, 357, 373, 415–416, 476; collapse of, 54, 331, 476; and Common Foreign and Security Policy, 189; and Commonwealth of Independent States, 88–89; and Council for Mutual Economic Assistance, 101; and Energy Charter, 163; and environmental policy, 173; and Finland, 234; and Greece, 257; and Middle East, 342–343; and North Atlantic Treaty Organization, 360–361; and Organization for Security and Cooperation in Europe, 372; and Trade and Cooperation Agreement, 447, 456; and Yugoslavia, 494

Spaak, Paul-Henri, 3, 24, 182, 210, 331, 340, 341, 348, 429–430, 505. See also Spaak Report Spaak Report, 429 Spain, 430–433; accession of, 166, 185, 204, 255, 344, 418, 430–431, 434, 437, 441, 508, 509; and cohesion policy, 45–49, 79, 130; and Commission, 59; and Common External Tariff, 80; and Common Fisheries Policy, 81–82; and Community Trademark Office, 91; and decisionmaking, 120, 395; and Economic and Monetary Union, 145, 152; and environmental policy, 171–172, 273; and European Monetary System, 208; and Ioannina Compromise, 298–299; and infringement, 278; and Latin America, 321–323; and Mediterranean Policy, 337; and national parliament, 351; and North Atlantic Treaty Organization, 360; and presidency, 392; and Schengen Agreement, 413; and single market program, 307; and South Africa, 428; and telecommunications policy, 447, 451; and Western European Union, 486 Special Administrative Region (SAR) of Hong Kong, 41 Special Committee for Agriculture, 69 Special Negotiating Body (SNB), 433 Special Programs for the Victims of Apartheid, 428–429 Specific Actions for Vigorous Energy Efficiency (SAVE), 433 Spierenburg, Dirk, 433. See also Spierenburg Report Spierenburg Report, 65, 66, 433 Spillover, 279–280, 355 Spinelli, Altiero, 101, 109, 125, 141, 184, 210, 231, 232, 278, 433–434, 439, 508 Sport, 9 SPRINT. See Strategic Program for Innovation and Technology Transfer STABEX. See System for the Stabilization of Export Earnings from Products Stability and Growth Pact, 434, 514–515 Stability Pact (for Central and Eastern Europe). See Balladur Plan Stabilization Force (SFOR), 385, 495–496 Standards and Conformity Assessment, 434–436 Standing Committee on Agricultural Structures, 74, 436 STAR. See Committee on Agricultural Structures and Rural Development State aids, 436. See also Competition policy Statement of Assurance, 108 Statistical Office of the European Communities (EUROSTAT), 402, 436 Stockholm Conference. See Conference on the Human Environment Stoltenberg, Gerhard, 144 Strasbourg, 102, 109, 141, 211, 239, 382, 414, 436–437 Strasbourg Summit (December 1989), 130, 144, 178, 186, 189, 295, 510 Strategic Defense Initiative (SDI), 219–220

Index

561

Strategic Program for Innovation and Technology Transfer (SPRINT), 437 Stresa Conference, 72, 335, 437, 506 Strübe, Jurgen, 457 Structural funds, 5, 19, 39, 47–50, 74, 177, 219, 223, 300, 390 Structural policy, 437. See also Cohesion policy Structured dialogue, 437–438. See also Central and Eastern European States Stuttgart Declaration. See Solemn Declaration on European Union Suarez, Adolfo, 255 Subsidiarity, 66, 82, 127, 132, 133, 233, 356, 392, 402, 422, 438–441 Sudan, 83, 328 Suez Crisis, 333, 359 Summit, 4, 441. See also European Council Supranationalism, 118, 131, 441 Supremacy of European Community Law, 441–442. See also European Court of Justice Sutherland, Peter, 442, 457. See also Sutherland Report Sutherland Report, 442 Sweden, 442–443; accession of, 166, 202, 226, 298, 411, 479, 511, 512; and Baltic Council, 21; and Central and Eastern European States, 38; and citizenship, 43; and cohesion policy, 50, 437; and Common Agricultural Policy, 75, 75; and Common Commercial Policy, 76, 248; and Common External Tariff, 80–81; and Common Foreign and Security Policy, 83, 84; and Common Market, 86, 435; and competition policy, 86, 92–95; and decisionmaking, 120, 395; and Economic and Monetary Union, 149; and environmental policy, 171, 172, 173; and European Economic Area, 197–198; and European Free Trade Association, 201; and neutrality, 357–358; and Nordic Council, 359; and Norway, 362–363; and Organization for Economic Cooperation and Development, 369; and presidency, 392; referendum in, 364, 366, 397, 442–443; and Schengen Agreement, 413; and transparency, 105, 133, 460; and Western European Union, 235, 486–487 Switzerland, 134, 166, 167, 197, 199, 200, 201, 248, 288, 327, 369, 443–445, 511; membership application of, 202, 444; and neutrality, 357–358, 444; referendum in, 358, 444 Syria, 24, 79, 213, 336, 337, 342 SYSMIN. See System for the Stabilization of Export Earnings from Minerals System for the Stabilization of Export Earnings from Minerals (SYSMIN), 329, 445. See also Lomé Convention System for the Stabilization of Export Earnings from Products (STABEX), 329, 445. See also Lomé Convention TABD. See Transatlantic Business Dialogue

562

Index

TACIS. See Technical Assistance for the Commonwealth of Independent States TACs. See Total Allowable Catches TAD. See Transatlantic Declaration TAFTA. See Transatlantic Free Trade Area Taiwan, 12, 13 Tajikistan, 90 Target price, 72 TAS. See Technical Advisory Service Task Force for Human Resources, Education, Training, and Youth, 166, 187 Taylor, Paul, 280 TCAs. See Trade and Cooperation Agreements Technical Advisory Service (TAS), 203, 205 Technical Assistance for the Commonwealth of Independent States (TACIS), 89, 336, 407–409 Telecommunications policy, 447–452 Telefonica, 451 Television Without Frontiers, 14–17, 452 Telia, 451 Temporary Committee of Enquiry, 452 TEMPUS. See Trans-European Mobility Scheme for University Students Ten, 452 TENs. See Trans-European Networks TEU. See Treaty on European Union Thailand, 12, 13 Thatcher, Margaret, 453–454; and antifederalism, 28; and Leon Brittan, 27; and Budget, 236; and cohesion policy, 47, 48; and Council of Ministers, 103; and Etienne Davignon, 117; and democratic deficit, 134; and France, 243; and Edward Heath, 363–364; and industrial policy, 274; and Helmut Kohl, 318; and opposition to German unification, 253; and Single European Act, 11, 343, 418; and single market program, 185; and social policy, 424–425; and Treaty on European Union, 472–473 THERMIE, 310, 454 Third Countries, 454 Third Pillar, 454 Thorn, Gaston, 330, 375, 454–455 Three Wise Men, 335, 455 Tinbergen, Jan, 77 Tindemans, Leo, 24, 294, 438–439, 455, 508. See also Tindemans Report Tindemans Report, 439, 455 Tokyo Round, 81, 85, 248, 306, 480 Total Allowable Catches (TACs), 82, 455, 457 Tourism, 455–456 Trade and Cooperation Agreements (TCAs), 21–22, 36–37, 88–89, 101, 380, 407, 456 Trade Assessment Mechanism, 307 Trademark Office. See Community Trademark Office Trade-Related Intellectual Property Rights (TRIPS), 489 Transatlantic Action Plan. See Joint EU-U.S. (Transatlantic) Action Plan

Transatlantic Agenda. See New Transatlantic Agenda Transatlantic Business Dialogue (TABD), 456–457, 481 Transatlantic Declaration (TAD), 11, 17, 58, 358, 458, 477, 511 Transatlantic Economic Area, 458 Transatlantic Free Trade Area (TAFTA), 458, 478, 481 Trans-European Mobility Scheme for University Students (TEMPUS), 458–459, 447, 458 Trans-European Networks (TENs), 97, 128, 204, 212, 220, 221, 412, 459, 461, 465 Translation Center for Bodies of the European Union, 459 Transparency, 9, 105, 133, 459–460 Transport policy, 460–462 Treaties of Rome. See Treaty of Rome Treaty of Economic, Social, and Cultural Collaboration and Collective Self-Defense. See Brussels Treaty Treaty of Friendship and Reconciliation. See Elysée Treaty Treaty of Maastricht. See Treaty on European Union Treaty of Paris, 179, 180, 181, 331 Treaty of Rome, 200, 462–463; and accession, 166; and budget, 28; and cohesion policy, 46–47; and Common Agricultural Policy, 71; and Common Commercial Policy, 37, 76, 176, 248, 305, 365, 490; and Common Market, 85–88; and company law, 91; and competence, 440; and competition policy, 86–87, 92–95; and Council of Ministers, 102; and decisionmaking, 45, 123–124; and Economic and Monetary Union, 148; and Economic and Social Committee, 153; and education policy, 160; and energy policy, 163–164; and environmental policy, 172; and European Atomic Energy Community, 177–178; and European Community law, 191, 277, 391; and European Economic Area, 197, 202; and European Free Trade Association, 201; and European Investment Bank, 203; and free movement, 42; and industrial policy, 274–275; and Justice and Home Affairs, 313–315; negotiation of, 183, 238, 331, 303, 430; and overseas countries and territories, 376–377; preamble of, 110, 217; and regional policy, 399; and research and technological development policy, 403; revision of, 185, 294–297, 418, 464; and right of establishment, 405; and social policy, 223, 424–425; tenth anniversary of, 389; and transport policy, 460–461 Treaty of Versailles, 415 Treaty of Westminster, 374 Treaty on European Union (TEU), 54, 182, 232–233, 333, 463–467; and accession, 1, 39; and Austria, 18; and budget, 31; and Central and Eastern European States, 38; and citizenship, 42–43, 255, 331; and cohesion policy, 49; and Commission, 60, 65; and Committee of

Permanent Representatives, 69; and Committee of the Regions, 70–71; and Common Foreign and Security Policy, 83, 120, 218, 259; comparison with Amsterdam Treaty, 10; and competition policy, 87; and consumer policy, 98; and Council of Ministers, 102–105; and Court of Auditors, 107, 109; and cultural policy, 14, 110–111; and decisionmaking, 2, 97, 118, 471; and Economic and Monetary Union, 32, 99, 127, 130, 132, 138, 144–152, 157, 207, 463–466; and education policy, 160; and energy policy, 163; and enlargement, 16, 169; and environmental policy, 171, 172; and European Parliament, 192, 211–216; and Germany, 253–254; and Greece, 257; and human rights, 188; and industrial policy, 276; and integration theory, 280, 282; and Justice and Home Affairs, 6, 310, 314, 383; and national parliaments, 13, 351–352; negotiation of, 26, 186, 202, 219, 232, 251, 295–297, 330, 345, 356, 432, 463–464, 511; and public health, 263; ratification of, 28, 38, 50, 57, 98, 125, 128, 130, 135, 136, 186, 209, 226, 243, 258, 264, 324, 325, 327, 386, 390, 397–398, 411, 453, 511, 512; and research and technological development policy, 403–405; and Schengen Agreement, 414; and social policy, 8, 43, 118, 187, 225, 424, 426–427, 483; and subsidiarity, 392, 439–440; and United Kingdom, 187, 472; and Western European Union, 486 Trevi Group, 69, 259, 310, 467 Trieste, 121 TRIPS. See Trade-Related Intellectual Property Rights Troika, 217, 467 Trotman, Alex, 456 Trudeau, Pierre, 33 Truman, Harry, 2 Truman Declaration, 373 Tunisia, 24, 336, 337 Turin Summit (March 1996), 26, 296, 314, 398 Turkey, 24, 13–115, 167, 175, 200, 210, 257, 271, 336, 337, 338, 339, 360, 369, 412, 467–469, 486, 509, 515 Turkish Republic of Northern Cyprus, 114 Twelve, 469 Two-speed Europe, 137. See also Differentiated integration

UFE. See Union for Europe Ukraine, 83, 89, 90, 406–408 UN. See United Nations Unanimity, 471. See also Decisionmaking procedures; Empty chair crisis UNCTAD. See United Nations Conference on Trade and Development UNCED. See United Nations Conference on Environment and Development Unemployment, 133, 136, 147, 240, 431

Index

563

UNICE. See Union of Industrial and Employers’ Confederations of Europe Union for Europe (UFE), 303, 380, 383, 471 Union of Industrial and Employers’ Confederations of Europe (UNICE), 220, 225, 292, 425, 426, 471, 483 Union of Soviet Socialist Republics (USSR). See Soviet Union Unisource, 451 United Arab Emirates, 259 United Kingdom (UK), 471–474; accession of, 4, 166, 184, 197, 263, 299, 333, 366, 389, 424, 506, 507; and Amsterdam Treaty, 9, 393; and Black Wednesday, 26; and Bovine Spongiform Encephalopathy crisis, 26–27; and budget, 30, 130, 185, 236, 237, 294, 318, 344, 453; and cohesion policy, 50; and Cold War, 53; and Commission, 309; and Committee of the Regions, 71; and Common Fisheries Policy, 81–82; and Common Foreign and Security Policy, 84; and contact group, 99; and Cyprus, 113; and decisionmaking, 120, 395; and differentiated integration, 139; and early years of European integration, 5, 42, 179, 180, 201, 232, 331, 415–416; and Economic and Monetary Union, 144–145, 152, 262, 465; and energy policy, 165; and environmental policy, 173; and European Community law, 265; and European Defense Community, 195; and European Monetary System, 26, 138, 185, 207–209, and European Police Agency, 216; and Falklands War, 322; and financial services, 88; and General Agreement on Tariffs and Trade, 249; and industrial policy, 274–275; and infringement, 278; and intergovernmental conferences, 343, 352; and Ioannina Compromise, 298–299; and Ireland, 299–301; and Japan, 306–307; and Justice and Home Affairs, 314; and Lomé Convention, 328–329; and North Atlantic Treaty Organization, 360; and opposition to integration, 194; and Organization for Economic Cooperation and Development, 369; and presidency, 392; referendum in, 397, 508; and Schengen Agreement, 269, 413–414, 421; and Single European Act, 48, 453; and social policy, 8, 187, 225, 227, 424; and South Africa, 428; and telecommunications policy, 449–451; and TransEuropean Networks, 97; and Treaty on European Union, 369, 453–454; and Western European Union, 487 United Nations (UN), 34, 39, 83, 84, 88, 114, 137, 153, 187, 221, 235, 244, 359, 362, 373, 390, 428–429, 430, 474 United Nations Conference on Environment and Development (UNCED), 170 United Nations Conference on Trade and Development (UNCTAD), 79, 474 United Nations Food and Agriculture Organization, 474

564

Index

United Nations General Assembly, 474 United Nations High Commissioner for Refugees (UNHCR), 494 United Nations Industrial Development Organization, 474 United Nations Protection Force (UNPROFOR), 494–495 United Nations Security Council, 474, 519 United States (U.S.), 474–482; and Airbus, 7–8; and audiovisual policy, 15–18; and China, 41; and Cold War, 51–55; and Common Agricultural Policy, 72–74; Congress of, 211, 212, 215, 374, 489; and contact group, 99; and Council of Ministers, 102, 104; and Cyprus, 115; and early years of European integration, 5, 121, 122, 177, 179–181, 373; economic relations with the European Union, 75, 77, 80, 94, 185, 190, 220, 224, 237, 276, 436; and enlargement, 479; and environmental policy, 173; and European Bank for Reconstruction and Development, 178; and European Defense Community, 195; and European security, 223, 241, 244, 356–357, 360–362, 372, 442, 474–478; Federal Reserve banks, 147; and federalism, 44, 231–233, 288; and France, 184; and G7, 247; and General Agreement on Tariffs and Trade, 247–250, 489–490; and industrial policy, 275; and Japan, 305, 306, 308; and Latin America, 321; and Marshall Plan, 336, 371; and Middle East, 342–343; and monetary policy, 34, 149, 156, 305, 306, 476; and New Transatlantic Agenda, 85; and Organization for Economic Cooperation and Development, 369; and origins of European integration, 121–122; and Russia, 406–408; and telecommunications policy, 448–452; and United Kingdom, 184, 333; and World Trade Organization, 498–490; and Year of Europe, 493; and Yugoslavia, 99, 117, 495–497 Uruguay, 321, 322, 405 Uruguay Round, 14, 17, 74, 80, 81, 85, 222, 239, 248, 334, 365, 371, 451, 489–491, 509, 512 USSR. See Soviet Union Uzbekistan, 90

Val Duchesse Process, 483 Value Added Tax (VAT), 29, 87, 111, 420, 483 Van den Broek, Hans, 90, 114, 264 Van Gend en Loos case, 42, 140 Van Helmont, Jacques, 3 Variable geometry, 137. See also Differentiated integration VAT. See Value added tax Vedel, Georges, 483. See also Vedel Report Vedel Report, 131, 483 Venezuela,10, 322, 405, 411 Venice Declaration, 341–342, 483 Ventotene Declaration, 231 VERs. See Voluntary export restraints Victory Program, 180, 347 Vienna Convention, 173

Vietnam, 13 Vietnam War, 475, 476 Viner, Jacob, 77 Visegrad, 407, 487. See also Central and Eastern European States Vlaams Blok, 366 Vocational training, 327, 387 Voigt, Karsten, 496 Voluntary export restraints (VERs), 85, 305 Voluntary restraint agreements (VREs), 80 Volvo, 220 Vredeling, Henk, 484 Vredeling Directive, 227, 484 VREs. See Voluntary restraint agreements

Waigel, Theo, 145, 434 Wales, 71. See also United Kingdom Wallonia, 25 Warsaw Pact, 331, 359, 360, 362, 485 Weighted voting, 120, 138. See also Decisionmaking Weimar Germany, 5 Werner, Pierre, 148, 331, 485 Werner Plan, 144, 148, 149, 151, 157, 330, 331, 485, 423, 507 Werner Report. See Werner Plan Westendorp, Carlos, 139, 296, 398 Western European Armaments Grouping (WEAG), 487 Western European Union (WEU), 485–488, 519; and Amsterdam Treaty 10; and Austria, 19; and Central and Eastern European States, 39; and Combined Joint Task Forces, 56; and Common Foreign and Security Policy, 43–84; and Cyprus, 114; and differentiated integration, 137; and European Security and Defense Identity, 223; and Finland, 235; and France, 241, 345; and Kirchberg Declaration, 317; and Noordwijk Declaration, 359; and North Atlantic Treaty Organization, 360–361, 475–477; origin of, 28, 142, 373; and Petersberg Declaration, 386; and Sweden, 443; and Treaty on European Union, 296, 465; and United States, 475–477; and Yugoslavia, 350, 384, 494 White Paper, 91, 125, 128, 276, 277, 419–420, 423, 449, 459, 488 WHO. See World Health Organization Widening, 121. See also Enlargement Wilson, Harold, 263, 300, 309, 472, 488 Working Groups, 11, 102–104, 488–489 World Bank, 203, 385, 490 World Food Program, 474 World Health Organization (WHO), 262 World Trade Organization (WTO), 79, 489–491; and audiovisual policy, 17–18; and Canada, 34; and China, 41; and European Parliament, 213; and General Agreement on Tariffs and Trade, 248–250; and Organization for Economic Cooperation and Development, 370; and Partnership and Cooperation Agreements, 89; and regional integration, 157–158; and Russia,

408–409; and telecommunications policy, 451; and Transatlantic Business Dialogue, 457; and United States, 477–482 World War I, 415, 467, 493 World War II, 101, 363, 373, 429, 433, 442, 444, 467, 486 World Wildlife Fund, 292 WTO. See World Trade Organization Xerox, 457 Yalta, 241

Index

Yaoundé Convention, 493, 506, 507 Year of Europe, 493 Yom Kippur War, 507 Youth for Europe, 161, 493 Youth policy. See Education Yugoslavia, 10, 21, 37, 83, 84, 117, 166, 189, 218, 251, 259, 333, 349–350, 362, 372, 384–386, 404, 423, 477, 487, 493–497, 511 Zaire, 328

565

ABOUT THE BOOK

The Encyclopedia of the European Union provides in-depth, authoritative discussions of the key concepts, developments, institutions, policies, negotiations, treaties, national interests, and personalities related to European integration. The more than seven hundred easily accessible entries, written by internationally recognized scholars, cover virtually every aspect of the European Union. Maps, glossaries, appendixes, and a comprehensive index further enhance the volume. First published in 1998, the Encyclopedia is now available in paperback, priced for student

use. The chronology, tables, and appendixes have been updated through 1999 to reflect recent events, including the constitution of the new Commission and the organization of the newly elected European parliament. Desmond Dinan is associate professor in the Institute for Public Policy at George Mason University and professor at the College of Europe, Bruges. He is author of Ever Closer Union: An Introduction to European Integration, Second Edition.