The European Integration, Vol. 1: History (Springer Texts in Political Science and International Relations) [1st ed. 2023] 3031477758, 9783031477751

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Springer Texts in Political Science and International Relations

Panagiotis Liargovas Christos Papageorgiou

The European Integration, Vol. 1 History

Springer Texts in Political Science and International Relations

Springer Texts in Political Science and International Relations delivers high-quality instructional content for undergraduates and graduates in all areas of Political Science and International Relations. The series is comprised of self-contained books with a broad and comprehensive coverage that are suitable for class as well as for individual self-study. All texts are authored by established experts in their fields and offer a solid methodological background, often accompanied by problems and exercises.

Panagiotis Liargovas • Christos Papageorgiou

The European Integration, Vol. 1 History

Panagiotis Liargovas Department of Management Science and Technology University of Peloponnese Tripoli, Greece

Christos Papageorgiou Department of Management Science and Technology University of Peloponnese Tripoli, Greece

ISSN 2730-955X ISSN 2730-9568 (electronic) Springer Texts in Political Science and International Relations ISBN 978-3-031-47775-1 ISBN 978-3-031-47776-8 (eBook) https://doi.org/10.1007/978-3-031-47776-8 Translation from the Greek language edition: “Τo ευρωπαι__κó φαινóμενo: Iστoρία, θεσμoί, πoλιτικε ς” by Panagiotis Liargovas and Christos Papageorgiou, # 2018. Published by Τζιóλα. All Rights Reserved. # The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Paper in this product is recyclable.

Cover image: The flag of the European Union. The Council of Europe, which predates the European Communities, adopted in 1955 the current emblem, a circle of 12 golden stars representing completeness, on a blue background symbolizing the sky, while the circle itself is a symbol of unity. The Council of Europe had urged other European organisations to adopt the same flag. In 1983, the European Parliament listened and in 1985 the flag was adopted as the official emblem by all the Heads of State and Government of the European Communities, even before the European Union was founded. Since the beginning of 1986, this flag has been the symbol of all the institutions of the European Communities and the subsequent European Union

Dedicated to to all young people who own Europe

Contents

1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 The Present Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

The Genesis of the ‘European Idea’ and Its Early Implementation Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 First Thoughts on European Integration . . . . . . . . . . . . . . . . . . 2.1.1 Plans for a United Europe in the Middle Ages . . . . . . . 2.1.2 Plans for Europe in Modern Times . . . . . . . . . . . . . . . 2.1.3 The European Idea After the French Revolution . . . . . . 2.1.4 New Initiatives for Unification After the First World War . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 Plans for the Future of Europe After World War II . . . . . . . . . . 2.2.1 The Tehran Conference . . . . . . . . . . . . . . . . . . . . . . . 2.2.2 The Yalta Conference . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.3 The Potsdam Conference . . . . . . . . . . . . . . . . . . . . . . 2.2.4 Post-War Territorial Particularities in Europe . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

From the Ruins of World War II to the Dawn of a New Europe (1945–1950) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 Political, Economic and Social Conditions . . . . . . . . . . . . . . . . 3.1.1 The ‘Marshall Plan’ . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1.2 The Organisation for European Economic Cooperation (OEEC) . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 The Start of the Cold War in Europe . . . . . . . . . . . . . . . . . . . . 3.2.1 The Truman Doctrine . . . . . . . . . . . . . . . . . . . . . . . . . 3.2.2 The Berlin Blockade and the Prague Coup . . . . . . . . . . 3.3 The Formation of Defence Coalitions . . . . . . . . . . . . . . . . . . . . 3.3.1 The Treaty of Brussels and the Western Union . . . . . . . 3.3.2 The North Atlantic Treaty Organisation (NATO) . . . . . 3.4 The Post-War Political Movements for Unification . . . . . . . . . . 3.4.1 The Union of European Federalists . . . . . . . . . . . . . . .

1 3 8 11 11 11 13 14 21 23 24 25 26 29 30 33 33 34 35 36 36 38 38 39 40 41 42

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3.4.2 The United Europe Movement . . . . . . . . . . . . . . . . . 3.4.3 The Hague Conference on Europe . . . . . . . . . . . . . . . 3.4.4 The European Movement . . . . . . . . . . . . . . . . . . . . . 3.4.5 The Council of Europe . . . . . . . . . . . . . . . . . . . . . . . 3.5 The First Post-War Economic Agreements . . . . . . . . . . . . . . . 3.5.1 The Custom Convention of Benelux . . . . . . . . . . . . . . 3.5.2 The Council for Mutual Economic Assistance (Comecon) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5.3 The European Payments Union . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

. . . . . .

42 43 43 44 46 46

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47 48 49

From Schuman Declaration to the Establishment of the European Communities (1950–1958) . . . . . . . . . . . . . . . . . . . . . . . . 4.1 Peace Necessitates the Establishment of the First Community . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1.1 The Schuman Declaration . . . . . . . . . . . . . . . . . . . . . 4.1.2 The Establishment of the ECSC . . . . . . . . . . . . . . . . . 4.1.3 The Institutional Organisation of the ECSC . . . . . . . . . 4.1.4 The Functioning of the ECSC . . . . . . . . . . . . . . . . . . . 4.1.5 Consequences and Effects of the ECSC Operation . . . . 4.2 Attempts to Establish a Defence and Political Community . . . . . 4.2.1 The Attempt to Establish a European Defence Community (EDC) . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2.2 The Failure to Establish a European Political Community (EPC) . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2.3 The ‘Re-founding’ of the Western European Union (WEU) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3 Plans for Sectorial Integration and Establishment of New Communities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.1 The Establishment of the EEC and the EAEC . . . . . . . 4.3.2 The Institutional Organisation of the Two New Communities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.3 The Functioning of the EEC . . . . . . . . . . . . . . . . . . . . 4.3.4 The Functioning of the EAEC . . . . . . . . . . . . . . . . . . . 4.3.5 Results from the Operation of the Two New Communities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4 The Development and Impact of the Cold War in Europe . . . . . 4.4.1 The Berlin Question and the Workers’ Strikes . . . . . . . 4.4.2 The Establishment of the Warsaw Pact . . . . . . . . . . . . 4.4.3 Conciliation Efforts and Peace Consolidation Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4.4 Riots in Poland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4.5 Uprising in Hungary . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

51 51 52 53 54 54 55 56 56 59 60 61 62 63 64 65 65 66 67 67 68 68 69 70

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6

From Crisis to the Luxembourg Compromise: The Period of Stagnation (1958–1969) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 The First Steps of the EEC and the Establishment of Common Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1.1 The European Customs Union . . . . . . . . . . . . . . . . . . . 5.1.2 The Common Agricultural Policy (CAP) . . . . . . . . . . . 5.1.3 The Common Transport Market . . . . . . . . . . . . . . . . . 5.2 Different Views and Different Paths . . . . . . . . . . . . . . . . . . . . . 5.2.1 The Positions of Charles de Gaulle . . . . . . . . . . . . . . . 5.2.2 The European Free Trade Association (EFTA) . . . . . . . 5.2.3 The Two Fouchet Plans and Their Rejection . . . . . . . . 5.2.4 Accession Efforts of Britain, Denmark, Ireland and Norway . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.5 The Results of the Franco-German Friendship Pact . . . . 5.3 The Compromise and the New Difficulties . . . . . . . . . . . . . . . . 5.3.1 The Luxembourg Compromise . . . . . . . . . . . . . . . . . . 5.3.2 France’s Second Refusal of Britain’s Accession . . . . . . 5.4 Institutional Changes and Merging of Institutions . . . . . . . . . . . 5.4.1 The Signing of the Merger Treaty . . . . . . . . . . . . . . . . 5.5 The Climax of the Cold War and the Crises in Europe . . . . . . . . 5.5.1 The Construction of the Berlin Wall . . . . . . . . . . . . . . 5.5.2 The ‘Prague Spring’ and the Invasion of Czechoslovakia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . From the Hague Conference to the Crises of the 1970s (1969–1979) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1 The Change in French European Policy . . . . . . . . . . . . . . . . . . 6.1.1 The Hague Conference . . . . . . . . . . . . . . . . . . . . . . . . 6.1.2 The Introduction of the Community Own Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2 Economic Circumstances, Trade Relations and Agricultural Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2.1 The Two Oil Crises . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2.2 The Conclusion of International Trade Agreements . . . . 6.2.3 The Reform of the CAP and the Mansholt Plan . . . . . . 6.3 Plans for an Economic and Monetary Union (EMU) . . . . . . . . . 6.3.1 The ‘Werner Report’ . . . . . . . . . . . . . . . . . . . . . . . . . 6.3.2 The European Currency Snake . . . . . . . . . . . . . . . . . . 6.3.3 The European Monetary System (EMS) . . . . . . . . . . . . 6.4 The Call for a European Political Cooperation (EPC) . . . . . . . . 6.4.1 The ‘Davignon Report’ on European Political Cooperation (EPC) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4.2 The ‘Copenhagen Report’ on the EPC and European Identity . . . . . . . . . . . . . . . . . . . . . . . . . . . .

xi

71 71 71 72 73 74 74 75 75 77 78 79 79 80 81 81 82 82 83 84 87 87 87 89 89 90 90 91 91 92 94 95 97 97 98

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6.4.3

The Establishment of the European Council as the Coordinator of the EPC . . . . . . . . . . . . . . . . . . . . . . . 6.4.4 The ‘Tindemans Report’ on European Integration . . . . . 6.4.5 Evaluation of the Operation of the EPC . . . . . . . . . . . . 6.5 The First Enlargement of the EC . . . . . . . . . . . . . . . . . . . . . . . 6.5.1 The Accession Negotiations with Britain . . . . . . . . . . . 6.5.2 The Accession Negotiations with Ireland, Denmark and Norway . . . . . . . . . . . . . . . . . . . . . . . . . 6.5.3 The Implementation of the First Enlargement . . . . . . . . 6.5.4 The Impact of the First Enlargement . . . . . . . . . . . . . . 6.5.5 Institutional Changes Since the First Enlargement . . . . . 6.6 Institutional Reforms. Elections for the European Parliament . . . 6.6.1 The Establishment of the European Council as an Informal Institution . . . . . . . . . . . . . . . . . . . . . . . . . . 6.6.2 Proposals for Institutional Reforms . . . . . . . . . . . . . . . 6.6.3 Election of Members of the European Parliament . . . . . 6.7 Competition Between the Superpowers and European Reactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7.1 Germany’s ‘Ostpolitik’ . . . . . . . . . . . . . . . . . . . . . . . . 6.7.2 The Signing of the Helsinki Final Act . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

From Enlargement to the South to the Single European Act (1979–1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1 The Second and Third Enlargement of the EC towards the South . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1.1 The Accession Negotiations with Greece . . . . . . . . . . . 7.1.2 The Implementation of the Second Enlargement . . . . . . 7.1.3 The Accession Negotiations with Spain and Portugal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1.4 The Implementation of the Third Enlargement . . . . . . . 7.1.5 The Consequences of the First Enlargement . . . . . . . . . 7.1.6 Impact of the Second and Third Enlargements. The IMPs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1.7 Institutional Changes Since the Second and Third Enlargements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2 The Road to the Single European Act (SEA) . . . . . . . . . . . . . . . 7.2.1 The Genscher-Colombo Plan and the Promotion of the EPC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2.2 The Spinelli Initiative for a Treaty Establishing the European Union . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2.3 The Mitterand-Kohl Initiative and the “Dooge Report” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2.4 Jacques Delors’ White Paper on the Single Market . . . .

98 99 100 101 102 102 103 104 105 105 106 106 107 109 110 111 112 115 115 116 117 118 119 119 120 123 123 124 127 127 128

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7.2.5

The Intergovernmental Conference for the Revised Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2.6 The Signature and Validation of the SEA . . . . . . . . . . . 7.2.7 Institutional Reforms as a Result of the SEA . . . . . . . . 7.2.8 Launching the Single Internal Market . . . . . . . . . . . . . 7.2.9 Promoting a Social Policy . . . . . . . . . . . . . . . . . . . . . . 7.2.10 Scientific and Technological Development . . . . . . . . . . 7.2.11 The Operation and Institutionalisation of the EPC . . . . . 7.3 A “Europe of the Peoples” Without Borders and with a Common Face . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3.1 The Establishment of the Official Symbols of the EC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3.2 The Introduction of the European Passport . . . . . . . . . . 7.3.3 The Signing of the Schengen Agreement . . . . . . . . . . . 7.4 The Arms Race and Changes in Europe . . . . . . . . . . . . . . . . . . 7.4.1 The Arms Race of the Superpowers . . . . . . . . . . . . . . . 7.4.2 The Solidarity Trade Union Movement in Poland . . . . . 7.4.3 Mikhail Gorbachev Takes over the Reins of the USSR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4.4 Self-Governing Greenland Is Leaving the EC . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

From the Single Market Goal to the Treaty on European Union (1986–1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1 The Community Budget and the Single Internal Market . . . . . . . 8.1.1 The ‘Delors I and II Packages’ . . . . . . . . . . . . . . . . . . 8.1.2 The 1992 ‘MacSharry CAP Reform’ . . . . . . . . . . . . . . 8.1.3 Relations with Trading Partners and the GATT Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1.4 The Formulation of Regional Policy (First CSF 1988–1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1.5 The Regional Policy Review (Second CSF 1994–1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1.6 Progress of the Single Internal Market . . . . . . . . . . . . . 8.1.7 The Establishment of the European Economic Area (EEA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2 The Plans for EMU and the First Stage of Its Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2.1 The Delors’ Report on EMU . . . . . . . . . . . . . . . . . . . . 8.2.2 The Implementation of the First Stage of EMU . . . . . . 8.3 Plans for a Political Union . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3.1 The First Joint Message of Mitterand and Kohl on a Political Union . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3.2 Reactions to Franco-German Proposals for Political Union . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

128 130 131 131 132 132 133 134 134 135 135 137 137 138 139 140 140 143 143 144 145 146 147 148 150 151 152 153 154 155 156 157

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8.4

8.5

8.6

Towards the Treaty on European Union (TEU) . . . . . . . . . . . . . 8.4.1 The Intergovernmental Conference on EMU . . . . . . . . 8.4.2 The Intergovernmental Conference on Political Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.4.3 The Signing and Ratification of the TEU . . . . . . . . . . . 8.4.4 The Institutional Reforms . . . . . . . . . . . . . . . . . . . . . . 8.4.5 The First Pillar and the European Community . . . . . . . 8.4.6 Planning for the Implementation of the Final Stages of EMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.4.7 The Second Pillar and the CFSP . . . . . . . . . . . . . . . . . 8.4.8 EU Activity in the CFSP Area . . . . . . . . . . . . . . . . . . . 8.4.9 Upgrading the WEU Through the CFSP . . . . . . . . . . . 8.4.10 The Third Pillar and Cooperation in JHA Areas . . . . . . 8.4.11 The Establishment of EUROPOL in the Context of Cooperation in JHA . . . . . . . . . . . . . . . . . . The End of the Eastern Coalition and the Cold War . . . . . . . . . . 8.5.1 The Disarmament Agreements and Gorbachev’s Reforms . . . . . . . . . . . . . . . . . . . . . . . . . 8.5.2 New Regime in Poland and the Role of Solidarity . . . . 8.5.3 Regime Change in Hungary . . . . . . . . . . . . . . . . . . . . 8.5.4 The Fall of the Berlin Wall and the Question of Reunification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5.5 The Settlement of the German Question and the Unification Treaty . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5.6 Institutional Changes in the EC Since German Unification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5.7 The Velvet Revolution in Czechoslovakia . . . . . . . . . . 8.5.8 Regime Change in Romania, Bulgaria and Albania . . . . 8.5.9 Dissolution of USSR: The Commonwealth of Independent States . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5.10 Focal Points of Conflict and Strife Within the CIS . . . . 8.5.11 The Violent Break-Up of Yugoslavia . . . . . . . . . . . . . . 8.5.12 The EU’s Attitude to the War in Yugoslavia . . . . . . . . Euro-Atlantic Relations Between Central-Eastern Europe and the CIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.6.1 The Second and Third CSCE and Their Contribution to the Recession . . . . . . . . . . . . . . . . . . . 8.6.2 PHARE and TACIS Programmes: Association Agreements with the EC . . . . . . . . . . . . . . . . . . . . . . . 8.6.3 The Visegrad Group . . . . . . . . . . . . . . . . . . . . . . . . . . 8.6.4 Accession of New States to the Council of Europe . . . . 8.6.5 Dissolution of the Warsaw Pact and Cooperation with NATO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

159 160 161 163 166 167 168 169 170 171 173 174 174 175 176 176 179 181 182 183 184 187 190 191 196 197 197 198 199 200 200

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8.6.6

The Copenhagen Criteria for the Accession of New Countries to the EU . . . . . . . . . . . . . . . . . . . . . . 201 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202 9

From the Inception of the EU to the Treaty of Amsterdam (1993–1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.1 The Fourth Enlargement of the EU . . . . . . . . . . . . . . . . . . . . . . 9.1.1 The Accession Negotiations . . . . . . . . . . . . . . . . . . . . 9.1.2 The Implementation of the Fourth Enlargement . . . . . . 9.1.3 Institutional Changes Since the Fourth Enlargement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.2 The Single Internal Market, EMU and the Agenda 2000 . . . . . . 9.2.1 The Functioning of the Single Internal Market . . . . . . . 9.2.2 EMU, the Stability and Growth Pact and the ‘Euro’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.2.3 Changes in the Leadership and Appointment of the Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.2.4 Agenda 2000: Regional Policy (Third CSF 2000–2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.2.5 Agenda 2000: CAP Reform (Fischler I) . . . . . . . . . . . . 9.3 The Treaty of Amsterdam and Its Implications . . . . . . . . . . . . . 9.3.1 The Intergovernmental Conference . . . . . . . . . . . . . . . 9.3.2 The Signing of the Treaty of Amsterdam . . . . . . . . . . . 9.3.3 The Institutional Reforms . . . . . . . . . . . . . . . . . . . . . . 9.3.4 The Community Provisions of the Treaty of Amsterdam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.3.5 Further Institutionalisation of the CFSP . . . . . . . . . . . . 9.3.6 Changes in the JHA Sectors . . . . . . . . . . . . . . . . . . . . 9.3.7 The Single Area of Freedom, Security and Justice (AFSJ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.3.8 Integration of the Schengen Agreement into the European Acquis . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.3.9 The Establishment of a European Security and Defence Policy (ESDP) . . . . . . . . . . . . . . . . . . . . . . . 9.4 Developments After the End of the Cold War . . . . . . . . . . . . . . 9.4.1 The Transformation of the CSCE into an Organisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.4.2 Developments on the Transnistria Issue . . . . . . . . . . . . 9.4.3 The War in Kosovo . . . . . . . . . . . . . . . . . . . . . . . . . . 9.4.4 Establishment of Bodies of European Interest in the Context of the CIS . . . . . . . . . . . . . . . . . . . . . . 9.4.5 Establishment of Bodies of European Interest Outside the CIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

205 205 206 207 207 208 209 210 213 215 216 217 218 220 221 222 223 224 225 225 227 229 230 230 231 233 234 235

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From the Treaty of Nice to the Fifth and Sixth Enlargements (1999–2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1 The Treaty of Nice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1.1 The Intergovernmental Conference . . . . . . . . . . . . . . . 10.1.2 The Signing and Ratification of the Treaty of Nice . . . . 10.1.3 The Institutional Reforms . . . . . . . . . . . . . . . . . . . . . . 10.1.4 Changes to the CFSP . . . . . . . . . . . . . . . . . . . . . . . . . 10.2 Reports and Debates on the Future of Europe . . . . . . . . . . . . . . 10.2.1 The Charter of Fundamental Rights of the European Union . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.2.2 The Convention on the Future of Europe and the Draft Constitution . . . . . . . . . . . . . . . . . . . . . . . . . 10.2.3 The Intergovernmental Conference on the Constitutional Treaty . . . . . . . . . . . . . . . . . . . . . . . . . 10.2.4 The Signing of the CTE and the Failure to Ratify It . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3 Other Important Developments in Community Policies . . . . . . . 10.3.1 The Lisbon Strategy: An Innovation and Knowledge Society . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3.2 2003 Mid-Term Review and Reform of the CAP (Fischler II) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3.3 The Course of EMU and the Eurogroup. The Revision of the SGP . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3.4 The New Regional Policy (NSRF 2007–2013) . . . . . . . 10.3.5 The Course of ESDP in the Context of the CFSP and Relations with NATO . . . . . . . . . . . . . . . . . . . . . . 10.3.6 Operations and Missions Under the ESDP . . . . . . . . . . 10.3.7 Developments in AFSJ, Dublin II Regulation and the Hague Programme . . . . . . . . . . . . . . . . . . . . . 10.4 The Fifth and Sixth Enlargements of the EU . . . . . . . . . . . . . . . 10.4.1 The Accession Negotiations of the Fifth Enlargement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.4.2 The Signing of the Accession Treaty for the Fifth Enlargement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.4.3 Institutional Changes Since the Fifth Enlargement . . . . 10.4.4 The Accession Negotiations of the Sixth Enlargement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.4.5 The Signing of the Accession Treaty of the Sixth Enlargement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.4.6 Institutional Changes Since the Sixth Enlargement . . . . 10.5 Developments in Europe Outside and in Relation to the EU . . . . 10.5.1 New EU Pre-accession and Neighbourhood Programmes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.5.2 Developments in New Yugoslavia and Transnistria . . .

237 237 238 239 241 243 244 250 252 254 255 258 258 260 264 266 267 270 271 272 273 275 277 279 279 280 281 282 284

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10.5.3

Establishment of Organisations of European Interest Within the CIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285 11

From the Treaty of Lisbon to the Seventh Enlargement (2007–2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1 The Treaty of Lisbon as an Informal EU Constitution . . . . . . . . 11.1.1 The Intergovernmental Conference . . . . . . . . . . . . . . . 11.1.2 The Signing and Ratification of the Treaty of Lisbon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1.3 Institutional Reforms . . . . . . . . . . . . . . . . . . . . . . . . . 11.1.4 Improvements in the CFSP and Expansion of the Missions of the CSDP . . . . . . . . . . . . . . . . . . . . . . . . 11.1.5 The Changes in JHA Issues and the Strengthening of the Single AFSJ . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2 Developments in European Policies and the Image of the EU . . . 11.2.1 The Europe 2020 Strategy . . . . . . . . . . . . . . . . . . . . . 11.2.2 Establishing the European Semester as a Coordination Cycle . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2.3 Developments in AFSJ, Stockholm Programme, and Dublin III Regulation . . . . . . . . . . . . . . . . . . . . . . 11.2.4 The CAP “Health Check” and the 2009 Reform (Boel) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2.5 The 2009 CAP Reform with a View to 2020 (Cioloş) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2.6 The Evolution of Regional Policy (NSRF 2014–2020) . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2.7 The European Banking Union as a Complement to EMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2.8 The ESDP/CRPD Missions . . . . . . . . . . . . . . . . . . . . . 11.2.9 The 2012 Nobel Peace Prize Is Awarded to the EU . . . 11.3 The Global Economic Crisis and the EU Response to It . . . . . . . 11.3.1 The Transfer of the Economic Crisis to the EU . . . . . . . 11.3.2 Methods of Responding to the Economic Crisis in the EU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.3.3 Providing Support to Eurozone and EU Member States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.3.4 The Recapitalisation of Banks and Their Supervisory Framework . . . . . . . . . . . . . . . . . . . . . . . 11.4 The Seventh Enlargement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.4.1 The Accession Negotiations with Croatia . . . . . . . . . . . 11.4.2 The Signing and Ratification of Croatia’s Accession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.4.3 Institutional Changes Since the Seventh Enlargement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

287 287 287 288 291 293 295 296 296 299 301 303 305 308 311 313 314 315 316 317 321 323 325 325 326 326

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11.5

Developments in Europe Outside the EU and the EU’s Attitude . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.5.1 The Declaration of Independence of Kosovo . . . . . . . 11.5.2 The Issue of Transnistria . . . . . . . . . . . . . . . . . . . . . . 11.5.3 The War in South Ossetia and Abkhazia . . . . . . . . . . 11.5.4 The Riots in Ukraine . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12

. . . . . .

From Britain’s EU Exit Referendum to the COVID-19 Pandemic (2014–2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.1 Britain’s Referendum to Leave the EU . . . . . . . . . . . . . . . . . . . 12.1.1 A Historical Review: The 1975 Referendum . . . . . . . . 12.1.2 The Referendum of 23rd July 2016 . . . . . . . . . . . . . . . 12.1.3 The Negotiations for Britain’s Withdrawal . . . . . . . . . . 12.1.4 Withdrawal, Negotiations on the Future, and the Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2 Developments in EU Policies: New Strategic Agenda . . . . . . . . 12.2.1 The Proposal for the New CAP for the Period 2021–2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2.2 The New Regional Policy for the Period 2021–2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2.3 The CFSP and the EU’s Global Strategy . . . . . . . . . . . 12.2.4 EU-NATO Cooperation in the Context of ESDP . . . . . 12.2.5 The CSDP Missions . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2.6 The European Pillar of Social Rights . . . . . . . . . . . . . 12.2.7 Developments Related to the Crisis, EMU, and the Banking Union . . . . . . . . . . . . . . . . . . . . . . . . 12.2.8 The European Green Deal . . . . . . . . . . . . . . . . . . . . . 12.2.9 The New EU Strategic Agenda 2019–2024 . . . . . . . . . 12.3 Increased Migration Flows and the COVID-19 Pandemic . . . . . 12.3.1 Rapid Increase in Migration Flows and How to Deal with It . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.3.2 Measures to Respond to the COVID-19 Pandemic . . . . 12.4 Developments on the European Continent and in Relation to the EU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.4.1 The Crisis in the Crimean Peninsula . . . . . . . . . . . . . . 12.4.2 Armed Clashes Between Armenians and Azeris in Nagorno Karabakh . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

328 328 328 329 329 331 333 333 333 334 337 340 342 342 344 346 350 350 351 352 353 354 356 356 360 363 363 364 366

1

Introduction

The end of the Second World War brought to the fore the intense social problems it caused, as well as the conditions of misery, insecurity and uncertainty about the future that the European peoples experienced as a result of its brutality. The need to find a definitive solution that would put an end to the emergence of totalitarian regimes, consolidate peace and security and ensure future economic prosperity was more urgent than ever. The experience of two bloody and destructive European (essentially civil) wars has been a catalyst in this direction, having taught peoples and governments that only through sincere cooperation, mutual concessions and joint planning could the appropriate structures and conditions be created to promote the common interests of peoples, respect for the rule of law and the equality and prosperity of citizens. In essence, a new Europe would be born through a process of integration, which would be the basic idea to be implemented, initially in Western Europe, and in the future throughout the continent. European unification, although pre-existing as an idea, was actually launched a few years after the Second World War, setting as its main initial objectives economic reconstruction after the war and the gradual formation of a single area of peace, democracy and development, which would prevent the recurrence of war conflicts in Europe. However, according to the main initiator of the idea of European unification, Robert Schumann, ‘Europe will not be created by magic or on the basis of a master plan. It will be built by concrete achievements that first create a real solidarity’. This is what he declared in his famous declaration of 9th May 1950, which set out the plan for European integration, foreseeing that it would not be an easy process but a continuous effort to solve problems such as concerns and obsessions, lack of trust, social conflicts, state interests, nationalistic tendencies, democratic deficit, etc. Much has been done since then, and much more needs to be done. There have been many difficulties, which at one time seemed insurmountable. However, the progress to date has shown that any problems that arise can be resolved. The continuing growth in the number of states participating in the integration process, the development of more and more common policies, the adoption of common rules # The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 P. Liargovas, C. Papageorgiou, The European Integration, Vol. 1, Springer Texts in Political Science and International Relations, https://doi.org/10.1007/978-3-031-47776-8_1

1

2

1 Introduction

and the introduction of a single currency demonstrate the success of the project, which has been both historically useful and historically enduring, and the existence of a strong will to deepen this integration further. It is clear that this process has made a decisive contribution to the consolidation of stability, democracy and prosperity in Europe and has created a broad area of economic and political freedom in which the values of fundamental individual rights, solidarity, social justice and progress are respected. In particular, the unification process has contributed to reconciliation in Europe, contributing from the beginning to the peaceful coexistence of peoples, then to the reunification of Germany after the fall of the Berlin Wall in 1989 and helping the states of Central and Eastern Europe after the collapse of the Soviet Union to join the European family or to prepare themselves politically and economically for this purpose, by implementing appropriate adjustment programmes financed by the European budget. There has also been significant progress in economic cooperation, with more than 500 million consumers benefiting from it as a result of the single internal market, which involves removing barriers to trade and freeing businesses, workers and consumers from unnecessary bureaucracy. The effort to complete economic and monetary integration is also working in this direction. In addition, the existence of the single currency has protected euro area Member States from speculation and devaluation, and a concerted effort is being made to ensure that countries facing an economic crisis find a way out of recession and into sustainable growth. At the same time, free competition on a European scale, which exists due to the functioning of the single internal market, requires balancing through solidarity on a European scale for regions facing specific adjustment problems. Thus, the European Structural Funds complement the efforts of national and local authorities to reduce disparities between the various regions of Europe, while money from the European budget is used to improve transport infrastructure at the European level, providing better access to remote areas and boosting trans-European trade. For a practical commitment to human rights, social solidarity, the fair distribution of wealth, the right to protect the environment and respect for cultural, linguistic and religious diversity, the Charter of Fundamental Rights of the European Union was adopted, which lists all the rights currently recognised by European states and their citizens. It also supports European identity in a globalised environment, while highlighting the diversity of the continent’s inhabitants, its regional specificities and the richness of its traditions and cultures. Finally, in the field of security, efforts are being made to take effective measures to this end. However, more and closer cooperation with Europe’s allies is needed, as is the development of a genuine common European security and defence policy. Moreover, and with a view to making Europe an area of freedom, security and justice, various European bodies such as Europol, Eurojust, etc., which have been set up for this purpose, are largely effective, but more active and effective action and cooperation is needed in the future. However, given today’s globalised economy, it is necessary to unleash the potential of the half a billion or so Europeans who believe in the same values and

1.1 The Present Contribution

3

have the same interests, in order to speed up the process of integration, bypassing difficulties and obstacles that arise from time to time. Jean Monnet, the architect of European integration, prophetically concluded his memoirs in 1976 with the following observation: ‘The sovereign nations of the past can no longer solve the problems of the present: they can no longer guarantee their own progress or control their own future. And the Community itself is only a stage on the road to the organised world of tomorrow’.

1.1

The Present Contribution

This book is an attempt to record both the difficult course towards unification and the functioning of a unified Europe in a way that is understandable both to the ordinary reader, who would like to have a relatively complete picture of the unification process and its functions, and to the more specialised reader, who would like to have in his hands a book that records the historical dimension of the unification project, as well as important details of the unification process. Furthermore, it could be used as an introductory aid for students whose field of study is related to the field of European integration. Initially, Chap. 2 explores the inception of the European concept and early efforts aimed at realising some form of European unification up until the onset of World War II. It is found that plans for a United Europe have been a recurring theme in European history. This is despite the constant shifts in the geographical and cultural boundaries, influenced by Greek mythology, which have given rise to various geopolitical and cognitive maps of Europe, defined by either real or symbolic boundaries born from the geographical imagination of its people. Then, Chap. 3, describes the post-war climate in Europe, the beginning of the Cold War and the prevailing conditions of misery, insecurity and uncertainty for the continent’s future. It highlights how the failure of nation-states to offer basic protective measures, sustenance and organisation for their people led to a tendency to downgrade nation-states and an inclination towards broader inter-European cooperation. This collaboration, in various fields, was either through intergovernmental cooperation or through the establishment of supranational associations with loose or strong links between member states. Chapter 4 describes the course of the unification process, starting with the founding of the first European Communities: the European Coal and Steel Community in 1951 and the European Economic Community and the European Atomic Energy Community in 1957. Despite the extensive damage inflicted on German industry by World War II, it swiftly recovered to pre-war production levels, supported by significant financial aid from the Marshall Plan, reducing its trade deficit and creating a new monetary system. Moreover, the revival of capitalism in Germany was seen by Western Europeans as an effective weapon against the communist threat. The efforts to establish single policies, such as the European Customs Union, the Common Agricultural Policy and the Common Transport Policy, are the subject of

4

1 Introduction

Chap. 5. It also delves into the early relationship crises among partners, the compromises, the stagnation of the unification process and the pinnacle of the Cold War. Chapter 6 examines the oil crises of the 1970s, the first enlargement of the European Communities in 1972 and the preliminary plans for an Economic and Monetary Union, with a detailed examination of the superpower rivalry and European responses. Chapter 7 describes the two southward enlargements of the European Communities in 1981 and 1986, the signing of the Schengen Agreement in 1985, the ratification of the Schengen Agreement in 1985, the approval of the Single European Act in 1986 and concurrent developments in Eastern Europe. Chapter 8 refers to the progress in the implementation of the Single Internal Market and Economic and Monetary Union, the signing of the Treaty on the European Union in 1992, the end of the Eastern Coalition and the Cold War and the reunification of Germany. It also explores the formation of a European Economic Area (EEA) and assesses some significant institutional reforms. Chapter 9 describes the procedures of the fourth enlargement, developments in the Economic and Monetary Union, the Action Programme 2000, the signing of the Treaty of Amsterdam in 1997 and the establishment of organisations of European interest outside the European Union. For example, the Baltic Free Trade Agreement (BAFTA) was a free trade agreement between Estonia, Latvia and Lithuania, created to help prepare these countries for EU membership. Similarly, the Central European Free Trade Agreement (CEFTA) was intended to prepare its Member States for full EU membership by gradually introducing parliamentary political systems and free market rules. The signing of the Treaty of Nice in 2001, the adoption of the Charter of Fundamental Rights of the European Union, the signing of the Constitutional Treaty for Europe in 2004, the establishment of the Lisbon Strategy, the fifth enlargement in 2004 and the sixth enlargement in 2007 are the subjects of Chap. 10. Chapter 11 first describes the signing of the Treaty of Lisbon in 2007 and the establishment of the ‘Europe 2020’ Strategy. It then moves to the global economic crisis and its implications for the EU’s economic governance, which revealed a number of inadequacies in the EU’s economic governance. It also covers the processes of the seventh enlargement in 2011 and the corresponding developments in Europe. Finally, Chap. 12, starts with a description of Britain’s referendum to leave the EU and its outcome, followed by an analysis of developments in key EU policies, including the Common Agricultural Policy (CAP) and Regional Policy. The increased migration flows and the EU’s response are also the focus of this chapter. Finally, the socio-economic crisis triggered by the COVID-19 pandemic is also addressed in this chapter (Figs. 1.1 and 1.2).

1.1 The Present Contribution

5

Fig. 1.1 Europe ‘from above’. The Old Continent of Europe is the fourth largest continent of the seven continents of the world, consisting of the western part of Eurasia. Its geographical boundaries with Asia are formed by the Ural Mountains, the Ural River, the Caspian Sea and the Caucasus Mountains. It is bounded by the Arctic Ocean to the north, the Atlantic Ocean to the west, the Mediterranean Sea to the south and the Black Sea to the southeast. Europe occupies an area of 10.5 million square kilometres, covering about 7% of the world’s total land area. Its population, according to a 2016 UN estimate, is close to 740 million inhabitants

Notes The member states of the European Union currently have the following official names: Kingdom of Belgium, Republic of Bulgaria, Czech Republic, Kingdom of Denmark, Federal Republic of Germany, Republic of Estonia, Ireland, Hellenic Republic, Kingdom of Spain, French Republic, Republic of Croatia, Italian Republic, Republic of Cyprus, Republic of Latvia, Republic of Lithuania, Grand Duchy of Luxembourg, Hungary, Republic of Malta, Kingdom of the Netherlands, Republic of Austria, Republic of Poland, Portuguese (continued)

6

1 Introduction

Republic, Romania, Republic of Slovenia, Slovak Republic, Republic of Finland, Kingdom of Sweden and the United Kingdom of Great Britain and Northern Ireland. The names used in the text of the book for the sake of brevity are: Belgium, Bulgaria, Bulgaria, Croatia, Czech Republic, Denmark, Germany, Estonia, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Malta, Netherlands, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland, Sweden, Spain and Britain.

Fig. 1.2 Europe today. Recognised independent states, semi-autonomous and autonomous regions and regions with limited or no international recognition

1.1 The Present Contribution

7

Recognised Independent States AZ Azerbaijan AL Albania AD Andorra AM Armenia AT Austria VA Vatican BE Belgium BA Bosnia BG Bulgaria UK Britain

FR France DE Germany GE Georgia DK Denmark CH Switzerland GR Greece EE Estonia IE Ireland IS Iceland ES Spain

IT Italy KZ Kazakhstan HR Croatia CY Cyprus LV Latvia BY Belarus LT Lithuania LI Liechtenstein LU Luxembourg MT Malta

ME Montenegro MD Moldova MC Monaco NO Norway NL Netherlands HU Hungary UA Ukraine MK N. Macedonia PL Poland PT Portugal

RO Romania RU Russia SM San Marino RS Serbia SK Slovakia SI Slovenia SE Sweden TR Turkey CZ Czechia FI Finland

Dependent semi-autonomous and autonomous regions AX Alan Islands ES-ML Melilla FO Ferroes Islands GI Gibraltar ES-CE Ceuta JE Jersey

GG Guernsey

IM Isle of Man

Areas with limited or no international recognition Abkhazia South Ossetia Transistria Northern Cyprus

Kosovo

Nagorno-Karabakh

Comments • Russia, Turkey, Azerbaijan, Georgia and Kazakhstan include territories that are mostly geographically part of Asia. • Cyprus and Armenia belong geographically to Asia but are considered to belong culturally and historically to Europe. • Denmark also includes the autonomous Ferroes Islands and the autonomous Greenland, which is geographically part of North America. • Norway owns the Jan Magen Island and the Svalbard Archipelago in the Arctic Ocean—also, Bouvet Island in the South Atlantic, Peter I Island and Queen Mound Land in Antarctica. • Finland also includes the autonomous Alan Islands. • Britain also owns the islands of Guernsey and Jersey in the English Channel area and the Isle of Man in the Irish Sea. Also, Anguilla, Bermuda, the Cayman Islands, Montserrat Island, the Virgin Islands and the Turks and Caicos Islands in the North Atlantic, St Helena, Asencion and Tristan da Cunha, the South Georgia and South Sandwich Islands and the Falkland Islands in the South Atlantic, the Pitcairn Islands in the Pacific Ocean, and the British Indian Ocean Territory. In Cyprus are the areas of Akrotiri and Dhekelia which are under British jurisdiction. Also in southern Spain is Gibraltar, which is an overseas territory of Britain. Finally, Britain owns Graham’s Land, the South Arc Islands and the South Shetland Islands in Antarctica. (continued)

8

1 Introduction

• France owns French Guiana in South America, the islands of Saint Pierre and Miquelon in the North Atlantic, Guadeloupe, Martinique, Saint Martin and Saint Bartholomew in the Caribbean Sea, and French Polynesia, New Caledonia, Wallis and Futuna Islands and Clipperton in the Pacific Ocean, as well as Reunion, Mayotte, the Scattered Islands, the Crozet Islands, the Kerguelen Islands, St. Paul and New Amsterdam Islands in the Indian Ocean. Finally, France also owns Sister Earth in Antarctica. • The Netherlands also includes the Aruba Island and the Netherlands Antilles with the Southern Group (Windy Antilles) comprising Curaçao and Bonaire and the Northern Group (Windy Islands) comprising St. Maarten, St. Eustatius and Samba in the Caribbean Sea. • Spain also includes the Canary Islands, the cities of Melilla and Ceuta, in northwest Africa, and the enclosed city of Livia in France, just 1.6 km from the Spanish border. • Portugal also includes the Azores and Madeira Islands in Africa. • In the southern part of Serbia is Kosovo, which unilaterally declared independence from Serbia in 2002, and to date more than 100 countries have recognised its independence. • The northern part of Cyprus, which has been under Turkish occupation since 1974, was recognised by Turkey as the Turkish Republic of Northern Cyprus in 1983, but without any international recognition. • To the east of Moldova is Transnistria, which declared independence in 1990 but has not been internationally recognised. Transnistria has been declared by the European Council as an area of ‘frozen conflict’. • Georgia includes Abkhazia, which unilaterally declared independence in the early 1990s and was recognised by Russia and some other states, but has not been recognised internationally. South Ossetia is a similar case for Georgia. • Azerbaijan includes the autonomous republic of Nagorno-Karabakh, which unilaterally declared independence in late 1991, but has not been internationally recognised.

References Dinan, D., Europe recast: A history of European Union, Palgrave Macmillan, 2014 European Union, The Charter of Fundamental Rights of the European Union, 2012, at: https:// www.europarl.europa.eu/charter/pdf/text_en.pdf. Gillingham, J. European Integration, 1950-2003: Superstate or New Market Economy?, Cambridge University Press, 2003 Judt, T., Postwar: A History of Europe Since 1945, Penguin, 2006 Monnet, J., Memoirs, Collins, 1978, at: https://archive.org/stream/MonnetJeanMemoirs/Monnet%2 C%20Jean%20-%20Memoirs_djvu.txt.

References

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Moravcsik, A., The choice for Europe: Social purpose and state power from Messina to Maastricht, Cornell University Press, 1998 Nugent, N., The government and politics of the European Union, Palgrave, 2017 Pinder, J., & Usherwood, S., The European Union: A very short introduction, Oxford University Press, 2018 Schuman, R., The Schuman Declaration, 1950, at https://www.consilium.europa.eu/en/70schuman-declaration/ Wallace, H., Pollack, M.A., & Young, A.R., Policy-making in the European Union, Oxford University Press, 2015 Zielonka, J., Counter-revolution: Liberal Europe in retreat, Oxford University Press, 2018

The Genesis of the ‘European Idea’ and Its Early Implementation Efforts

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First Thoughts on European Integration

It seems that the realisation of the ‘European idea’, i.e. the set of proposals formulated and policies pursued from time to time, with the aim of establishing some form of European unification, is not a concept and practice exclusive to the twentieth century, but a timeless effort in the long history of Europeans. This is despite the continuous shifts in the geographical and cultural boundaries of this European entity, rooted in Greek mythology, which have resulted in the creation of various geopolitical and mental maps of Europe, with real or symbolic borders, as the result of the geographical fantasies of its inhabitants.

2.1.1

Plans for a United Europe in the Middle Ages

This effort was initially expressed by the coronation of the so-called ‘king—father of Europe’ (rex—pater Europae) Charlemagne as ‘emperor of the Romans’, around 800, implying with this act the rebirth of the unified Roman Empire, with new boundaries (limes) that confined it to the western European geographical area and removed it from the African continent with which it was connected via the Mediterranean Sea, which the Romans called ‘Mare Nostrum’. The new empire was for the first time clothed in the garb of an Imperium Christianum, and later, after the eleventh century, it was called the Holy Roman Empire, openly incorporating into the ‘idea’ the holiness of the Christian religion, making the latter a constituent element of European unity (Fig. 2.1). This synthesis was also expressed by the use of names such as Respublica Christiana or Universitas Christiana, complementary to the now mutilated ecumenical and Roman Imperium, but also indicative of the distinction of the ‘christiani’ from the ‘muslims’ non-Christians, which still existed in occupied Spain by the Arabs and in the Holy Land, but also, shortly afterwards, as an Ottoman threat from # The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 P. Liargovas, C. Papageorgiou, The European Integration, Vol. 1, Springer Texts in Political Science and International Relations, https://doi.org/10.1007/978-3-031-47776-8_2

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Fig. 2.1 Charlemagne. Source: Painting of Albrecht Dürer (1511–1513). Germanic National Museum, Nürnberg, Germany. https://commons. wikimedia.org/wiki/Carolus_ Magnus#/media/File:D%C3% BCrer_karl_der_grosse.jpg. Public Domain

the East, limiting sometimes the political and sometimes the cultural scope of Christian Europe. Thus, in 1306, the jurist Pierre Dubois (1255–1321), under Philippe IV de France (Philippe le Bel, Philippe IV of France, 1285–1314), envisioned in his work De recuperatione terre sancte (On the recovery of sacred places, 1306) the creation of a Christian confederation of rulers, with institutions in the form of an arbitration council composed mainly of laymen or even ecclesiastics, chosen on the basis of their wisdom, experience and faith, which would ensure the peaceful coexistence of peoples. It should be noted that the confederation between rulers undermined the primacy of the Pope and promoted the consolidation of modern monarchies free from the suzerainty of the one emperor of the Holy Roman Empire. However, Dubois’ views at heart served to promote France as the leading European power.

2.1 First Thoughts on European Integration

2.1.2

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Plans for Europe in Modern Times

After the fall of Constantinople to the Ottomans in 1453, the Hussite king of Bohemia Georg von Podiebrad (Jiří z Poděbrad, George of Podiebrad, 1458–1471), influenced by the mysterious and versatile Frenchman Antoine Marini or Marigny from Grenoble, proposed a treaty between the Christian rulers, who, emancipated from both the Pope and the sole emperor, would form a kind of defensive alliance to achieve peace and counter the Ottoman danger that lay ahead after the fall of Constantinople. He sent his message of peace to all European rulers as Tractatus pacis toti Christianitati fiendae (Treaty for the attainment of peace in the Christian world, 1462), thus beginning a round of negotiations with the prospect of being concluded in 2 years. His plan provided for a supranational arbitration council and an assembly with a rotating seat, in which all the participating states would be represented by delegates. However, the plan could not be promoted and accepted by the other sovereigns (Fig. 2.2). Also noteworthy is the Grand Dessein (Grand Design, after 1620) of the French minister of finance Maximilien de Béthune, duc de Sully (Maximilian Sylly, 1560–1641) under Henri IV (1589–1610), which included a confederation of 15 principalities in the form of a Respublica Christiana, an institutional arbitration body of 40 members in the form of a council with a rotating seat, six regional councils and a European army under a single command, able to enforce the decisions of the councils and to deal effectively with the irreligious. It also provided for the abolition of customs duties between the contracting parties. It should be noted that the plan did not provide for Russia’s participation in the confederation (Fig. 2.3).

Fig. 2.2 Georg von Podiebrad as depicted in 1607. Source: Illumination in perchament codex containing Kronika česká by Přibík Pulkava z Radenína and Staré letopisy české National Archives, Czech Republic. Unknown Author. https:// upload.wikimedia.org/ wikipedia/commons/a/a0/ Georg_of_Podebrady.jpg. Public Domain

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Fig. 2.3 Portrait of Maximilien de Sully. Source: Peinture, École française du XVIe siècle, Musée des beaux-arts de Blois, Château de Saint-Germain-Beaupré. Unknown painter. http:// henri4.culture.fr/fr/ uc/02_02_01?version= accessible. Public Domain

Maximilien de Sully’s project seems to have been the model for a number of later proposals by European thinkers. Thus, in 1693, the Englishman William Penn (1644–1718), a Quaker immigrant to America, published his Essay towards the Present and Future Peace of Europe (1693), in which he envisaged a union of European states represented in a central delegation with a different number of representatives for each state, depending on its population and economic situation, and with a rotating presidency. Both Russia and the Ottoman Empire had a place in this union, and there would be a single army capable of enforcing the decisions of the delegation. Also, the Englishman John Bellers (1654–1725), a Quaker, friend of William Penn, in his proposal submitted to the British Parliament Some Reasons for a European State (1710) on the occasion of the war between France and the Netherlands, he combined views of Maximilien de Sully and William Penn, proposing also the functioning of a European parliament that would make it possible to achieve peace between the warring parties. Furthermore, in 1713, the French abbé Charl es-Irénée Castel de Saint-Pierre (Charles Saint-Pierre, 1658–1743) in his Projet pour rendre la paix perpétuelle en Europe (Project to establish perpetual peace in Europe, 1713) proposed the establishment of a permanent alliance that would establish lasting peace in Europe, under the control of a 40-member senate with legislative and judicial powers. Decisions would be taken by a simple majority of the members of the alliance, provided that each member met a minimum population criterion to have one vote; otherwise, the smaller states would have to combine their populations to obtain the right to vote. Furthermore, the alliance would also have a formidable army to deal with external dangers (Figs. 2.4 and 2.5).

2.1.3

The European Idea After the French Revolution

The French Revolution of 1789 brought to the fore the issue of nationalities and the self-determination of peoples. It should be noted that the temporary unification of

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Fig. 2.4 William Penn. Source: From the book: The Story of our Nation. From the Earliest Discoveries to the Present Time. By Ella Hines Stratton. National Publishing Co 1902. Library of Congress. https://archive.org/details/ storyofournation00stra/page/ n12/mode/1up?view=theater. Public Domain

Fig. 2.5 Charles-Irénée Saint-Pierre. Source: Institut de France, Collection de l’Académie française. Circa 1701–1794. Painter: François de Troy. https://commons. wikimedia.org/wiki/Category: Charles-Ir%C3%A9n%C3% A9e_Castel_de_SaintPierre#/media/File:Charles-Ir %C3%A9n%C3%A9e_ Castel_de_Saint-Pierre_-_ Versailles_MV_2941.png. Public Domain

Europe through the Napoleonic wars, until 1815, highlighted the dangers to peace and self-determination of peoples in cases of hegemony of a powerful state such as France. In addition, the establishment of the Holy Alliance between Prussia, Austria and Russia after 1815, which aimed to maintain balance and peace in Europe by obliging them to intervene with armed force against any action that might disturb it, failed to flourish after the end of the 1820s. Gradually, and as a consequence of a new reality expressed by the emergence of strong tendencies towards independence and self-determination in Europe, a new European idea was formed, institutionally expressed as a confederation of independent nation-states. It was in this spirit that

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Fig. 2.6 Claude Henri de Saint-Simon. From the book: Galerie des contemporains illustres, par un homme de rien, t. 2, Bruxelles, Meline, Cans et Cie, 1848. By Louis de Loménie. https://upload. wikimedia.org/wikipedia/ commons/8/8b/Claude_ Henri_de_Saint-Simon.jpg? uselang=fr. Public Domain

Claude Henri de Rouvroy comte de Saint-Simon (Claude de Saint-Simon, 1769–1825), in collaboration with Jacques Nicolas Augustin Thierry (1795–1856), promoted the idea of a confederation of states, co-founded by France and Britain and with the prospect of other European states joining, in his work De la réorganisation de la société européenne (On the reorganisation of European society, 1814). The states would retain their autonomy within the confederation, while executive power would be vested in a government with a hereditary monarch. Furthermore, the institutional organisation would be complemented by a large European parliament consisting of two houses. The upper house would have members appointed by the monarch, the lower house would be composed of elected representatives of the various professional classes, and the electorate would consist of literate citizens holding certain property (Fig. 2.6). Remarkable and particularly characteristic—and to some extent prophetic—was the proposal of the German economist Georg Friedrich List (1789–1846) based on the transformation of a basically economic unification into a political one. In his work Das nationale System der Politischen Ökonomie (The National System of Political Economy, 1841), he envisioned a commercial European unification that would also form the basis for political cooperation between certain European states, which would set the foundations for a lasting peace based on the economic interests of these states (Fig. 2.7). The unification of European states while maintaining their autonomy was also proclaimed by the French writer Victor-Marie Hugo (1802–1885) at the Third Congress of Friends of Peace, held in Paris in 1849, during his inaugural speech as its president. In particular, Hugo predicted that the nations of the European continent, without losing their autonomy and specificity, would form a unity, with ‘[. . .] a great sovereign senate, which will be to Europe what the parliament is to

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Fig. 2.7 Georg Friedrich List. Source: Photograph by Peter Geymayer from original lithograph by Josef Kriehuber, 1845. https://en.wikipedia. org/wiki/Friedrich_List#/ media/File:Friedrich_List_1 845_crop.jpg. Public Domain (cropped)

Fig. 2.8 Victor-Marie Hugo. Source: Lithograph on chine collé, by Achille Devéria, 1829. National Gallery of Art, Washington. https://en. wikipedia.org/wiki/Victor_ Hugo#/media/File:Achille_ Dev%C3%A9ria,_Victor_ Hugo,_1829,_NGA_208390. jpg. Public Domain

England, what the diet is to Germany, what the legislative assembly is to France. [. . .] A day will come when these two immense groups, the United States of America end the United States of Europe, shall be seen, placed in presence of each other, extending the hand of fellowship across the ocean.’ But it seems that the paternity of the idea of the United States of Europe belongs to Carlo Cattaneo (1801–1869), who led the Italian revolution in Milan in 1848 (Fig. 2.8).

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However, according to the French anarchist Pierre-Joseph Proudhon (1809–1865), the strengthening of the role of the nation-states would in any case be to the detriment of any just confederation of states, since very soon the stronger of the participating states would try to marginalise the smaller ones. Thus, in his work Du principe federalif (On the federal principle, 1863), he proposed a form of federalisation, which would be the final phase of a previous decentralisation of the large and powerful states to the regional level, thus undermining their capacity to regulate the fates and economies of the smaller states and their own regions. Similar positions were expressed by another anarchist of the time, the Russian Mikhail Alexandrovich Bakunin (1814–1876), at the 1867 conference of the League for Peace and Freedom in Geneva, in the presence of Victor Hugo, who argued that in order for liberty, justice and peace to triumph and to exclude the danger of civil war among the peoples of the European family, it is necessary to establish the United States of Europe in the form of a federation. He even supported his positions in his speech entitled Federalism, Socialism, Anti-Theologism (1867), setting as a precondition for this federation the reconstitution of states—especially the powerful ones— without monarchical regimes and central government, but based on local communities, regions, states and finally the United States (Figs. 2.9 and 2.10). Nevertheless, the wars of national liberation of the nineteenth century were based on the dynamics of nationalism, which managed to mobilise the popular masses. Subsequently, the state itself, with its administrative, military, educational and cultural institutions, helped consolidate the notion of belonging to a nation, allowing individuals to believe that they belong to ‘imagined communities’ that they themselves form, believing that all those belonging to them share common characteristics

Fig. 2.9 Mikhail Bakunin in a photograph. Source: Photography from 1860. The New York Public Library. Tucker, Benjamin Ricketson Collection. https://commons. wikimedia.org/wiki/File: Bakunin_Nadar.jpg#/media/ File:Mikhail_Bakunin_ formal_portrait.jpg. Public Domain (cropped)

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Fig. 2.10 Pierre-Joseph Proudhon. Source: Portrait by Gustave Courbet, 1865. Musée d’Orsay, Paris, France. https://en.wikipedia.org/wiki/ Pierre-Joseph_Proudhon#/ media/File:Portrait_of_ Pierre_Joseph_Proudhon_1 865.jpg. Public Domain

and traditions. Gradually, the increasing participation of a larger and larger part of the population in the political processes of the state and thus their identification with the nation-state meant that wider sections of the population began to see the international political arena as a field of competition in which their country should play a dominant role. Consequently, identification with the community meant suspicion and often overt hostility towards the outsider. In particular, after the Franco-German War of 1870, the rise of nationalism and the creation of new powerful nation-states of Germany and Italy intensified the rivalries between the large European states at the European and international level, but also the regional rivalries between smaller nation-states. In this context, efforts to realise the European idea became more realistic. A typical example is the views of the Swiss Johann Kaspar Bluntschli (1808–1881) in his work Die Organisation des europäischen Staatenvereines (The Organisation of the European Society of States, 1878). Bluntschli proposed a loose federation of states with a federal council as an institution, but which would not have the power to enforce decisions except with the cooperation of the governments of the states in the federation. Similar views were expressed by the Frenchman Henri Jean Baptiste Anatole Leroy-Beaulieu (1842–1912), who submitted a paper in 1900 to the Paris Congress of Political Sciences, proposing as a solution a European federation that could not be compared to the United States of America, given that in Europe the pre-existing states of the federation were independent entities with differentiations between them that did not resemble the British colonies in America. For this reason, it was necessary to ensure their preservation through a loose federation (Figs. 2.11 and 2.12).

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Fig. 2.11 Johann Bluntschli. Source: Photograph by unknown photographer, from 1861 to 1881. https:// commons.wikimedia.org/ wiki/File:Johann_Caspar_ Bluntschli_%2 8HeidICON_33432%29.jpg. Attribution: Universitätsbibliothek Heidelberg. Licensed under the Creative Commons Attribution-Share Alike 4.0 International license

Fig. 2.12 Anatole LeroyBeaulieu. Source: Personal work (Private collection of postcards) of Félix Potin et Cie (around 1900). https:// commons.wikimedia.org/ wiki/File:CFP_Leroy_ Beaulieu,_Anatole.jpg? uselang=fr. Public Domain

2.1 First Thoughts on European Integration

2.1.4

21

New Initiatives for Unification After the First World War

Excerpt from Richard Coudenhove-Kalergi’s Pan-Europe (1923) Europe as a political concept does not exist. The part of the world that bears this name harbors a chaos of peoples and states, a powder store of international conflicts, a retort of future world wars. The European question and European hatred pollute the international atmosphere. [. . . .] The European question can only be resolved through the unification of the nations of Europe. [. . .] The greatest obstacle to the fulfilment of the United States of Europe is the millennial rivalry between the two most populous nations of pan-Europe: Germany and France.

Source: Graf von Coudenhove-Kalergi, R. N. (1923). Pan-Europa. Austria: Pan-Europa-verlag. European colonialism, however, intensified the competition between the large European states, while the nationalist rivalries of smaller states caused tensions and friction, culminating in the Balkan wars of 1912–1913. Ultimately, the clash of European nationalisms marked the inevitable path to World War I, which was a long and particularly destructive European civil war. After the end of the war, the recognition of the principle of the self-determination of peoples, as well as the negative economic circumstances, intensified nationalist tendencies, especially among the defeated, and contributed to the emergence of tendencies to move away from the European idea. Nevertheless—and perhaps also because of them, in order to overcome them—there were also attempts to embody the European idea. Excerpt from Aristide Briand’s Speech of Fifth September 1929 to the League of Nations [. . .] I think between peoples who are geographically grouped as the peoples of Europe, there must be some sort of federal link; these peoples shall have the opportunity at any time to contact, discuss their interests, take joint resolutions, to establish between them a bond of solidarity, to enable them to cope, timely, in serious circumstances, should they arise. [. . .] Obviously. Association will especially in the economic field: this is the most pressing issue. I think we can get success.

Source: http://fondationsaintjohnperse.fr/en/la-programmation-culturelle/ archives/europe_documentation/discours-briand-1929/ In particular, the foundation of the ‘Pan-European Union’ by the Austrian diplomat and cosmopolitan Count Richard Nikolaus Eijiro von Coudenhove-Kalergi (1894–1972) in 1924 reflected the desire of certain pan-European political circles for European unification. According to Richard Coudenhove-Kalergi’s book Pan Europa (Pan-Europe, 1926), the realisation of European unification required the convening of a European conference, the conclusion of a treaty, the drafting of a

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constitution and a customs union between states. Britain has no place in this process of unification because of its large number of colonies outside Europe that would endanger European unity, Russia because of its totalitarian regime and Turkey because of its cultural identity that linked it to Asia. These plans were presented at the First Pan-European Conference held for this purpose in Vienna in 1926 and were particularly well received in political circles in many European countries. Thus, the honorary president of the Pan-European Union since 1927, the French politician Aristide Briand (1862–1932), who had been Foreign Minister and several times Prime Minister of France, proposed, in a speech to the League of Nations on 5 September 1929, the creation of a form of European Federal Union, mainly at the economic level, without prejudice to the sovereignty of the participating states. However, despite the initial acceptance of Aristide Briand’s plan by several European states, including the German Foreign Minister Gustav Stresemann (1878–1929), the more moderate plan submitted by France the following year to the League of Nations entitled Mémorandum sur l’organisation d’un régime d’union fédérale européenne (Memorandum on the organisation of a regime of European federal union) seems to have failed to convince most European states, including Germany (Figs. 2.13 and 2.14). It should be noted that the First Pan-European Congress of Vienna was attended by the last Russian Prime Minister before the October Revolution of 1917, Alexander Fiodorovich Kerensky (1881–1970), aiming at a European support against the Soviet Union regime. In contrast, Leon Trotsky (Lev Davidovich Bronshtein, 1879–1940) referred to the United Soviet European States, from 1923, in which the initiative would be taken by the workers and peasants, as opposed to the United States of Europe, which would represent American capitalism on European soil.

Fig. 2.13 Richard Nikolaus Coudenhove-Kalergi. Source: Photograph by unknown photographer, before 1926, Rozpravy Aventina, Ročník 2/ 1926–1927, číslo 5, strana 55. https://upload.wikimedia.org/ wikipedia/commons/f/f4/ Coudenhove-Kalergi_1926_ %28cropped%29.jpg. Public Domain (cropped)

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Fig. 2.14 Aristide Briand. Source: Photograph by unknown photographer, 1920. https://commons.wikimedia. org/wiki/Category:Aristide_ Briand#/media/File:Aristide_ Briand.png. Public Domain (cropped)

The economic crisis of the 1930s and the rise of fascism and later Nazism, which led Europeans to the Second World War, the biggest European civil war, did not allow further discussion, much less any efforts to implement the European idea. An exception is perhaps the publication of the manifesto Per un’ Europa libera e unita (For a free and united Europe) in 1941, also known as Manifesto di Ventotene, by the Italian politician Altiero Spinelli (1907–1986), imprisoned and deported by the Italian fascist regime on the island of Ventotene, and his fellow prisoner Ernesto Rossi (1897–1967). The Manifesto di Ventotene, released as part of the Italian resistance, called on the European resistance forces to work together to create a federal European state. It constituted the programme of the Movimento Federalista Europeo (European Federalist Movement), founded in Milan in August 1943 with Altiero Spinelli as its leading figure. The movement, sensing the crisis of nationalism, aimed at a federal union of European states that would prevent a new European war. Echoing these views, the Declaration of European Resistance in Geneva, drafted by representatives of resistance organisations of nine European states in July 1944, envisaged a federal Europe with its own constitution, a single supranational government and a single European army, without individual state military forces (Fig. 2.15).

2.2

Plans for the Future of Europe After World War II

In November 1943, Europe was largely occupied by the Axis forces, with the exception of the British Isles and the Iberian Peninsula. The Allies had dominated North Africa and had begun the invasion of Italy with difficulty. The Germans had been defeated at Stalingrad by USSR forces, and the Japanese had withdrawn from

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Fig. 2.15 Altiero Spinelli. Source: Photograph of the Italian Ministry of the Interior by unknown photographer in 1937, at the time of his detention by the Italian fascist regime.—https://commons. wikimedia.org/wiki/File: Spinelli_Ventotene.JPG. Public Domain

the Pacific with the exception of the Philippines and Southeast Asia. However, the war was raging on the fronts in Europe as well as in Asia. From November 1943 until the end of the war, three meetings of great importance for the future of Europe took place between the leaders of the USA, Britain and the USSR in Teheran, Yalta and Potsdam. The decisions effectively defined the spheres of influence of the three countries on the European continent.

2.2.1

The Tehran Conference

From 28 November to 1 December 1943, the Tehran Conference known as ‘Eureka’ was held, attended by US President Franklin Roosevelt (1882–1945), British Prime Minister Winston Churchill (1874–1965) and the General Secretary of the Communist Party of the USSR Joseph Stalin (1878–1953) (Fig. 2.16). The decisions taken at the conference included the need to support the Yugoslav resistance, the attempt to involve Turkey in the war on the side of the Allies, the launching of the secret ‘Overlord Operation’ concerning the Allied invasion of Normandy, the possibility of an invasion of southern France and the combined attack of the Soviet forces on the eastern front to keep the German forces there and prevent them from moving to the new western fronts. The meeting established, despite initial opposing views, a good rapport between Roosevelt and Stalin, often embarrassing to Churchill, indicative of the emergence of the two new superpowers on the world stage, leaving Britain behind.

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Fig. 2.16 Stalin, Roosevelt and Churchill on the portico of the Soviet Embassy during the Tehran Conference. Source: US Signal Corps photograph. http://hdl.loc. gov/loc.pnp/cph.3a33351 & http://teachpol.tcnj.edu/amer_ pol_hist/thumbnail381.html, 28 November 1943. https://en. wikipedia.org/wiki/Tehran_ Conference#/media/File: Teheran_conference-1943. jpg. Public Domain

2.2.2

The Yalta Conference

Less than a year and a half after the Tehran Conference, the war in Europe was in its final phase, but it was still going on in the Far East. The second meeting of ‘The Big Three’, namely US President Roosevelt, British Prime Minister Churchill and USSR Communist Party General Secretary Stalin, known as the Yalta Conference, was held at the Tsarist summer palace Livadia, in Yalta, southern Crimea, from 4 to 11 February 1945, at which the policy of the victors and hitherto allies for the postwar organisation of Europe, the Far East and the world was determined. At this meeting Roosevelt appeared to be unwilling to follow Churchill’s policy of rivalry with Stalin, which, moreover, he had not done at their previous meeting in Tehran (Fig. 2.17).

Fig. 2.17 The ‘Big Three’, Churchill, Roosevelt and Stalin at the Yalta Conference. Source: US government photograph, February 1945. https://en.wikipedia.org/wiki/ Yalta_Conference#/media/ File:Yalta_Conference_ (Churchill,_Roosevelt,_ Stalin)_(B&W).jpg. Public Domain (cropped)

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In a statement, the ‘Three’ said that their ultimate goal was to crush German Nazism and ensure that Germany would not be able to disturb the peace in the future. They would proceed to disarm and disband the German army, destroy German military equipment, control German industrial production, arrest and convict Nazi war criminals and establish a council for German war reparations. In this context, it was decided to partition Germany and Austria into occupation zones by the USA, the USSR and Britain. Stalin agreed that France could hold a fourth zone of occupation in both Germany and Austria although he pointed to its collapse without much resistance when Germany invaded its territories. With regard to Poland, the ‘Three’ expressed, at Churchill’s insistence, the general desire for a free, independent and democratic Poland. Rooesvelt proposed that the pro-Stalinist Polish government-in-exile in Moscow should be enlarged for the purpose of wider popular representation, forming a provisional government of national unity. It was also decided to regulate the border between Poland and the USSR, roughly following the Curzon line, drawn by former British Foreign Secretary George Curzon (1859–1925) after World War I. This meant that Poland would lose some eastern areas that the USSR would gain. But it would gain in the west some areas of East Prussia. For Yugoslavia, it was agreed to form a provisional coalition government and set up a provisional parliament. Finally, Stalin agreed to declare war on Japan in 3 months after Germany’s defeat, in return for the USSR being given South Sakhalin, the Kuril Islands, part of Korea and access to Manchuria. The ‘Three’ also issued the Declaration for liberated Europe, which could be seen as a continuation of the ‘Atlantic Charter’ issued as a joint declaration by Churchill and Rooesvelt on 14 August 1941. The aim of this declaration was to solve the political and economic problems of a free Europe through democratic institutions and procedures. Stalin also pledged to participate in the establishment of the United Nations (UN), and in the conference to draw up the final text of the statute of the organisation to be convened in San Francisco, USA, on 25 April 1945, but imposed his opinion on the right of veto of the five permanent member states of the UN Security Council. Germany signed its unconditional surrender on 8 May 1945. However, the USA and Britain were still at war with Japan. The USSR, which had been advancing rapidly through the liberated territories of Central and Eastern Europe, was in an advantageous position over the USA and Britain and had changed the facts as to its future position in Europe. Churchill, expressing his concern in early May 1945 to the new US President Harry Truman, who had replaced the deceased Roosevelt in April 1945, called for a new meeting of the ‘Three’ to confirm what had been agreed at Yalta and to put pressure on Stalin to join the war against Japan.

2.2.3

The Potsdam Conference

The Potsdam Conference, which was the last of the ‘Three’ during World War II, was held at the Cecilienhof Palace in Potsdam, a suburb of Berlin, between 17 July

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Fig. 2.18 Attlee, Truman and Stalin at the Potsdam Conference, Source: US government’s photograph, July 1945. https://commons. wikimedia.org/wiki/File: Attlee,_Truman_and_Stalin_ at_Potsdam.jpg#filehistory. Public Domain

and 2 August 1945. Truman, Stalin and Churchill were initially present. The latter withdrew on 25 July when his electoral defeat in Britain was announced and was replaced by the new British Prime Minister Clement Richard Attlee (1883–1967) (Fig. 2.18). Meanwhile, just 1 day before the opening of the Conference, on 16 July 1945, the USA had successfully tested its first atomic bomb, changing the facts and the balance of power between the ‘Three’. Both Churchill and Truman’s advisers, wanting to avoid a possible increase in the USSR’s influence in the Far East, no longer wanted the USSR to be involved in the war with Japan. Given that Truman did not follow his predecessor Roosevelt’s benevolent policy towards Stalin, the latter was viewed by his interlocutors with suspicion and rivalry. Nevertheless, when Stalin was informed by the US President of the possession of atomic weapons, he seemed more concerned with securing financial reparations to the USSR and controlling the areas occupied by the Red Army, which he considered would serve as mounds of protection for the USSR. Stalin’s bargaining position was strengthened by the advanced positions of USSR troops in the liberated European territories. For Germany in particular, it was agreed that all annexed territories in Europe should be restored to the countries to which they belonged before their annexation to Germany. It was also agreed to prosecute German war criminals, which later led to the Nuremberg Trial. The separation of Germany and Austria into four zones of occupation and their capitals, Berlin and Vienna, was also to be implemented in accordance with the decisions of the Yalta Conference. The main purpose of occupying and dividing Germany was to denazify it. For the necessary initial actions and subsequent control of the occupied German territories, the Allied Control Council (ACC) was formed by the foreign ministers of the USA, the USSR, Britain, China and France, based in London. The purpose of the Council was also to prepare for the signing of peace treaties with Germany and the other belligerent states.

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Excerpt from Konrad Adenauer’s Memoirs 1945–1953 [. . . .] The decision of the Potsdam Conference to regard Germany as a single economic entity proved impossible to carry out [. . . .] The four zones of occupation were moving further and further apart economically, and the economic chaos was constantly widening. Germany’s economic structure required the exchange of agricultural products from the east and, to a lesser extent, from the south of the country, with industrial products from the Ruhr Valley and other industrial regions. This exchange was interrupted by the division of the country into four zones. The commanders of each zone acted according to directions received from their governments and each followed a different policy in each zone. This tactic prevented the development of an economy already shattered by the consequences of the war.

Source: Adenauer, Konrad “Konrad Adenauer: Memoirs 1945–1953”, Regnery, 1966. During its occupation, Germany would be treated as a single economic entity despite its division into zones. The production of German arms in any form would be prohibited, while the production of chemical and heavy industry would be strictly controlled and limited to the quantities necessary for the country. At the same time, measures would be taken to restore transportation, housing and infrastructure. It was also agreed that Germany’s war reparations to the USSR would be received from the Soviet zone of occupation. However, the inability of the Allied occupying powers to treat Germany as a single economic entity, resulting in obvious inequalities in the different zones of occupation, was criticised by the later German Chancellor Konrad Adenauer (1876–1967). This division was seen as a cause of hindrance to the balanced economic development of war-torn Germany, given that in each zone growth was following its own rhythm (Fig. 2.19). For Poland, the formation of a provisional government of national unity under Soviet control was agreed upon, its eastern frontier agreed upon at the Yalta Conference was confirmed, and its provisional western frontier was determined, the final definition of which was to take place with the signing of a peace treaty. Finally, it was pointed out that Japan had to surrender unconditionally in order not to face total destruction. It should be noted that on 6 August 1945, the United States dropped the first atomic bomb on Hiroshima, thus demonstrating its military power to friends and adversaries alike. A few days later, on 9 August, the USA dropped a second atomic bomb on Nagasaki, forcing Japan to capitulate unconditionally because of the very large number of casualties caused by the use of the new superweapon. In the meantime, the USSR declared war on Japan on 8 August 1945, thus claiming what had been agreed at the Yalta Conference. It is obvious that the suspicion among the Allies was decisive for the future of Europe. For the Soviets, the invasion of European forces during the civil war after the October Revolution had left bad memories, while for the Western Europeans the Soviet invasion of the Baltic, Poland and Finland, after the signing of the German-

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Fig. 2.19 Konrad Adenauer. Source: on Time magazine cover, 31 August 1953. Author: Ernest Hamlin Baker. https://commons.wikimedia. org/wiki/File:Konrad_ Adenauer-TIME-1953_%2 8cropped%29.jpg. Public Domain (cropped)

Soviet Ribbentrop-Molotov Non-Aggression Pact in 1939, had left bad memories and aroused fears of an attempt to Bolshevize the USSR-occupied European territories. In fact, the Potsdam Conference, like the Yalta Conference, defined the post-war map of Europe and marked the beginning of the Cold War. Albania, Bulgaria, Yugoslavia, Hungary, Poland, Romania, Czechoslovakia and the part of Germany occupied by Soviet troops came under the sphere of influence of the USSR, with the remaining areas coming under the control of Britain, France and, above all, the United States, which had emerged as a new superpower.

2.2.4

Post-War Territorial Particularities in Europe

Among the existing post-war problems of Europe, we should list certain territorial particularities that either stem from existing geopolitical realities and existing material borders in Western Europe, or come from existing mainly economic and cultural differentiations and become the cause of the creation of mentally defined regions. From a geopolitical point of view, there are obvious problems of insularity, which cause friction in the definition of territorial waters, as well as the continental shelf, when it has been officially defined since 1958, as in the case of Greece, Norway, the Channel Straits and elsewhere. Furthermore, existing intra-European problems include the British claims to Cyprus and Malta and the Danish claims to Greenland, as well as the dispute between Britain and Spain over the territory of Gibraltar. Also, problems of cohesion in some Western European states are caused by issues of regionalism, such as those inherent in Basque Country, Catalonia, Ireland, Scotland, Wales, and Corsica, and differentiation, such as in the Walloon and Flemish regions

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of Belgium, and in many other regions of Western Europe where populations of different ethnicities coexist. Moreover, in Western Europe, there are states, sometimes inside Western European states, such as the Vatican, St. Maarten and Monaco, and sometimes outside them, such as Liechtenstein and Andorra, as independent states, as well as the Ferroes, Allan Islands, etc., which are autonomous or semi-autonomous regions. There are also areas that are territorial parts of Western European states, such as the cities of Melilla and Ceuta in North Africa, which belong to Spain, and the possessions of Britain, Belgium, France and the Netherlands in Africa, America, Asia and the Pacific Islands, which are territories of Western European states outside the European continent. Similar problems of regional territoriality and ethnic differentiation also existed in the states of Central Eastern Europe and the Balkan Peninsula that were under the sphere of influence of the USSR. However, the forms of regimes and state structures in these regions did not allow the manifestation and externalisation of these problems, except in the form of reactions and revolts against the regimes.

References Adenauer, K., Memoirs, 1945-1953, Henry Regnery Company, Chicago, 1966 Bakunin, M., "Federalism, Socialism, Anti-Theologism", Speech to the League for Peace and Freedom, Geneva, 1867, Available: https://www.marxists.org/reference/archive/bakunin/ works/various/reasons-of-state.htm Bellers, J., "Some Reasons for an European State, Proposed to the Powers of Europe, by an Universal Guarantee, and an Annual Congress, Senate, Dyet, or Parliament, to Settle Any Disputes About the Bounds and Rights of Princes and States Hereafter..." (1710). Historical Quaker Books, Pennington ePress, 11 December 2019 Bluntschli, J.K., Die Organisation des europäischen Staatenvereines, Darmstadt, Wissenschaftliche Buchgesellschaft, 1962 (1878) Briand, A., "Speech to the League of Nations", Proceedings of the 10th Ordinary Session of the Assembly (6 th Plenary Session), Geneva, 5 September 1929, Available: http:// fondationsaintjohnperse.fr/en/la-programmation-culturelle/archives/europe_documentation/ discours-briand-1929/ Castel de Saint-Pierre, Ch.-I., Projet pour rendre la paix perpetuelle en Europe, 2 volumes, Published by Utrecht, chez Antoine Schouten, 1713 Churchill, W.S., The Second World War: Closing the Ring, Houghton Mifflin Company, Boston, 1951 Coudenhove-Kalergi, R.N., Pan-Europa, Alfred Knopf, New York, 1926 De Rouvroy comte de Saint-Simon Cl.-H. & Thierry, A., De la réorganisation de la société européenne, ou de la nécessité et des moyens de rassembler les peuples de l’Europe en un seul corps politique, en conservant à chacun son indépendance nationale, chez Adrien Egron, Paris, 1814 Draft declaration of the European resistance movements (20 May 1944), p. 1-4, CVCE.eu, 2020, via Militant Socialist International, Available: https://www.cvce.eu/en/obj/draft_declaration_ of_the_european_resistance_movements_20_may_1944-en-d68ca0ad-c24b-4906-8235-96b82 814133a.html Dubois, P. De Recuperatione Terre Sancte: Traité de Politique Générale, A. Picard, Paris, 1891

References

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Giorgio di Poděbrady, Tractatus pacis toti Christianitati fiendae, 1462-1464, The Universal Peace Organization of King George of Bohemia a fifteenth Century Plan for World Peace 1462 / 1464, Publishing House of the Czechoslovak Academy of Sciences, Prague, 1964 Hugo, V., Speech to the Third Congress of Friends of Peace, Paris, 1849, Available: https://trove. nla.gov.au/newspaper/article/12914658 Il Movimento federalista europeo, La nostra storia, 2021. Available: https://www.mfe.it/port/index. php/chi-siamo/la-nostra-storia Leroy-Beaulieu, A., "Les Etats-Unis d'Europe", The International Conference of Political Sciences (Institut des sciences politiques): Les Etats-Unis d'Europe, Paris, 1900 List, F., Das National System der olitischen Oekonomie, Stuttgart und Tübingen, Cotta, 1841 Ogg, D., (Author), Sully's Grand Design of Henry IV: From the Memoirs of Maximilien De Béthune Duc De Sully (1559-1641), Publisher: Forgotten Books, London, 2017 Ministère des Affaires étrangères de France, Mémorandum sur l'organisation d'un régime d'union fédérale européenne, Archives du ministère des Affaires étrangères, La Courneuve, 411QO/3: Papiers 1940, Légers, ff. 250-259, Available: https://www.diplomatie.gouv.fr/IMG/pdf/plan_ union_euro_manuscrite_cle479c84.pdf Penn, W., "13 - An Essay towards the Present and Future Peace of Europe (1693)" in Murphy, A., (Editor), William Penn: Political Writings, from Part IV - Broader Perspectives, Published online by Cambridge University Press: 05 December 2020 Proudhon, P.-J., Du principe fédératif et de la nécessité de reconstituer le parti de la révolution, E. Dentu, Libraire- Éditeur, Paris, 1863 Spinelli, A., Rossi, E., Per un' Europa libera e unita - Manifesto di Ventotene, Istituto Altiero Spinelli per gli studi federalisti, Ventotene, [s.d.]

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3.1

Political, Economic and Social Conditions

With the end of the Second World War, the view prevailed to some extent in Western Europe that nationalism and identification with the nation-state constituted the deeper cause of Europe’s suffering since they had reinforced the dynamics that were largely responsible for the conflictual tendencies between European states. On the other hand, resistance movements during the war fostered political ideologies and values that were often contrary to the then-dominant policy of identifying citizens with the nation-state. In addition, the state apparatus of both the victors and the vanquished—which had been partially replaced by occupying institutions— were confronted with the devastation caused by the war in the areas of infrastructure, transport, communications and housing. The inability of the nation-states to provide the basic conditions for the protection, subsistence and organisation of their peoples soon became apparent. Consequently, at the end of the war, there was a tendency to devalue the nation-state and to seek political solutions based on broader cooperation between European states in various fields, either through intergovernmental cooperation or through the establishment of supranational associations with loose or strong links between member states. The dramatic reduction in industrial production, mainly due to the disasters during the war, contributed to the disorganisation of the economy, while one of the most important consequences of the war was the disorientation of industrial activities, which had been adapted to the needs of the war. The consequence of this in the early post-war years was the relatively limited production of the European states, mainly for domestic consumption. However, the ever-increasing need for imports increased the balance of payments deficit, while poor harvests in centralwestern Europe contributed to rising food prices. Furthermore, the war had created conditions of full employment, and the state and the wider public sector had expanded considerably during the war. These events made the process of transition # The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 P. Liargovas, C. Papageorgiou, The European Integration, Vol. 1, Springer Texts in Political Science and International Relations, https://doi.org/10.1007/978-3-031-47776-8_3

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from a ‘war economy’ to a ‘peace economy’ difficult, and the cost of this impossibility was mainly borne by the governments of nation-states and their policies. Moreover, the conditions of misery, insecurity and uncertainty about the future in both defeated Germany and Italy exacerbated the social problems of their populations. However, in Italy and even more so in Germany, the new dominant political forces had developed a desire for reconciliation and cooperation with the other European states. In this way, they would manage to be accepted again in the society of the sovereign European states as equal states, overcoming the historically bad past. The European and democratic orientation of many members of the new political leaderships that appeared on the political scene in many other European states also argued in favour of the European course of their countries.

3.1.1

The ‘Marshall Plan’

The year 1947 was economically a particularly difficult year for Europe. The disasters in agricultural production due to the very bad weather conditions during the winter of that year resulted in a widening of the opening of the balance of imports and exports of the European states, while the future of international trade for these states was uncertain. This was mainly due to trade with the USA, from which they imported goods and raw materials in large quantities. The difficult economic situation prompted the intervention of the United States through the Plan of the US Secretary of State George Marshall (1880–1959), a European Recovery Plan announced at Harvard University on 5 June 1947, which aimed to help the countries of Europe devastated by World War II to recover. It included shipments of goods, financial aid and loans and represented the transfer of $13 billion in resources from the United States to Europe over the 4-year period from 1948 to 1951. Excerpt from the Speech at Harvard University of 5th June 1947 by George Marshall [....] The truth of the matter is that Europe’s requirements for the next three or four years of foreign food and other essential products - principally from America - are so much greater than her present ability to pay that she must have substantial additional help or face economic, social, and political deterioration of a very grave character. The remedy lies in breaking the vicious circle and restoring the confidence of the European people in the economic future of their own countries and of Europe as a whole. [....] Aside from the demoralizing effect on the world at large and the possibilities of disturbances arising as a result of the desperation of the people concerned, the consequences to the economy of the United States should be apparent to all. It is logical that the United States should do whatever it is able to do to assist in the return of normal economic health in the world, without which there can be no political stability and no assured peace.

Source: OECD at https://www.oecd.org/general/ themarshallplanspeechatharvarduniv ersity5june1947.htm

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Fig. 3.1 George Marshall. Source: Extracted image from photograph by United States Department of State (1947– 1949). https://commons. wikimedia.org/wiki/File: George_C._Marshall,_U.S._ Secretary_of_State.jpg. Public Domain

The US government, despite domestic opposition, implemented the ‘Marshall Plan’ in order to achieve concrete results. In the short term, the intervention was necessary in order for the US to be able to continue trading with Europe. In the long term, the US looked forward to an open post-war international economy with the prevalence of international liberal economic relations, ensuring the smooth functioning and expansion of the international market. But the most important outcome, closely related to the previous one, was the desire of the US government to prevent the potential growth of communist influence in the war-torn countries of Europe by supporting liberal political regimes in post-war Europe (Fig. 3.1). At the planned meeting of the European states in Paris on 12 July 1947, for talks on how to manage the American aid resulting from the ‘Marshall Plan’, although the Soviet-influenced states were invited to participate, and despite the initial positive response of Czechoslovakia, they did not participate. The establishment of Cominform in September 1947, replacing the Communist International (Comintern), which had been dissolved in 1943 on the initiative of the USSR, and involving eight other communist and workers’ parties of the states under its influence, in order to deal with the divergent views among the governments of these states on the acceptance of their participation in the ‘Marshall Plan’ acceptance procedures, led to their refusal to participate, confirming the political and economic division of Europe.

3.1.2

The Organisation for European Economic Cooperation (OEEC)

An important consequence of the Marshall Plan was the need to create institutions of cooperation between the Western European states, as the programme required them to cooperate in order to determine the type of programme to be financed in each

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country and the way the resources were to be distributed. The first step was the establishment, on 16 April 1948, at the initiative of the United States, of the Organization of European Economic Cooperation (OEEC) to coordinate the implementation of the Marshall Plan, with the Frenchman Robert Marjolin (1911–1986) as the first Secretary General. The 16 founding member states were Austria, Belgium, Britain, France, Denmark, Greece, Ireland, Iceland, Italy, Luxembourg, Netherlands, Norway, Portugal, Sweden, Switzerland and Turkey. Since 1949, the Chateau de la Muette in Paris has been the headquarters of the organisation. The programme, depending on the area of modernisation that was to be strengthened, determined the future position of the Member State concerned in the international economy. In 1949, the Free Territory of Trieste joined the OEEC as a member state, which remained in the organisation until the end of 1954, when it ceased to exist as an independent state, while Germany was admitted as a member state in 1955. The last member state of the OEEC was Spain, from 1959. In 1961, the OEEC was renamed the Organisation for Economic Cooperation and Development (OECD) by a treaty signed on 14 September 1960 in Paris. Today, the Organisation has 38 member states.

3.2

The Start of the Cold War in Europe

One of the main results of the Second World War was the change in the global balance of power between the Great Powers, given that Germany and Italy had suffered a crushing defeat, the European states were weakened and unable to assume a dominant role, while Britain was in roughly the same position. Thus, the USA and the USSR emerged as the strongest military powers on the planet, despite the cost of their participation in the war. This, combined with the USSR’s influence on the states of Central Eastern Europe under its control and the US acquisition of the atomic bomb before the end of the Second World War, were important factors in the cultivation of mutual suspicion between these two superpowers and their states of influence and the start of the Cold War. The latter was practically a geopolitical, ideological and economic competition between the two superpowers, which lasted from 1947 until the fall of the Berlin Wall in 1989 and the collapse of the communist regimes in the remaining states under the influence of the USSR.

3.2.1

The Truman Doctrine

During this period of time and on the occasion of certain events taking place in Europe, culminating in the Greek Civil War, the American president Harry Truman (1884–1972), in a declaration on 12 March 1947, addressed to Congress, pledged to support ‘free peoples who resist the operation of enslavement by armed minorities or external pressures’. In this declaration, known as the Truman Doctrine, he aimed to help the governments of Greece, Turkey and Iran deal with any communist danger. At the same time, however, the Truman Doctrine also marked the beginning of the Cold War, which resulted in a change in US foreign policy. Thus, on 10 May 1947,

3.2 The Start of the Cold War in Europe

37

Congress approved his plan and on 22 May it became the law of the US state. The military and financial aid given to Greece and Turkey amounted to approximately 300 and 100 million dollars, respectively. The consequences of the Truman Doctrine were decisive for international developments. The decision of the USA to get involved in Greek affairs was a practical and symbolic ‘answer’ to the USSR and certainly of decisive importance for the relations between the two states, in view of the broader Marshall Plan (see § 3.1.1). This action of the USA, which essentially bypassed the newly established UN, was also of particular importance for the development of the Cold War, intensifying the confrontation with the USSR and projecting to the West the image of states controlled by totalitarian regimes, both for the latter and for the states under its influence, against the prevailing democracy and civil liberty in the Western European states and the USA (Fig. 3.2). Excerpt from Harry Truman’s Declaration to Congress of 12th March 1947 [....] I believe that it must be the policy of the United States to support free peoples who are resisting attempted subjugation by armed minorities or by outside pressures. I believe that we must assist free peoples to work out their own destinies in their own way. I believe that our help should be primarily through economic and financial aid which is essential to economic stability and orderly political processes.

Source: https://www.trumanlibrary.gov/library/online-collections/trumandoctrine

Fig. 3.2 Harry Truman. Source: Portrait (1947). from the US National Archives and Records Administration. https://en.wikipedia.org/wiki/ Harry_S._Truman#/media/ File:TRUMAN_58-766-06_ (cropped).jpg. Public Domain (cropped)

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3.2.2

3 From the Ruins of World War II to the Dawn of a New Europe (1945–1950)

The Berlin Blockade and the Prague Coup

The first signs of suspicion and rivalry did not take long to appear when the joint administration of the defeated Germany by the four Allies collapsed in 1946. The failure of the USA, the USSR, Britain and France to resolve the German question at the London Conference in December 1947 highlighted the magnitude of the emerging problem. The situation worsened the following year when the Soviet administration moved to blockade Berlin, beginning on 24 June 1948 and ending on 12 May 1949, forcing the USA to establish an airlift to supply the inhabitants of West Berlin. Moreover, in Czechoslovakia after the 1946 elections, the loss of some of the Communists’ popularity began to become apparent. In view of the new elections in May 1948, and in order to prevent further apparent losses in their strength, the Communist leadership staged a coup just before the elections in February 1948, anticipating the recording of the decline in their popularity. To ensure the passivity of military units that might oppose the coup, their non-communist commanders were placed under restriction. At the same time, units under communist command were put on alert during the coup without having to intervene since the legal government was easily overthrown and replaced by one friendly to the Moscow regime on 25 February 1948. On 9 May of the same year, the new constitution of the country was adopted, defining Czechoslovakia as a ‘people’s republic’, and the elections of 30 May were held with the single ballot paper of the united National Front, the majority of which was composed of persons friendly to the Communist Party. Political purges and persecutions of non-communist politicians and senior state officials followed (Fig. 3.3). However, the Soviet actions in both the Berlin blockade and the overthrow of the legitimate government of Czechoslovakia provoked strong protests from Western European governments and were major causes of a change in the negative opinion of the US public about planned US aid to European states and the country’s arms spending.

3.3

The Formation of Defence Coalitions

Under the Cold War regime, the cooperation efforts of the Western European states were extended, apart from the economic field, to the military as well. Such cooperation was first implemented with the conclusion of a treaty of alliance and mutual assistance between France and Britain on 4 March 1947 in Dunkirk. The Dunkirk Treaty, which entered into force on 8 September 1947, aimed, among other things, at resolving any disputes between them through diplomatic channels by frequent bilateral contacts, and at taking the necessary measures for joint action in the economic and social fields, within the framework of the purposes of the United Nations.

3.3 The Formation of Defence Coalitions

39

Fig. 3.3 Aerial bridge to supply the inhabitants of West Berlin during the Soviet blockade in the period 24.06.1948–12.05.1949. Source: Photograph by Henry Ries/USAF—United States Air Force Historical Research Agency via Cees Steijger (1991), “A History of USAFE”, Voyageur. https:// en.wikipedia.org/wiki/Berlin_ Blockade#/media/File:C-54 landingattemplehof.jpg. Public Domain

3.3.1

The Treaty of Brussels and the Western Union

The conclusion of this treaty was followed by a second treaty following an invitation by the two countries to others to join the Dunkirk mutual guarantee system. Thus, a treaty of cooperation was signed on 17 March 1948 in Brussels between Belgium, Britain, France, Luxembourg and the Netherlands after the invitation of the parties of the Treaty of Dunkirk to the Benelux countries, known as the Western Union (WU). To meet the defence requirements of the signed Treaty of Brussels, a Supreme Military Command was provided (Fig. 3.4). The Treaty of Brussels, in force for 50 years, in addition to activating the system of mutual guarantee in the event of a threat from anyone in Europe, provided for the possibility for the contracting member states to invite other states to accede to it. At the same time, the treaty provided for political, social and cultural cooperation in addition to military cooperation. However, the Treaty of Brussels was soon inactivated by the signing of a number of other treaties in the political, economic, social, cultural and military fields, such as the Convention establishing the Organisation for the Eyeopean Economic Cooperation in April 1948, (see § 3.1.2), the North Atlantic Treaty Organisation in April 1949 (see § 3.3.2), the Council of Europe in May 1949 (see § 3.4.5) and the European Coal and Steel Community in April 1951 (see § 4.1.2).

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Fig. 3.4 The ceremony of the signing of the Treaty of Brussels on 17 March 1948, in the presence of the representatives of the signatory states, Belgium, Britain, France, Luxembourg and the Netherlands. Source: Fotocollectie Anefo. Nationaal Archief, Den Haag, nummertoegang 2.24.01.09, bestanddeelnummer 902– 6325. Author: Noske, J.D./ Anefo. https://en.wikipedia. org/wiki/Treaty_of_ Brussels#/media/File:Pact_ van_Brussel,_Bevin_tekent. jpg. Creative Commons Attribution-Share Alike 3.0 Netherlands license (cropped)

3.3.2

The North Atlantic Treaty Organisation (NATO)

The immediate realisation by the five Contracting States to the Brussels Treaty that the Western Union alone would not be able to deal effectively with a Soviet threat was the cause of the opening of consultations with a view to setting up an organisation to prepare them for the possibility of such an attack and to strengthen their common defence militarily and politically. It was on this basis that the North Atlantic Treaty Organization (NATO) was founded on 4 April 1949 in Washington, which, in addition to the five member states of the Western Union, included Denmark, the United States, Iceland, Italy, Canada, Norway, Iceland, Canada and Portugal. NATO’s supreme body is the North Atlantic Council, based in Brussels, composed of the representatives or the Ministers of Foreign Affairs and Defence of the member states. The signing of the founding of the organisation seems to have contributed to the ending of the blockade of West Berlin just 1 month later, highlighting the importance of the armed balances for that era. However, the establishment of the US-European defence alliance provoked a negative reaction from the USSR and its influential states in Central Eastern Europe. After all, according to the British diplomat Hastings Lionel Ismay (1887–1965), the first Secretary General of the Council of the Alliance since 1952, it was created ‘to keep the Americans in, the Russians out, and the Germans down’. Two major events, the first Soviet atomic bomb test in August 1949 and the Korean War in June 1950, imposed on the North Atlantic alliance the need to create an integrated military structure capable of effectively defending the alliance’s member states. The American World War II general Dwight Eisenhower

3.4 The Post-War Political Movements for Unification

41

(1890–1969) was appointed Supreme Military Commander of the Allied Powers. In 1951 the Supreme Headquarters of Allied Powers in Europe (SHAPE) was established in Paris. Since 1967 its headquarters have been located in Casteau, Belgium. The enlargement of the alliance began with the participation of Greece and Turkey in 1952. After the US insistence from the outset on Germany’s membership of the alliance, the failure to establish the European Defence Community (see § 4.2.1), and the conclusion of the Warsaw Pact by the Soviet-influenced states of Central Eastern Europe, Germany joined the alliance in 1955 (see § 4.2.3). Today, there are 30 member states of the North Atlantic Alliance. Of these member states, 12 are states from Central Eastern Europe and the Balkans that joined the alliance after the fall of the Berlin Wall and the collapse of the communist regimes. On 14 October 1953, the Council of the Alliance adopted as NATO’s flag and emblem the design of a cross-shaped compass card with white and dark blue colours on a dark blue background.

3.4

The Post-War Political Movements for Unification

One of the first important post-war political proposals was that of the former British Prime Minister Winston Churchill, who, in a speech at the University of Zurich on 19 September 1946, referred to the need for the creation of a form of United States of Europe, which would be the result of Franco-German reconciliation. In this speech, Churchill made no mention of Britain’s participation in this United States. Moreover, according to his pre-war views, published in a British newspaper in 1930, Churchill was in favour of the unification of the countries of continental Europe, but without Britain’s participation in it. He was at the time praising the initiatives of Aristide Briand, stating, ‘We are with Europe but we do not belong to it’ (Fig. 3.5). Excerpt from the Speech at the University of Zurich on 19th September 1946 by Winston Churchill [...] It is to recreate the European fabric, or as much of it as we can, and to provide it with a structure under which it can dwell in peace, safety and freedom. We must build a kind of United States of Europe. In this way only will hundreds of millions of toilers be able to regain the simple joys and hopes which make life worth living [...] The first step in the re-creation of the European family must be a partnership between France and Germany.

Source: https://rm.coe.int/html/16806981f3

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Fig. 3.5 Winston Churchill. Source: Photograph by Yousuf Karsh (1941), Library and Archives of Canada. https://commons.wikimedia. org/wiki/Winston_Churchill#/ media/File:Sir_Winston_ Churchill_19086236948.jpg. Public Domain (cropped)

3.4.1

The Union of European Federalists

In the same month of September 1946, a meeting of representatives of the federalist movements of 14 European states was held in Hertenstein, Switzerland, with the central orientation of creating a European federation of states as the only way to avoid new European civil wars, such as the two disastrous world wars. A second meeting in Luxembourg designated Paris as the permanent seat of their European secretariat, where the meeting was finally held on 15 and 16 December 1946, which led to the founding of the Union of European Federalists (UEF), with the aim of coordinating the activities of some 50 federalist movements, and from 27 to 31 August 1947 its first congress was held in Montreux, Switzerland. The Dutch politician Hendrik Brugmans (1906–1997) was elected president of the Association of European Federalists, while among the personalities of the association were the French politician Henry Frenay (1905–1988), the Russian-German journalist and politician Eugen Kogon (1903–1987), the Russian-German writer Alexandre Marc (Aleksander Markovitch Lipiansky, Marc, 1904–2000) and Altiero Spinelli.

3.4.2

The United Europe Movement

However, on 14 May 1947, on the initiative of the British politician Duncan Sandys (1908–1987) and with the support of Winston Churchill, the Anglo-French United Europe Movement (UEM) was created. This movement opposed the creation of a

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43

European federation with supranational institutions and advocated a union of European states operating within the framework of intergovernmental cooperation. Shortly afterwards, other European organisations with similar aims were created in many European countries. However, the existence of different trends for the future of Europe, such as those of the federalists and unionists, as well as other views on how to implement European unification, required the establishment of a coordinating body and the holding of a pan-European conference to coordinate and organise their joint action for the purpose of implementing unification.

3.4.3

The Hague Conference on Europe

The Committee for the Coordination of the European Movements met first in Paris on 17 July 1947 and later on 10 November 1947, where the joint International Committee of the Movements for European Unity (ICMEU) was established. The latter organised the Congress of Europe in The Hague from 7 to 11 March 1948, chaired by Winston Churchill and attended by 16 former prime ministers and some 800 delegates from 90 European states, including influential politicians such as the German Konrad Adenauer, the British Harold Macmillan (1894–1986) and David Maxwell-Fyfe (1900–1967), the French Pierre-Henri Teitgen (1908–1997) and François Mitterrand (1916–1996), the Belgian Albert Coppé (1911–1999), the Dutch Hendrik Brugmans, and the Italian Altiero Spinelli. The three committees of the congress, the political committee chaired by former French Prime Minister Paul Ramadier (1888–1961), the economic and social committee chaired by former Belgian Prime Minister Paul Guillaume van Zeeland (1893–1973) and the cultural committee chaired by Spanish writer and diplomat Salvador de Madariaga y Rojo (1886–1978), proposed the creation of a European Consultative Assembly of representatives of national parliaments and a European Council charged with preparing the political and economic integration of European countries. They also proposed the establishment of a charter of human rights and the creation of a court to ensure its observance. Finally, they also proposed the creation of a European cultural centre (Fig. 3.6).

3.4.4

The European Movement

Shortly afterwards, on 25 October 1948, as a result of the Hague Conference on Europe, the European Movement (EM) was founded, replacing the International Committee of Movements for European Unity, in order to implement the proposals of the Conference on Europe. Duncan Sandys became President of the European Movement, while the French former Prime Minister Léon Blum (1872–1950), the British former Prime Minister Winston Churchill, the Italian Prime Minister Alcide de Gasperi (1881–1954), the Belgian Prime Minister Henri-Paul Spaak

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3 From the Ruins of World War II to the Dawn of a New Europe (1945–1950)

Fig. 3.6 The Congress of Europe in The Hague, May 1948. In the background is the emblem of the Congress, a capital red letter “E”. Author: Snikkers/Anefo. Source: http://proxy.handle.net/1064 8/a8b68af4-d0b4-102d-bcf8003048976d84. Public Domain (cropped)

(1899–1972), the French former Prime Minister Robert Schuman (1886–1963), the Austrian diplomat Richard Coudenhove-Kalergi, while the German politician Konrad Adenauer became Honorary Presidents. From 25 to 27 February 1949, the first international congress of the European Movement was convened in Brussels, where the idea of a charter of human rights and the creation of a court of law, which had been proposed at the Congress for Europe in The Hague the previous year, was adopted. A key priority of the European Movement was the establishment of the Council of Europe on 5 May 1949 (see § 3.4.5), while one of its most important activities was the establishment of the College of Europe in Bruges, Belgium, on 19 May 1950, with Hendrik Brugmans as its first rector, and the European Centre of Culture in Geneva on 7 October 1950, under the supervision of the Swiss Denis de Rougemont (1906–1985).

3.4.5

The Council of Europe

Starting from the 1948 Hague Conference on Europe and based on the proposals of the committees for the establishment of a European Council, the idea of establishing a European political entity that would work towards European unification matured. As early as August 1948, Paul Ramadier, chairman of the political committee of the Congress for Europe, submitted to the governments of the 16 member states of the Organisation for European Economic Cooperation set up to administer American aid under the ‘Marshall Plan’ (see § 3.1.2) a plan to set up a European assembly to act as a mechanism for achieving unification. The views of federalists and unionists were divided as to the extent to which national sovereignty should be transferred to the political entity to be set up. Finally, from the beginning of 1949, some European governments decided to set up a political entity consisting of a consultative assembly and a committee of ministers who would make the final decisions. However, the

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45

Fig. 3.7 Emblem of the Council of Europe established by its Parliamentary Assembly on 25 October 1955 and as a flag by the Committee of Ministers on 9 December 1955. Contributors: Image by Clker-Free-Vector-Images. Clker-Free-Vector-Images

establishment of a Council for Europe was also a priority for the European Movement. Thus, on 5 May 1949, the Statue of the Council of Europe was signed in London by ten European states, Belgium, Britain, France, Denmark, Ireland, Italy, Luxembourg, Norway, Netherlands and Sweden, with the aim of ‘achieving closer unity among its members in order to safeguard and promote common ideals and principles and to foster their economic progress’. The Statute of the Council of Europe entered into force on 3 August 1949, and on 9 August of the same year Greece and Turkey became co-founding members of the Council of Europe. The following day, on 10 August 1949, the first session of the Consultative Assembly of the Council of Europe was convened in Strasbourg. This was the first international parliamentary assembly with representatives from the national parliaments of the member states and the French former Prime Minister Édouard Herriot (1872–1957) as its president. However, despite the encouraging start, the next president, PaulHenri Spaak, resigned from the presidency of the Parliamentary Assembly of the Council of Europe on 10 December 1951 in protest at Britain’s indifferent attitude towards the effort for European unity (Fig. 3.7). Meanwhile, on 4 November 1950, the Convention for the Protection of Human Rights and Fundamental Freedoms was signed in Rome by representatives of the member states of the Council of Europe, in accordance with the decisions of the European movements at the 1948 Hague Conference on Europe. Today, the Council of Europe has 47 member states. On 25 October 1955, the Parliamentary Assembly of the Council of Europe established the circle of 12 gold stars on a blue background as its emblem, while on 9 December of the same year the Committee of Ministers adopted it as its flag, officially establishing it a few days later, on 13 December in Paris.

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3 From the Ruins of World War II to the Dawn of a New Europe (1945–1950)

The First Post-War Economic Agreements

The economic problems arising from the devastating consequences of the Second World War forced the acceleration of efforts to recover the economies of the European states by reorganising and modernising industry, agricultural production, services and trade. The modernisation of economic activities required cooperation between European states and the conclusion of economic agreements that would facilitate economic relations between them, controlling production in the primary and secondary sectors and liberalising trade by facilitating the movement of goods, services, persons and capital. Some agreements, such as the Tripartite Council for Economic Cooperation, between France, Belgium and the Netherlands, signed on 20 March 1945 in Paris, or the Fritalux customs union, renamed Finebel, between France, Italy, the Netherlands, Belgium and Luxembourg, in January 1948, failed to launch processes of substantial unification. Some others, however, either simply had a longer life span or were decisive for the course of European integration, paving the way and providing models that served as models for the implementation of the major European economic agreements of the following decades.

3.5.1

The Custom Convention of Benelux

Based on an economic union formed in 1922 by Belgium and Luxembourg, a Custom Convention of Benelux was signed on 5 September 1944 by the governments of Belgium, the Netherlands and Luxembourg in exile in London, following the monetary agreement of 21 October of the previous year between the same countries. The name of the convention was obviously formed from the first letters of the names of each member state. This agreement established a board of directors for customs of all three member states, a board for economic union and a board for trade agreements. The agreement was to be adopted and entered into force after the repatriation of the exiled governments. Given that the entry into force of the treaty did not take place immediately after the end of the war, a new agreement was signed at The Hague on 14 March 1947, which provided for the elimination of customs duties on products in transit between member states and the limitation or elimination of customs duties on products imported from the overseas possessions of member states. This agreement entered into force on 1 January 1948. It should be noted that on 17 March of the same year the Benelux member states signed in Brussels, with Britain and France, the 50-year Treaty of Brussels establishing the Western Union (see § 3.1.2), which, in addition to its defence aspect, provided for cooperation in the commercial, economic and coordination fields. In June of the same year at the Benelux Conference in the Ardennes Tower, it was agreed to speed up the period of economic integration by coordinating the monetary and pricing policies of the three countries and balancing their budgets, and in 1955 the Benelux Parliament was created.

3.5 The First Post-War Economic Agreements

47

The Benelux Customs Convention was replaced in 1960 by the Treaty of Benelux Economic Union (Benelux Economische Unie, Union Économique Benelux, Benelux Economic Union, BEU) signed in 1958 and entered into force in 1960 to promote the free movement of workers, capital, services, and goods. It lasted for 50 years, and its general secretariat was set up in Brussels, where the Benelux Court of Justice has been based since 1975. On 17 June 2008, a new treaty was signed between the Benelux member states to replace the previous treaty of 1958, given that its 50-year term was due to expire in 2010. The new treaty has an unlimited duration and renamed the Benelux Economic Union as the Benelux Union (Benelux Unie, Union Benelux, Benelux Union, BU), which aims at cooperation between its member states in the areas of a single internal market and economic integration, sustainable development, and justice and home affairs. Its institutional bodies are the Committee of Ministers, the Council, the Parliament, the Court of Justice and the General Secretariat.

3.5.2

The Council for Mutual Economic Assistance (Comecon)

The Council of Mutual Economic Assistance (Comecon) was established after the economic conference of the countries of Central Eastern Europe in Moscow from 5 to 8 January 1949 and was officially announced on 25 January of the same year. The founding members of Comecon were the Soviet Union, Bulgaria, Hungary, Poland, Romania and Czechoslovakia. Albania became the seventh member a month later, while the German Democratic Republic became a member the following year. The establishment of Comecon was based on the Soviet leadership’s attempt to tie the other member states economically to the Soviet Union’s chariot, cutting off all trade and economic cooperation with the Western European states at a time when the Marshall Plan was being implemented and processes for economic agreements in Western Europe were beginning (Fig. 3.8).

Fig. 3.8 Meeting of the Comecon Executive Committee. From the 1964 book “Twenty Years of the People’s Republic of Poland”, photographer not specified and no copyright notice in the book. https://commons.wikimedia.org/wiki/File:Comeconexecutivecommittee.JPG. Public Domain

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In practice, Comecon’s economic isolation benefited the Soviet Union since the blockade of trade between its member states and Western Europe resulted, on the basis of the ‘Sofia Principle’ August 1949, in the conclusion of preferential agreements between them and the Soviet Union. The latter thus imported products from these states at artificially low prices, weakening the stronger economies of the technologically more developed states, such as East Germany and Czechoslovakia in particular, but also, to a lesser extent, Poland and Hungary. Moreover, investment activities in the Comecon states ceased to be economically driven, making them inefficient. In practice, however, the 1949 ‘Sofia Principle’ ceased to apply around the end of the 1960s. Comecon member states reached 11 in the 1980s. After the collapse of the communist regimes in Central Eastern Europe, Comecon formally ceased to exist on 18 June 1991 and most European member states gradually became members of the European Union.

3.5.3

The European Payments Union

After the end of the Second World War, and given the small dollar reserves of the European states, at a time when international trade was conducted on the basis of the US dollar, trade transactions had decreased significantly. This contributed to the establishment of the European Payments Union (EPU), which was founded on 19 September 1950 by the 16 member states of the OEEC, namely Austria, Belgium, Britain, France, Denmark, Greece, Ireland, Iceland, Italy, Luxembourg, Netherlands, Norway, Portugal, Sweden, Switzerland and Turkey and also Germany and the Free Territory of Trieste. The purpose of its creation was to facilitate the convertibility of European currencies by fixing exchange rates that would reflect the reality of the economic situation of each country. The agreement establishing the union would have retroactive effect from 1 July 1950. The EPU acted as a centre for multilateral trade, replacing bilateral trade, liberalising trade, fixing the exchange rates between different currencies and acting as a clearing mechanism for settling accounts between European states. To this end, a unit of account was established based on the value of the dollar against gold, through which the settlements of accounts and settlements between States were made at the end of each month. The administration of the settlements was entrusted to the Bank for International Settlements (BIS), based in Basel. The EPU has helped to ensure exchange rate stability and promote free trade between countries. However, it faced a number of crises caused by doubts about price fluctuations and the convertibility of European currencies. Finally, the EPU was wound up on 27 December 1958 and replaced on the same day by the European Monetary Agreement (EMA), which provided the institutional framework for monetary cooperation between the countries of the OEEC from 1958 to 1972. The EMA had been signed by the 17 Member States of the European Payments Union—which constituted all the member states of the OEEC—on 5 August 1955 and the European Coal and Steel Community had already been established.

References

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References Baylis, J., “The Western Union and the Brussels Pact”. In: The Diplomacy of Pragmatism. Palgrave Macmillan, London, 1993. https://doi.org/10.1057/9780230372375_6 Britannica, Comecon, “Council for Mutual Economic Assistance (Comecon)”. https://www. britannica.com/topic/Comecon Council of Europe, “Our History”. https://www.coe.int/en/web/about-us/founding-fathers CVCE, “Benelux”. https://www.cvce.eu/en/education/unit-content/-/unit/026961fe-0d57-4314-a40 a-a4ac066a1801/c28bd41d-7e26-48bf-b9a6-1cce7cc5eb70 CVCE, “The Congress of Europe in The Hague (7 to 10 May 1948)”. https://www.cvce.eu/en/ education/unit-content/-/unit/7b137b71-6010-4621-83b4-b0ca06a6b2cb/4b311dc0-cbe6-421d9f9a-3bc8b1b155f6 European Movement International, “Our Mission and History”. https://europeanmovement.eu/ourmission-history/#our-history Harry S. Truman, “The Truman Doctrine”, 1952, Series: President’s Secretary’s Files. https://www. trumanlibrary.gov/library/research-files/truman-doctrine?documentid=NA&pagenumber=1 Historical Archives of the European Union, “European Payments Union 01 July 1950 (Paris [France]) - 27 December 1958 (Paris [France])”. https://archives.eui.eu/en/isaar/31 Historical Archives of the European Union, “The Organisation for European Economic Co-operation, 16 April 1948 (Paris [France]) - 01 September 1961 (Paris [France])”. https:// archives.eui.eu/en/isaar/39 Historical Archives of the European Union, “The United Europe Movement and the Congress of Europe. Documents from 26 April 1948 to 10 October 1953”. https://archives.eui.eu/en/fonds/1 94018?item=UWK/NS.B-1.4-548 NATO, “What is NATO?”. https://www.nato.int/nato-welcome/ OECD, The “Marshall Plan” speech at Harvard University, 5 June 1947. https://www.oecd.org/ general/themarshallplanspeechatharvarduniversity5june1947.htm Union of European Federalists, “UEF”. https://www.federalists.eu/uef

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From Schuman Declaration to the Establishment of the European Communities (1950–1958)

4.1

Peace Necessitates the Establishment of the First Community

Despite the large-scale devastation caused by World War II to German industry, it soon appeared that it would be able to recover its pre-war production levels. This was helped by the substantial financial aid it received under the ‘Marshall Plan’, which enabled it to reduce its trade deficit and establish a new monetary system. Moreover, the revival of capitalism in Germany was seen by Western Europeans as an effective weapon against the communist threat. However, France soon realised that peace in the region and its prosperity depended on the internal situation in Germany and that its industries would very soon be unable to compete with future German industries. Consequently, the control of the coal mines and the breaking up of the monopolies in heavy industry was a crucial factor in the relations between the two states and a necessary condition for the peace and prosperity of Europe. It should be noted that the German regions of the Saar and the Ruhr Valley, which were under French occupation under the war reparations regime, were among the richest and most productive coal-mining areas in Europe. Given that the coal and steel production of the Benelux countries was still being used almost exclusively to meet their domestic demand, the control of coal and steel production and the question of the Saar and the Ruhr Valley should be resolved soon and in a peaceful manner that would ensure a lasting peace in Europe. Moreover, Germany wished to regain full territorial sovereignty, and German Chancellor Konrad Adenauer made repeated public statements in favour of FrancoGerman cooperation. On 7 November 1949, he went further, proposing a plan for the merger of Franco-German heavy industry and advocating the creation of an international body to control the coal mining and industrial areas of Germany, Belgium and France. Adenauer hoped that this would also solve the problem of the Saar and the Ruhr valley in a peaceful way since it would place Germany in a wider European context, where its equal rights with its other partners would be recognised. # The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 P. Liargovas, C. Papageorgiou, The European Integration, Vol. 1, Springer Texts in Political Science and International Relations, https://doi.org/10.1007/978-3-031-47776-8_4

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4 From Schuman Declaration to the Establishment of the European. . .

Moreover, on 6 March 1950, Adenauer, in an interview with an American journalist, proposed the creation of a Franco-German economic and political union.

4.1.1

The Schuman Declaration

Excerpt from the Declaration of 9 May 1950 by Robert Schumann [...] Europe will not be made all at once, or according to a single plan. It will be built through concrete measures which first create a de facto solidarity. The coming together of the nations of Europe requires the elimination of the age-old opposition of France and Germany. Any action taken must in the first place concern these two countries. With this aim in view, the French Government proposes that action be taken immediately on one limited but decisive point. It proposes that Franco-German production of coal and steel as a whole be placed under a common High Authority, within the framework of an organization open to the participation of the other countries of Europe. The pooling of coal and steel production should immediately provide for the setting up of common foundations for economic development as a first step in the federation of Europe, and will change the destinies of those regions which have long been devoted to the manufacture of munitions of war, of which they have been the most constant victims. [...] By pooling basic production and by instituting a new High Authority, whose decisions will bind France, Germany and other member countries, this proposal will lead to the realization of the first concrete foundation of a European federation indispensable to the preservation of peace.

Source: https://european-union.europa.eu/principles-countries-history/his tory-eu/1945-59/schuman-declaration-may-1950_en Five years after the end of the war, it was found that both the Organisation for European Economic Cooperation and the Council of Europe were unable to activate mechanisms for resolving the Franco-German problem through procedures for controlling the production of coal and steel. Other solutions had to be found that would serve the need to consolidate peace and (re)integrate (West) Germany into the Western European family. It was precisely then that the declaration of the French Foreign Minister Robert Schuman of 9 May 1950, drafted by the French government’s top adviser Jean Monnet (1888–1979) as head of a committee, opened the greatest chapter in the history of European integration (Figs. 4.1 and 4.2). The Schuman Declaration provided for putting all French and German coal and steel production under a common authority and had the political aim of removing the risk of a new war, strengthening Franco-German solidarity, and creating the conditions for European unification. After all, coal and steel production was an important factor in the economic recovery of the European states affected by the war. The Schuman Declaration was accepted on 3 June 1950 by the German Chancellor Konrad Adenauer, as well as by Italy, the Netherlands, Belgium and Luxembourg, and rejected by Britain, which refused to cede its sovereign rights to a supranational authority that would control European coal and steel production (Fig. 4.2).

4.1 Peace Necessitates the Establishment of the First Community

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Fig. 4.1 French Foreign Minister Robert Schuman. Creator: The U.S. National Archives. Contributor: The U.S. National Archives via Picryl.com. Copyright: No known copyright restrictions (cropped)

Fig. 4.2 The French politician and shaper of the Schuman Plan, Jean Monnet. Source: Anonymous author (Keystone France), 1952: https://commons.wikimedia. org/wiki/File:Jean_Monnet. (cropped2).jpg. Public Domain (cropped)

4.1.2

The Establishment of the ECSC

The Treaty establishing the European Coal and Steel Community (ECSC) was signed in Paris on 18 April 1951 and entered into force on 24 July 1952 for a limited period of 50 years. The treaty provided for a common market for coal and steel, with

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4 From Schuman Declaration to the Establishment of the European. . .

the abolition of tariffs and subsidies, and included France, Germany, Italy, the Netherlands, Belgium and Luxembourg, thus creating the first delimited community of European states. The common market provided for by the Treaty became operational on 10 February 1953 for iron ore and coal, on 15 March 1953 for scrap iron and on 1 May 1953 for steel.

4.1.3

The Institutional Organisation of the ECSC

The High Authority, consisting of nine members, up to two of whom could be from the same state and appointed for 6 years, functioned as an executive body independent of the governments of the Member States, refraining from actions that would call into question its supranational character. The first President of the High Authority for the period 1952–1955 was Jean Monnet. The Special Council of Ministers, as a parallel executive body, but with fewer powers than the High Authority, consisted of six ministers representing the Member States. The Presidency was held in rotation by each Member State of the Council for a period of 3 months. The institutional machinery of the ECSC was complemented by the Joint Assembly, as a legislative body, consisting of 78 members appointed by the parliaments of the Member States. In the Joint Assembly, France, Germany and Italy each had 18 representatives, Belgium and the Netherlands 10 representatives each, and Luxembourg 4 representatives. Finally, the Court of Justice, which consisted of seven judges and two prosecutors, appointed by agreement of the governments of the Member States for a period of 6 years, was an international institution with supranational jurisdiction and a mission to uphold Community law, whose decisions were binding on the Member States. Luxembourg was designated as the provisional seat of the institutions, with the exception of the Joint Assembly, which had its seat in Strasbourg. It should be noted that the Council of Ministers, as a parallel executive body, was not provided for in the Schuman plan but was imposed by the Benelux countries in order to mitigate the supranationality and hence the federalism represented by the High Authority (Fig. 4.3).

4.1.4

The Functioning of the ECSC

The High Authority would collect information that businesses and Member States would be obliged to provide. This would be used to make forecasts to guide the action of the parties concerned. At the same time, the ECSC would carry out its own studies on prices and markets in order to supplement the information provided by businesses and associations. The financing of the ECSC to cover administrative costs would come from levies on coal and steel production and from the conclusion of loans. In the field of investment, the ECSC would be able to grant loans and also to guarantee loans taken out by undertakings with third parties and would be able to direct investments that it does not finance.

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Fig. 4.3 The ECSC emblem with the six stars of the six Member States and the two colours, black for coal and blue for steel. Creator: University of Kentucky. Creative Commons Attribution-Share Alike 4.0 International License

In the production sector, the ECSC would mainly play a supporting role through cooperation with governments and interventions in the field of prices and trade policy. However, in the event of a fall in demand, the ECSC could intervene directly by imposing quotas aimed at a planned reduction in production or, in the event of insufficient production, by setting consumption priorities, allocating resources and determining the level of exports. As regards price fixing, the Treaty prohibited all discriminatory practices and all unfair competition. In certain circumstances, such as in cases of imminent crisis, the High Authority could set maximum or minimum export prices within the Community. In order to ensure free competition, the High Authority could prohibit cartels or associations of undertakings if it finds that they tend directly or indirectly to hinder or restrict competition. Wages and labour mobility were important issues on which the High Authority could intervene in cases of abnormally low wages or wage reductions, under certain conditions explicitly set out in the Treaty. With regard to the mobility of skilled labour, the Treaty provided for the abolition, on the part of States, of restrictions on labour on grounds of nationality. Furthermore, under certain conditions and with the necessary reforms in the field of immigration, businesses could also recruit foreign workers. Finally, the Treaty contained provisions on the ECSC’s trade policy towards third countries, such as the possibility of setting maximum and minimum tariff rates, control of the granting of export or import licences and the right to be informed of trade agreements concluded in the coal and steel sector.

4.1.5

Consequences and Effects of the ECSC Operation

The form of federalism that prevailed with the ECSC, harnessed the Franco-German rivalry that had been the cause of wars in the past. The ECSC confirmed the pre-World War II borders between France and Germany, without creating a political problem because of the existence of a supranational High Authority to which the sovereign rights of the Member States of the Community were transferred. In the

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1960s, due to the weakening of Community solidarity, the ECSC was marginalised, since it was unable to continue the successful development of mechanisms to rationalise coal and steel production, due to conflicts of interest between the Member States, at a time of overproduction of oil, imports of cheap coal from the USA and imports of cheap steel from third countries. Overall, however, the ECSC has managed to ensure a balanced development of production and resource allocation and to contribute to the necessary technological restructuring. Steel production has increased compared with the 1950s, with a cheaper and better quality product. Coal production was necessarily reduced, but coal production technology improved, and although the workforce employed decreased, the ECSC’s social management systems proved effective in dealing with crises. However, while the project had an ostensibly economic basis, promoting economic cooperation in the very important coal and steel sectors, according to German Chancellor Konrad Adenauer, the ECSC was of particular political importance, given that it harnessed the Franco-German rivalry, which had been the cause of wars in the past. With the establishment of the ECSC, the pre-World War II borders between France and Germany were stabilised, while the presence of a supranational High Authority, to which the sovereign rights of the Member States of the Community were delegated, prevented the emergence of transnational problems (Fig. 4.4).

4.2

Attempts to Establish a Defence and Political Community

The blockade of Berlin by the Soviet Union from June 1948 to May 1949, the construction and testing of an atomic bomb by the Soviets in August 1949 and the Korean War that began in June 1950 brought to the fore the need to rearm Germany. This need was supported by the United States, but met with suspicion from both France and many European states, with recent memories of World War II. Germany’s participation in a European defence community, guided by the experience of the ECSC, was seen as an appropriate solution. The establishment of a European political community was attempted along the same lines shortly afterwards. However, both ambitious attempts failed to produce the desired results.

4.2.1

The Attempt to Establish a European Defence Community (EDC)

Excerpt from the Declaration of 24 October 1950 by René Pleven [The plan] proposes the creation, for the purposes of common defence, of a European army tied to the political institutions of a united Europe. [...] The Member Governments would appoint a Minister for Defence who would be accountable, in

(continued)

4.2 Attempts to Establish a Defence and Political Community

57

a manner yet to be determined, to those appointing him and to a European Assembly. [...] The contingents provided by the participating countries would be incorporated in the European army, at the level of the smallest possible unit.

Source: https://www.fransamaltingvongeusau.com//documents/dl2/h6/2. 6.1.pdf The supranational federal model of the High Authority of the ECSC, which Jean Monnet himself expressed as its President, could not be applied to the establishment of a European Defence Community (EDC), which would constitute the military arm of the European unification of the six ECSC Member States. The plan to establish the EDC was proposed by the French Prime Minister René Pleven (1901–1993) on 24 October 1950, from the floor of the French National Assembly, with the aim of arming West Germany (Fig. 4.5). The first meeting to this end was held before the signing of the Treaty establishing the ECSC, on 15 February 1951, in Paris, with the participation of France, Italy,

Fig. 4.4 The ECSC countries in 1952

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4 From Schuman Declaration to the Establishment of the European. . .

Fig. 4.5 The Prime Minister of France, René Pleven. Source: Anonymous (Keystone France), 1950. https://commons.wikimedia. org/wiki/File:Ren%C3%A9_ Pleven.jpg. Public Domain (cropped)

Luxembourg and Germany, and with the participation of the United States, Canada, Denmark, Norway, Britain and the Netherlands as observers. Finally, the Treaty establishing the EDC was signed in Paris on 27 May 1952 by the same six ECSC Member States. Institutionally, the 11-member governing body of the 40 divisions of the EDC, similar to the High Authority of the ECSC, would be controlled by the Council of Ministers, which would take its important decisions by unanimity, while the Joint Assembly and the ECSC Court of Justice would be complementary institutions of the EDC. Obviously, an intergovernmental function combined with federal characteristics was prescribed for the EDC, despite the initial excessive ambitions of the federalists. However, these functional characteristics of the EDC were causing political fears in France. In particular, on the Gaullist side, there was a fear of loss of sovereignty and military upgrading of Germany, while on the left there were concerns about possible US manipulation of European defence policy. Moreover, at a time of significant political change in France following its defeat in Indochina and the death of Joseph Stalin in the Soviet Union, the project of a defence community was considered by much of the political world in the country to be untimely. Furthermore, the new French Prime Minister from June 1954, Pierre Mendés France (1907–1982), quite arbitrarily drew up a protocol in which he abolished all supranational and federal features of the new treaty, mainly contained in Article 38. This article was the brainchild of the federalist Prime Minister of Italy, Alcide de Gasperi, and provided for the establishment of a federal or confederal structure to coordinate the functioning of the existing and future Communities. However, the France Protocol was not accepted by the other five ECSC Member States at the Brussels Conference of 19–22 August 1954. Finally, the French Parliament, on

4.2 Attempts to Establish a Defence and Political Community

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Fig. 4.6 Prime Minister of Italy Alcide de Gasperi. Source: Unknown author— http://www.iomiimpegno.it/? p=760, 1953. https://en. wikipedia.org/wiki/Alcide_ De_Gasperi#/media/File: Alcide_de_Gasperi_2.jpg. Public Domain

30 August 1954, rejected without debate the Treaty establishing the EDC. These suspended efforts to establish a defence community and led the Chairman of the High Authority of the ECSC, Jean Monnet, to declare in November of that year that he did not wish to renew his term of office as Chairman (Fig. 4.6).

4.2.2

The Failure to Establish a European Political Community (EPC)

Meanwhile, the Belgian Foreign Minister, Paul-Henri Spaak, as chairman of an ad hoc assembly set up by the Foreign Ministers of the Six Member States on 10 September 1952, handed on 9 March 1953 to the President of the ECSC Council a draft treaty for the creation of a European Political Community (EPC) (Fig. 4.7). The project, which was structured along the federal logic provided for in Article 38 of the EDC (see § 4.2.1), envisaged the establishment of a community aimed at defending human rights and fundamental freedoms, ensuring the security of the Member States, coordinating their foreign policy and gradually creating a common market. Institutionally, it provided for the existence of an executive Council, a bicameral Parliament, a Council of Ministers of the Member States, a Court and a Social and Economic Committee. However, the failure of the EDC project contributed to the abandonment for the time being of the idea of establishing an EPC, the federal structure of whose institutions was a source of suspicion, especially on the part of France.

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4 From Schuman Declaration to the Establishment of the European. . .

Fig. 4.7 Belgian Foreign Minister Paul-Henri Spaak. Source: Unknown author Credit/Provider Bundesarchiv. licensed under the Creative Commons Attribution-Share Alike 3.0 Germany license (cropped)

4.2.3

The ‘Re-founding’ of the Western European Union (WEU)

Finally, the problem of the controlled rearmament of Germany, in order to guarantee its sovereignty, which contributed to the ineffective project of establishing the EDC, was solved with the establishment of the Western European Union (WEU), on 23 October 1954 in Paris, following the Final Act of the Nine-Power Conference (Belgium, Canada, France, Germany, Italy, Luxembourg, Netherlands, Britain and the United States), held in London, from 28 September to 3 October 1954 and reactivating the inactive Treaty of Brussels of 17 March 1948 between Britain, France and the Benelux, establishing the Western Union (see § 3.3.1). Germany and Italy were to participate in the WEU, in addition to Belgium, Britain, France, Belgium, Luxembourg and the Netherlands. Germany would also become an equal member of NATO through its participation in the WEU, and its maximum permissible military strength would be 12 divisions, without the possibility of possessing atomic, chemical or bacteriological weapons. Institutionally, the WEU would be based on the Member States’ Council of Foreign Ministers, a Parliamentary Assembly with the Member States’ representatives in the Council of Europe’s Assembly, and an arms control body. It is obvious that the uncertainty and political fears, which were consequences of the recent Second World War, did not allow the first step of establishing a defence community, which would have been the precursor of a corresponding policy, creating the framework for a common foreign policy. This project was thus postponed to the distant future, while efforts towards European integration were now concentrated on achieving ‘low politics’ objectives, with integration processes

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mainly in economic fields, instead of the difficult ‘high politics’ objectives, which required integration processes in the more difficult areas of foreign and defence policy and political integration.

4.3

Plans for Sectorial Integration and Establishment of New Communities

The failure of the EDC, which was attributed to the French government, caused, in addition to the suspension of any discussion on the establishment of an EPC, the downgrading of the consolidation processes. Nevertheless, in order to revitalise the European idea, Jean Monnet, President of the High Authority of the ECSC, proposed at the beginning of 1955 the establishment of a European Atomic Energy Community, which, among other things, would ensure control of a future German nuclear industry. He informed the Belgian Foreign Minister Paul-Henri Spaak, a supporter of sectoral integration, of this plan and sought his support, while refraining from informing the French government of his plans. At the same time, the Dutch Foreign Minister Johan Willem Beyen (1897–1976) advocated the creation of a free market leading to European economic integration, without abandoning the idea of a political community. He essentially sought horizontal integration rather than sectoral integration as in the case of the ECSC. His plan, known as the ‘Beyen plan’, was communicated to his counterparts, Belgian Minister Paul-Henri Spaak and Luxembourg Minister Joseph Bech (1887–1975) on 4 April 1955. At their meeting on 23 April 1955 in The Hague, the three ministers were able to agree on a common position, which was recorded in a joint memorandum. This document, which took its final form on 18 May 1955 and became known as the ‘Benelux Memorandum’, proposed the creation of an economic community based on a general common market and a sectoral approach to transport and energy, particularly nuclear energy, thus covering the views of Paul-Henri Spaak, who was more in favour of sectoral integration, and Jean Monnet. The common market was to be achieved through the gradual removal of trade restrictions and customs duties. In addition, he proposed the creation of a common independent authority as an institution of the single economic community. The memorandum was communicated 2 days later, on 20 May 1955, to the governments of the other three partners, namely France, Germany and Italy, together with a proposal to hold a conference to discuss it. After some hesitation, German Chancellor Konrad Adenauer and Italian Foreign Minister Gaetano Martino (1900–1967) accepted the proposal. However, the plan ran up against the French government’s opposition to any new extension of supranationalism through the establishment of a common market. In the meantime, on 9 May 1955, the Joint Assembly of the ECSC unanimously decided to resume work on European integration, which would include both the plans for sectoral integration and the plans for a common market, submitted by the representatives of Germany and the Benelux. Thus, the attempt to revive the unification processes would be carried out by the six partners at the Messina Conference on 1 and 2 June 1955.

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The success of the ECSC was the model for the establishment of the European Economic Community (EEC) and the European Atomic Energy Community (EAEC), also known as EURATOM. The intergovernmental committee appointed at the Messina Conference under the Belgian Foreign Minister Paul-Henri Spaak, in which a British representative participated, began its work on 9 July 1955 and submitted a report to the Council of Ministers of the six ECSC Member States on 21 April 1956. The Spaak Committee’s proposal was adopted by the six partners at the Venice Conference on 29 and 30 May 1956. Specifically, for the European Atomic Energy Community, a committee was set up in October 1956 with Louis Armand (1905–1971), president of the French national railways, Franz Etzel (1902–1970), vice-president of the ECSC High Authority, and Francesco Giordani (1896–1961), former chairman of the Italian Nuclear Research Commission, to prepare a report on Europe’s requirements and potential for nuclear power generation. On 4 May 1957, the report of the ‘Three Wise Men’ entitled ‘A target for EURATOM’ was submitted, which recommended the construction of nuclear power stations to prevent oil-producing countries from using oil as a means of exerting international pressure.

4.3.1

The Establishment of the EEC and the EAEC

The Treaty establishing the EEC and the Treaty establishing the EAEC were signed in Rome on 25 March 1957 and entered into force on 1 January 1958. It should be noted that Britain, although it attended the work of the Spaak Committee with a representative, expressed its opposition to the establishment of the Communities from the outset, and its representative expressed the view that it was impossible to reach any agreement and that if an agreement was finally concluded, it would not be possible to implement it. The EEC aimed to create a common market, subject of course to the existence of a customs union, which would be implemented over a transitional period of 12 years, at the end of which all the rules of the common market, with free movement of goods, services, persons and capital, would come into force. Furthermore, the development of common policies in various sectors, starting with agriculture, would gradually begin. The EAEC concerned the specific energy sector, atomic energy, which, at that time, was of particular importance both for the reduction of the dependence of European countries on oil-producing countries, especially after the Suez Canal crisis of 1956 and the restriction on oil imports from the Middle East, and for the development of European industry. The ultimate aim of the Treaty was to contribute to the creation and development of safe European nuclear technology for peaceful purposes so that all six Member States could benefit from the development of atomic energy and ensure security of supply.

4.3 Plans for Sectorial Integration and Establishment of New Communities

4.3.2

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The Institutional Organisation of the Two New Communities

Institutionally, the EEC had as its executive body a nine-member Commission, composed of independent persons appointed jointly by the governments of the Member States. The first President of the Commission was Walter Hallstein (1901–1982), a German adviser to Chancellor Adenauer and university professor, from January 1958. The Commission functioned in parallel with the Council of Ministers, which was composed of six representatives of the Member States and had the power to reject or amend the Commission’s proposals, while its decisions were taken by majority vote, using the weighted voting system. France, Germany and Italy each had four votes, Belgium and the Netherlands two votes and Luxembourg one vote (Fig. 4.8). The EAEC had as its executive body a five-member Commission, composed of independent persons appointed jointly by the governments of the Member States. The Commission functioned in parallel with the Council of Ministers, which was composed of six representatives of the Member States and had the power to reject or amend the Commission’s proposals, while its decisions were taken by majority vote, using the weighted voting system, as in the case of the EEC mentioned above. The institutional organisation of the now three Communities, the ECSC, the EEC and the EAEC, was complemented by the Assembly, as a legislative body, now consisting of 142 members. France, Germany and Italy each had 36 representatives, Belgium and the Netherlands 14 and Luxembourg 6. The European Court of Justice, which was common, consisted of seven judges and two prosecutors-general, appointed by common accord of the Member States. The Joint Assembly was Fig. 4.8 The first President of the EEC Commission Walter Hallstein. Author: Unterberg, Rolf. Attribution: Bundesarchiv, B 145 BildF004665-0003/Unterberg, Rolf/CC-BY-SA 3.0 Licensed under the Creative Commons Attribution-Share Alike 3.0 Germany license (cropped)

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renamed, from 1962, the European Parliament. The European Economic and Social Committee (EESC) was also set up as a forum for debate, providing a forum for interest groups such as trade unionists, employers, farmers, etc., to express their views on legislative proposals. In 1965 the Treaty of Brussels establishing a single Council and single Commission of the European Communities (known as the ‘Merger Treaty’), was signed in Brussels (see § 5.4.1), which was to take effect from 1 July 1967, when the European Communities acquired a single Commission and a single Council of Ministers. However, they would continue to function according to the rules that applied to each of them separately. There were disagreements between the partners on the location of the various institutions of the communities. In the end, Brussels was chosen as the seat of the two Committees, i.e. EEC and ECSC, despite the disagreements of Luxembourg, which was the seat of the ECSC High Authority. Brussels was also the seat of the single Commission of the three Communities created in 1967 and of the Council of Ministers. The Court of Justice remained in Luxembourg, while the plenary session of the Joint Assembly, renamed the European Parliament in 1962, continued to meet in Strasbourg, at France’s insistence, except for meetings of the parliamentary committees, which were held in Brussels and, more rarely, until 1981, in Luxembourg, where the seat of the European Parliament’s Secretariat continued to remain. Finally, the EESC had its seat in Brussels.

4.3.3

The Functioning of the EEC

The EEC Treaty, which established a single economic area, provided for the creation of a common market, which would promote the harmonious development of economic activities, stability, a rapid rise in living standards and closer relations between Member States. The common market would be based on the well-known ‘four freedoms’, namely the free movement of persons, services, goods and capital, and would be based on the principle of free competition. Agreements between undertakings would be prohibited, as would State aid that would prevent, restrict or distort free competition within the common market. The implementation of the common market would take place progressively over a 12-year transitional period, in three stages, each lasting 4 years. Each stage was to be accompanied by a set of measures to be taken and implemented simultaneously. Subject to the exceptions and derogations provided for in the Treaty, the end of the transitional period was the final date for the entry into force of all the rules provided for in the Treaty, which the establishment of the common market required. To this end, it was planned to create a customs union, with the abolition of customs duties between Member States and of quotas on trade between them and the establishment of a Common External Tariff (CET) for products from third countries. A common external trade policy was also established, as well as the development of other common policies, such as a common agricultural policy, a common transport policy, etc.

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The European Social Fund (ESF) was established on 11 May 1960 to boost regional competitiveness and support the employment of workers in the Member States through the development of new skills in new technology sectors. The founding Treaty also provided for the establishment of the European Investment Bank (EIB), as of 1 January 1958, to finance the projects necessary to achieve the objectives of the EEC.

4.3.4

The Functioning of the EAEC

The Commission’s responsibilities included inviting Member States, undertakings and independent natural persons to develop research and ensure the dissemination of technical knowledge and to communicate the programmes they undertake in the field of nuclear research. Member States should report annually to the Commission on the development of their mining research, fissile material production and potential stocks. The EAEC would facilitate investment in the establishment of basic nuclear energy development facilities within the Community and ensure a regular and equitable supply of nuclear fuel for all users in the Community. The EAEC would also ensure the application of uniform safety rules to protect the health of the population and workers, while guaranteeing that nuclear materials were not used for military purposes. Each Member State was required to provide the Commission with information on any plan for the disposal of radioactive residues. The required safeguards control of the EAEC would be exercised in conjunction with the safeguards provided by the International Atomic Energy Agency. Furthermore, the EAEC would promote the peaceful use of nuclear energy through cooperation with third countries and international organisations, while the Member States, for their part, would have to communicate to the Commission draft agreements or contracts with third countries, international organisations or individuals.

4.3.5

Results from the Operation of the Two New Communities

During the 1960s, the EAEC faced difficulties in fulfilling its task, given that in the midst of the ‘reactor war’, France preferred natural uranium reactors it possessed, ruling out any transatlantic cooperation, while Germany preferred to cooperate with American reactor companies using more economical enriched uranium. Overall, however, the EAEC has had positive results, particularly in the fields of research, health protection, control of installations, peaceful uses of nuclear materials and international relations in the field of atomic energy, which was confirmed in 2007 when the Commission evaluated its work to date. Given the need to secure energy supplies and concerns about possible climate change, interest in nuclear energy has been revived, and it was considered necessary for the EAEC to continue to contribute to the development of the nuclear industry and to guarantee the high standards of nuclear installations to ensure the health and safety of citizens (Fig. 4.9).

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Fig. 4.9 The European Communities in 1958

Furthermore, the 1960s was a period of relative inactivity for the EEC, mainly due to the attitude of Charles de Gaulle’s France (1890–1970) and the friction between the French government and the Committees, which did not favour decisive steps. However, the EEC completed the customs union of the ‘Six’ by 1 July 1968 and then followed a more successful course that steeled the will of the Europeanists to take further steps towards integration. The common market regime, the customs union and the common foreign trade policy were the main contributors to this.

4.4

The Development and Impact of the Cold War in Europe

During the 1950s, relations between the two superpowers, the USA and the USSR, were characterised by constant tensions and mistrust. The situation became more difficult with the invasion of South Korea by the troops of communist North Korea in June 1950. This event also increased the distrust of the Western Europeans towards the USSR and made it necessary to rearm Germany and join military

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coalitions (see § 4.2.3). Although the Korean War, which ended in July 1953, was geographically limited, it showed that it could have international repercussions. In addition, the USSR had successfully tested its first atomic bomb by August 1949, and by 1953 it seems to have possessed the first hydrogen bomb, shortly after the first successful test of a similar bomb in October 1952 by the USA. These events intensified the tension and competition between the superpowers, which culminated in 1956 with the launch of the first Soviet satellite into space in October 1957, giving the USSR a temporary lead in space exploration. However, the death of Joseph Stalin on 5 March 1953 and the beginning of a process of destalinisation in the USSR created expectations of a period of decline in superpower relations. A series of events in Europe during this period underline the impact of the relations between the two superpowers on the European continent. These events were at times indicative of a good mood for easing tensions and at other times showed a tendency for them to come to a head.

4.4.1

The Berlin Question and the Workers’ Strikes

During the 1950s, the divided city of Berlin was a space in which events were played out that reflected the crises of the Cold War on a global scale. Moreover, for the communist government of the German Democratic Republic, West Berlin was a constant challenge, as it was an easy destination for many East Berliners who, in search of a better quality of life, could leave the country without being easily hindered. In 1953, the government of the German Democratic Republic imposed more unfavourable working conditions with no prospect of any improvement in the standard of living of the country’s workforce. The workers of East Berlin reacted to these measures by organising strikes on 16 and 17 June 1953, which soon spread throughout the German Democratic Republic. These uprisings were violently suppressed by Soviet troops and tanks, which left many dead and wounded, followed by the death sentences of the leaders. The violent repression of the June 1953 strikes resulted in several hundred thousand East Germans fleeing directly to West Germany, and more than two million crossing from the East to the West in less than 10 years.

4.4.2

The Establishment of the Warsaw Pact

Despite the apparent mood of rapprochement between the Cold War rivals, when Germany joined NATO on 9 May 1955, the USSR reacted immediately by signing the Treaty of Friendship, Cooperation and Mutual Assistance, known as the Warsaw Pact, with Albania, Bulgaria, the German Democratic Republic, Hungary, Poland, Romania and Czechoslovakia. The Warsaw Pact, which was a military alliance of a defensive nature between the communist states of Central and Eastern Europe, was

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established on 14 May 1955, signed in Warsaw and was valid for 20 years with automatic renewal for another 10 years. Given that the Warsaw Pact throughout its existence did not formally clash with NATO, it was practically used as a tool to control the countries occupied by the USSR after World War II, intervening militarily whenever the political hegemony of their Communist Parties was threatened. Yugoslavia did not participate in the Pact from the beginning, while Albania ceased its cooperation in 1961 and formally withdrew in 1968. The pact lasted throughout the Cold War until some Member States began to withdraw in 1989, following the collapse of communist regimes in Central and Eastern Europe and the Balkans.

4.4.3

Conciliation Efforts and Peace Consolidation Meetings

Austria, like Germany, was divided after the Second World War into four administrative sectors, the USA, the USSR, Britain and France (see § 2.2.3). However, after lengthy negotiations, on 15 May 1955, Austria and its four occupying powers signed the Treaty of the Austrian State, which ended the occupation of the country and restored Austria as a neutral and independent state, with the 1938 borders. On 26 October of the same year, the country declared its stable and permanent neutrality and the following year became a Member State of the Council of Europe. Two months later, from 18 to 23 July 1955, the first Geneva summit in almost a decade took place, which was described as the meeting of the ‘Big Four’. In attendance were the US President Dwight Eisenhower, the British Prime Minister Anthony Eden (1897–1977), the USSR Chairman of the Cabinet Nikolai Bulganin (1895–1975) and the French Prime Minister Edgar Faure (1908–1988). Nikita Khrushchev (1894–1981), General Secretary of the Communist Party of the USSR, was also present. Although the negotiations on European security and disarmament did not make much progress, the meeting showed goodwill between the protagonists. Later, in September 1955, German Chancellor Konrad Adenauer visited Moscow for the first time and during his meeting with the General Secretary of the Soviet Communist Party Nikita Krushchev, diplomatic relations between Germany and the USSR were established.

4.4.4

Riots in Poland

After Stalin’s death and the looming destalinisation in the USSR, which became more evident after the death of the Stalinist chairman of the Soviet cabinet Bolesław Bierut (1892–1956), hope began to emerge in Poland for the possibility of reforms in the political and economic spheres. In June 1956, workers began protest demonstrations in Poznań in protest at shortages of food and consumer goods, poor housing conditions, declining real incomes and poor economic management. Initially, the Polish government, with the assistance of the Soviets, dealt with the protesters violently. Later, however, in October 1956, Władysław Gomułka

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(1905–1982), who had in the meantime been reinstated by the regime after his arrest in 1951, became the new first secretary of the central committee of the Polish United Workers’ Party. Aware of the need for reforms, he justified their promotion to the USSR government, seeing them as the ‘Polish road to socialism’, which would not divert the country from the common communist path, nor would it remove it from the treaties it had signed with the Soviet Union. By this attitude, he managed to avert a possible Soviet invasion of his country to suppress the demonstrations. Nevertheless, Gomułka’s later policy did not deviate much from the traditional conservative policy of the Soviet communist leadership.

4.4.5

Uprising in Hungary

In Hungary, on 4 July 1953, Imre Nagy (1896–1958) took office as the new president of the cabinet. On 20 August of the same year he declared the ‘new course’ towards socialism, a programme of reforms involving privatisation, a reduction in the pace of industrialisation, the dismantling of the state and collective agricultural cooperatives which owned much of the land, and the amnesty of many Nazi collaborators. Eventually, however, Nagy was forced to resign on 18 April 1955 and was expelled from the Communist Party along with his group as a consequence of his reformist positions which were not to the liking of the USSR leadership. However, intellectuals and students, protesting the decline in their living standards and the alienation of their national independence, demanded the withdrawal of Soviet troops and the holding of free elections. The protests became more intense from 19 October 1956, after the news of the Polish uprising against the Soviet hegemony. Their peaceful demonstration of 23 October in Budapest turned into a riot at dawn the next day. The rioters tore down the statue of Stalin and demanded Nagy’s return as chairman of the cabinet. Their demand was accepted by the central committee of the Socialist Party of Hungarian Workers. The new government of 24 October 1956, supported by the insurgents and headed by Imre Nagy, and upholding Hungary’s right to determine its own course, called for the withdrawal of Soviet troops and the abolition of the one-party system. On 31 October 1956 he announced Hungary’s withdrawal from the Warsaw Pact and on 1 November he asked the international community to recognise Hungarian neutrality. Initially, the USSR seemed willing to withdraw its troops from Hungary. On 4 November, however, Soviet tanks re-entered Budapest and Soviet troops opened fire on the rioters and violently suppressed the uprising, killing more than 2500 people. To escape arrest, more than 200,000 Hungarians sought refuge in the West through Austria or Yugoslavia. Negy would be arrested and sentenced to death on 16 June 1958, while Hungary with János Kádár (1912–1989), the new general secretary of the Socialist Party of Hungarian Workers, announced the creation of a Hungarian revolutionary government of workers and peasants and renewed relations with the USSR. At the same time, the Western European states, especially France and Britain, preoccupied with the Suez crisis, reacted rather lukewarmly to the

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invasion of Hungary by Soviet troops, leaving the field open for the USSR to secure its influence in the region.

References Britannica, Hungary, "The Revolution of 1956", https://www.britannica.com/place/Hungary/TheKadar-regime CVCE, "The failure of the European Defence Community (EDC)", https://www.cvce.eu/en/ education/unit-content/-/unit/1c8aa583-8ec5-41c4-9ad8-73674ea7f4a7/bd191c42-0f53-4ec0a60a-c53c72c747c2 CVCE, "The European Political Community (EPC)", https://www.cvce.eu/en/recherche/unitcontent/-/unit/02bb76df-d066-4c08-a58a-d4686a3e68ff/6550430e-98c0-4441-8a60-ec7c001c3 57b CVCE, "Western European Union", https://www.cvce.eu/en/collections/unit-content/-/unit/02 bb76df-d066-4c08-a58a-d4686a3e68ff/9059327f-7f8a-4a74-ac7e-5a0f3247bcd3 Department of State, USA - The Office of the Historian, "The East German Uprising 1953", 2017, https://history.state.gov/milestones/1953-1960/east-german-uprising Department of State, USA - The Office of the Historian, "The Warsaw Treaty Organization, Riots in Poland 1956", 2017b, https://history.state.gov/milestones/1953-1960/warsaw-treaty The Foundation Robert Schuman, "Declaration of 9 May 1950", https://www.robert-schuman.eu/ en/declaration-of-9-may-1950 Treaty of Paris, "Traité instituant la Communauté Européenne du Charbon et de l'Acier", Paris, 18 April 1951. Treaty of Rome (EEC), "Traité instituant la Communauté Économique Européenne et documents annexes", Rome, 25 March 1957. Treaty of Rome (EAEC), "Traité instituant la Communauté Européenne de l' Énergie Atomique (EURATOM ) et documents annexes", Rome, 25 March 1957. Treaty of Merger, Journal Officiel des Communautés Européennes 13.07.1967, No 152, (67/443/ CEE) (67/443/Euratom), "Traité instituant un Conseil unique et une Commission unique des Communautés Européennes", Brussels, 8 April 1965.

5

From Crisis to the Luxembourg Compromise: The Period of Stagnation (1958–1969)

5.1

The First Steps of the EEC and the Establishment of Common Policies

As mentioned above, among the first measures of the EEC was the establishment of a common market over a period of 12 years, during which time customs barriers between Member States were to be abolished by the establishment of a European Customs Union and the adoption of a Common External Tariff (CET). Furthermore, a Common Agricultural Policy (CAP) should be gradually established in order to minimise the existing differences between Member States in both the production and marketing of their agricultural products. It also provided for the establishment of a Common Transport Market for road, rail and inland waterway transport to facilitate the free movement of goods, services and persons in a Europe without internal borders.

5.1.1

The European Customs Union

The European Customs Union aimed to abolish customs duties and quantitative restrictions between Member States and to create a common customs tariff in relation to third countries. The creation of the customs union proceeded much faster than the Treaty of Rome had envisaged, despite the difficulties encountered by some Member States, notably France, which, at the time, was involved in a war in Algeria. The first phase of trade liberalisation, in January 1959, was followed by an acceleration of the rate of reduction of tariffs and quantitative restrictions between the Member States, following proposals from the Commission from May 1960, which were accepted by the Council of Ministers. These measures were accompanied by the introduction of a Common External Tariff, which the Council of Ministers decided to reduce by 20% in 1960. The consequence of all this was the completion

# The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 P. Liargovas, C. Papageorgiou, The European Integration, Vol. 1, Springer Texts in Political Science and International Relations, https://doi.org/10.1007/978-3-031-47776-8_5

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of the Customs Union on 1 July 1968, 18 months before the date foreseen by the Treaty of Rome. At the same time, the EEC participated in September 1960 in the negotiations for the General Agreement on Tariffs and Trade (GATT) of the Dillon Round of 1960–1962, with the participation of 26 countries, which brought about a 6.5% reduction in the Common External Tariff of its Member States. Also, in May 1964, it participated in the Kennedy Round negotiations of 1964–1970, with the participation of 62 countries, which dealt with tariff concessions and the treatment of aggressive price policies in international trade.

5.1.2

The Common Agricultural Policy (CAP)

In a community of about 200 million inhabitants, with an average of 20% of them engaged in agriculture, the Treaty of Rome made it possible to develop the CAP, with the objectives of increasing agricultural productivity, improving the living standards of farmers and ensuring a unified and stable market in which the availability of agricultural products at affordable prices for consumers is guaranteed. However, the task has proved difficult because of the great differences between the Member States in terms of production volumes, the degree of mechanisation, production costs, the extent to which national needs are met, the size of exports and the proportion of the rural population involved. The Member States directly interested in the development and implementation of a CAP were mainly France and the Netherlands. The first conference for this purpose was held from 3 to 11 July 1958 in Stresa, Italy, where the six ministers of agriculture, experts from the Member States and representatives of agricultural trade unions defined the guidelines for the future agricultural policy: market unity, Community preference and financial solidarity (Fig. 5.1). After the conference, the Commission Vice-President responsible for agriculture, the Dutchman Sicco Mansholt (1908–1995), was asked to draw up detailed proposals. The Commission submitted a series of proposals to the Council of Ministers on 30 June 1960, which provided for the free movement of agricultural products, the guarantee of Community preference, financial solidarity, the creation of a European Agricultural Guidance and Guarantee Fund (EAGGF, Fonds Européen d’ Orientation et de Garantie Agricole, FEOGA) and the gradual introduction of uniform prices for agricultural products. On 14 January 1962, after long negotiations, the Council of Ministers approved the organisation of six categories of agricultural product markets (cereals, pigmeat, eggs, poultry meat, fruit and vegetables, and wine), as well as the establishment of a timetable for the organisation of other categories (dairy products, beef, sugar, etc.). In practice, the principle of free movement was already applied to the products of the Member States with the establishment of the EEC common market, which also covered agricultural products, with the sole requirement that their health and veterinary provisions be harmonised in order to place these products on the common market.

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Fig. 5.1 The Vice-President of the Commission, also responsible for agriculture, Sicco Mansholt. Source: Author Anefo, 1967. http:// proxy.handle.net/10648/ab2 e1ec8-d0b4-102d-bcf8-00304 8976d84. Public Domain (cropped)

Ensuring Community preference to satisfy internal demand in the EEC, the common market would protect its producers against cheaper imports from third countries by imposing tariffs, even though this preference was contrary to the GATT. The revenue from the tariffs would be used to finance exports, reducing the prices of Community agricultural products in relation to those on the world market. To implement economic solidarity, the Member States would be financed by the Community, ensuring guaranteed prices for farmers. The Community body responsible for administering the CAP budget would be the EAGGF, which was set up on 24 April 1962, whose expenditure would account for almost 60% of the Community budget. Finally, in the cereals market, the Council of Ministers on 15 December 1964 approved relatively low prices, which came into force on 1 July 1967, satisfying France, which was the largest cereal producer. In addition, by May 1966, agreement had been reached on the Commission’s proposals for financing the CAP.

5.1.3

The Common Transport Market

With a view to the free movement of goods, services and persons, some attempts have been made to develop a common transport policy. However, the Treaty establishing the EEC did not provide for a detailed timetable. At the same time, there were significant differences in transport policies between the Six, which were not willing to modify them, mainly because of their different geographical characteristics and their particular structures, as in the case of railways.

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For this reason, the adoption of only a few rules on competition in the transport sector seems to have been sufficient and satisfactory in the current period.

5.2

Different Views and Different Paths

In the late 1950s, Britain was still abstaining from the processes of establishing the European Communities, even though its participation would play a countervailing role in the event of Germany’s increased influence within them. At the same time, its participation would be a factor of economic stability and industrial vitality for the emerging European Communities. However, Britain—which in the meantime had carried out its first successful nuclear test on 8 November 1957—initially preferred to adopt a cautious attitude, perhaps doubting the success of integration. It then spearheaded the establishment of an alternative but looser European economic grouping of states, the European Free Trade Association, in 1960, which would also act as a rival to the European Communities.

5.2.1

The Positions of Charles de Gaulle

The proclamation of the Fifth French Republic in October 1959 and the assumption of its presidency by Charles de Gaulle on 9 January 1959 marked the beginning of a crucial decade for the European Communities. The French President, considered to be a supporter of the doctrine of a ‘Europe of Nations’, which had been proposed since 1952 by Michel Debré (1912–1996), Prime Minister of France since 1959 during his presidency, considered, contrary to the functional theory of unification, that the European Communities were economic mechanisms without political and efficiency, and was also opposed to any supranational perspective in their course. He preferred a loose intergovernmental cooperation that would ensure a political course for the European states independent of the USA and NATO ‘from the Atlantic to the Urals’, according to his statement of 23 November 1959 in Strasbourg (Fig. 5.2). Especially after the first successful French nuclear test on 13 February 1960, combined with the existence of natural uranium deposits in the French subsoil, there were the prospects for France to emerge as a nuclear superpower, emancipated from the USA and distanced from the ECSC’s objectives for the peaceful use of atomic energy. Besides, France’s differentiation towards the ECSC policy became more evident after the 1958 agreement between the ECSC and the USA to use enriched uranium processed in the USA instead of France’s natural uranium. This attitude of France in the 1960s caused friction between the French government and the Commissions, which were the institutions—the spokesmen of the supranational and supranational federal function of the Communities.

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Fig. 5.2 President of France Charles de Gaulle. Attribution: Bundesarchiv, B 145 Bild-F010324-0002/ Steiner, Egon/CC-BY-SA 3.0. Licensed under the Creative Commons Attribution-Share Alike 3.0 Germany license (cropped)

5.2.2

The European Free Trade Association (EFTA)

At the initiative of Britain, which began in 1959, the Treaty on the European Free Trade Association (EFTA) was signed at the Golden Hall in Stockholm on 4 January 1960 and entered into force on 3 May 1960. The founding Member States of EFTA were Austria, Britain, Denmark, Switzerland, Norway, Portugal, Sweden, Denmark and Switzerland. Geneva was designated as the seat of the EFTA Secretariat, with the first Secretary General since 1960 being the British Frank Edward Figgures (1910–1990). Finland became an associated Member State of EFTA in 1961, while Iceland joined as a Member State in 1970. Differentiated from the European Communities, EFTA supported loose intergovernmental ties between Member States instead of strong supranational ties, trade in industrial products only, and each Member State pursued its own policy on external tariffs. However, despite the not particularly ambitious initiative, the economic results for the seven EFTA members—known as the ‘outer seven’, as opposed to the ‘inner six’ of the European Communities—were excellent during the 1960s, as it triggered an increase in the volume of foreign trade between the Member States. However, they did not outperform the corresponding results of the European Communities Member States, which proved that the project of integration through the European Communities was successful.

5.2.3

The Two Fouchet Plans and Their Rejection

Aiming at an intergovernmental cooperation between the member-states that would also ensure Europe’s disengagement from the USA and NATO, de Gaulle announced on 5 September 1960 his plan for a political union in Europe. At the

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first (informal) summit of the six partners, held in Paris on 10 February 1961, he proposed the establishment of a committee to submit proposals on the political future of Europe. The French diplomat Christian Fouchet (1911–1974) was appointed chairman of the committee. At the second summit, held on 18 July 1961 in Bad Godesberg, a suburb of Bonn, the six-Member States issued the Bad Godesberg Declaration, in which they reiterated their intention to cooperate in foreign and security policy, which would result in the establishment of Political Europe. Despite the positive mood that emerged from the Bad Godesberg Declaration, the future belied their expectations. The committee under Fouchet initially submitted a draft on 2 November 1961, which provided for the coexistence of a Political Union of European States alongside the European Communities, with a view to creating mechanisms for the formulation and implementation of a single foreign policy. The Political Union would operate on a purely intergovernmental basis, rejecting any federal practice. It would be institutionally controlled by a Political Council composed of the heads of government of the Member States, which would decide by unanimity, a Parliamentary Assembly composed of members of the national parliaments of the Member States, which would submit proposals to the Political Council, and a Political Committee composed of senior officials from foreign ministries without powers delegated to it by the Member States, which would prepare the work of the Political Council. However, the apparent downgrading of the supranational European Commission of the European Communities and its possible future absorption by the Political Union or by an emerging Franco-German directorate provoked the reaction of the Benelux countries in particular, which considered that the Political Union would thus constitute an obstacle to the realisation of European integration. Furthermore, the prospect of Europe’s withdrawal from NATO and the USA did not satisfy the ‘Atlanticists’, particularly in the Benelux countries. Despite the initial concessions that France declared that it might make in order to reach agreement on the implementation of Political Union, an amended draft submitted by the Fouchet Commission on 18 January 1962 not only did not include them but also provided for an extension of the powers of Political Union in the economic field, making clearer the intention to replace the European Communities by Political Union. The Benelux countries again raised objections, with the result that efforts to set up the Political Union were finally abandoned on 18 April 1962. Excerpt from Charles de Gaulle’s Press Conference of 15 May 1962, on the ‘Europe of Nations’ and the ‘Europe of States’, after the Failure of the Fouchet Plans [...] I have never personally, in any of my statements, spoken of a ‘Europe of nations’, although it is always being claimed that I have done so. It is not, of course, that I am repudiating my own; quite on the contrary, I am more attached to France than ever, and I do not believe that Europe can have any living reality if it does not include

(continued)

5.2 Different Views and Different Paths

77

France and her Frenchmen. Germany and its Germans. Italy and its Italians, and so forth. Dante. Goethe. Chateaubriand belong to all Europe to the very extent that they were respectively and eminently Italian. German and French They would not have served Europe very well if they had been stateless or if they had thought and written in some kind of integrated Esperanto or Volapiik But it is true that the nation is a human and sentimental clement, whereas Europe can be built on the basis of active, authoritative and responsible elements. What elements? The states, of course; for, in this respect; it is only the states that are valid, legitimate and capable of achievement. I have already said, and I repeat, that at the present time there cannot be any other Europe than a Europe of states, apart, of course, from myths, stories and parades. What is happening with regard to the Economic Community proves this every day. For it is the states, and only the states, that created this Economic Community, that furnished it with funds, that provided it with stall” members: and it is the states that give it reality and efficiency, all the more so as it is impossible to take any far-reaching economic measure without committing a political action.

Source: Charles de Gaulle “Major Addresses, Statements, and Press Conferences of General Charles de Gaulle, May 19, 1958-January 31, 1964”. French Embassy, Press and Information Division, New York, 1964

5.2.4

Accession Efforts of Britain, Denmark, Ireland and Norway

In the meantime, Britain, although it had not abandoned its views on loose inter-state ties in the European Communities, recognising the success of the unifying project of the European Communities, began to adopt a more pragmatic attitude towards them. Thus, the British Conservative government of Harold Macmillan, seeing the economic success of the European Communities, the gradual exclusion of Britain from the positively evolving Community market and the weakening of Britain’s economic and commercial ties with the Member States (former British colonies) of the British Commonwealth, applied for British membership of the European Communities on 9 August 1961, following Ireland’s application on 31 July 1961. This was followed by Denmark on 10 August 1961, and Norway applied on 30 April 1962 (Fig. 5.3). The accession negotiations proceeded smoothly, despite Britain’s insistence on maintaining its preferential trade relations with the Member States of the British Commonwealth. It seems, however, that the British Prime Minister’s acceptance of US President John Kennedy’s (1917–1963) offer to supply Britain with Polaris nuclear missiles under NATO control exacerbated de Gaulle’s fears that Britain, as a Member State of the European Communities, would act as a Trojan Horse for the United States in Europe and as an advocate for its positions, and would prevent the emergence of Europe as a great power in between in which France could play a leading role. This was at a time when the Kennedy administration from June 1962 began to promote the idea of the ‘Atlantic Partnership’, which would lead to new

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Fig. 5.3 British Prime Minister Harold Macmillan. Source: Cecil Stoughton, 1961. White House Photographs. John F. Kennedy Presidential Library and Museum, Boston. https://www.jfklibrary.org/ Asset-Viewer/Archives/ JFKWHP-ST-A22-1-61.aspx Public Domain (cropped)

partnerships beyond the traditional alliances with Europe, but without the USA giving up its military leadership, especially in nuclear armaments, in accordance with the new ‘McNamara doctrine’ introduced by US Secretary of Defence Robert McNamara (1917–2009). Thus, on 14 January 1963, de Gaulle proposed, through a press conference, the right of veto for Britain’s accession to the European Communities, without consulting his other partners. For their part, the British accused de Gaulle of being a nationalist seeking a leading role for France in the European Communities. Although de Gaulle’s refusal did not apply to the three other candidate states, the latter did not agree to continue the accession process without Britain’s presence.

5.2.5

The Results of the Franco-German Friendship Pact

Immediately after de Gaulle’s refusal to accept Britain as a partner in the European Communities, he turned his attention to consolidating Franco-German friendship. The signing of the Franco-German Treaty of Friendship and Reconciliation by de Gaulle and Adenauer in Paris on 22 January 1963, known as the Treaty of Elysium, ensured cooperation between the two states in the fields of foreign policy, defence, education and youth. Above all, it confirmed the consolidation of Franco-German peace and created the right conditions for de Gaulle to work on developing the French economy, raising France’s prestige as a major nuclear power and establishing it as a leading power.

5.3 The Compromise and the New Difficulties

5.3

79

The Compromise and the New Difficulties

De Gaulle’s attempt to downplay the supranational and supranational role of the Commission, expressed as a confrontation with its president, Walter Hallstein, an advocate of federalism, caused a crisis that threatened the cohesion of the Communities. The crisis, which began in 1965, was centred on the Commission’s proposals, presented by its President on 23 March of that year, on the financing of the CAP, the granting of greater powers to the European Parliament in budgetary matters, the introduction of own resources for the Communities and the introduction of the majority system in the decision-making process, in view of the start, on 1 January 1966, of the third stage of the transitional period of the common market for the EEC. De Gaulle from 1 July 1965, opposing the Commission’s proposals, forbade his ministers to participate in the Council of Ministers, recalled the French representative from Brussels and forbade his party’s MEPs to take part in votes on matters relating to the development of the Communities, thus applying the policy of ‘empty chairs’.

5.3.1

The Luxembourg Compromise

The abstention of French government MPs from voting was causing problems for the functioning of the European Communities. Given the opposition of the other five partners to the French position, a compromise was needed to end the crisis, which was jeopardising the cohesion of the Communities. The President of the Council of Ministers, Prime Minister of Luxembourg Pierre Werner (1913–2002), proposed a compromise solution at the meetings held in Luxembourg on 17 and 18 January and 28 and 29 January 1966, which was finally accepted on 30 January 1966. Under this settlement, known as the Luxembourg Compromise, many French positions were accepted. In particular, the dynamics of the unification process were limited, the CAP was strengthened, discussions on the introduction of a system of own resources and the delegation of powers to Parliament were postponed and, finally, the principle of unanimity in decision-making remained in force—in the French view—although the compromise expressly stated that in cases where the very important interests of one or more States were at stake, the members of the Council would try to reach solutions that could be approved by all the States with due respect for each other’s mutual interests. Since then, however, the principle of unanimity has been used extensively by the delegations of the Member States, in an attempt to defend the interests of the States they represented and to the detriment of the unification process of the Communities, misinterpreting the text of the agreement, which required the continuation of negotiations until a commonly accepted solution was reached. This misinterpretation caused the Commission’s right to propose legislation to be restricted in the future, particularly as the number of Member States increased. This problem was partially

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solved by the Single European Act, from 1 July 1987, when decisions on a large part of single internal market matters could be taken under the qualified majority rule.

5.3.2

France’s Second Refusal of Britain’s Accession

On 10 May 1967, Britain, with Harold Wilson (1916–1995) of the Labour Party as Prime Minister, submitted a new application for membership of the European Communities, followed by Ireland and Denmark on 11 May of the same year, while Norway applied on 25 July 1967. Britain’s new application was accompanied by its stated willingness to contribute to the technological upgrading of Western Europe, which was lagging behind the rapid technological progress of the United States. On 27 November of the same year, de Gaulle’s France again put forward the right of veto on Britain’s membership of the European Communities, arguing that Britain would have to reform itself completely before joining them, given its differentiation in many areas of its economy and agricultural policy. As a result of the French position, accession negotiations with the other candidate countries were also broken off (Fig. 5.4). These latest developments caused the discontent of the other member-states of the European Communities, which saw the unification process being interrupted, and France—which in the meantime had withdrawn from the military arm of NATO by de Gaulle’s announcement on 7 March 1966—trying to play a hegemonic role in the European Communities and Western Europe in general.

Fig. 5.4 The Prime Minister of Britain, Harold Wilson. Source: Eric Koch for Anefo, 1967. http://proxy.handle. net/10648/ab114cbc-d0b4102d-bcf8-003048976d84. Public Domain (cropped)

5.4 Institutional Changes and Merging of Institutions

5.4

81

Institutional Changes and Merging of Institutions

Efforts for institutional changes started in the early 1960s. On 17 May 1960, the Assembly adopted a resolution on the direct election of its members by universal suffrage, and on 24 November 1960 it adopted a report by the French politician Maurice Faure (1922–2014) on the merger of the executive bodies of the European Communities. Also, on 30 March 1962, the Convention adopted a resolution to change its name to the European Parliament, which, on 27 June 1963, adopted a resolution to upgrade its powers and competencies. However, France expressed its reservations about the direct election of Members of the European Parliament by the citizens of the European Communities by universal suffrage, refusing to accept an enhanced legislative power within the Communities, while similar reservations were expressed by the other Member States, with the exception of Italy and the Netherlands.

5.4.1

The Signing of the Merger Treaty

Despite the positive attitude of the other Member States of the European Communities to the merger of the High Authority of the ECSC and the Committees of the EEC and the EAEC, for operational and economic reasons, France wanted the Council of Ministers to be strengthened, objecting to the creation of a strong supranational Commission as the executive body of the three Communities. Under pressure from the other Member States, the Council of Ministers of 23 September 1963 finally accepted the merger of the three executive bodies and the creation of a single Commission but sought to limit its supranationality and power. After lengthy negotiations on the number of Commissioners in the new single Commission, agreement was finally reached on 1 and 2 May 1965. Thus, on 8 April 1965, the Treaty of Brussels establishing a single Council and single Commoission of the European Communities (EC) (known as the ‘Merger Treaty’) was signed in Brussels, establishing a single Council of Ministers based in Brussels. The Treaty entered into force on 1 July 1967. The Belgian politician Jean Rey (1902–1983), who replaced Walter Halstein, until then President of the High Authority of the ECSC, became President of the single 14-member Commission. Halstein had originally been proposed to chair the single Commission. However, given Halstein’s federalist positions and his conflict with de Gaulle, the latter insisted that he be given the chairmanship of the Single Commission for only 6 months, forcing him to resign. The new Commission would have 14 members, for a transitional period of 3 years, during which each Member State would have at least one Commissioner, but this number could not exceed three for any one Member State. From 1970, the Commission would have nine members, with France, Germany and Italy each having two members and the Netherlands, Belgium and Luxembourg each having one member. Furthermore, in the Council of Ministers, which would be the dominant decision-making body, France, Germany and Italy would have ten votes each,

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the Netherlands and Belgium five votes each, and Luxembourg two votes. In the single European Parliament of 142 members, France, Germany and Italy would have 36 MEPs each, Belgium and the Netherlands 14 MEPs each and Luxembourg 6 MEPs.

5.5

The Climax of the Cold War and the Crises in Europe

A serious source of tension during this period was the Cuban Missile Crisis, which began with the overthrow of the dictatorial regime in the country by Fidel Castro (1926–2016) in January 1959 and the failure of the latter’s overthrow by exiled USA-backed dissidents who invaded Cuba in April 1961 from the Bay of Pigs. The USSR decided to secretly supply Cuba with medium-range nuclear missiles that could pose an immediate danger to the USA. In October 1962, the Soviet ships carrying the missiles were detected by USA planes, leading US President Kennedy to impose a naval blockade on Cuba. Nuclear war was avoided literally at the last minute, after repeated contacts between the USA and USSR governments and the mediation of the United Nations. Furthermore, in Vietnam, the US military presence in support of the South Vietnamese government in attacks by the South Vietnamese communist Viet Cong guerrillas and possible raids by the North Vietnamese army dates back to the late 1950s. By 1964, USA involvement in military operations not only against the Viet Cong but also against North Vietnam was formalised, while the USSR was engaged in arming the guerrillas. The situation deteriorated in 1968, following widespread attacks by North Vietnam and the Viet Cong on many targets in South Vietnam. Despite the failure of these attacks, public opinion in the USA turned against the involvement of USA soldiers in Vietnam, forcing the USA leadership to change policy and gradually disengage, which would be completed in 1972. However, the Vietnam War intensified the Cold War and created a negative climate for the USA leadership both at home and abroad. The climax of the Cold War was evident in Europe with events that marked its history and highlighted the danger of crises that could lead to uncontrollable situations with unforeseen consequences. Such cases were the construction of the Berlin Wall and the invasion of Czechoslovakia by USSR troops.

5.5.1

The Construction of the Berlin Wall

West Berlin was still a major problem for the USSR and its controlled regime, the German Democratic Republic. After the strikes of 16 and 17 June 1953 and the intervention of Soviet troops that followed, more than two million people had crossed from East to West Germany in less than 10 years. To stop this mass exodus, which particularly affected the economy of the German Democratic Republic, the authorities decided to build the Berlin Wall in 1961. Thus, communication between East and West Berlin was cut off when, on the night of

5.5 The Climax of the Cold War and the Crises in Europe

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Fig. 5.5 The Berlin Wall. Source: Unknown author, 1961. https://commons.wikimedia.org/wiki/ Category:Berlin_Wall_in_1961#/media/File:Berlinmuren.jpg. Public domain

12–13 August 1961, workers flanked by soldiers of the German Democratic Republic built a wall between East and West Berlin, surrounding the whole of West Berlin (Fig. 5.5). The reaction of the Western European states was limited to verbal protests. However, during US President Kennedy’s visit to West Berlin on 26 June 1963, he made a public speech in front of the wall in which he expressed his sympathy for all the city’s inhabitants without exception, declaring ‘Ich bin ein Berliner’. In practice, however, the ‘wall of shame’ divided the city and became a symbol of the Cold War and the division of Europe.

5.5.2

The ‘Prague Spring’ and the Invasion of Czechoslovakia

From the early 1960s, Czechoslovakia faced a deep economic crisis that peaked in 1963. Gradually and on the occasion of this crisis, an oppositional liberalisation trend emerged with technocratic views on the restructuring of the country’s economy, known as the Third Way, which also attracted public opinion. These tendencies culminated in protests and student demonstrations in the last months of 1967. In January 1968, Alexander Dubček (1921–1992) took over the reins of the Czechoslovak Communist Party as the new general secretary. Dubček began implementing a series of reforms in the spring of that year aimed at restructuring the economy and ensuring freedom of expression and information. The reforms contributed to the emergence of the ‘Prague Spring’ phenomenon. However, the

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Fig. 5.6 Soviet invasion of Czechoslovakia, 21 August 1968. Source: Photo from “CIA Analysis of the Warsaw Pact Forces: The Importance of Clandestine Reporting”— 10 Soviet Invasion of Czechoslovakia. https:// commons.wikimedia.org/ wiki/File:10_Soviet_ Invasion_of_ Czechoslovakia_-_Flickr_The_Central_Intelligence_ Agency.jpg. Public Domain

lifting of censorship contributed to the emergence of anti-Soviet political tendencies and the free expression of political initiatives, which annoyed the General Secretary of the Communist Party of the USSR Leonid Brezhnev (1906–1982) (Fig. 5.6). With a view to breaking the deadlock, meetings were held between representatives of the Czechoslovak government and the five Warsaw Pact Member States, namely, the USSR, Bulgaria, Hungary, Poland and the German Democratic Republic, while the Romanian government dissociated itself from the Czechoslovak reforms, viewing the Czechoslovak reforms sympathetically. The pressure exerted by the USSR leadership on the Prague government to stop the reforms and the threat of military intervention did not seem to have had any effect. Thus, on 21 August 1968, the troops from the five Warsaw Pact countries, with the exception of Romania, invaded Czechoslovakia. The large number of invaders meant that within a few hours and with limited fighting, strategic points of the country were occupied. Dubček and some members of his government were taken to Moscow on 23 August for official negotiations. Although Dubček retained his position for a short time after his release, his reform program was interrupted and he left his position in April 1969. The Western European states and the North Atlantic Treaty Organisation reacted only verbally by condemning the invasion of Czechoslovakia, while the leaders of Romania and Yugoslavia sided with Dubček. Furthermore, the occupation of Czechoslovakia by Warsaw Pact forces resulted in tens of thousands of people fleeing the country.

References Anceau, Ér., De Gaulle and Europe, EHDE, European History Digital Encyclopedia, 2020, https:// ehne.fr/en/encyclopedia/themes/political-europe/arbiters-and-arbitration-in-europe-beginningmodern-times/de-gaulle-and-europe BERLIN, Berlin Wall, History, The construction of the Berlin Wall, https://www.berlin.de/mauer/ en/history/construction-of-the-berlin-wall/

References

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Charles de Gaulle, Major Addresses, Statements, and Press Conferences of General Charles de Gaulle, May 19, 1958-January 31, 1964, French Embassy, Press and Information Division, New York, 1964 CVCE, Fouchet Plans, 2023, https://www.cvce.eu/en/education/unit-content/-/unit/02bb76df-d0 66-4c08-a58a-d4686a3e68ff/a70e642a-8531-494e-94b2-e459383192c9 CVCE, The Luxembourg Compromise (January 1966), 2023, https://www.cvce.eu/en/education/ unit-content/-/unit/d1cfaf4d-8b5c-4334-ac1d-0438f4a0d617/a9aaa0cd-4401-45ba-867f-50e4 e04cf272 Department of State, USA - The Office of the Historian, The Berlin Crisis, 1958–1961, 2017, https://history.state.gov/milestones/1953-1960/berlin-crises Department of State, USA - The Office of the Historian, Soviet Invasion of Czechoslovakia, 1968, 2017, https://history.state.gov/milestones/1961-1968/soviet-invasion-czechoslavkia EFTA, The European Free Trade Association Convention, Stockholm, 4 January 1960, https:// www.efta.int/Legal-Text/EFTA-Convention-1152 European Parliament, Fact Sheets on the European Union, Common transport policy: Overview, 2023, https://www.europarl.europa.eu/factsheets/en/sheet/123/common-transport-policyoverview European Union, Customs, The EU customs union in action, 2020, https://european-union.europa. eu/priorities-and-actions/actions-topic/customs_en Maraveyas, N., Developments in the Common Agricultural Policy and Greek Agriculture (in Greek Language), Sakkoulas, Athens - Komotini, 2003. Teasdale, A., The Fouchet Plan: De Gaulle's Intergovernmental Design for Europe, LEQS Paper No. 117, 24 Oct 2016 The Foundation Robert Schuman, The Élysée Treaty, Franco-German reconciliation and the construction of Europe: myth and reality, 2023, https://www.robert-schuman.eu/en/europeanissues/0653-the-elysee-treaty-franco-german-reconciliation-and-the-construction-of-europemyth-and-reality Treaty of Merger, Journal Officiel des Communautés Européennes 13.07.1967, No 152, (67/443/ CEE) (67/443/Euratom), "Traité instituant un Conseil unique et une Commission unique des Communautés Européennes", Brussels, 8 April 1965. Warner, G., “France, Britain, and the EEC.” The World Today, vol. 23, no. 3, 1967, pp. 115–22. JSTOR, http://www.jstor.org/stable/40393971. Accessed 30 Aug. 2023. Welch, D., Modern European History, 1871-2000: A Documentary Reader, 2nd edition, Routledge, 2020, p.140

6

From the Hague Conference to the Crises of the 1970s (1969–1979)

6.1

The Change in French European Policy

The election of Georges Pompidou (1911–1974) to the presidency of the French Republic on 20 June 1969 marked new developments, starting from a change in French European politics. Pompidou now wanted a European construction in the form of a confederation of states, retaining the primacy of national sovereignty in the context of a more flexible and progressively closer European cooperation, with harmonised policies and unified economies, without excluding a future federal approach. He also believed that Britain’s entry into the EC would facilitate the halting of a rapid federalism and contribute to a slower but more stable approach. Thus, from his first press conference after his election as President of France, he proposed the completion of the unification process on the basis of the triptych of integration, deepening and enlargement and invited his partners to a conference to launch these processes. The new German Chancellor Willy Brandt (1913–1992), who took office on 21 October 1969, also made an important contribution to the relaunch of the unification project. His realistic positions on the European unification project included accepting Britain as a Community partner and carrying out institutional reforms (Fig. 6.1).

6.1.1

The Hague Conference

Brandt’s positions helped create a climate of understanding with Pompidou, which accelerated the rapprochement between the two and the promotion of the processes of understanding. Thus, the Hague Conference, held at the initiative of French President Pompidou on 1 and 2 December 1969, agreed on the next steps to implement the triptych of integration, deepening and enlargement. Given the completion of the customs union on 1 July 1968, the procedures for the integration # The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 P. Liargovas, C. Papageorgiou, The European Integration, Vol. 1, Springer Texts in Political Science and International Relations, https://doi.org/10.1007/978-3-031-47776-8_6

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6 From the Hague Conference to the Crises of the 1970s (1969–1979)

Fig. 6.1 French President George Pompidou and German Chancellor Willy Brandt in Cologne, on 3 July 1972. Source: Photographer Ludwig Wegmann, German Federal Archives, 1972, Attribution: Bundesarchiv, B 145 Bild-F037099-0021/ Wegmann, Ludwig/CC-BYSA 3.0, https://commons. wikimedia.org/wiki/File: Bundesarchiv_B_145_BildF037099-0021,_K%C3% B6ln,_Staatsempfang_f%C3 %BCr_Pr%C3%A4sident_ Pompidou.jpg (cropped)

(completion) of the common market on 1 January 1970, as provided for in the founding of the EEC 12 years earlier, were launched, and it was decided to set up the Own Resources for the financing of the Community, which would ensure its independence and Community solidarity between the partners. The partners also referred to the need for cooperation in the fields of research and technology, the pursuit of an Economic and Monetary Union (EMU) and the establishment of a European Political Cooperation (EPC), thus defining the desired degree of deepening (strengthening) of the Communities, and the need for institutional reforms. Finally, it opened the way to enlargement with the accession of new Member States, starting with the lifting of France’s reservations about Britain’s accession and the acceptance of the other candidate countries and the opening of accession negotiations with Britain from 1 July 1970. Excerpt from the Statement to the Hague Conference of 1 December 1969, by Georges Pompidou [. . .] Public opinion in our six countries expects a great deal from this meeting. I hope we will not disappoint our peoples and for this reason I feel that we must explain ourselves clearly. This is what I now propose to do on behalf of France. [. . .] There are three problems facing us at the present time: First we have the problem of “completion”, in other words the changeover to the definitive period and the adoption of the definitive financial arrangements; Then there is the problem of “strengthening”, sometimes called “development”, which concerns the prospects for Community growth; And lastly, we have the problem of “enlargement”, in other words the applications for membership.

(continued)

6.2 Economic Circumstances, Trade Relations and Agricultural Policy

89

Source: Bulletin of the European Communities. Dir. of publ. Commission of the European Communities. February 1970, n° 2. Luxembourg: Office for Official Publications of the European Communities. “Statement by Georges Pompidou (The Hague, 1 December 1969)”, p. 33–35.

6.1.2

The Introduction of the Community Own Resources

The problem was particularly significant for the financing of the CAP, which accounted for most of the EEC budget. To this end, it was agreed at The Hague that, over time, the Member States’ financial contributions to the financing of the EC should be replaced by the Community Own Resources. Thus, with the Treaty of Luxembourg of 22 April 1970 and the Council of EC’ Regulation of 21 April 1970, a new financing system was introduced with effect from 1 January 1971. From 1 January 1975, financing was to be provided exclusively from own resources. However, in order to ensure that the transition to the new financing system was gradual, for the first transitional 3-year period (1975–1977), provision was made for mixed financing from both Member States’ contributions and own resources. There would be three categories of own resources. The two ‘traditional’ resources consisted of agricultural levies from imports of agricultural products from third countries, which had been introduced since 1962, and customs duties on imports imposed at the external borders through the common customs tariff introduced in 1968 in the framework of the integrated customs union. In addition, a third resource came from the revenue of each Member State from Value Added Tax (VAT), with a maximum contribution rate of 1%, with effect from 1 January 1975. However, its implementation was not possible before the harmonisation of the Member States’ VAT systems in 1979. A subsequent Decision of the Council of EC of 7 May 1985 raised this maximum contribution to 1.4%. Furthermore, a fourth resource was introduced by Decision of the Council of EC of 24 June 1988, which would reach 1.2% of the Member States’ gross national product (GNP) in 1992, determined in such a way as to balance the budget.

6.2

Economic Circumstances, Trade Relations and Agricultural Policy

Since the 1960s, oil consumption in Europe has increased at the expense of coal and gas consumption, making European countries heavily dependent on oil and oil-producing countries for energy. However, the Arab-Israeli wars of 1973 and the Islamic revolution in Iran that led to the fall of the Shah in 1979 triggered the two oil crises that negatively affected the oil-dependent European economies. Furthermore, speculation in the US dollar exchange market caused a devaluation of the dollar and an international currency crisis, which began in the spring of 1971.

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The climax of the currency crisis came with the beginning of the collapse of the Bretton Woods system, when the convertibility of the dollar into gold was first interrupted on 15 August 1971, the only currency directly convertible into gold since 1944 under this system. The final collapse of the Bretton Woods system in February 1973 and the new depreciation of the dollar against gold caused new turbulence in the exchange rates of European currencies. At the same time, the economic competition that European products faced in the 1970s, both from the USA and from the emerging economies of South East Asia, brought to the fore intense economic concerns in the context of the functioning of the EC, which tempered efforts for integration, enlargement and deepening. However, international trade cooperation between EC Member States and developing states and the conclusion of trade agreements with them has not stopped.

6.2.1

The Two Oil Crises

During the Arab-Israeli war of October 1973, the Arab oil-producing countries cut off oil exports to Europe and the USA, resulting in a fivefold increase in the price of crude oil by December 1973. The underlying economic crisis worsened, interrupting a 30-year course of economic growth, with repercussions on industrial production and international trade in Western Europe that caused a rapid increase in inflation and unemployment, as well as huge budget deficits and bankruptcies. Concerns about structural imbalances and unemployment led to a more targeted social policy. Thus, at the Summit of 9 and 10 December 1974, the Social Action Programme, which had been submitted by the Commission in October 1973, was adopted. The problems of stagflation and budget deficits continued after the second oil crisis of 1979. Moreover, despite the fact that crude oil prices moved downward in the early 1980s, the two oil crises were a reason for keeping oil prices high until early 1986, when Saudi Arabia abandoned its policy of restricting its crude oil production, thus bringing normalisation to the crude oil market.

6.2.2

The Conclusion of International Trade Agreements

In the context of international trade, the EC participated in the 1973–1979 Tokyo Round negotiations on the General Agreement on Tariffs and Trade (GATT), related to transparency in public procurement and codes of conduct on subsidies and countervailing subsidies and addressing aggressive commercial price policies in international trade. The agreement was signed by 102 countries, including the then-nine EC Member States. Furthermore, despite the economic crisis, the EC Member States at the Paris summit of 19–21 October 1972 confirmed their willingness to cooperate with developing countries. Thus, on the basis of the second Yaoundé Convention, signed on 29 July 1969, between the EC and developing African states, with effect from 1 January 1971, and in the context of the required adaptation of the EC to the British

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Accession Treaty (see § 6.5.1), the Lomé Convention was signed in the Togolese capital Lomé between the EC and 46 African, Caribbean and Pacific (ACP) states on 28 February 1975. The Convention provided for free access to the Community market for almost all products of the ACP States free of charge and in unlimited quantities. Products of the EC Member States were to be treated on an equal way with those of the ACP States. A Second Lomé Convention was signed on 31 October 1979 with 59 ACP countries, which allowed the EC to provide emergency financial assistance to ACP States facing problems in their metallurgical industries.

6.2.3

The Reform of the CAP and the Mansholt Plan

In December 1968, Commissioner for Agriculture Mansholt submitted to the Council of EC a proposal for the reform of the CAP (also known as the ‘Agricultural Programme 1980’ or ‘Mansholt Plan’), with obvious structural character. The proposed structural changes were aimed at (a) increasing the size of the farm, given that 66% of farms were smaller than 10 hectares, and less than half of the farms accounted for 80% of the workforce; (b) reducing the total amount of land under cultivation, with the land that would be withdrawn preferably being used for afforestation or the construction of service areas; (c) the reduction of the number of people employed in the agricultural sector, with financial incentives for leaving; and (d) the training of those employed in the agricultural sector. However, the implementation of the plan would require financial incentives and compensation for younger or older farmers who would leave farming, while it would also affect the structure of family farming, especially in France and Germany, and cause uncontrolled exits from the agricultural sector. The reform was finally accepted by the Council of EC in April 1972. However, due to strong opposition to the radical nature of the Mansholt Plan proposals, meagre results were achieved in the form of only three directives in 1972 and one in 1975 on the modernisation of farms, early retirement and retirement of farmers over 55, training of farmers and, finally, compensation for farmers in mountainous and problem areas.

6.3

Plans for an Economic and Monetary Union (EMU)

The differences in the economic and monetary policies of the EEC Member States and the currency crises that preceded the Hague Conference of December 1969, with the devaluation of the French franc by 11.2% on 19 August 1969 and the revaluation of the German mark by 9.3% on 24 October of the same year, and the decline in the credibility of the US dollar as a consequence of the increased USA debt, brought to the fore the need to draw up a plan for the gradual creation of an economic and monetary union (Fig. 6.2).

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Fig. 6.2 Commission VicePresident Raymond Barre. Source: U.S. National Archives and Records Administration, 1977–1981. https://picryl.com/media/ french-prime-ministerraymond-barre-nara-176212f5cec6. Public domain (cropped)

As early as 12 February 1969, the Commission’s Vice-President and later Prime Minister of France, Raymond Barre (1924–2007), had presented a plan for dealing with exchange rate instability, which was also a proposal from the Commission to the Council of EC. Thus, at the Hague Conference of 1 and 2 December 1969, in the context of the deepening requested, the six Member States, on the proposal of German Chancellor Willy Brandt, agreed to the gradual creation of an economic and monetary union.

6.3.1

The ‘Werner Report’

Following a second Barre plan submitted on 4 March 1970, the Council of EC on 6 March of the same year instructed a committee of experts headed by the Prime Minister and Minister of Finance of Luxembourg, Pierre Werner, to carry out a study on the steps to be taken to set up this association and to submit a report. A draft of the final report, with elements of the Barre project, was submitted to the Council of EC on 20 May 1970. The final report of the Committee on the Establishment of EMU, known as the ‘Werner Report’, drawn up in collaboration with the Committee of Central Bank Governors of the EEC, was submitted on 8 October 1970. The ‘Werner Report’ tried to reconcile the German position, which initially wanted an economic convergence that would prepare for monetary union, and the French position, which saw monetary union as a basis for closer economic cooperation. It presented proposals for the completion of EMU in three phases over 10 years, with the basic condition of ensuring stable exchange rates. The initial aim would be to coordinate the fiscal policies of the six Member States and to harmonise VAT and excise duties. The Committee of Central Bank Governors, established on 8 May

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Fig. 6.3 Prime Minister and Minister of Finance of Luxembourg Pierre Werner. Source Unknown author. Family Pierre Werner licensed under the Creative Commons Attribution-Share Alike 3.0 Luxembourg license. https:// commons.wikimedia.org/ wiki/File:Pierre_Werner_204 g.jpg (cropped)

1964, was to be given the task of laying down general guidelines on interest rates, bank liquidity ratios and lending, and the Commission was to propose the legislation necessary for the implementation of the first stage of EMU. There was also mention of the need to give greater powers to the European Parliament and to change the way its members are elected. In the second stage, it would be possible to create a European Monetary Cooperation Fund (EMCF), which would manage the progressively increasing foreign exchange reserves of the Member States, have the capacity to grant loans to the economically weaker Member States and prepare the ground for the operation of a central bank in the third stage. Finally, the Werner report proposed the creation of two new institutions, the first as an independent economic decisionmaking centre accountable to the European Parliament, and the second as a central bank body responsible for monetary matters (Fig. 6.3). The Commission adopted the Werner report on 29 October 1970, but in order to avoid the opposition of Member States who did not wish to see their sovereign rights transferred to Community institutions, as the report suggested, it specified that this could only be done to the extent necessary to meet the needs of the initial objectives of EMU. It even suggested that the first stage should be completed in the 3-year period 1971–1973. However, French President Pompidou, despite his positive view of monetary cooperation, considered that it could be achieved through intergovernmental cooperation, avoiding federal-style transfers of sovereignty to Community institutions. Thus, at the Council of EC meeting in December 1970, France rejected the two Commission proposals for EMU based on the Werner report, stating that it was determined to retain control of its national currency and proposing a looser economic cooperation. Moreover, Germany did not wish to jeopardise the credibility

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of its currency in the context of an excessively lax economic policy, especially in view of a forthcoming period of high inflation.

6.3.2

The European Currency Snake

The Council of EC, in the midst of the world monetary crisis, seeking a way out, took the first step on 22 March 1971, adopting by resolution the Commission’s proposals based on the Werner report for gradual monetary integration over a 10-year period, starting, retroactively, from 1 January 1971. As a first step, the measures required for the first 3 years were identified, the basic condition being that the Member States should ensure that the fluctuation of their currencies’ exchange rates remained below the fluctuation limit set by the International Monetary Fund (IMF) against the US dollar, which was limited to a band of ±1%. However, the global currency crisis has necessitated new measures. Speculation on the foreign exchange market in the dollar, the only currency convertible into gold since 1944 under the Bretton Woods Agreement, led to an increase in the value of the Deutsche Mark, which began in the spring of 1971 and intensified during the year. The peak of the currency crisis came with the beginning of the collapse of the Bretton Woods system, brought about by US President Richard Nixon (1913–1994) himself, when he suspended the convertibility of the US dollar into gold on 15 August 1971. The Benelux countries reacted a few days later by signing an agreement on 23 August 1971, which maintained their exchange rate against the dollar at the previous level. However, new parities between the European currencies and the US dollar were established following the Smithsonian Institute agreement signed in Washington between ten countries on 17 and 18 December 1971, the six Member States of the EEC, Britain, the USA, Canada and Japan. European currencies were overvalued against the dollar, which depreciated by 7.89% against gold. At the same time, the agreement allowed the exchange rates of European currencies to fluctuate against the dollar by up to 4.5%. This agreement led the EEC Member States to seek to narrow the fluctuation margins of the exchange rates between European currencies in order to achieve monetary stability, leading to gradual monetary integration. Thus, on 10 April 1972, an agreement was signed in Basel introducing a monetary system that has remained known as the ‘snake in the tunnel’. In this agreement, the Committee of Central Bank Governors of the EEC defined the margins of fluctuation of the exchange rates of the main European currencies up to 2.25%, as a snake moving around the central rate against the dollar, within the tunnel defined by the Smithsonian Institute agreement for a fluctuation of up to 4.5%. The currency snake system entered into force on 24 April 1972 and operated essentially outside the formal structures of the EEC. From 1 May 1972, the currencies of Britain, Denmark and Ireland, with which treaties of accession to the EC had already been signed in January of that year (see § 6.5.3), as well as those of Norway and Sweden, which were associated states of the EEC, were also included in the system. However, Britain abandoned the stability of the monetary system shortly

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afterwards, on 23 June 1972, and allowed its currency to fluctuate freely against the dollar, unable to withstand speculative attacks on its currency and economy. Ireland and Denmark followed suit. Nevertheless, the Paris Summit of 19–21 October 1972 confirmed the desire of the Member States to achieve the objective of EMU by 1980, as agreed from the outset, while maintaining the snake currency system. However, the final collapse of the Bretton Woods system in February 1973 and the renewed devaluation of the US dollar by 10% against gold caused new turbulence in exchange rates. Under the pressure of galloping inflation, Britain, Ireland and Italy permanently withdrew their currencies from the currency snake. These events forced the other EEC Member States to allow their currencies to fluctuate freely against the dollar, thus rescuing for the time being the currency snake, which from March 1973 could move out of the tunnel without safety, becoming a ‘snake without tunnel’. Furthermore, the Council of EC reacted negatively in April 1973 to the Commission’s proposal to launch the second phase of EMU. However, it did approve the establishment of the EMCF from 6 April 1973 in order to control the stability of exchange rates and established the European Unit of Account (EUA), which would be used to express the monetary operations of the EMCF, with a value equal to 0.88867088 grams of pure gold. However, the economic problems of this period were exacerbated by the first oil crisis of October 1973. On 19 January 1974, France withdrew from the currency snake, and although it re-joined on 10 July 1975, it finally withdrew on 15 March 1976. Sweden also withdrew the following year, followed by Norway in 1978. The countries of the German ‘mark zone’, namely Germany, Denmark and the three Benelux countries, showed particular stability in the snake currency system but failed to create the conditions for maintaining the system.

6.3.3

The European Monetary System (EMS)

At a time when high inflation was causing serious problems in France and Germany was opposed to a broad monetary cooperation with its weaker economic partners in the EEC, fearing the destabilisation of its economy, the proposal of the British Commission President Roy Jenkins (1920–2003), in a speech in Florence on 20 October 1977, for the creation of a European monetary system, was the trigger for a new course towards EMU. The proposal was supported by French President Valéry Giscard d’Estaing (1926–2020) and German Chancellor Helmut Schmidt (1918–2015) at the Copenhagen Conference on 7 and 8 April 1978, who, at the Bremen European Council on 6 and 7 July 1978, promoted the idea of creating a European Monetary System (EMS). The Brussels European Council of 5 and 6 December 1978 thus defined the basic features of the EMS, which entered into force on 13 March 1979 and operated essentially outside the institutional structures of the EEC, like the monetary snake. Furthermore, the European Currency Unit (ECU) was adopted, while the Exchange Rate Mechanism (ERM), as well as the monetary solidarity and financial support mechanisms, were also in operation (Fig. 6.4).

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Fig. 6.4 Commission chairman Roy Jenkins. Author: Rob Croes/Anefo. Source: http://proxy.handle. net/10648/ac97fae0-d0b4-102 d-bcf8-003048976d84. Public domain (cropped)

From 1 January 1979, EMS operations were to be denominated in ECU, replacing the EUA as the bundle (‘basket’) of the currencies of the EEC Member States. The ECU was not established as a stand-alone currency but as a weighted average of the currencies of the EEC Member States, based mainly on their contribution to Community GDP, used for drawing up the Community budget, and as a unit of payment and calculation for the exchange rate and intervention mechanisms and for the operations of the credit facilities. An indication of the strength of the Member States’ currencies during this period is the participation of the German mark, with a share of over 30%, followed by the French franc with a share of just under 20%, and the currencies of the other Member States with smaller shares than the previous ones. According to the ERM, for each currency, there was a central rate with the ECU, and a series of bilateral rates for each currency pair with fluctuation limits of ±2.25%. For certain weak currencies, such as the Italian lira, a fluctuation limit of ±6% was temporarily allowed. If a currency was on the verge of deviation, i.e. 75% of the maximum possible deviation, the Member State to which it belonged had to intervene in the exchange markets and take specific monetary and fiscal measures to support its currency. It should be noted that not all Member States were required to participate in the ERM, and there were cases of entry, exit and re-entry into the mechanism. The mechanism has worked steadily and efficiently, with some necessary adjustments, and the participating countries have experienced greater convergence in their economic performance and low inflation rates. However, due to speculative pressures in the foreign exchange market, after 1992, the ERM decided in August 1993 to widen the margins of exchange rate fluctuation to ±15%. The year 1998 was the last year in which the exchange rates of the currencies participating in

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the mechanism were set before the introduction of the euro (€) as the single currency of the euro area (see § 9.2.2). Each EMS Member State participated in the monetary solidarity credit mechanism with 20% of its gold reserves and 20% of its foreign exchange reserves. Through the EMS, the central banks of the Member States were credited with a corresponding amount in ECU, which they could use for their interventions in the foreign exchange markets. Furthermore, through the financial support mechanisms, resources were made available in the form of a short-term credit facility between the central banks of the Member States and an amount of ECU 25 billion to address the problems of Member States with significant external deficits as medium-term assistance between Member States. Undoubtedly, the establishment and operation of the EMS was an important stage in the EC Member States’ progress towards the final EMU, given that it functioned smoothly at least until 1992, and was maintained, despite all the problems, until 1998, before the introduction of the Euro.

6.4

The Call for a European Political Cooperation (EPC)

In the context of the requested deepening, the six Member States agreed at the Hague Conference on 1 and 2 December 1969 on the need to revive and promote the idea of their political cooperation and instructed their foreign ministers to submit proposals by June 1970. Thus, on 6 March 1970, the Council of EC agreed to set up a committee under the Belgian Foreign Minister Etienne Davignon (1932–) and the heads of the political directorates of the foreign ministries of the six Member States to draw up a report on the establishment of European political cooperation.

6.4.1

The ‘Davignon Report’ on European Political Cooperation (EPC)

Following an acceptance in principle of the report of the Davignon Committee in July 1970, the Council of EC in Luxembourg on 27 October 1970 adopted the report, which became known as the ‘Davignon Report’ or ‘Luxembourg Report’. The nature of the proposed Cooperation (EPC) was intergovernmental, and its operation was initially outside the institutional framework of the Community, but it was to be gradually institutionalised through regular 6-monthly meetings (conferences) of foreign ministers and quarterly meetings of the Political Committee, composed of the directors of political affairs of the foreign ministries of the Member Stagtes. The Commission would provide opinions on matters within its remit, while the European Parliament’s Political Affairs Committee would be informed of the outcome of the meetings. The report considered the participation of each new EC Member State in the EPC to be self-evident and necessary. It aimed at cooperation between the Member States in the field of their foreign policy and the undertaking of joint actions

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wherever possible, in order to demonstrate Europe’s political mission internationally. However, it made no reference to security and defence issues. Although the proposal was accepted by the six Member States, Georges Pompidou did not accept Willy Brandt’s proposal to establish a permanent political secretariat based in Brussels to coordinate its activities. However, despite its non-institutional character, the EPC began its activities with the first meeting of the foreign ministers of the Member States in Munich on 19 November 1970.

6.4.2

The ‘Copenhagen Report’ on the EPC and European Identity

At the Paris Summit, between 19 and 21 October 1972, the six Member States of the Communities and the three future Member States confirmed their desire to intensify their political cooperation so that Europe could function as a single political entity on the international scene. Thus, they instructed the Foreign Ministers to issue a second report on methods of promoting and strengthening the EPC. On 23 July 1973, the Foreign Ministers of the nine Member States issued the ‘Copenhagen Report’, which promoted the strengthening of the EPC by increasing the number of meetings of the Foreign Ministers and the Political Committee. At the same time, it proposed the inclusion in the EPC mechanism of the diplomatic delegations of the nine EC Member States, both in the Member States and in third countries and international organisations. It also established a network of European Correspondents (Correspondance Européenne, COREU), with access to a telecommunications system (telex), through which permanent communication and cooperation between the foreign ministries of each Member State would be undertaken. At the Copenhagen summit on 14 and 15 December 1973, the nine Member States reiterated once again the need for more frequent meetings to define the procedures for the future of the EC, while reaffirming the importance of a single European identity in their external relations. According to a document of the nine Member States of 14 December 1973 on the definition of the European identity now being introduced in foreign policy, this includes a) a summary of the common heritage, common interests and obligations of the nine Member States, as well as the degree of their unity that has been achieved through the Communities; b) an assessment of the extent to which the nine Member States act in concert in their relations with the rest of the world and the responsibilities arising from those relations; and c) an account of the dynamic nature of European integration.

6.4.3

The Establishment of the European Council as the Coordinator of the EPC

Following a proposal by the new French president Valéry Giscard d’Estaing, at the Paris summit on 9 and 10 December 1974, the European Council was established as an informal institution, composed of the heads of state or government of the Member States, replacing the summit. The European Council was to act as an

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intergovernmental forum for discussion, but also as an intergovernmental coordinating body promoting the policies of the EC. The establishment of the European Council would thus contribute to a better coordination of the ENP because of the role of the Heads of State and Government in the formulation of the general political orientation of the Communities, while the publicity given to the official positions of the European Council would further strengthen the functioning of the EPC. Furthermore, at the same summit, the nine Member States decided to develop a common strategy in all areas of international politics that affected their interests. Recognising the international importance of an internationally united Europe, they entrusted Leonard ‘Leo’ Clemence Tindemans (1922–2014), Prime Minister of Belgium, with the task of submitting a detailed report on the transformation of the EC into a European Union and the importance and weight that this union should have.

6.4.4

The ‘Tindemans Report’ on European Integration

The report on the European Union by the federalist Belgian Prime Minister was published on 29 December 1975, and on 2 April 1976 it was presented to the Luxembourg European Council, which held a preliminary exchange of views on its contents. The ‘Tindemans Report’ advocated the pursuit of a common policy by the Member States in critical areas of their international relations in order to lay the foundations for a future common foreign policy. It also proposed the implementation of a common defence policy with enhanced cooperation in the field of armaments. In the economic field, it developed a series of proposals to exercise effective Community control over the mechanisms of the then-existing European monetary snake with a view to ensuring greater international monetary stability. He also proposed the pursuit of a single social and structural Community policy and recommended the introduction of a single European policy on education, environmental protection and consumer rights (Fig. 6.5). At the institutional level, the ‘Tindemans Report’ proposed the extension of the Commission’s powers and competencies, the appointment of its President by the Council of EC and the approval of his appointment by the European Parliament. It also strengthened the powers of the European Parliament, whose members were proposed to be elected by universal suffrage before the end of 1978, giving it the right to propose legislation, which had hitherto been the sole prerogative of the Commission. The report also proposed that decisions in the Council of EC should be taken by majority vote and that Member States should change the terms of their presidency to 1 year instead of 6 months. Despite its realistic tone, the Tindemans report failed to convince many political leaders of the Member States who were not prepared to discuss any further loss of national sovereignty, nor did it convince the federalists, who considered it quite conservative. Thus, at the European Council meeting in the Hague on 30 September 1976, the desire of the nine Member States for European cooperation in foreign

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Fig. 6.5 Belgian Prime Minister Leo Tindemans. Attribution: Bundesarchiv, B 145 Bild-F050938-0028/ Engelbert Reineke/CC-BYSA 3.0. Licensed under the Creative Commons Attribution-Share Alike 3.0 Germany license. https:// commons.wikimedia.org/ wiki/Category:Leo_ Tindemans_in_1977#/media/ File:Bundesarchiv_B_145_ Bild-F050938-0028,_Bonn,_ Tagung_CDUBundesausschuss,_ Tindemans.jpg (cropped)

policy matters was reiterated, and a request was made to the Council of Foreign Ministers of EC and the European Commission to draw up an annual report on the progress of European integration. However, the Tindemans report, although considered, was not taken forward, with the result that the political dimension of European integration was confined to the non-institutionalised EPC.

6.4.5

Evaluation of the Operation of the EPC

With the gradually institutionalised EPC, the intergovernmental form of the Fouchet Plans was adopted, without, however, including forms such as that of the Political Union, which caused fears, especially in the Benelux countries, about the possibility of creating a climate of competition with the Commission. Furthermore, Britain’s participation in the EPC was also important, despite its continued cooperation with the USA on the other side of the Atlantic. However, despite occasional attempts to upgrade the role of the EPC, at least until 1986 when it was finally institutionalised with the signing of the Single European Act (see § 7.2.5), its mechanism remained incomplete, with the Commission having no initiative in its functions, the foreign ministers of the Member States not being bound by the existing decision-making procedures of the Council of, EC and it failed in practice to formulate a firm basis for a common foreign policy. However, it achieved some successes during the 1970s, notably with its actions for a cease-fire during the Middle East crisis on 13 October 1973, with the joint declarations on finding a peaceful solution to the Cyprus problem in the summer of 1974 and with the formulation of the Final Act of the Helsinki Conference on

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Security and Cooperation in Europe (CSCE) on 30 July 1975. Of course, the EPC’s inability to develop a unified and dynamic European foreign policy became more evident during the Soviet invasion of Afghanistan in 1979 and later during the wars in Yugoslavia in 1990–1995.

6.5

The First Enlargement of the EC

In a different climate from that of the first application for membership of the Communities in 1961 and the second in 1967, accession negotiations with Britain were resumed on 30 June 1970, which had been interrupted after France’s second refusal in December 1967. Britain’s ties with the Member States of the British Commonwealth had weakened, both economically and in the political and military spheres, making Britain more flexible in the accession negotiations, while France’s attitude was more favourable, aiming at a balancing role that Britain as a member of the EC could play in the possible emergence of Germany as a dominant power in the EC. Furthermore, Edward Heath (1916–2005) as the new Prime Minister of Britain on 19 June 1970 greatly facilitated the accession negotiations because of his government’s positive attitude to the prospect of Britain’s membership of the EC. To this end, he issued a White Paper on 7 July 1971, setting out the benefits for Britain of joining the EC. In the wake of the Hague Conference decisions of December 1969, negotiations continued with Ireland, Denmark and Norway, whose markets and economies remained closely linked to the British market, in the context of EFTA, which justified the suspension of accession negotiations on their part, following France’s two refusals to admit Britain as a member of the Communities. It should be noted that Denmark and Norway, following France’s rejection of Britain’s accession in 1967, opened negotiations in April 1968, together with Sweden and Finland, with a view to creating a customs and economic union for the four Nordic countries, to be known as Nordek, by January 1974 at the latest. The final draft treaty, inspired by the 1957 Treaty of Rome establishing the EEC and the EAEC, was published on 17 July 1969, and provided for the creation of a customs union to be operational from 1 January 1972, without prejudice to the participation of Denmark, Norway and Sweden in EFTA as Member States, of which Finland was also a cooperating Member State. However, Finland, fearing that such cooperation might be detrimental to good bilateral relations with the USSR, abandoned the negotiations on 24 March 1970 and on 20 July of the same year signed a protocol extending for another 12 years the Treaty of Friendship, Cooperation and Mutual Assistance that it had signed with the USSR since April 1948. The resumption of negotiations for the accession of Denmark and Norway to the EC on 30 June 1970 marked the end of negotiations for the establishment of Nordek so that plans for a Nordic customs and economic union were finally abandoned.

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6 From the Hague Conference to the Crises of the 1970s (1969–1979)

The Accession Negotiations with Britain

The main problems in the negotiations were Britain’s contribution to the EC budget and in particular its participation in the CAP, as well as certain imports of products from Commonwealth Member States, namely sugar from the Caribbean and butter from New Zealand. Britain, under the current Community arrangements for the establishment of the Community’s own resources (see § 6.1.2), would have had to pay disproportionately large amounts as levies on its large imports of agricultural products from third countries at prices lower than Community prices and as customs duties arising from the Community’s common customs tariff on imports, as well as VAT levies. In contrast, the contributions it would receive from the EAGGF would be very small due to the limited participation of the British agricultural sector in the state economy, which gave the British a sense of the absence of a ‘fair return’ that should apply under the CAP. The meeting of French President Pompidou and British Prime Minister Heath in Paris, on 20 and 21 May 1971, allowed the climate of negotiations to improve. Thus, very soon, Britain accepted the system of Community preferences and agreed to contribute to the financing of the Community budget at a rate that would gradually increase over 5 years, starting from 8.6% of the total Community budget in 1973, to 18.9% in 1977. However, the text finally adopted contained a number of ambiguities which allowed Britain to revisit the issue of its contribution to the EC budget in the 1980s. A compromise was also reached on imports of butter from New Zealand, after Britain was granted special treatment and a transitional period to adapt to Community rules. As regards imports of sugar from the Caribbean, Britain accepted a moral commitment, which would take the form of a formalised special agreement between the EC and certain Commonwealth countries.

6.5.2

The Accession Negotiations with Ireland, Denmark and Norway

With Ireland, there were no particular problems, given that both the political will of the government and the will of the people were unreservedly in favour of EC membership. Ireland, as a largely agricultural country at the time, hoped to benefit from the CAP and gain access to new markets. During the negotiations, the Irish government was able to win a number of concessions relating to fishing rights, as well as benefits from Community structural regional aid. Denmark, as a major exporter of butter, was aiming, through its participation in the EC, to increase its exports, in particular because its main markets, Germany and Britain, would now be its Community partners. However, there was also a climate of mistrust in Denmark, stemming from the necessary transfer of sovereignty to Community institutions as a result of its accession to the EC. On the part of the six EC Member States, and in order to avoid intense competition, it was intended that a transitional period of adjustment should initially be granted for the import of butter and other agricultural products from Denmark.

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An important issue from Norway’s point of view was fishing, given that under the current Community regulations its Community partners could exploit its natural marine resources with it and fish in its territorial waters, which caused a reaction mainly from its fishermen, whose fishing fleet was inferior to that of other Member States. However, it was agreed that Norway, like any new Member State, would exceptionally be able to exclude foreign fleets from entering the six-mile coastal zone, which could be extended up to 12 miles, for the purpose of exploiting its marine resources. Furthermore, its agricultural production, which was not competitive, would be severely affected by the regulations provided for in the CAP, which would no longer allow state subsidies. However, Norway did not wish to restrict its agricultural activities in its northern regions. Thus, during the negotiations, it was given a sufficiently long transitional period to allow its agricultural production to adapt to the Community rules.

6.5.3

The Implementation of the First Enlargement

Following the successful conclusion of accession negotiations with the four candidate countries, the Treaty of Accession of Britain, Denmark, Ireland and Norway was signed in Brussels on 22 January 1972. In the meantime, by 28 October 1971, the British House of Commons had approved Britain’s membership of the EC, with dissenting voices both from the Conservative wing, which had been in favour of membership, and from the Labour wing, which opposed it. On 13 July 1972, the House of Commons ratified Britain’s accession to the EC, following the signing of the accession treaty, and the House of Lords did the same on 20 October. In Ireland, the Accession Treaty was ratified in the referendum of 10 May 1972 by 81%. The same was done in Denmark, in the referendum of 2 October 1972, with 63% of the vote. However, in Norway, in the referendum of 26 September 1972, just 1 week before the Danish referendum, the accession treaty was not accepted, with a rejection rate approaching 53.5%, despite the efforts of the socialist government. Contributing to the refusal was the isolation of the rural areas of the north and west of the country in the 1960s, populated by farmers and fishermen who were sceptical of the EC, believing it to be another remote decision-making centre that would contribute to their greater isolation. Although the result of the Norwegian referendum was formally advisory, it also had a negative impact on the related vote in the Norwegian parliament, where the three-quarters majority required to ratify the accession treaty was not achieved, forcing the Norwegian government to resign. However, in May 1973, a trade agreement was signed between the EC and Norway, which lifted tariffs on many products (Fig. 6.6). From 1 January 1973, the EC of Nine, with the participation of the three new Member States, Britain, Denmark and Ireland, was a fact. The territory of Gibraltar, as a British possession, did not join the EC, with the prospect of this issue being the subject of future negotiations with Spain.

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Fig. 6.6 The European Communities in 1973

6.5.4

The Impact of the First Enlargement

The return of Harold Wilson’s Labour Party to the British prime ministership on 4 March 1974 marked the beginning of a process of questioning the terms of Britain’s membership of the EC. This was clearly shown by the first speech in the House of Commons by Foreign Secretary James Callahan (1912–2005) on 1 April 1974, when he called for the renegotiation of the terms of Britain’s membership of the EC, without however questioning its own membership. The purpose of the requested renegotiation was to extend Britain’s adjustment period, especially for imports of butter from New Zealand and sugar from the Caribbean. Furthermore, the British side sought a reduction in its contribution to the Community budget, as well as an increase in the Community contributions it would receive from the EAGGF, considering that the ‘fair return’ regime of the CAP did not apply. Despite initial opposition from France, and in order to maintain unity within the EC, at the Paris summit on 9 and 10 December 1974, following a proposal from Britain and Ireland, it was decided to create a European Regional Development Fund

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(ERDF), as of 1 January 1975, with the aim of helping the problematic regions of the EC. Furthermore, the Dublin European Council of 10 and 11 March 1975 approved the creation of a ‘correction mechanism’ to take corrective action on contributions to the Community budget, which was to become operational on 17 May 1976. Thus, the Wilson government issued a new White Paper on 27 March 1975, promoting the continuation of the British presence in the EC, and in the referendum held on 5 June 1975, the British people voted in favour of Britain remaining in the EC by 67.2%. However, the Callahan government, which took over on April 5, 1976, reopened the question of British contributions to the Community budget in 1978, considering that they were still too high, but provoking a negative Franco-German reaction to any proposal for renegotiation. Ireland also faced adjustment problems, due to large economic differences from the other EC Member States. However, the establishment of the ERDF was intended to mitigate these differences by transferring resources to European regions that were lagging behind the others. Finally, in order to maintain economic relations with the other EFTA member states, from which Britain and Denmark withdrew when they joined the EC, a free trade agreement was signed with Austria, Switzerland, Iceland, Portugal and Sweden, which was also initiated by Finland on 22 July 1972. The agreement entered into force on 1 January 1973.

6.5.5

Institutional Changes Since the First Enlargement

The number of Commissioners, after the first enlargement, increased to 13, with two Commissioners from Britain and one from Denmark and Ireland. In the Council of EC, Britain, France, Germany and Italy now had ten votes each, Belgium and the Netherlands five each, Denmark and Ireland three each and Luxembourg two. In the European Parliament, the number of members has increased to 198, with 36 new MEPs from Britain and 10 each from Denmark and Ireland. Furthermore, in the EC Court of Justice, there were now nine judges and four advocates-general.

6.6

Institutional Reforms. Elections for the European Parliament

However, increasing the number of members of the European institutions could work against their efficiency and decision-making capacity, as well as exacerbate their bureaucratic image in the eyes of European citizens. In addition, enlargement has also caused various budgetary, administrative and logistical problems, particularly as regards the use of new languages and the geographical distribution of services. It has also triggered new activities for the EC, making it necessary to improve the way it operates, develop new policies and adapt to new circumstances, with a view to future enlargements. The consequence of all this has been the

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recognition of the need for reforms in the functioning of the Community institutions to enable them to respond to the new demands of the evolving EC. In response to the desire expressed at the Paris Summit of 19–21 October 1972 to develop a European Union, the Commission presented a report to the Heads of State and Government of the EC Member States on 26 June 1975, which highlighted the inability of the existing Community institutions to curb the tendencies of the Member States to promote their interests and to design and implement common policies. Major institutional reforms were therefore required, including the establishment of a European Parliament with two chambers, the House of States representing the governments of the Member States and the House of Peoples representing the people, elected by direct universal suffrage. The Parliament would have to acquire legislative powers, and it would be necessary to create a European Government to replace the Council of EC and the Commission and to establish a Court of Auditors. Finally, it was considered important to establish the European Council approved by the Paris Summit in December 1974.

6.6.1

The Establishment of the European Council as an Informal Institution

The acceptance of the proposal of French President Giscard d’Estaing, at the Paris Summit of 9 and 10 December 1974, to establish the European Council as an informal intergovernmental institution, consolidated the role of the meetings of the Heads of State and Government, known until then as summits (see § 6.4.3). The European Council, which would meet three times a year, would function as an intergovernmental coordinating body, promoting the policies of the EC. The inaugural meeting was held in Dublin on 10 and 11 March 1975 during the first Irish Presidency. With the Single European Act of 1986, the informal European Council was established as a regular institution of the EC, with the power to define general policy, to promote unification procedures and to reach agreements on particularly difficult issues. However, the European Council took its present formal form with the Treaty of Maastricht of 1992, which established it as the coordinating body of the future European Union, defining and promoting the necessary policies and general political orientations. As of 1 December 2009, on the basis of the Treaty of Lisbon, it became one of the seven institutions of the European Union (see § 11.1.3).

6.6.2

Proposals for Institutional Reforms

In September 1978, the Commission expressed a desire to review its methods of operation and to solicit suggestions that might lead to their improvement. The ‘Group of Five’, set up in January 1979 under the leadership of Dirk Spierenburg (1909–2001), a Dutch politician and former member of the ECSC High Authority, cooperated to this end with the ‘Committee of Three Wise Men’ (see below), which

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had been set up to draw up a report to the European Council on the improvement of the EC institutions. The report entitled Proposals for the Reform of the Commission of the European Communities and its services, known as the ‘Spierenburg Report’, submitted on 24 September 1979 to Roy Jenkins, President of the Commission, and published immediately, proposed the appointment of a single Vice-President responsible for coordinating the work of the Commission, the reduction of the number of Commissioners to one per Member State, and the reduction of the number of Directorates-General to ten. Although the administrative reform was coincidentally implemented quickly, no measures were taken to reduce the number of Commissioners and Directorates-General. Also, the Brussels European Council of 5 December 1978, at the proposal of French President Giscard d’ Estaing, asked a committee of eminent politicians to draw up a report on the improvement of the institutions of the EC, particularly in view of their expected enlargement. The committee, known as the ‘Committee of Three Wise Men’, consisting of Barend Biesheuvel (1920–2001), former Prime Minister of the Netherlands, Edmund Dell (1921–1999), former British Trade Minister, and Robert Marjolin, a French politician, first secretary of the OEEC and former vice-president of the Commission, began its meetings on 18 December 1978 in Brussels. It also worked with the committee under Dirk Spierenburg, which was preparing a report on the restructuring of the Commission. The Report on the European Institutions, by the ‘Committee of Three Wise Men’, was published in October 1979 and presented to the Dublin European Council, held on 29 and 30 November 1979. In particular, the report welcomed the establishment of the European Council in 1975. It called for qualified majority voting to become standard decision-making practice. It stressed the need to give the Commission the right to promote legislation and to strengthen its role, in particular that of its President. He suggested limiting the number of Commissioners to one per Member State and limiting the number of Directorates-General. He advocated strengthening cooperation between the Commission and the European Parliament, which had recently been elected by direct universal suffrage. The report of the Committee of Three Wise Men was examined by the Luxembourg European Council on 1 and 2 December 1980, but no further action was taken to implement its recommendations.

6.6.3

Election of Members of the European Parliament

In March 1971, the Commission set up a committee of independent experts, chaired by Georges Vedel (1910–2002), to draw up a report on the strengthening of the institutional and financial powers of the European Parliament and their consequences. On 25 March 1972, the ad hoc committee published a detailed report, known as the ‘Vedel Report’, in which it recommended a progressive increase in the legislative powers of the European Parliament and a real power of co-decision with the Council of EC. Furthermore, the report recommended that the Council’s appointment of the President of the Commission should be ratified by the European

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Parliament before the appointment of the Commissioners. In addition, it advocated the election of MEPs by direct universal suffrage, without specifying the electoral procedure. Finally, he proposed the implementation of a system of consultation between national parliaments and the European Parliament. In December 1974, under the leadership of French President Giscard d’ Estaing, the issue of electing the members of the European Parliament by direct universal suffrage was raised, with a view to holding the election in 1978 or later. At the Brussels European Council of 12 and 13 July 1976, a series of decisions to that effect were taken, and later, on 20 September of the same year, the Act concerning the election of the European Parliament was signed by the Council of EC and ratified by all the Member States of the EC. The number of Members of the European Parliament increased from 198 to 410, and the first elections by universal suffrage were held on 7 and 10 June 1979, with a turnout of very close to 62% of European citizens. The electoral systems were different in each Member State, as was the date of the elections. The representativeness of the Member States, expressed in terms of seats in the European Parliament, was not the same in relation to their population, but worked in favour of the Member States with smaller populations. Thus, out of a total of 410 seats, Britain, France, Germany and Italy each had 81 seats, the Netherlands 25 seats, Belgium 24 seats, Denmark 16 seats, Ireland 15 seats and Luxembourg 6 seats. The elected MEPs were organised into European political groups, such as the European Socialist Party, the European People’s Party, the European Liberal Democrats, the Communists, etc., while several MEPs, such as the British Conservatives and the French Gaullists, remained unattached. The first President of the elected European Parliament was elected on 17 July 1979, the Frenchwoman Simone Veil (1927–2017) (Fig. 6.7).

Fig. 6.7 Simone Veil. Source: Nationaal Archief. Author: Rob Croes for Anefo, 1984. https://commons. wikimedia.org/wiki/File: Simone_Veil_%281984%29. jpg. Public Domain (cropped)

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The democratic legitimacy of the European Parliament through direct and universal suffrage for the election of its members has allowed for views to be expressed at every opportunity on the expansion of its role in the legislative and control work of the EC. Furthermore, among the institutional consequences of the introduction of the Community’s own resources was the conferring of new powers on the European Parliament to adopt the Community budget. In particular, the Treaty of Luxembourg (First Budget Treaty) of 22 April 1970 provided for a division of responsibilities for the adoption of the budget so that the Council of EC would approve compulsory expenditure and the European Parliament would approve non-compulsory expenditure. With the Brussels Second Budget Treaty of 22 July 1975, the European Parliament’s powers were strengthened by the right to reject the Community budget and to grant discharge to the Commission in respect of its implementation. It should be noted that the same Treaty of 22 July 1975 also established the Court of Auditors, based in Luxembourg, which began operating on 18 October 1977, with the task of auditing the management of EC funds.

6.7

Competition Between the Superpowers and European Reactions

Significant changes in relations between the two superpowers occurred in the 1970s. Following the shift in public opinion in the USA against the involvement of US soldiers in Vietnam, the US leadership was forced to change its policy. The peace negotiations that began in May 1968 in Paris resulted in the gradual disengagement of the USA from the war in Vietnam that would end in 1972. South Vietnam, no longer without the physical presence of the US military, was finally defeated with the fall of its capital Saigon on 30 April 1975. However, the results of the Vietnam War had a negative impact on US prestige in Europe, although it did help ease tensions in Asia. The results of the Strategic Arms Limitation Talks between the USA and the USSR, which resulted in the signing of the SALT I Treaty on 26 May 1972 in Moscow, on the limitation of strategic arms, were also impressive. In October of the same year, the USA partially lifted the trade blockade it had imposed on the USSR since 1949, and there were successive meetings between US President Richard Nixon and Leonid Brezhnev, General Secretary of the Communist Party of the USSR. However, the development of new weapons such as the USSR’s multiwarhead missiles and the development of the USA neutron bomb, which were not foreseen by the SALT I Treaty, necessitated the need to renegotiate a second treaty, which was finally signed as the SALT II Treaty on 18 June 1978 in Vienna by USA President Jimmy Carter (1924–) and the General Secretary of the Communist Party of the USSR Leonid Brezhnev. However, the USSR’s intervention in Afghanistan on 24 December 1979 did not allow its implementation. Moreover, the development of new SS-20 medium-range missiles by the USSR in the late 1970s opened a new chapter in the tension between the two superpowers.

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Despite the efforts to limit the nuclear armaments of the two superpowers, the actions of both of them to maintain or increase their spheres of influence in the world continued with negative results for their relations with each other. The USSR tried to gain a foothold in Africa, particularly in Ethiopia in 1974, Mozambique in 1975 and Angola in 1975, and, together with Cuba, became a key ally of the new regime of the Sandinista Liberation Front in Nicaragua in 1979. The US supported the anticommunist rebels in Angola and gained a foothold in Egypt after the peace agreement signed at Camp David between Egypt and Israel in 1978. Furthermore, the invasion of Afghanistan by the Soviet army on 24 December 1979 provoked a strong reaction from the United States, and after the election of a new president, Ronald Reagan (1911–2004), in November 1980, relations between the two countries ceased to be good. However, relations between the Western European states and the Sovietinfluenced states of Eastern Europe and the Balkans improved as a result of the German Ostpolitik and the Helsinki Conference on Security and Co-operation in Europe (OSCE) (see § 6.7.2) of 1 August 1975, which was attended by NATO and Warsaw Pact member states, with the presence of other non-aligned states.

6.7.1

Germany’s ‘Ostpolitik’

The government of Willy Brandt, which took power in Germany on 21 October 1969, implemented the policy of opening up to the East (Neue Ostpolitik), concluding a treaty with the USSR in Moscow on 12 August 1970, respecting territorial integrity and existing borders, which paved the way for diplomatic relations with other European states under Soviet influence. Already in 1967, the German government, bypassing the ‘Hallstein Doctrine’, which had been in existence since 1955 of breaking off diplomatic relations with all states that recognised the German Democratic Republic, with the exception of the USSR, established diplomatic relations with Yugoslavia and Romania. After the conclusion of the 1970 treaty, meetings between Brandt and Brezhnev became more frequent, and after the conclusion of trade agreements between the two states, Germany became the largest importer of Soviet products from Western European states. Following the recognition of the Oder-Neisse border between Germany and Poland, Brandt signed a mutual recognition treaty between Germany and Poland in Warsaw on 10 December 1970, which, among other things, allowed Polish citizens of German origin to settle in Germany if they wished to do so. Brandt’s pilgrimage on 7 December 1970 to the memorial of the victims of the Jewish Ghetto uprising in occupied Warsaw against the Germans during the Second World War caused positive comments in Poland, but also objections from the German opposition. A similar treaty of mutual recognition with Czechoslovakia was signed in Prague on 11 December 1973. Particularly important was the meeting between German Chancellor Willy Brandt and the Prime Minister of the German Democratic Republic Willi Stoph (1914–1999) on 19 March 1970 in Erfurt. This meeting, which took place for

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Fig. 6.8 Meeting between German Chancellor Willy Brandt and the Prime Minister of the German Democratic Republic Willi Stoph on 19 March 1970 in Erfurt. Source: German Federal Archives or Bundesarchiv Attribution: Bundesarchiv, B 145 Bild-F031406-0017/CC-BY-SA 3.0. https:// commons.wikimedia.org/wiki/File:Bundesarchiv_B_145_Bild-F031406-0017,_Erfurt,_Treffen_ Willy_Brandt_mit_Willi_Stoph.jpg

the first time, broke the ice in relations between the two Germanies. Thus, after the signing of a quadripartite agreement between Britain, France, the USSR and the USA on 3 September 1971 on the conditions for crossing the border between East and West Berlin and the reopening of telephone communications, the treaty of mutual recognition of the two Germanies was signed on 21 December 1972 in East Berlin. This event paved the way for the recognition of the German Democratic Republic by other Western European states and its acceptance as a UN Mamber State in September 1973 (Fig. 6.8).

6.7.2

The Signing of the Helsinki Final Act

With the participation of 35 states, including NATO and Warsaw Pact Member States and non-aligned states, the Conference on Security and Cooperation in Europe (CSCE) concluded its work in Helsinki on 1 August 1975, where the Helsinki Final Act was signed. The non-institutionalised first CSCE began its work on a continuous basis on 3 July 1973, with the aim of overcoming the problems of the division of Europe, and for this reason all European states, except Albania, as well as the USA and Canada, participated (Fig. 6.9). The text of the Helsinki Final Act contained three main sections, the so-called ‘canisters’ or ‘baskets’. The first included a declaration of the principles that should

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Fig. 6.9 Signing of the Helsinki Final Act. Source: Unknown author, 1975. The USA National Archives and Records Administration. https://commons.wikimedia. org/wiki/File:Photograph_of_ President_Gerald_R._Ford_ Signing_the_Final_Act_of_ the_Conference_on_ Security_and_Cooperation_ in_Europe_as_It_is_Passed__ NARA_-_7462052.jpg. Public Domain

govern the relations of the participating states, such as the inviolability of borders and respect for territorial integrity, the renunciation of the threat or use of force and the peaceful settlement of disputes, the right of peoples to self-determination and non-interference in the internal affairs of states, respect for human rights and fundamental freedoms, and respect for obligations under international law. Furthermore, the borders created in Europe at the end of the Second World War were de facto recognised, and a system of confidence-building measures was introduced, according to which all participating states must notify in advance any military action they take. The second provided for economic, technical and scientific cooperation between the participating states, as well as the protection of the environment. The third included issues of cultural, humanitarian, educational and information exchange cooperation. However, the results of the Helsinki conference in the long term belied the initial optimism generated by the signing of the Final Act.

References CVCE, Proposition de réforme de la Commission des Communautés européennes et de ses services (24 septembre 1979), https://www.cvce.eu/en/education/unit-content/-/unit/02bb76df-d066-4c0 8-a58a-d4686a3e68ff/8e5dfa57-8b52-4862-8d45-ecef86981114/Resources#d3982dfa-f4a6-44 ad-b5d0-1f6b58f796a1_en&overlay (Spierenburg Report) CVCE, The first and second Barre Plans, 2023a, https://www.cvce.eu/en/collections/unit-content/-/ unit/56d70f17-5054-49fc-bb9b-5d90735167d0/f4696168-70cb-43d6-a191-364db2a894a6 CVCE, The first elections by universal suffrage, 2023b, https://www.cvce.eu/en/collections/unitcontent/-/unit/df06517b-babc-451d-baf6-a2d4b19c1c88/88c8177c-4117-4c00-b7c78c898e9961d6 Daniel T. Murphy, The System of European Political Cooperation: A Brief Explanation, 10 N.C. J. INT'L L.383 (1985). https://scholarship.law.unc.edu/ncilj/vol10/iss2/4 Dell, Ed., “The Report of the Three Wise Men.” Contemporary European History, vol. 2, no. 1, 1993, pp. 35–68. JSTOR, http://www.jstor.org/stable/20081465. Department of State, USA - The Office of the Historian, Strategic Arms Limitations Talks/Treaty (SALT) I and II, https://history.state.gov/milestones/1969-1976/salt

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Energy Education, Oil crisis of the 1970s, 2023, https://energyeducation.ca/encyclopedia/Oil_ crisis_of_the_1970s Federal Reserve History, The Smithsonian Agreement, November 22, 2013, https://www. federalreservehistory.org/essays/smithsonian-agreement Gainar, M., European Political Cooperation (1970-1993) - An Institutional Approach, EHNE, European History Digital Encyclopedia, 2020, https://ehne.fr/en/encyclopedia/themes/interna tional-relations/diplomatic-practices/european-political-cooperation-1970-1993 Helsinki Final Act, Organization for Security and Co-operation in Europe Date 1 August 1975, https://www.osce.org/files/f/documents/5/c/39501.pdf Hirsch, Felix E. “Ostpolitik in Historical Perspective.” Current History, vol. 62, no. 369, 1972, pp. 229–63. JSTOR, http://www.jstor.org/stable/45312663 International Monetary Fund, e-Library, Giinter Wittich and Masaki Shiratori, The snake in the t u n n e l , I n t e r n a t i o n a l Mo n e t a r y F u n d , h t t p s : / / w w w. e l i b r ar y . i m f . o r g / v i e w/ journals/022/0010/002/article-A002-en.xml International Monetary Fund, e-Library, Horst Ungerer, The European Monetary System (EMS), https://www.elibrary.imf.org/display/book/9781557751720/ch001.xml?tabs=fulltext International Monetary Fund, History, The end of the Bretton Woods System (1972–81), https:// www.imf.org/external/about/histend.htm Jean-Christophe Bureau. Enlargement and reform of the EU Common agricultural policy: impacts on the western hemisphere countries, Interim report, Contract number 3502, Inter-American Development Bank, First draft, September 17 2002 Mansholt, S., “The Mansholt Plan.” Studies: An Irish Quarterly Review, vol. 59, no. 236, 1970, pp. 404–18. JSTOR, http://www.jstor.org/stable/30087925. Accessed 1 Sept. 2023. Maraveyas, N., Developments in the Common Agricultural Policy and Greek Agriculture (in Greek Language), Sakkoulas, Athens - Komotini, 2003. Report to the Council and the Commission on the realisation by stages of Economic and Monetary Union in the Community, Bulletin of the European Communities, Supplement II, Luxembourg, 9 October 1970 (Werner Report). Report by the Foreign Ministers of the Member States on the problems of Political Unification, Bulletin of the European Communities, No 11, November 1970, Luxembourg, 27 October 1970 (Davignon Report). Report by Mr Leo Tindemans, Prime Minister of Belgium, to the European Council, Bulletin of the European Communities Supplement 1/76, 29 December 1975 (Tindemans Report). Social Action Programme. COM (73) 1600 final, 24 October 1973. Bulletin of the European Communities, Supplement 2/74 "Statement by Georges Pompidou (The Hague, 1 December 1969)", Office for Official Publications of the European Communities, Bulletin of the European Communities. Dir. of publ. Commission of the European Communities. Ν° 2. Luxembourg, February 1970, p. 33-35. Traité Portant Modification de Certaines Dispositions Budgétaires des Traités Instituant les Communautés Européennes et du Traité Instituant un Conseil Unique et une Commission Unique des Communautés Européennes, Luxembourg, 22 April, 1970. Treaty concerning the accession of the Kingdom of Denmark, (n.d.) Ireland, the Kingdom of Norway and the United Kingdom of Great Britain and Northern Ireland to the European Economic Community and to the European Atomic Energy Community, Official journal of the European Communities, 27.3.72. Whitman, R.G., The Development of the Framework of the International Identity: (2) From EPC to CFSP. In: From Civilian Power to Superpower?. Palgrave Macmillan, 1998.London, https://doi. org/10.1057/9780230375956_3. World Trade Institute, Association Convention between the European Economic Community and the African and Malagasy States associated with that Community - 2nd Yaoundé Convention (1969).

7

From Enlargement to the South to the Single European Act (1979–1986)

7.1

The Second and Third Enlargement of the EC towards the South

On 8 June 1959, Greece, invoking Article 238 of the Treaty of Rome, applied for association with the European Communities and after the signing of the Association Agreement in Athens on 9 July 1961, it became the first European state with associate membership, as of November 1962. The Association Agreement provided for the completion of the customs union between Greece and the EEC at the end of a 22-year transitional period, as well as the conclusion of a financial protocol and the harmonisation of certain policies, mainly in the agricultural sector. The free movement of persons, services and capital was to come into force at the end of a 12-year period, while recognising Greece’s eligibility for membership of the European Communities. However, the military coup of the colonels on 21 April 1967 suspended the Association Agreement and Greece withdrew from the Council of Europe in December 1969. After the restoration of democracy on 24 July 1974, Greece returned to the Council of Europe on 28 November 1974, and on 12 June 1975 Greece applied for membership of the European Communities in a friendly climate, with the expectation of its economic development, the strengthening of its democratic status and the improvement of its international political position. Greece’s accession was supported by the New Democracy party, which had governed the country since the first parliamentary elections in 1974, after the dictatorship, with Konstantinos Karamanlis (1907–1998) as Prime Minister, and the Centre Union party, while the Panhellenic Socialist Movement and the Communist Party of Greece expressed opposing positions. In Portugal, the “Carnation Revolution” of 25 April 1974 ousted the authoritarian regime of Marcelo Caetano (1906–1980), successor since 1968 to Antonio de Oliveira Salazar (1889–1970), who had controlled the country since 1933. Despite the problems of armed rebellions and the threat of chaos and division between officers and citizens, the considerable international support the country received, # The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 P. Liargovas, C. Papageorgiou, The European Integration, Vol. 1, Springer Texts in Political Science and International Relations, https://doi.org/10.1007/978-3-031-47776-8_7

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helped to consolidate the new democratic regime. Portugal, which had concluded a free trade agreement with the EC since January 1973, joined the Council of Europe on 22 September 1976, and on the initiative of the country’s Prime Minister since 1976 and leader of the Socialist Party, Mario Soares (1924–2017), formally applied for EC membership on 28 March 1977. In Spain, the death of the dictator since 1939, General Francisco Franco (1892–1975), on 20 November 1975, and the accession of Juan Carlos (1938–) to the throne of Spain marked the democratisation and normalisation of the country. The fragile democracy was threatened during the failed coup attempt on 23 February 1981, however, constitutional order was quickly restored. The country submitted an application for association with the EC in February 1962, but it was not considered. However, in October 1970 the country was linked to the EEC through a preferential tariff agreement. Spain formally applied for EC membership on 28 July 1977, just 1 month after the first parliamentary elections, where Adolfo Suárez (1932–2014), leader of the Union of Democratic Centre party, became Prime Minister. On 24 November of the same year, Spain joined the Council of Europe.

7.1.1

The Accession Negotiations with Greece

The EEC was Greece’s main trading partner, given that, in 1976, almost 50% of Greek exports were directed to the EEC Member States, from which it derived about 40% of its imports. Moreover, a large number of Greeks worked in the EC Member States, mainly in Germany, Britain and France. By joining the EC, Greece hoped to benefit in particular from guaranteed prices for agricultural products and benefits from certain Community structural funds and from the development of tourism and the expected inflow of revenue. However, Greece had about half the per capita Gross Domestic Product (GDP) of the EC. There were also large differences between economic structures, with more than 26% of the active population in Greece employed in agriculture, while the primary sector in the EC represented only 8% of the active population. Furthermore, some Greek agricultural products, such as olive oil, wine, fruit and vegetables, were competing with their Italian and French counterparts, which were already in surplus. Moreover, competition with the Greek merchant fleet was foreseen, which would, however, make the European fleet the largest in the world. Finally, due to the higher unemployment rate in Greece, there was a risk of an influx of cheap Greek labour into the EC Member States. Thus, the Commission’s report to the Council of EC, dated 29 January 1976, expressed reservations about the possibility of Greece’s accession to the EC, stressing the great difference between Greece and the “Nine” in the fields of economy and agriculture. At the same time it stressed the strained relations between Greece and Turkey, following the Turkish invasion and occupation of the northern part of Cyprus, which would probably create political problems in the EC, given that Turkey had signed an Association Agreement with the EEC, in force since 1963. The Commission therefore proposed a transitional pre-accession period of 7–8 years. For its part, the Greek government, led by Konstantinos Karamanlis, argued the need to

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consolidate and support the restored democracy in Greece, which would be achieved by the country’s full and rapid accession to the EC, and expressed Greece’s intention to accept all Community legislation and to incorporate the acquis communautaire into its legislation. However, Greece has received the support of two of its strongest future EU partners, for different reasons. The President of France, Valéry Giscard d’Estaing, supported the Greek application mainly for political reasons, considering as an absolute priority the strengthening of the democratic constitution in Greece, in the sensitive Balkan region. German Chancellor Helmut Schmidt’s support was based more on economic reasons, given that he was Greece’s largest supplier, which looked forward to further strengthening trade relations between the two countries. Furthermore, on a symbolic level, Greece’s accession would confirm the commitment of modern Greek culture to European civilisation, of which ancient Greek civilisation was a constituent element. Thus, despite the Commission’s hesitations, on 9 February 1976, the Council of EC approved Greece’s application for EC membership, and accession negotiations were officially opened on 27 July 1976 and concluded on 23 May 1979. Greece was given a transitional period of 5 years to bring its agricultural prices into line with those of the EEC and to plan for the introduction of the drachma into the EMS, where it would represent 1.3% of the ECU. The free movement of Greek workers and certain agricultural products such as peaches and tomatoes would come into effect on 1 January 1988, while Greece would be temporarily exempted from part of its contribution to the Community budget from the collection of VAT.

7.1.2

The Implementation of the Second Enlargement

The Treaty of Accession of Greece was signed in Athens on 28 May 1979 and ratified by the Greek Parliament on 28 June 1979. Greece became the tenth Member State of the European Community on 1 January 1981, enjoying particularly favourable conditions for accession. The desire to strengthen the democratic constitution was ultimately a strong argument for overcoming the Commission’s cautious report, mainly for economic reasons (Fig. 7.1). However, the socialist government of Andreas Papandreou (1919–1996), which won the elections of 18 October 1981, asked for derogations and an increase in aid for Greece to remain in the EC. Although Greece’s requested modification of the terms of Greece’s Accession Treaty was not possible, the Andreas Papandreou government did succeed to some extent in increasing Community aid to the country, for the modernization of the structures of the Greek economy, through what is known as the Integrated Mediterranean Programmes (IMPs), from 1986, as described below, in the aftermath of the second and third enlargements of the EC to the South.

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Fig. 7.1 The European Communities in 1981

7.1.3

The Accession Negotiations with Spain and Portugal

The accession negotiations with Spain and Portugal were not easy, given that some EC Member States, notably France and Italy, expressed serious reservations, fearing that their agricultural products would flood the European market, which was already suffering from its own surplus production of agricultural products, especially wine, fruit and vegetables. It should be noted that in 1977, almost 50% of Spanish exports were destined for the EC Member States, while both Spain and Portugal had small surpluses in their trade balance with the EC Member States. Furthermore, some Spanish industrial sectors would compete with their counterparts in the EC Member States. In addition, there was a widespread fear that the accession of the two states would increase regional disparities within the EC, while the current free movement of workers would direct large numbers of unemployed people from both countries, Spain and Portugal to neighbouring EC Member States in search of work. However, following a request from the Council of EC for an opinion on Portugal’s application for membership, the Commission delivered its favourable opinion on 19 May 1978, together with its views on the necessary measures to be

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taken. The long and difficult accession negotiations with Portugal thus began on 17 October 1978. The Commission also gave a favourable opinion on 29 November 1978 in response to a similar request from the Council of EC concerning Spain’s application for membership, also providing for a number of measures to be taken. The lengthy and extremely difficult accession negotiations with Spain began on 5 February 1979. The negotiations required the organisation of Community markets for fruit, vegetables and olive oil from October 1983 and an agreement to control wine production in February 1985. A transitional period of 7 years of adjustment was also provided for Spain and a corresponding period of 10 years for Portugal. The final approval of the accession of the two States was given by the Brussels European Council on 29 and 30 March 1985.

7.1.4

The Implementation of the Third Enlargement

The accession of the two new Member States was achieved with the signing of the Treaty of Accession of Spain and Portugal to the EC, for Portugal in Lisbon and for Spain in Madrid, on 12 June 1985, bringing the number of EC Member States to 12. The French socialist government of François Mitterrand contributed to the good outcome of the negotiations, showing solidarity with the socialist governments of Mario Soares of Portugal and Felipe González (González, 1942–) of Spain. The Treaty entered into force on 1 January 1986. One day earlier, Portugal formally withdrew from EFTA, of which it had been a founding member since 1960 (Fig. 7.2).

7.1.5

The Consequences of the First Enlargement

The issue of disproportionate British contributions to EU budget expenditure was reintroduced by the new Conservative government of Margaret Thatcher (1925–2013) when she took office on 4 May 1979. Thatcher, based on the way each Member States’s contribution to the Community budget was determined, and the principle of ‘fair return’ (see § 6.5.4), demanded repayment of the extra money paid by Britain. Thus, in an interview with the Guardian newspaper in the context of the Dublin European Council on 30 November 1979, and after it became clear that the eight partners had refused to accept Britain’s request, Thatcher made public Britain’s demand for repayment of the money with the well-known phrase ‘I want my money back’. In order to break the deadlock, the Council of Ministers reached a compromise agreement on 30 May 1980, reducing by two-thirds Britain’s net contribution, i.e. the difference between the payments and the refunds, which for 1980 were 20% and 8% respectively of the Community budget. The agreement was only in force for the 3 years 1980, 1981 and 1982, but did not sufficiently satisfy Britain (Fig. 7.3). Finally, the European Council of Fontainebleau, on 25 and 26 June 1984, resolved the deadlock by the acceptance by the nine partners of the UK’s annual

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Fig. 7.2 The European Communities in 1986

reimbursement of 66% of the difference between the country’s contributions and its refunds, in the form of a rebate, as opposed to the 50% proposed by France. This difference was to be borne by the other Member States, and as a practice was put into practice by the more recent Own Resources Agreement of 7ης May 1985. It should be noted that for 1985, this compensation amounted to ECU 1 billion. However, in 2005 Britain was obliged to waive part of the compensation it received annually, contributing to the financial requirements of the major enlargement of the European Union, and committed itself to reviewing the issue in 2008.

7.1.6

Impact of the Second and Third Enlargements. The IMPs

The accession of Greece to the EC strengthened their Mediterranean character, while adding a Balkan and Orthodox element to their cultural quiver. Moreover, the accession of Spain and Portugal contributed to a further shift in the centre of gravity of the EC’s interests towards the Mediterranean. However, the absence of a common

7.1 The Second and Third Enlargement of the EC towards the South

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Fig. 7.3 British Prime Minister Margaret Thatcher, Source: Unknown photographer, Margaret Thatcher Foundation, https:// commons.wikimedia.org/ wiki/File:Margaret_Thatcher. png. Public Domain (cropped)

Fig. 7.4 Greek Prime Minister Andreas Papandreou. Source: Author Eric Koch for Anefo, 1968, http://proxy. handle.net/10648/ab3e0108d0b4-102d-bcf8-00304 8976d84. Public Domain (cropped)

land border between Greece and any other EC Member State had exacerbated the existing problems of regional disparities (Fig. 7.4). However, the most important change resulting from these inclusions was the fact that Greece, Spain and Portugal based their economies mainly on primary sector activities, i.e. agriculture, livestock and fisheries, and tourism, unlike the other EC

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Member States, with the exception of Ireland, which were based on secondary sector activities and advanced tertiary sector activities. Consequently, as part of the necessary solidarity between Member States, large Community funds should be invested to bring the new and less developed regions closer to the Community average, as was done in 1975 with the creation of the ERDF to help the regions in difficulty. Thus, the first official position of the new Greek government of Andreas Papandreou, expressed a week after the elections of 18 October 1981, “in order to bridge inter-regional inequalities and to strengthen the countries of the South of Europe”, took the form of a memorandum in March 1982, through which the Greek specificity was promoted, with the aim of improving the country’s position in the context of the EC. The Commission responded to the Greek memorandum in March 1983 by pointing out that ‘the specificity of the Mediterranean problems is a fact recognised by the Community’ and that ‘in the case of Greece, Community action is intended to be more extensive and more intensive than in the other Mediterranean regions of the Community’. However, the Greek proposal was not immediately taken forward by the European Council, with the result that Andreas Papandreou threatened to exercise his right of veto on the accession of the like-producing countries of Spain and Portugal to the EC at the Dublin European Council on 3 and 4 December 1984. A solution to the problem was made possible at the Brussels European Council of 29 and 30 March 1985, where the Integrated Mediterranean Programmes (IMPs) were adopted and the accession of Spain and Portugal to the EC was approved. The IMPs were adopted by a Council of EC Regulation of 23 July 1985. The duration of the IMPs was initially set for the years 1986–1989 and extended to 1993, with a Community contribution of ECU 6.6 billion. This amount covered 70% of the expenditure of the projects to be included in the IMPs. The geographical scope of the IMPs covered Greece and certain regions of France and Italy, with development measures for agriculture, fisheries, industry, crafts, services and the development of human resources. The projects did not progress satisfactorily due to insufficient preparation and lack of experience, and it was agreed that the unused Community aid would be carried over to the next first Community Support Framework for the years 1989 to 1993. Furthermore, Greece failed to attract foreign investors despite realising the need for a policy of incentives to this end. Nevertheless, the IMPs are seen as an important example of the implementation of a meaningful European regional policy. The accession of Spain and Portugal to the EC has helped to create the necessary framework to strengthen the necessary structural reforms in both countries. At the same time, their participation in the EC has helped to modernise their economies and adapt them to the environment of European markets and intense global competition. At the same time, they have attracted foreign investors and have made extensive use of the Community support frameworks that followed to strengthen their infrastructure.

7.2 The Road to the Single European Act (SEA)

7.1.7

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Institutional Changes Since the Second and Third Enlargements

Since 1981, with the entry of Greece into the EC, the number of Commissioners has increased by one Commissioner from Greece, bringing the total to 14. In the Council of EC, Greece had five votes, while in the European Parliament Greece participated with 24 new members out of a total of 434 MEPs. Furthermore, in the Court of Justice of the EC, with the accession of Greece, the number of judges became ten and the number of prosecutors general increased to five, while from March 1981, the number of judges was increased to eleven, by decision of the Council of EC. With the entry of Portugal and Spain into the EC in 1986, the number of Commissioners increased with two Commissioners from Spain and one from Portugal, bringing the total to 17. In the Council of EC, Spain had eight votes and Portugal five votes. In the European Parliament, Spain had 60 new members and Portugal 24 out of a total of 518 MEPs. Furthermore, in the Court of Justice of the EC, there were now 13 judges and six prosecutors-general.

7.2

The Road to the Single European Act (SEA)

Since the early 1980s, there has been a common perception among the EC Member States that solutions were needed in the economic field to improve the competitiveness of European products, which had suffered during the previous decade, as mentioned above, leading the economies of the Member States to stagnate. At the same time, on the political front, and given that European countries had hitherto remained locked into the logic of bipolarity and dependence on the superpowers, the governments of the Member States decided that, instead of being locked into national strategies and narrow state interests, it would be preferable to make further use of the opportunities offered by the Community framework for integration, enlargement and deepening, thus also aiming at the full completion of the single internal market. To this end, it was necessary to take significant steps also in the field of common foreign and security policy, as well as to make the necessary amendments and extensions to the 1957 Treaty of Rome, in particular to the decision-making procedures of the Council of EC, the powers of the Commission and the powers of the European Parliament (Fig. 7.5). In the context of these efforts, on 30 May 1980, the Council of Foreign Ministers of EC of the “Nine” Member States, instructed the Commission to submit, by 30 June 1981, specific proposals for the structural reform of the Community’s policies and budget. Thus, on 24 June 1981, the President of the Commission, Gaston Thorn (1928–2007), presented a report to the Heads of State and Government on the creation of a “second generation Europe”, proposing the reform of budget expenditure, the reform of the CAP and the development of common policies. Moreover, the British Foreign Secretary Peter Carrington (1919–2018) appealed in November 1980 to his partners for the development of a European political

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Fig. 7.5 Commission’s President Gaston Thorn. Source: Nationaal Archief. Author: Rob Croes for Anefo. Licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license

cooperation. On 13 October 1981, and in the wake of Carrington’s appeal, the Council of Foreign Ministers of EC in London adopted a report confirming the need for the “Ten” to adopt a coordinated policy on international and security issues, with consultation between the Member States before any individual initiatives were taken by any of them.

7.2.1

The Genscher-Colombo Plan and the Promotion of the EPC

Excerpt from the Speech in Stuttgart on 6 January 1981, by Hans-Dietrich Genscher [. . .] The answers to the great challenges of our time must not only come from the Europeans in the undeniably important reform of the agricultural market, in the dispute over market regulations and also not in the disputes between the organs of the community are sought. A Europe that would only understand itself in this way would stagnate on the path of decay. It withdrew from international politics. Europe needs a new political impetus. A visible step towards the European Union is needed. I ask: Isn’t it finally time for a treaty on the European Union? [. . .] The goals of a European Union must be: the development of a common European Foreign policy, the development of Community policies in accordance with the Paris and Rome Treaties, the Coordination in the field of security policy, closer cooperation in the cultural field and the harmonization of legislation. None of these demands are new, they can be found in many documents, but the time has come to put them into practice implement reality.

(continued)

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Source: FDK: Freie Demokratische Korrespondenz. 06.01.1981, Nr. 2. Bonn: Pressedienst der Freien Demokratischen Partei. “Rede des F.D. P.-Bundesvorsitzenden Hans-Dietrich Genscher auf dem Dreikönigstreffen in Stuttgart (6. Januar 1981)”.

Excerpt from the Speech in Florence of 28 January 1981, by Emilio Colombo [. . .] Europe is now at a decisive turning point, on which its future profile and very means of survival as a Community committed to political unification and economic integration depends. [. . .] Economic integration is a vital but not sufficient condition for achieving political union. It must go hand in hand with a political and institutional blueprint which will allow the Community to expand its policies gradually, shifting them from national to European hands. But in order to give this process fresh impetus, Europe must single out those interests that are common to all its members and it is on these that a system of integration, acceptable to all, can be built.

Source: Europe. Documents. Dir. of publ. RICCARDI, Lodovico; Editor GAZZO, Emanuele. 03.02.1981, n° 1136. Brussels, 18/12/2013. “Speech by Emilio Colombo (Florence, 28 January 1981)”, p. 1–4.Copyright: (c) Agence Europe S.A.URL: http://www.cvce.eu/obj/address_given_by_emilio_ colombo_florence_28_january_1981-en-d2f67c9c-715c-44dbabef-c9240193 a8a3.html In the same context, the German Foreign Minister Hans-Dietrich Genscher (1927–2016), in a speech in Stuttgart on 6 January 1981, called for the strengthening of political cooperation between the EC partners, followed by his Italian counterpart, Emilio Colombo (1920–2013), who in a speech in Florence on 28 January of the same year, proposed much the same thing. Their coordinated interventions resulted in a draft text published on 6 November 1981, known as the Genscher-Colombo Plan. This draft was essentially a draft ‘European Act’ to improve the mechanisms of the institutions and was presented to the European Council in London on 26 and 27 November 1981. It provided for coordination in the actions of the Member States, confirmed the leading role of the Council of Foreign Ministers of EC in the development of the EPC and proposed the establishment of a secretariat for the EPC (Figs. 7.6 and 7.7). The Genscher-Colombo initiative paved the way for the signing of the Stuttgart Declaration on European Union on 19 June 1983, which contained the bulk of the project proposing the drafting of a European instrument to complement the Treaty of Rome. In the Stuttgart Declaration on European Union, the Member States recognised the prominent political role of an institutionalised European Council in

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Fig. 7.6 German Foreign Minister Hans-Dietrich Genscher. Source: Biddle, Susan. Records of the White House Photograph Office, 01/20/1989 - 01/20/1993 (Collection GB-WHPO), 1989. http://bushlibrary.tamu. edu/photos/photos.php. Public Domain (cropped)

Fig. 7.7 The Minister of Foreign Affairs of Italy Emilio Colombo. Unknown author. Source: https://it.wikipedia. org/wiki/File:EmilioColombo.jpg. Public domain (cropped)

shaping the EPC, and expressed the intention to give the Commission, the Council of EC and the European Parliament a direct say in the design of the EPC and in the future development of a European Union. They also stressed the need for coordination between Member States with a view to adopting common positions in international conferences and organisations.

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However, the Stuttgart Solemn Declaration on European Union was contested by some Member States, including Denmark and Greece, the project remained a mere declaration without becoming a legally binding text, and the way it was to be implemented remained unclear.

7.2.2

The Spinelli Initiative for a Treaty Establishing the European Union

Political unification efforts were continued by the initiative of the veteran Italian federalist MEP Altiero Spinelli, who in 1981 set up a parliamentary committee on institutional affairs of the European Parliament to draft a treaty to replace the existing Communities with a European Union. This initiative had its origins in the informal meetings of a group of MEPs, starting in July 1980, at the Crocodile restaurant in Strasbourg, which became known as the “Crocodile Club”. The European Parliament on 14 February 1984 approved the Draft Treaty establishing the European Union drawn up by the Commission, which, with a clear federal perspective, in addition to linking the EC with its institutions within a European Union, also linked the common policies of this Union to the EPC, giving the Union new powers in the fields of foreign and security policy. It also provided for the exercise of legislative initiative exclusively by the Commission, the exercise of legislative power by the Council of EC and the European Parliament, with the former taking its decisions by simple or qualified majority. A noteworthy detail of the draft is the division of powers between the Member States and the European Union, as well as the division of the way in which the European Union acts, either as joint action or as cooperation between Member States, as would later be provided for in the Maastricht Treaty on European Union.

7.2.3

The Mitterand-Kohl Initiative and the “Dooge Report”

The intentions to activate the unification process were again set out at the Fontainebleau European Council on 25 and 26 June 1984, on the initiative of French President François Mitterrand and with the help of German Chancellor Helmut Kohl (1930–2017). At Fontainebleau it was decided to set up an ad hoc committee to submit proposals for improving European cooperation at Community and political level. This committee, headed by the senator and former Irish Foreign Minister James Dooge (1922–2010), was set up in September 1984 and submitted its final “Dooge Report” to the Brussels European Council of 29 and 30 March 1985. In it, it recommended the transformation of the EC into a European Union, the development of a single economic area, the promotion of a European external identity, the strengthening of the EMU and the development of common policies on social, environmental and cultural issues. With regard to the EPC, the Committee stressed

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the need to create a permanent secretariat, and to have a common representation of the “Ten” in international organisations. As regards the institutions, the report proposed increasing the number of cases of majority voting in the Council of EC, limiting the number of Commissioners to one for each Member State, the appointment of the Commission President by the European Council, a vote of confidence in the Commission by the European Parliament, strengthening the Commission’s executive powers and granting the European Parliament a real right of co-decision. To achieve all this, the Committee recommended that an Intergovernmental Conference be convened to draw up a draft Treaty on European Union.

7.2.4

Jacques Delors’ White Paper on the Single Market

The Brussels European Council of 29 and 30 March 1985, although it did not examine the Dooge report in depth, decided to mandate the Commission to draw up a report on a single internal market by 1992, and to draw up a timetable for its implementation. Thus, on 14 June 1985, Jacques Delors (1925–), as President of the Commission, presented to the Council of EC a draft agreement on the completion of the single internal market. The draft, which took the form of a White Paper, was the work of the British Francis Arthur Cockfield (1916–2007), Vice-President of the Commission, and was presented by the Commission to the Milan European Council of 28 and 29 June 1985. It provided for the free movement of persons, goods, services and capital, and the merging of national markets into a single market by 31 December 1992 at the latest. The plan made clear all the obstacles to the completion of this single internal market and proposed the removal of all barriers to the conduct of intra-Community trade, starting with the physical barriers of border controls, passing through the technical barriers of different production standards for similar products and ending with the tariff barriers imposed by excise duties and value added taxes (Fig. 7.8).

7.2.5

The Intergovernmental Conference for the Revised Arrangements

The Milan European Council of 28 and 29 June 1985 approved both the Dooge Report and the Commission’s draft White Paper on the Single Internal Market. The Italian presidency, with the support of French President Mitterand and German Chancellor Kohl, managed to overcome the difficulties that had emerged and to promote the Dooge Commission’s proposal to convene an Intergovernmental Conference, despite the disagreements and reservations expressed by Britain, Denmark and Greece about the proposed institutional reforms and the different views of the other Member States on the proposals to be adopted. The Intergovernmental Conference would have the task of accelerating the completion of the single internal market by 1992, improving the functioning of the

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Fig. 7.8 Commission President Jacques Delors. Source: Author Ludwig Wegmann, 1988, Bundesarchiv, B 145 BildF078267-0023/Wegmann, Ludwig/CC-BY-SA 3.0 de https://commons.wikimedia. org/wiki/File:Bundesarchiv_ B_145_Bild-F078267-0023,_ Bonn,_Ministerpr%C3%A4 sidenten_mit_EUKommissar_DelorsCROPPED.jpg (cropped)

EC institutions and implementing a common foreign and security policy. It would also involve the acceding Member States, namely Spain and Portugal. A particular contribution to the success of the Intergovernmental Conference was made by the Luxembourg Presidency, whose government submitted a draft on 5 July 1985. Thus, on 22 July of the same year, the Council of Foreign Ministers of EC, with the encouragement of the Commission and the European Parliament, formally convened the Intergovernmental Conference to examine the draft. The Intergovernmental Conference met five times at the level of foreign ministers, from 9 September to 28 November 1985, examining at the same time a French Draft European Act, which proposed an amendment to the Treaty establishing the EEC and a new treaty of political cooperation, as a Single Act. The Luxembourg European Council of 2 and 3 December 1985 managed to overcome the obstacles raised by the Member States by finally adopting an important joint declaration, as a political agreement which was obviously the product of compromise. It provided for the completion, before 31 December 1992, of the single internal market, the extension of the qualified majority voting method rather than unanimity in decision-making, the further development of EMU, the reorganisation of the powers and responsibilities of the Commission, the European Parliament and the Court of Justice of the EC, technological cooperation between Member States and the promotion of the EPC. The Council of Foreign Ministers of EC, meeting on 16 and 17 December 1985 in Luxembourg, undertook to transform the political agreement into a treaty text, entitled the Single European Act (SEA) as a single document containing both the amendments to the Treaties of the Communities and the measures required for

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cooperation between the Member States in the field of the EPC. France wanted the treaty to be called the European Union Act, in order to highlight its importance in promoting the idea of the European Union. However, Britain, which was a strong supporter of the single internal market for its own economic reasons, and Denmark objected, not wishing to see their sovereign rights ceded to a European supranational entity, while the Benelux countries, on the other hand, rejected this name because they considered that the content of the treaty was far removed from the vision of a desirable European Union. Moreover, despite the success of the efforts to draw up such a treaty, some politicians, such as Leo Tindemans, considered the text to be “a good agreement, but not a good treaty”, given that as a mere consensual text, it was less progressive than the proposals put forward in both the “Dooge Report” and Altiero Spinelli’s Draft Treaty establishing the European Union.

7.2.6

The Signature and Validation of the SEA

The Single European Act (SEA), approved by the Council of Foreign Ministers of EC of the “Ten” Member States, could not be signed given the refusal of the Danish Parliament to approve it, by 80 votes to 75, on 21 January 1986, and Italy’s insistence that its approval be made conditional on the pre-approval of the European Parliament. Faced with the categorical refusal of its partners to any renegotiation of the Treaty, Denmark called for a referendum on its approval on 27 February 1986. However, the Council of EC set 17 February as the date for signing the Treaty, without waiting for the final results of the referendum in Denmark. However, on 13 February, Italy announced its intention not to sign the Treaty, pending the results of the Danish referendum, and Greece did the same shortly afterwards. Thus, on 17 February 1986, Belgium, Britain, France, Germany, Ireland, Spain, Luxembourg, the Netherlands, Germany, Ireland, Luxembourg, the Netherlands and Portugal signed the Single European Act in Luxembourg. On 27 February, 56.2% of the Danish population voted in favour of the Treaty, with a turnout of 75.4%. The next day, it was the turn of Denmark, Italy and Greece to sign the Single European Act in The Hague. To implement it, it still had to be ratified by the parliaments of the Member States, in accordance with the specific constitutional requirements of each signatory Member State. The original intention was for the SEA to enter into force on 1 January 1987. However, this was not possible because of the decision of the Irish Supreme Court of 9 April 1987 that a relevant amendment to the Irish constitution was necessary and could be implemented by holding a referendum in the country. This was finally held on 26 May 1987 and the proposal was approved by the Irish electorate by a vote of 69.9% in favour to 30.1% against and a turnout of 44.1%. Ireland formally ratified the SEA in June 1987 and the SEA finally entered into force on 1 July 1987 as the first substantive amendment to the founding Treaty of Rome of 1957.

7.2 The Road to the Single European Act (SEA)

7.2.7

131

Institutional Reforms as a Result of the SEA

With the SEA, the informal European Council, composed of the heads of the executive power of the Member States, took its present formal form and established itself as a regular institution of the European Communities, with the power to define general policy, to promote unification procedures and to reach agreements on particularly difficult issues. In this way, the European Council became an important institution for the realisation of European integration. To facilitate the completion of the internal market, the SEA increased the cases where the Council of EC would decide by qualified majority. In particular, it provided for the replacement of the unanimity procedure for the cases of amendment of the common customs tariff, the free provision of services, the free movement of capital and the common maritime and air transport policy. Thus, unanimity would no longer be required for measures to be taken to establish the internal market, except for those relating to taxation, the free movement of persons and the rights and interests of employees. In addition, the Council of EC could meet not only on the initiative of its President, but also at the request of the Commission or a Member State, if a majority of its members agreed within a 2-week period. Furthermore, the SEA strengthened the powers of the European Parliament, given that the consent procedure was required for the conclusion of an enlargement or association agreement with new states, and introduced the cooperation procedure, which allowed it to reject a decision of the Council of EC by majority vote, thus allowing double reading of the proposed legislation, while it could make limited amendments to the Commission’s proposals. The European Parliament would thus become, in a way, an equal partner of the Council of EC in the legislative work. However, the scope of this procedure remained limited and, in the case of disagreement, the Council of EC had the final decision. It is also worth noting that the name “European Parliament”, which had been adopted by the Joint Assembly in 1962, was also used officially for the first time through a reference to the SEA. Finally, the SEA provided for the creation of a Court of First Instance of the European Communities to relieve the overburdened Court of Justice and to create another institution for the administration of justice, which would deal with cases at first instance.

7.2.8

Launching the Single Internal Market

The SEA was to complete the gradual transformation of the common market into a single internal market by 31 December 1992. The single internal market was defined as “an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured”, covering then more than 300 million consumers. The operation of a large European market for the products of the Member States, while developing free competition, was seen as a prerequisite for their economic development.

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The creation of a European market area without internal borders required the promotion of EMU and the establishment of common policies, which should be reinforced by the implementation of directives to be issued and incorporated into the laws of the Member States, which would impose a series of measures such as the abolition or simplification of customs formalities for the movement of persons and goods, the adoption, elimination or equivalence of technical standards, the harmonisation of public procurement and public contracts, the liberalization of services, the parity of diplomas for freelancers, standardization of excise duties and VAT rates, etc.

7.2.9

Promoting a Social Policy

With the SEA, a social policy based on economic and social cohesion would be put in place to offset the effects of the implementation of the internal market in the less developed Member States and to reduce the disparities in the level of development between the regions of the EC. The Community intervention to normalise regional disparities would be carried out through the EAGGF and the ERDF. Furthermore, a parallel economic and monetary policy should be implemented by all Member States. At the same time, the SEA gave Member States the opportunity to promote policies to improve the health and safety of workers, to develop social dialogue and to define, in a practical way, the gradual creation of a European social area. In order to facilitate the joint implementation of social policy, the promotion of dialogue between the social partners and the recognition of the role of trade unions were encouraged. The decision of the “Twelve” to promote social policy-related directives to be adopted by the Council of EC, by qualified majority instead of unanimity, following a proposal from the Commission and consultation of the Economic and Social Committee, reflects the partners’ intention to promote social policy as codified in the SEA. It should be noted that the Strasbourg European Council of 8 and 9 December 1989 approved the Community Charter of Fundamental Social Rights of Workers, despite the refusal of Britain, and invited the Council of EC to discuss the Commission’s proposals for its implementation, which was to be presented as an action plan.

7.2.10 Scientific and Technological Development Strengthening the scientific and technological base of European industry to develop international competitiveness was one of the key objectives of the SEA. In order to exploit the EC’s potential for technological innovation and to pursue a common

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policy for applied research, the SEA provided for the establishment of a multi-annual framework programme and a number of other specific programmes. It also urged the adoption of the necessary initiatives and actions to protect and improve the quality of the environment, protect the health of individuals and the rational use of natural resources, opening up new avenues for environmental policy and linking economic development with environmental protection.

7.2.11 The Operation and Institutionalisation of the EPC During the 1980s, the EC Member States, in the context of the non-institutionalised EPC, adopted some common positions, sometimes accompanied by economic sanctions or incentives. Such cases included the Soviet invasion of Afghanistan in 1979, the Argentine invasion of the Falkland Islands in 1982, the Israeli-Palestinian talks in the Middle East during the 1980s, and the Iran-Iraq war that started in 1980, efforts to end apartheid in South Africa in the 1980s, the superpower talks on nuclear disarmament, the fight against international terrorism and Libya’s involvement in it, etc. The signed SEA foresaw that the Member States would make efforts to develop and implement a common European foreign policy. In this way, the non-institutionalised EPC started to become a regular Community institution, which would require a necessary coordination as well as consultations on foreign policy and security issues of the Member States before formal decisions and positions could be taken. The EPC was mainly articulated through the European Council, the Council of Foreign Ministers of EC and the EC Presidency. The now institutionalised European Council has become the body that will set the general guidelines for the EPC, with its at least two annual meetings. The Council of Foreign Ministers of EC would meet at least once a month to examine the international situation and draw up its conclusions. The current EC Presidency, assisted by its predecessor and successor in the form of a tripartite (troika), would be responsible for taking the initiative, coordinating and representing the Member States vis-à-vis third countries in this area. Furthermore, the European Parliament would be regularly informed about decisions taken in the framework of the EPC, mainly through its Political Affairs Committee, and could also adopt resolutions with positions on EC foreign policy. Finally, the Commission’s involvement in the EPC process was formalised by monitoring and supporting it through monthly meetings of the Political Committee, composed of senior civil servants from the Ministries of Foreign Affairs of the Member States, and through a permanent Political Secretariat, a creation of the SEA, based in Brussels. However, the Commission’s role in the development of the EPC remained relatively marginal.

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A “Europe of the Peoples” Without Borders and with a Common Face

The idea of a single European identity, adopted at the Copenhagen summit on 14 and 15 December 1973, was the trigger for the adoption of new measures to further accelerate the processes of European integration. Thus, at the end of the Fontainebleau European Council meeting on 26 June 1984, the Heads of State and Government of the “Ten”, expressing their intention to strengthen the European identity and the image of Europe internationally, set up an ad hoc working party on a Europe of the peoples, chaired by the former Italian MEP Pietro Adonnino (1929–). The task of this committee was to propose measures that would promote a single identity for the EC internationally and strengthen a single Europe without internal borders, facilitating the free movement of goods and the free movement and establishment of persons. The Adonnino Commission presented its first report to the Brussels European Council on 29 and 30 March 1985. Its proposals included measures to improve the free movement of persons, the mutual recognition of higher education diplomas and even the introduction of a European vocational training certificate for all qualified professionals. On 30 March 1985, the European Council adopted the principle of mutual recognition of higher education diplomas. Measures were also taken to facilitate the free movement of economically inactive persons, students, pensioners, etc. and access to employment in the public services of the Member States for all citizens who would have been nationals of an EC Member State.

7.3.1

The Establishment of the Official Symbols of the EC

The European Council encouraged the Adonnino Commission to continue its work. Thus, a second report was submitted by the Committee to the Milan European Council on 28 and 29 June 1985. In this report the Committee proposed a single procedure for all Member States for the elections to the European Parliament, and raised a number of important issues, such as cooperation between universities and student exchange programmes, etc. As a consequence of the Committee’s proposals, the first European driving licences were issued by the Member States on 1 January 1986. However, particular emphasis was placed by the committee on the use of common European symbols, such as the use of a flag for the EC, the introduction of a European anthem, as well as the standardisation of postage within the EC and the abolition of all forms of customs controls at internal borders. The European blue flag with 12 gold stars, which had been established as a symbol of the Council of Europe since 1955, was formally adopted by the Brussels European Council on 29 May 1986, while the “Ode to Joy” from Ludwig van Bethoven’s (1770–1827) Ninth Symphony, which had already been adopted as the anthem of Europe by the Committee of Ministers of the Council of Europe on 12 January 1972, was established as the anthem of the EC (Fig. 7.9).

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Fig. 7.9 The European blue flag with twelve gold stars, adopted by the EC

7.3.2

The Introduction of the European Passport

At the end of the Paris Summit, on 9 and 10 December 1974, the Heads of State and Government of the “Nine” referred to the establishment of a committee of experts to work on the standardisation of passports of the Member States, the abolition of passport controls within the EC and the harmonisation of entry and residence conditions in the Member States. The European Council in Rome on 3 and 4 December 1975 approved the issue of standardised passports to be issued from 1978. The representatives of the governments of the Ten accepted the first standard form passport on 23 June 1981. The model European passport was presented to the press during the Fontainebleau European Council on 25 and 26 June 1984 by the President of the European Council, French President François Mitterrand. The first standardised European passports, in red, bearing both the Community symbols and the national symbols of the Member States, were issued from 1 January 1985. The cover of the passports bore the title “European Community” and the name of the Member State in the official languages of the Member State and were a token of mutual recognition between Member States as a common identity document for all EC citizens.

7.3.3

The Signing of the Schengen Agreement

Despite the efforts and discussions on the free movement of persons within the territory of the EC Member States, during the 1980s, some Member States wanted to maintain border controls and the separation between European citizens and third country nationals. However, in 1985, Belgium, France, Germany, Germany, Luxembourg and the Netherlands reached an agreement on the creation of a border-free area for the free movement of persons. Thus, on 14 June 1985, the first Schengen Agreement was signed by the five states, in the small town of Schengen, Luxembourg, for the progressive abolition of controls at their common borders, the establishment of free movement for all persons, nationals of the states that signed the Agreement, as well as police and judicial cooperation between them. The treaty was signed on board the steamship

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Princess Marie-Astrid, which was anchored on the Moselle River, the tri-national border between France, Germany and Luxembourg. On 19 June 1990, the Convention implementing the Schengen Agreement was again signed in Schengen, supplementing and specifying the original agreement. Subsequently, other Member States of the EC and the successor European Union joined the Treaty by signing protocols and accession agreements. These were Italy in 1990, Spain and Portugal in 1991, Greece in 1992, Austria in 1995 and Denmark, Sweden and Finland in 1996. The Treaty entered into force on 26 March 1995, creating the Schengen area, while cooperation between the participating States was at a purely intergovernmental level, outside the institutional framework of the European Union. Iceland and Norway, which since 1957 had been participating with the last three Scandinavian states in a similar Scandinavian association, the Nordic Passport Union (Nordic Passport Union), signed a specific agreement to participate in the Schengen Agreement with the other 13 Member States of the European Union participating in the Treaty on 19 December 1996. With the entry into force of the Treaty of Amsterdam (see § 9.3.2) on 1 May 1999, the Schengen Agreement, which was incorporated into the framework of the European Union, entered into force for all its Member States, with the exception of Ireland and the United Kingdom. The agreement was initially applied, from 26 March 1995, to the five founding countries. Italy signed the agreements on 27 November 1990, with effect from 26 October 1997, Spain and Portugal signed on 25 June 1991, with effect from 26 March 1995, Greece signed on 6 November 1992, with effect from 26 March 2000, Austria signed on 28 April 1995, with effect from 1 December 1997, Denmark, Finland and Sweden signed on 19 December 1996, with effect from 25 March 2001, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia and the Czech Republic also acceded to the Schengen acquis in parallel by signing their accession to the EU on 16 April 2003 and with effect from 21st December 2007, with the exception of Cyprus, where it will be applied as soon as security conditions permit, due to the occupation of the northern part of the island by Turkey. Bulgaria and Romania also acceded to the Schengen acquis by signing their accession to the EU on 25 April 2005, but with the application of the agreement suspended. Croatia acceded to the Schengen acquis by signing its accession to the EU on 9 December 2011, also with a suspension of the application of the agreement. Finally, the UK and Ireland are EU Member States that have not acceded to the agreement. Of the non-EU Member States, Iceland and Norway signed the agreements on 19 December 1996, with an effective date of 25th March 2001, Switzerland signed on 26 October 2004, with an effective date of 12th December 2008 and Liechtenstein signed on 28 February 2008, with an effective date of 19th December 2011 (Fig 7.10).

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Fig. 7.10 The signing of the Schengen Agreement on 14 June 1985 in Schengen, Luxembourg. Author: carrasco. Source: https://en.wikipedia.org/wiki/Schengen_Agreement#/media/File: Schengen_Agreement_place.jpg. Licensed under the Creative Commons Attribution-Share Alike 4.0 International license

7.4

The Arms Race and Changes in Europe

The Soviet invasion of Afghanistan on December 24, 1979, and the failure of the USA to release the hostages of its embassy in Tehran, which had been seized by Iranian students on November 4, 1979, in a military operation in April 1980, created a climate of discontent in USA public opinion. The election of Ronald Reagan as the new USA president was seen as an opportunity to restore the USA image internationally, allowing the new president to take a tough stance on USA foreign fronts. The arms race has been particularly felt by the increase in military expenditure and has reached such a point that the prevailing situation has been described as “the balance of terror”. As a show of force, the USA supported Britain in the 1982 Falklands war, backed the counter-revolutionary Contras in Nicaragua against the leftist revolutionary regime of the Santinistas Front in the early 1980s and overthrew the pro-Soviet regime in Grenada in 1983. However, the arms race also had its consequences in Europe, whose states were the sites of the new nuclear missiles of the two superpowers. It was not until 1985, with the appointment of Mikhail Gorbachev (1931–2022) as General Secretary of the Central Committee of the Communist Party of the USSR and the launch of internal reforms to democratise the state that it appeared that the reckless arms race could be brought to an end. These reforms could also change the attitude of the USSR to the demands for reform and democratisation that were manifested as internal uprisings in USSR-controlled states, such as Poland.

7.4.1

The Arms Race of the Superpowers

On 28 October 1977, German Chancellor Helmut Schmidt denounced from London the intention of the USSR to install SS-20 missiles in Eastern Europe, seeking to establish its regional military supremacy, which would endanger the security of European states. Since the early 1980s, the superpowers’ arms competition began,

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following NATO’s decision of 12 December 1979 to deploy 108 Pershing missiles and 464 USA Cruise missiles in Europe to offset the USSR’s installed SS-20 missile power in Warsaw Pact Member States in Eastern Europe. Once again, the old continent became the focus of competition between the two superpowers, since the deployment of USA missiles in Belgium, Britain, Germany, Italy and the Netherlands from 1983 onwards led to the failure of the disarmament negotiations in Geneva, which had begun in June 1982, and intensified the superpowers’ arms competition. On 23 March 1983, USA President Ronald Reagan announced the launch of a new military programme, known as the Strategic Defence Initiative (SDI), or “Star Wars”, to create a space shield to protect against hostile nuclear weapons, such as Soviet ballistic missiles. The announcement of this project by the USA, and the need for the USSR to confront it, would bring the latter to the brink of economic collapse.

7.4.2

The Solidarity Trade Union Movement in Poland

The intensification of the economic crisis in Poland, from mid-1979, manifested itself in strikes and general unrest in the country. From August 1980, the uprisings were led by the workers of the Coordinating Strike Committee for the Coordination of Strikes throughout the country, headed by Lech Wałęsa (1943–). The focus of the uprisings was the Baltic shipyards, particularly the Lenin shipyards in Gdańsk. In September of that year, the Polish government, despite its initial negative attitude, signed an agreement with the Strike Committee allowing the creation of organisations, paving the way for the creation of the Solidarity trade union (‘Solidarność’), with Lech Wałęsa as its president. The strike actions were effective, as they led to the recognition of the right to strike, the strengthening of the role of the Catholic Church and other concessions, while the striking workers accepted the leadership of the Communist Party and the country’s remaining in the Eastern Coalition. However, in October 1981, with the intervention of the USSR, the moderate Stanisław Kania (1927–2020) was removed from the leadership of Poland’s unified Labour Party and replaced by General Wojciech Jaruzelski (1923–2014), Prime Minister of Poland since February of that year. Jaruzelski immediately outlawed “Solidarity” and imposed martial law, trying to return the country to the previous political situation. On 11 December 1981, Wałęsa was arrested and remained a prisoner until 14 November 1982. In 1983 General Jaruzelski lifted martial law, but Solidarity was not legalised. The country’s economic situation was still bad, and this was compounded by the economic sanctions that the USA unilaterally imposed in response to the declaration of martial law, without prior notification of its European NATO allies (Fig. 7.11).

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Fig. 7.11 Lech Wałęsa, supported by members of the Solidarity trade union, 1980. Source: Author [onbekend] Nationaal Archief via Picryl. com. http://proxy.handle.net/ 10648/dc815c3b-1d2b-801ffb8e-95745fb8cb10 Public Domain

7.4.3

Mikhail Gorbachev Takes over the Reins of the USSR

On 11 March 1985, Mikhail Gorbachev was appointed General Secretary of the Central Committee of the Communist Party of the USSR. Since taking office, his aim has been to carry out a radical and far-reaching reform of the Soviet system of government, aiming at economic “reconstruction” (“Perestroika”), as well as the introduction of “transparency” (“Glasnost”) in the functioning of the state, alongside freedom of expression and information. To implement this ambitious policy successfully, Gorbachev had to limit the USSR’s international commitments to its friendly countries and reduce its military spending, thereby limiting the country’s economic degradation (Fig. 7.12). Fig. 7.12 Mikhail Gorbachev. Source: Author Yuryi Abramochkin, 1986, RIA Novosti archive, image #770913 / Yuryi Abramochkin / CC-BY-SA 3.0, http://visualrian.ru/ru/ site/gallery/#770913. https:// commons.wikimedia.org/ wiki/File:RIAN_archive_770 913_The_final_speech_of_ the_General_Secretary_of_ the_CPSU_Central_ Committee_M._Gorbachev. jpg. (cropped)

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Gorbachev’s actions contributed to the resumption of the dialogue between the USA and the USSR on arms control, and to the establishment of closer relations with the EC. He initiated the withdrawal of Soviet troops from Afghanistan, put pressure on Vietnam to withdraw from Cambodia, made efforts to restore Sino-Soviet relations, and eased Soviet support for the pro-Soviet regime in Ethiopia, cut off economic aid to Cuba and withdrew Soviet troops from the country, restored diplomatic relations with Israel and later condemned Iraq’s invasion of Kuwait.

7.4.4

Self-Governing Greenland Is Leaving the EC

Greenland, which had been part of the Danish state and therefore a territory of the EC since Denmark’s accession to the EC on 1 January 1973, was granted autonomous status by Denmark in 1979. However, the binding EEC regulations on fishing and prohibitions on seal fishing created fears among the inhabitants that they would be detrimental to the economy of their region. Thus, a referendum held on 23 February 1982 decided by 52% to withdraw from the EC, a decision which came into effect on 1 February 1985. To this end, the Greenland Treaty was signed on 13 March 1984, which provided for Greenland’s withdrawal from the EC and a special protocol referred to the special regime governing relations between the EC and Greenland.

References Bialer, S., “Gorbachev’s Program of Change: Sources, Significance, Prospects” Political Science Quarterly 103, no. 3, 1988, 403–60. https://doi.org/10.2307/2150758. Communication A 10.04 COM 85, SN/2536/3/85, Report to the European Council by the ad hoc committee “On a People’s Europe” (The “Adonnino Report”), Saturday, 29 June 1985. Communication COM(85) 310 - Completing the Internal Market: White Paper from the Commission to the European Council, Commission of the European Communities, Brussels, 14 June 1985. Commission of the European Communities, “The Integrated Mediterranean Programmes”, European File 1/86, Directorate-General for Information, Communication and Culture, Brussels, January 1986. CVCE, Negotiations with Ireland, Denmark and Norway, 2023a, https://www.cvce.eu/en/ collections/unit-content/-/unit/df06517b-babc-451d-baf6-a2d4b19c1c88/7bdbbad1-08e8-473897ee-0a2e847cad7d. CVCE, The symbols of the European Union, 2023b, https://www.cvce.eu/en/education/unitcontent/-/unit/eeacde09-add1-4ba1-ba5b-dcd2597a81d0. CVCE, The United Kingdom’s accession to the EC, 2023c, https://www.cvce.eu/en/education/unitcontent/-/unit/dd10d6bf-e14d-40b5-9ee6-37f978c87a01/3cf54bc7-03f0-4306-9f25-316d508d0 c38. Draft Treaty establishing the European Union, Official Journal of the European Communities No C 77/33 Tuesday, 14 February 1984 (The Spinelli’s Plan) Eurofund, EurWork, European Observatory of Working Life, Community Charter of the Fundamental Social Rights of Workers, 2011, https://www.eurofound.europa.eu/observatories/ eurwork/industrial-relations-dictionary/community-charter-of-the-fundamental-social-rightsof-workers.

References

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Europe. Documents. Dir. of publ. Riccardi, Lodovico ; Editor Gazzo, Emanuele. 03.02.1981, N° 1136. Brussels. “Speech by Emilio Colombo (Florence, 28 January 1981)”, p. 1-4. Copyright: (c) Agence Europe S.A., https://www.cvce.eu/en/obj/address_given_by_emilio_colombo_ florence_28_january_1981-en-d2f67c9c-715c-44db-abef-c9240193a8a3.html. Freie Demokratische Korrespondenz. 06.01.1981, Nr. 2. Bonn: Pressedienst der Freien Demokratischen Partei. “Rede des F.D.P.-Bundesvorsitzenden Hans-Dietrich Genscher auf dem Dreikönigstreffen in Stuttgart (6. Januar 1981)”. https://www.cvce.eu/en/obj/speech_by_ hans_dietrich_genscher_stuttgart_6_january_1981-en-73cd40b0-7dce-479b-8c7c-8404 afe7c69e.html Hoeller, P., & Louppe, M-O., The EC’s Internal Market: Implementation and Economic Effects, OECD Economic Studies No. 23, Winter 1994, https://www.oecd.org/eu/33765116.pdf. Johansen, Ov., & Sørensen, C.L., “Greenland’s Way out of the European Community” The World Today 39, no. 7/8, 1983, 270–77. http://www.jstor.org/stable/40395531. MacShane, D., Solidarity: Poland’s Independent Trade Union, Spokesman Pr, 1981. Official Journal of the European Communities, 22.9.2000, Convention Implementing the Schengen Agreement of 14 June 1985 between the Governments of the States of the Benelux Economic Union, the Federal Republic of Germany and the French Republic on the gradual abolition of checks at their common borders, Schengen, 14 June 1985 – 19 June 1990. Report of the Ad Hoc Committee for Institutional Affairs to the European Council (Brussels, 29-30 March 1985). Brussels, 29-30 March 1985 (Dooge Report). Single European Act, Official Journal of the European Union No C 53, “Single European Act”, Luxembourg, 17 February 1986 and The Hague, 28 February 1986. Smith, M.E., Europe’s Foreign and Security Policy The Institutionalization of Cooperation, Cambridge University Press, 2009, https://ir101.co.uk/wp-content/uploads/2018/11/Smith2004-Europes-Foreign-and-Security-Policy.pdf. Teasdale, A., & Bainbridge, T., European passport, The Penguin Companion to European Union, 2012, https://penguincompaniontoeu.com/additional_entries/european-passport/. Treaty concerning the accession of the Hellenic Republic to the European Economic Community and to the European Atomic Energy Community, (n.d.) Official Journal of the European Communities, 19.11.79. Treaty concerning the accession of the Kingdom of Spain and the Portuguese Republic to the European Economic Community and to the European Atomic Energy Community, (n.d.) Official Journal of the European Communities, 15.11.85. U.S. Department of State, Archive, Strategic Defence Initiative (SDI), (n.d.) https://2001-2009. state.gov/r/pa/ho/time/rd/104253.htm. Yannopoulos, G.N. “The Challenge of the Southern Enlargement of the European Community”, Il Politico, vol. 52, no. 3, 1987, pp. 427–36. JSTOR, http://www.jstor.org/stable/43100571.

8

From the Single Market Goal to the Treaty on European Union (1986–1993)

8.1

The Community Budget and the Single Internal Market

A prerequisite for the implementation of the single internal market launched by the SEA was the reform of the Community budget. In particular, the CAP, as it came into force in January 1962 (see § 5.1.2), was based mainly on the functioning of the single market, the preferential trade policy of the EEC and budgetary solidarity between the EC Member States. This framework offered the rural population guaranteed prices for their products, as well as protection against competition from imported products and subsidised exports, while making the EC Member States food self-sufficient. However, the guaranteed prices led to overproduction and stockpiling financed by the Community budget, which benefited the largest farms, while, on average, farm incomes remained low. Community budget funding of the CAP has been steadily increasing, reaching a level of around 75% of the budget. At the same time, the enlargement of the EC with Greece, Portugal and Spain, in addition to the increase in the required agricultural subsidies, required greater financial support to cover the EC’s regional policy. The Community budget soon doubled from ECU 18.4 billion in 1980 to ECU 36.2 billion in 1987, with an estimated deficit of ECU 6 billion. From the Community’s own resources, customs duties on imports through the Common Customs Tariff have been steadily decreasing, while contributions from customs duties on imports of agricultural products have also been minimised as a consequence of the EC’s food self-sufficiency policy. Furthermore, the third resource, derived from contributions from the VAT levied by the Member States, which had risen to 1.4% since May 1985, could not be increased any further. The Member States therefore had to find ways of making up the Community budget deficit. Thus, by the early 1980s, a reform of the Community budget had become an urgent necessity, to be implemented both by reforming the CAP and by finding the resources to finance the necessary EC cohesion funding.

# The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 P. Liargovas, C. Papageorgiou, The European Integration, Vol. 1, Springer Texts in Political Science and International Relations, https://doi.org/10.1007/978-3-031-47776-8_8

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The ‘Delors I and II Packages’

With a view to reforming the Community budget, the Commission presented on 15 February 1987 a plan For the Success of the Single Act: a new frontier for Europe, known as the ‘Delors I package’. Its two main thrusts were to limit CAP expenditure by stabilising agricultural production and to finance economic cohesion by increasing the structural resources of the ERDF and other social funds. After almost a year of intense and difficult negotiations, the Brussels European Council of 11–13 February 1988 accepted the plan. The successful outcome of the negotiations was largely due to the then President of the European Council, Chancellor Kohl of Germany, who managed to overcome the French opposition and soften the opposition within Germany itself. In order to ensure the financing of the Community budget, a fourth Community Own Resource was introduced, according to the plan, as a contribution based on the GDP of the Member States, calculated in relation to the difference between the expenditure and the performance of the other Own Resources for each Member State. However, given that the two traditional Community Own Resources were decreasing, it was clear that contributions based on the GDP of the Member States would gradually increase. Indeed, in order to safeguard the Community budget, a ceiling was decided on the total amount of Community resources as a percentage of Gross Community Product, which would increase from 1.15% in 1988 to 1.20% in 1992. Furthermore, in order to improve the annual budgetary procedure, there was an agreement between the Council of EC, the Commission and the European Parliament on 29 June 1988, which established rules for enhanced Community budgetary discipline for a period of 5 years, from 1988 to 1992, by setting priorities for specific Community policies that would also identify the expenditure required and set the limits for its increase in line with the identified ceilings on the Community’s own resources. The system worked well for 5 years, leading the Commission to adopt on 14 February 1992, the new plan From the Single Act to Maastricht and beyond: the means to achieve our ambitions, known as the ‘Delors II package’, to be implemented after the expiry of the first one. This new Commission plan was accepted by the Edinburgh European Council on 11 and 12 December 1992, with a view to its implementation over the next 7 years. Under this plan, the ceiling on the total amount of Community resources as a percentage of gross Community product was to be raised from 1.20% in 1993 to 1.27% in 1999, and the rate of contribution from the VAT levied by the Member States, the third resource of the budget, was to be reduced from 1.4% to 1% between 1995 and 1999, which would necessarily increase the amount of the fourth resource, based on the GDP of the Member States, still further. It was also proposed to renew the agreement between the Council of EC, the Commission and the European Parliament on the procedures for establishing and maintaining the Community budget. The new agreement was reached on 29 October 1993 and provided for similar procedures to the previous one for a period of 7 years, from 1993 to 1999.

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However, from 1995, with the extension of the application of the European System of Accounts (ESA 1995) to the budget, the concept of Gross Community Product was replaced by that of Gross National Income (GNI). In order not to change the amount of budgetary resources made available to the Communities, the own resources ceiling was adjusted as a percentage to 1.24% of EU GNI.

8.1.2

The 1992 ‘MacSharry CAP Reform’

The effort to review the CAP began in July 1985 with the publication of the Green Paper: Perspectives for the Common Agricultural Policy by the Commission, addressed to the Council of EC and the European Parliament. The Brussels European Council of 11–13 February 1988, accepting the proposals of the ‘Delors I package’, limited the increase in agricultural expenditure to 74% of the annual growth rate of Gross Community Product. Certain measures to limit surplus production had already been taken since 1984, when the system of production quotas, which applied to sugar, was extended to milk. The system of maximum guaranteed production, which applied to turnips and sunflower in 1987, was extended from 1988 to cereals, cotton, olive oil, rice, etc. Furthermore, fallowing was encouraged by the payment of compensation, the switch to other non-excess crops by the payment of transitional payments, and the early retirement of farmers over 55 years of age. However, in 1991, butter stocks amounted to 500,000 tonnes while cereal stocks exceeded 15,000,000 tonnes. Thus, as of 1 February 1991, the Commission, under the Irish Commissioner for Agriculture Raymon ‘Ray’ MacSharry (1938–) proposed drastic measures to further reduce agricultural production, but met with strong opposition from farmers in the Member States. However, the Commission’s proposals were finally adopted by the Council of EC on 21 May 1992, allowing for a major reform of the CAP, which became known as the ‘MacSharry reform’. This broadly provided for (a) reducing production for surplus agricultural products by reducing their guaranteed prices, such as cereals by 29%, beef by 15%, etc., over a 3-year period, while maintaining the quota system for cow’s milk, tobacco, sugar, etc.; (b) granting of income support, to compensate for price reductions, which would no longer be calculated according to the quantity of product produced, but would constitute ‘coupled aid’ paid per hectare cultivated for agricultural products and per animal reared for livestock; (c) fallowing for arable crops, with a view to reducing the area under cultivation and thus limiting surpluses; and (d) introduction of fiscal discipline measures, as well as accompanying measures to encourage farmers’ retirement, reforestation of arable land, environmental protection, quality of agricultural products and food safety. The reform came into force gradually from 1993, and was generally successful, since stocks of certain surplus agricultural products, such as butter, milk, etc., were reduced. The granting of income support, to compensate for price reductions, was no longer to be calculated according to the quantity of product produced, but per hectare cultivated for agricultural products and per animal reared for livestock. However, the

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Fig. 8.1 Ray MacSharry, Commissioner of Agriculture. Source: Jean-Louis Debaize— https://audiovisual.ec.europa. eu/en/photo-details/P-004 699~2F02-5 (cropped)

administrative system required to implement the reform was complex and did not solve all the problems of the CAP (Fig. 8.1).

8.1.3

Relations with Trading Partners and the GATT Negotiations

One of the factors that forced the 1992 CAP reforms was the need to reach an agreement with the EEC’s trading partners in the Uruguay Round of GATT talks, which had started in 1986 with the participation of 123 countries. It covered issues relating to intellectual property rights in trade, international trade in services, as well as agriculture and textiles, trade in which had hitherto been subject to specific rules. With regard to agricultural subsidies in particular, the negotiations were directly linked to the decisions to be taken by the EEC on the reform of the CAP, given that the US wanted the Community to abolish them before the year 2000. The Uruguay Round Agreement, reached in December 1993 and signed on 15 April 1994 by 111 countries, strengthened the existing rules of international trade, notably by reforming the provisions on safeguards, subsidies and antidumping. At the same time, the Marrakesh Agreement of 15 April 1994 replaced GATT, as of 1 January 1995, by the World Trade Organization (WTO). Market access for products was significantly improved by the substantial reduction by at least 33% of tariffs imposed by industrialised countries, and by many developing countries, on building materials, agricultural machinery, medical equipment, pharmaceuticals, textiles, alcoholic beverages, etc. The reduction in customs duties on agricultural products was similar. The Uruguay Round Agreement was incorporated into the law of the EEC Member States. However, it was possible to ensure that the granting of income support per hectare and per farm animal (see §

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8.1.2) was not regarded by the EEC’s trading partners as a distortion of international trade competitiveness until the year 2000.

8.1.4

The Formulation of Regional Policy (First CSF 1988–1993)

Regional and Cohesion Policy essentially took its present form in 1988, when it was decided to coordinate the action of the Structural Funds by reforming their regulations. It was essentially the transformation of what had hitherto been a supportive policy towards the Member States into a genuine European Regional Policy. Thus, in the context of the entry into force on 1 January 1987 of the Single European Act (SEA) signed the previous year, the plan For the Success of the Single Act: a new frontier for Europe, known as the ‘Delors I Package’, was presented by Commission President Jacques Delors. Its main provision was to strengthen the structural policy of the EC and to double the resources of the Structural Funds by the year 1993, compared to 1987. The Brussels European Council of 11 and 12 February 1988 approved the increases in favour of the Structural Funds. Following proposals from the Commission, the management of the Structural Funds between 1989 and 1993 was codified in five Council Regulations on their effectiveness and coordination, their implementation and general provisions, and the participation of each of the three Funds. The Coordination Regulation was adopted by the Council of EC on 24 June 1988, and four other Regulations were adopted by the Council of EC on 19 December 1988. All entered into force on 1 January 1989. The regulations clearly defined the uniform criteria for the classification of the three categories of regions of the European territory (Nomenclature d’ Unités Territoriales Statistiques, NUTS), as well as certain principles and objectives for the Cohesion Policy that applied to the population, regions and Member States of the then EC. The five basic principles on which regional structural policy is based and which are seen as complementary and inextricably linked to each other as a whole are the following: 1. The concentration and orientation of structural policy on five specific objectives, based on the SPD and with a total funding of ECU 68.2 billion: (i) The development and structural adjustment of the least developed regions with a per capita GDP of less than 75% of the average of the Member States, financed by the ERDF, the ESF and the EAGGF. (ii) The restructuring of areas affected by industrial decline, financed by the ERDF and the ESF. (iii) The fight against long-term unemployment, financed by the ESF. (iv) The promotion of the vocational rehabilitation of young people, financed by the ESF. (v) Rural restructuring and development, with two sub-objectives: (a) Support for the adaptation of rural areas, financed by the EAGGF and (b) rural development, financed by the ERDF, the ESF and the EAGGF. It should be noted that Objectives 1, 2 and 5b were targeted at specific regions of the EC, while the other Objectives were targeted at the whole territory of the EC. The funding was

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3.

4.

5.

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to be implemented mainly through multi-annual action bundles in Community regions, known as Community Structural Funds (CSFs), which would also be partly financed from the national resources of the Member States concerned by the implementation of the package of actions. Partnership, as a close understanding between the Commission, the Member State concerned and the competent authorities designated by it at national, regional, local or other level, where all parties are partners pursuing a common objective. The partnership shall cover the preparation, financing, monitoring and evaluation of actions. The partnership derives from the principle of subsidiarity, is complementary in nature, is based on close cooperation between the actors involved, has a three-level structure involving the Commission, the Member State concerned and the competent authorities at national, regional, local or other level and, finally, runs through all the stages of preparation, negotiation, financing and evaluation of actions. Cohesion, which seeks to ensure coherence between EU actions and Member States’ strategies at local, regional and national level and seeks, in particular, to coordinate economic policies with a view to converging Member States’ economic performance. Better management of the Funds, establishing: (a) the doubling of resources, (b) multiannual financial programming, (c) additionality, whereby Structural Fund resources will constitute additional assistance, over and above that of the Member State, for the purpose of regional development, (d) provisions to avoid overlapping and duplication in the interventions of the Funds, (e) the rules of financial discipline in a broad sense, (f) increased transparency, (g) systematic ex ante and ex post evaluation of Community’s structural action at macroeconomic and microeconomic level. Notably, 85% of the Funds’ resources will be allocated to the five priority objectives, and 15% will be allocated at the Commission’s initiative. Simplification, monitoring and flexibility, ensured by (a) the simplification of Community structural action by integrating the intervention procedures of the three Structural Funds, (b) the creation of mechanisms for monitoring and evaluation of actions and (c) the possibility of annual modification of the CSFs.

8.1.5

The Regional Policy Review (Second CSF 1994–1999)

In view of the EMU initiatives taken after the entry into force of the SEA, the governments of Greece, Ireland, Spain and Portugal, led by the Spanish government, called for the strengthening of Community cohesion by creating a special fund for Member States with a per capita income below 90% of the average of the EC Member States. Despite the initial refusal of the other eight Member States, from November 1991 Commission President Jacques Delors began to advocate the creation of a cohesion fund, a view finally agreed by the Member States at Maastricht in February 1992, including a provision to this effect in the new Treaty on European Union (TEU) signed in February 1992.

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The Edinburgh European Council of 11 and 12 December 1992 accepted the new package of proposals from the Commission and its President Delors for the new financial period 1994–1999, known as the ‘Delors II package’, presented in the context of the provisions of the signed TEU. The Cohesion Fund (CF) would have been operational before the end of 1993, would have been directed at Member States rather than Community regions, and would have concerned trans-European network and environmental projects. It also doubled structural expenditure for the four least developed Member States, namely Greece, Ireland, Spain and Portugal, for the 7-year period 1993–1999. This was followed in July 1993 by the revision of the Structural Funds regulations, based on the decision of the Edinburgh European Council of December 1992, thus forming the second CSF for the period 1994–1999. Following proposals from the Commission, the rules relating to the Structural Funds and the Cohesion Fund were laid down in six Council of EC Regulations of 20 July 1993, which regulated their effectiveness and coordination, their implementation and general provisions, as well as the implementation of each of the Structural Funds. A separate Regulation of the Council of EU of 16 May 1994 approved the establishment of the CF. The Coordination Regulation did not bring about many changes to the previous three-stage system launched in 1989, which included national plans, CSFs and operational programmes. However, it did call for more detailed national plans, particularly on environmental issues. It also introduced the innovation of the single programming document, whereby Member States and regions could submit plans and operational programmes in one document, followed by a single Commission decision. The fisheries sector was added, and the Financial Instrument for Fisheries Guidance (FIFG) was established by the first of the above Regulations, which was set up as a fund to finance it. It should be noted that the forthcoming accession of Sweden, Finland and Austria to the EU in 1995 also contributed to the adjustment of structural policy, from which the first two benefited in particular for 5 years, to promote the structural adjustment of their regions with extremely low population density. Finally, coordination between the various funds is ensured within the partnership. In summary, the new priority objectives for the period 1994–1999, with a total funding of ECU 160.8 billion, of which ECU 14.45 billion from the CF, include: (1) The development and structural adjustment of the less developed regions with a per capita GDP of less than 75% of the average of the Member States, financed by the ERDF, the ESF and the EAGGF. In addition, the CF for countries under its responsibility would also contribute to this objective. (2) The restructuring of areas affected by industrial decline, financed by the ERDF and the ESF. (3) The fight against long-term unemployment, the vocational rehabilitation of young people and the promotion of equal opportunities for men and women, financed by the ESF. (4) The vocational adaptation of workers to industrial change, financed by the ESF. (5) Rural restructuring and development, with two sub-objectives, (a) support for the adaptation of rural areas and the modernisation of fisheries, financed by the ERDF, the EAGGF and the FIFG, and (b) development of sensitive rural areas, financed by the ERDF, the ESF and the EAGGF.

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Progress of the Single Internal Market

The relaunch of European integration imposed by the SEA was spearheaded by the realisation of the single internal market as an area without internal borders, ensuring the free movement of goods, persons, services and capital. The deadline for the implementation of the single internal market was set by the SEA as 31 December 1992. Customs formalities for goods were restricted from 1 January 1988 and abolished from 1 January 1993. Trade has been facilitated by the introduction of approach measures for the mutual recognition of rules on the manufacture of products between Member States, and harmonisation measures for the adoption of criteria and specifications for the manufacture of products, which are compulsory in all Member States in order to meet the essential requirements for the safety and health of consumers. The freedom of movement and establishment of persons, already established for employees and entrepreneurs, was extended to persons not in paid employment, such as students, pensioners and people living on benefits. Progress has also been made in the mutual recognition of professional qualifications so that holders can establish themselves and work professionally in all Member States, and in the abolition of border controls on persons, which was initiated in the context of the first signing of the 1985 Schengen Agreement and the 1990 Convention implementing the Schengen Agreement (see § 7.3.3). The freedom to provide and receive services, despite its importance in the economy, has been significantly delayed. Since 1992, insurance companies have had the freedom to provide services in all Member States and, since 1993, so have banks. The freedom to provide services in the transport sector was introduced gradually, for maritime transport from 1986, for air transport from 1987 and for road transport from 1992. However, there have been difficulties in the rail sector due to differences between national networks and despite the opening up of this market to private operators. On 2 December 1992, the Commission adopted the White Paper on the Development of the common transport policy, which emphasised the opening up of markets in the transport sector and marked a shift towards an integrated approach covering all modes of transport based on the model of sustainable mobility. On the one hand, it is about ensuring the affordable and efficient movement of goods and passengers, as a necessary element of a competitive EU internal market and as a foundation for the free movement of persons. On the other hand, it is about meeting ever-increasing transport needs and minimising the consequences associated with them, such as accidents, respiratory diseases, noise pollution, congestion and environmental pollution. As regards capital movements, the relevant provisions of the founding Treaty of Rome of 1957 were not particularly binding since they imposed an obligation on the Member States to gradually abolish restrictions on capital movements to the extent necessary for the functioning of the common market and not to introduce new exchange restrictions. The Council of EC, by a series of directives, and in particular by a Council Directive of 24 June 1988, established the full free movement of capital

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within the single internal market from 1 July 1990, in view of the plans for the rerouting of EMU and the implementation of its first stage. However, these directives were revised with the signing of the Maastricht Treaty on European Union in February 1992 (see § 8.4.3).

8.1.7

The Establishment of the European Economic Area (EEA)

The economic and trade relations of the EC with the seven EFTA, Member States namely Austria, Switzerland, Iceland, Norway, Finland, Sweden and Liechtenstein, which joined on 1 January 1991, were put under scrutiny as a consequence of the effort to implement the single internal market. The EFTA Member States had signed a free trade agreement with the EC Member States on 22 July 1972, which entered into force on first January 1973 (see § 6.5.4). Since then, the EEC has been the place of origin of about two-thirds of EFTA imports and the place of destination of about half of its exports. It should be noted that Switzerland and Liechtenstein had already concluded a customs and monetary union treaty. Thus, in May 1990, the Council of EC, following a proposal made by Commission President Jacques Delors in January 1989, gave the Commission a mandate to negotiate the participation of the EFTA States in the single internal market. The establishment of a European Economic Area (EEA), covering the four basic freedoms of the single internal market, namely the movement of goods, persons, services and capital, and consisting of an area of almost 380 million inhabitants, with the participation of the EEC and EFTA Member States, required the latter to comply with Community rules on matters such as competition, state aid, public procurement procedures, consumer protection, etc. Negotiations between the EEC and EFTA led to the Treaty establishing the EEA, signed in Porto, Portugal, on 2 May 1992. However, the agreement reached contained a number of derogations. Thus, as regards the free movement of goods, liberalisation was to be gradual for agricultural and fishery products, while for other goods the free movement of those produced by the EEA States would apply. The free movement of persons would apply only to workers and not to the whole population. The freedom of movement of capital would be subject to derogations for Iceland and Norway in the area of fisheries investment, and certain restrictions on property, such as fishing boats in Norway and real estate in Liechtenstein, would also apply. The agreement also did not provide for tax harmonisation, and there would be no external economic policy, i.e. common external tariffs, anti-dumping measures, etc. As a result, the EEA would not in practice and at present be a single internal market without borders, nor a true customs union. However, close cooperation was envisaged in the areas of research, the environment and working conditions. Furthermore, much of the legislation of the Single European Market would apply to the whole of the EEA. The EEA Joint Committee, composed of officials from the EC (later the European Union) and EFTA Member States, was appointed as the institutional executive body. Central responsibility is assumed by the EEA Council, which consists of ministers

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from each of the Member States. Decisions are taken by consensus, while the EC (later the European Union) and EFTA will be separately responsible for their implementation. Thus, supervision of implementation would be carried out by the EC Commission on the one hand and the EFTA Surveillance Authority on the other. Finally, legal supervision would be the responsibility of the European Court of Justice and the EFTA Court. In case of legal conflicts between the decisions of the EC Court of Justice and those of the EFTA Court, bilateral negotiations would take place between representatives of the EC and EFTA in the EEA Joint Committee. The ratification of the Treaty establishing the EEA was carried out by all EC and EFTA Member States, with the exception of Switzerland, which rejected the Treaty in a referendum on 6 December 1992, delaying its implementation. The Treaty thus entered into force on 1 January 1994, while Liechtenstein approved its accession to the EEA by referendum on 9 April 1995. The treaty provided that states joining the EC (later the European Union) or EFTA after the establishment of the EEA would automatically become members of the EEA. Austria, Sweden and Finland joined the European Union on 1 January 1995, and withdrew from EFTA, which currently covers Iceland, Liechtenstein, Norway and Switzerland. The latter, after rejecting its accession to the EEA, signed a series of special association agreements with the EC (later the European Union).

8.2

The Plans for EMU and the First Stage of Its Implementation

The objective of creating EMU among the EC Member States was first set at the meeting of the ‘Six’ at The Hague in December 1969 and confirmed by the ‘Nine’ at the Paris summit in October 1972, with the intention of starting by the end of 1980 at the latest. However, the governments of the Member States were unable to reach an overall agreement on a general plan for EMU, which had been presented by Luxembourg Prime Minister Pierre Werner as early as October 1970, and given the international exchange rate problems of the early 1970s, it was decided to introduce the currency snake system from April 1972, which limited the fluctuations of the exchange rates of the European currencies within certain limits. This non-institutionalised monetary system collapsed, as it was soon abandoned by all but the strongest currencies, most notably the German mark. The EMS followed, from March 1979, as an intergovernmental agreement, operating outside the Community institutional framework, which set fixed but adjustable exchange rates in order to achieve monetary stability. The signing of the SEA, in February 1986, which aimed at creating a single internal market, set as a precondition the establishment of a real economic and monetary union, as stated in its preamble. However, the structure and functioning of EMU within the institutional Community framework were open issues, and the problem of a common currency was raised by Member States with weak currencies as a result of their earlier inability to keep pace with the Deutsche Mark within the EMS, which forced them to raise interest rates and pursue restrictive fiscal policies.

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Moreover, Germany, at the prospect of abandoning its currency, the foundation of its economic strength, due to the management of the new common currency by a European central bank, expressed its fears of losing its economic stability and of the emergence of inflationary phenomena. Furthermore, Britain has from the outset expressed its objections to the transfer of powers to the EC, which the implementation of EMU would require, excluding the loss of its sovereign rights in the matter of issuing and circulating its national currency. In spite of the apparent problems, the Hanover European Council of 17 and 18 June 1988, following an agreement between French President François Mitterrand and German Chancellor Helmut Kohl, confirmed the objective of EMU proposed by the Commission and called for the setting up of a Commission to study Economic and Monetary Union under the chairmanship of Jacques Delors.

8.2.1

The Delors’ Report on EMU

Jacques Delors proposed the creation of a special EMU project committee under his chairmanship, composed of central bank governors rather than the finance ministers of the Member States, to operate more independently. This proposal was accepted after intense negotiations, and the committee would include three independent experts nominated by the Council of EC, as well as the Commission’s vice-chairman Frans Andriessen (1929–2019). The Delors Report was submitted on 12 April 1989. Its text adopted the main points of the 1970 Werner Report and set out as prerequisites for the completion of EMU the irrevocable fixing of exchange rates between European currencies and their full convertibility, the establishment of the free movement of capital and, finally, the adoption of the single currency. All this would facilitate the free movement of goods, by removing the costs of exchanging currencies and eliminating the exchange rate risks arising from changes in the exchange rates between them, which would encourage investment and economic growth. However, in order to achieve monetary union, it would be necessary to establish a common economic policy to some extent and to address the problem of harmonising the fiscal and budgetary policies of the Member States, for which binding standards would have to be set. At the same time, the implementation of a single internal market would also require the integration of structural and regional policies. The Delors Report defined the completion of EMU in three stages: The first stage, as an initial phase, would not require a revision of the EC Treaties and would be completed under the existing institutional framework. It involved the completion of the single internal market, the coordination of economic policy in monetary matters, and the participation of all currencies in the EMU’s ERM. At this stage, negotiations would have to be conducted to ratify the EMU Treaty. The second stage, as a transitional phase, would involve the completion of the harmonisation of the monetary policies of the Member States. A European Monetary Institute (EMI) would become operational, the European System of Central Banks (ESCB) would be prepared for operation, and national monetary authorities would be brought together

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for joint decision-making. The third and final stage involved the transfer of all the monetary responsibilities of the Member States to the Community institutions. This meant the transformation of the EMI into the European Central Bank (ECB), the assumption of single monetary and exchange rate policy initiatives by the ESCB, the final and irrevocable determination of the exchange rates of the Member States’ currencies against the possible new single European currency that would replace them. However, the establishment of the ECB also required a revision of the Treaty of Rome on the EC. Although the Delors Report clearly set out the measures required for the establishment of EMU, as well as for the transfer of the Member States’ monetary responsibilities to the Community institutions, such as the ECB, it did not specify a timetable or binding deadlines for the three stages required for the completion of EMU.

8.2.2

The Implementation of the First Stage of EMU

Given the right economic context, the Delors Report was well received, as the strengthening of the single internal market through EMU inspired optimism in European business circles. The Madrid European Council of 26 and 27 June 1989, despite the initial opposition to EMU from Britain and the need to revise the original Treaty of Rome, as well as the expressed differences of opinion of some Member States, finally confirmed the decision of the Member States to achieve EMU gradually and decided to launch the first stage on 1 July 1990, with the full liberalisation of capital movements. Furthermore, the EMU was strengthened by Spain’s accession to the EMU in June 1989, followed by Britain when its Prime Minister Margaret Thatcher, was threatened with the resignations of her Foreign Secretary Geoffrey Howe (1926–2015) and Finance Minister Nigel Lawson (1932–2023) and was forced to accept her country’s conditional accession to the EMU from October 1990, and Portugal from April 1992. Of the currencies of the EC Member States, only the Greek drachma was currently outside the ERM. However, as mentioned above, the current EMS was in danger of collapse in the period 1991–1993. Germany, in order to finance its huge expenditure during reunification, resorted to borrowing at extremely high interest rates, whereupon the German mark appreciated on the foreign exchange market and the US dollar fell. Other European currencies could not keep pace, leaving them vulnerable to speculation. In September 1992, the Finnish mark depreciated, followed by the Italian lira, the Spanish peseta, the Irish lira and the Portuguese escudo. The British pound was withdrawn from the ERM on ‘Black Wednesday’ on 16 September 1992, while the Italian lira was withdrawn a day later, as they could not be kept within the range of the foreseen percentage fluctuation of the exchange rate against the ECU. The withdrawal of the threatened French franc from the ERM would also lead to the collapse of the EMU, making the implementation of the subsequent stages of EMU extremely difficult. Maintaining the exchange rate of the French franc within the foreseen limits was achieved thanks to the relatively high lending rates for France,

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combined with the cooperation between the Banque de France and the Bundesbank, which was carried out at the request of French President François Mitterrand to German Chancellor Helmut Kohl. However, this support from Germany was not applied to other currencies that were in danger of being excluded from the ERM. In order to prevent the collapse of the system, the Ministers of Finance and Finance and the governors of the central banks of the ‘12’ decided on 2 August 1993 to temporarily widen the margin of fluctuation of the exchange rate of the currencies from ±2.25% on either side of the central rate with the ECU to ±15%. This discouraged speculation against the weaker currencies and made it possible to reduce interest rates since there was no longer any need to borrow from the markets at high interest rates in order to maintain their exchange rates. Thus, the EMS remained in force. For the other two stages, the European Council in Strasbourg on 8 and 9 December 1989, following the agreed common line of French President François Mitterrand and German Chancellor Helmut Kohl, decided, despite Britain’s refusal, to launch preparations for an Intergovernmental Conference to determine the necessary amendments to the Treaty of Rome to enable the implementation of EMU. However, differences of opinion and hesitations about the continuation of the process towards the completion of EMU soon emerged. Apart from British Prime Minister Margaret Thatcher’s rejection of a new treaty, Commission President Jacques Delors and French President François Mitterrand advocated the adoption of a new common currency that would limit the influence of the Deutschmark in the economic life of Europe, the British Finance Minister John Major (1943–), proposed strengthening the ECU as a parallel currency to the national currencies of the Member States and the German Chancellor Helmut Kohl expressed hesitation about the possibility of abandoning the strong Deutschmark. However, the fall of the Berlin Wall and the prospect of German reunification accelerated the process, prompting Chancellor Kohl to accept the circulation of a new common European currency while bringing all of Germany under the common European roof in exchange for Mitterrand and the French accepting the unification of Germany.

8.3

Plans for a Political Union

In the early 1990s, following the historic changes in Europe, with the collapse of the imposed socialist regimes, the dissolution of the Soviet Union, the opening of the borders of Central Eastern Europe and the desire to strengthen the international position of the EC, new discussions were launched on the need to strengthen the political cooperation of the ‘12’ Member States. This position was further reinforced by the planned reunification of Germany and the need to carry out the necessary institutional reforms to ensure that the European project was properly shaped to allow for the participation of new states. At the same time, the European Parliament, expressing its views on the extension of the powers of the Commission and the Parliament, as well as the strengthening of the qualified majority voting system in the Council of EC, submitted a resolution on

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14 March 1990 in which it stressed, among other things, the need to transform the EC into a European Union of federal type, extending beyond the single market and monetary union, and to speed up the procedures for political cooperation, which would ensure a common foreign policy, in view of the rapid political developments in Europe. Around the same time, on 20 March 1990, the Belgian government took the initiative of sending a memorandum to its partners, in which it advocated strengthening the Community institutional system through the general application of qualified majority voting in the Council of EC, the reduction of the number of Commissioners, the election of the President of the Commission by the European Parliament, the introduction of the co-decision legislative procedure between the European Parliament and the Council of EC, and the strengthening of cooperation in foreign policy and its extension to security problems. Although the Belgian proposals were not immediately heeded, the main themes of their memorandum were already at the heart of the debate.

8.3.1

The First Joint Message of Mitterand and Kohl on a Political Union

However, the joint message of the President of France François Mitterrand and the Chancellor of Germany Helmut Kohl, dated 18 April 1990, to the President of the European Council, the Prime Minister of Ireland, in preparation for its meeting in Dublin, requesting that the procedures for the Political Union of Europe be accelerated and that an Intergovernmental Conference be convened for this purpose, alongside the Intergovernmental Conference on EMU. In their joint message, they said that they considered that the time was right for the transformation of the European Communities into a European Union. Mitterand and Kohl proposed through the joint message of 16 April 1990, their four main objectives of the European Union: (a) the strengthening of democratic legitimacy, (b) the effectiveness of its institutions by extending the application of qualified majority voting in the Council of EC and expanding the role of the European Council, (c) ensuring the unity and coherence of activities in the economic, monetary and political framework and (d) the definition and creation of a common foreign and security policy (Fig. 8.2). Excerpt from the Joint Message of 18 April 1990 of François Mitterrand and Helmut Kohl [...] we want the European Council of 28 April to decide: 1. To ask the competent authorities to intensify the preparatory work for the convening of an intergovernmental conference on economic and monetary union, as decided at the Strasbourg European Council, before the end of 1990 [...] 2. To take forward the preparatory

(continued)

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work for an intergovernmental conference on political union. This would be aimed in particular at: a) strengthening the democratic legitimacy of the Union; b) improving the effectiveness of the institutions; c) ensuring the unity and consistency of the Union's activities in the economic, monetary and political context; d) defining and establishing a common foreign and security policy.

Source: Bulletin des Presse- und Informationsamtes der Bundesregierung. Hrsg. Presse- und Informationsamt der Bundesregierung. 11.12.1990, Nr. 144. Bonn: Deutscher Bundesverlag. ‘Gemeinsame Botschaft von François Mitterrand und Helmut Kohl (Paris, 6. Dezember 1990)’, p. 1513. ‘Gemeinsame Botschaft von François Mitterrand und Helmut Kohl (Paris, 6. Dezember 1990)’, p. 1513. Copyright: (c) Presse- und Informationsamt der Bundesregierung

8.3.2

Reactions to Franco-German Proposals for Political Union

There were reactions and objections to Belgium’s proposals and to the joint message from French President François Mitterrand and German Chancellor Helmut Kohl, which became evident at the Dublin European Council on 28 April 1990. British Prime Minister Margaret Thatcher expressed concern about the possible transfer of state sovereignty to a European Union, a view with which the prime ministers of

Fig. 8.2 French President François Mitterand and German Chancellor Helmut Kohl. Source: German Federal Archive (Deutsches Bundesarchiv), 1987, Attribution: Bundesarchiv, B 145 Bild-F076604-0021/ Schaack, Lothar/CC-BY-SA 3.0, https://commons. wikimedia.org/wiki/File: Bundesarchiv_B_145_BildF076604-0021,_Frankreich,_ Staatsbesuch_ Bundeskanzler_Kohl.jpg (cropped)

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Fig. 8.3 John Major, Prime Minister of Britain. Source: Attributed to PFC Tracey L. Hall-Leahy, USA, 1995, https://commons.wikimedia. org/wiki/File:Major_PM_ full_(cropped).jpg (cropped)

Denmark and Portugal agreed. However, as she considered that it was not possible to avoid a decision by the European Council to convene an Intergovernmental Conference on Political Union, she asked for clarification in advance of the form of such a Union. At the same time, there was a widespread fear in many Member States who wished to speed up integration that reference mainly to the Political Union rather than to the whole of the EC would weaken the prospect of integration. Finally, at the instigation of the European Council, a list of proposals was drawn up and a report was drafted by the Foreign Ministers, taking into account the views of the European Parliament and the Commission, summarising the main objectives of a Political Union, in relation to the legitimacy and effectiveness of the institutions, as well as Community action on the international political scene. On the basis of this report, the second Dublin European Council, on 25 and 26 June 1990, decided to launch the procedures for convening an Intergovernmental Conference on Political Union, alongside the Intergovernmental Conference decided on EMU (Fig. 8.3). However, objections and disagreements about the type and the way of implementation of the Political Union emerged again, and groups of Member States with common lines were formed. Thus, France and Germany at first, followed by Belgium, Greece, Spain and Luxembourg, were in favour of a common foreign and defence policy. Belgium, Germany, Italy, Germany and the Netherlands called for an extension of the powers of the European Parliament. Belgium, France, Germany, Italy, France, Germany, Italy, Luxembourg and the Netherlands were interested in social policy. The Mediterranean Member States were calling for economic and social cohesion with the countries of northern Europe. Finally, Britain was opposed to most of these proposals and sought to maintain the status quo, rejecting any transfer of sovereignty to European institutions, followed in this latter position, but to a lesser extent, by Denmark, the Netherlands and Portugal. However,

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the British position became more flexible after Margaret Thatcher left the prime ministership on 28 November 1990, and John Major took over. At the same time, the Commission, in expressing its views on political union on 21 October 1990, advocated a single community combining political, economic and monetary union, although it recognised the difficulty of pursuing a single foreign policy. Finally, on 6 December 1990, French President François Mitterrand and German Chancellor Helmut Kohl, in a second joint message, proposed extending the Community’s competencies in the fields of the environment, health, social policy, energy, research and technology, consumer protection, immigration, asylum, visas and international crime. They also promoted the introduction of a ‘European citizenship’, proposed by Spanish Prime Minister Felipe González. Finally, they called for the powers of the Community institutions to be extended by promoting the codecision procedure between the European Parliament and the Council of EC, the approval by the European Parliament of the appointment of the President of the Commission and the extension of qualified majority voting in the Council of EC, but also insisted on strengthening the position of the European Council, given its contribution to the synthesis of views and the consolidation of integration, and the role it is called upon to play. However, they did not fail to state the need to strengthen NATO, but by strengthening the role and responsibilities of its European Member States and creating a European defence pillar.

8.4

Towards the Treaty on European Union (TEU)

In the light of the decisions of the Strasbourg European Council of December 1989 to prepare an Intergovernmental Conference on EMU and the Dublin European Council of June 1990 to prepare an Intergovernmental Conference on Political Union, the Rome European Council of 27 and 28 October 1990 formed a general framework for the parallel Intergovernmental Conferences on EMU and on Political Union. The Rome European Council of 27 and 28 October 1990 established a general framework for the parallel Intergovernmental Conferences on EMU and on Political Union and set the date for the start of the second stage of EMU at 1 January 1994, subject to the completion of the single internal market and the ratification of the new Treaty amending the Treaty of Rome. Later, the Rome European Council of 14 and 15 December 1990 convened the Intergovernmental Conferences. The Ministers of Economy and Finance were to be responsible for the Intergovernmental Conference on EMU, while the Ministers of Foreign Affairs of the ‘12’ were to take responsibility for holding the Intergovernmental Conference on Political Union. The negotiations were particularly difficult, and the proposals of the Member States and the EP institutions often lacked common ground, particularly in relation to European defence policy, social policy, the economic and social cohesion of the Community, and at the institutional level, the right of co-decision for the European Parliament and the extension of the use of qualified majority voting in the Council of EC. In addition, some Member States, notably Britain, continued to support the

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non-conferral of sovereign rights to the Community institutions, as well as the preservation of their currency within the EMU framework.

8.4.1

The Intergovernmental Conference on EMU

The negotiations were conducted mainly by the Ministers of Economy and Finance of the Member States, as well as by the directors of their ministries, under the chairmanship of Luxembourg’s Finance Minister Jean-Claude Juncker (1954–) in the first half of 1991, and under the chairmanship of the Dutch Finance Minister Wim Kok (1938–2018) in the second half of the same year, without much coordination with the parallel Intergovernmental Conference on Political Union (Fig. 8.4). Based on the Delors Report, the ultimate goal of EMU was the adoption of a single currency. EMU was to be implemented in three stages, the first of which had already started on 1 July 1990 (see § 8.2.2). France, despite the initial position of its Finance Minister Pierre Beregovoy (1925–1993) on strengthening the Council of Economic and Finance Ministers of EC to supervise the single currency, accepted Germany’s proposal that this role should be assumed by the ECB, which was independent of the Member States. Thus, the second stage, as a transitional phase, was envisaged, in accordance with the Delors Report, to be the operation of the EMI and the preparation for the operation of the ESCB. The economic and monetary policies of the Member States would be monitored by the Council of EC, following the adoption of ‘general guidelines’ aimed at harmonising them and reducing their public deficits. In the third and final stage, all monetary powers would be transferred to the ECB, as a development of the EMI, with the ESCB taking the initiative to conduct a single monetary and exchange rate policy, and the final and irrevocable determination of the exchange rates of the Member States’ currencies against the new single European currency that would replace them. Member States would

Fig. 8.4 Jean-Claude Juncker, Luxembourg’s Finance Minister. Source: Author Jean-Claude_Juncker_ (2006).jpg, Martin Möller, derivative work: IgnisFatuus (talk), Creative Commons Attribution-Share Alike 2.0 Germany license, https:// commons.wikimedia.org/ wiki/File:Jean-Claude_ Juncker.jpg. Public Domain (cropped)

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Fig. 8.5 Wim Kok, Deputy Minister of Finance of the Netherlands. Source: Nationaal Archief: entry ad72f4b0-d0b4-102d-bcf8003048976d84, Author: Croes, Rob for Anefo. Licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license, https://commons.wikimedia. org/wiki/File:Wim_Kok_1 989_%281%29.jpg (cropped)

remain responsible for their economic policies, but there would be consequences in the event of deviation from the conditions adopted for joining EMU. Disagreements remained, however, both as to the start and duration of the two final stages of EMU, and as to the criteria and conditions for a Member State’s accession to EMU. Furthermore, Britain expressed strong reservations about the success of the project, while both Britain and Denmark wished to opt out of the third stage of EMU for the time being (Fig. 8.5).

8.4.2

The Intergovernmental Conference on Political Cooperation

Without an earlier report as a guide, such as the Delors Report on EMU, the Intergovernmental Conference on Political Union proved to be more difficult than the one on EMU. It was held in parallel with the EMU one, in the first half of 1991 under the presidency of the Luxembourg Foreign Minister Jacques Poos (1935–2022) and in the second half of 1991 under the presidency of the Dutch Foreign Minister Hans van den Broek (1936–). Given the political changes in Eastern Europe, the break-up of Yugoslavia, and the Gulf War, a large number of proposals were tabled for discussion, as well as opinions from the Community institutions. Furthermore, the entry of many economic migrants into EC Member States required responsibilities of the Ministries of the Interior and Justice, which in Germany’s view should be dealt with jointly and in a Community context. However, France, although it wanted closer intergovernmental cooperation in foreign policy and home affairs, did not at present wish to see an extension of Community competence in these areas, while Britain was opposed from the outset to the idea of assuming such competencies in a Community context,

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Fig. 8.6 Jacques Poos, Foreign Minister of Luxembourg. Source: Fotograaf: Vollebregt, Sjakkelien/Anefo. 1985, Auteursrechthebbende: Nationaal Archief, CC-BYSA. Cropped by User: Zinneke, http://proxy.handle. net/10648/ad7c7274-d0b4102d-bcf8-003048976d84 (cropped)

considering that such an action would limit its sovereign rights. Similar positions were held by Denmark and Portugal (Fig. 8.6). On 17 April 1991, the Luxembourg presidency presented a draft Treaty on European Union, introducing a structure for the Union consisting of three areas of activity, known as pillars, under a single crown in the form of ancient Greek temple pillars supporting a single and unique pediment. The first was the activity of the three European Communities, which would include the EMU. The second concerned the Common Foreign and Security Policy, and the third covered cooperation in the areas of Justice and Home Affairs, which would operate through intergovernmental cooperation, thus covering the reservations of those Member States that did not wish to lose their sovereign rights in these areas. The Council of EC would be the only institution with powers in all areas of activity. This structure was criticised by the Commission, which proposed a single Community structure, but using different decision-making procedures depending on the area of interest, in the form of a tree with a single trunk and several branches of different sizes. On the contrary, according to the Commission, the three pillars’ structure could suspend the unification process since strengthening the intergovernmental process, at least in the areas of the Common Foreign and Security Policy and cooperation in the fields of Justice and Home Affairs, would limit the federal perspective of the European Union. However, the structure of the pillars proposed by Luxembourg was supported by several Member States. Thus, when in September 1991 the Dutch presidency attempted to bring back for discussion the form of a unitary structure for the European Union, it failed (Fig. 8.7). It is worth noting that on the important issue of the Political Union, the attempt to create a European security and defence identity was an important point of friction. Britain, the Netherlands, Denmark and Portugal wished not to disconnect from the

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Fig. 8.7 Hans van den Broek, Foreign Minister of the Netherlands. Source: Fotograaf Bogaerts, Rob/ Anefo, 1985, http://proxy. handle.net/10648/ad49dea4d0b4-102d-bcf8-00304 8976d84 (cropped)

NATO chariot, while France, Germany, Spain, Italy and other Member States wanted to create an independent European security and defence identity. In October 1991, Britain and Italy, despite their differing views on this issue, submitted a plan proposing the creation of a European defence structure compatible with NATO, while France and Germany continued to promote the idea that a certain degree of autonomy in defence and security matters was necessary. On 14 October 1991, French President François Mitterrand and German Chancellor Helmut Kohl addressed their counterparts for the third time in a joint message. In it, they argued that the Common Foreign and Security Policy should encompass all matters relating to security and defence and that decisions of the European Union in this matter should be implemented by the WEU, the only Community military organisation, without affecting the contractual obligations of the Member States with NATO. The WEU should therefore be transformed into a ‘fighting force’ of the European Union with the possibility of cooperating with NATO. Given that the United States, at the North Atlantic Council held in Rome on 7 and 8 November 1991, accepted in principle the creation of a defence structure with a European identity, the Community partners of France and Germany accepted the FrancoGerman proposals in turn.

8.4.3

The Signing and Ratification of the TEU

The revision project was completed at the Maastricht European Council on 9 and 10 December 1991, when all the new reforms and provisions were brought together in a single Treaty on European Union (TEU), also known as the Treaty of Maastricht. The form of the EU launched by the Treaty of Maastricht followed

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the model of the three functional pillars that it included: (a) the European Community (EC), which included all the known European Community structures and would operate by the known Community methods; (b) the Common Foreign and Security Policy (CFSP), which would be a typical example of pluralist intergovernmental cooperation, based on a doctrine of ‘shared sovereignty’, but without the erosion of the sovereign rights of the Member States, and based very much on unanimity; and (c) cooperation in the fields of Justice and Home Affairs (JHA), with competencies also in the areas of immigration, political asylum and the crossing of EU borders, and operating through intergovernmental cooperation. Although this scheme did not correspond to the unifying scheme envisioned by the pioneers of European unification, it could be seen as an important step in that direction. However, it took a few weeks to adapt to the text of the new treaty what was agreed by the ‘Twelve’ at the Maastricht European Council. Finally, the TEU was signed in Maastricht on 7 February 1992 by the Ministers for Foreign Affairs and Finance of the ‘Twelve’, after the Treaties establishing the ECSC and the EAEC had been amended on 3 February 1992 to make them compatible with the new Treaty, on the same day as the signature of the TEU, the Treaty Establishing the European Community (TEC) was signed, effectively replacing the EEC and setting out the new Community structures and functions. The TEU was to enter into force on 1 January 1993, subject to ratification by all Member States. The efforts of the governments of the Member States to secure ratification of the TEU before the end of 1992 proved to be no easy task. The slowdown in growth and the exchange rate crises of 1992–1993, the rise in unemployment rates and the disagreements that arose during the Uruguay Round of GATT negotiations were negative exogenous factors in the immediate acceptance of the TEU. To these should be added a number of endogenous factors, such as the inability of the EC to intervene effectively in the war in the former Yugoslavia, the complexity of the treaty under ratification and the successive amendments to its text, the apparent risks of loss of sovereignty of the Member States due to the prospect of the introduction of a common currency, a single foreign and defence policy and a single EU citizenship, and finally, the absurd bureaucracy of the central European authority in Brussels, which seemed to ignore the European citizen and created a sense of a democratic deficit. All this reinforced a Euroscepticism and a general negative attitude towards any promotion of European integration. The first negative reaction to the TEU came from the European Parliament, in a resolution of 7 April 1992, which, while urging the parliaments of the Member States to vote in favour of the TEU, also listed a number of shortcomings in the Treaty, mainly concerning the limited or non-existent role of the European Parliament and the Commission in the second and third pillars of the Treaty. The negative reaction from Member States started in Denmark, with the failure of the Parliament to ratify the TEU. This forced the Danish government to resort to a referendum held on 2 June 1992. The result of the referendum was negative, with a positive vote of 49.3% and a high turnout. The main reasons appear to have been fears of losing their state sovereignty due to a common currency, a single foreign and defence policy and a single EU citizenship.

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Nevertheless, the ratification procedures of the TEU continued. Thus, on 18 June 1992, a similar referendum in Ireland voted in favour of ratification of the TEU by a comfortable 69.1%, as the Irish people were convinced that their country’s accession to the EC had allowed their economy to grow dramatically. This was followed by the ratification of the TEU by a number of parliaments. Luxembourg ratified the Treaty on 2 July 1992 by the Parliament, followed by Belgium on 17 July of the same year with the ratification of the Treaty by the Parliament and on 4 November by the Senate, and Greece on 31 July by the Parliament, Italy on 17 September by the Senate and 29 October by the Parliament, Spain on 29 October by the Parliament, the Netherlands on 12 November by the Lower House of Parliament and 15 December by the Upper House of Parliament and Portugal on 10 December by the Parliament. Meanwhile, the French president François Mitterrand, with a comfortable vote for the ratification of the TEU in mind, at least as the polls indicated, although not required by the constitution, decided to hold a referendum on the ratification of the treaty. On 20 September 1992, following a campaign by the opponents of the TEU, namely the Communist Party and the extreme right-wing party, as well as representatives of the Gaulish opposition, the main reasons being the loss of sovereign rights and economic problems, the French people, with a relatively high turnout, voted in favour of the treaty by a lukewarm 51.0%. However, despite the slim majority for the ratification of the treaty in France, a second very important rejection, which could have been fatal for its implementation, was finally avoided. In Germany, concern about the single currency, which would be the cause of the disappearance of the Deutschmark, the symbol of the country’s economic power, created a climate of anxiety about the possibility of its non-ratification. However, the Federal Parliament voted in favour of ratification of the TEU by an overwhelming majority on 2 December 1992. However, it took a court decision on 12 October 1993 to reject 20 appeals against the constitutionality of the treaty before its ratification was formalised. To overcome the problem caused by the Danish referendum, Denmark has asked to be subject to special opt-out clauses from the single currency, common defence, citizenship and EU competencies in the fields of justice and policing. The Edinburgh European Council of 11 and 12 December 1992 accepted the requests for opt-outs in specific protocols annexed to the TEU. Thus, in a second referendum held in Denmark on 18 May 1993, the Danish people, with a large turnout, accepted the ratification of the TEU with 56.7% of the vote. In John Major’s government in Britain, a strong anti-European spirit prevailed, reinforced by the initially negative attitude of Denmark and the crisis of the British pound and its withdrawal from the EMU. However, Britain had secured opt-out clauses from the outset from the single currency and social policy. John Major agreed to postpone the vote on the ratification of the TEU by the House of Commons, pending the outcome of Denmark’s second referendum. Finally, on 20 May 1993, following the successful outcome of the Danish referendum, the House of Commons approved the ratification of the TEU, with the majority of Labour MPs abstaining from the vote. Thus, following the final decision of the

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German courts, on 12 October 1993, on the constitutionality of the TEU, the way was now open for its implementation by the Member States from 1 November 1993.

8.4.4

The Institutional Reforms

The cohesion of the EU had to be ensured by a single institutional framework covering its three pillars, the first of which operated under the familiar Community structure and the other two under intergovernmental procedures. Institutionally, with the TEU, the role of the European Parliament was further enhanced for the first pillar, with the extension of the existing consent procedure (see § 7.2.7) to a number of important areas, in addition to the accession of new Member States or the association of third countries, which had previously been the case. Such areas included the provisions relating to the right of European citizens to move and reside in another Member State, the creation of the CF, the operation of the remaining Structural Funds, the amendment of certain provisions of the ESCB Statute and the introduction of a single procedure by all Member States for the election of Members of the European Parliament. The upgrading included the extension of the cooperation procedure (see § 7.2.7) to new areas, and the new co-decision procedure was created, which allowed the European Parliament to adopt acts jointly with the Council of EU. This procedure implied the need to strengthen a consultation between the European Parliament and the Council of EU with a view to reaching an agreement. This agreement had to be approved by a qualified majority of the Council of EU and by an absolute majority of the European Parliament. Otherwise, the proposal would not be deemed to have been adopted, and the European Parliament would have the final say. However, the scope of this procedure was strictly limited to certain measures relating to the single internal market, which was already covered by the cooperation procedure, and to measures relating to freedom of movement and establishment, health, research, the environment, education and culture. The European Parliament would also be actively involved in the process of appointing the members of the Commission by the governments of the Member States, who would appear before it and present their programme for approval. However, the European Parliament’s role in the second and third pillars would be merely advisory. Furthermore, the TEU extended the use of qualified majority voting in the Council of EU for most decisions to be taken under the co-decision procedure and for all decisions to be taken under the cooperation procedure, such as in the fields of education, health, vocational training, consumer protection, social policy, etc. Unanimity was maintained in critical areas, such as the review of treaties, the entry of new Member States into the EU, the approval of own budget resources, as well as decisions concerning economic and social cohesion, taxation, the framework programme for research, industry, culture, the environment, etc. However, for the issue of the qualified majority and in view of the enlargement of the EU with new Member States, it followed a decision of the Council of Foreign Ministers of EU during their informal meeting in Ioannina, Greece, on 29 March 1994, known as

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the Ioannina Compromise (see § 9.1.2). It is noteworthy that the Council of EU would now play a primary role, given that its responsibilities would cover all three pillars of the EU. On the contrary, the Commission, although linked to all the activities of the Council of EU, would have the exclusive right to propose legislation only in relation to Community affairs. However, its term of office would be increased from 4 to 5 years in order to make it identical to that of the European Parliament. The Court of Justice would also retain its powers for the first pillar but would have no powers for the other two. Furthermore, the European Council would continue to set general policy, promote unification processes and reach agreements on particularly difficult issues, and exercise the necessary impetus and guidelines it provided to the EC, whose powers would now extend to the three pillars of the EU. Finally, the Court of Justice now has the power to fine Member States that do not comply with or violate its decisions and EU directives, while the Court of Auditors, which has been in operation since October 1977, becomes a full-fledged Community institution. The EU’s institutional framework would be completed by the newly created Committee of the Regions (CoR), based in Brussels, which would be made up of representatives of local and regional authorities, with the task of promoting the local and regional point of view on European legislation by issuing opinions, and the European Economic and Social Committee (EESC), established by the Treaty of Rome in 1957, which included representatives from the economic and social sectors. Both committees could be invited by the Council of EU to issue opinions on matters within their remit.

8.4.5

The First Pillar and the European Community

The first pillar includes the structures and functions of the European Community and brings together the amended articles of the Treaties establishing the EEC, the ECSC and the EAEC, which retain their legal personality. In this way, the European Community is taking on a character that goes beyond the old competencies in the economic sphere alone, pursuing a balanced way of development by promoting environmentally friendly economic growth, but also with competencies and policies in new areas such as education and vocational training, culture, youth, consumer protection, industrial policy and trans-European networks, giving priority to employment, social welfare, public services and public health. Taking into account the fundamental social rights contained in the European Charter adopted by the Council of Europe and signed in Turin on 18 October 1961, and the Community Charter of the Fundamental Social Rights of Workers adopted by the Member States at the European Council in Strasbourg on 9 December 1989, with the exception of Britain, the TEU provided for certain measures to give a social dimension to the functioning of the single internal market in the form of a Social Protocol. The aim was to improve living and working conditions and combat

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exclusion, while promoting social dialogue and developing the human resources that would make it possible to achieve these objectives. Britain agreed not to prevent the inclusion of the Social Protocol in the TEU provided that a specific protocol exempting it from the Social Protocol was included. The introduction of EU citizenship by the TEU is an important definition of European citizenship, which does not replace national citizenship but complements it by granting new rights to citizens in order to raise their awareness of European identity. It granted the right to move and reside freely within the European Community, the right to vote and stand as a candidate in European and municipal elections, the right to diplomatic and consular protection of a Member State other than the Member State of origin in the territory of a third country where the Member State of origin is not represented, the right to report to the European Parliament and to lodge a complaint with the European Ombudsman, established as an EU institution based in Strasbourg. Furthermore, the TEU sets out the principle of subsidiarity for the exercise of competencies. According to this principle, the European Community may intervene and act in areas that are not its exclusive competence only when action at the Community level ensures a better result than can be achieved by the Member States. It should be noted that the Edinburgh European Council of 11 and 12 December 1992 adopted a declaration on the principle of subsidiarity, which laid down the rules for its application to ensure that the EU does not take action—except in areas falling within its exclusive competence—unless such action is more effective than similar action that can be taken at national, regional or local level. Specifically, for the single internal market, the TEU has given, through the first pillar, new perspectives on the entry and movement of workers and the strengthening of competitiveness in industry, energy and tourism. However, the completion of EMU, initiated by the TEU, was an important event in the completion of the single internal market.

8.4.6

Planning for the Implementation of the Final Stages of EMU

Through the TEU, the date of 1 January 1994 was finalised as the starting date of the second stage of EMU. Despite Germany’s reservations about the finalisation of the date for the start of the third stage of EMU, at the insistence of French President François Mitterrand, supported by Italian Prime Minister Giulio Andreotti (1919–2013), it was decided that the final stage of EMU would enter into force on 1 January 1997, provided that a majority of Member States met the conditions laid down. Otherwise, the single currency would be adopted by 1 January 1999 at the latest, only by those Member States that were in a position to do so. However, the European Council agreed that accession to EMU could also be subject to political criteria, which would be taken into account, while the final decision on the accession of a Member State would be taken by a qualified majority. With regard to Britain and Denmark, which did not currently wish to join the third stage of EMU, two separate

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protocols of opt-out were drawn up, pending a later decision for the former and a referendum for the latter. To join EMU, Member States would have to meet certain convergence criteria as conditions: Their average inflation should not exceed 1.5% above the average of the three lowest-performing Member States and their long-term interest rates should not exceed 2% above the average of the three best-performing Member States. Furthermore, a currency should have participated in the EMS ERM for at least 2 years without having exceeded the percentage fluctuation margins provided for by the ERM. Finally, in the public finances of the Member States, the deficit should not exceed 3% of GDP for public expenditure (central, regional and local governments, as well as social security funds), while public debt should remain below or equal to 60% of GDP. The quantitative elements of the criteria would be defined by two interpretative protocols, which could be amended by the Council of EU, following a unanimous decision.

8.4.7

The Second Pillar and the CFSP

The CFSP was essentially an institutionalised evolution of the EPC, which had already been launched with the EEP in 1986. It is a separate pillar of the TEU (Title V) operating through intergovernmental cooperation. The objectives of the CFSP are to safeguard the common values, fundamental interests and independence of the EU in order to strengthen the security of the EU and its Member States in all its forms. At the same time, it aims to maintain peace and strengthen international security, to promote international cooperation and to develop and consolidate democracy, the rule of law and respect for human rights and fundamental freedoms. In order to reconcile the divergent views on a common defence policy, which Britain, Denmark, the Netherlands and Portugal were calling for, and on a practically effective common defence, which France, Germany, Belgium, Luxembourg, Greece and other Member States wanted, a compromise solution was sought by stating, ‘The competence of the Union in the field of the common foreign and security policy shall cover all areas of foreign policy and all questions relating to the security of the Union, including the progressive framing of a common defence policy which may lead to a common defence’. Obviously this wording did not clarify the ways in which a common defence policy for the CFSP could be pursued, but was an ambiguous formulation of objectives that would avoid deadlock. For the operation of the CFSP, it is foreseen that the Council of Foreign Ministers of EU may unanimously determine the ‘common position’ of the Member States in areas of general interest. Member States must ensure that their policies are consistent with the positions taken in the Council of Ministers. Furthermore, on the basis of guidelines laid down by the European Council, the Council of Ministers may decide unanimously on ‘joint action’. The required implementing measures may be adopted by a qualified majority, provided that the unanimous decision on joint action by the Council of Ministers has been taken beforehand. However, for decisions requiring unanimity, Member States are encouraged, as far as possible, not to prevent a

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unanimous decision from being taken when it is clear that a qualified majority is in favour of such a decision. In the area of CFSP, the Commission does not have the right to make proposals on which the Council of EU would have to take a decision, as is the case for Community matters under the first pillar. It can only refer matters to the Council of EU, just as the Member States can do. However, it does control the financial instruments used to conduct foreign policy (financial aid, the consequences of an economic and trade blockade, etc.). The European Parliament has only an advisory role, as it is informed and debates on CFSP issues and can only address questions and recommendations to the Council of EU. Furthermore, the Court of Justice has no competence or legal involvement in CFSP proceedings. To implement the CFSP, the EU, which does not have its own diplomatic representation, must coordinate the diplomatic and consular representations of its Member States in third countries and in various international organisations, in particular the UN Security Council and its various organisations. The Member State holding the 6-monthly Presidency of the Council of EU represents the EU in matters relating to the CFSP and is responsible for implementing joint actions, assisted by the Member State holding the previous Presidency and the Member State holding the next Presidency, in the form of a troika, in order to ensure a certain continuity in the exercise of the CFSP. At the same time, the CFSP also incorporated to some extent the WEU as a parallel institution and defence component (see § 8.4.9), which nevertheless retained substantial autonomy, given that its activities required the agreement of both the EU and NATO, on which the EU still relied for its defence.

8.4.8

EU Activity in the CFSP Area

Activity in the field of the CFSP in the immediate years to come has been relatively limited. This is due to the fact that the 6-month Presidency of the Council of EU, which is responsible for representing the EU, is too short to formulate a stable policy. Furthermore, the lack of stable institutions and regular meetings, such as meetings of foreign ministers and the established Political Committee, which consists of the directors of the foreign ministries of the Member States, has not facilitated the achievement of the CFSP objectives. However, the main reason for the ineffective functioning of the CFSP has been the ambiguity of its objectives due to the different views of EU Member States on this issue. The Brussels European Council of 29 October 1993 identified five joint actions to be undertaken in the field of the CFSP: (a) the resolution of the military conflict in Bosnia-Herzegovina; (b) the creation of a stability pact between Eastern and Western Europe; (c) the improvement of relations with Russia; (d) support for the Middle East peace process; and (e) support for the democratic transition in South Africa. The greatest disappointment, however, relates to the conflict in Yugoslavia, with many EU Member States refusing to intervene, with the result that the EU was seen as unable to prevent or intervene in conflicts taking place in Europe. This was despite

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its final participation in the peace processes that led to the Dayton Peace Agreement in November 1995, which was signed on 14 December 1995 in Paris, with the participation of the UN, the USA, the EU and Russia. The political dialogue with the EU candidate countries of Central Eastern Europe was aimed at better preparing them, proactively reducing the risks that might arise from tensions related to the presence of minority groups in the EU, and resulted in the signing of a Stability Pact with the Central—Eastern European countries in Paris on 21 March 1995, the monitoring of which was entrusted to the OSCE. The EU also signed partnership agreements with Russia on 24 June 1994 and subsequently with other former Soviet Republics. It also maintained its position on the Arab-Israeli conflict, adopted by the Venice European Council on 12 and 13 June 1980, recognising that the Palestinian people have the same rights as the Israelis, and supported the peace process undertaken by the United States without its participation in it. Finally, the EU continued its support for the democratic transition processes in South Africa. Finally, looking at the impact of the CFSP on the EU’s relations with the USA, there are efforts to improve them through the implementation of a Joint Action Plan signed in Madrid on 3 December 1995, which includes a common understanding of the security of Europe, the indivisibility of transatlantic security, the enlargement of NATO and the EU through autonomous but complementary processes and the promotion of peace, democracy and stability. The implementation of the plan would create a balanced partnership between the EU and the US, but the US seemed to want to maintain its leadership position, while many EU Member States seemed to be reluctant to have such a relationship with the PACE.

8.4.9

Upgrading the WEU Through the CFSP

France’s efforts to upgrade the role of the WEU, starting in February 1984, and the positive response of the other Member States, led the WEU Council in October 1984 to adopt the Rome Declaration, in which the seven Member States stressed their determination to make the best use of the WEU framework to strengthen their cooperation in the field of security policy. However, efforts to substantially upgrade did not have the expected results, mainly because of US concerns about the competitive role the WEU would be called upon to play vis-à-vis NATO, but also because of the cautious attitude of the UK and the Netherlands. After the signature of the SEA in February 1986, which launched the institutionalisation of the ENP, the seven Member States of the WEU issued the Platform on European Security Interests in The Hague on 27 October 1987, in which they expressed their determination to strengthen the European pillar of the North Atlantic Alliance through the WEU. However, there was a difference of opinion as to how to strengthen the WEU. France and Germany, during the ferment for the signing of the TEU, expressed through the joint messages of their presidents Mitterand and Kohl on 6 December 1990 and 14 October 1991 (see §§ 8.3.2 and 8.4.2) their desire to upgrade the WEU in terms of acquiring military defence capabilities for better

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cooperation with NATO. In contrast, Britain and the Netherlands expressed concern that this upgrade would remove the USA from the prospect of providing military assistance to Europe, which in the long run would weaken their common defence. With the signing of the TEU in February 1992, the CFSP was promoted, and through it the WEU was upgraded, both as a defence component of the EU and as the European arm of the North Atlantic Alliance. The WEU would retain its effective autonomy, while its activities would require the agreement of both the EU and NATO, on which the EU continued to rely for its defence. The Council of the WEU, in the meeting at the Petersberg host site near Bonn on 19 June 1992, adopted the Petersberg Declaration, which defined the role of the WEU as the defence component of the EU. In addition to the EU’s military missions within NATO, the Declaration identified the EU’s ‘Petersberg Missions’, which include humanitarian aid, crisis management and peace-keeping missions. In view of the new role of the WEU, apart from Spain and Portugal, which joined it in 1990, Greece joined in 1995 as a regular Member State, bringing the number of regular Member States, which were also EU and NATO Member States, to ten. Iceland, Norway and Turkey, as NATO Member States only, became associated states with the WEU from 1992, while Ireland, as an EU Member State only, became an observer state from 1992, as did Austria, Finland and Sweden, as subsequent EU Member States only, from 1995. Denmark was also an observer state, which, although as a Member State of the EU and NATO it was entitled to be a regular member of the WEU, was not granted this status because of its exemption by a special protocol from the common defence component of the TEU (see § 8.4.3). Hungary, Poland and Czechia, as NATO Member States only from 1999, also became associated states with the WEU from the same year. Furthermore, since 1994, the states of Central and Eastern Europe, which were neither EU nor NATO Member States, became associated partners with the WEU. The headquarters of the Council of EU and Secretariat of the WEU were moved from Paris to Brussels to allow for better communication with both NATO and the EU. The headquarters of the Institute for Security Studies, established in 1990, remained in Paris, as well as the Assembly of the WEU, which consisted of parliamentarians from the Member States and, as an institution, interacted with the Council of EU. However, the operational capabilities of the WEU remained limited, as it did not have a permanent peacetime military structure. In times of crisis, the WEU relied either on NATO forces and personnel or on conventional European multinational armed forces made available to the WEU by EU Member States. Such forces were notably Eurocorps, created in La Rochelle, France, on 22 May 1992, as the European Military Corps, by France and Germany initially, and later joined by Belgium in 1993, Spain in 1994, Luxembourg in 1996, Luxembourg in 1996, Greece and Turkey in 2002, Poland in 2003 and Italy in 2009, Eurofor and Euromarfor, created in 1995 as the European Rapid Reaction Force and the European Maritime Rapid Reaction Force by France, Spain, Italy and Portugal, the European Air Group, created in 1995 as the European Air Group by Belgium, Britain, France, Germany, France, Italy, Spain and the Netherlands, as well as a number of other multinational European forces.

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The WEU was practically limited to small operations, such as those of mine collection in the Persian Gulf during the Iran–Iraq War from 1987 to 1988, the naval blockade of Iraq during the Gulf War from 1990 to 1991, the naval blockade of Serbia and the surveillance of parts of Bosnia-Herzegovina during the Yugoslav war from 1992 to 1996, etc.

8.4.10 The Third Pillar and Cooperation in JHA Areas The existing degree of intergovernmental cooperation that had already been achieved in the judicial and police area, until the signature of the TEU, seemed quite insufficient. The consolidation of the single internal market, with the abolition of internal border controls and the free movement of goods and persons, created new realities in the single European area, where illegal trade should not be encouraged, while state laws and regulations in the areas of immigration, the fight against terrorism, drugs, arms smuggling and organised crime should be coordinated. The creation of a third pillar, relating to cooperation in areas of JHA (Title VI), with competencies also in the areas of immigration, political asylum and the crossing of EU borders, was therefore a consequence of the need for the smooth functioning of the single internal market. The TEU refers to policies on asylum, EU external border crossing rules, migration policy, policy on third-country nationals, the fight against drug addiction and fraud on an international scale, judicial cooperation in civil and criminal matters and rules on police cooperation. However, Member States retain their responsibilities in relation to the maintenance of law and order within their territory. Since these are all sensitive areas related to state sovereignty, intergovernmental cooperation applies to the areas of JHA. It should be noted that the Dublin Convention on asylum and immigration had been signed on 15 June 1990 and entered into force on 1 September 1997, initially for the then 12 signatory Member States, then on 1 October 1997 for Austria and Sweden, and on 1 January 1998 for Finland. The Dublin Convention was also implemented in practice by Norway and Iceland as of 1 April 2001, following an agreement signed between the EU and these States in Brussels on 19 January 2001. The convention set out the criteria for determining the state responsible for examining asylum applications. Furthermore, links are created between the pillar of cooperation in JHA and the first pillar of the European Community, given the involvement of their competencies. Thus, the European Community is responsible for the management of visa policy (visa), so the Commission prepares the legislative framework and decisions are taken by a qualified majority by the Council of EU. The Commission does not have the right to propose legislation on matters falling exclusively within the competence of the third pillar of cooperation in JHA. Proposals may be submitted by Member States, while the Council of EU decides by unanimity on common positions and joint actions, while decisions on implementing measures may be taken by a qualified majority.

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8.4.11 The Establishment of EUROPOL in the Context of Cooperation in JHA In the context of early cooperation in the fields of justice and home affairs between the EC Member States, the establishment of the TREVI network, as a system of intergovernmental cooperation between officials of the Ministries of Justice and Home Affairs, decided at the European Council in Rome on 1 and 2 December 1975, was aimed at combating serious crime, terrorism and drug trafficking. Later, the Schengen Agreement provided for the strengthening of police cooperation in these areas, with the operation of an electronic information system enabling police forces in the area covered by the treaty to monitor wanted persons. Although these systems did not meet the requirements of a single internal market, the demands of Germany and Spain for the establishment of a more effective European police force were initially met with reluctance from most EC Member States. Finally, the European Council in Luxembourg on 28 and 29 June 1991 accepted in a first stage the proposal by German Chancellor Helmut Kohl to set up a European police force to combat drugs and organised crime. Shortly afterwards, the TEU provided for the establishment of a European Police Office (EUROPOL), which, by decision of the Brussels European Council of 29 October 1993, was to be based in The Hague. The EUROPOL Drugs Unit (EDU) became operational on 3 January 1994. The Convention establishing EUROPOL was finally signed by the Council of EU on 26 July 1995 but entered into force in July 1999. EUROPOL’s powers are limited to dealing with offences committed on an international scale, including drug trafficking, illegal immigration, trafficking in human beings, money laundering, counterfeiting and terrorism. By unanimous decision, the Council of EU may extend its jurisdiction to other offences.

8.5

The End of the Eastern Coalition and the Cold War

The last decade of the twentieth century brought significant geopolitical changes in Europe. The fall of the Berlin Wall in November 1989, the reunification of Germany, the end of bipolarity and the dissolution of the Council for Mutual Economic Assistance (Comecon) and the Warsaw Pact in 1991 marked the end of the Cold War and the beginning of improved relations between Eastern and Western Europe. However, the reforms initiated by Gorbachev in the USSR and his conciliatory policy towards the Western European states and the USA encouraged opposition movements in the ‘actually existing socialist’ states and effectively hastened the collapse of the communist regimes. Thus, despite the reform policies pursued both in the USSR and in other states of ‘actually existing socialism’, their path towards Western-style multi-party democracy was inevitable. These favourable conditions, both in the states of Central Eastern Europe and in the new states created after the dissolution of the USSR, resulted in the bloodless creation of new states, with a declared orientation in principle towards a free market economy and parliamentary democracy. However, the same was not the case in

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Yugoslavia, whose break-up into constituent federal states was violent and disastrous. The intention of many Eastern European states to turn towards Western Europe, seeking political support in order to facilitate their transition to free economy and parliamentary regimes, has created a sense of increased responsibility in the EU. However, the EU’s contribution to resolving the problems in Yugoslavia has not been particularly satisfactory, as it has demonstrated its weaknesses in pursuing a unified foreign policy.

8.5.1

The Disarmament Agreements and Gorbachev’s Reforms

The aim of the General Secretary of the Central Committee of the Communist Party of the USSR Mikhail Gorbachev was the extensive reform of the Soviet state administration system, whose bureaucratic inertia was an obstacle to economic reconstruction (‘Perestroika’), as well as the introduction of transparency (‘Glasnost’) in state functioning, along with freedom of expression and information. In order to implement this ambitious policy successfully, Gorbachev had to curb the USSR’s international commitments and reduce its military spending in order to limit the moral and economic decline of the USSR. This led to the resumption of the dialogue between the USA and the USSR on nuclear arms limitation. The talks resulted in the signing of three agreements by 1991. The first INF (Intermediate-range Nuclear Forces) Agreement of 8 December 1987, signed in Washington, D.C., provided for the destruction within 3 years of all Soviet and American intermediate-range missiles between 500 and 5500 km in Europe, including the SS-20 of the USSR and the Pershing II of the USA. The second CFE (Conventional Forces in Europe) Agreement, of 19 November 1990, signed at the second Paris CSCE by the 16 NATO and six Warsaw Pact Member States, was concerned with the reduction of conventional weapons in Europe (see § 8.6.1). However, this treaty would lose its significance with the dissolution of the Warsaw Pact on 1 July 1991 (see § 8.6.5). The third agreement (START I) of 31 July 1991, signed in Moscow, concerned the reduction of strategic nuclear weapons. At the same time, Gorbachev sought, for economic reasons, to end the USSR’s moribund military presence in Afghanistan. He also put pressure on Vietnam to withdraw its troops from Cambodia, attempted to restore Sino-Soviet relations by withdrawing Soviet support for the Mengistu Haile Mariam (1937–) in Ethiopia and Cuban troops in Angola, cut off economic aid to Cuba and withdrew Soviet troops from the island, restored diplomatic relations with Israel, and condemned Iraq’s invasion of Kuwait. However, Gorbachev’s reforms resulted in the disruption of the control by the communist party central planning and production system, without the simultaneous implementation of new market control mechanisms. This contributed to a reduction in production and shortages of goods and caused social discontent. Furthermore, the transparency regime it tried to implement encouraged dissidents, mainly intellectuals, but also provoked a reaction from supporters of the old communist regime.

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New Regime in Poland and the Role of Solidarity

In Poland, economic shortages caused new strikes in the spring and summer of 1988, with the Solidarity movement playing a leading role in them. Prime Minister Zbigniew Messner (1929–2014), who had replaced Wojciech Jaruzelski, who had moved to the presidency of the Council of State on 6 November 1985, was forced to resign on 27 September 1988 after his cabinet was censured by the Polish Diet, an unprecedented event for a communist regime. His successor Mieczysław Rakowski (1926–2008), who remained in office until 2 August 1989, trying to defuse the growing social unrest, encouraged secret talks between Foreign Minister Czesław Kiszczak (1925–2015) and the president of the outlawed Solidarity movement, Lech Wałęsa. These informal talks resulted in the formal Round Table Talks, which began on 6 February and concluded on 5 April 1989, co-chaired by Kiszczak and Wałęsa. Other opposition groups, apart from Solidarity, also participated in these meetings, with the aim of exploring the possibility of participation in the government of the country by persons outside the Polish United Labour Party. The talks legitimised the Solidarity movement, agreed on the creation of a National Assembly consisted of two legislative chambers, the Sejm and the Senate, established the new office of President as Head of State and set the date for free elections. In the elections held on 4 and 18 June 1989, the Solidarity movement won all 35% of the seats in the Sejm, the remaining 65% having been allocated by agreement to members of the Communist Party and its affiliated parties, and won 99 of the 100 seats in the Senate. However, Jaruzelski was elected President of Poland on 29 July 1989, by a margin of one vote. Tadeusz Mazowiecki (1927–2013), a representative of the Solidarity movement, became the first non-communist prime minister on 24 August 1989, in a multi-party government, replacing Czesław Kiszczak, who had succeeded Rakowski on 2 August 1989. Mazowiecki’s appointment was approved by the Polish Sjem in early September 1989, following an agreement between the Solidarity movement and the Communists. On 9 December 1990, Lech Wałęsa, after Jaruzelski’s resignation, won the election for the presidency of Poland with Tadeusz Mazowiecki as his main opponent and took office on 22 December of the same year. A few days later, the necessary constitutional changes were made to democratise the country (Fig. 8.8).

8.5.3

Regime Change in Hungary

In Hungary, although limited economic and political reforms had taken place during the 1980s, substantial reforms were only carried out after János Kádár was replaced as General Secretary of the Communist Party on 27 May 1988 by Karoly Grosz (1930–1996). On 24 November 1988, Miklós Németh (1948–) was appointed Prime Minister, replacing Karoly Grosz, who had also remained as Prime Minister until then, alongside his new position as General Secretary of the Communist Party. On 12 January 1989, the Parliament adopted a number of important reforms, including political, laboural and journalistic freedoms, as well as a revision of the constitution.

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Fig. 8.8 The Round Table Talks in Poland, from 6 February to 5 April 1989. Source: photo by Erazm Ciołek, Polish History, https://polishhistory.pl/the-long-route-to-polands-round-tableagreement/, Public Domain

However, the mass demonstrations of 15 March, a national day, convinced the regime to start negotiations with the emerging non-communist political forces. The talks, which began unofficially in March 1989, continued formally as the Round Table Talks, which began on 22 April and continued until an agreement was signed on 18 September 1989. In the meantime, from 2 May 1989, the dismantling of the 240-km-long fence on the border with Austria began an action which facilitated the passage of thousands of refugees from East Germany and Czechoslovakia to Austria during the summer and autumn. This, as well as the statement by the Hungarian Foreign Minister Gyula Horn (1932–2013) that refugees from East Germany would not be repatriated but would be allowed to leave for Western European states, accelerated the fall of the Berlin Wall. Furthermore, on 1 June 1989, the Communist Party admitted that former Prime Minister Imre Nagy was illegally executed after a mock trial for his role in the 1956 Hungarian uprising. Thus, on 16 June 1989, the re-burial as a hero of former Prime Minister Nagy took place in Budapest, attended by a large crowd of citizens. The agreement of 18 September 1989, reached by the Round Table negotiators, included six parts covering the reform of the Constitution, the creation of a Constitutional Court, the functioning of political parties, elections for the National

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Assembly, the judiciary and the penal code. The electoral system was the product of a compromise since about half of the deputies would be elected by proportional representation and the rest by majority representation. However, no agreement was reached on how and when to elect the President of the Republic. Thus, between 16 and 20 October 1989, the parliament adopted legislation providing for multi-party parliamentary elections on 24 March 1990, direct presidential elections and renaming the Hungarian People’s Republic into the Republic of Hungary. Miklós Németh took over as caretaker prime minister until a newly elected prime minister was elected by election. Furthermore, in a referendum held on 26 November 1989, it was chosen by a small majority to precede the presidential election with a parliamentary election. Parliamentary elections held on 24 March 1990 and concluded on 2 April 1990 resulted in the formation of a government by the Democratic Forum, with József Antall (1932–1993) as the first elected Prime Minister, who took office on 23 May 1990. Furthermore, on 4 August of the same year, the National Assembly elected Árpád Göncz (1922–2015) as the first President of the Republic, while the last Soviet troops left Hungary on 19 June 1991 (Fig. 8.9).

Fig. 8.9 Demonstrations of 15 March 1989 in front of Magyar Televízió headquarters. Source: Derzsi Elekes Andor—Own work, licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license, Metapolisz DVD line http://nektar.oszk.hu/en/manifestation/2623913, and https://commons.wikimedia.org/wiki/File:Nemzeti_%C3%9Cnnep_-_Szabads%C3%A1g_t%C3% A9r_1989.03.15_(4).jpg

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179

The Fall of the Berlin Wall and the Question of Reunification

Despite Gorbachev’s reforms in the USSR, the regime of the German Democratic Republic, based on the Communist Party, the army and the state secret services, seemed unmoved by the old conservative methods and practices of government, even counting on the support of the Soviet troops stationed in the country. However, a growing wave of opposition, motivated mainly by intellectuals, from the autumn of 1988, called on the people to fight for a ‘society with a human face’, and then, from 1989, for liberation from the dictatorial regime. Very soon, however, these efforts were overtaken by events, as huge civil demonstrations demanded much more than reform, demanding freedom of thought, freedom of speech and freedom of the press. Despite Gorbachev’s efforts to persuade the East German leadership to undertake reforms, Communist Party General Secretary Erich Honecker (1912–1994) refused any such action. At a time when the country was experiencing a severe economic crisis, and the East German government seemed unable to prevent the strong protests of its citizens and the flight of many to West Germany, Honecker was removed from office and replaced with the consent of the USSR by Egon Krenz (1937–) on 18 October 1989, in order to carry out reforms. However, on 4 November of that year, the new East German leadership was disapproved by a huge crowd that gathered at Alexanderplatz in East Berlin. On 9 November, the regime, trying to appease the angry people, decided to allow citizens to travel abroad. However, the hasty and carelessly worded announcement of the decision on television and in the press resulted in the gathering of many thousands of citizens demanding to pass through the border stations in West Berlin, whereupon the border guards were de facto forced to open the exits. In the following days, the crowds began to tear down the wall, and on 10 November, the East German leadership promised to hold free elections in May 1990. The Strasbourg European Council of 8 and 9 December 1989 endorsed the unification of Germany, provided that the new state would function in a democratic manner, in accordance with the Helsinki Final Act (see § 6.7.2) of 1975, and in the perspective of European integration. However, reunification was not simply an intraGerman affair, given that the new state of 80 million inhabitants would have a political and economic activity that was likely to disturb the existing balance and stability of Western Europe. In particular, British Prime Minister Margaret Thatcher preferred a divided Germany, within the existing equilibrium, instead of a united and strong Germany. French President François Mitterrand also expressed hesitation, bearing in mind the bad experience of a strong Germany in the past. In the meantime, German Chancellor Helmut Kohl was trying to convince his partners that the reunification of Germany would take place within the framework of the EC, while the new unified German state would remain a member of NATO. Kohl also assured Mitterrand that the reunification of Germany would strengthen the EC and that a new Franco-German alliance would be to the benefit of the EC’s political union. At the same time, during his meeting with Gorbachev, he stressed Germany’s Western European orientation, which would determine the orientation of the new

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unified German state. Furthermore, US President George Herbert Walker Bush (1924–2018), who was favourable to the prospect of German reunification, stressed that the new state should become a member of NATO so as not to disturb the cohesion of the alliance, but that this reunification should not disturb Gorbachev’s reform policy in the USSR. Thus, at the meeting between Bush and Gorbachev in Malta on 3 December 1989, the former promised substantial financial aid to the USSR if the latter accepted East Germany’s membership of NATO as part of a unified Germany, while Kohl pledged to contribute to the costs of Soviet troops stationed in East Germany. At the same time, Gorbachev declared in January 1990 that he would accept the apparent reunification of Germany, provided that it remained neutral in relation to the existing military pacts of NATO and the Warsaw Pact (Fig. 8.10).

Fig. 8.10 Demonstrators from East Berlin have climbed the wall on 10 November 1989 and are looking at West Berlin undisturbed, effectively nullifying its existence. Source: Original photo by unknown author. Reproduction from public documentation/memorial by Lear 21 at English Wikipedia, licensed under the Creative Commons Attribution-Share Alike 3.0 Unported licence, https://commons.wikimedia.org/wiki/File:West_and_East_Germans_at_the_Brandenburg_Gate_ in_1989.jpg

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181

The Settlement of the German Question and the Unification Treaty

Under the pressure of the ongoing mass demonstrations, elections in East Germany were held on 18 March 1990, earlier than originally predicted for May of that year. The new East German government was headed by the Christian Democrat Lothar de Maizière (1940–) who, on 12 April 1990, advocated a unified Germany within the framework of NATO and the EC. Furthermore, pressure from the USA to promote German reunification and the final acceptance of reunification by French President François Mitterrand, with the simultaneous acceptance by German Chancellor Helmut Kohl of a single European currency within the EMU, as demonstrated at the European Council in Strasbourg on 8 and 9 December 1989 (see § 8.2.2), accelerated the reunification process. Thus, the Dublin European Council of 28 April 1990 decided that the integration of East Germany into the territory of the EC, through its reunification with West Germany, could take place smoothly, without any revision of the EC Treaties, subject to the observance of the necessary transitional measures, in particular in the fields of foreign trade, agriculture, structural policies and the environment. The economically weak regions of East Germany would receive Community aid like the other disadvantaged regions of Italy, Greece, Spain, Portugal and Ireland. However, the Community aid would be too little for the restructuring of East Germany and would require a high level of expenditure by the unified Germany, amounting to more than DEM 110 billion per year. This would force the German government to cut other public spending, increase taxes and borrow heavily in order to protect its currency. In view of the developments favourable to the reunification of Germany, Kohl and de Maizière signed a treaty on 18 May 1990 on the creation of an economic and monetary union, which entered into force on 1 July of the same year. The strong German mark replaced the weak East German mark, with a one-for-one exchange value. Despite opposition from the Bundesbank, which felt that this would cause inflation, Kohl believed that this exchange rate would encourage monetary and economic union between the two German states and would be a prelude to their political unification. However, for the conclusion of a treaty of unification of the two German states, a final settlement of the German question was required, which was the responsibility of the four guarantor (former occupying) powers of Germany, i.e. the USA, the USSR, Britain and France. The Four-Power Conference, with representatives of both German states, known as the Two Plus Four Conference, began its work in Bonn on 5 May 1990 and ended with the signing of the Treaty on the Final Settlement of Relations with Germany in Moscow on 12 September of the same year. This treaty was ratified by the second CSCE in Paris from 19 to 21 November 1990 (see § 8.6.1). In the meantime, and as mentioned above, on the initiative of US President George Bush, it was proposed to give security guarantees to the USSR to accept the inclusion of East Germany in NATO, after its reunification with West Germany.

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Helmut Kohl also reached an agreement with Mikhail Gorbachev on 16 July 1990 on the conditions for reunification. Furthermore, the question of Germany’s borders with Poland was raised, following a demand by the latter and the agreement of France that these should be definitively demarcated according to the Oder-Neisse line. Thus, on 17 July, the Two Plus Four adopted a Declaration on the definitive nature of Germany’s borders, and Germany and Poland undertook to sign a treaty recognising their common borders. This treaty was finally signed by the two states on 14 November 1990. Finally, the amount of the financial contribution to be paid to the USSR for the withdrawal of its troops from East Germany was determined. NATO’s jurisdiction was to be extended to the territory of the former East Germany, without nuclear weapons, after the withdrawal of Soviet troops in August 1994. The troops of the other three powers, the United States, Britain and France, were to leave Berlin on 8 September 1994. The military strength of a united Germany would be limited in numbers to 370,000 soldiers, and Germany would not be allowed to possess atomic, biological and chemical weapons of mass destruction. In the meantime, with the prospect of a settlement of the German question, the Treaty of Unification of the two German states was signed by the two Chancellors, Helmut Kohl and Lothar de Maizière, on 31 August 1990, in East Berlin. The treaty entered into force on 3 October 1990 and was ratified by the unified German parliament that emerged from the German general elections of 2 December 1990 (Fig. 8.11).

8.5.6

Institutional Changes in the EC Since German Unification

The reunification of Germany and the consequent increase in the country’s population has led to an increase in the number of its representatives in the European Parliament. Although German representation in the Commission and the European Court of Justice and the number of votes in the Council of EU remained constant, the new German states annexed to Germany were initially entitled to send 18 observers to the European Parliament and then, following the decision of the Edinburgh European Council of 11 and 12 December 1992, to elect 18 MEPs, thus increasing the number of German MEPs from 81 to 99. To compensate for the increase in the number of German MEPs due to the reunification of East and West Germany since the 1994 European elections, the number of MEPs from the other Member States has been set as follows: Britain, France and Italy would be represented by 87 MEPs, Spain by 64, the Netherlands by 31, Belgium, Greece and Portugal by 25, Denmark by 16, Ireland by 15 and Luxembourg by 6. Thus, from 1994 onwards, the European Parliament will consist of a total of 567 MEPs, instead of the 518 MEPs that existed until then.

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Fig. 8.11 The European Communities in 1990

8.5.7

The Velvet Revolution in Czechoslovakia

Although in Czechoslovakia, a programme of reforms inspired by those of the USSR was drawn up in December 1987, it could not be implemented and the regime became more repressive. Thus, on 17 November 1989, it violently suppressed a peaceful student demonstration in Prague, which triggered a series of popular demonstrations from 19 November to the end of 1989, with the number of demonstrators growing rapidly. In addition, a 2-h general strike, involving all citizens of Czechoslovakia, was successfully held on 27 November of the same year. The collapse of the communist governments in Poland and Hungary, the fall of the Berlin Wall and the growing protests and demonstrations by citizens forced the Communist Party of Czechoslovakia to announce on 28 November 1989 that it would leave power and dissolve the one-party state. This action was the last act of the Velvet Revolution, which caused the fall of the communist regime in Czechoslovakia. Thus, from 5 December 1989, fences and barbed wire began to be removed from the country’s borders with West Germany and Austria, and on

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10 December, Czechoslovak President Gustáv Husák (1913–1991) appointed the first largely non-communist government since 1948 and resigned. On 28 December, Alexander Dubček was elected President of the Federal National Assembly, while the leader of the opposition Civic Forum party, Václav Havel (1936–2011), was unanimously elected interim President of the Republic by the country’s parliament on 29 December 1989. In the first free parliamentary elections on 8 June 1990, the Civic Forum won the elections and reappointed Václav Havel as President of the Republic in July of that year. After the collapse of the communist regime and the withdrawal of the last Soviet troops on 27 June 1991, the main problem facing Czechoslovakia was the projected tendency to divide the country into the two constituent states of the Czech Republic and Slovakia. Václav Havel was opposed to any prospect of partitioning the country. In the June 1992 elections, which saw the election of Václav Klaus (1941–) as Prime Minister in the federal state of the Czech Republic and Vladimír Mečiar (1942–) as Prime Minister in the federal state of Slovakia. On 17 July, the Slovak parliament approved the declaration of Slovak independence, and 6 days later, Klaus and Mečiar, meeting in Bratislava, agreed to a ‘velvet divorce’, i.e. the dissolution of Czechoslovakia. Václav Havel resigned on 20 July 1992, as the last president of Czechoslovakia, opposing any decision to dissolve Czechoslovakia, and the dissolution of Czechoslovakia took place on 1 January 1993, with the simultaneous establishment of the Czech Republic and Slovakia. However, Václav Havel was a candidate in the Czech presidential election on 26 January 1993, which he won and thus became the country’s first president (Fig. 8.12).

8.5.8

Regime Change in Romania, Bulgaria and Albania

In Bulgaria, in October and November 1989, demonstrations took place, mainly in Sofia, demanding political reforms. In particular, and on the occasion of an international conference on ecology organised by Foreign Minister Petar Mladenov (1936–2000), demonstrations were held, which were violently suppressed by the regime. Mladenov considered the regime’s violent intervention unacceptable and resigned. However, on 10 November 1989, the day of the fall of the Berlin Wall, the General Secretary of the Bulgarian Communist Party Todor Zhivkov (1911–1998) and head of state was forced to resign from the party’s Politburo and was succeeded by the resigned former Foreign Minister Mladenov. The new regime tried to abolish Zhivkov’s restrictions and make reforms. However, the opposition and newly formed anti-communist movements demanded immediate and radical changes in the country’s system of government. Amid escalating protests, Mladenov resigned on 11 December 1989, but remained as head of state, and the National Assembly in January 1990 stripped the Communist Party of its status as the country’s sole ruling party. Following the Polish model, round-table talks between the government and the opposition were held from 3 January to 14 May 1990, during which it was decided to transition to parliamentary democracy and hold free elections. The Communist Party of Bulgaria was renamed

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Fig. 8.12 Vaclav Havel and protesters commemorate the struggle for Freedom and Democracy at Prague memorial during 1989 Velvet Revolution. Source: MD—Own work, licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license, https://commons.wikimedia.org/ wiki/File:Havla_1989.jpg

the Bulgarian Socialist Party on 3 April 1990, and on the same day Mladenov was named president of the country. In June 1990, the first free elections were held, which were won by the Bulgarian Socialist Party, which retained Andrey Lukanov (1938–1996), already Prime Minister, in office. However, Mladenov resigned from the presidency of the country on 6 July 1990 and as of 1 August of the same year the position was taken over by Zhelyu Zhelev (1935–2015) of the Union of Democratic Forces, elected by the National Assembly. On 7 December 1990, a coalition government was formed under Dimitar Iliev Popov (1927–2015), and on 9 July 1991 the new Constitution of the country was adopted. Elections on 13 October 1991 put the Union of Democratic Forces as the first party and Philip Dimitrov (1955–) as Prime Minister and paved the way for parliamentary democracy. In Romania, the mass strikes in the city of Brasov in November 1987 were followed by intense anti-regime demonstrations in November 1989. On 16 December 1989, the secret services of the head of state Nicolae Ceauşescu (1918–1989), General Secretary of the Romanian Communist Party, ordered the arrest and exile of the local Calvinist clergyman of Hungarian origin László Tőkés (1952–), from the city of Timişoara for his sermons offensive to the regime. This event caused demonstrations and riots in Timişoara, with massive participation of students and citizens. Police and army forces opened fire on the protesters on 17 December. The

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events became known throughout Romania, despite the state media’s silence. Ceauşescu, returning from a visit to Iran, demanded a mass rally in support of him outside the Communist Party offices in Bucharest on 21 December. However, he was surprised when the gathered crowd started taunting him and his wife, while mass anti-regime protests broke out. Initially, the security forces, obeying Ceauşescu’s orders, began shooting at the demonstrators, resulting in a large number of deaths; however, on the morning of 22 December, when it was announced that Defence Minister Vasile Milea (1927–1989) had committed suicide, the army almost massively joined the revolution, while tanks began to move towards the headquarters of the Communist Party Central Committee along with crowds of people. The Ceauşescu couple managed to escape by helicopter from the roof of the building. However, the Ceauşescu couple were arrested shortly afterwards, and on Christmas Day, Romanian television showed them facing a short trial and then being summarily executed. The newly formed National Salvation Front, led by former Communist Party member Ion Iliescu (1930–), took over the government. Iliescu was appointed President of the country, and Petre Roman (1946–) was appointed Prime Minister. The National Salvation Front organised the first free elections for April 1990, but these were postponed and finally held on 20 May 1990. Iliescu won the elections with a large majority and retained the office of president. The country’s new constitution was adopted on 8 December 1991, paving the way for a multi-party democracy (Fig. 8.13). In Albania, the first uprisings that started in Skodra in 1989 spread to other cities. The attempt of the General Secretary of the Communist Party of Albania and Head of State Ramiz Alia (1925–2011) to introduce limited reforms was met with a cautious attitude of the Albanian youth and their increasing demands for democratisation. On 9 December 1990, student demonstrations took place at the then Enver Hoxha University in Tirana and then in the streets of the capital with slogans for reform and democratisation. The ensuing clashes with the police did not curb student reactions. At the same time, and despite positive signs of the regime’s intentions for reforms, many Albanians, due to the economic difficulties in the country, were trying to leave Albania, mainly for Greece and Italy. Eventually, Alia announced democratisation measures, allowed Albanians to travel abroad and called free elections on 31 March 1991. Alia’s party won these first elections, he was elected the first president of the post-communist republic, and the communists appeared to retain control of the country. However, a general strike just 2 months after the elections forced Alia to form a ‘national salvation’ government, but it collapsed after 6 months under the pressure of economic problems and social unrest. New elections on 22 March 1992 declared the Democratic Party led by Sali Berisha (1944–) the winner. Alia resigned on 3 April 1992 and on 9 April of the same year, Berisha was declared by the Albanian National Assembly as the second elected president.

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Fig. 8.13 Demonstration in Timișoara, Romania in December 1989. Source: FOTO:FORTEPAN/ Urbán Tamás, licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license, http://www.fortepan.hu/_photo/download/fortepan_47063.jpg and https://commons.wikimedia. org/wiki/File:1989_December_16._sug%C3%A1r%C3%BAt_%C3%A9s_a_Tudor_ Vladimirescu_%C3%BAt_keresztez%C5%91d%C3%A9se._Fortepan_31892.jpg

8.5.9

Dissolution of USSR: The Commonwealth of Independent States

Pro-independence demonstrations were held simultaneously in all three Soviet Baltic countries, Estonia, Latvia and Lithuania, in 1988 and 1989. The most significant joint demonstration by the peoples of all three Baltic countries took place on 23 August 1989, with the formation of the Baltic Way, in the form of a 600-km-long human chain, with the participation of more than 1.5 million people, linking the three capitals of these countries. At the same time, demonstrations and demands were also made by the Soviet countries of the Transcaucasus, namely Armenia, Azerbaijan, Georgia and Moldova (Fig. 8.14). Gorbachev’s constitutional reform of 1 December 1988 resulted in the creation of a new House of Representatives after the elections of 26 March 1989, two-thirds of which were elected by secret universal suffrage. However, the overwhelming majority of those elected consisted of those opposed to Gorbachev’s policies, and extreme nationalists who envisaged the independence of the Soviet countries they represented. However, the ability of national movements to demand the democratisation and independence of their countries also caused tensions between

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Fig. 8.14 The Baltic Way, 23 August 1989. Source: Kusurija—Own work, licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license, https://commons.wikimedia.org/ wiki/File:Baltsk%C3%BD%C5%98et%C4%9Bz.jpg

the countries themselves, in cases of deep-rooted hostility between their peoples, as was the case between the Armenians and the Azeris. Aiming at the survival of the USSR and the prevention of internal wars between the Soviet republics, Gorbachev tried to rally them around a new form of Union of Sovereign States. Gorbachev’s proposal was well received by the Soviet Central Asian republics, which sought economic support from Russia and access to the markets of the USSR. In March 1991, Gorbachev called for a referendum to approve the New Union Treaty and elect a president. The referendum was held on 17 March in nine Soviet republics, Russia, Belarus, Ukraine, Azerbaijan, Turkmenistan, Uzbekistan, Tajikistan, Kazakhstan and Kyrgyzstan, where the electorate voted in favour of the New Union Treaty. Estonia, Latvia, Lithuania, Armenia, Georgia and Moldova did not take part in the referendum. At the Novo-LiOgaryovo summit on 23 April 1991, Gorbachev and the leaders of the nine Soviet republics reached the ‘9 + 1’ Agreement, in which they decided to accelerate the creation of the New Union, believing that if the original group of nine Soviet republics signed the new treaty, the other republics would gradually be encouraged to follow suit. However, on 19 August 1991, on the eve of the signing of the New Union Treaty by the first three Soviet republics, Russia, Uzbekistan and Kazakhstan, a coup d’état occurred in Moscow by a group of conservatives from the Communist Party of the USSR, the army and the KGB, who could not accept Gorbachev’s reforms and the risk of the break-up of the USSR. The coup plotters

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Fig. 8.15 During the coup of August 19912, access to Cremlin and the Red Square was closed, guarded by the Red Army. Source: Photo by Tove Knutsen//Moscow, Mokhovaya Street X Vozdvizhenka, licensed under the Creative Commons Attribution-Share Alike 2.0 Generic license, https://commons.wikimedia.org/wiki/File:Red_army_tanks_(8000380028).jpg

deposed Gorbachev, who was on vacation in Crimea, and replaced him with Vice President Gennady Yanayev (1937–2010). The latter declared a state of emergency and reintroduced censorship. However, Boris Yeltsin (1931–2007), elected by universal suffrage on 12 June 1991 President of the Supreme Soviet of Russia, given the decision of the Supreme Soviet of Russia in June of the same year for the priority of Russian legislation on the territory of Russia over Soviet legislation, calling for a general strike and demonstrations by both the army and the citizens, he overturned the coup on 21 August and arrested the leaders (Fig. 8.15). However, Yeltsin from the day of his election as president of Russia resigned from the Communist Party and promoted Russian sovereignty, with the result that the main pillar of support for the USSR has ceased to support its existence. Thus, when Gorbachev returned to Moscow on 27 August, after the failure of the coup, he found himself effectively weakened. At the same time, the Soviet republics were becoming increasingly reluctant to accept restrictions on their independence, with the result that the central government was gradually losing its power and the USSR was being driven to dissolution. First among the Baltic countries, Lithuania declared independence on 11 March 1991. In the Caucasus region, Georgia declared independence on 9 April 1991. The other two Baltic countries, Estonia and Latvia followed suit, on 20 and 21 August, respectively, during the attempted coup in

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Moscow. Ukraine followed on 24 August 1991, Belarus on 25 August, Moldova on 27 August, Azerbaijan on 30 August, Uzbekistan and Kyrgyzstan on 31 August, Tajikistan on 9 September, Armenia on 23 September, Turkmenistan on 27 September and finally Kazakhstan on 16 December. Despite Gorbachev’s efforts to conclude at least one economic union treaty and his dramatic appeal on 3 December 1991 to prevent the break-up of the Union, a few days later, on 8 December, the Presidents of Russia, Belarus and Ukraine, meeting in Belavezha National Park in Belarus, decided that the USSR as a geopolitical entity had ceased to exist. On the same day, they signed a Treaty establishing a Commonwealth of Independent States (CIS), to which all the states of the former USSR would be welcome. On 21 December of the same year, at the Alma-Ata meeting in Kazakhstan, eight more states of the former USSR joined the CIS: Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan, Moldova, Uzbekistan, Tajikistan, Tajikistan and Turkmenistan. In contrast, Estonia, Latvia, Lithuania and Georgia refused to sign the Alma-Ata Declaration. However, Georgia joined the CIS on 3 December 1993, at a time of tension in its region, while Ukraine and Turkmenistan never ratified the CIS Charter, drawn up in 1993, thus annulling their official membership of the CIS. However, Georgia, in a declaration on 12 August 2008, in response to the war in South Ossetia (see § 11.5.3), expressed its intention to withdraw from the CIS, which it finally did on 18 August 2009. On the same day of the signing of the CIS founding treaty, the signatories informed Gorbachev that the USSR had ceased to exist as a state entity and therefore his role as its president was no longer meaningful. Thus, Gorbachev resigned on 25 December 1991. The CIS is essentially a loose inter-state organisation with most of the former Soviet republics as member states, based in Minsk, Belarus, with the aim of solving the ethnic, territorial and economic problems created by the break-up of the USSR. Russia’s primacy in it is obvious, both because of the size of its state and economy, and because it succeeded the USSR as a permanent member of the UN Security Council, in adherence to the international treaties accepted by the USSR and in the possession of nuclear weapons.

8.5.10 Focal Points of Conflict and Strife Within the CIS However, tensions between the Member States after the dissolution of the USSR, especially in the Caucasus region, created problems in the functioning of the CIS. Among them were the military conflicts between Armenia and Azerbaijan that started after a referendum of 10 December 1991 on the autonomy of the Nagorno Karabakh region, which is mainly inhabited by Armenians but belongs to Azerbaijan, and ended on 16 May 1994. Furthermore, the status of Abkhazia, in the north-eastern part of Georgia, which is mainly inhabited by Abkhazians, is a central issue of dispute due to Abkhazian demands for independence that led to military conflicts from 14 August 1992 to 27 September 1993, which were repeated in August 2008 during the South Ossetia

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war. A similar situation applies to the part of South Ossetia claiming autonomy from Georgia, to which it belongs territorially that led to military conflicts from 5 January 1991 to 24 June 1992, which were repeated from 8 August 2008 to 16 August 2008. It should be noted that the August 2008 war in South Ossetia provoked the intervention of the Russian army, which inflicted heavy losses on Georgian troops and was the cause of Georgia’s withdrawal from the CIS on 18 August 2009. There is also friction between Russia and Ukraine—although the latter is not an official CIS Member State—over the semi-autonomous region of the Crimean peninsula, where the Russian Navy controls certain points on the southern Crimean coast. There are residents of Russian origin in the area, and after the dissolution of the USSR, Crimean Tatars who had been displaced returned and are claiming their land. Relations between Ukraine and Russia depend on the attitude of the Ukrainian governments, which sometimes seek a European perspective and sometimes prefer to cling to Russia, on which they are heavily dependent economically because of the natural gas it supplies. There is no shortage of disputes such as the one in 2008, when the Ukrainian government accused Russia of providing Russian passports to the Crimean population, thus creating the conditions for the possibility of its intervention inside Ukraine in order to protect Russian citizens (see § 11.5.4) and the later crisis in the Crimean Peninsula in 2014 (see § 12.4.1). Another important cause of conflict is Chechnya’s demand for independence from Russia, to which it belongs territorially, which has led to two wars between Chechen separatists and the Russian army, from 11 December 1994 to 31 August 1996 and from 26 August 1999 to May 2000, as well as a series of terrorist acts by Chechen separatists. Furthermore, separatist tendencies are also expressed by the inhabitants of Kabardino-Balkars, which is located in the North Caucasus region and is territorially part of Russia. Finally, the demands for autonomy from 2 September 1990 by the inhabitants of Transnistria, which is territorially part of Moldova, resulted in fighting between Transnistrian separatists and the Moldovan army from 2 March 1992 to 21 July of the same year, when a ceasefire agreement was signed. The Transnistrian separatists were supported by Russian, Cossack and Ukrainian volunteers, as well as by the 14th Russian Army.

8.5.11 The Violent Break-Up of Yugoslavia Although the dissolution of the USSR went relatively smoothly, the fragmentation of the Federal Republic of Yugoslavia was combined with a civil war, which ended with the intervention of Western powers. The beginning of the escalation occurred when, on 5 May 1989, Slobodan Milošević (1941–2006) became President of the Socialist Republic of Serbia and confirmed his intention to politically support the non-Serbian Serb minorities in Croatia, Bosnia and FYROM, while at the same time, and through an amendment to the current constitution, limiting the autonomy of the regimes of the intra-Serbian regions of Vojvodina and Kosovo.

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In Slovenia since September 1989 a more liberal political situation prevailed, allowing for criticism and freedom of the press, and anti-Yugoslav demonstrations and marches were held. In response to Milosevic’s warning of intervention by the federal army, Slovenians threatened to change their constitution, an act indicating their de facto secession from the Federal Republic of Yugoslavia, and Croats, threatened to ban the federal army from crossing their country’s borders. In Milosevic’s attempt to impose himself through a congress of the Communist Party of Yugoslavia, convened on 20 January 1990, the Slovenes and Croats caused the Yugoslav crisis to begin. On 7 March 1990, the Slovenian Assembly changed the official name of the state to the Republic of Slovenia, and on 8 April of the same year the first election was held, which resulted in the victory of Jože Pucnik (1932–2003), head of the united Democratic Opposition of Slovenia (DEMOS). However, in the May 1990 presidential elections, the former communist Milan Kučan (1941–) was elected president. In a referendum held on 23 December 1990, more than 88% of the participants voted for Slovenian independence and thus, on 25 June 1991, Slovenia declared independence. However, 2 days later, the Yugoslav federal army intervened to prevent Slovenia’s secession, which led to the Ten Day War. The absence of a Serb minority in Slovenia contributed to the brief end of hostilities, and on 7 July 1991 the Brijuni Agreement was signed to implement a ceasefire. At the end of the month, the last soldiers of the Yugoslav federal army left the country. On 23 December 1991, a new constitution was adopted, and on 15 January 1992, the EC Member States recognised Slovenia as an independent state. In Croatia, as of 15 February 1990, the Croatian Assembly passed electoral laws allowing for free elections. These were held on 22 April and 7 May 1990 and were won by the Croatian Democratic Union party (HDZ) led by Franjo Tuđman (1922–1999), who became president of the country. However, from 17 August 1990, the Serbian minority in Croatia, expressing their opposition to the Croatian government, started the so-called ‘Log Revolution’, using tree logs to cut off roads leading to the Serbian areas of southern Croatia as an expression of their separation from the Croatian areas, and on 21 December of the same year declared the autonomous Serbian Republic of Krajina. On 22 December 1990, the Croatian Assembly adopted a new constitution and changed the official name of the state to the Republic of Croatia. The first armed clashes between Croatian forces and Serbian separatist forces in Croatia began at the end of March 1991. In a referendum held on 19 May 1991, more than 93% of the participants voted for Croatian independence. Thus, on 25 June 1991, Croatia, like Slovenia, declared independence. Armed conflict gradually intensified with the participation of the Yugoslav federal army. The conflict culminated in the flattening of the Croatian town of Vukovar by the federal army and Serbian paramilitary groups after a siege of almost 3 months in November 1991. The same forces infiltrated the country’s interior and carried out criminal acts of ethnic cleansing against the Croatian civilian population in the Serbian regions of Croatia. However, from September of that year, Croatian forces began to successfully confront the invaders, but they too were unable to avoid extreme and criminal acts against the civilian Serb population of Croatia. On 2 January 1992, a cease-fire was reached with the Sarajevo Agreement, and on

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Fig. 8.16 The destroyed town of Vukovar, Croatia, by the Yugoslav Federal Army and Serbian paramilitary groups, November 1991. Source: Peter Denton—Flickr: Croatian War 1991: Vukovar destroyed, licensed under the Creative Commons Attribution-Share Alike 2.0 Generic license, https://commons.wikimedia.org/wiki/File:Croatian_War_1991_Vukovar_destruction.jpg

15 January 1992 Croatia, like Slovenia, was recognised as an independent state by the EC Member States. The federal army withdrew from Croatia, while armed conflict with Serbian paramilitary groups continued with sporadic clashes until the final capture of Knin, capital of the autonomous Serbian Republic of Krajina, on 7 August 1995, in the operation ‘Storm’ of the Croatian army (Fig. 8.16). The first free elections in Bosnia and Herzegovina were held on 18 and 25 November 1990, which resulted in a tripartite Bosnian assembly of the three Bosnian ethnic communities—Muslim, Croat and Serb—and the Bosnian Muslim Alija Izetbegovic (1925–2003) as president. However, the declaration of independence by Slovenia and Croatia in June 1991 provoked a reaction from the Serbs, who, sensing the willingness of the other ethnic groups in the country to secede from the Yugoslav Federation, abandoned the Bosnian Assembly and formed the Assembly of the Serb People of Bosnia and Herzegovina on 24 October 1991. The latter, on 9 January 1992, proclaimed the Serb Republic of Bosnia and Herzegovina, which was renamed as Serb Republic in August 1992. At the same time, on 18 November 1991, the Bosnian Croats and the Croatian government declared the existence of a Croatian entity as a separate ‘political, cultural, economic and territorial entity’ on the territory of Bosnia and Herzegovina, but this was not recognised by the official Bosnian government. In the referendum on the independence of Bosnia and

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Herzegovina, held on the weekend of 29 February and 1 March 1992, in which the vast majority of Bosnian Serbs did not participate, 99.7% of voters voted in favour of independence, and Bosnia and Herzegovina declared independence on 3 March 1992. Immediately afterwards, from 7 March 1992, Serbian paramilitary forces attacked Bosnian Muslim and Bosnian Croatian areas, marking the beginning of the war between the three major Bosnian communities. The armed occupation of large parts of Bosnia and Herzegovina by the Serbs seems to have been a priority of Serbian President Milošević to implement his plan for the creation of ‘Greater Serbia’. Moreover, the Croatian government of Tuđman’s policy on Bosnia and Herzegovina was not clear either, hiding tendencies to expand Croatia’s borders against Bosnia and Herzegovina. Bosnia and Herzegovina’s state administration has effectively ceased to function, having lost control over the entire territory. And although the international recognition of Bosnia and Herzegovina and increased diplomatic pressure forced the Yugoslav federal army to withdraw from the territory of Bosnia and Herzegovina, in practice, the Bosnian Serb paramilitary forces, reinforced with equipment, volunteers and troops from the Yugoslav Federation with Bosnian Serb military insignia, succeeded in bringing a large part of Bosnia and Herzegovina under their control, threatening in May 1992 even the capital Sarajevo itself and arresting the leader of the Bosnian Muslims, Izetbegovic, whom they released after UN intervention. Following the Graz Agreement of 6 May 1992 between Serbs and Croats, the latter, although the agreement had divided them, tried in June and October of that year to control areas in central and southern Bosnia-Herzegovina by attacking Bosnian Muslims. Looting, ethnic cleansing, civilian killings, rape and large numbers of refugees have been a frequent feature of the war in Bosnia and Herzegovina. The new massacres of Bosnian Muslims in Srebrenica by the Serbs in spring of 1993 provoked a belated reaction from the UN, and in May of the same year, although an agreement was reached in Athens between the three Bosnian communities, it was rejected shortly afterwards by the Serbs. At the same time, action against the Bosnian Muslims was again taken by the Croats, who were coveting large areas of the Bosnian Muslim, which borders Croatia to the south, and in August of the same year they bombed the Bosnian Muslim town of Mostar. Faced with the new threat to the Bosnian Muslims, the USA took action and threatened aerial bombing of Bosnian Serbs and Bosnian Croats. The latter capitulated in February 1994 and in March of the same year an agreement was signed in Washington between the Muslim and Croatian communities of Bosnia and Herzegovina to establish the Federation of Bosnia and Herzegovina. Finally, in the same month, with Russian intervention, the siege of Sarajevo by the Serbs was lifted (Fig. 8.17). However, after new massacres in Srebrenica in July 1995, NATO decided to launch air strikes against the Bosnian Serbs the following month. Under the cover of NATO, the Bosnian Croats went on the offensive, but carried out ethnic cleansing against the Bosnian Serbs. Also, an attack by the allied Bosnian Croats and Bosnian Muslim forces pushed the Bosnian Serbs away from the territories they held in

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Fig. 8.17 View of Grbavica, a neighbourhood of Sarajevo. Source: LT. STACEY WYZKOWSKI—www.dodmedia.osd.mil, and https://commons.wikimedia.org/wiki/Category: Siege_of_Sarajevo#/media/File:Sarajevo_Grbavica.JPG. Public Domain

Western Bosnia-Herzegovina, which opened the way for negotiations. Thus, on 14 December 1995, the Dayton Agreement, which had been reached the previous month in Ohio, USA, was signed in Paris by Presidents Izetbegovic of Bosnia-Herzegovina, Tuđman of Croatia and Milošević of Serbia, for a cessation of hostilities and the establishment of a Federation of Bosnia and Herzegovina with federal states on the basis of 51% for Bosnian Croats and Bosnian Muslims and 49% for Bosnian Serbs (Fig. 8.18). In FYROM, Kiro Gligorov (1917–2012) was the first elected president of the country since 27 January 1991. On 6 April 1991, the country’s parliament established the name ‘Republic of Macedonia’. Following a referendum held on 8 September 1991, in which more than 96% of voters voted in favour of independence, the country declared its independence and was recognised by the EC on 15 January 1992. The secession of the country from the Yugoslav Federation took place smoothly and without problems. However, the new state continued to have problems in its relations with Greece until 2018, due to the use of the name ‘Macedonia’, which is a historical area of Greek territory. On 12 June 2018, the Prespa Agreement was signed in Prespes, between Greece and FYROM, by which the latter will be universally recognised as the Republic of North Macedonia. The wars in Yugoslavia resulted in about 100,000 dead, 1.8 million displaced and the division of the country into five independent states in place of the Yugoslav republics: Croatia, Slovenia, Bosnia and Herzegovina, FYROM, and the New

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Fig. 8.18 The signing of the Dayton Agreement on 14 December 1995 by Presidents Izetbegovic of Bosnia and Herzegovina, Tuđman of Croatia and Milošević of Serbia. Source: U.S. Air Force/ Staff Sgt. Brian Schlumbohm, https://commons.wikimedia.org/wiki/File:DaytonAgreement.jpg. Public Domain

Yugoslavia (Federal Republic of Yugoslavia), established by Serbia and Montenegro, as of 28 April 1992, since, in the 1992 referendum in Montenegro, almost 96% of those who voted favoured the country remaining a Yugoslav republic. New Yugoslavia included the regions of Kosovo and Vojvodina.

8.5.12 The EU’s Attitude to the War in Yugoslavia The contradictions of the permanent members of the UN Security Council did not allow the organisation to react in a timely and coordinated manner, with the result that the UN forces were unable to effectively protect the civilian population in the areas of Yugoslavia where hostilities were taking place. Similarly, the EC failed to develop a unified foreign and security policy for the region, as Yugoslavia’s admission to the EC was initially made conditional on the unity of the country on the basis of a cooperation agreement between Yugoslavia and the EC since 1980. Subsequently, after the early recognition of the independence of Slovenia and Croatia by Germany in the autumn of 1991, the EC changed its position, with the submission of a plan by the British former Foreign Secretary Carrington allowing for the peaceful independence of the Yugoslav states, which eventually led to the EC’s recognition of the independence of these states. The same applies to the USA, which

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initially supported the unity of Yugoslavia, and later, in July 1991, in statements by its Secretary of State James Baker (1930–), made it clear that they were not opposed to a peaceful and consensual independence of the Yugoslav states. However, the EU did show some form of unified foreign policy, with the adoption of an action plan on Yugoslavia, initiated by France and Germany in November 1993. The war in Yugoslavia was a test of the CFSP envisaged by the EU Treaty, but it highlighted its inadequacies, mainly due to the absence of military support, although the EU provided most of the humanitarian aid to the newly independent states of the former Yugoslavia.

8.6

Euro-Atlantic Relations Between Central-Eastern Europe and the CIS

The first trade agreements between the Comecon Member States and the EC were concluded as soon as Gorbachev’s liberal policy allowed it, i.e. when, from 25 June 1988, it became clear that negotiations for trade agreements directly with the EC would be the exclusive business of each Member State individually. The first step was taken by Hungary in September 1988, followed by Czechoslovakia in December of the same year. This was followed by Poland in September 1989, the USSR in December of the same year and East Germany and Bulgaria in May 1990. These trade agreements were aimed at abolishing quantitative restrictions on the part of the EEC on imported products from the countries of Central Eastern Europe and at promoting exports of agricultural products, steel, coal and textiles to these countries. The result was a drastic reduction in trade between the Central Eastern European countries and the USSR and their trade dependence on the EC. Comecon ceased to have any reason to exist and at the final meeting of its Member States, held on 28 June 1991 in Budapest, it was agreed that it should be dissolved within 90 days. However, the need to assist the Central Eastern European countries and CIS Member States to implement the principles of multi-party democracy, free market economy and the promotion of private and entrepreneurial initiative, as well as to prepare the Central Eastern European countries states that would be candidates for EC membership, has been the reason for the establishment of EC assistance programmes for these states. As early as July 1989, at the Paris summit of the seven major industrialised countries (G7), the Commission took over the coordination of this assistance.

8.6.1

The Second and Third CSCE and Their Contribution to the Recession

At the second CSCE held in Paris from 19 to 21 November 1990, the Charter of Paris for a New Europe was adopted, with references to the Helsinki Final Act (see § 6.7.2) of 1975. The Charter marked the end of confrontation and division and the universal desire to build democracy, reiterated the participants’ firm desire to protect

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human rights and freedoms, to consolidate peace and friendship between states and to achieve unity in Europe, and launched the creation of the institutions of the CSCE, namely the Council of Foreign Ministers, the Parliamentary Assembly, the Secretariat, the Conflict Prevention Centre in Vienna and the Office of Free Elections (later Office of Democratic Institutions and Human Rights) in Warsaw. The Conventional Forces in Europe Treaty (CFE) was also signed by the 22 Member States of NATO and the Member States of Warsaw Pact, which entered into force on 17 July 1992. The first Council of Foreign Ministers met in Berlin on 19 and 20 June 1991. At the third CSCE held in Helsinki (Helsinki II) in 1992, in the midst of the developments in Yugoslavia, it was given to a High Commissioner on National Minorities the responsibility of conflict prevention and crisis management of minority issues. Also, a Forum for Security and Cooperation was created, and special attention was given to economic development and cooperation between European states.

8.6.2

PHARE and TACIS Programmes: Association Agreements with the EC

On 18 December 1989, the EC set up the PHARE programme for Poland and Hungary (Poland and Hungary: Assistance for Restructuring their Economies, PHARE), to provide assistance for the restructuring of their economies. In 1990, the programme was extended to all the countries of Central and Eastern Europe and to implement it, the European Bank for Reconstruction and Development (EBRD) was established on 15 April 1991, which took over the task of granting loans for productive investment in the countries of Central and Eastern Europe, which were committed to the principles of multi-party democracy, a free market economy and the promotion of the private and entrepreneurial initiative. The ultimate objective of the programme was to prepare and support candidate countries of Central and Eastern Europe for accession to the EC. One EC programme to provide technical assistance to the CIS states and Mongolia was TACIS (Technical Assistance to the Commonwealth of Independent States, TACIS), which was mainly aimed at transitioning these states to multi-party democracy, free market economy and promoting private and entrepreneurial initiative, but did not include any pre-accession preparation for EC membership. It was launched in 1991, initially to cover the period 1991–1999, and provided funded technical assistance to 12 CIS Member States in Eastern Europe and Central Asia. Association agreements between the EC and the countries of Central and Eastern Europe, known as the ‘Europe’ Agreements, were gradually signed. Such agreements were signed with Poland and Hungary on 16 December 1991, with Romania on 1 February 1993, with Bulgaria on 8 March 1993, with Czechia and Slovakia on 4 October 1993, with Estonia, Latvia and Lithuania on 12 June 1995 and with Slovenia at the end of 1995. The bilateral ‘Europe’ Agreements were aimed at assisting the associated countries to join the EU. They included the creation of a free

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trade area, the approximation of their legislation to that of the Community, and economic, cultural and financial cooperation.

8.6.3

The Visegrad Group

The Visegrad Group was founded on 15 February 1991 at a meeting attended by József Antall, Prime Minister of Hungary, Lech Wałęsa, President of Poland, and Václav Havel, President of Czechoslovakia, in the Hungarian town of Visegrád. The aim of the group was to implement the reforms necessary for the full integration of the three states into the Euro-Atlantic institutions, i.e. the EC and NATO. The Visegrad Declaration of 1991 is an example of the traditional cooperation between the three neighbouring countries with a common destiny and refers to the corresponding historic meeting in Visegrad in 1335 between Charles I of Anjou, King of Hungary, Casimir III, King of Poland and John of Luxembourg, King of Bohemia, with the main theme of promoting cooperation between the three central European states. Following the division of Czechoslovakia into two separate states on 1 January 1993, the Visegrad Group of Three (V3) became the Visegrad Group of Four (V4), with Czechia and Slovakia becoming the third and fourth members of the group. After the collapse of the communist regimes, the Visegrad Group contributed to close political and economic cooperation between its Member States to promote and protect their common interests at the European level and to advance the processes towards full membership of the EC. Furthermore, coordinated action by the V4 has contributed to the dismantling of the Warsaw Pact and Comecon and to strengthening the process of transition to democracy. Heads of state and government meet at summits held each year in the country holding the group’s presidency. The only permanent structure associated with the Visegrad Group is the Fund, which was established in 2000 and is based in Bratislava. This is mainly intended to finance non-governmental organisations and to promote cultural cooperation between the Member States. However, during the accession negotiations with the EU, the Visegrad Group Member States found themselves in competition with each other, with a view to eventual fast-track accession. Nevertheless, on 21 October 1998, a new text of an agreement was signed in which an attempt was made to revitalise cooperation between them. Hungary, Poland and Czechia joined NATO in 1999, followed by Slovakia in 2004. Following their accession to the EU in 2004, the Visegrad Group Member States continued their efforts to cooperate within the EU framework. The Visegrad Group’s priorities include building links with other regional organisations such as the Benelux, addressing migration issues, cooperation in the fields of energy, tourism and justice, and the Group is a model for similar cooperation between the Balkan states. In addition, on 21 December 1991, in Krakow, the Visegrad Group Member States signed the Central European Free Trade Agreement (CEFTA), which entered into force on 1 March 1993 (see § 9.4.3). This free trade area, which contributed to

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regional trade cooperation in Central Europe, was gradually extended to include countries of South-Eastern Europe.

8.6.4

Accession of New States to the Council of Europe

Gorbachev’s liberal policies allowed Finland to join the Council of Europe in 1989, given that it had concluded a treaty of friendship and cooperation with the USSR, which it had not wanted to disturb in the past. Subsequently, and given their efforts to establish democratic institutions, almost all the states of Central Eastern Europe and the CIS were admitted, starting with Hungary in 1990, Poland in 1991, Bulgaria in 1992, and Estonia, Lithuania, Slovenia, Czechia, Slovakia and Romania in 1993. Since 1995 and up to the present day, all the countries of Central and Eastern Europe and the European CIS states have joined the Council of Europe—some after implementing specific democratisation measures—with the exception of Belarus. Russia in particular joined in 1996, despite its harsh attitude during its conflict with Chechnya, mainly due to the desire of the Western European states, in particular Britain, France and Germany, to strengthen the country’s ties with Europe. The Council of Europe, for its part, implemented several assistance programmes for the development of institutions and structures in the states of Central Eastern Europe and the CIS, which would function according to Western European democratic standards and would contribute to the compliance of these states with the principles of the Convention for the Protection of Human Rights and Fundamental Freedoms (see. § 3.4.5), signed in Rome in 1950, as well as the Helsinki Final Act of 1975 of the first CSCE and the Charter of Paris for a New Europe of 1990 of the second CSCE.

8.6.5

Dissolution of the Warsaw Pact and Cooperation with NATO

Despite the expiry of the 30-year treaty establishing the Warsaw Pact in May 1985, Gorbachev made sure to convene a conference of Member States in April of that year, at which the treaty was renewed. However, the course of events and the rapid changes taking place in Central Eastern Europe left little room for the survival of the Warsaw Pact. Thus, on 1 July 1991, at the last meeting of the Pact’s Member States in Prague, it was officially announced that the Warsaw Pact had ceased to exist, and Soviet troops were gradually withdrawn from its former Member States. The countries of the former Warsaw Pact, in their search for a reliable force to guarantee their security against regional threats, began to seek a form of cooperation with NATO. The Visegrad Group made a start by seeking cooperation with NATO and, in the long term, formal membership of its Member States. However, as early as 6 July 1990, the NATO Member States issued the London Declaration for a renewed North Atlantic Alliance, which aimed at developing cooperation with the countries of Central Eastern Europe by establishing permanent diplomatic relations between these countries and NATO. Furthermore, on

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6 December 1991, the North Atlantic Cooperation Council (NACC) was set up in Rome, a new body responsible for consultations with the countries of Central and Eastern Europe and the CIS countries, as well as Georgia and Albania, with a view to cooperating in the peaceful resolution of crises that would threaten security in Europe and beyond. The NACC began its activities on 20 December 1991 and soon included the vast majority of the states of Central Eastern Europe and the CIS, including Russia. Cooperation developed in all areas and was intensified in the framework of the Partnership for Peace (PfP), established in Travemünde, Germany, on 20 and 21 October 1993, and activated on 11 January 1994. The Partnership for Peace aimed at military cooperation between these countries and NATO and their participation in joint peacekeeping missions at the international level. The association of the countries of Central Eastern Europe and the CIS with the NATO Member States created the conditions for the enlargement of the North Atlantic Alliance, which was to take place gradually a few years later, starting with the three Visegrad Group Member States, Hungary, Poland and Czechia, from 12 March 1999, to be followed later by other Central Eastern European states. Today, the Partnership for Peace comprises the 31 NATO Member States and the 22 participating states of Western Europe, Central Eastern Europe and the CIS. Furthermore, the North Atlantic Cooperation Council was replaced on 1 January 1997 by the Euro-Atlantic Partnership Council (EAPC).

8.6.6

The Copenhagen Criteria for the Accession of New Countries to the EU

The Copenhagen European Council of 21 and 22 June 1993 confirmed that countries that had concluded Association Agreements with the EU could become regular Member States provided they met certain economic and political criteria, which remained known as the Copenhagen criteria. In particular, a candidate state would have to have (a) stable institutions guaranteeing democracy, the rule of law, human rights and the protection of minorities; (b) a viable market economy and the capacity to cope with competitive pressure and market forces within the EU; and (c) the capacity to take on the obligations of full membership, including the objectives of political, economic and monetary union. Furthermore, the European Council drew up a list of the countries of Central and Eastern Europe for which there were indications that they would have the potential to join the EU in the future. These were Bulgaria, Czechia, Estonia, Latvia, Lithuania, Hungary, Latvia, Poland, Romania, Slovakia, Slovenia and Poland. Furthermore, the Essen European Council of 9 and 10 December 1994 adopted a pre-accession strategy to prepare the countries of Central and Eastern Europe for the gradual adoption of the acquis communautaire. This pre-accession strategy was based on the Commission’s White Paper on the accession of the countries of Central and Eastern Europe to the EU, which was also adopted by the European Council in

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Cannes on 26 and 27 June 1995 as a guide for the implementation of the third Copenhagen criterion. Later, the Madrid European Council of 15 and 16 December 1995 further clarified the Copenhagen criteria, stating that a candidate country must be able to apply EU rules and procedures in practice and have adapted its administrative structures accordingly. In addition, the EU must ensure that its institutions continue to be effective after the accession of new Member States and that it continues to develop and implement common policies, which it can finance.

References Békés C., and Kalmár, M., The Political Transition in Hungary, 1989-90, Cold War International History Project Bulletin, issue 12/13, http://coldwar.hu/publications/pol_trans.pdf. Communication COM(87) 100 - The Single Act: A New Frontier for Europe, Commission of the European Communities, Brussels, 15 February 1987. Communication COM(92) 2000 final - From the Single Act to Maastricht and beyond: the means to achieve our ambitions, Commission of the European Communities, Brussels, 11 February 1992. CVCE, The Treaty on the Final Settlement with respect to Germany, 2023a, https://www.cvce.eu/ en/collections/unit-content/-/unit/df06517b-babc-451d-baf6-a2d4b19c1c88/efe51364-e699-4 d53-92ff-fe24f37e4d40. CVCE, The Visegrad Group and CEFTA, 2023b, https://www.cvce.eu/en/collections/unitcontent/-/unit/df06517b-babc-451d-baf6-a2d4b19c1c88/6edd6d7a-aa5a-4b7b-86bd-7268a361 70cb. CVCE, The Unification Treaty between the FRG and the GDR (Berlin, 31 August 1990), https:// www.cvce.eu/content/publication/1997/10/13/2c391661-db4e-42e5-84f7-bd86108c0b9c/pub lishable_en.pdf. EUR-Lex, (n.d.) Access to European Law, Accession criteria (Copenhagen criteria), https://eur-lex. europa.eu/EN/legal-content/glossary/accession-criteria-copenhagen-criteria.html. European Community. Luxembourg: Office for Official Publications of the European Communities, 1989. Bulletin des Presse- und Informationsamtes der Bundesregierung. Hrsg. Presse- und Informationsamt der Bundesregierung. 11.12.1990, Nr. 144. Bonn: Deutscher Bundesverlag. "Gemeinsame Botschaft von François Mitterrand und Helmut Kohl (Paris, 6. Dezember 1990)", p. 1513. "Gemeinsame Botschaft von François Mitterrand und Helmut Kohl (Paris, 6. Dezember 1990)", p. 1513. European University Institute, Historical Archives of the European Union, The European Union's Phare and Tacis Democracy Programme. Compendium of Ad-hoc Projects 1993-1997, Published by the European Commision, January 1998, https://archives.eui.eu/en/fonds/1012 68?item=AV/DOC-05-73. Kozłowski, T., The Long Route to Poland's Round Table Agreement, Polish History, 2019, https:// polishhistory.pl/the-long-route-to-polands-round-table-agreement/. Maraveyas, N., Developments in the Common Agricultural Policy and Greek Agriculture (in Greek Language), Sakkoulas, Athens - Komotini, 2003. Official Journal of the European Communities, Agreement on the European Economic Area, No L 1, 03.01.1994, Porto, 2 May 1992. Official Journal of the European Communities No C 316, Council Act of 26 July 1995 drawing up the Convention based on Article K.3 of the Treaty on European Union, on the establishment of a European Police Office (Europol Convention), 27.11.1995, Brussels, 26 July 1995. Pond, E., Front Matter. In Endgame in the Balkans: Regime Change, European Style (pp. i–vi). Brookings Institution Press, 2006, http://www.jstor.org/stable/10.7864/j.ctt6wpfzg.1.

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Report of the Committee for the Study of Economic and Monetary Union. Report on economic and monetary union in the European Community. Luxembourg: Office for Official Publications of the European Communities, 1989 (The Delors Report). Šubrt, J, Vinopal, J., Hampl, S., Pullmann, M., The Velvet Revolution and Modern Czech History in the Eyes of the Czech Population, Politologický Časopis / Czech Journal of Political Science 1/2012, https://czechpolsci.eu/article/view/34790/29680. Treaty on European Union, Official Journal of the European Communities 29.07.1992, No C 192, "Treaty on European Union", Maastricht, 7 February 1992. Treaty on the Functioning of the European Union (Consolidated version), Official Journal of the European Union, 26.10.2012, No C 326, "Treaty on the Functioning of the European Union", Brussels, 26 October 2012. U.S. Department of State, (n.d.-a) Diplomacy in Action, Treaty Between The United States Of America And The Union Of Soviet Socialist Republics On The Elimination Of Their Intermediate-Range And Shorter-Range Missiles (INF Treaty), https://2009-2017.state.gov/t/avc/ trty/102360.htm. U.S. Department of State, (n.d.-b) Diplomacy in Action, Treaty on Conventional Armed Forces in Europe (CFE), https://2009-2017.state.gov/t/avc/cca/cfe/index.htm. U.S. Department of State, Dissolution of the USSR and the Establishment of Independent Republics, 1991, https://2001-2009.state.gov/r/pa/ho/time/pcw/108229.htm. U.S. Department of State, Office of the Historian, The Breakup of Yugoslavia, 1990–1992, https:// history.state.gov/milestones/1989-1992/breakup-yugoslavia. U.S. Department of State, (n.d.-c) Office of the Historian, The Berlin Wall Falls and USSR Dissolves, https://history.state.gov/departmenthistory/short-history/berlinwall. Vilanova, P., From the CSCE to the OSCE: Is the World Safer Now?, CIDOP, Notes Internationals, 09/2015, https://www.cidob.org/en/publications/publication_series/notes_internacionals/ n1_122_de_la_csce_a_la_osce/from_the_csce_to_the_osce_is_the_world_safer_now.

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9.1

The Fourth Enlargement of the EU

It seems that two important reasons contributed to the decision of Austria, Switzerland, Norway, Sweden, Finland and Switzerland to apply for EC membership. The first relates to the end of the Cold War, which allowed Austria, Switzerland, Sweden and Finland, states that had maintained a balanced foreign policy towards the two opposing camps, to decide to join the EC. The second relates to the then-envisaged accession to the EEA of Austria, Norway, Sweden and Finland, four EFTA Member States, which created an obligation for these States to apply the common rules of the single internal market without exceptions and did not significantly differentiate them from the other EC Member States. In this climate, and preferring to be at the centre of EC decisions rather than simply following developments, these five states submitted applications for EC membership: Austria from 14 July 1989, Sweden from 1 July 1991, Finland from 18 March 1992, Switzerland from 20 May 1992 and Norway from 24 November 1992. However, following a referendum in Switzerland on 6 December 1992, which annulled its accession to the EEA (see § 8.1.6), its application for EC membership was also frozen. The accession negotiations with the four remaining states to join the EC were carried out without any particular problems, given that all four countries had signed on 2 May 1992 in Porto their accession to the EEA, to which they would formally belong from 1 January 1994. Furthermore, from the point of view of the ‘12’ EC Member States, there was a generally favourable attitude towards the prospect of the four countries’ accession, given their high standard of living and their minimal requirements for Community aid. The Maastricht European Council of 9 and 10 December 1991 decided that negotiations for EU membership, as provided for in the draft EU Treaty, could begin as soon as the internal negotiations on the EC’s own resources were completed. The issue of the need for an immediate reform of the EC institutions to cope with an increase in the number of Member States was also raised. The candidate # The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 P. Liargovas, C. Papageorgiou, The European Integration, Vol. 1, Springer Texts in Political Science and International Relations, https://doi.org/10.1007/978-3-031-47776-8_9

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Member States, for their part, wanted the necessary institutional reforms to be decided upon after their accession so that they could participate in the relevant decisions. However, the difficulties in ratifying the TEU and the EMS crisis contributed to the view that it would be prudent not to continue discussions on institutional reforms at this time. Thus, the Lisbon European Council of 26 and 27 June 1992 defined the conditions for the accession of the new Member States and stressed their obligation to accept the acquis communautaire and the TEU, while the Edinburgh European Council of 11 and 12 December 1992 decided that accession negotiations would start in early 1993 before the TEU had been ratified by all Member States. Furthermore, the Brussels European Council of 29 October 1993 set the date for the accession of the new Member States as January 1995.

9.1.1

The Accession Negotiations

In the light of the Commission’s positive views and the decisions of the European Councils of Lisbon in June 1992 and Edinburgh in December 1992, accession negotiations were opened, conducted separately with each of the candidate countries, from 1 February 1993 in Brussels with Austria, Sweden and Finland and from 5 April 1993 in Luxembourg with Norway. However, the orientation of the economy of all four states was export-oriented, which raised serious concerns in public opinion within these states about the necessity of EU membership. The main issues of the negotiations were the prices of agricultural products, regional aid, contributions to the Community budget and the setting of fishing quotas. The Nordic countries in particular had guaranteed prices for agricultural products that were much higher than those in the EU, and the Commission proposed to compensate for the adjustment of these prices by means of income support for farmers in these countries. With regard to regional aid, and in accordance with the Community principle, only regions where GDP per capita was less than 75% of the EU average were eligible for Structural Fund support. However, some candidate Member States sought to receive regional aid for certain regions in the Arctic and the Alps, where GDP per capita was higher than the EU average. Furthermore, all the candidate countries, with the exception of Finland, would have a net contribution to the Community budget and wanted this to be progressive over time. Finally, Norway did not wish to implement the Common Fisheries Policy or allow other EU Member State fishing vessels to access its territorial waters for fishing and refused to suspend whale hunting, even though this was prohibited by a Community Directive. The negotiations were concluded relatively quickly, in March 1994. Austria was granted a transitional period on the right to impose restrictions on the passage of lorries on its Alpine roads for reasons of air pollution, as well as various derogations allowing it to continue to subsidise its agricultural production in the Alpine regions and to restrict the purchase of land by foreigners in areas of tourist interest in order to protect the property rights of its nationals. Sweden was excluded from participation in EMU, while maintaining some social benefits for its nationals. Norway managed to secure important temporary measures for its farmers and fishermen. Finally,

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Finland achieved a number of temporary adjustment measures and secured the possibility of regional aid funding for its Arctic regions.

9.1.2

The Implementation of the Fourth Enlargement

Despite the successful outcome of the accession negotiations, there was a problem with the issue of voting in the Council of EU due to the accession of the new Member States, which would increase the chances of a blocking minority, whenever voting would require a qualified majority, and would more often impede decisionmaking procedures. The solution was provided indirectly by the Ioannina Compromise, at the informal Council of EU of 29 March 1994, convened in the Greek city, and took the form of a decision, which was not provided for in the TEU, without, however, requiring further ratification. The compromise provided that the blocking minority would not change numerically; however, in the event that the negative votes in the Council of EU were very close in number to the value of the blocking minority, without reaching it, then the Council would try to reach an acceptable solution with a majority greater than that of the qualified majority within a reasonable period of time. One day after the compromise, the conclusion of the negotiations with the four candidate countries was officially announced. The required consent of the European Parliament, already foreseen by the SPD for the accession of new Member States (see § 7.2.6), was obtained by a significant majority on 4 May 1994, paving the way for the signing of the EU Accession Treaties of Austria, Norway, Sweden and Finland. The Accession Treaties were signed in Corfu on 24 June 1994, during the European Council held there. The ratifications of the Accession Treaty of Austria, Norway, Sweden and Finland were carried out by the 12 without any problems. All four candidate countries held referendums on the ratification of the accession treaties. Austria held the referendum on 12 June 1994, before the Accession Treaty had even been signed, and ratified its accession by 66.6%. Finland held its own referendum on 16 October of the same year and ratified its accession treaty with 56.9%. Sweden did the same on 13 November of the same year, with a majority of 52.7%. However, the referendum held in Norway on 28 November of the same year showed that 52.2% of voters rejected its EU accession treaty. This was the second time this had happened, following a similar rejection of the accession treaty in 1972 (see § 6.5.3), and despite the fact that all the candidate countries had already ratified the accession treaties. Norway thus remained a Member State of the EEA only, while the other three new EU-15 and EEA Member States withdrew from EFTA (Fig. 9.1).

9.1.3

Institutional Changes Since the Fourth Enlargement

As of 1 January 1995, the EU institutions have changed in number to accommodate the three new Member States. The number of Commissioners was increased by three, one from each new Member State, bringing the total to 20. In the Council

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Fig. 9.1 The European Union in 1995

of EU, Austria and Sweden each had four votes and Finland three. In the European Parliament, 59 MEPs were added, of which Sweden had 22, Austria had 21 and Finland had 16, out of a total of 626 MEPs. Furthermore, the Court of Justice now had 15 judges and nine advocates-general, until 6 October 2000, when the number of advocates-general became eight.

9.2

The Single Internal Market, EMU and the Agenda 2000

Under the EU’s first pillar, the single internal market should have been fully operational by the beginning of 1993, with the introduction of the free movement of persons, goods, services and capital. However, significant delays in its full operation had been caused by the obstructionism of many governments for reasons of petty political interests and the opposition of groups with particular interests affected by its operation. Furthermore, according to the EMU implementation programme and the Maastricht criteria of 1991, the EU was to move to the second stage of EMU from

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July 1994, which would last until the introduction of the new single currency in the third stage. This would start on 1 January 1997, provided that a majority of Member States met the conditions laid down. Otherwise, the single currency would be adopted from 1 January 1999 at the latest, only by those Member States that were in a position to do so. In addition, the need to address the forthcoming enlargement and the problems that would result from it prompted the Commission to present, on 16 July 1997, the Agenda 2000: Towards a stronger and wider Union. This was an action programme responding to the demands of the Madrid European Council of 15 and 16 December 1995, with the main objectives of promoting EU structural policy to strengthen the economic and social cohesion of its regions, reforming the CAP, and defining a new financial framework for the period 2000–2006. The Agenda 2000 also provided for its review in the middle of the period 2000–2006. At the global level, on 11 December 1997, a Draft Protocol on Climate Change was adopted at the Kyoto International Conference in Japan as a ‘roadmap’, which includes the necessary steps to address in the long term the climate change caused by the increase in anthropogenic greenhouse gas emissions.

9.2.1

The Functioning of the Single Internal Market

The freedom of movement and establishment of persons, which had already been granted to employees and entrepreneurs, was extended to other persons such as students, earners and pensioners. Progress was also made in the mutual recognition of professional qualifications and the abolition of border controls on persons under the Schengen Agreement. Customs controls were also abolished from 1 January 1993, and the free movement of goods on the Community market was greatly facilitated by the mutual recognition of product production rules provided that they meet the essential health and safety requirements. As regards the freedom to provide services, banking institutions have been granted the freedom of establishment since 1993, while insurance undertakings have had the right to provide services since 1992. However, in the transport sector, despite the liberalisation of other means of transport, the creation of a European rail market has been difficult due to differences between the national networks of the Member States. Furthermore, since 1997, the Commission has introduced the concept of ‘universal service’, which has also allowed state-owned undertakings to continue to exist and operate in the context of free competition in the single internal market, provided that they open up part of their business or capital to competition. Finally, from 1 January 1998, the telecommunications market was fully liberalised. Competition policy in the context of the single internal market prohibited preferential state agreements and state aid. However, the absence of a common tax system contributed to the existence of different tax rates and VAT rates between Member States, which often led to tax dumping in order to attract businesses and investors. Furthermore, while the effects of the implementation of the single internal market were immediately felt with the increase in intra-European trade, from 1992 onwards

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the economic climate deteriorated, with the consequences of slowing growth and rising unemployment in Europe. Moreover, it became clear that the EU needed to improve its competitiveness in order to cope with increased international competition.

9.2.2

EMU, the Stability and Growth Pact and the ‘Euro’

In 1994, the second stage of EMU began, as provided for in the TEU, with the establishment on 1 January of the same year of the EMI in Frankfurt, as a precursor to the ECB. Through the EMI, the monetary policies of the independent central banks of the Member States were coordinated, which were encouraged to achieve economic convergence. The EMI also carried out the work necessary for the introduction of the new single currency to be put into circulation in the third stage of EMU. The Madrid European Council of 15 and 16 December 1995 defined the name of the new currency, the ‘euro’ (with the symbol €), and set out the procedures for the changeover to the single currency, which would be introduced on 1 January 1999 and officially circulated as a currency on 1 January 2002. In the meantime, Austria and Finland entered the ERM on 9 January 1995 and 14 October 1996, respectively, while Italy rejoined the ERM on 25 November 1996. Furthermore, the Luxembourg European Council of 12 and 13 December 1997 endorsed the French proposal for the establishment of the Eurogroup, consisting of the Ministers of Finance of the euro area Member States, the Vice-President of the Commission responsible for economic affairs and the euro and the President of the ECB, which was to be established. The first informal meeting of the Eurogroup of the 11 candidate euro area Member States (see below) was held at the Chateau de Senningen in Luxembourg on 4 June 1998. As a complement to the convergence criteria of the TEU, it was decided, on a proposal from Germany, to establish a Stability and Growth Pact (SGP), which would aim to ensure fiscal discipline in the context of EMU. The pact, at the suggestion of France, would not only address monetary stability but also growth in order to emphasise the importance of a general economic convergence of Member States with a view to growth. Initially, the Florence European Council, held on 21 and 22 June 1996, decided to set the upper limit for the budget deficit at 3% of GDP, which the Member States that would be able to adopt the new currency and join the euro area could not exceed except temporarily and in exceptional circumstances. This limit on the budget deficit was accepted, despite the objections of Germany in particular, which wanted it to be limited to 1%. The Dublin European Council of 13 and 14 December 1996 instructed the Council of Finance and Economy Ministers to determine the sanctions to be imposed on euro-area Member States that breached this limit. The Amsterdam European Council of 16 and 17 June 1997 reached an agreement on the SGP, established within the euro framework the new ERM (ERM II), to which the candidate Member States would join from 1999, and adopted resolutions on growth and employment.

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The provisions of the SGP were laid down shortly afterwards, by two Regulations of 7 July 1997, while the ERM II was created on the basis of the Agreement of 1 September 1998 between the ECB and the central banks of the non-euro area Member States laying down the operating procedures for the exchange rate mechanism in stage three of EMU, amended by the Agreement of 14 September 2000. For the coordination and surveillance of national budgetary policies, the SGP provided that countries joining the euro area should submit an annual ‘stability programme’ before 1 March 1999. The budget deficit could not exceed 3% of GDP, and derogating Member States would have to submit a ‘convergence programme’. Responsibility for monitoring compliance with the programme was given to the Commission. Following a recommendation from the Commission to the Council of EU, the latter took a decision by qualified majority, according to which, if a Member State exceeds the 3% of GDP deficit threshold, the Council of EU will first address a recommendation to it, which will then be made public. If this proves to be insufficient, then sanctions will be imposed, in proportion to the national economy of the Member State, and account will be taken of the case of an economic recession. If the recession is more than 2% of the Member State’s GDP, it will be recognised as an exceptional case and no sanctions will be imposed. In cases of a recession between 2% and 0.75% of GDP, the Council of EU will make an assessment of the severity of the case, while in cases of a recession of less than 0.75%, the Member State will not be able to invoke an exceptional case for not imposing sanctions. The Council of EU will be able to request the Member State to provide additional financial information before issuing bonds and debt securities, to request the EIB to review its lending policy towards the Member State concerned, require the Member State to make a non-interest-bearing deposit until its excessive deficit has been corrected, and finally, impose a fine equal to 0.2% of GDP, increased by one-tenth of the percentage of the excess above 3%, without the fine exceeding 0.5% of GDP in total. However, serious problems in the implementation of the SGP arose in 2003 (see § 10.3.3). As for the form of the new currency, following a competition for the banknote designs, launched by the ENI in February 1996, the winning design was that of Robert Kalina (1955–) of the National Bank of Austria, presented to the Dublin European Council on 13 and 14 December 1996 by ENI President Alexandre Lamfalussy (1929–2015). This was followed by the public selection of the common European side of the coins. The design by Luc Luycx (1958–), of the Belgian National Mint, was chosen and endorsed by the Amsterdam European Council on 16 and 17 June 1997, while each Member State would choose the designs for its own national side (Fig. 9.2). At an extraordinary meeting of the Council of EU on 3 May 1998, it was established that 11 of the 15 EU Member States met most of the conditions for adopting the euro as the new single currency on 1 January 1999. These were Austria, Belgium, France, Germany, Ireland, Spain, Italy, Luxembourg, the Netherlands, Portugal and Finland. Britain, Denmark and Sweden had opted not to participate in the third stage of EMU, while Greece, which had entered the ERM on 16 March 1998 (later ERM II), did not yet fulfil all the convergence criteria. However, the

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Fig. 9.2 Euro banknotes from the first series (The Ages and Styles of Europe) (2002– 2013). Source: Bericht—Own work, https://en.wikipedia. org/wiki/Euro_banknotes#/ media/File:Euro_banknotes,_ First_series.png, Public Domain

finding of convergence included political criteria, given that many of the 11 countries had deficits that were at least slightly above 3% of GDP, while Belgium and Italy had public debt exceeding 60% of GDP. It should be noted that according to the convergence criteria, in order to participate in Stage Three of EMU, Member States had to have a budget deficit of less than 3% of GDP, a government debt of less than 60% of GDP, an inflation rate not exceeding by 1.5% the average of the three best performing Member States with the lowest inflation rate and a long-term interest rate not exceeding by 2% the average long-term interest rate of the three best performing Member States. Furthermore, the Member State’s currency should have participated in the ERM of the EMS for at least 2 years without exceeding the percentage fluctuation margins provided for therein (Fig. 9.3). The EMI was replaced by the ECB, which was established together with the ESCB on 1 June 1998, with its headquarters in Frankfurt, and the exchange rates between the euro and the currencies of the euro area Member States were irrevocably fixed by a Regulation of the Council of EU of 31 December 1998. On 1 January 1999, the euro was formally introduced and the Eurosystem, consisting of the ECB and the central banks of the euro area Member States, assumed responsibility for monetary policy in the euro area. Thus, a transitional period of 3 years began, which would end with the circulation of euro notes and coins and the withdrawal of national notes and coins from 1 January 2002. In the meantime, Denmark joined ERM II on 1 January 1999, while the European Council of Santa Maria da Feira on 19 and 20 June 2000 approved the entry of Greece into the euro area, after a positive recommendation from the Commission, having established that the convergence

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Fig. 9.3 The common side of the euro coins. Source: Vander—Own work, https://commons. wikimedia.org/wiki/File:Euro_coins_line.jpg. Public Domain

criteria had been fulfilled, and Greece became the 12th member of the euro area on 1 January 2001. During the 3-year transition period, the financial and business world was able to use the euro in everyday transactions in an accounting format. National banknotes and coins remained the medium of daily cash transactions as states and citizens gradually adapted their accounting, invoicing and payment systems to the euro, which finally came into circulation on 1 January 2002.

9.2.3

Changes in the Leadership and Appointment of the Commission

The TEU provided that the new European Parliament, which emerged from the European elections of June 1994, was to play an active role in the process of appointing a new Commission. The outgoing President of the Commission, Jacques Delors, since January 1985, had managed during his 10-year term of office to make a decisive contribution to the establishment of the single internal market, to the incorporation of the Social Protocol into the TEU, and to the progress towards the realisation of EMU. In pursuing what he saw as a pragmatic policy, he recognised

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Fig. 9.4 Commission President Jacques Santer. Source: EPP Political Bureau 9 November 2006. Author: European People’s Party. Licensed under the Creative Commons Attribution 2.0 Generic license, https:// commons.wikimedia.org/ wiki/File:Flickr_-_ europeanpeoplesparty_-_ EPP_Political_Bureau_9_ November_2006_(29).jpg (cropped)

that intergovernmental cooperation was insufficient for European integration, while a more federal function could have produced better results. However, some Member States, and Britain in particular, were clearly opposed to Delors’ federalist tendencies and to any apparently greater political influence that the Commission might acquire (Fig. 9.4). At the Corfu European Council, held on 24 and 25 June 1994, France and Germany supported the appointment of Jean-Luc Dehaene (1940–2014), Prime Minister of Belgium, as President of the Commission, but the British Prime Minister, John Major, refused, believing that Dehaene would pursue a federal policy similar to that of Delors. At the extraordinary European Council in Brussels on 15 July 1994, an agreement was finally reached to appoint Jacques Santer (1937–), Prime Minister of Luxembourg, as Commission President, who was more acceptable to Britain. However, in accordance with the provisions of the TEU, the European Parliament had to give its consent to the appointment of Jacques Santer, which was finally given on 21 July 1994. However, the European Parliament also required the Commissioners-designate to appear before it in order to approve their appointment, which was completed after a lengthy procedure on 29 October 1994. Finally, the new Commission was approved by the European Parliament by a large majority on 18 January 1995 and took office on 23 January for the period 1995–2000. However, on 15 March 1999, for the first time in EU history, the entire 20-member Commission resigned, obeying the European Parliament’s demand, following heavy allegations of corruption, scandals and nepotism. Romano Prodi (1939–), former Prime Minister of Italy, became the new Commission President on 16 September 1999.

9.2 The Single Internal Market, EMU and the Agenda 2000

9.2.4

215

Agenda 2000: Regional Policy (Third CSF 2000–2006)

With the Agenda 2000: Towards a stronger and wider Union, presented by the Commission on 16 July 1997, it set out, in a single document, the overall prospects for the development of the EU and its policies, as well as the problems that would arise from its forthcoming enlargement. The Commission identified a number of priorities, in particular the need to maintain economic and social cohesion policy, to strengthen growth and employment and to improve living conditions to allow for the accession of new members, and proposed to make regional policy more effective. In March 1998, the Commission presented legislative proposals in line with its proposal for the Agenda 2000. The Berlin European Council of 24 and 25 March 1999 drew up the necessary guidelines. However, it did not support the Commission’s proposal to maintain regional policy funding for the period 2000–2006 at the same level as the previous period, limiting the total amount to be allocated for this period to just over €205 billion from the Structural Funds and €25.4 billion from the CF. The revision of the Structural Funds regulations was carried out in the same year, following proposals from the Commission, shaping the third CSF for the 2000–2006 period. The European Parliament was involved for the first time in the adoption of the ERDF and ESF regulations under the co-decision procedure. The most important change was the Council of Ministers’ Regulation of 21 June 1999 laying down general provisions on the Structural Funds, which replaced the previous coordination provisions and parts of the implementation provisions. A number of other new Regulations on the Structural Funds and the CF were also adopted. The three objectives foreseen for this period with a total funding of € 232.7 billion, of which 25.4 billion ECU from the CF, are the following: (1) The objective of development and structural adjustment of regions whose growth is lagging behind and whose GDP is below 75% of the EU average. The sources of funding will be the ERDF, the ESF, the EAGGF and the FIFG. (2) The objective of social and economic reconstruction of regions facing structural difficulties, mainly due to unemployment. The sources of funding will be the ERDF, the ESF and the FIFG. (3) The objective of adapting and modernising policies and systems to promote education, training and employment, particularly for women. The source of funding will be the ESF. In addition, 6.5% of the structural funds would be available for Community initiatives taken by the Commission to launch these programmes under these objectives. A division of responsibilities between the Structural Funds, namely the ERDF, the ESF, the EAGGF and the FIFG, and the new basic principles of regional eligibility were also defined. Between May 2000 and April 2004, the Commission adopted decisions on a series of implementing regulations, which set out detailed rules on the use of the euro, information and promotion, eligible expenditure, management and control systems, and financial corrections. The responsibilities of national managing and paying authorities were clarified, and the management of programmes was simplified and accelerated through financial discipline and the ‘”n + 2’” rule. Under this rule, if no proof of payment is provided within 2 years, the budget is lost.

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Agenda 2000: CAP Reform (Fischler I)

According to the Commission’s Agenda 2000, the 1992 CAP reform was inadequate and the support given to farmers favoured the more prosperous regions and their farmers. There were problems due to intensive production methods, with serious consequences both for the environment and for animal and human health, for example, bovine spongiform encephalopathy. In addition, the planned enlargement of the EU required a reform of the CAP to enable the new Member States to adapt to it more quickly and better. Lastly, account should be taken of the results of the Uruguay Round agreement, which provided for a reduction in the granting of income support, although it was possible, by the year 2000, that the granting of income support per hectare and per farmed animal (see § 8.1.2) not to be regarded by the EU’s trading partners as a distortion of international trade competitiveness (see § 8.1.3). However, the new multilateral negotiations within the WTO, which were to start in Seattle in 1999, foreshadowed new changes to the support regime. The Commission’s proposals, drawn up by the Austrian Agriculture Commissioner Franz Fischler (1946–), were presented on 18 March 1998. The aim was to reduce guaranteed prices, the reduction being only partly offset by direct income support for farmers, the cost of which could be shared between the EU and the Member States. At the same time, an integrated rural development support policy should be formulated as Pillar II of the CAP, in order to preserve the diversity of European agriculture, strengthen the social and economic fabric of rural areas and protect the environment. The proposals were discussed at a long meeting of the Council of EU Agriculture Ministers of EU from 22 February to 11 March 1999. Germany aimed at co-financing direct payments to farmers by the EU and the Member States, with a view to reducing the proportion of the budget devoted to agricultural policy. France, on the other hand, on the grounds of the financial solidarity resulting from the CAP, wanted income support for farmers to be paid exclusively by the EU, without the participation of the Member States (Fig. 9.5). Finally, at the Berlin European Council of 24 and 25 March 1999, in the framework of the Agenda 2000, it was decided to reform the CAP for the period 2000–2006 on a limited scale. In particular, it was decided: a) to reduce the guaranteed prices of Pillar I of the CAP for certain agricultural products, such as cereals by 15%, beef by 20%, and butter and milk powder by 15%, while maintaining the quota system for cow’s milk, beef, etc., and b) income support to farmers per hectare and per farm animal was increased to some extent, and no longer counted under Pillar I of the CAP, but under Pillar II, that of rural development, while fiscal discipline measures were also introduced. At the same time, for Pillar II of the CAP, attention was paid to the integrated approach to the rural economy through multi-sectoral development, attention to its environmental dimension and the quality characteristics of the food produced, as well as the importance of the competitiveness of agricultural products.

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Fig. 9.5 Agriculture Commissioner Franz Fischler. Source: Herbert Ortner—Own work, 2006, licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license, https:// commons.wikimedia.org/ wiki/File:Fischler1.jpg (cropped)

9.3

The Treaty of Amsterdam and Its Implications

The TEU itself provided for a review procedure with a review clause contained in Article N of Title VII of the Treaty and provided for the convening of a conference to this end in 1996. The purpose of a new treaty was to create the necessary institutional and political conditions to enable the EU to face future challenges, the main one being the foreseen major enlargement of the EU with new Member States, mainly from Central and Eastern Europe. Another reason for revising the TEU was the way it was received by the citizens of the Member States and the difficulties in ratifying it. The Corfu European Council of 24 and 25 June 1994 decided to set up a Reflection Group, consisting of representatives of the Foreign Ministers of the 15, a representative of the Commission and two representatives of the European Parliament, under the chairmanship of Carlos Westendorp y Cabeza (1937–), Spanish State Secretary for European Affairs. From the first half of 1995, each EU institution drew up a report on the functioning of the TEU, and from June 1995 the Reflection Group devoted itself to analysing the options and identifying areas of concern in preparation for an Intergovernmental Conference. At the same time, each Member State was given the opportunity to submit its own proposals (Fig. 9.6). The required institutional changes focused on the European Parliament’s request for a revision of the budget approval procedures, on institutional issues related to the forthcoming enlargement, which had not been settled even during the fourth enlargement, and on the extension of the scope of the co-decision procedure. It also raised the question of how to make the CFSP, the second pillar of the EU, more effective, at the request of France and Germany, how to improve cooperation in the areas of JHA, the third pillar of the EU, at the request of Belgium, and how to address issues

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Fig. 9.6 Carlos Westendorp y Cabeza, State Secretary of Foreign Affairs of Spain. Source: Josebono.jpg: DoD photo by Helene C. Stikkel. (Released) derivative work: Egs (talk)—Josebono.jpg, https://es.wikipedia.org/wiki/ Carlos_Westendorp#/media/ Archivo:Carlos_Westendorp. jpg. Public Domain (cropped)

relating to security and civil protection, employment, the environment and energy, following concerns raised by Sweden and Finland. Preparations for the Intergovernmental Conference were confirmed at the European Council in Cannes on 26 and 27 June 1995, and the report of the Reflection Group was submitted to the European Council in Madrid on 15 and 16 December 1995, where it was decided to convene an Intergovernmental Conference to review the TEU.

9.3.1

The Intergovernmental Conference

The Intergovernmental Conference formally began its work in Turin on 29 March 1996 with the aim of reaching an agreement. However, the negotiations have not been an easy task because of the divergence of views between the governments of the Member States. The British Conservative government of John Major, following the exceptions it received at the signing of the TEU on the third stage of EMU and social policy, rejected the extension of qualified majority voting in the Council of EU, the inclusion of a chapter on employment, and the strengthening of the WEU in the EU on the grounds that it would adversely affect EU-USA relations. However, the new Labour government of Tony Blair (1953–), from May 1997, showed more flexibility by accepting mainly the new provisions on social policy. Furthermore, despite the initial refusal of the French government of Édouard Balladur (1929–) and the French President François Mitterand, during the 1993–1995 period, to follow the proposals on institutional reform promoted by the German Chancellor Helmut Kohl, with a view to European integration, the new French President Jacques Chirac (1932–2019), from May 1995, managed to come closer to the German proposals. Thus, a series of joint proposals were presented, following cooperation with Member States wishing to improve the functioning of the CFSP, to strengthen the role of the

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Fig. 9.7 French President Jacques Chirac and German Chancellor Helmut Kohl. Source: Originally posted to Flickr by the Central Intelligence Agency, 1995, at https://www.flickr.com/photos/ 59094030@N08/9779541593. Public Domain (cropped)

WEU in the EU and to extend the scope of qualified majority voting. The Nordic Member States were more interested in social and environmental issues. The smaller countries wanted to strengthen the institutions in order to protect their interests from the power of the larger Member States (Fig. 9.7). The report of the Reflection Group presented to the Madrid European Council on 15 and 16 December 1995 identified three areas where concrete action was needed: bringing the EU closer to its citizens, improving and making its institutions more effective in view of the planned enlargement, and improving the EU’s capacity to conduct a common foreign policy. However, the report contained only general guidelines rather than specific proposals. Thus, negotiations were conducted mainly within the group of ministerial representatives, on the basis of the decisions of the Council of Foreign Ministers of EU and the general guidelines of the European Councils. The Commission, which took part in all the negotiations, played a secondary role, while the European Parliament, which was periodically informed, expressed its views through its President at meetings of the Council of EU and the European Council. After 15 months of negotiations at the Florence European Council on 21 and 22 June 1996, the extraordinary Dublin European Council on 5 October 1996, the Dublin European Council on 13 and 14 December 1996, and the informal European Council in Noordwijk on 23 May 1997, agreement was reached at the Amsterdam European Council on 16 and 17 June 1997. Many of the final arrangements were proposed by German Chancellor Helmut Kohl and French President Jacques Chirac in their joint message of 9 December 1996 to the Presidency of the Dublin European Council on 13 and 14 December 1996.

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Excerpts from the Joint Message of 9 December 1996 of Helmut Kohl and Jacques Chirac [. . .] In our view [. . .] we should concentrate our Intergovernmental Conference deliberations on three groups of issues which are of special significance for our shared goal: Internal and external security and institutional reform. [. . .] it is vital in order to gain public support for European integration that we create a common European legal area which guarantees the citizen both greater freedom of movement and enhanced security. [. . .] The “Schengen cooperation”, which is basically open to all EU Member States, could thus be included in the institutional framework of the EU through a protocol to the EU Treaty which would of course only bind participant Member States. [. . .] Decision-making could also be further eased if we basically agreed that in the CSFP an “abstention” will not stand in the way of a decision even in cases where unanimity remains obligatory. Each Member State could, by means of this “constructive abstention”, express its reservations towards certain decisions without hindering joint European action. [. . .] Moreover, we require greater continuity, as well as a “face” and “voice” for the CFSP. Our partners in the world often wonder who their foreign-policy “counterpart” in the EU is. We therefore propose that the Member State governments agree to entrust with this task a person with the necessary political qualification. This person would be responsible to the Council and would report to it at regular intervals and, on request, also to the European Council. [. . .] it is indispensable to further develop the EU’s institutions, particularly against the background of the forthcoming enlargement. [. . .] the Council should as far as possible use qualified majority voting [. . .] The future size of the Commission should [. . .] in any case have fewer members than there are future EU Member States. The authority of the President over his fellow Commissioners should be increased. [. . .] [For the Parliament] we should also examine how to extend the co-decision procedure to other areas.

Source: Nuremberg Franco-German Summit joint letter from M. Jacques Chirac, President of the republic, and M. Helmut Kohl, German Chancellor to M. John Bruton, President if the European council (Paris, Bonn, 9 December 1996. [ON-LINE]. [s.l.]: [05.06.2007]. Disponible sur http://www. ambafrance-us.org/news/statmnts/1997/germany/security.asp

9.3.2

The Signing of the Treaty of Amsterdam

The agreement reached has made it possible to some extent to reform the institutions and improve the functioning of the EU in order to make it more democratic for European citizens and more effective in its preparation for enlargement to the countries of Central and Eastern Europe. The CFSP has also been strengthened to some extent, particular importance has been attached to the creation within the EU of

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an area of freedom, security and justice, the provisions of the Schengen Agreement have been incorporated and a common social policy has been developed without derogations for the Member States. However, given that the progress made since the Treaty of Amsterdam in reforming the EU institutions has been rather limited, the Member States agreed to conduct further negotiations before any further enlargement. The Treaty also introduced for the first time the concept of enhanced cooperation between Member States in individual policies so that those Member States that wish and have the capacity to do so can carry out cooperation that the others do not wish or cannot readily do. But this choice of Member States would be particularly critical as it could create a hard core of strong Member States, which would probably not be open to new Member States, a scenario that worried small Member States and met with Britain’s refusal. It could also contribute to the cooperation of a majority of Member States on a policy that would allow other Member States to join it, as was the case in practice with the implementation of the third stage of EMU. Lastly, it could give rise to a flexible form of many different forms of cooperation between Member States within the EU, with each Member State being free to choose the type and extent of cooperation, thus creating a Europe of multiple options and speeds, i.e. an ‘à la carte’ Europe, which was again a matter of concern for some Member States. The lack of a common approach to the issue of enhanced cooperation prevented its implementation at the entry into force of the Treaty. After a final drafting and minor amendments, the Treaty of Amsterdam was signed by the Foreign Ministers of the Member States on 2 October 1997. Ratifications were easily secured by the 15. Instruments of ratification of the Treaty were deposited in 1998 by Germany on 7 May, Sweden on 15 May, Britain on 15 June, Denmark on 24 June, Finland on 15 July, Austria on 21 July, Italy on 24 July, Ireland on 30 July, Luxembourg on 4 September and the Netherlands on 3 December, while in 1999 by Spain on 5 January, Belgium on 17 February, Portugal on 22 March, Greece on 23 March and France on 30 March. The Treaty entered into force on 1 May 1999.

9.3.3

The Institutional Reforms

Institutionally, the Treaty simplified and extended the co-decision procedures, replacing the cooperation procedures and strengthening the role of the European Parliament. The European Parliament would now have to approve, rather than simply give its opinion, on the appointment of the President of the Commission by the governments of the Member States, which in turn had to consult the European Parliament before appointing new Commissioners. The latter would ultimately be appointed following an agreement between the President of the Commission and the governments of the Member States. Furthermore, with a view to further enlargement of the EU, it was envisaged that the ceiling for the total number of MEPs would reach 700, with no numerical changes to the current figure. In addition, the information of national parliaments on EU activities was improved.

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The role of the Commission was strengthened by the more active role of the European Parliament in the appointment of its President and Commissioners, while the role of the President of the Commission was also strengthened in the appointment of its members and the reorganisation of its services. However, the question of the total number of Commissioners was not resolved, in view of a further increase in the number of EU Member States following the planned major enlargement of the EU. This is because the smaller Member States insisted on having at least one Commissioner, which would have caused problems of coherence and effectiveness for the Commission in the event of a new enlargement. In the Council of EU, the principle of qualified majority voting for the first pillar of the EU was extended to some extent, but the process was made even more difficult by the re-weighting of votes resulting from the increase in the number of EU Member States from 12 to 15, without any change in the method of determining the blocking minority. This made it more difficult to take decisions on the basis of the qualified majority principle, which was sought by Britain, wishing to weaken the supranational character of the EU, and by Spain, which would thus more easily oppose any attempt to reduce regional aid. In addition, any enlargement of the EU with new Member States would make this problem even greater, due to the possible clustering of any group of small Member States, which would easily create a blocking minority. Finally, the role of the Court of Auditors was strengthened, and the role of the Court of Justice was clarified in areas such as fundamental rights and certain aspects closely related to the EU’s internal security. It is clear that the new Treaty of Amsterdam has not resolved key institutional issues of the EU. A protocol annexed to the Treaty provided that the Commission would include one Commissioner from each Member State, provided that the weighting of votes in the Council of EU was modified in a way acceptable to all Member States, and in view of a new enlargement, a more extensive reform would be required, to be implemented at least a year before the accession of new Member States to the EU, bringing the total number of Member States to over 20. Therefore, a possible reform of the institutions would only take place during the EU enlargement process and not before. It is therefore understandable that the governments of Belgium, France and Italy, at the signing of the Treaty on 2 October 1997 in Amsterdam, issued a statement calling for a new reform as a necessary condition for future enlargements.

9.3.4

The Community Provisions of the Treaty of Amsterdam

At the economic level, and within the framework of the EU’s first pillar, procedures have been proposed to extend the scope of the common commercial policy to include international agreements on services and intellectual property rights. In order to respond to citizens’ concerns, the Treaty strengthened policies on the environment, health and consumer protection and emphasised sustainable development.

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Particular attention was given to the area of relations between the EU and its citizens, with explicit reference to human rights and the principles of freedom, democracy and the rule of law. Compliance with these is a prerequisite for any candidate country for EU membership, and failure to comply with them is a possible cause for sanctions. Furthermore, the Treaty provided for the right of access for all citizens to the documents of the EU institutions and to communicate with them in their own language. The Treaty also clarified the concept of European citizenship, explicitly stating that it does not replace national identity but complements it, and allowed for the promotion of the free movement and residence of its holders in the EU Member States, through the integration of the Schengen Agreement into the European acquis. The Treaty included a chapter on employment, providing a comparison of the prevailing situation in the Member States, and another on the introduction of incentives for employment. The Social Protocol, which was adopted by Member States other than Britain when the TEU was drawn up, was incorporated into the treaty after its acceptance by Tony Blair’s new Labour government in Britain. But the treaty was limited to setting out general principles for promoting employment, social protection, combating social exclusion from the labour market, strengthening equal treatment of men and women, improving living and working conditions. The Member States retain their competence in these areas, given the existing specificities in these areas, despite the definition of common strategies for employment and the coordination of the respective national policies. However, with the momentum generated by the Treaty, an Extraordinary European Council on Employment was convened on 20 and 21 November 1997 in Luxembourg, where the European Employment Strategy (EES) was agreed and the pillars of an active and proactive employment policy were drawn up. The envisaged coordination of national employment policies was intended to commit Member States to a common set of goals and objectives around the four pillars of the EES: (a) employability, (b) entrepreneurship, (c) adaptability and (d) equal opportunities.

9.3.5

Further Institutionalisation of the CFSP

Little progress was made in the second ‘pillar’ of the European Union, where the CFSP remained intergovernmental. Although it was hoped that this pillar could be strengthened to enable the EU to play a greater role on the international scene, only minor modifications have been made to improve its capacity for action. The Treaty partially revised the TEU by further institutionalising the CFSP, while a compromise was again adopted on CFSP and NATO cooperation so that any EU action related to its defence policy would not threaten the cohesion of the North Atlantic Alliance. Thus, no decision was taken on the further upgrading of the EU’s military component, mainly due to the opposition of Britain and Denmark, who did not want the EU to leave the NATO framework, but also due to the attitude of some neutral Member States, which did not want the EU to be involved in military operations. Significant changes in the structure and functioning of the WEU and its relationship with the EU

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would take place shortly afterwards, in 1999, in the attempt to establish a meaningful European Defence and Security Policy (see § 9.3.9). The post of High Representative for the CFSP was established and the Planning and Early Warning Unit was set up so that the coherence of this common policy could be clearly expressed. The common will of the Member States to protect the EU’s borders and the security of citizens was also expressed, and the Petersberg missions were promoted to undertake humanitarian aid and peace-building actions in accordance with the principles of the United Nations Charter, the Helsinki Final Act and the objectives of the Charter of Paris. Furthermore, the procedures for financing the CFSP have been simplified. To facilitate decision-making in the CFSP, the practice of ‘constructive abstention’ has been introduced so that those Member States that do not wish to adopt a decision can abstain from voting without hindering its adoption and implementation. However, the unanimity rule continued and would only marginally be affected by the practice of ‘constructive abstention’. The exercise of the right of veto remained, even for any implementing measures adopted by qualified majority.

9.3.6

Changes in the JHA Sectors

A decisive step forward towards the creation of a single area of freedom, security and justice (see § 9.3.7) was taken with the incorporation of the Schengen Agreement into the European acquis through the Treaty of Amsterdam. However, this integration also brought about certain changes in the objects of the first and third pillars of the EU. Thus, responsibilities for visa policy, asylum, immigration and judicial cooperation in civil matters have been transferred to the first pillar, except for criminal law, which remained in the third pillar. The purpose of this change was to achieve the EU’s primary objective of creating an area of freedom, security and justice within the framework of Community policy. However, this change raised questions in the interpretation of the conventional notion of national sovereignty of the Member States, resulting in a search for an acceptable balance between a Community practice applied in the first pillar and an intergovernmental cooperation that was a modus operandi of the EU’s third pillar. The third pillar was limited to judicial cooperation in criminal law matters and police cooperation, which could not be transferred to the Community area of the first pillar. However, even this cooperation could not be carried out under a simple intergovernmental management, since the establishment of clear objectives for these areas required coordinated action by the Member States. The Treaty took account of the Convention establishing EUROPOL, signed by the Council of EU on 26 July 1995 (see § 8.4.11) and set out more clearly the general framework for police and judicial cooperation in criminal matters, providing for the adoption of legislation with common elements for the Member States relating to organised crime, terrorism and drug trafficking. The decision-making process in police and criminal matters would no longer be strictly intergovernmental. The Council of EU would continue to decide by unanimity, but the Commission would be given the

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right of initiative equivalent to that of the Member States, and the European Parliament would henceforth be consulted.

9.3.7

The Single Area of Freedom, Security and Justice (AFSJ)

Particular progress was made through the Treaty of Amsterdam in the field of the protection of citizens with the decision to create a single Area of Freedom, Security and Justice (AFSJ). To this end, the guarantees provided for the protection of citizens’ fundamental rights within the EU, relating to the elimination of social discrimination, gender equality, the processing of personal data, visas, asylum, immigration and other policies related to the free movement of persons, police and judicial cooperation in criminal matters, within the single internal market, and the conditions for the integration of the provisions of the Schengen Agreement, were first clarified. The political will to strengthen this single AFSJ was expressed by the Prime Minister of Spain, Jose Maria Aznar (1953–), in October 1998. In this context, the Commission presented proposals, the European Parliament adopted resolutions, and the Vienna European Council of 11 and 12 December 1998 drew up an action plan listing the measures to be taken within 2–5 years of the entry into force of the Treaty of Amsterdam. The Tampere European Council in Finland, held on 15 and 16 October 1999, made internal security one of the main priorities of the EU, with the full and immediate implementation of the Treaty of Amsterdam, and with a view to a Common European Asylum System (CEAS), drew up the Tampere Programme for the period 2000–2004, with the aim of developing a common European policy on asylum and immigration and creating a European area of justice by ensuring mutual recognition of civil and criminal laws and easier access to justice for European citizens. It also sought to strengthen the EU in the fight against crime through EUROPOL and the creation of EUROJUST, a judicial organisation to coordinate investigations into organised crime and by harmonising the criminal law of the Member States. Finally, decisions were taken on the procedures for drawing up a Charter of Fundamental Rights of the European Union.

9.3.8

Integration of the Schengen Agreement into the European Acquis

The first attempt to draw up a convention on the ‘external borders’ of the EC was made in June 1991, with the aim of defining the external territorial, maritime and air borders of the Community, clarifying the nature of the border controls to be carried out between Member States and establishing rules on visas for entry into the EC area that would apply to all Member States. However, such an agreement was not signed after Spain raised the issue of Gibraltar’s territorial status. Immediately after the collapse of the communist regimes in Central and Eastern Europe, the increase in the

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number of asylum seekers created a major problem for Germany, which alone received half of the refugees hosted in EC Member States. German Chancellor Helmut Kohl expressed the view that asylum and migration issues should be the responsibility of the EC. The signing of the Schengen Agreement on 14 June 1985 (see § 7.3.3) created the ‘Schengen area’ of free movement of persons for five Member States, Belgium, France, Germany, Luxembourg, Germany and the Netherlands. On 19 June 1990, the Convention Implementing the Schengen Agreement established the practical implementation of the abolition of internal border controls in the EU, which entered into force on 26 March 1995, although it was planned to be implemented from 1 January 1993. This was because major problems arose that required temporary derogation clauses, as in the case of Italy and Greece, due to the difficulties encountered in controlling their maritime borders and the case of France, which cited the terrorist attacks during 1995 and the problems of drug trafficking originating in the Netherlands, through its borders with Belgium and Luxembourg. The Schengen Agreement also introduced a series of necessary measures to strengthen external border controls, establish procedures for issuing uniform visas, take action to combat drug smuggling and create the Schengen Information System (SIS) for the exchange of information between Member States. The Schengen area was gradually expanded to include all the then EU Member States, until 1996, with the exception of Britain and Ireland. In addition, Iceland and Norway, which had been members of the Nordic Passport Union since 1957 together with Denmark, Sweden and Finland, signed a special agreement to participate in the Schengen Agreement with the other 13 EU Member States. This facilitated the free movement of persons, which was an element of the first pillar of the EU, and brought about closer cooperation in the areas of police and judicial cooperation between the Member States, which were elements of the third pillar of the EU. Although the Schengen Agreement was incorporated into the EU acquis through the Treaty of Amsterdam, Britain and Ireland, by a special protocol annexed to the Treaty of Amsterdam, acquired the right to maintain border controls and to opt out of the new Community policies on visas, asylum, immigration and other policies related to the free movement of persons, which would now form part of the first pillar of the EU. It became clear, however, that any future participation of the two states in these policies would not allow them to exercise the right of veto. Furthermore, Denmark, which joined the Schengen area and accepted the intergovernmental cooperation provided for in the Treaty, was given the possibility, by means of a specific protocol, to opt out of participation in the Community policies on visas, asylum, immigration and judicial cooperation in civil matters under the third pillar, which were transferred to the first pillar of the EU. However, in order to avoid a possible increase in the number of EU Member States with a special status with regard to the provisions of the Schengen Agreement resulting from future enlargements of the EU, the Amsterdam Treaty stipulates that the Schengen Agreement is an acquis to be accepted in its entirety by all EU candidate countries.

9.3 The Treaty of Amsterdam and Its Implications

9.3.9

227

The Establishment of a European Security and Defence Policy (ESDP)

Since the Treaty of Amsterdam, particular emphasis has been placed on the defence aspect of the CFSP field. The NATO Council in January 1994 recognised the importance of defining a specific European identity in the field of security and defence, as a European pillar within NATO, to deal with crises in Europe in which the United States would not wish to intervene. This process began to be implemented at the NATO Council in Berlin on 3 June 1996, which launched the development of the European Security and Defence Identity (ESDI) within the North Atlantic Alliance, with the link between NATO and the EU being reactivated since 1984 WEU. In this way, the WEU would become an effective military organisation, while recognising the primacy of the North Atlantic Alliance. Britain’s non-participation in the third stage of EMU, which would probably lead to its marginalisation, seems to have prompted British Prime Minister Tony Blair to take the initiative to establish closer and more effective EU defence cooperation. In a memorandum to the informal European Council in Portschach, Austria, on 24 and 25 October 1998, the British Prime Minister referred to this issue, without, however, challenging NATO’s dominant position in this area. These positions were also reflected in the joint Declaration on European Defence made by British Prime Minister Tony Blair and French President Jacques Chirac at the Franco-British summit in Saint-Malo on 3 and 4 December 1998, in which they stressed that EU in order to play a more active role internationally, it should have its own substantial military forces to deal with international crises, whenever NATO was not involved. The subsequent Vienna European Council of 11 and 12 December 1998 welcomed the initiative for a European security and defence policy within the framework of the EU and the WEU. A similar stance was taken at the NATO 50th Anniversary Summit in Washington DC on 23 and 24 April 1999, where NATO and EU relations were reshaped by allowing the EU access to the North Atlantic Alliance’s planning (Fig. 9.8). The EU’s inability to intervene decisively in the Kosovo incidents forced the subsequent Cologne European Council of 3–4 June 1999 to transfer some of the functions and responsibilities of the WEU to the EU side, by transferring responsibility for the European Security and Defence Policy (ESDP), which has since been established, to the Council of EU, so that it became the operational arm of the CFSP, with the most important operational responsibility being the undertaking of Petersberg missions, which had previously been the responsibility of the WEU. It also appointed Javier Solana (1942–), former Foreign Minister of Spain and then Secretary General of NATO, as Secretary General of the European Council—a position that would make him High Representative of the CFSP—and proposed that the Defence Ministers of the Member States should also participate in certain meetings of the General Affairs Council, i.e. the Council of Foreign Ministers of EU. The same European Council also received the Franco-German proposal to make the European Military Corps (Eurocorps) of the EU (see § 8.4.9) available to the ESDP. The first joint meeting of Foreign and Defence Ministers in a General Affairs

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Fig. 9.8 Javier Solana, Secretary-General of the European Council. Source: DoD photo by R. D. Ward— http://www.pentagon.gov/ photos/Sep1999/990923-D9880W-080.html and https:// en.wikipedia.org/wiki/Javier_ Solana#/media/File:Javier_ Solana_1999.jpg. Public Domain (cropped)

Council took place on 15 November 1999, and on 20 November 1999, the High Representative of the CFSP also took over as Secretary General of the WEU. Shortly afterwards, at the Helsinki European Council on 10 and 11 December 1999, with the adoption of the Headline Goal 2003, tendencies towards autonomy from NATO’s primacy were revealed by the decision to establish a European Rapid Reaction Force (ERRF) of the EU, which stated that ‘Member States, cooperating voluntarily in EU-led operations, should be able by 2003 to deploy within 60 days and support for at least one year military forces of up to 50–60.000 personnel capable of the full range of Petersberg missions’, as well as the definition of the institutional framework for the ESDP, with the establishment of institutions for its functioning, such as the Political and Security Committee (PSC), which would exercise political control, the Military Committee, which would exercise military command, and the Military Staff, which would provide military expertise. These developments highlighted trends towards the absorption of the WEU into the EU and raised concerns within NATO about the possibility of EU military autonomy. These concerns had already been expressed by the USA, following the Cologne European Council of 3–4 June 1999, as fears of delinking, duplicating and discriminating (known as the 3 D’s). Thus, at the European Council in Santa Maria da Feira on 19 and 20 June 2000, the relationship between the EU’s ESDP and NATO in the field of crisis management was more clearly defined, to be governed by cooperation and respect for the EU’s autonomy (see § 10.3.5). It should be noted that Eurocorps, which had begun its active presence as a European Military Corps in 1992, took up action in Kosovo by decision of the NATO Council on 28 January 2000. From April to October 2000, some

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350 Eurocorps soldiers formed the core of the Kosovo Force (KFOR) based in Pristina and Skopje.

9.4

Developments After the End of the Cold War

The end of the Cold War created the conditions for the formation of a new geopolitical situation in Europe. The CSCE, despite its contribution to bringing Central, Eastern and Western Europe states closer together, had to be transformed into an organisation with permanent structures so that it could better fulfil its purpose, adapting to the new political and economic realities. This transformation was launched at the Budapest CSCE in December 1994. The emergence of new states in Central and Eastern Europe, sometimes peacefully and sometimes after bloody conflicts and nationalist outbursts, has been one of the characteristics of the first post-Cold War era. A memorandum of understanding was signed between Moldova and Transnistria to normalise relations between them. However, in the Kosovo region of New Yugoslavia, in the late 1990s, a new hotbed of conflict emerged, driven by the separatist tendencies of the Albanian-speaking Kosovars in the region and New Yugoslavia’s refusal to accept a new secession of its territory. At the same time, the need to organise the old and new states of Central Eastern Europe and the former USSR so that they could face the new challenges arising from their political, economic, trade and defence relations with the rest of Europe, as well as the prospect of some of them joining the EU, caused the emergence of new organisations of states within the CIS, in the Baltic region, as well as in Central Eastern Europe, with a particular European interest. It should be noted that the European PHARE and TACIS programmes continued during this period. The TACIS programme, which covered the period 1991–1999, took a sectoral form since the technical and financial assistance it provided was intended mainly for the restructuring of businesses and human resources and for the safe use of nuclear energy. For the period 2000–2006, the ISPA, SAPARD and CARDS programmes were added from 1999 (see § 10.5.1) (Fig. 9.9). Fig. 9.9 Boris Yeltsin at a press conference with American President Bill Clinton in 1995. Attribution: www.kremlin.ru. Licensed under the Creative Commons Attribution 3.0 Unported license, https://es.m. wikipedia.org/wiki/Archivo: Boris_Yeltsin_with_Bill_ Clinton-1.jpg

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The Transformation of the CSCE into an Organisation

Despite the fact that the CSCE contributed to the détente between the two coalitions and played an important role in the respect of human rights and fundamental freedoms, it remained a conference that took consensual decisions at periodic conferences, which were not binding in practice. Thus, at the Fourth CSCE Budapest Conference on 5 and 6 December 1994, it was decided to transform the CSCE into the Organization for Security and Cooperation in Europe (OSCE), as of 1 January 1995, with its institutions being the Council of Foreign Ministers, the Parliamentary Assembly, the Secretariat, the Conflict Prevention Centre and the Office for Democratic Institutions and Human Rights. The OSCE would act as a regional organisation for the safeguarding of security, peace, democracy, human rights and cooperation in Europe, preventing crises and intervening when they occur. It would include as Member States the states created by the break-up of the USSR and Yugoslavia, the other European states, the USA and Canada. In this context, the OSCE was given the task of monitoring the implementation of the Stability Pact in Europe, with a focus on South-Eastern Europe. This Pact was adopted on 21 March 1995 in Paris as an EU initiative, proposed by the Brussels European Council on 29 October 1993, aimed at promoting stability and peace in Europe, focusing on minority problems and regional cooperation. The fifth summit—and the first of the OSCE—was held on 2 and 3 December 1996 in Lisbon, where was adopted the Lisbon Declaration as the Common and Integrated Model for Security in Europe in the Twenty-First Century. Three years later, on 18 and 19 November 1999, the sixth OSCE summit was held in Istanbul, where the Istanbul Declaration was adopted and the Charter for European Security was signed as a manifestation of the participants’ comprehensive and firm commitment to a free, democratic and secure coexistence of individuals and communities of the OSCE Member States. Today, the OSCE, with 57 Member States, handles the practice of preventive diplomacy, crises and conflicts that are on the horizon or in progress, as happened in the Kosovo war in 1999. Its intervention in security matters has the advantage of not provoking reactions due to the lack of military means of enforcing its decisions and recommendations, unlike NATO, which bears the burden of its pre-USSR dissolution status. Russia, in fact, sought as early as 1996 to transfer many security issues to the OSCE agenda in order to avoid them becoming NATO’s responsibility. However, in major crises, the OSCE proves inadequate, given its limited powers and the lack of means of enforcing its decisions. Nevertheless, in times of peace, it has the potential to create conditions for improving relations between its Member States.

9.4.2

Developments on the Transnistria Issue

Since 21 July 1992, with the signing of the ceasefire agreement between the Transnistrian and Moldovan separatists, a regime of ‘frozen conflict’ has been

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consolidated. As part of this agreement, a tripartite Joint Control Committee with representatives from Russia, Moldova and Transnistria oversaw security arrangements in the demilitarised zone, which includes 20 locations on both sides of the Dniester River. However, the status of Transnistria remained unresolved. The OSCE, in its effort to facilitate a negotiated settlement, helped secure the signing on 8 May 1997 of the agreement between the President of Moldova Petru Lucinschi (1940–) and the President of Transnistria Igor Smirnov (1941–), the Memorandum on the principles of normalization of relations between the Republic of Moldova and Transnistria, also known as the ‘Primakov Memorandum’, after the name of the Russian Foreign Minister who contributed to this rapprochement, Yevgeny Primakov (1929–2015). The two parties reaffirmed the 1992 ceasefire and asked Russia, Ukraine and the OSCE to continue their mediation efforts. However, the provisions of the memorandum were interpreted differently by the Moldovan and Transnistrian governments.

9.4.3

The War in Kosovo

Already in the early 1990s there had been riots by Albanians in the Kosovo region, which were violently suppressed by the Yugoslav government. In July 1992, a referendum was held in the region, in which the Republic of Kosovo proclaimed itself, with Ibrahim Rugova (1944–2006) as president, but without being recognised by any other state. Over the next 3 years, tensions in the region continued, and in 1995, at the conclusion of the Dayton Peace Agreement, which ended the war in Bosnia and Herzegovina, the issue of Kosovo was not discussed. This fact undermined Rugova’s credibility among the Albanian inhabitants of Kosovo and favoured the emergence of the secret Kosovo Liberation Army (KLA, Ushtria Çlirimtare e Kosovës, UÇK), a nationalist Albanian rebel group that took armed action. By the summer of 1998, this group had managed to effectively control at least a quarter of the region, leading the Yugoslav army and the Serbian military forces to take action, displacing more than 200,000 Albanians from their areas of residence, without overlooking the extremes of the UÇK rebels, at the expense of the Kosovo Serb’s minority. Faced with a UN ceasefire resolution and NATO threats of air strikes, Serbian President Slobodan Milosevic agreed to withdraw part of his troops from Kosovo and allow an OSCE inspection mission to come to Kosovo. However, the ceasefire did not last long and fighting resumed in December 1998. The massacre of Kosovar Albanians in Racak in January 1999 again focused the attention of the international community on the region. The warring parties were invited to Rambouillet, France, for negotiations in March 1999. However, negotiations broke down on 20 March when the Serbs rejected the proposed agreement, which provided for the restoration of Kosovo’s autonomy and the deployment of NATO peacekeeping forces in the region.

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From 24 March to 10 June 1999, NATO launched air strikes against Yugoslavia to drive Serbian forces out of Kosovo. However, this military action was not authorised by the UN Security Council and was therefore contrary to the provisions of the UN Charter. NATO argued that it was designed to ensure the provision of humanitarian assistance to the people of Kosovo and to help repel an armed attack, so no such approval was required. During the conflict, around one million Albanians fled their homes in Kosovo, and there were thousands of dead and missing persons. Finally, in June, Milošević, who had assumed the presidency of Yugoslavia in 1997, agreed to withdraw his troops from Kosovo and accept the presence of peacekeeping troops in the region. Thus, on 10 June 1999, by a UN Security Council resolution, Kosovo was placed under a UN interim administration, UNMIK (United Nations Interim Administration Mission of Kosovo), while the security of the region was taken over by the Kosovo Force (KFOR), a NATO special military force. In May 1999, the International Criminal Court began prosecuting crimes committed during the Kosovo war against Serb and Yugoslav politicians and soldiers, including Milošević, as well as Albanian UÇK rebels, many of whom were convicted, and Milošević himself died in 2006 before he could hear the verdict of the trial (Fig. 9.10).

Fig. 9.10 Portuguese soldiers of KFOR in Kosovo. Source: AgrCHARLIE, pool fotográfica de Utad3.—Agrupamento CHARLIE/BLI: batalhão do Exército Português (TF Pegasus) integrado na Missão de Imposição de Paz da KFOR/NATO. https://commons.wikimedia.org/wiki/File: AgrCHARLIE_KFOR_P5250031.jpg. Public Domain

9.4 Developments After the End of the Cold War

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Establishment of Bodies of European Interest in the Context of the CIS

Despite the differences within the CIS, a Collective Security Treaty (CST) was signed in Tashkent, Uzbekistan, on 15 May 1992 by Armenia, Kazakhstan, Kyrgyzstan, Uzbekistan, Russia and Tajikistan. It was followed by Azerbaijan, which signed the treaty on 24 September 1993, Georgia on 9 December 1993 and Belarus on 31 December 1993. The treaty entered into force on 20 April 1994 for a period of 5 years, with a view to its renewal, and aspired to become the military power of the CIS. The purpose of the CST was to combat terrorism and organised crime. However, Azerbaijan, Georgia and Uzbekistan did not renew their participation in it after the expiry of the 5-year period in 1999. On 7 October 2002, the Presidents of Armenia, Kazakhstan, Kyrgyzstan, Belarus, Russia and Tajikistan signed the Charter of the Collective Security Treaty Organisation (CSTO) in Tashkent, as a development of the CST, with each Member State rotating the annual chairmanship. Uzbekistan, yielding to Russian pressure, rejoined the CSTO on 23 June 2006, with a view to leaving it in 2012, which it did on 28 June of that year. On 4 February 2009, an agreement was reached on the establishment of a Collective Rapid Reaction Force, without the participation of Belarus and Uzbekistan. However, Belarus accepted its participation in it the following October. The Collective Rapid Reaction Force was intended to repel any military aggression, fight terrorism, international crime and drug trafficking, and respond to natural disasters. However, during the June 2010 ethnic clashes between Uzbeks and Kyrgyz in southern Kyrgyzstan, the CSTO did not intervene, considering the issue an ‘internal affair’ of the CIS. An informal political cooperation in many areas between Georgia, Ukraine, Azerbaijan and Moldova was launched with the GUAM Consultative Forum, from the Latin initials of the four states, on 10 October 1997 in Strasbourg. In 1999, the organisation was renamed GUUAM due to the participation of Uzbekistan. At the Five States Summit in Yalta on 6 and 7 June 2001, the statutes of the organisation were signed, formalising its existence. However, in 2002, Uzbekistan announced its intention to withdraw from the organisation, which it finally did on 24 May 2005, shortly after a bloody repression of a demonstration by the country’s security forces in the city of Andijan. At the Kiev summit on 23 May 2006, it was announced that the organisation would be renamed GUAM Organization for Democracy and Economic Development, with its headquarters in the Ukrainian capital. Given Russia’s primacy in the CIS, the GUAM Organization for Democracy and Economic Development is sometimes seen as a way of countering Russian influence in the region, although GUAM has repeatedly rejected these claims and states its willingness to develop close relations with Russia. Finally, as of 15 April 1994, all CIS Member States except Turkmenistan initially agreed in Moscow to create a free trade area. The final agreement was reached in 2009, with the conclusion of a CIS Free Trade Agreement (CISFTA) from 2011. The

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agreement was signed in St. Petersburg on 18 October 2011 by seven of the CIS member states, Armenia, Kazakhstan, Kyrgyzstan, Belarus, Moldova, Russia and Tajikistan, as well as by Ukraine, which has not ratified the CIS Charter. It was not signed by the official CIS member states Azerbaijan and Uzbekistan, as well as by Turkmenistan, which has not ratified the CIS Charter. The agreement provided for the elimination of tariffs on certain goods, as well as certain exemptions that would be phased out. However, a problem in the implementation of the agreement is the corruption and bureaucracy that existed in CIS countries.

9.4.5

Establishment of Bodies of European Interest Outside the CIS

The Baltic Free Trade Agreement (BAFTA) was a free trade agreement between Estonia, Latvia and Lithuania, created to help prepare these countries for EU membership. It was signed on 13 September 1993 and entered into force on 1 April 1994, as a first form of customs union, but did not extend to agricultural, food and fishery products. The EU itself helped draw up this agreement so that these states could gain access to European markets. From 1 January 1997, the agreement was extended to cover trade in agricultural, food and fishery products. With the accession of the three Baltic States to the EU on 1 May 2004, the BAFTA ceased to exist. One of the objectives of the Visegrad Group (see § 8.6.3) was to stimulate trade between the Member States of the group. To this end, the Central European Free Trade Agreement (CEFTA) was signed at the Visegrad Group summit in Krakow on 21 December 1992 and entered into force on 1 March 1993. As a transitional organisation of states, the CEFTA was intended to prepare its Member States for full EU membership by gradually introducing parliamentary political systems and free market rules. A large proportion of the external trade of the CEFTA Member States was with EU Member States. This free trade area was gradually extended to include countries of South-Eastern Europe. Slovenia joined in 1996, Romania in 1997, Bulgaria in 1998 and Croatia in 2003. Following their accession to the EU on 1 May 2004, the four Visegrad Group Member States, i.e. Hungary, Poland, Slovakia and Czechia together with Slovenia, withdrew from the CEFTA. Bulgaria and Romania left the CEFTA on 1 January 2007, when they also joined the EU. Thus, on 19 December 2006, the new CEFTA 2006 Agreement with new South-Eastern European Member States was signed and entered into force in 2007, on 26 July for Albania, Kosovo, FYROM, Moldova and Montenegro, on 22 August for Croatia, on 24 October for Serbia, and on 22 November for Bosnia and Herzegovina. Croatia left the CEFTA 2006 on 1 July 2013, when it joined the EU. Notably, Kosovo, which joined the CEFTA 2006 in 2007, was represented by UNMIK, which continued to represent it even after its declaration of independence on 17 February 2008.

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References Buti, M., Eijffinger, S., & Franco, D., Revisiting EMU’s Stability Pact: A Pragmatic Way Forward. Oxford Review of Economic Policy, 19(1), 100–111, 2003. http://www.jstor.org/stable/2360 6946. Communication COM(97) 2000 final - Agenda 2000: For a stronger and wider Union, Commission of the European Communities, Brussels, 15 July 1997. CVCE, The role of the CIS, 2023, https://www.cvce.eu/en/collections/unit-content/-/unit/df0651 7b-babc-451d-baf6-a2d4b19c1c88/85a0d837-3992-4a63-b411-f36727d07f70. EUR-Lex, Access to European Union Law, Stability and Growth Pact, https://eur-lex.europa.eu/ EN/legal-content/glossary/stability-and-growth-pact.html. European University Institute, Historical Archives of the European Union, The contribution of the European Parliament to European project as seen by the actors inside the Parliament and beyond (1979-2019) - The Fall of the Santer Commission (part 1), https://blogs.eui.eu/soft-law/the-fallof-the-santer-commission-part-1/. Maraveyas, N., Developments in the Common Agricultural Policy and Greek Agriculture (in Greek Language), Sakkoulas, Athens - Komotini, 2003. Nuremberg Franco-German Summit joint letter from M. Jacques Chirac, President of the republic, and M. Helmut Kohl, German Chancellor to M. John Bruton, President if the European council (Paris, Bonn, 9 December 1996. http://www.ambafrance-us.org/news/statmnts/1997/germany/ security.asp. Official Journal of the European Communities 10.11.1997, No C 340, Treaty of Amsterdam, “Treaty of Amsterdam amending the Treaty on European Union, the Treaties establishing the European Communities and certain related acts”, Amsterdam, 2 October 1997. Omblus, J., Free Trade Agreements in the Transition of the Estonian Economy. Russian & East European Finance and Trade 32, no. 5 (1996): 5–15. http://www.jstor.org/stable/27749123. CEFTA, Central European Free Trade Agreement, https://cefta.int/ Sapiro, M., Changing the CSCE into the OSCE: Legal Aspects of a Political Transformation. The American Journal of International Law 89, no. 3 (1995): 631–37. https://doi.org/10.2307/ 2204183. Treaty concerning the accession of the Republic of Austria, the Kingdom of Sweden, the Republic of Finland and the Kingdom of Norway to the European Union, Official Journal of the European Communities, 29.08.1994. Urse, C., (n.d.) Solving Transnistria: Any Optimists Left? Connections, Vol. 7, No. 1 (Spring 2008), pp. 57-75 (19 pages), https://www.jstor.org/stable/26323320 Webber, M., The Kosovo War: A Recapitulation. International Affairs (Royal Institute of International Affairs 1944-) 85, no. 3 (2009): 447–59. http://www.jstor.org/stable/27695024.

From the Treaty of Nice to the Fifth and Sixth Enlargements (1999–2007)

10.1

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The Treaty of Nice

The dawn of the twenty-first century brought to the fore the challenge of the forthcoming major enlargement of the EU and the need to resolve institutional issues that had not been resolved by the Treaty of Amsterdam. After all, the Treaty of Amsterdam itself provided for this necessity in the event of an enlargement that would bring the total number of Member States to over twenty. Moreover, in addition to the relevant provision of the Treaty of Amsterdam, Belgium, France, and Italy stressed in an official declaration when the Treaty was signed on 2 October 1997 that strengthening the institutions “is a necessary condition for the conclusion of the first accession negotiations”. The Cologne European Council of 3 and 4 June 1999 confirmed the need to convene an Intergovernmental Conference to resolve the institutional issues that had not been settled in Amsterdam prior to enlargement (Fig. 10.1). The preparatory work for the Intergovernmental Conference began in October 1999 with the publication of the report on the institutional changes required as a result of enlargement, drawn up at the request of Commission President Romano Prodi by a group of experts chaired by Jean-Luc Dehaene. The Helsinki European Council of 10 and 11 December 1999 listed the issues to be examined by the Intergovernmental Conference, namely the size and composition of the Commission, the weighting of votes in the Council of EU, and the extension of the qualified majority voting system, leaving open the possibility of including other issues on the agenda. Following the Dehaene report, on 26 January 2000 the Commission adopted a document on this subject entitled Adapting the institutions to make a success of enlargement, and the European Parliament submitted similar proposals on 3 February 2000 (Fig. 10.2).

# The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 P. Liargovas, C. Papageorgiou, The European Integration, Vol. 1, Springer Texts in Political Science and International Relations, https://doi.org/10.1007/978-3-031-47776-8_10

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Fig. 10.1 Commission President Romano Prodi. Source: GhePeU—cropped detail of the original picture Prodi Heiligendamm G8 2007 001.jpg, uploaded by Gryffindor, https://commons. wikimedia.org/wiki/File: Prodi_Heiligendamm_ G8_2007_001_crop.jpg. Public Domain (cropped)

Fig. 10.2 Jean-Luc Dehaene, former Prime Minister of Luxembourg. Source. Author: Michiel Hendryckx. File:Cvp premiers 675.jpg, licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license, https:// commons.wikimedia.org/ wiki/File:Deheane_cropped. jpg (cropped)

10.1.1 The Intergovernmental Conference The Intergovernmental Conference was launched in Brussels on 14 February 2000 under the Portuguese Presidency, in consultation with the Commission and the European Parliament. At the European Council in Santa Maria da Feira on 19 and 20 June 2000, the issue of enhanced cooperation was added. Since July 2000, the

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Intergovernmental Conference has continued its work under the French Presidency. In any case, the French Presidency wished to avoid extending the discussions in the IGC to areas relating to the future and nature of the EU after the forthcoming major enlargement, which could cause divisions and delays. Its aim remained to conclude the negotiations strictly within the framework of the agreed issues, without any dependence on the overarching perspective for European integration. At the informal European Council in Biarritz on 13 and 14 October 2000, significant progress was made. In particular, the large Member States agreed to participate in the Commission with only one Commissioner instead of two, so that the smaller Member States could also participate with one Commissioner for reasons of prestige, without significantly altering the required flexibility of the Commission. Furthermore, the number of Member States that could enter into enhanced cooperation, introduced by the Treaty of Amsterdam, has been fixed, without constituting a numerical majority of Member States, as originally envisaged. Finally, 11 months of negotiations on the “Amsterdam leftovers” were concluded with the drafting of the Treaty of Nice, which was finalised at political level during the Nice European Council, the longest in the history of the institution, from 7 to 11 December 2000, following marathon meetings of its members.

10.1.2 The Signing and Ratification of the Treaty of Nice Although an effort was made to adapt the EU’s institutions in view of the entry of new members, the Treaty of Nice ultimately left institutional reform unfinished, making the decision-making mechanism more complex and tipping the balance against small and medium-sized countries. Britain managed to retain the right of veto on issues considered vital and to maintain the intergovernmental nature of the CFSP. Germany did not secure an increase in the weighting of its votes in the Council of EU on the basis of its population, but managed to make it a condition that 62% of the EU’s population should be represented in the Council of EU for decisions to be taken by qualified majority. In addition, Germany was the only state without a reduction in the number of its MEPs in the European Parliament after the future enlargement. Furthermore, Germany ensured that a new Intergovernmental Conference was convened in order to take the political integration of the EU forward. France, although maintaining formal parity with Germany in the votes of the Council of EU, began to show signs of weakening, given that it did not put forward substantive proposals on the future of the EU as it had done in the past, and it was the first time that Franco-German cooperation had not played a significant role in advancing the project of European integration. The Treaty of Nice set the conditions for the transition to enhanced cooperation, established by the Treaty of Amsterdam. Enhanced cooperation now required the participation of at least eight Member States and would be open to any other Member State wishing to join in the future. Enhanced cooperation under the first pillar of the Community could only be applied in areas where the Community does not have exclusive competence and in matters subject to the co-decision procedure between

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the European Parliament and the Council of EU. In addition, the scope of enhanced cooperation was broadened to include the CFSP of the second pillar of the EU, but with the restrictions requested by the UK, Ireland, and Sweden, i.e. to apply to joint actions agreed unanimously by the Council of EU, but not to matters requiring military or defence activities. There could also be enhanced cooperation in the areas of justice and home affairs under the EU’s third pillar. Despite the satisfaction expressed by the French government at the agreement and the facilitation of the accession procedures for the new Member States, President Jacques Chirac was strongly criticised by the representatives of the political parties in the European Parliament on 12 December 2000, during the presentation of the new treaty, and the dissatisfaction of Commission President Romano Prodi was also evident. The reasons for this dissatisfaction were the failure to include the Charter of Fundamental Rights of the European Union as an integral part of the Treaty (see Sect. 10.2.1), the restrictions placed on the extension of the co-decision procedure between the Council of EU and the European Parliament, and the failure to respect the ceiling of 700 MEPs for the future enlarged EU. Thus, on 14 December of that year, the European Parliament, while approving the provisions of the treaty on the Commission and on enhanced cooperation, adopted a resolution accusing the governments of having given priority to their short-term state interests rather than to the general interests of EU citizens. The Treaty of Nice was signed on 26 February 2001 and then needed to be ratified by the fifteen EU Member States before it could enter into force. However, the ratification process got off to a bad start in Ireland, as a referendum on 8 June 2001 saw Irish citizens reject the Treaty by 53.9%. This unexpected result resulted in the members of the European Council declaring shortly afterwards that any renegotiation of the Treaty of Nice was ruled out and that the timetable for the accession of the new Member States would not be changed. However, the ratifications of the Treaty of Nice by the remaining Member States took place through the parliamentary process, without particular problems, and ratification documents were deposited during 2001, Luxembourg on September 24, France on October 19, Spain on December 27, and the Netherlands on December 28, and during 2002, Austria on January 8, Portugal on January 18, Sweden on January 25, Finland on January 29, Germany on February 11, Greece on June 3, Denmark on June 13, Italy on July 9, Britain on July 25, and Belgium on August 26. The Irish government undertook a major public information campaign and the Seville European Council declaration of 21 and 22 June 2002, guaranteeing Ireland’s neutrality in the conduct of the CFSP, helped to turn the tide. Thus, in the second referendum held on 19 October 2002, the Treaty of Nice was ratified by 62.9% of the votes cast, and Ireland submitted an instrument of ratification on 18 December of the same year. Following the ratifications, the Treaty of Nice entered into force on 1 February 2003. After the Nice European Council, and the signing of the Treaty of Nice, efforts were made to restore the normalcy of Franco-German relations, which seemed to have been disturbed, starting with the difference of opinion during the 1999 CAP reform (see Sect. 9.2.5). Statements by the governments of both states stressed the need for close cooperation between them, which would act as a driving force for

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European integration. In essence, these statements made it possible to find a common line of approach in order to take initiatives for the future of Europe, on which a declaration was signed in the Treaty of Nice, and to draw up a draft European Constitution (see Sect. 10.2.2).

10.1.3 The Institutional Reforms Negotiations also during the Nice European Council on institutional reforms have been difficult and without the expected results. Thus, the institutional reforms that were carried out were described as “technical” and “limited”, without substantially changing the institutional framework of the EU in the context of the integration perspective. The role of the European Parliament was strengthened to some extent, as the co-decision procedure was extended to cover new issues that had to be approved by the Council of EU by qualified majority and concerned a number of important areas such as industry, immigration, and judicial cooperation in civil matters. Furthermore, the number of MEPs to be elected by the current and future Member States was changed. The solution adopted took greater account of the population of the Member States, with a weakening of proportionality to the detriment of the large Member States and in favour of the medium and small ones. Thus, in the European Parliament, the Fifteen would have 626 seats, whereas with the admission of the twelve new Member States, this number would reach 732. However, Germany retained the 99 seats it had after reunification, while Britain, France, and Italy would now have 72 seats each, Spain 50, the Netherlands 25, Belgium, Greece, and Portugal 22, Sweden 18, Austria 17, Denmark and Finland 13, Ireland 12, and Luxembourg 6. The twelve candidate countries would have Poland 50 seats, Romania 33, Bulgaria, Hungary, and Czechia 17 each, Slovakia 13, Lithuania 12, Latvia 8, Slovenia 7, Estonia and Cyprus 6 each, and Malta 5. Given that Romania and Bulgaria would not join the EU with the first group of the new ten Member States, their seats would be divided proportionally between the “Twenty-five”. However, no provision was made for the case of a larger increase in the number of Member States than 27. The distribution of seats for the two advisory committees, the EESC and the CoR, was also regulated. In view of the expected enlargement, from 1 January 2005, the Commission would be composed of one Commissioner from each Member State until the accession of all 27 members, when, at the beginning of the first Commission’s term of office after the accession of the last Member State, the number of Commissioners would be decided unanimously by the Council of EU. This decision was taken after the Member States that had two Commissioners, namely Britain, France, Germany, France, Spain, and Italy, gave up this right in order to reduce the number of Commissioners and to make the Commission operational in view of the accession of new Member States that would seek to be represented in the Commission by one Commissioner for reasons of prestige, even though the role of the Commissioners was not to represent the Member States but to act independently

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and in the general European interest. Thus, the issue of the excessive number of Commissioners was not resolved in Nice. The President of the Commission would be appointed by the Council of EU by qualified majority rather than unanimity, and would select the Commissioners in cooperation with the Council of EU. The Commissioners would then have to be approved by the European Parliament. The power of the Commission President was strengthened, as he could allocate portfolios and reallocate the responsibilities of Commissioners during their term of office. With the approval of the Commissioners, he could appoint the Vice-Presidents and could, if he saw fit, ask individual Commissioners to resign. In the Council of EU, the number of cases where the qualified majority principle will apply, even in the area of the JHA, has been increased, but it will not apply to critical social policy and taxation issues at the request of Britain, to trade policy issues at the request of France, to immigration, visas, asylum, and environment issues at the request of Germany, and to structural policy issues at the request of Spain. The large Member States wanted the new distribution of votes to redress the imbalance to their detriment caused by the entry of the new Member States into the EU, given that they would still represent the majority of the EU’s total population and production. In addition, Britain, France, Germany, Germany, Spain, and Italy had waived their right to two Commissioners in the Commission, but sought to increase their votes in the Council of EU. The Commission’s proposal for qualified majority voting, taking into account both the numerical majority of Member State votes in the Council of EU and the representation through the Member States of a majority of the total EU population, worked in Germany’s favour, leaving behind France, which had traditionally been an equal partner in the processes of European integration. After all, this balance had been upset after the reunification of Germany and the increase in the number of its Members of the European Parliament to 99. In order to maintain the balance, the principle of the “triple majority” of Member States, votes, and populations was adopted, according to which, in order for a decision to be taken by qualified majority, it must be supported by (a) a majority of Member States, if it is a Commission proposal, otherwise at least two-thirds of the Member States; (b) a specific number of votes, which will reach 258 votes out of 345 for the final enlargement; and (c) the so-called “demographic control clause”, according to which the majority Member States must represent at least 62% of the total EU population. Britain, France, Germany, and Italy would have 29 votes each in the Council of EU, despite differences in their population, Spain and Poland 27 votes each, Romania 14 votes, the Netherlands 13 votes, Belgium, Greece, Hungary, Portugal, and Czechia 12 votes, Austria, Bulgaria, and Sweden 10 votes, Denmark, Ireland, Lithuania, Slovakia, and Finland 7 votes, Estonia, Cyprus, Latvia, Luxembourg, and Slovenia by 4 votes, and Malta 3 votes. However, this makes it more difficult to take decisions by qualified majority, as a blocking minority is easily formed by the large Member States. Furthermore, a declaration annexed to the Treaty of Nice provides that from 2002, one meeting of the European Council per Presidency will be held in Brussels and, once the EU has 18 Member States, all meetings of the European Council will be held in Brussels. This statement only applies to formal meetings of the European

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Council, while the 6-monthly Presidencies are free to organise informal meetings of the European Council wherever they choose. The Court of Justice under the Nice Treaty will be composed of the same number of judges as the Member States. The number of Prosecutors General will remain eight, but the Council of EU may increase this number by unanimous decision. In view of the increase in the number of judges resulting from enlargement, and in order to maintain the effectiveness of the Court’s jurisdiction and the consistency of its case law, the Court could meet as a “Grand Chamber” of eleven judges, which would, as a rule, hear cases already examined by the full Court. The Court of First Instance would also include at least one judge per Member State. Furthermore, a new division of responsibilities between the Court of Justice and the Court of First Instance has been introduced. The Court of Justice, as the highest judicial body of the Union, retains jurisdiction over other disputes relating to fundamental questions of Community law and exercises this function through the preliminary ruling procedure on questions referred by the courts of the Member States. However, it will be able to confer on the Court of First Instance jurisdiction to give preliminary rulings in specific areas. The Court of First Instance will be competent for cases of common law in the first instance, in particular for the appeals of annulment, omission, and liability, with the exception of those provided to concern the Court. Finally, the treaty stipulated that the Court of Auditors would consist of a representative from each Member State, replacing a previous method that determined a specific number of members, which, however, practically corresponded to the number of Member States. It should be noted that all the institutional reforms introduced would unilaterally and for the first time determine the terms of institutional adjustment of the new Member States to be admitted, without these states having the possibility to negotiate them before their accession to the EU.

10.1.4 Changes to the CFSP In the field of foreign policy, the Treaty of Nice ended the relationship with the WEU, which had been initiated by the Treaty of Amsterdam, without however preventing any Member State from developing bilateral relations with it. The CFSP also fully integrated the ESDP (see Sect. 9.3.9), abolishing the Political Committee, whose powers would now be vested in the PSC, while putting on a permanent basis the other two bodies that would be necessary for the exercise of a common security policy, namely the European Military Committee and the European Military Staff. The European Council could authorise the PSC to manage a crisis, for as long as it lasts, in order to take the necessary political and military decisions. It also extended the possibility of applying “enhanced cooperation” in the field of the CFSP, provided that it does not concern matters relating to military operations and defence, but only the implementation of joint action or the promotion of a common position. However, the ending of the EU and the WEU relationship with the Treaty of Nice, the integration of the ESDP into the CFSP, and the European

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Council’s empowerment of the ESDP, albeit on a temporary basis, to take critical decisions on EU security, are particularly important elements of an effort towards a more autonomous and effective EU foreign policy.

10.2

Reports and Debates on the Future of Europe

Excerpts from the speech: From Confederation to Federation - thoughts on the finality of European integration, 12 May 2000, at Humboldt University, by Joschka Fischer “[. . .] [federalism] means nothing less than a European Parliament and a European government which really do exercise legislative and executive power within the Federation. [. . .] A European Parliament must therefore always represent two things: a Europe of the nation-states and a Europe of the citizens. [. . .] Similarly, there are two options for the European executive, or government. Either one can decide in favour of developing the European Council into a European government, i.e. the European government is formed from the national governments, or - taking the existing Commission structure as a startingpoint - one can opt for the direct election of a president with far-reaching executive powers. [. . .] There should be a clear definition of the competences of the Union and the nation-states respectively in a European constituent treaty [. . . .] The main axis for such a European constitution will be the relationship between the Federation and the nation-state. [. . .] One thing at least is certain: no European project will succeed in future either without the closest Franco-German cooperation” Source: “From Confederacy to Federation - Thoughts on the finality of European integration” Speech by Joschka Fischer at the Humboldt University in Berlin, 12 May 2000. [ON-LINE]. [Berlin]: Auswärtiges Amt (The Federal Foreign Office), [17.01.2005]. Available on http://www.auswaertigesamt.de/ www/de/infoservice/download/pdf/reden/redene/r000512b-r1008e.pdf. Given that the Treaty of Nice did not address substantive issues concerning the future of the EU due to the forthcoming enlargement with new Member States, the circulation of the single currency in the Eurozone, and the current inadequate intergovernmental cooperation process, it became necessary to add a “Declaration on the Future of Europe” to the final act. This declaration, annexed to the Treaty at Germany’s insistence, was intended to occupy the Swedish and Belgian Presidencies in 2001 with drafting and submitting by December of that year a report on the legal status of the established Charter of Fundamental Rights of the European Union (see Sect. 10.2.1), the simplification of the Treaties, the delimitation of competences between the Member States and the EU with a view to its further federalisation, and

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Fig. 10.3 German Foreign Minister Joschka Fischer. Source: U.S. State Department, 2002, https://2001-2009.state.gov/ secretary/former/powell/ photos/2002/9871.htm. Public Domain (cropped)

the role of the parliaments of the Member States. The “Declaration on the Future of Europe” showed a willingness, particularly on the part of Germany, to further accelerate the unification process. These tendencies had already been highlighted by the German Foreign Minister Joschka Fischer (1948–), in his private speech at the Humboldt University of Berlin on 12 May 2000, entitled From Confederation to Federation—thoughts on the finality of European integration, in which he considered it necessary to move from a Union of States to a Federation, with one government and one parliament, and considered that a constitutional treaty clearly defining the relationship between the Member States and the Federation was necessary (Fig. 10.3). Shortly afterwards, in a speech to the German Bundestag in Berlin on 27 June 2000, French President Jacques Chirac announced the start of a transitional period for institutional reforms in the EU, and proposed the launch of an open process, which would pave the way for the first European Constitution. The President of France also proposed the creation of a “vanguard group” of Member States, which, together with Germany and France, would take a leading role in the EU in the context of enhanced cooperation.

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Excerpts from the Speech: on “The future of an enlarged Europe” of 28 May 2001, by Lionel Jospin “[. . .] [The concept of] “federation of nation states“ [. . .] I believe it is politically sound, because Europe is an original political structure, a unique precipitate of an indissoluble mixture of two different elements: the federalist ideal and the reality of European Nation States. [. . .] This is why the concept of a “federation of Nation States” so aptly reflects the constituent tension which underpins the European Union. [. . .] A “federation of Nation States” would entail greater involvement of national parliaments in the construction of Europe. Current consultation procedures between the European Parliament and national parliaments do not go far enough. Let us vest in a common body - a permanent conference of parliaments or “Congress” - a real political role. [. . .] This “Congress” could play a role in amending the rules within the Union. With the exception of standards of a “constitutional” nature, for which current ratification procedures would remain in force, treaty changes relating to common policy technical rules could be handled, thanks to this “Congress”, in simplified procedures. This formula could replace, to good effect, the thirty or so national ratification procedures which would otherwise be needed in tomorrow’s Europe. Common policies could thereby be amended far more flexibly. [. . .] [The] political authority and legitimacy [of the Commission] must be strengthened. For this purpose I propose that the President of the Commission be appointed from the European political group which wins the European elections. The European Parliament, as the expression of the will of the peoples, would thus be in a better position to fulfil its role as the institution to which the Commission is politically accountable and which can pass a vote of censure against the Commission. [. . .] I propose that the European Council be given a right to dissolve the Parliament on the proposal of the Commission or the Member States. This could be used in a political crisis or to resolve an institutional stand-off. [. . .] [The European] Council should have the task of approving a true multi-year “legislative” programme, based on a proposal submitted by the Commission and the European Parliament. [. . .]Furthermore, the time has come to think of establishing a permanent Council of Ministers. Its members, having a status tantamount to that of VicePrime Ministers, would co-ordinate work on European issues within their own national governments. A body of this type could provide impetus, preparation and coordination of European work upstream of the European Council. In conjunction with the European Parliament, it would better fulfil its role as a (continued)

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co-legislator in framing European “laws”. In this last respect, voting should always be by qualified majority. [. . .] These proposals suggest the idea, which I favour, of a European Constitution. A constitution would set out the structure and the functioning of the European institutions. Of course, it would not be enough to simply call a new treaty a “Constitution”. [. . .] The Fundamental Rights Charter would be at the heart of the Constitution. Following the method used to such good effect in the drafting of the Charter, preparation of this Constitution could be entrusted at European level to a Convention bringing together the different players in the Union: States, national parliaments, the European Parliament and civil society. Final decisions would be taken by States and ratified by peoples.” Source: Address by Mr Lionel Jospin, Prime Minister, on “ The future of an enlarged Europe “ (Paris, May 28 2001). [ON-LINE]. [Paris]: Ministère des Affaires étrangères (Ministry of Foreign Affairs), [17.01.2005]. Disponible sur. http://www.diplomatie.gouv.fr/avenir/jospin280501.gb.html. Commission President Romano Prodi, in a speech to the European Parliament on 3 October 2000, and in view of enlargement, pointed out the weaknesses of intergovernmental cooperation as a method of functioning of the EU, and stressed the importance of its democratic functioning, which should be expressed by direct representation of the people through the European Parliament and representation of the Member States through the Council of EU. According to Prodi, the conditions were now ripe to decide on the way in which power should be shared between the Union and its Member States, in order to avoid the lack of coherence and the confusion of powers that can arise, for example between the Commission and the Council of EU when the latter also assumes executive roles. His views were also expressed by British Prime Minister Tony Blair in his speech in Warsaw on 6 October 2000, arguing that the EU, while maintaining its intergovernmental and supranational structure, could evolve into a superpower that would not be a superstate but an equal partner of the Member States. In his opinion, in place of a European Constitution, it would be preferable to have a declaration of principles, which would serve as a political charter of competences, rather than a legal document. Views similar to Joschka Fischer’s were also expressed by German Chancellor Gerhard Schröder (1949–) on 30 April 2001, on the transformation of the Commission into a central European government, the strengthening of the role of the European Parliament, which would act as a “lower house” and exercise full control over the Union’s budget, and the transformation of the European Council into an “upper house” of the Member States, thus confirming their role in decision-making.

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Fig. 10.4 Lionel Jospin, Prime Minister of France. Source: Lionel Jospin. Author: jyc1. licensed under the Creative Commons Attribution 2.0 Generic license

These proposals were made after the signing of the Treaty of Nice, and were therefore of particular importance. Of particular importance were the positions of the French Prime Minister Lionel Jospin (1937–), as expressed in his speech in Paris on 28 May 2001, on The Future of an Enlarged Europe, which, although more conservative, contained valuable elements for a federal perspective. Among them was the idea of a “federation of nation states”, with a permanent “Congress” of national parliaments, which would maintain the sovereignty of the Member States, controlling the institutions of the federation, but giving the right to dissolve the European Parliament to the Council of EU, on a proposal from the Commission. Jospin also proposed that the President of the Commission be elected by the party emerging as the majority party in the EU elections for the European Parliament (Fig. 10.4). Furthermore, the Belgian Prime Minister Guy Verhofstadt, in a speech to the European Policy Centre on 20 September 2001, entitled A Vision for Europe, acknowledged the lack of sufficient democratic legitimacy in the Union and advocated the strengthening of the Commission and its transformation into a European government, the transformation of the Council of EU into a second parliament to represent the Member States on an equal footing with the European Parliament, which would represent the peoples proportionally, and the increase in the powers of the CFSP representative (Fig. 10.5). However, important statements on the future of Europe were also made by politicians who supported the European integration process in the past, leaving their mark on the course of unification. Former Commission President Jacques

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Fig. 10.5 Guy Verhofstadt, Prime Minister of Belgium. Author European Parliament. Source: European Parliament, licensed under the Creative Commons Attribution 2.0 Generic license, https://www. flickr.com/photos/366123 55@N08/51269199230/ and https://commons.wikimedia. org/wiki/File:Guy_ Verhofstadt_June_2021_ (cropped).jpg (cropped)

Delors, in an interview with the French newspaper Le Monde on 19 January 2000, proposed for the EU a form of federation of nation states, aiming to maintain the sovereignty of the Member States within a federation in order to speed up the processes of integration. In addition, former German Chancellor Helmut Schmidt and former French President Valéry Giscard d’Estaing expressed their views in the French newspaper Le Figaro on 10 April 2000 on the institutional reforms needed in the context of the forthcoming enlargement, with a federal perspective. Despite the generally established necessity for institutional reforms and perhaps the creation of a constitution for the EU, the “Declaration on the Future of Europe” annexed to the Treaty of Nice, which foresaw a new Intergovernmental Conference for 2004, was made at a time when differences had arisen between France and Germany, starting in 1997 with the disagreement between Chirac and Kohl on the SGP and the following year on the appointment of the head of the ECB, and the disagreement between Chirac and Schröder in 1999 on the reform of the CAP and the following year on the weighting of votes in the Council of EU. More generally, Germany, after its reunification, aimed to play a leading role in Central Europe, in view of the accession of new states from Central Eastern Europe to the EU, while France still believed in its role on the international stage as a nuclear power, even though this status had lost its great importance with the end of the Cold War. At the same time, within France, there were different assessments of French priorities in the EU, between President Chirac and Prime Minister Jospin, who after all belonged to different political spheres. The former put the emphasis on the required institutional reforms, while the latter put the emphasis on social policy and on the use of the Charter of Fundamental Rights of the European Union. At the same time, the other large Member States could not give more impetus to the

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unification process, especially given Britain’s refusal to further cede sovereign rights to an EU with a federal perspective, while the smaller Member States expressed fears about the possible creation of a “pioneer group” of Member States led by France and Germany, in the context of an enhanced cooperation of EU Member States, which could possibly act as a “Steering Group”, controlling and guiding the smaller Member States.

10.2.1 The Charter of Fundamental Rights of the European Union The Treaty of Nice complemented the Treaty of Amsterdam on the issue of respect for human rights and fundamental freedoms by adding a prevention mechanism. In particular, following the identification of a specific risk of a potential serious breach of fundamental rights in a Member State by one-third of the Member States, the European Parliament, or the Commission, the Council of EU could act preventively and, by a majority of four-fifths of its members and with the consent of the European Parliament, make the necessary recommendations. However, since the signing of the SEA, the objective of protecting human rights and fundamental freedoms had been explicitly enshrined, while the shift towards the human dimension of EU development had been partially expressed in the TEU, as well as in the provisions of the Treaty of Amsterdam, through the creation of the single area of freedom, security, and justice. Therefore, given that the protection of fundamental rights was a basic principle of the EU and a necessary condition for its legitimacy, there was a need to draw up a charter codifying the fundamental rights and freedoms of EU citizens. Thus, at the request of the European Parliament, the European Council, meeting in Cologne on 3 and 4 June 1999, decided to launch the project of codifying the rights of European citizens in a charter, which should be incorporated into the European Treaties so that every European citizen could refer to it. To this end, it was entrusted to a Convention composed of representatives of the Heads of State and Government and the President of the Commission, as well as members of the European Parliament and of the parliaments of the Member States. Representatives of the Court of Justice would participate as observers, while representatives of the EESC, the CoR, and independent experts would be invited to express their views. The final form and composition of the Convention was determined by the Tampere European Council on 15 and 16 October 1999. The Assembly held its inaugural session on 17 December 1999 under the chairmanship of Roman Herzog (1934–2017), former President of Germany. The difficulties to be overcome centred on the differences between the legal systems of Britain, France, and Germany. Despite the difficulties, the draft charter was completed on 26 September 2000 and presented to the European Council in Biarritz on 13 and 14 October 2000, with a view to its final approval or rejection by the Nice European Council in December 2000. The Charter of Fundamental Rights of the European Union to be adopted included for the first time in a single text all the civil, political, economic, and social rights of European citizens and of all persons living in the EU. It was based on the Convention for the Protection of Human Rights and

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Fig. 10.6 Roman Herzog, former President of Germany. Source: User:Zeitblom, cropped by User: Polarlys https://commons.wikimedia. org/wiki/File:Roman_Herzog. jpg. Public Domain

Fundamental Freedoms, signed in Rome on 4 November 1950 (see Sect. 3.4.5) and the Helsinki Final Act, signed in the framework of the OSCE on 1 August 1975 (see Sect. 3.4.5). The issues it deals with are grouped under six main headings: dignity, freedom, equality, solidarity, civil rights, and justice (Fig. 10.6). The chapter on Dignity refers to the right to life and not to be condemned to death, physical and mental integrity, and the prohibition of cloning, torture, slavery, and forced labour. The chapter on Freedom refers to the right to liberty and security, respect for private and family life and the protection of personal data, the right to marry and found a family, the right to freedom of thought, conscience, religion, expression, information, education, choice of profession, assembly and association, property, asylum, and freedom of the arts and sciences. The chapter on Equality refers to equality before the law, respect for cultural, religious, and linguistic diversity, equality between men and women, the rights of children and the elderly, and the integration of people with disabilities. In the chapter on Solidarity, it refers to the right of workers to information and consultation in the context of their place of work, the right to negotiation and collective activities, the right of access to employment services, protection in the event of unfair dismissal, suitable working conditions, the prohibition of child labour and the protection of young people at work, the protection of family life and the reconciliation of family and working life through measures such as the right to leave the workplace and the right to work, and the right of workers to be informed and consulted in the context of their work. The chapter on Citizens’ Rights lists the rights of European citizens, who are by definition citizens of the EU Member States, namely the right to vote and to stand as a candidate in elections to the European Parliament and in local elections in their country of residence, the right to good administration by the EU institutions and

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bodies, the right to refer cases of maladministration to the EU Ombudsman, the right of access to documents of the European Parliament, the Council of EU and the Commission, the right to vote in elections to the European Parliament and the Council of Ministers, and the right to vote in local elections in their country of residence. In the chapter on Justice, a general reference is made to the right to apply to the courts for a remedy for any person whose rights and freedoms guaranteed by EU law have been violated, the presumption of innocence and the right of defence, the principles of legality and proportionality of meritorious acts and penalties, and the right not to be tried or punished more than once for the same offence. The Biarritz European Council of 13 and 14 October 2000 unanimously agreed on this draft and forwarded it to the European Parliament and the Commission. The European Parliament accepted the draft on 14 November 2000 and the Commission did the same on 6 December 2000. Before the opening of the Nice European Council in December 2000, the Council of EU, together with the European Parliament and the Commission, jointly presented the Charter of Fundamental Rights of the European Union. The Nice European Council, however, contented itself with this solemn presentation and decided to examine the question of the Charter’s legal status in the context of the debate on the future of the EU to be launched on 1 January 2001.

10.2.2 The Convention on the Future of Europe and the Draft Constitution One year after the Treaty of Nice, the Laeken European Council of 14 and 15 December 2001 adopted the “Declaration on the future of the European Union”, also known as the “Laeken Declaration”, which posed 60 questions focusing on the future of the Union, divided into four thematic areas: (a) division and definition of competences between the Member States and the EU; (b) simplification of the Treaties; (c) institutional organisation for more democracy, transparency, and efficiency in the EU; and (d) a path towards a Constitution for European citizens. In order to provide answers to these questions, it was decided to convene a Convention on the Future of Europe, with the task of preparing the future Intergovernmental Conference in 2004. This ad hoc Assembly began its work on 28 February 2002 in Brussels, chaired by former French President Valéry Giscard d’Estaing and co-chaired by former Italian Prime Ministers Giuliano Amato (1938–) and Belgian Prime Minister JeanLuc Dehaene, appointed by the Laeken European Council. The Convention was attended by 15 representatives of the Member States, 30 representatives of the national parliaments (two from each Member State), 16 Members of the European Parliament, and two representatives of the Commission. The candidate countries were represented in the same way and participated in the discussions, but did not prevent the Member States from reaching an agreement. The Convention would prepare a final text of common agreement as a starting point for the discussions in the Intergovernmental Conference. From the start of the Convention’s work, citizens would have the opportunity to be kept informed of its activities, to ask relevant

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Fig. 10.7 Valéry Giscard d’Estaing, President of the Assembly on the Future of Europe. Source: European People’s Party—EPP Congress Brussels 4–5 February 2004, licensed under the Creative Commons Attribution 2.0 Generic license, https://commons. wikimedia.org/wiki/File: EPP_2004_Poettering_-_d%2 7Estaing_-_Chabert_ (cropped).jpg

questions, and, above all, to participate in debates by means of Internet contributions (Fig. 10.7). The work of the Convention was characterised by the skill of its President Valéry Giscard d’Estaing, who tried to bring together views and lead the Convention to draft a text that could be accepted by the governments of the Member States. France, Britain, and Spain wanted a permanent presidency for the European Council and permanent representation for foreign policy, while Germany wanted to strengthen the role of the President of the Commission. Belgium, the Netherlands, and Luxembourg wanted the President of the Commission to be elected by the European Parliament. The smaller Member States and all the candidate countries wanted the Commission to remain in its present form, with Commissioners from all Member States and the continuation of the rotating presidency of the European Council. Spain wished to maintain the triple voting system provided for in the Treaty of Nice. Britain was opposed to qualified majority voting on CFSP issues and to the abolition of unanimity on fiscal and budgetary policy. The smaller Member States expressed their distrust of enhanced cooperation that could create strong nuclei within the EU. Finally, the European Parliament and the Commission sought to strengthen their powers, while the latter opposed the presence of a permanent President of the European Council as a threat to the institutional balance due to the confusion of competences with the Commission. The 16-month-long work of the Convention and its 11 working groups reached a very high level with the participation of high-level representatives of Member States that one would expect to be present at the level of an Intergovernmental Conference. The Convention eventually resulted in the drafting of a text in the form of a comprehensive draft constitutional treaty, rather than simply a list of proposals to the Intergovernmental Conference. This draft was adopted by an overwhelming

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majority of the Convention’s members on 13 June 2003 and submitted to the Thessaloniki European Council on 19 and 20 June 2003, which was considered a good basis for an Intergovernmental Conference to begin its work in Rome on 4 October 2003. Valéry Giscard d’Estaing was given a further month by the European Council for additional technical work on the draft constitutional treaty, which was presented in its final form on 18 July 2003 to the Italian Prime Minister Silvio Berlusconi (1936–) in Rome, where he held the Presidency of the Council of the EU. Among its main provisions were (a) to give legal force to the Charter of Fundamental Rights of the European Union; (b) to extend the powers of the European Parliament by extending the co-decision procedure with the Council of EU to other areas; (c) to increase the role of national parliaments, especially in monitoring the compliance of legislation with the principle of subsidiarity; and (d) to elect the President of the European Council by its members for a two-and-a-half-year term of office, with the possibility of re-election for a second term.

10.2.3 The Intergovernmental Conference on the Constitutional Treaty The Intergovernmental Conference for the drafting of a Constitutional Treaty for Europe (CTE) started its work on 4 October 2003 in Rome. The Intergovernmental Conference was held for the first time at the level of Heads of State or Government, assisted by the Ministers of Foreign Affairs, with the participation of the President of the Commission and the President of the European Parliament, assisted by two Commissioners and two Members of the European Parliament, respectively. Difficulties in reaching an agreement on the CTE were encountered under the Italian Presidency at the Brussels European Council of 16 and 17 October 2003 and at the Brussels European Council of 12 and 13 December 2003, mainly because of the negative reaction of Spain and Poland to the double majority procedure for qualified majority voting, and there were also problems with the composition of the Commission and the minimum number of seats in the European Parliament. However, a solution had to be found before the European elections in June 2004, in which the new Member States would also take part. Under the Irish Presidency, and at the Brussels European Council of 25 and 26 March 2004, the problems appeared to remain, although a political commitment was made by the Member States to resolve them. The landscape subsequently changed with the departure of Spanish Prime Minister José María Aznar and his replacement by the socialist José Luis Rodríguez Zapatero (1960–), following the Spanish elections in March of that year. However, discussions on the issue of qualified majority voting and the identification of the sectors it would cover continued to be a problem.

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Fig. 10.8 José Manuel Barroso, President of the Commission. Source: Author Besoin d’air, José Manuel Barroso2, 2007, licensed under the Creative Commons Attribution-Share Alike 2.0 Generic license, https:// commons.wikimedia.org/ wiki/File:Jos%C3%A9_ Manuel_Barroso_MEDEF_2. jpg (cropped)

Finally, after the European elections in June, the CTE was adopted by the Brussels European Council on 17 and 18 June 2004, in a tense atmosphere among its members. One of the causes of the tension was the appointment of Romano Prodi’s successor as President of the Commission, which caused disagreements between British Prime Minister Tony Blair, who opposed the nomination of former Dutch Prime Minister Guy Verhofstadt, and the latter’s supporters, namely French President Jacques Chirac and German Chancellor Gerhard Schröder. Agreement was reached at the Council of EU on 29 June 2004, with the appointment of José Manuel Barroso (1956–) as President of the Commission and the reappointment of Javier Solana as Secretary General of the European Council and High Representative for CFSP. The Heads of State and Government also decided that Javier Solana will be appointed EU Foreign Minister on the day the Constitution enters into force. The Barroso Commission was finally approved by the European Parliament on 18 November 2004 (Fig. 10.8).

10.2.4 The Signing of the CTE and the Failure to Ratify It The CTE was signed on 29 October 2004 by the “Twenty-Five” in Rome, after the ten new Member States had already joined the EU (see Sect. 10.4.2). The Treaty was signed in the same Capitol Hall where the Treaties of Rome were signed on 25 March 1957 by the six founding Member States of the EEC and the EAEC, subject to ratification by the Member States in time for it to enter into force on 1 November 2006. The CTE consisted of a preamble, four parts, and 36 protocols. It also included two annexes attached to the treaty, as well as 41 declarations adopted by the

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Intergovernmental Conference. The CTE consisted of a total of 448 articles. After the Preamble, Part I contained general definitions and objectives of the EU, Part II contained the Charter of Fundamental Rights of the European Union, Part III contained the policies and functioning of the EU, and Part IV contained General and Final Provisions, followed by the Protocols, the Annexes, and the Final Act. The CTE would result in an institutional governance of the EU, with a clearer division of competences between the EU and the Member States and more democratic procedures and functions, which would be more accountable and accessible to the citizens of the Member States. In practice, the TEU replaced, by consolidating into a single legal text, all the previous treaties, from the 1957 Treaty of Rome, the 1986 TEU, the 1992 TEU, the 1997 Treaty of Amsterdam, and the 2000 Treaty of Nice. The TCE generally provided for (a) the strengthening of citizens’ rights by incorporating the Charter of Fundamental Rights of the European Union, which thus acquired legal force; (b) the strengthening of the powers of the European Parliament, which, together with the Council of EU, became the main legislative body of the EU, and also decides on the budget; (d) the creation of the institution of the President of the European Union, who will be elected by the heads of state and government for a term of two and a half years, with the possibility of one more renewal of his term; (e) the recognition of the role of the European Parliament in approving the entire budget by abandoning the distinction between compulsory and non-compulsory expenditure; (f) upgrading the role of national parliaments by informing them in time about the Commission’s proposed legislation and EU policies and introducing an early warning mechanism, based on which national parliaments will be involved in checking the compatibility of proposed legislation with the principle of subsidiarity; (g) the election of the President of the Commission by the European Parliament following a proposal by the European Council; (h) the reduction of the number of Commission members from 2014 so that to be no more than two-thirds of the number of Member States, with their appointment based on a system of equal rotation that will reflect the demographic and geographical diversity of the EU states; (i) the extension of the qualified majority voting process to thirty new areas, such as justice, immigration, and asylum, but maintaining unanimity in critical areas for the Member States, such as fiscal and tax policy, foreign policy, and defense; (j) the calculation of the qualified majority as a double majority of 55% of the Member States, representing at least 65% of the EU population, with the start of application of this system from 1 November 2009; (k) the abolition of the rotating Presidency of the Council of EU by one Member State every 6 months and the introduction of a rotating Presidency held by a group of three States for a period of 18 months; (l) the creation of the post of EU Minister for Foreign Affairs, merging the posts of High Representative for CFSP and Commissioner for External Relations; (m) the establishment of the Common Security and Defence Policy (CSDP), the predecessor of the ESDP, as an integral part of the CFSP; (n) the establishment of a form of enhanced cooperation in the field of military affairs and the creation of a European Armaments, Research and Military Capabilities Agency; (o) the emphasis on the importance of democratic life, equality, representative and participatory democracy, and transparency; and (p) the recognition of the importance

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of consultation of the social partners and the right of European citizens to have recourse to the European Ombudsman. It should be noted that the CTE eliminated the three-pillar structure of the EU, since the second pillar of the CFSP and the third pillar of the JHA, hitherto governed by the intergovernmental process, were now communitarised. At the same time, the decision-making procedures and means of action were simplified by establishing six types of legal instruments with simple and clear terminology and a clear hierarchy of rules. In addition, priority was given to the ordinary legislative procedure, which corresponds to the well-known co-decision procedure. As mentioned above, the initial objective was to have the Treaty ratified by all 25 Member States in time for it to enter into force on 1 November 2006. The CTE was approved in a referendum held in Spain on 20 February 2005 by a majority of 81.8%. However, on 29 May of the same year, the CBA was rejected in a referendum in France by 54.7%, and the same happened shortly afterwards, on 1 June, in the Netherlands by 61.5%. Following these results, the Brussels European Council of 16 and 17 June 2005 considered that the date of 1 November 2006, originally envisaged for the entry into force of the CTE, was no longer realistic, given that the Member States that had not ratified it would not be in a position to give a clear answer before mid-2007. A “period of reflection” was therefore required in order to draw better conclusions. A similar referendum in Luxembourg on 10 July 2005 approved the CSCE by 56.5%, and by 5 December 2006, 14 other Member States had ratified the CSCE through their national parliaments, as well as Bulgaria and Romania through the signature of their EU accession treaty, while Britain, Denmark, Ireland, Poland, and Portugal, and Sweden and Czechia through their national parliaments, postponed their ratification by referendums. However, following the French and Dutch referendums and the “period of reflection” decided by the Brussels European Council on 16 and 17 June 2005, a “group of wise men”, known as the Action Committee for European Democracy (ACED), headed by former Italian Prime Minister Giuliano Amato, was set up to examine possible courses of action. On 4 June 2007, the Committee, known as the Amato Group, presented its report, in which it proposed the convening of a new Intergovernmental Conference with a view to drafting a new Treaty on the EU, which would amend the existing treaties, give a legally binding character to the Charter of Fundamental Rights of the European Union, and include the first and fourth parts of the CTE. Thus, the Brussels European Council of 21 and 22 June 2007 agreed to abandon the CTE and to convene a new Intergovernmental Conference to negotiate a new reform treaty containing the amendments to the existing treaties. These negotiations will be concluded by the end of the year, and the new treaty will be signed in Lisbon on 13 December 2007 (see Sect. 11.1.2) (Fig. 10.9).

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Fig. 10.9 Giuliano Amato, former Prime Minister of Italy Source: Camera dei Deputati. Author: dati.camera.it. Licensed under the Creative Commons Attribution 4.0 International license, https:// commons.wikimedia.org/ wiki/File:Giuliano_ Amato_2001_(cropped).jpg

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In a period of favourable economic conditions and the expansion of information and communication technologies in the professional and private spheres, it was necessary to take measures to ensure that European countries are leaders in all areas of competition, and to propose solutions to overhaul the European education system and ensure lifelong access to vocational training through knowledge and the use of modern technologies. This is the context of the Lisbon Strategy, adopted by the Lisbon European Council on 23 and 24 March 2000 and given new impetus by the Brussels European Council of 22 and 23 March 2005. Furthermore, based on the forecasts of the Berlin European Council of 24 and 25 March 1999, a “mid-term review of the CAP” was carried out, which, taking into account the decisions of the Gothenburg European Council of 15 and 16 June 2001, the forthcoming enlargement of the EU with new Member States, and the prospects of the negotiations of the WTO Member States of the Doha Round, starting on 14 November 2001, resulted in a new radical reform of the CAP starting in 2003.

10.3.1 The Lisbon Strategy: An Innovation and Knowledge Society In order to adopt a strategic goal for the decade 2000 to 2010 to make the EU a highly competitive and dynamic innovation and knowledge-based economy in the world, with more and better jobs and greater social cohesion, the Portuguese

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Presidency took the initiative to raise the issue at the Lisbon European Council on 23–24 March 2000. The European Council resulted in the Lisbon Strategy. This strategy, which was developed in the context of a series of European Councils held after the Lisbon European Council, is based on three pillars: (a) an economic pillar to prepare the transition to a competitive and dynamic knowledge-based economy; (b) a social pillar to modernise the social model through investment in human resources and the fight against social exclusion; and (c) an environmental pillar, added at the Gothenburg European Council of 15 and 16 June 2001, which focuses on the fact that economic growth must be separated from the use of natural resources. The Lisbon Strategy provides for the adaptation and strengthening of existing coordination procedures: (i) the “Luxembourg process” for employment (see Sect. 9. 3.4), (ii) the “Cardiff process” (stemming from the conclusions of the Cardiff European Council of 15th and 16 June 1998) on the functioning of markets, and (iii) the “Cologne process” (stemming from the conclusions of the Cologne European Council of 3rd and 4th June 1999) on the macroeconomic dialogue. The Lisbon Strategy includes ten main directions: (i) The creation of a European knowledge area. (ii) The development of a European research and innovation area. (iii) The creation of an environment friendly to new and innovative businesses. (iv) Economic reforms for the integration and efficiency of the internal market. (v) The creation of efficient and integrated financial markets. (vi) The implementation of sound macroeconomic policies. (vii) Emphasis on education and training. (viii) The creation of more and better jobs. (ix) The modernisation of social policy and protection systems. (x) Strengthening social cohesion and eliminating social exclusion. The Lisbon European Council readily endorsed the Lisbon Strategy, even promoting the objective of allocating 3% of Member States’ GDP to research and development by 2010. In addition, the Nice European Council of 7–11 December 2000 adopted the Commission’s proposal for a Social Policy Agenda, submitted on 28 June 2000, entitled the European Social Agenda (ESAP), which set priorities for specific actions to be undertaken over the next 5 years around six strategic guidelines in all areas of social policy: (a) more and better jobs, (b) anticipating and exploiting environmental change, (c) improving the quality of life, (d) improving the quality of life, (e) improving the quality of life, (f) improving the quality of life, and (e) improving the quality of life. However, progress in implementing the Lisbon Strategy has remained limited, as growth started to slow down and unemployment started to rise in 2001, while Member State governments were no longer able to shoulder the economic burden of the “knowledge economy”. Thus, 5 years after the launch of the Lisbon Strategy, the Commission, following a mid-term review drawn up in March 2004 by a group of experts chaired by the former Dutch Prime Minister Wim Kok, in its Communication entitled “Working together for growth and jobs, a new start for the Lisbon Strategy” proposed to the European Council a more streamlined coordination process, accompanied by the efforts of the Member States through their own National Action Plans (NAPs). The main objectives of the renewed strategy included implementing macroeconomic policies focused on stability and sustainable fiscal

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policies, securing more and better quality jobs, and achieving a clearer and more effective division of responsibilities at EU and Member State level to achieve better governance. At the same time, it maintained the objective of Member States allocating 3% of their GDP to research and development by 2010. Subsequently, the Brussels European Council of 22 and 23 March 2005 proposed the relaunch of the Lisbon Strategy for the 3-year period 2005–2008, focusing on the actions to be taken rather than the numerical targets to be achieved. Furthermore, the Commission launched the new Social Policy Agenda (2006–2010) in February 2005. The two main priority axes of the new Agenda are employment, under the prosperity objective, and equal opportunities and inclusion, under the solidarity objective.

10.3.2 2003 Mid-Term Review and Reform of the CAP (Fischler II) The Berlin European Council of 24 and 25 March 1999 provided for a “Mid-Term review of the CAP” so that the system could be revised where necessary. The general finding that rural development policy, aimed at strengthening economic and social cohesion, was inadequate, particularly in certain regions of Europe, necessitated a re-evaluation of the CAP. The Commission presented a report on 10 July 2002, in which it assessed the reforms carried out since 1992 and set out the objectives of the requested review, which were in line with the objectives of the Berlin European Council of 24 and 25 March 1999 and those of the Sustainable Development Strategy set at the Gothenburg European Council of 15 and 16 June 2001. These key objectives were broadly speaking (a) to link European agriculture more closely to international markets; (b) to prepare for the enlargement of the EU to include new Member States, which necessitated a review before it could be implemented; (c) to respond more closely to the requirements of environmental protection and the quality of agricultural products; (d) to make the CAP compatible with the demands of third countries for a reduction and phasing out of all forms of direct aid and subsidies, which were causing distortions in the market; (e) to ensure that the CAP is compatible with the requirements of the EU’s agricultural policy and the requirements of the environment; (f) to ensure that the CAP is compatible with the demands of third countries for a reduction and phasing out of all forms of direct aid and subsidies, which were causing distortions in the market; and (g) to ensure that the CAP is compatible with the requirements of the EU’s agricultural policy. The Commission proposed specific technical measures to achieve these objectives defined in the revised framework of the new CAP, such as greater liberalisation of agricultural product markets, decoupling of payments from the type and size of production, a gradual reduction of direct payments under the “first pillar” of the CAP, that of guarantees, which caused market distortions, and a transfer of funding to the “second pillar” of the CAP, that of rural development, measures for animal health and welfare, and measures to promote compliance with animal welfare standards.

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At the same time, the planned enlargement of the EU with new Member States, mainly from Central Eastern Europe, whose agricultural sectors, although large, were not competitive, imposed price support for their agricultural products as part of the acquis communautaire. However, in the Commission’s view, this support would not necessarily encourage the modernisation of their agricultural sector, and it proposed that CAP “first pillar” payments to the new Member States should be paid gradually, starting from 25% of the equivalent of the old Member States’ payments in 2004, rising to 100% in 2013, a solution which the candidate countries considered unsatisfactory. Following an agreement between French President Jacques Chirac and German Chancellor Gerhard Schröder, who was re-elected in September 2002, the possibility of a solution to the CAP reform issue emerged at the Brussels European Council on 24 and 25 October 2002. It was decided that Pillar I of the CAP should be maintained after 2006 at the level set by the Berlin European Council of 24 and 25 March 1999, but adjusted for distribution according to the needs of the 25 new Member States from 2004 and then of the 27 Member States from 2007, with an annual increase of 1%, irrespective of the level of annual average EU inflation. It was also decided that these payments for the new Member States would be phased in gradually, starting at 25% of the equivalent of the old Member States’ payments in 2004, rising to 100% in 2013. This timetable was accepted in its entirety at the Copenhagen European Council of 12 and 13 December 2002. Thus, the CAP would have a stable budget until 2013, with a ceiling on “first pillar” payments, but distributed among the 25 Member States from 2004, and then among the 27 Member States from 2007, instead of the original 15. On 16 December 2002, the Commission presented general proposals to the Council of EU, providing for an average 36% reduction in tariffs on imports of agricultural products, a 45% reduction in all forms of export subsidies, and a 55% reduction in support for agricultural product prices. Furthermore, on 21 January 2003, Agriculture Commissioner Franz Fischler presented further proposals for the general reform of the CAP, based on the complete decoupling of direct payments from the type and quantity of agricultural production, as well as a reduction in intervention prices for cereals and dairy products. Despite France’s initial refusal and the fruitlessness of the Council of Agriculture Ministers of EU, the need to find a solution before EU enlargement and France’s understanding of the impossibility of supporting its positions finally led to a compromise at the Council of Agriculture Ministers of EU in Luxembourg on 26 June 2003. The 2003 Luxembourg agreement brought about a gradual and practical radical transformation of the CAP, with the introduction of new aid systems and the creation of new payment mechanisms. Furthermore, the initial reform of June 2003 was the first phase of a gradual process of more sectoral reforms. In June 2003, the reform mainly covered cereals, rice, dried fodder, and the milk and dairy sectors. In April 2004, it covered the so-called “Mediterranean package”, i.e. olive oil, raw tobacco, and the hops and cotton sectors. In February 2006, it covered the sugar sector. In June 2007, it covered the fruit and vegetables sector. Finally, in December 2007 it covered the vine and wine sector. Furthermore, the Council of Agriculture Ministers

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of EU approved on 20 November 2008 the carrying out of a “health check” of the CAP (see Sect. 11.2.3), as a stage in the evaluation of this long reform process, which may require an adjustment of the mechanisms introduced since 2003. The main points of the agreement can be summarised as follows: (a) The principle of decoupling, with most of the Pillar I direct payments to farmers being replaced by a Single Decoupled Payment for each farm, as a fixed income for the producer, regardless of the type and quantity of production, in order to make farms more market-oriented and reduce distortions in the production and markets of agricultural products. The new Single Decoupled Payment for each holding thus replaces the previous Pillar I direct payments per kilogram of product, per hectare cultivated, or per animal reared and will be calculated on the basis of the direct payments paid during the 3-year period 2000–2002, as a historical reference period, and during the 4-year period 1999–2002 specifically for olive oil. The single and decoupled payments would in practice be considered by the WTO, from 2006, as rural development aid that does not distort markets, and would therefore cease to be part of Pillar I of the CAP and would now be part of Pillar II. (b) The Single Payment and Decoupled Payment shall be paid in accordance with the Number of Individual Payment Entitlements of each beneficiary producer, which shall be equal to the annual average of the number of hectares cultivated or used for animal feed during the historical reference period referred to above. The Value of the Individual Payment Entitlement shall be obtained by dividing the amount of the single and decoupled payment attributed to each beneficiary by the Number of Individual Payment Entitlements. The beneficiary of Individual Payment entitlements may be the owner or tenant of the agricultural land in the historical reference period concerned. Individual entitlements may be inherited or transferred as a parental benefit. They may also be sold to another person, but in the same Member State, with or without the corresponding agricultural land, provided that they have been activated in the previous year by at least 80%. Finally, they may be rented, but in this case only with the corresponding agricultural land. (c) Cross-compliance, which makes payments of all direct payments conditional on compliance with a series of criteria set out in 18 Community rules in the fields of the environment, public health, appropriate animal welfare, the suitability of foodstuffs produced, the protection of arable land and surface and groundwater from the extensive use of fertilisers and pesticides, the protection of ecosystems, etc., with consequent financial penalties in the event of non-compliance. 75% of the cuts are returned to the Community budget and 25% remain with the Member State that made the cut. (d) Modulation, which provides for a reduction in all direct payments for farms with more than 5000 € in payments (which make up a quarter of farms and which receive more than 80% of the payments) by 3% in 2005, 4% in 2006, and 5% from 2007 to 2013, and the transfer of these amounts to Pillar II of the CAP. Thus, 80% of the resources saved through modulation will be returned to the Member State from which they originate and used for additional rural development measures under Pillar II of the CAP, while the remaining 20% will be redistributed between Member States on the basis of the areas cultivated, the employment rate in the agricultural sector, and the GDP per capita. (e) The possible implementation of a Regional Decoupling System under

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which, in general, Member States would have the possibility, instead of calculating the value of entitlements per beneficiary producer, to calculate the total value of payment entitlements per region as the quotient of the total annual payments paid in total in that region during the historical reference period divided by the annual average of the total hectares used as agricultural land in the region. Consequently, the individual entitlements in the same region will have the same value and all producers in that region will be joint beneficiaries of the single decoupled payment. (f) The introduction of a Financial Discipline, for the period 2007–2013, which would freeze the Pillar I budget of the CAP, imposing annual compulsory ceilings. In order to comply with budgetary discipline in the CAP within a derogation limit of 300 million euros, the European institutions would be able to make horizontal reductions in direct aids granted. (g) The upgrading of the existing Integrated Administration and Control System (IACS), which will include an electronic database, a system for the geographical identification of parcels, a system for calculating and recording entitlements, a system for recording annual payments, a system for identifying and recording farm animals, etc. (h) The farm advisory system, which will operate in a supportive manner by providing advice and information to adapt to the rules of the Multilateral Farming Code and to implement good farm management methods and practices. (i) The establishment of a National Reserve of Entitlements by withholding up to 3% of the total number of Individual Payment Entitlements from each Member State, in order to deal with specific cases, such as the entry of new farmers into the profession who did not receive direct payments during the historical reference period, as well as to cover cases of force majeure. (j) The exceptional application of partial decoupling for certain agricultural products, which was introduced as an option for Member States to choose, from the first year of application of the scheme, to keep part of the existing payments linked to the type of production concerned. The options available were limited: For cereals, up to 25% of the total cereal payment and alternatively up to 40% of the durum wheat supplementary payment. For sheep and goats, up to 50% of the aid. For beef and veal, up to 100% of the total aid for suckler cows and up to 40% of the slaughter aid for male bovine animals, alternatively up to 100% of the total slaughter aid and alternatively up to 75% of the special aid for male bovine animals. For olive oil, up to 40% of the total aid. For tobacco, and only for the years 2006–2009, different percentages per region could be applied, up to 60% of the total aid, while for the years 2010–2012, 50% of the aid will be decoupled from production and the remaining 50% will be transferred to Pillar II of the CAP rural. For seeds, bananas, raisins, and silkworms, as well as for production activities in the small Aegean islands, the possibility of a total exemption of direct payments from decoupling was given. For processed fruit and vegetables, from 2008 onwards, Member States were given the possibility to opt for a partial coupling of existing payments for a transitional period, namely, for industrial tomatoes, up to 50% of the existing aid until the end of 2011 and for tree crops and raisins, up to 100% of the existing aid until the end of 2010 and up to 75% until the end of 2012. (k) The validity of a specific aid scheme for certain agricultural products, with aids linked to annual production: Durum wheat: special premium of 4 € per hectare for a maximum area of

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6,170,000 ha. Rice: specific aid of 56.1 € per hectare for a maximum area of 203,000 ha. Cotton: specific aid corresponding to 35% of the old aid not released, 59.4 € per hectare for a maximum area of 3,000,000 ha, and 34.28 € per hectare for a maximum area of 700,000 ha. Nuts (almonds, walnuts, hazelnuts, pistachios, hazelnuts, and locust beans): specific aid of 12,075 € per hectare for a maximum area of 411,000 ha, with the possibility of granting additional national aid up to a maximum of 12,075 € per hectare, with the possibility of granting additional national aid not exceeding the Community aid. Dried fodder: specific aid of 33 € per tonne paid to the dehydrator for a maximum quantity of 37,500 tonnes. Energy crops: aid for the production of biofuels or biomass of 4.5 € per hectare. Cow’s milk: new direct payments per tonne to compensate for the reduction in institutional prices, to be phased in gradually, 8.15 € per tonne in 2004, 16.31 € per tonne in 2005, and 24.49 € per tonne in 2006. From 2007, these will become single decoupled aids. In addition, a new Council of Ministers Regulation of 21 June 2005, applicable from 1 January 2007, replaced the guidance and guarantee sections of the pre-existing EAGGF by two separate funds to finance the two pillars of the CAP: the European Agricultural Fund for Rural Development (EAFRD) and the European Agricultural Guarantee Fund (EAGF), which will be controlled by the Commission.

10.3.3 The Course of EMU and the Eurogroup. The Revision of the SGP On 1 January 2002, the eleven Member States that entered the third stage of EMU in 1999, i.e., Austria, Belgium, France, Germany, Ireland, Spain, Italy, Luxembourg, the Netherlands, Portugal, Finland, Portugal, and Spain, started to use the euro as the currency of the euro area, and, in the meantime, the European Council of Santa Maria da Feira on 19 and 20 June 2000 approved Greece’s entry as the twelfth Member State into the euro area, following a positive recommendation from the Commission, which concluded that the country fulfilled the necessary conditions for the adoption of the single currency. In addition to the above-mentioned euro area Member States, the States of San Marino, the Vatican, and Monaco also started to use the euro as their official currency, following a special agreement with the EU, and even minted their own coins. Britain and Denmark remained outside the Eurozone, having secured their non-participation in the third stage of EMU through protocols in the TEU, but retaining the right to join the Eurozone in the future. Furthermore, Sweden, which had joined the EU in 1995 and had chosen to consider joining later, remained outside the euro area. As of October 1997, Britain’s Tony Blair’s Labour government declared that it was going to hold a referendum on his country’s membership of the Eurozone during the next parliamentary term. However, despite their re-election, Labour in Britain again postponed the referendum, with a statement in June 2003, for a time when the British economy could catch up with that of the Eurozone. Furthermore, in a referendum held in Denmark on 28 September 2000, 53.1% of voters rejected the country’s membership of the Eurozone. Finally, in a referendum

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held in Sweden on 14 September 2003, 56.1% of voters opposed their country’s participation in the euro area. Following the major enlargement of 2004, Estonia, Lithuania, and Slovenia joined ERM II on 28 June 2004, Cyprus, Latvia, and Malta on 2 May 2005, and Slovakia on 28 November 2005, with a view to full euro area membership. The Ecofin Council of EU on 11 July 2006 approved Slovenia’s entry into the euro area as from 1 January 2007, and on 10 July 2007, it did the same for Cyprus and Malta’s entry into the euro area as from 1 January 2008. In order to coordinate the work of the euro area finance ministers, the Eurogroup, consisting of the euro area finance ministers, the Vice-President of the Commission responsible for economic affairs and the euro, and the President of the ECB, was set up as an informal body from the outset (see Sect. 9.2.2). The meeting was chaired by the Finance Minister of the EU Member State holding the Presidency of the EU Council of EU, unless that Minister did not represent a euro area Member State, in which case the Presidency was taken over by the next Minister of a euro area Member State who would be the first in line to take over the next Presidency of the Council of EU. The Eurogroup held regular meetings once a month, before the Ecofin Council of EU meeting. Since 2004, it was agreed to elect a Eurogroup President for a renewable 2-year term of office. The first President of the Eurogroup, as of 1 January 2005, for the 2-year period 2005–2006, was Jean-Claude Juncker, Prime Minister of Luxembourg, who was elected again for the 2-year period 2007–2008. The Eurogroup was recognised as an institution by a special protocol to the Treaty of Lisbon (see Sect. 11.1.2), which entered into force on 1 December 2009, also providing for the election of its President for 2 years. However, since 2008, non-regular meetings of the Heads of State and Government of the Eurozone Member States, known as Euroconferences, have also begun to take place. It should be noted that major problems have arisen in the implementation of the SAA, adopted by the Amsterdam European Council on 16 and 17 June 1997 (see Sect. 9.2.2), which Commission President Romano Prodi described in an interview with Le Monde on 17 October 2002 as “stupid”. In 2003, the Council of EU, following initial recommendations from the Commission, announced that both France and Germany were running budget deficits in excess of the 3% of GDP forecast for 2002. Later that year, the Commission requested that the two Member States take action to bring their deficits back within the prescribed limits. However, at the Council of EU on 25 November 2003, the required qualified majority in favour of the Commission’s proposal was not reached at the Council of EU on 25 November 2003, which led to a deadlock. Under pressure from France and Germany, the Ecofin Council of EU, in a report to the European Council, proposed a revision of the SGP with the intention of ending the uncertainty that has existed since 2003. The proposed revision of the SGP allowed for greater flexibility in cases of deficits caused by economic downturns and provided for procedures for structural and long-term corrections of the deficits of Member States with deviations. The proposal was accepted at the European Council meeting on 22 and 23 March 2005. Although the conditions of the revised SGP for limiting the budget deficit of euro area Member States to below 3% of their GDP and

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for limiting their borrowing to 60% of GDP were not changed, among the new provisions was the long-term continuation of efforts to improve their economic performance with a minimum improvement in their annual balance performance of 0.5% of GDP for three consecutive years, even when their budget deficit is reduced to below 3% of GDP. However, the impossibility of imposing sanctions on large Member States that violated the SGP during this period was put forward by non-eurozone Member States, such as Britain and Sweden, as a reason for not entering the eurozone, reinforcing a broader Euroscepticism.

10.3.4 The New Regional Policy (NSRF 2007–2013) The Lisbon European Council of 23 and 24 March 2000 adopted the Lisbon Strategy to make the EU the most competitive and dynamic knowledge-based economy in the world, capable of sustainable growth with more and better jobs and greater social cohesion. In the wake of the Lisbon Strategy for growth and jobs, and in view of the accession of Bulgaria and Romania, the Commission has presented its proposals for EU budgetary policy for the period 2007–2013 since July 2004. The proposals also covered structural policy, for an EU of 27 Member States and 271 regions, with a view to being negotiated. The final text in the form of regulations was to be adopted by the Council of EU and the European Parliament in 2005. Despite an initial divergence of views at the Brussels European Council on 16 and 17 June 2005, final agreement was reached at the Brussels European Council on 15 and 16 December 2005, with no major deviations from the Commission’s proposals. In June 2004, the Commission presented for adoption a legislative package of five regulations comprising a general regulation, three for the ERDF, ESF, and Cohesion Fund, and one for the establishment of the European Grouping of Territorial Cooperation (EGTC) to facilitate cross-border, interregional, and transnational cooperation at regional level. The Council of EU and the European Parliament adopted three Regulations on 5 July 2006 and two Regulations on 11 July 2006, after agreeing on the budget. The new regulations were published in July 2006, reducing the Structural Funds to three, the ERDF, the ECIP, and the CF, while an EGTC was being set up to facilitate cross-border, interregional, and transnational cooperation at regional level. In particular, as mentioned above, CF funding is targeted at Member States with a GDP per capita below 90% of the EU average. In practice, it covers all new Member States as well as Greece and Portugal, while Spain remains a beneficiary on a transitional basis. The targets were set for the period 2007–2013 and would absorb around 346.4 billion euros, of which 69.6 billion euros from the CF were used to finance (1) the Convergence objective, which was similar to the previous Objective 1, covering human and physical capital, innovation, the knowledge society, the environment, and administrative efficiency, aimed to accelerate the economic convergence of the least developed regions whose per capita GDP is less than 75% of the EU average of twenty-seven Member States. The objective will be financed by the ERDF and the

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ESF, as well as by the CF for eligible Member States, the GDP of which is less than 90% of the EU average. (2) The Regional Competitiveness and Employment objective, which was similar to the previous Objective 2, covers the strengthening of the competitiveness, employment attractiveness, and employment of regions not covered by the Convergence objective. The objective will be financed by the ERDF and the ESF. (3) The European territorial cooperation objective, which was similar to the previous Objective 3, promotes the development of common solutions to issues such as urban, rural, and coastal development, and environmental management, by promoting the strengthening of territorial cooperation at the levels of cross-border and transnational cooperation by regions and networking and exchange of experience. The objective will be financed by the ERDF. It is noted that the EU’s strategic guidelines on cohesion highlight the need to strengthen synergies with the then revised Lisbon Strategy for growth and jobs and to promote the implementation of this strategy. Each Member State submits a National Strategic Reference Framework (NSRF) as a reference instrument for the preparation of Structural Funds programming, which is forwarded to the Commission. This ensures the consistency of the Funds’ interventions with the strategic guidelines. The NSRF as a reference instrument has replaced the CSF, which was essentially a management instrument for budget preparation. The new Structural Funds regulations were complemented by a Commission Regulation of 8 December 2006 implementing the general provisions of the Regulation, which replaced the five existing regulations with provisions on information, promotion, management, control systems, irregularities, financial corrections, and eligibility.

10.3.5 The Course of ESDP in the Context of the CFSP and Relations with NATO As mentioned above, the Santa Maria da Feira European Council of 19 and 20 June 2000 defined more clearly the relationship and balance between EU and NATO ESDP in the field of crisis management and established EU-NATO cooperation teams to define and implement the scope of the new cooperation relations agreed. That same year at the Nice European Council, from 7 to 11 December, the French Presidency’s report on ESDP was adopted, according to which the allocation of resources by the Member States for EU operations would be decided by the Member States themselves, reassuring Britain and Denmark, who wanted these decisions not to be taken at the central EU level, thus breaking the sovereignty of the Member States. The Treaty of Nice ended the relationship with the TEU, while the CFSP fully integrated the ESDP (see Sects. 9.3.9 and 10.1.4) as an operational arm, abolishing the Political Committee, whose powers would now be vested in the PSC. At the same time, the EU Military Committee and the EU Military Staff were made permanent, to become operational in 2001. However, the provision for guaranteed EU access to NATO’s planning capabilities ran up against the veto of Turkey, as a

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NATO Member State, which made its removal a precondition for upgrading its participation in the ESDP’s formulation and decision-making mechanism. At the Gothenburg European Council of 15 and 16 June 2001, EU Member States committed themselves to further developing the capabilities and structures of ESDP, with the assumption of crisis management and conflict prevention tasks. However, the terrorist attack of 11 September 2001 provided an opportunity to rethink EuroAtlantic relations and ESDP capabilities, given that the attack was directed against common principles. A Joint Declaration by the Heads of State and Government of the EU Member States, the representatives of the EU institutions, and the High Representative of the CFSP on 14 September 2001 made clear the intention of the European partners to maintain a common line within the CFSP on the issue of terrorism, despite the known weaknesses of the ESDP and the different positions that emerged at the start of the war in Afghanistan on 7 October 2001. The Ghent European Council of 19 October 2001 took stock of the progress made since the terrorist attack of 11 September 2001 and the existing shortcomings and adopted a Crisis Management Concept (CMC). At the Council of Defence Ministers of the EU Member States, and in particular at the Capability Improvement Conference in Brussels on 19 and 20 November 2001, a European Capabilities Action Plan (ECAP) was drawn up, incorporating all efforts planned at both national and multinational level to improve existing resources and gradually develop the necessary capabilities for ESDP actions. The plan was based on four principles: (a) the promotion of the effectiveness of European defence capabilities through cooperation between Member States; (b) the emergence (“bottom-up”) of European defence cooperation based on voluntary state commitments; (c) the coordination of actions between Member States and NATO; and (d) public support, stemming from the transparent and clear procedures of the plan. It also confirmed the commitment to establish the EDTA by 2003, agreed at the Helsinki European Council in December 1999. In December 2001, the issue raised by Turkey regarding the participation of the ESDP in NATO’s planning and the use of NATO structures was also settled, as well as the failure to allow the six non-EU-NATO allies in Europe (such as Turkey) to participate in such planning and decision-making within the framework of the ESDP. After the Ankara Document, Turkey ceased to assert its right of veto as a NATO Member State on this issue, having secured its full participation in operations on its borders, and seems to have secured the EU’s commitment not to engage the latter in conflicts between NATO Member States, apparently implying a conflict between Turkey and Greece. Furthermore, the Laeken European Council of 14 and 15 December 2001 adopted the ESDP. However, despite the support of the Fifteen for the deployment of a multinational security force in Afghanistan, which was encouraging for the development of the ESDP, there were differences and limitations as to its composition and how it should be supported. At the Seville European Council of 21 and 22 June 2002, the fight against terrorism was formally included in the responsibilities of the ESDP. On 24 and 25 October of the same year, at the Brussels European Council, the procedures for the participation of the six non-EU European NATO Member States (also known as

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the “+6”) in ESDP operations were regulated. In the same year, at the NATO Summit in Prague on 21 and 22 November 2002, it was decided that seven new Member States would join the North Atlantic Alliance—Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia, and Slovenia—as of 29 March 2004, bringing the number of Central Eastern European countries that would now be members of the Alliance to ten. Furthermore, in Prague it was decided to establish a NATO Response Force (NRF), which would become fully operational in 2006, with a strength of 21,000 troops, deployed in 7 days and with a self-sufficiency of 1 month, apparently for short missions. Shortly afterwards, on 16 December 2002, the Joint EU-NATO Declaration, known as the Berlin Plus Agreement, was adopted on the basic principles of cooperation and coordination of operational activities between ESDP and NATO, based on the decisions of the NATO Council in Berlin on 3 June 1996 and the conclusions of the NATO Summit in Washington on 23 and 24 April 1999 (see Sect. 9.3.9). New ambitious plans for the promotion and symbolic projection of the EU’s European defence identity were proposed in April 2003 by Belgium, France, Germany, and Luxembourg for the establishment of an autonomous European headquarters in the Brussels suburb of Tervuren, close to the NATO headquarters in Brussels, provoking strong reactions from both the US and the EU’s “proAtlanticists”, i.e. Britain, Spain, and Italy. This confrontation ended after an agreement between Britain, France, and Germany in Naples, shortly before the Brussels European Council on 12 and 13 December 2003, where it was presented as a proposal. This provided, inter alia, for the creation of a European cell at the Supreme Headquarters Allied Powers Europe (SHAPE) for European operations within NATO, as a headquarters for autonomous low-level operations with limited responsibilities, encapsulated in the NATO headquarters in Brussels. At the same European Council, in response to the internal EU disagreements over the war in Iraq, which started on 20 March 2003, and on the basis of the text of the High Representative for the CFSP Javier Solana, A Secure Europe in a Better World, presented to the Thessaloniki European Council on 21 June 2003 on the further development of European crisis management capabilities up to 2010, the new European Security Strategy (ESS) was adopted. The ESS highlighted a number of key threats to Europe that needed to be addressed, such as terrorism, weapons of mass destruction, regional conflicts, state fragmentation, and organised crime. At the Brussels European Council of 17 and 18 June 2004, and in line with the ESS, the new Headline Goal 2010 was adopted, focusing on the development, operability, and sustainability of capabilities, while expanding the original scope of the Petersberg missions to also include joint disarmament operations, support to third countries in the fight against terrorism and the upgrading of the security sector. By 2010, new military capabilities were to be developed, such as the 15 Battle Groups as rapidly expanding units of the 1st Marine Division. 500 soldiers, preparing the ground for the EDTA, the European Gendarmerie Force of 800–900, the Marine Force, the 5 Operational Headquarters in Britain, France, Germany, Greece, and Italy, etc.

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Furthermore, in July 2004, the Council of EU completed the procedures for the European Defence Agency (EDA) to become operational as of 14 July 2004, based in Brussels, with the aim of providing support to EU Member States to improve their military capabilities, in line with the objectives of ESDP, as defined by the ESDP. The EDA is based on four strategies: the Capability Development Plan (CDP), the European Defence Research & Development Programme (EDRP), the European Defence Research and Development Agency (EDDA), and the European Defence Research and Development Agency (EDDA). It should be noted that in 2004, an attempt was made to further codify the ESDP through the CPA, but it was never enacted. Finally, the Brussels European Council of 16 and 17 December 2004 also identified the Non-Military Headline Goals for 2008 for civilian crisis management missions in the ESDP.

10.3.6 Operations and Missions Under the ESDP The first ESDP missions took place in 2003. The EUPM BiH police mission in Bosnia and Herzegovina, as of 1 January 2003, started with an initial 3-year mandate, which was, however, to last until 30 June 2012. The military operation EUFOR Concordia in the FYROM, from 31 March 2003 to 15 December 2003, was the first ESDP mission using NATO structures and resources and EU insignia. The military operation Artemis in Congo, from 12 June 2003 to 1 September 2003, made exclusive use of European resources and assets provided by France as the planning and controlling State of the operation. The EUPOL FYROM Proxima police mission in FYROM lasted from 15 December 2003 to 14 December 2005. In the following years and until 2007, several military, police, special, and mixed operations were carried out. The EUJUST Themis justice space mission in Georgia started on 16 July 2004 and ended on 14 July 2005. The military operation EUFOR Althea in Bosnia and Herzegovina succeeded NATO SFOR on 2 December 2004 to oversee the implementation of the Dayton Agreement, using NATO structures and resources, and continues to this day. The EUPOL Kinshasha police mission in Kinshasha, Congo, from 12 April 2005 ended on 30 June 2007. The main military operation EUSEC RD Congo in Congo, launched on 8 June 2005, provided advice on the defence organisation, security, and democratisation of the country and ended on 30 June 2016. The EUJUST LEX-Iraq justice space mission in Iraq, from 1st July 2005, was tasked with crisis management and ended on 31 December 2013. The EU Joint Mission EU Support to AMIS in the Darfur region of Sudan, from 18 July 2005, lasted until 31 December 2007. The Joint Monitoring Mission Aceh Monitoring Mission (AMM) in Aceh, Indonesia, from 15 September 2005 expired on 15 December 2006. The police mission in the Palestinian Territories, EUPOL COPPS, started on 1 January 2006 and is ongoing until today. The EU Border Assistance Mission Rafah on the border line between the Gaza Strip and Egypt was launched on 25 November 2005 to monitor the border crossing and continues to date. The mainly technical EUBAM Moldova and Ukraine mission on the MoldovaUkraine border, launched on 1 December 2005, has been ongoing until today. The

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EUPAT FYROM police mission in FYROM started after EUPOL FYROM Proxima on 15 December 2005 and lasted 6 months. The short-term military operation EUFOR RD Congo in Congo started on 30 July 2006 to monitor the electoral process in the country and ended on 30 November 2006. The EUPOL Afghanistan police mission in Afghanistan lasted from 15 June 2007 to 31 May 2013. Finally, the EUPOL RD Congo police mission in Congo lasted from 1 July 2007 to 30 September 2014. In addition, Eurocorps, which started its activity in 1992 (see Sect. 8.4.9), was certified by NATO in 2002 as a High Readiness Force (HFR). From August 2004 to February 2005, 450 Eurocorps soldiers formed the bulk of the International Security Assistance Force (ISAF) in Kabul, Afghanistan, at the request of NATO. Furthermore, in 2006, Eurocorps was certified as a NATO Response Force (NRF), and from 1 July 2006 to 10 January 2007, following a decision by the North Atlantic Council, Eurocorps was the land component No 7 of the NATO Response Force.

10.3.7 Developments in AFSJ, Dublin II Regulation and the Hague Programme On 15 January 2003, the European Dactyloscopy (EuroDac) system, which is a fingerprint database for the identification of persons over 14 years of age who either apply for asylum or enter an EU Member State illegally crossing its borders, became operational. The database will be accessible to all competent authorities of Member States to automatically check whether asylum seekers have already lodged an asylum application in another EU Member State or whether they have entered illegally via another Member State, thus identifying their first entry into an EU Member State (“first contact principle”). All EU Member States, as well as Norway, Iceland ,and Switzerland, are participating in the project. On 18 February 2003, the Council of EU adopted a Regulation on the criteria and mechanisms for determining the Member State responsible for examining an asylum application lodged in a Member State by a third-country national, known as the Dublin II Regulation, replacing the 1990 Dublin Convention (see. Sect. 8.4.10), for all EU Member States, with effect from 17th March 2003, except Denmark, to which the application of the Regulation was extended by a separate agreement signed in Brussels on 10 March 2005, with effect from 1st April 2006. By a separate Protocol signed in Brussels on 29 June 2005, the application of the Regulation was extended to Norway and Iceland with effect from 1 May 2006. The provisions of the Regulation were extended by a separate agreement with Switzerland, signed in Luxembourg on 26 October 2004, with effect from 1 March 2008, given that the agreement was approved by a referendum held in the country on 5 June 2005 by 54.6%. Liechtenstein accepted the application of the Regulation by a Protocol signed in Brussels on 28 February 2008, with effect from 1 April 2011. Furthermore, similar protocols implementing the regulation were signed between the states that have applied the regulation since 17 March 2003. The aim of the Dublin II Regulation is to prevent asylum seekers from being sent from one Member State to another and to

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prevent more than one asylum application being lodged by a single person. For these reasons, objective and hierarchical criteria are established in order to determine, on a case-by-case basis, the Member State responsible for examining the asylum application. In addition, 5 years after the Tampere Programme (see Sect. 9.3.7), the Commission published a Communication on the progress of the AFSJ in June 2004, which recorded the positive developments concerning the implementation of the measures foreseen by the Programme, as well as future guidelines for the improvement of the AFSJ. Furthermore, on 26 October 2004, the European Agency for the Management of Operational Cooperation at the External Borders of the Member States of the EU (also known as Frontières extérieures (FRONTEX)), building on the experience of the External Border Practitioners Common Unit, had been established 2 years earlier and had set up seven ad hoc centres for border control: risk analysis in Helsinki, land borders in Berlin, air borders in Rome, western borders in Madrid, education and training in Traiskirchen, excellence in Dover, and eastern borders in Piraeus. The main functions of FRONTEX would be to coordinate operational cooperation between Member States in the field of effective management of the external borders, as well as to provide the necessary technical assistance and expertise. Based on the conclusions of the Brussels European Council of 4 and 5 November 2004, the Hague Programme for the period 2005–2009 was adopted to strengthen the EU’s SDS, which, after reporting on the achievement of the objectives of the Tampere Programme, set out the policy in the field of WSS for the next 5 years. Key elements of the programme were cooperation to improve the control of the EU’s external borders and the fight against illegal immigration through the activation of FRONTEX, which became operational on 1 October 2005, based in Warsaw. At the same time, it was decided to establish a Common European Asylum System by 2010, to fight organised cross-border crime, to extend the mutual recognition by Member States of judicial decisions in civil and criminal matters and to make fuller use of and upgrade EUROPOL and EUROJUST. Finally, the new European drugs policy was adopted, and the qualified majority/co-decision procedure was introduced for all JHA issues, except for legal migration. A few months later, in May 2005, the Commission presented a specific Action Plan for the implementation of the Hague Programme.

10.4

The Fifth and Sixth Enlargements of the EU

After the collapse of the former socialist regimes, the countries of Central Eastern Europe expressed a desire to join the EU, which aroused the interest of the EU Member States and contributed to the establishment of programmes, such as PHARE (see Sect. 8.6.2), which would help these countries of Central and Eastern Europe to integrate more quickly and smoothly. With this in mind, association agreements were signed between the EU and these countries, and the Copenhagen European Council of 21 and 22 June 1993 established a number of economic and political

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criteria, known as the Copenhagen criteria, which the applicant countries would have to meet (see Sect. 8.6.6). Furthermore, the Essen European Council of 9 and 10 December 1994 adopted a pre-accession strategy to prepare the countries of Central and Eastern Europe for the gradual adoption of the acquis communautaire, while the Madrid European Council of 15 and 16 December 1995 further clarified the Copenhagen criteria. The countries of Central Eastern Europe applied for EU membership in the following order: 1994, Hungary on 31 March and Poland on 5 April. In 1995, Romania on 22 June, Slovakia on 27 June, Latvia on 13 October, Estonia on 24 November, Lithuania on 8 December, and Bulgaria on 14 December. In 1996, Czechia on 17 January and Slovenia on 10 June. At the Madrid European Council on 15 and 16 December 1995, a timetable for accession negotiations was drawn up, to begin 6 months after the conclusion of the Intergovernmental Conference on the Treaty of Amsterdam. Negotiations were to be conducted with the countries of Central Eastern Europe, as well as with Cyprus, which had concluded an Association Agreement with the EEC since 19 December 1972 and had applied for membership on 3 July 1990, and Malta, which had concluded an Association Agreement with the EEC since 5 December 1970 and had applied for membership on 16 July 1990. The Commission was given the task of presenting a report on the implementation of the accession negotiations with all the candidate countries.

10.4.1 The Accession Negotiations of the Fifth Enlargement The Commission presented its report on 16 July 1997 with the Action Programme 2000 immediately after the Amsterdam European Council of 16 and 17 June 1997, in which it considered that only six countries could join the EU by 2003, namely Estonia, Cyprus, Hungary, Poland, Czechia, and Slovenia, with which accession negotiations could be opened. The Luxembourg European Council of 12 and 13 December 1997 approved the opening of negotiations with the six countries (the “Luxembourg group”), but expressed the wish to include the ten candidate countries of Central Eastern Europe, together with Cyprus, in the accession negotiations, given that Malta had frozen its application for EU membership in October 1996, following the victory of the Labour Party in the country’s elections. To this end, it decided to convene a European Conference on an annual basis, starting in London on 12 March 1998, with the aim of establishing a general framework for the enlargement process. In addition to the EU Member States, the Conference would be attended by all the candidate countries, including Turkey. The latter had signed an Association Agreement with the EEC on 12 September 1963, had applied to join the EC on 14 April 1987, and completed its customs union with the EU on 31 December 1995. The procedures for accession negotiations were launched in Brussels on 30 March 1998 by the Council of EU and the Commission, with the six states initially proposed by the Commission (the “Luxembourg Group”), where each candidate state was given a list of steps required to meet the accession criteria, and

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from 10 November 1998 substantive negotiations began in the form of separate conferences with each of the six selected states. However, following the Commission’s annual monitoring report of October 1999, the Helsinki European Council of 10 and 11 December 1999 decided to open accession negotiations from February 2000 with the remaining six candidate countries (the “Helsinki group”), namely Bulgaria, Latvia, Lithuania, Romania, and Slovakia, together with Malta, which reactivated its application for EU membership in September 1998, following the victory of its national party in the country’s elections. It also granted Turkey the status of “candidate country”, but without setting a date for the start of accession negotiations, mainly on the grounds of the lack of democracy in the country, as well as the occupation of the northern part of Cyprus by Turkish troops since 1974 and the declaration of the unrecognised “Turkish Republic of Northern Cyprus” since 1983. At the Nice European Council of 7–9 December 2000, it was decided to accelerate accession negotiations with the twelve candidate countries on the basis of a timetable (“roadmap”) for the next 2 years, covering specific chapters of interest. In addition, the European Parliament had called for the new Member States to take part in the 2004 European elections, and to this end, the Commission presented a proposal to the Gothenburg European Council on 15 and 16 June 2001 to conclude negotiations with those candidate countries that were ready for EU membership by the end of 2002, so that they could take part in those elections. The Commission, which in its regular annual reports recorded the progress of the negotiations with the candidate countries and the progress of the reforms achieved in these countries, considered in its annual report of October 2001 that Estonia, Cyprus, Latvia, Cyprus, Estonia, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia, and Slovakia had not yet achieved their commitments, Lithuania, Malta, Malta, Hungary, Poland, Slovakia, Slovenia, and Czechia could be ready within the envisaged deadline, and Bulgaria and Romania would need further progress on the necessary reforms and the continuation of accession negotiations. The Laeken European Council of 14 and 15 December 2001 agreed with the Commission’s report, adding that if the ten candidate countries (“Laeken Group”) continued their efforts to align with EU Member States, the drafting of accession treaties would be feasible in the first half of 2002. Since not all candidate countries were in a position to adopt the acquis communautaire at the same pace before accession, transitional measures were envisaged from the negotiation phase, as clauses applicable for a limited period of time and in specific sectors, to be incorporated into the accession treaties. Such clauses concerned first pillar single internal market issues and third pillar justice and home affairs issues. Given that the new Member States would not be able to fully comply with the Schengen Agreement, they could join the Schengen area at a later stage. At the request of Germany and Austria, the free movement of persons would be restricted for 3 years, with the right of Member States to renew this restriction for a further 2 years, as regards access to employment, depending on labour market requirements. There was also a restriction on the free movement of capital for the purchase of real

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estate in the new Member States, where land prices were lower. There were also important environmental protection requirements, for which the new Member States were given 10 years to implement all the EU directives. As regards nuclear safety, rules and control measures were put in place for the five candidate countries that owned nuclear reactors, namely Lithuania, Hungary, Slovakia, Slovenia, Lithuania, Hungary, and Czechia. The reform of the CAP, launched in 2002, helped to avoid the strain on its budget due to the accession of new Member States whose agricultural production would have required the absorption of new funds. According to the timetable of the Brussels European Council of 24 and 25 October 2002, which was accepted in its entirety at the Copenhagen European Council of 12 and 13 December 2002, the phasing in of CAP payments for the new Member States was set out, starting from 25% of the equivalent of the old Member States’ payments in 2004 to 30% in 2005, 35% in 2006, and 40% in 2007, with further annual increases of 10%, up to 100% in 2013. Thus, the CAP would have a stable budget until 2013 (see Sect. 10.3.2). However, following the expressed dissatisfaction of the candidate Member States, and following a proposal from the Commission, increased aid was secured for the new Member States. The additional funding from national resources and from the EU rural development budget would bring support levels up to 55% of the equivalent of the old Member States’ support in 2004, up to 60% in 2005, and up to 65% in 2006. From 2007 onwards, the new Member States could continue to pay a supplement of up to 30% on top of CAP payments, provided that it comes from national resources. The milk, sugar, rice, and banana quotas, as well as those for herring fishing in the Baltic States, were also the subject of intense discussions. With regard to the Structural Funds and the CF, and given that the vast majority of the inhabitants of all candidate countries lived in regions with a GDP per capita below 75% of the EU average, the Berlin European Council of 24 and 25 March 1999 decided that it would be impossible to include the new Member States in the existing structural policy regime and set a ceiling of 4% of their GDP for the structural aid they would receive. In the area of monetary policy, the new Member States were invited to participate in the EMS and ERM II in order to maintain their currency fluctuations against the euro within a ± 15% band, with a view to joining the euro area if they met all the required convergence criteria of the ESS in the envisaged timeframe.

10.4.2 The Signing of the Accession Treaty for the Fifth Enlargement In its annual report of 9 October 2002, the Commission found that the ten candidate countries, namely Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Czechia, Slovakia, and Slovenia, met the Copenhagen criteria for accession to the EU. Negotiations with the ten candidate countries were thus concluded at the Copenhagen European Council on 12 and 13 December 2002. At the same time, it was decided to continue the adjustment processes in Bulgaria and Romania with a view to meeting the necessary criteria to enable them to join in 2007, while for

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Turkey it was not possible to set a specific date for the opening of accession negotiations. The European Parliament approved the accession of the ten countries to the EU by an absolute majority of its members on 9 April 2003, and the Treaty of Accession of the ten was officially signed in Athens on 16 April 2003 at the Attalos Arcade. The Accession Treaty was ratified by referendums in the nine new Member States, in some of them even before it was signed, while in Cyprus it was ratified by the parliament. In particular, ratifications by referendum were carried out in 2003 with the following acceptance rates: Malta on 8 March with 53.6%, Slovenia on 23 March with 89.7%, Hungary on 12 April with 83.7%, Lithuania on 10 and 11 May with 89.9%, Slovakia on 16 and 17 May with 92.4%, Poland on 7 and 8 June with 77.4%, Czechia on 13 and 14 June with 77.3%, Estonia on 14 September with 67.0%, and Latvia on 20 September with 67.0%. Finally, in Cyprus, the parliament voted in favour of EU membership on 14 July 2003. Furthermore, the Treaty was ratified by the parliaments of the other EU Member States. The date of entry into force of the Treaty was 1 May 2004, the day on which the EU of “Fifteen” became the EU of “Twenty-five”. From a political point of view, the accession of Cyprus, although presenting few economic difficulties, raised the political issue of the division of the island, since 1974, between the Greek and Turkish communities, as well as the presence of Turkish occupation troops in the northern part of the island. On 13 December 2002, the Copenhagen European Council concluded negotiations with Cyprus but was unable to find a political solution to the problem of the division of the island, despite diplomatic efforts under the auspices of the United Nations. The Cypriot government initially declared its support for the peace plan proposed by UN Secretary General Kofi Annan (1938–2018), known as the Annan Plan, which envisaged the creation of two federal states following a referendum to be held in both parts of the island on 24 April 2004, shortly before the entry into force of the EU accession treaty for Cyprus. However, the President of Cyprus, Tassos Papadopoulos (1934–2008), considering that the Annan Plan essentially legitimises the partition of the island, declared in a speech to the Greek Cypriots his refusal to accept it. Thus, in the referendum of 24 April 2004, 75.8% of Greek Cypriots rejected the Annan Plan, as opposed to 69.4% of Turkish Cypriots who accepted it. Despite EU and US dissatisfaction, the entire island joined the EU as a new Member State on 1 May 2004. However, only the Greek part would apply the acquis communautaire, while the status of the Turkish part would remain unclear until a final solution to the Cyprus problem was found. Furthermore, the Council of EU decided to grant financial aid to the Turkish Cypriots, without recognising the “Turkish Republic of Northern Cyprus”, in order to allow the economies of the two parts of the island to converge. It should be noted that the ten new Member States, which signed the Accession Treaty on 16 April 2003, immediately took part in the work of the Convention on the Future of Europe (see Sect. 10.2.2) as observers, together with the other three candidate countries, Bulgaria, Romania, and Turkey. The CTE was finally signed

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Fig. 10.10 The European Union in 2004

by all 25 Heads of State and Government on 29 October 2004 in Rome, while the other three candidate countries initialled the Final Act as observers (Fig. 10.10).

10.4.3 Institutional Changes Since the Fifth Enlargement Following the accession of the ten new Member States on 1st May 2004, the Commission gained 10 new members, one from each new Member State, bringing the total to 30. The new Commissioners had no specific responsibilities but were simply undergoing a period of familiarisation with the Commission’s workings. However, the Commission under Romano Prodi, whose term of office was due to expire on 31 December 2004, resigned on 31 October of the same year, thus allowing a new Commission to be set up in accordance with the institutional reforms of the Treaty of Nice. The new Commission of 25 members—one Commissioner from each Member State—chaired by José Manuel Durão Barroso, former Prime Minister of Portugal, took office on 1 November of that year, after receiving the approval of the new European Parliament, elected in June 2004.

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During the transitional period, from 1st May 2004 to 31 October of the same year, the old Member States retained their number of votes for qualified majority voting in the Council of Ministers, while the new Member States had a number of votes proportional to their size and population, effectively postponing the application of the Treaty of Nice until 1 November 2004. Thus, for this transitional period, in the Council of EU, Britain, France, Germany, and Italy had 10 votes each, Spain and Poland 8 votes each, Belgium, Greece, the Netherlands, Hungary, Portugal, and Czechia 5 votes each, Austria and Sweden 4 votes each, Denmark, Estonia, Ireland, Latvia, Lithuania, Slovakia, Slovenia, and Finland 3 votes each, and finally Cyprus, Luxembourg, and Malta 2 votes each. The total of 124 votes made a qualified majority requirement of 88 votes for matters based on a Commission proposal, while matters not originating from a Commission proposal required 88 votes from two-thirds of the Member States. From 1 November 2004, when the provisions of the Treaty of Nice for the EU institutions came into force, until 31 December 2006, the day before Bulgaria and Romania joined the EU, in the Council of EU, Britain, France, Germany, and Italy each had 29 votes, Spain and Poland had 27 votes, the Netherlands 13 votes, Belgium, Greece, Hungary, Greece, Portugal, and Czechia 12 votes, Austria and Sweden 10 votes, Denmark, Ireland, Lithuania, Slovakia, and Finland 7 votes, Estonia, Cyprus, Latvia, Luxembourg, and Slovenia 4 votes, and finally, and Malta 2 votes. Therefore, the total of 321 votes created a qualified majority requirement of 232 votes for matters based on a Commission proposal, while matters not originating from a Commission proposal required 232 votes from two-thirds of the Member States, as well as “demographic verification” for these Member States to cover at least 62% of the total EU population. Furthermore, until the end of 2006, only the old Member States would continue to chair the EU Council of EU every 6 months, giving the new Member States the opportunity to familiarise themselves with the institutions. Following the signing of the Treaty of Accession of the ten new Member States on 16 April 2003, 162 representatives of the new Member States began to attend the work of the European Parliament as observers: 6 from Estonia, 6 from Cyprus, 6 from Latvia, 9 from Latvia, 13 from Lithuania, 5 from Malta, 5 from Hungary, 24 from Poland, 54 from Slovakia, 14 from Slovakia, 7 from Slovenia, and 24 from Czechia. With the full accession of the new Member States as of 1 May 2004, their 162 observers became full-time MEPs and were added to the existing 626 MEPs from the old fifteen Member States, bringing the total number of MEPs in the European Parliament provisionally to 788. After the June 2004 elections, the distribution of seats was calculated on the basis of the Treaty of Nice, which provided for a total of 732 seats for 27 Member States. However, as there would be only 25 EU Member States by 31 December 2006, the seats reserved from 1 January 2007 for Bulgaria and Romania were provisionally allocated among the 25 Member States in proportion to the number of their MEPs, with some exceptions. Thus, Germany would have 99 seats, Britain, France, and Italy 78 each, Italy and Poland 54 each, the Netherlands 27, Belgium, Greece, Hungary, Portugal, and Czechia 24 each, Sweden 19, Austria 18, Denmark, Slovakia, and Finland 14 each, Ireland and Lithuania 13 each, Latvia 9, Slovenia 7, Estonia, Cyprus, and Luxembourg 6 each, and finally Malta 5.

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10.4.4 The Accession Negotiations of the Sixth Enlargement The reforms initiated in Bulgaria and Romania since 1996 have been noted and supported by the EU, and as a result, the Commission’s Annual Monitoring Report, published in October 1999, recommended the opening of accession negotiations with Bulgaria and Romania. The Helsinki European Council of 10 and 11 December accepted this proposal and included Bulgaria and Romania in the second group of candidate countries, together with Latvia, Lithuania, Malta, and Slovakia (the “Helsinki group”), with which accession negotiations were due to start in February 2000. However, the accession negotiations with Bulgaria and Romania progressed at a slower pace than those of the other candidate countries, mainly due to the problems faced by the two countries in setting up the administrative and legal systems and structures required for the adoption of the European acquis, as well as the delay in implementing the necessary economic reforms. The Copenhagen European Council of 12 and 13 December 2002 concluded the accession negotiations with the ten EU candidate countries (“Laeken Group”), but, taking into account the Commission’s views as set out in the October 2002 Annual Progress Report, agreed to continue accession negotiations with the other two countries, Bulgaria and Romania, in order to enable the two countries to complete the necessary changes and reforms and join the EU in 2007. However, Bulgaria and Romania, as mentioned above, participated as observer states in the work of the Convention on the Future of Europe (see Sect. 10.2.2) and initialled the Final Act on 29 October 2004 in Rome.

10.4.5 The Signing of the Accession Treaty of the Sixth Enlargement Accession negotiations with Bulgaria were concluded in June 2004 and with Romania in December 2004. On 22 February 2005, the Commission issued a report expressing its positive opinion on the accession of the two candidate countries to the EU. The European Parliament on 13 April 2005 approved the accession of the two countries and on 25 April of the same year the Treaty of Accession of Bulgaria and Romania to the EU was signed in Luxembourg. The Treaty of Accession of the two countries was ratified by the Parliaments of the two new Member States on 11 and 17 May 2005, respectively. However, the treaty included a number of safeguard clauses that could delay accession for a year if the necessary commitments to implement the agreed reforms were not met. At the same time there were safeguard clauses in certain areas, which would remain in force for a period of time after the formal accession of the two states. The Commission’s monitoring reports would therefore be particularly relevant in certain areas, such as the fight against corruption, ensuring the independence of the judiciary, the fight against organised crime, respect for human rights, and the protection of minorities.

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On 26 September 2006, the Commission published its final monitoring report on the readiness for accession of Bulgaria and Romania as of 1 January 2007. Although the report identified a number of problem areas, it concluded that Bulgaria and Romania would be in a position to assume the obligations arising from their accession as from 1 January 2007. Thus, following the approval of the Council of EU on 17 October 2006, the accession of Bulgaria and Romania entered into force on 1 January 2007, making the EU of Twenty-Seven a reality.

10.4.6 Institutional Changes Since the Sixth Enlargement Following the accession of Bulgaria and Romania on 1st May 2007, the Commission has grown by two members to 27, with one Commissioner from each Member State. However, as provided for in the Treaty of Nice, at the beginning of the first Commission’s term of office after the accession of the last Member State, the number of Commissioners would be determined unanimously by the Council of EU (Fig. 10.11).

Fig. 10.11 The European Union in 2007

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As of 1 January 2007, in the Council of EU, Britain, France, Germany, and Italy had 29 votes each, Spain and Poland 27 votes each, Romania 14 votes, the Netherlands 13 votes, Belgium, Greece, Hungary, Portugal, and Czechia 12 votes each, Austria, Bulgaria, and Sweden 10 votes each, Denmark, Ireland, Lithuania, Slovakia, and Finland 7 votes each, Estonia, Cyprus, Latvia, Luxembourg, and Slovenia 4 votes each, and finally, Malta 3 votes. The total of 345 votes created a qualified majority of 255 votes. Since 26 September 2005, 35 Romanian and 18 Bulgarian observers have been attending the proceedings of the European Parliament. As of 1 January 2007, the date on which these two states officially joined the EU, the observers became full-time Members, adding to the 732 other Members and bringing the total number of Members of the European Parliament provisionally to 785. At the start of the new parliamentary term from June 2009, in accordance with the Treaty of Nice, as amended by the 2005 Treaty of Accession of Bulgaria and Romania, the total number of MEPs would be 736, with the following breakdown: Germany 99 seats, Britain, France, and Italy 72 each, Spain and Poland 50 each, Romania 33, the Netherlands 25, Belgium, Greece, Greece, Hungary, Portugal, and Czechia 22 each, Sweden 18, Austria and Bulgaria 17 each, Denmark, Slovakia, and Finland 13 each, Ireland and Lithuania 12 each, Latvia 8, Slovenia 7, Estonia, Cyprus, and Luxembourg 6 each, and finally Malta 5 seats.

10.5

Developments in Europe Outside and in Relation to the EU

EU pre-accession programmes for the countries of Central Eastern Europe and the Western Balkans have continued and have been complemented by new ones to cover specific convergence requirements for the candidate countries. For the period 2000–2006, the EU’s pre-accession programme PHARE was complemented since 1999, for the countries of Central and Eastern Europe, with the ISPA programme for environment and transport and the SAPARD programme for agriculture. In addition, the CARDS programme for reconstruction and development financed the Western Balkan states for the same period. In addition, the programme for the neighbouring CIS countries of the EU, TACIS, evolved into TACIS II, in order to cover the ambiguities and to overcome the excessive centralised and often ineffective management and use of the former. In New Yugoslavia, the previously announced divorce of Serbia and Montenegro was implemented after a referendum was held in the latter, which voted in favour of independence from New Yugoslavia. Furthermore, the first elections were held in Kosovo and discussions on the future of the region began in 2006. Furthermore, within the framework of the CIS, economic-oriented and Europeanoriented organisations of European interest were established, such as the Eurasian Economic Community and the Common Economic Space, which included European and Asian states.

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10.5.1 New EU Pre-accession and Neighbourhood Programmes The ISPA (Instrument for Structural Policies for Pre-Accession) programme provided support for infrastructure projects in the EU’s priority areas of environment and transport. For the period 2000–2006, funds of 1.04 billion euros per year (at 1999 prices) were made available through this programme. The SAPARD programme (Special Accession Programme for Agriculture and Rural Development) provided support in the areas of agricultural and rural development of regions of the countries of Central and Eastern Europe as well as in the implementation of the CAP-related acquis communautaire. For the period 2000–2006, funds of 520 million euros per year (at 1999 prices) were made available through this programme. The ISPA and SAPARD programmes, which effectively complemented the PHARE programme, supported investment in infrastructure and in agricultural and rural development in the ten candidate countries of Central and Eastern Europe, namely Bulgaria, Czechia, Estonia, Hungary, Latvia, Lithuania, Latvia, Poland, Romania, Slovakia, Slovenia, and Hungary. Following the 2004 EU enlargement, Bulgaria and Romania remained as beneficiary states of the ISPA and SAPARD programmes, while Croatia was added as an EU candidate country in 2005. For the period 2000–2006, funds of 1.5 billion euros per year (at 1999 prices) were made available through this programme. The CARDS programme (Community Assistance for Reconstruction, Development and Stabilisation) was an EU financial instrument to support the participation of the Western Balkan countries in the Stabilisation and Association process with the EU. It was addressed to Croatia, Bosnia and Herzegovina, Serbia, Montenegro, Macedonia, Albania, Kosovo, Serbia, and Montenegro. The total budget of the CARDS programme for the period 2000–2006 was 4.65 billion euros. In addition to reconstruction, development, and stabilisation, the objectives of the programme were institution building, in particular, institutional and legislative development and harmonisation with EU rules, the establishment of democracy, the rule of law, human rights, civil society, the functioning of a free market economy, sustainable economic and social development, and regional cooperation between countries and between candidate countries and EU Member States. Since 2007, and for the period 2007–2013, the PHARE, ISPA, SAPARD, and CARDS programmes have been replaced by the IPA (Instrument for Pre-Accession Assistance) programme. IPA consisted of five different components: (a) assistance for transition and institution building; (b) cross-border cooperation with EU Member States and other eligible countries; (c) regional development; (d) human capital development and combating exclusion; and (e) rural development. Eligible countries for the IPA programme were the candidate countries Croatia, Turkey, and FYROM for all five components and the potential candidate countries of the Western Balkans Albania, Bosnia and Herzegovina, Montenegro, Serbia, Kosovo, and Montenegro for the first two components only. More specifically for the Western Balkans, and with a view to the region’s eventual accession to the EU, the Stabilisation and Association Process (SAP) was

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launched with Albania, Bosnia and Herzegovina, Croatia, the FYROM, Montenegro, and Serbia, including Kosovo. To this end, the EU is developing new contractual relations with these countries, the Stabilisation and Association Agreements (SAAs), with the aim of stabilising the region, defining common political and economic objectives, and creating a free trade area. The SAP as a necessity was recognised by the European Council in Santa Maria da Feira on 19 and 20 June 2000 and reinforced at the European Council in Thessaloniki on 20 and 21 June 2003. In addition to the specific regional requirements concerning political and economic stability and regional cooperation, the SAP has progressively integrated the instruments of the enlargement process to bring the countries of the region closer to the EU, such as the IPA programme. For the neighbouring CIS Member States of the EU, the TACIS programme covering the period 1991–1999 was more sectoral, given that it was mainly aimed at restructuring of enterprises and human resources and ensuring nuclear safety. In order to cover its ambiguities and decentralise its design to meet real local needs, it was transformed into the new TACIS II for the period 2000–2006, with a budget of 3.138 billion euros. In addition, TACIS II redefined its priorities by targeting nuclear safety but also institutional, legal, and administrative reform. In view of the major enlargement of 2004, the need to develop mutual cooperation with the new EU neighbours after enlargement was recognised, so as to avoid creating dividing lines between EU Member States and their neighbours. This is how the Wider Europe - Neighbourhood initiative was launched. In the context of these relations, the Copenhagen European Council of 12 and 13 December 2002 called for the inclusion of the Mediterranean neighbouring countries. Furthermore, a few months after the Rose Revolution in Georgia at the end of 2003, the Council of EU decided to include Georgia, Armenia, and Azerbaijan in the new policy, which was to be called the European Neighbourhood Policy (ENP). Thus, the ENP would include in the east Azerbaijan, Armenia, Georgia, Belarus, Moldova, and Ukraine, and in the south Egypt, Algeria, Algeria, Jordan, Israel, Lebanon, Libya, Morocco, the Palestinian Authority, Syria, and Tunisia. However, the EU did not have formal relations with Belarus and Libya, and consequently, the ENP in these countries was applied to a limited extent. Also, because Russia did not wish to participate in the emerging ENP, EU-Russia relations focused mainly on joint planning and the pursuit of certain “common policies”. For the period 2007–2013, the TACIS II programme was replaced for the ENP countries and Russia by the ENPI (European Neighbourhood and Partnership Instrument), with a focus on financing cross-border projects. ENPI also replaced the MEDA (Mesures D′ Accompagnement) programme, which was the financial instrument of the Euro-Mediterranean Partnership—also known as the “Barcelona Process”—providing support to the EU’s Mediterranean policy as defined by the Barcelona Declaration of 27th and 28th November 1995, adopted by fifteen Ministers of Foreign Affairs of the EU Member States and twelve counterparts from Mediterranean countries.

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10.5.2 Developments in New Yugoslavia and Transnistria New Yugoslavia was renamed by the Yugoslav parliament on 4 February 2003 as the Union of Serbia and Montenegro. However, in practice the union was non-existent, as since 1996, Serbia and Montenegro had been functioning as separate state entities. Thus, following a referendum held in Montenegro on 21 May 2006, 55.5% of those who voted were in favour of their country’s independence, thus substantiating their demand for a separate state entity, with the result that Montenegro broke away from the union on 3 June 2006, while Serbia declared itself independent only 2 days later. Furthermore, in November 2001, the OSCE supervised the first elections for the Kosovo Parliament. Following the elections, a coalition government was formed with Ibrahim Rugova as President and Bajram Redžepi (1954–) as Prime Minister. Finally, in 2006, international negotiations were launched to determine the final status of Kosovo. It should be noted that Kosovo remained under the interim administration of the UN, UNMIK (see Sect. 9.4.3). Efforts to find a solution to the Transnistria issue continued in November 2003, with Russia proposing the signing of a new memorandum, known as the “Kozak Memorandum”, after its author, Russian politician Dmitry Nikolayevich Kozak (1958 –). The draft provided for the establishment of a federation for Moldova and Transnistria and gave Transnistria the right to veto any future constitutional changes to the new federation. Furthermore, it would allow a Russian military force to remain in the country for the next 20 years, as a guarantee of compliance with the terms of the new memorandum. The plan was ultimately not accepted by Vladimir Voronin (1941–), President of Moldova. Thus, in a referendum held on 17 September 2006, the voters of the self-proclaimed Republic of Transnistria voted by 93.1% in favour of independence from Moldova and union with Russia, although the result of the referendum was not accepted by Russia.

10.5.3 Establishment of Organisations of European Interest Within the CIS Economically oriented organisations were created during this period within the CIS. The Eurasian Economic Community (EurAsEC or EAEC) came into being on 10 October 2000, when Kazakhstan, Kyrgyzstan, Belarus, Russia, and Tajikistan signed a treaty in Astana, Kazakhstan, which was ratified by the five Member States in May 2001. On 7 October 2005, Uzbekistan joined the EAEC, but withdrew 3 years later, on 12 October 2008. Armenia, Moldova, and Ukraine participate in the EAOC as observers. The aim of the EAEC is to create a common market for goods, transport, investment, and energy. The creation of a Common Economic Space (CES) between Russia, Ukraine, Belarus, and Kazakhstan was announced on 23 February 2003 in the Moscow suburb of Novo-Ogaryovo by the heads of these states. The CSO would operate under the supervision of a supranational committee based in Kiev, and would not be

References

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dependent on the governments of the four Member States. The ultimate goal would be a regional economic organisation that would be open to other countries that could join it and could even eventually lead to the introduction of a single currency. However, although Ukraine initially ratified its accession to the CSCE in May 2003, the new government that emerged in 2004 expressed its preference for EU membership. Thus, as of 1 January 2010 the Customs Union (CU) of Kazakhstan, Belarus, and Russia became operational as a first step towards the formation of a wider economic union. The Member States of the Customs Union plan to continue economic integration and remove all customs borders between them. On 19 November 2011, the Member States set up a joint commission to promote closer economic ties, planning to create a single economic space. Kyrgyzstan has expressed its intention to join the Customs Union since October 2011, and Tajikistan seems to want to do the same.

References Address by Mr. Lionel Jospin, Prime Minister, on "The future of an enlarged Europe" (Paris, May 28 2001), http://www.diplomatie.gouv.fr/avenir/jospin280501.gb.html. Communication COM(2002) 394 final - Mid-Term Review of the Common Agricultural Policy, Commission of the European Communities, Brussels, 10 July 2002. EUR-Lex, Access to European Union Law, Petersberg Tasks, https://eur-lex.europa.eu/EN/legalcontent/glossary/petersberg-tasks.html European Commission, Economy and Finance, History of the Stability and Growth Pact, 2023, https://economy-finance.ec.europa.eu/economic-and-fiscal-governance/stability-and-growthpact/history-stability-and-growth-pact_en. European Commission, Pre-Accession Assistance, About the programme, https://commission. europa.eu/funding-tenders/find-funding/eu-funding-programmes/pre-accession-assistance_en European Council, Conclusions of European Council of 23-24 March 2000, Lisbon, 23-24 June 2000. European Parliament, Berlin Plus agreement (Provided by Mr. Tim Waugh NATO), https://www. europarl.europa.eu/meetdocs/2004_2009/documents/dv/berlinplus_/berlinplus_en.pdf. European Union, Common Foreign and Security Policy, European Defence Agency (EDA), https:// european-union.europa.eu/institutions-law-budget/institutions-and-bodies/search-all-euinstitutions-and-bodies/european-defence-agency-eda_en Finck, F., Border Check-Point, the Moldovan Republic of Transnistria, in Hohmann, J., (ed.), Joyce, D., (ed.), International Law's Objects, Pages 162–172, Oxford Academics, Published: December 2018, https://doi.org/10.1093/oso/9780198798200.003.0013. Maraveyas, N., Developments in the Common Agricultural Policy and Greek Agriculture (in Greek Language), Sakkoulas, Athens - Komotini, 2003. Maresceau, M., Pre-accession, in Cremona M., (ed.) The Enlargement of the European Union, Pages 9–42, Oxford Acadenic, Published: March 2003, https://doi.org/10.1093/acprof:oso/ 9780199260942.003.0002 Official Journal of the European Communities 10.03.2001, No C 80.Treaty of Nice, "Treaty of Nice amending the Treaty on European Union, the Treaties establishing the European Communities and certain related acts", Nice, 26 February 2001. Official Journal of the European Communities, Charter of Fundamental Rights of the European Union, 18.12.2000, No C 364. "Charter of Fundamental Rights of the European Union", Brussels, 18 December 2000.

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Regulation (EC) 343/2003 of the Council of EU of 18 February 2003 on the criteria and mechanisms for determining the Member State responsible for examining an asylum application lodged in one of the Member States by a third-country national, known as the Dublin II Regulation, replacing the 1990 Dublin Convention. Regulation (EC) 2007/2004 of the Council of EU of 26 October 2004 establishing a European Agency for the Management of Operational Cooperation at the External Borders of the Member States of the European Union. Regulation (EC) 2007/2004 of the Council of EU of 26 October 2004 created the European Agency for the Management of Operational Cooperation at the External Borders of the Member States of the EU, also known as Frontières extérieures (FRONTEX). Speech by Joschka Fischer at the Humboldt University in Berlin "From Confederacy to Federation Thoughts on the finality of European integration", 12 May 2000. http://www.auswaertigesamt. de/www/de/infoservice/download/pdf/reden/redene/r000512b-r1008e.pdf. The Hague Programme: Strengthening Freedom, Security and Justice in the European Union, 03.03.2005, Council of EU, 3 March 2005. Treaty concerning the accession of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic to the European Union, Official Journal of the European Communities, L 236, 23.09.2003. Treaty concerning the accession of the Republic of Bulgaria and the Republic of Romania to the European Union, Official Journal of the European Communities, L 157, 21.06.2005. Treaty establishing a Constitution for Europe, Official Journal of the European Union 16.12.2002, C 310. "Treaty establishing a Constitution for Europe", Rome, 29 October 2004. United Nations, Yugoslavia and Successor States: Bosnia and Herzegovina, Croatia, Montenegro, North Macedonia, Serbia, Slovenia, https://www.un.org/en/about-us/member-states/yugoslavia. World Bank, Agreement on Foundation of Eurasian Economic Community, 10 October 2000, https://wits.worldbank.org/GPTAD/PDF/archive/EAEC.pdf.

From the Treaty of Lisbon to the Seventh Enlargement (2007–2013)

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The Treaty of Lisbon as an Informal EU Constitution

Following the rejection of the CSC, the Brussels European Council of 16 and 17 June 2005 decided to give the Member States a “period of reflection” to give them the opportunity to find a solution with the participation of civil society. The “period of reflection” was extended by the Brussels European Council on 15 and 16 June 2006, due to the different approaches of the governments of the Member States as to the type of solution to be sought, i.e. whether to amend the existing draft constitution or to draft a new text covering the necessary reforms. The German Presidency in 2007 stepped up efforts to break the deadlock. In March 2007, on the fiftieth anniversary of the Treaties of Rome, all Member States committed themselves to renewing the EU before the 2009 European Parliament elections. However, there were several contentious issues to be clarified, such as whether a new treaty would be a consequence of the unapproved TCE, whether the EU would acquire a legal personality, whether the Charter of Fundamental Rights of the European Union would acquire legal force, whether qualified majority voting would be extended to justice and home affairs, etc. Finally, at the Brussels European Council of 21–23 June 2007, it was decided to convene an Intergovernmental Conference with a view to adopting a text not in the form of a Constitution but as a “Reform Treaty” for the EU, amending the existing Treaties. Thus, the constitutional concept, which consisted in the abolition of all existing treaties and their replacement by a single constitutional text, was abandoned at the present time.

11.1.1 The Intergovernmental Conference The Intergovernmental Conference for the preparation of a “Reform Treaty” started its work on 23 July 2007 in Lisbon, with the Portuguese Presidency’s expressed intention to conclude its work in October of the same year. The aim of the new treaty # The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 P. Liargovas, C. Papageorgiou, The European Integration, Vol. 1, Springer Texts in Political Science and International Relations, https://doi.org/10.1007/978-3-031-47776-8_11

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was to amend the TEU, as well as the TEC, which would be renamed the Treaty on the Functioning of the European Union (TFEU). The new Reform Treaty would build on most of the changes proposed by the TCE, such as merging the three pillars of the TEU, giving the EU legal personality, upgrading the Charter of Fundamental Rights of the European Union to a legally binding text, strengthening the legislative and budgetary powers of the European Parliament, redefining and extending qualified majority voting in the Council of EU, establishing the position of President of the European Council, creating the position of the High Representative of the Union for Foreign and Security Policy matters, strengthening the role of national parliaments and citizens’ initiative, etc. All references in the concept of the “Constitution”, as well as in symbols, such as the flag, anthem, emblem, etc. would be removed, which Eurosceptics considered to hide the transformation of EU into a superstate and the dissolution of the state etities of its Member States. During the Intergovernmental Conference, Poland’s position on how to set up a blocking minority for the decisions of the Council of EU caused problems in the course of the conference. Furthermore, Italy was demanding a change in the number of its seats in the European Parliament for the 2009 elections, at a time when the negotiations were coming to an end. The final text of the treaty reached by the Intergovernmental Conference was adopted at the informal European Council in Lisbon on 18 and 19 October 2007.

11.1.2 The Signing and Ratification of the Treaty of Lisbon The fact is that the new treaty did not achieve the ambitious objectives attempted through the CTE, and, unlike the CTE, it does not repeal the treaties in force until then in order to replace them with a single text, but it modifies them. Thus, although it has incorporated most of the provisions of the CTE, it falls within the logic of the revisionist treaties like all the previous ones. However, with its acceptance it became clear that the majority of Member States believe in and seek European integration, and therefore, the Lisbon Reform Treaty is a step forward in this direction. In general, the new Treaty gives the EU legal personality and the term Union replaces and succeeds the term Community. The Union is based on two Treaties: (a) the TEU, which concerns the fundamental provisions on the Union’s purposes and institutions, including the provisions on the CFSP, and (b) the TFEU, which contains provisions and details on the functioning of the Union and its policies. The three pillars are merged, and, while respecting the specific status of the CFSP, all matters are transferred to one pillar, and the co-decision procedure is extended and renamed the ordinary legislative procedure (see Article 5(2) of the Treaty on European Union, Sect. 11.1.3) to almost the entire scope of the abolished third pillar, while the implementation of the AFSJ is strengthened (see Sects. 9.3.7 and 10.3.7), to which the subjects of the JHA are assigned (see Sect. 11.1.5). The Treaty incorporated the Charter of Fundamental Rights of the European Union into European primary law. It also strengthened the four freedoms of the single internal market and the political, economic, and social freedom of European

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citizens. Emphasis was placed on the required spirit of solidarity between EU Member States, which must act jointly if a Member State is attacked by terrorism or affected by a natural or man-made disaster, and the need for solidarity in the energy sector was also highlighted. The enhanced cooperation procedure was also established, in areas of non-exclusive EU competence, with a minimum of nine Member States cooperating, and open to new Member States wishing to join. In addition, Member States with high military capabilities are given the possibility to establish permanent structured cooperation within the EU. Finally, for the first time, the possibility for a Member State to withdraw if it so wishes has been provided for. With the Treaty of Lisbon, the EU would ensure a more effective external representation and presence in the international community. The new Permanent President of the European Council and the High Representative for Foreign Affairs and Security Policy would now be permanent interlocutors with third parties, responding to the long-standing demand—notably from the USA—for their existence. At the same time, the CSDP is established as an integral part of the CFSP. The Treaty of Lisbon was signed on 13 December 2007, subject to ratification by the Member States. To this end, the Heads of State and Government who signed the Treaty called for a swift completion of the ratification procedures by the 27 Member States, with a view to allowing it to enter into force on 1 January 2009. By October 2008, the Treaty had been ratified by the parliaments of several Member States. In particular, Malta and Hungary ratified the Treaty by depositing their respective instruments of ratification on 6 February, France on 14 February, Romania on 11 March, Slovenia on 24 April, Bulgaria on 28 April, Austria on 13 May, Denmark on 29 May, Latvia on 16 June, Portugal on 7 June, Slovakia on 24 June, the UK on 16 July, Luxembourg on 21 July, Italy on 8 August, Greece on 12 August, Cyprus and Lithuania on 26 August, the Netherlands on 11 September, Estonia on 23 September, Germany on 25 September following the decision of its Constitutional Court on the compatibility of the German Constitution with the Treaty, Finland on 30 September, Spain on 8 October, and Belgium on 15 October. However, the first rejection of the treaty came from Ireland, the only country that had to hold a referendum under its constitution to ratify the treaty. In particular, in the referendum held there on 12 June 2008, 53.4% voted against the treaty. At the urging of the European Council, and given that many Member States had ratified it, which ruled out the possibility of renegotiating the treaty, the ratification procedures continued. In order to allow the ratification process to continue, the Irish government decided to hold a second referendum on 2 October 2009, after receiving guarantees—known as the Irish guarantees—from the European Council on issues such as the retention of one Commissioner from each Member State in the Commission, taxation, abortion, and national defence, which appear to have led to the negative outcome. The second referendum ratified the treaty with 67.1% of those voting in favour and 32.9% against, and an instrument of ratification was deposited on 23 October. Sweden subsequently deposited an instrument of ratification on 3 December. The following year, Poland and the Czech Republic deposited instruments of ratification on 10 October and 13 November, respectively, the latter having obtained certain exceptions relating to the application of the Charter of

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Fig. 11.1 Herman Van Rompuy, first permanent President of the European Council. Source: Author: European People’s Party, https://www.flickr.com/ photos/eppofficial/5007331 731/. Licensed under the Creative Commons Attribution 2.0 Generic license https://commons. wikimedia.org/wiki/Category: Herman_Van_Rompuy_ (Presidency_of_the_ European_Council)#/media/ File:Herman_Van_Rompuy_ (2010-09-15).jpg (cropped)

Fig. 11.2 Catherine Ashton, first EU High Representative for Foreign Affairs and Security Policy. Attribution: European Defence Agency, licensed under the Creative Commons Attribution-Share Alike 2.0 Generic license, https://www.flickr.com/ photos/71445395@N03/134 68295505 (cropped)

Fundamental Rights of the European Union, while a protocol was to be annexed to the Treaty by a subsequent decision. It should be noted that Britain and Poland managed to include a protocol to avoid the requirement of full application of the Charter of Fundamental Rights of the European Union in their countries by the Court of Justice of the European Union (Figs. 11.1 and 11.2). The Treaty of Lisbon finally entered into force on 1 December 2009. Meanwhile, on 19 November 2009, the extraordinary European Council in Brussels elected Herman Van Rompuy (1947–), Prime Minister of Belgium, as the first Permanent President of the European Council and the British Trade Commissioner, Catherine Ashton (1956–), as EU High Representative for Foreign Affairs and Security Policy.

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11.1.3 Institutional Reforms Institutionally, the Treaty of Lisbon provided for important new powers for the European Parliament, in terms of legislation, the EU budget, and international agreements, given the increased use of the co-decision procedure, renamed the ordinary legislative procedure. This procedure is being extended to more than forty new areas, such as agriculture, justice, energy, structural funds, and immigration, with the result that the European Parliament is now on an equal footing with the Council of EU, which is now obliged to meet in public. The number of MEPs will increase to 751 at the start of the new parliamentary term, from June 2014, with the largest number of Member States represented being 96 MEPs and the smallest being 6 MEPs. They will be distributed in a “degressively proportional order” according to the population of the Member States, as follows: Germany 96 seats, France 74, Britain, and Italy 73 each, Spain 54, Poland 51, Romania 33, the Netherlands 26, Belgium, Greece, Greece, Hungary, Portugal, and Czechia 22 each, Sweden 20, Austria 19, Bulgaria 18, Denmark, Slovakia and Finland 13 each, Ireland and Lithuania 12 each, Latvia 9, Slovenia 8, and Estonia, Cyprus, Luxembourg, and Malta 6 each. The 750 MEPs will have the right to vote, as the President of the European Parliament will not have the right to vote. However, this distribution changed with Croatia’s accession to the EU (see Sect. 11.4.3). The number of MEPs as of June 2009, under the Treaty of Nice, was 736, which was less than the number provided for by the Treaty of Lisbon (see Sect. 10.4.6). Thus, 18 MEPs were added to the 736 elected in June 2009, following ratification by the Member States of a protocol of amendment adopted on 23 June 2010 in the context of an Intergovernmental Conference, temporarily increasing the number of MEPs to 754. This increased the number of MEPs in Austria by 2, Bulgaria by 1, Britain by 1, France by 2, Spain by 4, Italy by 1, Latvia by 1, Malta by 1, the Netherlands by 1, Poland by 1, Slovenia by 1, and Sweden by 2 (Fig. 11.2). It also strengthens the supervisory role of national parliaments, in parallel and not to the detriment of the European Parliament’s increased powers. The national parliaments will, among other things, monitor compliance with the subsidiarity principle. Thus, each national parliament will henceforth be able to put forward reasons why it considers that a proposal does not comply with this principle, in which case a two-stage procedure will be launched: (a) if one-third of the national Parliaments consider that a proposal does not comply with the subsidiarity principle, the Commission would have to re-examine its proposal and decide whether to maintain it, amend it, or withdraw it, and (b) if a majority of national Parliaments share the same concerns and the Commission decides to maintain its proposal, then the Commission should set out its arguments and the European Parliament and the Council of EU will decide whether the relevant legislative procedure should continue. At the same time, citizens are given an increased role with the establishment of the “citizens’ initiative” mechanism, since the Treaty gives them the right to submit any proposal that has the support of one million EU citizens and obliges the Commission to examine it.

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Qualified majority voting in the Council of EU is extended to new policy areas, such as the common transport policy, asylum, immigration, border controls, cooperation in criminal matters, police cooperation in non-operational areas, approximation in criminal law matters, and coordination of economic policies, while the procedure is also applied to newly introduced policies in areas such as energy, sport, tourism, and cooperation in space activities. However, in the decisions on the free movement of workers, cooperation in criminal matters, and approximation in criminal matters, a specific safeguard clause is introduced whereby, if a Member State considers that the proposed measure affects fundamental aspects of its national system, it can request the suspension of the ordinary legislative procedure and refer the matter to the European Council, which, after discussion and decision, ends the suspension of the procedure. Transitional provisions will apply to the qualified majority system until 31 October 2014, based on the current system of the “triple majority” of Member States, votes, and populations, of the Treaty of Nice (see Sect. 10.1.3). As of 1 November 2014, qualified majority voting will be based on the “double majority” of Member States and populations, so that a decision will have a qualified majority when it is taken by 55% of Member States representing at least 65% of the EU population, whereas, in the case where the decision of the Council of EU does not result from a Commission proposal, the affirmative votes of 72% of Member States and 65% of the EU population are required for a qualified majority to exist. However, for this period and until 31 March 2017, it will also be possible to apply the Ioannina Compromise (see Sect. 9.1.2), which will allow Member States representing at least 75% of the EU population or 75% of the number of Member States required to constitute a blocking (blocking) minority to refuse to accept a decision of the Council of EU by qualified majority, seeking to find a solution within a reasonable period of time. As of 1 April 2017, a mechanism similar to that of the Ioannina Compromise will apply, with reduced triggering thresholds, namely at least 55% of the number of Member States or 55% of the EU population necessary to constitute a blocking minority. Unanimity is maintained in general matters such as the appointment of members of the institutions, the composition of advisory bodies, the opening of negotiations for the accession or association of new states, and the revision of the Treaties, as well as in specific matters such as the common foreign and security policy, operational police cooperation, taxation, social security and social protection, budgetary policy, intellectual property, and family law. The position of permanent President of the European Council is established, elected for two and a half years, taking into account the relationship between the election of the President of the Commission and the results of the European elections. He/she shall prepare the work of the European Council in cooperation with the President of the Commission and shall direct its proceedings, striving for coherence and consensus, and present a report on the proceedings of each meeting to the European Parliament. The Permanent President of the European Council shall represent the Union internationally at the level of Heads of State on CFSP matters and may not exercise other national functions at the same time. Furthermore, the establishment of the European Council does not increase its current powers, but it does define them more clearly.

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Under the Treaty of Lisbon, the Commission would have a number of members equal to two-thirds of the number of Member States from 2014, and would be selected on the basis of equal rotation. The current system of one Commissioner from each Member State would only apply on a transitional basis for the Commission appointed in 2009. Due to the following facts: (a) the initial rejection of the ratification of the Treaty by the first Irish referendum on 17th June 2008, (b) the Irish request to retain one Commissioner from each Member State in the Commission in view of the holding of a second referendum on the ratification of the Treaty and (c) the possibility for the European Council to decide unanimously to change the number of Commissioners on the basis of Article 17 TEU, the Brussels European Council of 11th and 12th December 2008 committed itself that if the Treaty entered into force, it would take a decision on whether to grant the Irish request. Thus, following the ratification of the Treaty by all Member States and its implementation, the European Council on 22 May 2013 adopted the decision to maintain the current situation of one Commissioner from each Member State and for the new Commission to take office on 1 November 2014. An important innovation of the Treaty of Lisbon is the link between the selection of the candidate for the post of Commission President and the results of the European Parliament elections. Furthermore, the method of selecting the members of the Commission and the powers of the President of the Commission have been maintained. The post of High Representative of the Union for Foreign Affairs and Security Policy, who will also be Vice-President of the Commission, appointed by qualified majority by the European Council, with the agreement of the President of the Commission, has also been introduced. Since the signing of the Treaty of Lisbon, the Court of Justice of the EU has extended its jurisdiction to all areas of EU activity, including for the first time those under the abolished third pillar. Thus, the Court of Justice of the EU acquires competences in police cooperation and judicial cooperation in criminal matters. It consists of three judicial bodies: the Court of Justice itself, the General Court, and the Civil Service Tribunal. The Court of Justice is composed of one judge per Member State, and there are eight prosecutors-general. The General Court is composed of at least one judge per Member State, so the number of judges may be greater than the number of Member States. The Civil Service Tribunal is composed of seven judges. The Judges and Advocates-General of the Court of Justice and the Judges of the General Court shall be chosen from persons whose independence is beyond doubt and shall be appointed by common accord of the governments of the Member States for a term of 6 years, after consultation with a competent committee composed of seven persons chosen from among the former members of the two courts, members of the national supreme courts, and lawyers of recognised competence, one of whom shall be proposed by the European Parliament.

11.1.4 Improvements in the CFSP and Expansion of the Missions of the CSDP The Treaty of Lisbon provides the legal and political basis for the EU to acquire “politics of scale” that allow it to play a more active international role, thus enabling

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a “common” European foreign security and defence policy. A single EU representation in foreign policy and defence matters is expected to enhance the EU’s negotiating effectiveness in the CFSP, while the new European External Action Service (EEAS) will assist the EU High Representative for Foreign Affairs and Security Policy in his work. Furthermore, the Lisbon Treaty renames the ESDP as the Common Security and Defence Policy (CSDP). And while the Treaty contains essentially the same provisions as the TEU with regard to the ESDP/CSDP, it also adds some new provisions aimed at developing the CSDP. The Treaty of Lisbon for the first time provides for a Mutual Defence Clause linking EU Member States, so that if a Member State is under armed attack on its territory, it can count on the help and assistance of the other Member States, which must assist it. However, the clause does not affect the security and defence policy of certain Member States, which have traditionally declared themselves neutral, and it does not affect the commitments arising from their membership of NATO. Furthermore, the Treaty of Lisbon further extends and clarifies the competences of the European Defence Agency, which aims to improve the military effectiveness of the Member States. In particular, the Agency is required to define common objectives for the Member States in terms of military capabilities, to establish programmes and ensure their management in order to achieve the objectives it has set, to harmonise the operational needs of the Member States and improve methods of procurement of military equipment, to manage research activities in the field of defence technology, and to contribute to the strengthening of the industrial and technological base of the defence sector and to the optimisation of the European defence industry. An even deeper form of cooperation between Member States in the defence field is Permanent Structured Cooperation, which is the subject of a protocol annexed to the Treaty of Lisbon. In this context, the participating Member States commit themselves to further intensify their defence capabilities and to provide combat units for the missions envisaged, in accordance with the regular evaluation by the European Defence Agency. Permanent Structured Cooperation shall be approved by the Council of EU, which shall adopt a decision by qualified majority at the request of the participating Member States. However, no threshold of Member States is required for its establishment, and any Member State is free to withdraw or join the permanent cooperation, provided it meets the conditions of engagement. The CSDP remains essentially an intergovernmental matter, decisions are taken mainly by unanimity, while the funding and operational means of the missions, which are planned and conducted within the framework of the CSDP, are provided by the Member States. Nevertheless, CSDP provides a framework for cooperation, enabling the EU to conduct operational missions in third countries, with the aim of maintaining peace and strengthening international security, based on military and civilian assets provided by the Member States. Until the entry into force of the Treaty of Lisbon, the missions that could be conducted under the CSDP were Petersberg humanitarian, rescue, conflict prevention and peacekeeping, and crisis management combat intervention missions. The Treaty of Lisbon added three new missions: (a) joint disarmament actions, (b) military advice and assistance missions, and (c) post-conflict stabilisation operations.

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The objectives of these missions and the way in which they are to be carried out will be determined by the Council of EU, which will have the possibility of entrusting their execution to a group of Member States that wish to do so and have the military and civilian means necessary for their implementation. The Member States undertaking these operations shall keep the Council of EU informed of the progress of the missions and shall cooperate with the High Representative of the EU for Foreign Affairs and Security Policy. Moreover, the Treaty of Lisbon recognises the possible intervention of multinational forces, such as Eurocorps, Eurofor, Euromarfor, and the European Air Group, in the implementation of CSDP (see Sect. 8.4.9).

11.1.5 The Changes in JHA Issues and the Strengthening of the Single AFSJ A particularly important change brought about by the Treaty of Lisbon, following the abolition of the third pillar, is the application of Community rules in the field of criminal and police cooperation, i.e. the extension of the ordinary legislative procedure (former co-decision procedure) to almost the entire field of JHA, while the implementation of the AFSJ, which covers the JHA subjects, is strengthened. Thus, the Treaty of Lisbon extends the jurisdiction of the Court of Justice of the EU to matters under the former third pillar, including acts of the EU institutions in this area, while the Commission is given the power to bring infringement proceedings before the Court of Justice of the EU in respect of matters under the former third pillar, thus fully playing its role as guardian of the Treaties. It is also noted that the restrictions and derogations previously provided for in relation to violations by Member States are abolished, while only the exceptions relating to the proportionality of police operational actions, public order, and public security remain. More specifically on criminal cooperation issues, a specific legal basis is provided for the application of the principle of mutual recognition of judicial decisions, cooperation between Member States’ authorities, and crime prevention measures, while EUROJUST is given more operational powers. For matters of judicial cooperation in civil matters, the qualified majority and co-decision procedure for adopting legislative measures will continue to apply. However, for family law matters, unanimity and consultation of the European Parliament is maintained, and the role of national parliaments, whose negative opinion prevents the adoption of proposed measures in family law, is strengthened. Finally, on police cooperation matters, the EU’s competences remain unchanged, while the provisions on EUROPOL matters are broadened to include operational activities with a strictly defined framework. It should be noted that the existing protocols with exceptions for Britain and Ireland, as well as the relevant protocol for Denmark, are being extended to include criminal and police cooperation issues, while in addition, a complex procedure is

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foreseen to allow these states to withdraw from measures to which they are already bound.

11.2

Developments in European Policies and the Image of the EU

In a difficult economic context of this period, the Commission, considering that the economies of the EU Member States are largely interconnected with close links and “spill-overs” and therefore coordination within the EU is necessary to become more effective in dealing with the crisis, proposed in its Communication of 3 March 2010 the Europe 2020 Strategy for the period 2011–2020, which set out three priorities to promote growth: smart growth, sustainable growth, and inclusive growth. A cycle of economic and fiscal policy coordination was also established as part of the EU’s economic governance framework, the so-called “European Semester”, which covers three areas of economic policy coordination: structural reforms, fiscal policies, and the prevention of excessive macroeconomic imbalances. The Hague Programme adopted the Stockholm Programme, which sets out the framework for police and customs cooperation, rescue services, judicial cooperation in civil and criminal matters, asylum policy, migration and visas for the period 2010–2014, setting priorities for the promotion of citizens’ rights, improvement of daily life, protection of citizens, access to the European area, solidarity and partnership in the field of migration and asylum, and the external dimension of migration and asylum. Furthermore, a “health check” of the CAP was carried out as a process to evaluate and possibly adjust the mechanisms introduced in 2003. Thus, on 12 October 2011, the Commission presented a package of proposals setting out the main objectives of the new CAP for the period after 2013, and on 16 December 2013 the Council of EU adopted the proposal for the revision of the CAP for the period 2014–2020 in four regulations. Finally, improvements in the effectiveness of CSDP have been seen at operational level through operations, mainly in African states and regions, to combat piracy, to control maritime areas to enhance security, and to provide training to state institutions and security forces in some African states.

11.2.1 The Europe 2020 Strategy The Europe 2020 Strategy, proposed by the Commission on 3 March 2010 and endorsed by the European Council on 25 and 26 March 2010, set out three priorities to promote growth: (a) smart, with more effective investment in education, research, and innovation; (b) sustainable, with a decisive transition to a low-carbon economy; and (c) inclusive, with a focus on job creation and poverty reduction. To assess progress in implementing the Europe 2020 Strategy, five overarching objectives were agreed for the whole EU: (a) employment, (b) research and

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development, (c) climate change and energy sustainability, (d) education, and (e) combating poverty and social exclusion. These EU-level targets are then translated into national targets for each Member State, reflecting the different situations and circumstances in each Member State. For the employment target, it is planned to increase employment in the 20–64 age group from 69% to at least 75%. For the research and development objective, it is foreseen that 3% of EU GDP should be invested in research and development and the creation of a new indicator to monitor innovation. For the climate change and energy sustainability target, it is foreseen to reduce greenhouse gas emissions by 20% (or 30% if conditions allow) compared to 1990, to ensure 20% of energy from renewable sources, and to increase energy efficiency by 20%. For the education target, it is foreseen to reduce early school leaving rates from 15% to below 10% and to increase the completion of tertiary education for the 30–34 age group from 31% to at least 40%. Finally, for the objective of combating poverty and social exclusion, it is planned to reduce by at least 20% the number of people in or at risk of poverty and social exclusion, i.e. by 20 million. The objectives reflect the three priorities of smart, sustainable, and inclusive growth, but their scope is broader. Achieving them will require a wide range of actions at national, European, and international level. The Commission has proposed seven flagship initiatives that will act as catalysts for progress on each key priority: The “Innovation Union”, which seeks to refocus R&D and innovation policy on the challenges facing EU society, such as climate change, energy efficiency and resource efficiency, health, and demographic change, while bridging the gap between science and the market so that inventions are turned into products. At EU level, the Commission will work to (a) complete the European research area, develop a strategic research programme focused on challenges such as energy security, transport, climate change and resource efficiency, health and population ageing, environmentally friendly production methods, and land management; (b) improve the framework conditions for businesses in the innovation sector; (c) launch “European Innovation Partnerships” between EU and Member State level; (d) review and further develop the role of EU instruments to support innovation, facilitate access to finance, especially for SMEs, and create innovative incentive mechanisms linked to the carbon market; and (e) promote knowledge partnerships and strengthen links between education, business, research, and innovation. Youth on the Move, which aims to enhance the performance and attractiveness of Europe’s higher education institutions at international level and to improve the overall quality at all levels of education and training in the EU, combining excellence and equity by promoting student and trainee mobility and improving the employment situation of young people. At EU level, the Commission will work to (a) complete and strengthen EU programmes on mobility, universities, and researchers and link them with national programmes and resources; (b) accelerate the modernisation programme of higher education; (c) explore ways to promote entrepreneurship through mobility programmes for young professionals; (d) promote the recognition of informal and non-formal learning; and (e) launch a youth employment framework that will outline policies aimed at reducing youth unemployment.

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The “Digital Agenda for Europe” which seeks to deliver sustainable economic and social benefits from a single digital market based on fast and superfast Internet access and interoperable application, broadband access for all by 2013, access for all to higher Internet speeds (30 Mbps or higher) by 2020, and 50% or more of European households subscribing to Internet connections above 100 Mbps. At EU level, the Commission will work to (a) create a stable legal framework to attract investment in an open and competitive high-speed Internet infrastructure; (b) develop an effective radio spectrum policy; (c) facilitate the use of EU structural funds in the implementation of this programme; (d) create a real single market for online content and services; (e) reform research and innovation funds and increase support in the ICT sector; and (f) promote Internet access and use by all European citizens. “A resource-efficient Europe” to decouple economic growth from resource and energy use, support the transition to a low-carbon economy using renewable energy sources, reduce CO2 emissions, boost competitiveness, and increase energy security. At the EU level, the Commission will work to (a) mobilise EU financial instruments (e.g. rural development, structural funds, R&D framework); (b) strengthen a framework for the use of market-based instruments; (c) promote the modernisation and deregulation of transport carbon dioxide emissions by helping to increase competitiveness; (d) promote the upgrading of Europe’s networks, including trans-European energy networks, with the aim of creating a European hypergrid; (e) implement a revised energy efficiency action plan and promote a broad programme for efficient use of energy resources; and (f) formulate a vision of structural and technological changes necessary for the transition by 2050 to a low-carbon economy. “An Industrial Policy for the Globalisation Era” aims at a modern industrial policy that supports entrepreneurship, guides and assists industry on how to meet these challenges, promotes the competitiveness of Europe’s enterprises in the primary sector, manufacturing, and services, and helps them to seize the opportunities offered by globalisation and the green economy. At EU level, the Commission will work to (a) establish industrial policy by creating the best environment for maintaining and developing a strong, competitive, and diversified industrial base in Europe; (b) develop a horizontal approach to industrial policy by combining different policy instruments; (c) improve the business environment, especially for SMEs; (d) promote the restructuring of sectors facing difficulties in future-oriented activities; (e) promote technologies and production methods that limit the use of natural resources; (f) develop an effective space policy to provide the means to address some of the most important global challenges; (g) strengthen the competitiveness of the European tourism sector; and (h) support the transition of service and manufacturing sectors to more efficient use of resources, including more efficient recycling. The “Agenda for new skills and jobs” to modernise labour markets and ensure the sustainability of European social models, equip citizens with new skills to adapt to new circumstances and possible career changes, reduce unemployment, and increase labour productivity. At EU level, the Commission will work to (a) define and implement the second phase of the “flexibility with security” programme;

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(b) adapt the legislative framework, in line with the principles for “smart” regulation; (c) facilitate and promote labour mobility within the EU and better adapt supply workforce on demand; (d) strengthen the capacity of the social partners and make full use of the problem-solving potential provided by social dialogue at all levels; (e) give a strong impetus to the strategic cooperation framework for education and training with the participation of all stakeholders actors; and (f) develop a common language and an operational tool for education/training and work: a European framework for recycling skills, qualifications, and occupations. The “European Platform against Poverty” to ensure economic, social, and territorial cohesion, so that the fundamental rights of people living in poverty and social exclusion are recognised, enabling them to live in dignity and participate actively in society. At EU level, the Commission will work to (a) transform the Open Method of Coordination for social exclusion and social protection into a platform for cooperation and for taking concrete action, also using targeted support from the structural funds and in particular the ESF; (b) draw up and implement programmes to promote social innovation for the most vulnerable and for the integration of immigrants; and (c) undertake the assessment of the adequacy and sustainability of social protection and pension systems and identify ways to ensure better access to healthcare systems. Member States are committed to achieving the Europe 2020 Strategy targets, which they have translated into national targets. However, it is only through coordination and proper targeting of efforts undertaken at national level that the desired results for growth can be achieved. The European Semester (see Sect. 11.2.2) also coordinates the efforts of the Member States to achieve the objectives of the Europe 2020 Strategy. The central argument developed is that the Europe 2020 Strategy appears more social than the Lisbon Strategy of 2000, since it puts, among other things, the fight against poverty and social exclusion back at the heart of European policy and establishes for the first time quantitative targets and guidelines for combating them. Its proposals also covered structural policy, for the period 2014–2020. However, the analysis in the Commission’s Communication of 5 March 2014 to the European Parliament, the European Council, the European Economic and Social Committee, and the Committee of the Regions shows that experience with the Europe 2020 Strategy’s objectives and flagship initiatives has been mixed. The EU is expected to meet or come close to its targets for education, climate, and energy, but not for employment, research and development, or poverty reduction. However, the transfer of these targets to the national level has helped to highlight the differences between the best performing Member States and the worst performing Member States, as well as between EU regions.

11.2.2 Establishing the European Semester as a Coordination Cycle The Commission has established a cycle of economic and budgetary policy coordination, which is part of the EU’s economic governance framework, the so-called

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“European Semester”. The European Council of 17th June 2010 endorsed the idea of the “European Semester”, which focuses on the first 6 months of each year, hence the term “semester”. The “European Semester” is codified in the “Six Pack” (see Sect. 11.3.2) and covers three areas of economic policy coordination: (a) structural reforms, which focus on promoting growth and employment in line with the Europe 2020 Strategy; (b) fiscal policies, in order to ensure the sustainability of public finances in line with the SGP; and (c) the prevention of excessive macroeconomic imbalances. In essence, the European Semester provides the framework for coordinating the economic policies of EU Member States, enabling Member States to discuss their economic and budgetary planning and monitor progress at specific times during each year. Its name “semester” is due to the fact that it focuses mainly on the first 6 months of each year. At the same time, it provides a framework for coordinating labour and social policy within the EU. During the European Semester, Member States align their budgetary and economic policies with the objectives and rules agreed at EU level. Each year, the Commission carries out a detailed analysis of each EU Member State’s fiscal, macroeconomic and structural reform programme and makes recommendations for the next 12–18 months. The European Semester starts with the preparatory phase and the adoption of the Annual Growth Survey (AGS) by the Commission, usually in November each year. This document sets out the EU’s priorities to boost growth and jobs. At the same time, the Commission publishes an Alert Mechanism Report (AMR) under the Macroeconomic Imbalances Procedure. Based on a number of indicators, the Alert Mechanism Report identifies Member States that need further analysis, in the form of an in-depth review, in order to draw conclusions on the possible existence of imbalances and their nature. In addition, in the Preparatory Phase, the Commission’s Draft Recommendation on Euro Area Economic Policy calls on its Member States to implement policies specific to them as members of the euro area. The aim is to achieve greater convergence between the euro area dimension and the national dimensions of EU economic governance. In February, Phase 1 of the EU-level policy guidelines will be launched. Given that the Semester has implications for many policies, the Council of EU in its various meetings examines the Annual Growth Survey, formulates general policy orientations, and adopts conclusions. It also examines, amends if necessary, and adopts the draft Council of EU recommendation on euro area economic policy. The Annual Growth Survey is also discussed in the European Parliament, which may publish a report on its own initiative. The Parliament adopts an opinion on the employment guidelines. The European Parliament is also involved in the Semester through the economic dialogue. It may invite the President of the Council of EU, the Commission, and, where appropriate, the President of the European Council or the President of the Eurogroup, to discuss matters relating to the European Semester. It may also invite Member States to an exchange of views. The European Council formulates policy orientations based on the Annual Growth Survey and the Council of EU analysis and conclusions. Member States

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are also invited to take these orientations and the findings of the country reports into account when preparing their national stability or convergence programmes and national reform programmes. These programmes set out Member States’ budgetary policies and their policies to promote growth and competitiveness. Phase 2 of the formulation of Member States’ objectives, policies, and plans starts in April. Member States submit their policy plans: (a) Stability and Convergence Programmes, which set out the Member States’ medium-term budgetary strategy, and (b) National Reform Programmes, which set out the Member States’ structural reform plans, with a focus on promoting growth and employment. Member States should submit these programmes by 15 April or by the end of April at the latest. The following month the Commission assesses the national policy plans and presents draft country-specific recommendations. Then, in June, the Council of EU examines the proposed country-specific recommendations and finalises them. The European Council then endorses the final recommendations. Finally, in July, the Council of EU adopts the country-specific recommendations and Member States are invited to implement them. Phase 3 of the application will start around the end of July. So during the remaining 6 months of the year, sometimes called the “national semester”, Member States take the recommendations into account when drawing up their national budgets for the following year. Euro area Member States are also required to submit their draft budgets to the Commission and the Eurogroup by mid-October at the latest. Finally, Member States adopt their national budgets at the end of the year. The cycle starts again towards the end of the year with the Commission’s review of the economic situation in the context of the Annual Growth Survey for the following year.

11.2.3 Developments in AFSJ, Stockholm Programme, and Dublin III Regulation On 10 June 2009, the Commission presented the Communication on the Future of Justice, Freedom and Security Policies, which formed the basis for the new multiannual programme for the adoption of the priorities of EU Justice, Freedom, and Security policies for the period 2010–2014. The new programme, known as the Stockholm Programme, which replaces the respective Tampere (see Sect. 9.3.7) and Hague (see Sect. 10.3.7) Programmes, was adopted in Brussels by the European Council under the Swedish Presidency on 10 and 11 December 2009. In the light of the Treaty of Lisbon, which entered into force on 1 December 2009, bringing about significant changes to the CEAS, the Stockholm Programme for the period 2010 to 2014 sets out the framework for police and customs cooperation, rescue services, judicial cooperation in civil and criminal matters, asylum, immigration, and visa policy. The Stockholm Programme, as set out in the conclusions of the European Council of 10th and 11th December 2009, sets the following six priorities: (a) The promotion of citizenship and fundamental rights. Making European citizenship a tangible

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reality. The area of freedom, security, and justice must first and foremost be a single area for the protection of fundamental rights. The enlargement of the Schengen area must continue. Respect for the individual and human dignity and other rights enshrined in the Charter of Fundamental Rights and the European Convention for the Protection of Human Rights is an essential value. (b) A Europe of law and justice: The achievement of a European area of justice must be consolidated in order to overcome the current fragmentation. Priority should be given to mechanisms to facilitate access to justice so that everyone can claim their rights across the EU. Cooperation between public sector practitioners in justice-related professions and their training should also be improved, and means should be mobilised to remove obstacles to the recognition of legal decisions in other Member States. (c) A Europe that protects: An internal security strategy should be developed to further improve security within the EU and subsequently protect the lives and integrity of European citizens, which should address the issues of organised crime, terrorism, and other threats. This strategy should also seek to strengthen cooperation. Moreover, the EU should work in the spirit of solidarity between Member States. (d) Access to Europe in a globalised world: Access to Europe for persons with a recognised legitimate interest in entering EU territory must be made more effective and efficient. At the same time, the EU and its Member States must guarantee the security of their citizens. Integrated border management and visa policies should be put in place to serve these purposes. (e) A Europe of responsibility, solidarity, and partnership on migration and asylum: The development of a proactive and comprehensive European migration policy, based on solidarity and responsibility, remains a key political objective of the EU. All relevant legal instruments must be effectively implemented and full use must be made of the relevant organisations and agencies active in this field. The European Pact on Immigration and Asylum, adopted by the European Council of 15th and 16th October 2008, provides a clear basis for further progress in this area. The objective of establishing a CEAS by 2012 remains active and persons in need of protection must be guaranteed access to legally secure and effective asylum procedures. (f) Europe’s role in a globalised world—the external dimension: The external dimension is essential to address the key challenges we face and to provide greater opportunities for EU citizens to work and trade globally. The external dimension of freedom, security, and justice is critical to the success of the objectives of this programme and should in particular be taken into account in all other aspects of EU external policy and be fully consistent with them. As a result of the Stockholm Programme, particular emphasis has been placed on improving the level of cooperation between police and judicial authorities (EUROPOL and EUROJUST), making better use of the European Crime Prevention Network (EUCPN) established on 28 May 2001, the European Police College (Collège Européen de Police, CEPOL) established on 22 December 2000, the EU Situation Centre (EU SITCEN—renamed EU Intelligent Analysis Centre, EU INTCEN as of March 2012) established in June 2002, and the European Criminal Records Information System (ECRIS), which became operational in April 2012. Furthermore, the European Asylum Support Office (EASO) was developed as a tool for the development and implementation of the CEAS, the establishment of which

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was decided on 19 May 2010. FRONTEX has also been strengthened to enable it to respond more effectively. To this end, the European Border Surveillance System (EUROSUR), established on 22 October 2013, is a multi-objective system aimed at preventing illegal immigration and cross-border crime at the external borders, while helping to ensure the protection and rescue of the lives of migrants attempting to reach European shores. Furthermore, the Schengen Information System SIS-II, which was decided to replace the previous SIS (see Sect. 9.3.8), became operational on 20 December 2006, and finally became operational on 9 April 2013. Finally, the VIS (Visa Information System), which was established on 8 June 2004, became operational on 11 October 2011. Furthermore, following the Commission’s report on the evaluation of the Dublin immigration and asylum system adopted on 6 June 2007, the Commission, as of 3 December 2008, requested amendments to the Dublin II Regulation (see Sect. 10. 3.7). This was in view of the fact that this Regulation was informally under review, as it did not contain provisions relating to the length of detention of refugees or migrants, even though almost all Member States were holding asylum seekers for long periods while they were waiting to be transferred to another Member State. Negative criticisms, both from the European Parliament, which recognised the disproportionate burdens borne by refugee host countries, and from other bodies such as Amnesty International, contributed to the review. The new Dublin III Regulation was finally adopted on 26 June 2013, and entered into force on 19 July 2013, and applies to all Member States except Denmark. It is based on the same principle as the two previous ones, namely that usually the first Member State to ring and receive the asylum seeker is responsible for examining the asylum application. In addition, the Regulation provides that detention is permitted when less coercive alternatives have been exhausted and only if the person poses a significant risk of absconding pending transfer. Detention should not be longer than a specified reasonable period of time required for the administrative procedures for the transfer of the asylum seeker.

11.2.4 The CAP “Health Check” and the 2009 Reform (Boel) On 20 November 2007, the Commission, in a letter to the Council of EU and the European Parliament entitled Preparing for the “health check” of the CAP reform, set out, on the initiative of Commissioner for Agriculture and Rural Development Mariann Fischer Boel 1943–), the issues on which this check should focus. The “health check” (see Sect. 10.3.2) which was in practice an exercise to evaluate and possibly adapt the mechanisms established in 2003 in the light of new challenges such as climate change, the increased use of biofuels, and water management, despite its limited scope, resulted in findings that led to decisions by the Council of EU in November 2008, which were codified in a regulation on 19 January 2009 and other regulations adopted up to December 2009 (Fig. 11.3). The changes to the CAP decided in the context of this reform were as follows: (a) Further decoupling of aid, with immediate decoupling of aid for dried fodder,

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Fig. 11.3 Mariann Fischer Boel, Commissioner for Agriculture and Rural Development. Source: bauernverband—https:// www.flickr.com/photos/ bauernverband/8280857516/ in/photolist-4vVgzm-dBKyrs4vVgN9, licensed under the Creative Commons Attribution 2.0 Generic license, https://commons. wikimedia.org/wiki/File: Mariann_Fischer_Boel.jpg

potato starch, flax, and hemp; decoupling from the beginning of 2010 of aid for arable crops, durum wheat, olive oil, and hops; and decoupling from the beginning of 2012 of aid for beef, rice, nuts, seeds, and protein crops. Decoupled payments will be integrated into the single payment scheme, with the exception of suckler cow premiums and sheep and goat premiums for which Member States may maintain the current levels of coupled support. (b) The possibility for Member States to reallocate the value of Individual Payment Entitlements at country or geographical region level within 3 years on the basis of objective and non-discriminatory criteria. (c) The simplification of Multiple Compliance by removing standards which are not appropriate or not linked to the farmer’s responsibility, while new requirements will be added to ensure good agricultural and environmental condition of the land, which will start to be implemented from the beginning of 2010. (d) Compulsory modulation, which provides for the reduction of all direct payments, for farms with payments higher than 5000 €, is gradually increased by 2012 by 5%, in addition to the 5% already applied. The gradual modulation added to the basic modulation, which concerns farms receiving more than 300,000 € in direct payments, is increased by an additional 4%. The appropriations resulting from the application of the additional compulsory modulation, transferred to Pillar II, are mainly intended to address environmental issues such as water resources and climate change. (e) The possibility to withhold up to 10% of the national ceiling for reserved aid. Of this total amount, a percentage of up to 3.5% of the national ceiling may be reserved for sectoral programmes, such as programmes to improve the quality and marketing of agricultural products and to protect and improve the environment, for aid in regions affected by the abolition of milk quotas, for aid in regions affected by further decoupling in the rice sector, for the promotion of risk management measures, such as crop insurance schemes in the event of natural disasters, for the promotion of risk management measures, such as crop insurance schemes in the event of natural

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disasters, for the protection of the environment, and for the improvement of the quality of agricultural products and the protection and improvement of the environment. (f) The phasing out of milk quotas, with a view to their definitive abolition by April 2015. Ensuring a “smooth transition” is achieved by increasing quotas by 1% per year between 2009/10 and 2013/14. For Italy, a 5% increase will be applied immediately from 2009/10. In 2009/10 and 2010/11, farmers who would exceed the milk quota by more than 6% would have to pay a levy 50% higher than the normal levy. (g) The possibility to extend the application of the simplified single area payment scheme until 2013 for those Member States applying it without being obliged to apply the single payment scheme from 2010. (h) The abolition of set-aside of 10% of arable crops in order to allow maximum use of production potential.

11.2.5 The 2009 CAP Reform with a View to 2020 (Cioloş) However, after the completion of the CAP “health check”, a new period was written out, including the implementation of the Europe 2020 Strategy for smart, sustainable, and inclusive growth, the end of the transitional period of the CAP implementation for the last acceded Member States, the possibility of a new agreement on agriculture as a result of the WTO Doha Round negotiations, the possibility of a new protocol on climate change to replace the Kyoto Protocol, and a new financial framework for the period 2014–2020. Therefore, the definition of a new CAP to apply from 2014 onwards was a new necessity. In this context, the Commission, in its document entitled The CAP towards 2020: meeting the future challenges of food, natural resources and soil, of 18th November 2010, opened the debate on a revision of the CAP, and on 12 October 2011, on the initiative of Commissioner for Agriculture and Rural Development Dacian Cioloş (1969–), presented a package of proposals which set out the three strategic objectives of the new CAP for the period after 2013: (a) sustainable food production and long-term food security for citizens; (b) sustainable management of natural resources and biodiversity; and (c) balanced development of rural areas. To achieve these objectives, the Commission proposed that the future CAP should be greener with a fairer distribution of first pillar payments to active farmers and funding for competitiveness, innovation, environmental protection, sustainable development, and a focus on climate change under the second pillar, and should also be aligned with the Europe 2020 Strategy. On 16 December 2013, the Council of EU adopted the proposal for the revision of the CAP in four regulations, which were adopted the following day, in agreement with the European Parliament. These regulations set the new framework for the operation of the CAP for the period 2014–2020. The CAP budget for the period 2014–2020 will be 408.31 billion euros, i.e. 38% of the total EU budget. The first pillar of the CAP will spend 312.73 billion euros, i.e. 76.6% of the budget, and the second pillar will spend 95.58 billion euros, i.e. 23.4% of the budget. The main points of revision include direct aid measures, the Single CMO Regulation, rural

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Fig. 11.4 Dacian Cioloş, Commissioner for Agriculture and Rural Development. Source: European People’s Party derivative work: ALE! ¿. . .? - Dacian_Ciolos.jpg, licensed under the Creative Commons Attribution 2.0 Generic license, https:// commons.wikimedia.org/ wiki/File:Dacian_Ciolos_ (cropped).jpg (cropped)

development measures, and the Horizontal Regulation on the financing, management, and monitoring of the CAP (Fig. 11.4). Pillar I direct support measures include the following: (a) Reduction of the amount of income support for large crops: by applying a compulsory 5% reduction for amounts above 150,000 €, with an exception for Member States which use more than 5% of their national direct aid envelope to increase support for small farmers through a form of redistributive payment. (b) Redistributive payments: with an option given to Member States to redistribute direct income support to their farmers using up to 30% of their national direct payment envelopes to grant small farmers an additional payment for the first hectares for which they have activated payment entitlements, up to a maximum of 30 ha of an average farm area per Member State. (c) External convergence: to ensure a more equitable distribution of direct income support across the EU and to reduce the link to historical references. It is foreseen that all Member States with direct payments below 90% of the average level should make a reduction of one-third of the difference between the level at which they are now and this level, reaching the minimum threshold by 2020, with funding proportionately from all Member States with direct payments above the EU average. (d) Internal convergence: with procedures that can be implemented at national or regional level for Member States to at least partially restore the balance of the average level of direct payments per hectare at national or regional level by 2019, so that by then the value of all entitlements aid to reach at least 60% of the national or regional value. However, if the 60% rate leads to a loss of more than 30% in Member States applying this threshold, the minimum value of payment entitlements may be reduced to reach 30% as a maximum value. For the purposes of internal convergence, Member States may also take into account the 30% of the payments for greening (see below) received by farmers. (e) Coupled payments: with a limit for

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Member States of 8% coupled payments and an additional 2% for protein crops. Member States which used more than 5% coupled payments in one year in the period 2010–2014 can have a limit of 13% plus 2% for protein crops. Member States which used more than 10% of coupled payments in one year in the period 2010–2014 may decide to use more than 13% after approval by the Commission. (f) Fiscal Discipline: according to which, farmers receiving less than 2000 € in direct payments will be exempted from the straight cut in direct payments. (g) The concept of active farmer: according to which, stricter rules are introduced to prevent legal entities whose main activity is not agriculture from claiming direct payments, notably by providing for a mandatory “negative list” for persons who are a priori excluded from direct payments. (h) For “greening”: 30% of direct aid is subject to the evaluation of farming practices that are beneficial for the environment and the climate, such as, in particular, the diversification of production, the maintenance of permanent pastures, and the formation of an “ecological focus area” in every farm. (i) Preservation of permanent pastures: Member States must ensure that a minimum proportional area of permanent pastures is maintained in the total agricultural area. This ratio can be applied at national, regional, or per farm level. (j) Ecological Focus Areas (EFAs): the minimum area where there is no requirement to maintain an EFA shall be 15 hectares of arable land. This will start at 5% in 2015 and will increase to 7% in 2017. EFAs will only apply to arable land and not to permanent pasture and permanent crop land. The Single CMO regulation refers to the following areas: (a) Vine planting: the system for authorising new vine plantings starts in 2016 and will last until 2030, with a 1% annual increase. Current vine planting rights will be extended on a transitional basis from 3 to 5 years. (b) Sugar beet: Termination of quotas on September 30, 2017. Note that the standard provisions for agreements between sugar beet growers and operators will be maintained after the end of the quotas. (c) Milk: Termination of quotas on 31 March 2015. Pillar II Rural Development measures include the following: (a) A Common Strategic Framework: The European Agricultural Fund for Rural Development (EAFRD) (see Sect. 10.3.2) will be integrated with the European Investment Funds, for greater consistency, efficiency, and the possibility of co-financing a programme from different Funds. (b) Rural Environment, Organic Farming, Natura, and Water Framework Directive: Measures relating to environment and climate have been strengthened to increase their effectiveness. Due to the similarity of some greening practices under Pillar I with agri-environment and climate measures under Pillar II, the Regulation provides for an exception to double funding to ensure that farmers are not paid twice for the same activity. (c) Areas with natural constraints: A new designation of areas with natural constraints, formerly known as Less Favoured Areas, is introduced. These areas will now be defined on the basis of eight biophysical criteria, which will ensure an objective and transparent system for the whole EU. Member States can implement the new designation by 2018, with the possibility to start earlier. (d) Funding: For the sake of simplification, a Single Co-financing Rate is provided for all measures. This coefficient takes into account the different circumstances in the regions, as well as two types of transition in cases

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where the GDP per capita for the period 2007–2013 was below 75% of the EU average. In order to ensure the efficient use of EU funds, minimum spending conditions are provided for the environment and for the LEADER programme. At least 30% of the EAFRD should be available for environment and climate changerelated measures. Another 5% should be available for the LEADER approach, which supports the implementation of local strategies. (e) Innovation: This is a horizontal objective and will be supported through rural development measures. In addition, through the European Innovation Partnership for Agricultural Productivity and Sustainability, established as of 17 December 2013, resource efficiency and environmentally friendly agriculture and forestry will be promoted, while research and technology transfer to farmers will be supported. The Horizontal Regulation on the financing, management, and monitoring of the CAP is a combination of the rules of the CAP comprising: (a) The financing, management, and control systems, including the Paying Agencies and the IACS. (b) The agricultural advisory system, which consists of a set of advisory services, which are required by Member States to make farmers aware of their obligations under cross-compliance and greening. (c) The system of cross-compliance, created by the 2003 revision of the CAP, which links aid and support for farmers to compliance with criteria relating to the environment, animal welfare, and the use of plant protection products. (d) The system of withdrawal of unduly paid aid and penalties imposed on aid beneficiaries who do not comply with eligibility conditions or other obligations. In particular for “greening”, sanctions will be imposed gradually. In the first 2 years of its implementation, i.e. 2015 and 2016, no sanctions will be imposed at all, while thereafter an adjustment factor of 20% of the greening aid will be imposed for the year 2017 and 25% for the year 2018. (e) The publication of the names of the beneficiaries of the CAP funds in order to discourage beneficiaries from irregular behaviour. In order to ensure a balance between objective public scrutiny and the right of beneficiaries to respect their personal data, the names of those beneficiaries who receive amounts below the maximum allowable amounts of aid under the small farmers’ support scheme will not be published. (f) A crisis reserve to support the agricultural sector in cases of serious crises affecting agricultural production. The cases of use of the reserve are described in the Single CMO Regulation.

11.2.6 The Evolution of Regional Policy (NSRF 2014–2020) According to the Commission Communication of 3 March 2010 entitled “Europe 2020: A strategy for smart, sustainable and inclusive growth”, launched by the European Council of 25 and 26 March 2010 and endorsed by the European Council of 17 and 30 June 2010, this would enable the EU to achieve growth with the following characteristics: (a) smart: by promoting knowledge and innovation; (b) sustainable: based on the promotion of a greener, more competitive economy in which resources are used more efficiently; and (c) inclusive: aimed at increasing

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employment and strengthening social and territorial cohesion. In addition, the Commission sets a series of targets to be achieved by 2020. The five objectives of EU Regional and Cohesion Policy for this period absorb a total of 351.8 billion euros, are fully aligned with those of the Europe 2020 Strategy for 2020, and are as follows: (1) Employment: employ at least 75% of the working population aged 20–64. (2) Research and Development: 3% of EU GDP should be invested in research and development. (3) Climate change and energy sustainability: (a) Reducing greenhouse gas emissions by 20% from 1990 levels. (b) Ensuring 20% of energy from renewable sources. (c) Increasing energy efficiency by 20%. (4) Education: (a) Reducing early school leaving rates to below 10%. (b) Completing at least 40% of tertiary education for the 30–34 age group. (5) Combating poverty and social exclusion: Reduce by at least 20 million the number of people in or at risk of poverty and social exclusion. In this context, the Structural Funds and the CF for the period 2014–2020 contribute to the development and promotion of EU actions and lead to the strengthening of the EU’s economic, social, and territorial cohesion (in accordance with Article 174 TFEU), aiming at the following two general objectives: (a) Investment in growth and employment in the Member States and regions supported by the three Funds, i.e. the ERDF, the ESIF, and the CF (more than 95% of the resources). (b) European territorial cooperation (cross-border, transnational, and interregional), supported by the ERDF. Following a proposal from the Commission, for the 2014–2020 programming period, the Regulation of the European Parliament and of the Council of EU of 17 December 2013 laying down common provisions for the ERDF, the EIF, the CF, the EAFRD, and the European Maritime and Fisheries Fund (EMFF) and the general provisions for the ERDF, the EIF, the CF, and the EMFF established 11 Thematic Objectives supported by the European Structural and Investment Funds (ESIF): (i) Strengthening research, technological development, and innovation. (ii) Improving access to, use, and quality of information and communication technologies. (iii) Improving the competitiveness of small and medium-sized enterprises and the agricultural sector (for the EAFRD) and the fisheries and aquaculture sector (for the EMFF). (iv) Supporting the transition to a low-carbon economy in all sectors. (v) Promoting climate change adaptation, prevention, and risk management. (vi) Preserving and protecting the environment and promoting resource efficiency. (vii) Promoting sustainable transport and removing barriers to key network infrastructure. (viii) Promoting sustainable and quality employment and supporting worker mobility. (ix) Promoting social inclusion and the fight against poverty and social exclusion. (viii) Promoting sustainable and quality employment and supporting workers’ mobility. (ix) Promoting social inclusion and the fight against poverty and social exclusion. (ix) Promoting social inclusion and the fight against poverty and social exclusion. The first four Thematic Objectives cover the first feature of the Europe 2020 Strategy’s smart growth agenda. The next three Thematic Objectives cover the second characteristic of sustainable growth of the Europe 2020 Strategy. Finally,

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the last four Thematic Objectives cover the third characteristic of inclusive growth of the Europe 2020 Strategy. The priorities of the funds for the above 11 objectives are as follows: (a) The ERDF supports all 11 objectives, but its main priorities for investment are the first four objectives (i–iv). (b) The ESF supports the first four objectives (i–iv) but also the last four (viii–xi), but the main priorities for the fund are the last four objectives (viii–xi). (c) The CF supports only five objectives, namely the four intermediate objectives (iv–vii) and the last objective (xi). (d) Finally, the EAFRD and the EMFF support the third objective (iii). To maximise the contribution of the EIF, a Common Strategic Framework (CSF) and strategic guiding principles have been established to facilitate the programming process at Member State and regional level. The CSF sets out how the EIF contributes to the achievement of the EU’s strategy for smart, sustainable, and inclusive growth, the arrangements for promoting the integrated use of the EIF, and the arrangements for coordinating the EIF with other relevant Union policies and instruments. Under the CSF, each Member State should draw up, in cooperation with its partners and in consultation with the Commission, a Partnership Contract (PCP), which should translate into the national context what is set out in the CSF and make serious commitments to achieving EU objectives through the programming of the EIF. The FPA should include (a) arrangements to ensure alignment with the EU strategy for smart, sustainable, and inclusive growth and the specific missions of each fund in accordance with their Treaty-based objectives; (b) arrangements to ensure effective and efficient implementation of the EIF; and (c) arrangements for the partnership principle and an integrated approach to territorial development. The implementation of the NDEF will be carried out through programmes covering the programming period in accordance with the Partnership Contract. The programmes shall be drawn up by the Member States on the basis of procedures that are transparent and in accordance with their institutional and legal framework. The Member States and the Commission should cooperate to ensure coordination and coherence of the programming arrangements for the EIF. The Member States should monitor the programmes in order to oversee their implementation and progress towards achieving the objectives of the programmes. To this end, monitoring committees shall be set up by the Member States, in accordance with their institutional, legal, and budgetary framework, and their composition and functions shall be defined for the EIF. To ensure effectiveness, a monitoring committee should be able to provide comments to the managing authorities on the implementation and evaluation of the programme, including actions related to the reduction of the administrative burden on beneficiaries, and to monitor the measures taken to implement the programme.

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Excerpts from the Statement of 17th April 2012, by Christine Lagarde “[…] We must break the vicious cycle of banks hurting sovereigns and sovereigns hurting banks. […] In the euro zone, a single financial market cannot rely on legal and institutional frameworks that operate on an asymmetric national basis. To break the feedback loop between sovereigns and banks, we need more risk sharing across borders in the banking system. In the near term, a pan-euro area facility that has the capacity to take direct stakes in banks would help. Looking further ahead, monetary union needs to be supported by stronger financial integration which our analysis suggests be in the form of unified supervision, a single bank resolution authority with a common backstop, and a single deposit insurance fund.” Source: Internal Monetgary Fund, Speech, IMF/CFP Policy Roundtable on the Future of Financial Regulation, April 17, 2012, https://www.imf.org/en/ News/Articles/2015/09/28/04/53/sp041712

11.2.7 The European Banking Union as a Complement to EMU Given the weaknesses of the existing supervisory mechanism of banks in the EU (see Sect. 11.3.4), there was a widespread view that the problem could be solved through the restructuring and centralised supervision of the EU banking sector in the form of a Banking Union, which would act as a complement to EMU. Thus, IMF Managing Director Christine Lagarde (1956–), on 17 April 2012, was the first to formally articulate the need to break the vicious circle in which banks harm states and states harm banks, given that there is currently a morbid mutual feedback loop between fiscal and banking problems. Greater sharing of the risks arising from the banking system is therefore required, and EMU should be supported in the long run by closer financial integration in the form of a consolidated bank resolution supervision (Fig. 11.5). The report put forward a proposal for a new EMU architecture in the form of four pillars. On this basis, the Commission prepared a draft strategy which was presented to the European Council of 13th and 14th December 2012. The European Council agreed on a roadmap for the completion of EMU, based on (a) a unified financial framework (banking union), (b) a unified fiscal framework, (c) a unified economic policy framework, and (d) improved democratic legitimacy and accountability within EMU. It required the establishment of a Single Supervisory Mechanism (SSM) and the introduction of new rules on recovery and resolution and deposit guarantees. The SSM will be responsible for the direct supervision of the largest banking institutions, while state supervisors will continue to be responsible for the supervision of the remaining banks, with the ECB having ultimate responsibility. The process would be completed by the establishment of a Single Resolution

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Fig. 11.5 Christine Lagarde, Managing Director of the IMF. Source: Author not mentioned, http://www.imf. org/external/np/adm/pictures/ caption2.htm, https:// commons.wikimedia.org/ wiki/File:Lagarde,_Christine_ %28official_portrait_2011%2 9_%28cropped%29.jpg. Public Domain (cropped)

Mechanism (SRM), which would ensure that any future bank failures in the Banking Union would be managed effectively and at minimum cost. The Regulation of the Council of EU of 15th October 2013 entrusting the ECB with supervisory tasks and the Regulation of the European Parliament and of the Council of EU of 22 October 2013 entrusting the ECB with specific tasks established the ESM as the first pillar of the Banking Union, which would cover all banks in the euro area, while non-euro area Member States could, if they wished, participate in it. The ESM became operational on 4 November 2014. In addition, the Capital Requirements Directive (CRD) of 26th June 2013 and the Capital Requirements Regulation (CRR) of 26th June 2013 of the European Parliament and of the Council of EU of 26 June 2013 were adopted, legislative measures that transpose into European legislation the prudential capital requirements for banks, so that they are considered safe and able to cope with their operational losses, as agreed at international level through the agreement The UCITS and the CSR entered into force on 1st January 2014. However, the need to complete the implementation of the Banking Union seemed particularly urgent in order to avoid a new banking crisis in the Eurozone. Thus, on 18 December 2013 the Council of EU reached an agreement on the Banking Union after lengthy negotiations. The ECB will supervise around 130 major banks in the euro area. Furthermore, the agreement provided for a European resolution fund, the Single Resolution Fund (SRF), which would have a budget of 55 billion euros, equivalent to around 1% of covered deposits in euro area banks, raised by contributions from financial institutions over the next 10 years. The EIF would become operational from 2016. A Regulation of the European Parliament and of the Council of EU of 15th July 2014 established the EMI as the second pillar of the Banking Union, as well as a

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Single Resolution Fund (SRF) that would ensure the efficient management of any future bank failures within the Banking Union, at the lowest possible cost. A central authority, the Single Resolution Board (SRB), would have the ultimate responsibility for initiating a bank resolution process, while at the operational level the decision would be implemented in cooperation with state resolution authorities. The ESRB would start its work as an independent EU body on 1 January 2015. It should be noted that a Directive of the European Parliament and its Council of EU on Bank Recovery and Resolution (BRRD) of 15 May 2014, with effect from 1 January 2015, provides for measures to resolve troubled banks without requiring a taxpayer bailout, by applying the principle that losses should be covered first by shareholders and creditors, rather than by public funds. However, on the issue of the Banking Union there were several technical details that had not yet been finalised. For this reason, the Commission has been empowered to draft additional legislative acts, as second-level measures, to finalise these technical details. At present, the EU has at its disposal a package of measures that allow for a comprehensive approach to the banking sector, including (a) crisis prevention: to protect all banks from the outset; (b) early intervention: to ensure that, if banks find themselves in difficulty, supervisors can intervene in a timely manner to deal effectively with the difficulties; and (c) crisis management and resolution of banks: to ensure that, in most cases, mechanisms for crisis management are in place. Excerpts from the Statement of 17th April 2012, by Christine Lagarde “[…] we have to break the vicious circle where banks hurt states and states hurt banks. […] the single financial market in the euro area cannot continue to rely on legal and institutional frameworks operating on an asymmetric, national basis. To break the mutual feedback loop between fiscal and banking problems, we need more cross-border risk-sharing in the banking system. In the near future, it would be appropriate to have a pan-European mechanism that has the ability to invest directly in [troubled] banks. In the longer term, monetary union should be supported by closer financial integration, which in our analysis should take the form of consolidated supervision, a single authority for bank resolution supported by common financial instruments, and a single deposit guarantee fund.” Source: https://www.imf.org/en/News/Articles/2015/09/28/04/53/ sp012312

11.2.8 The ESDP/CRPD Missions Following the Treaty of Lisbon, security and defence issues were raised for the first time at the December 2013 European Council with the aim of (a) improving the effectiveness of the CSDP; (b) developing the EU’s defence capabilities; and (c) strengthening the defence industry of EU Member States.

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EUFOR Tchad/RCA was the largest EU multinational operation in Africa to date, involving 3700 soldiers. The operation was effectively launched on 28 January 2008 and officially ended on 15 March 2009. The presence of EUFOR Tchad, with regularly scheduled patrols and operations, contributed to a greater “sense of security” in its area of responsibility. EUNAVFOR Somalia launched Operation Atalanta on 8 December 2008 in response to increasing piracy and armed robbery off the Horn of Africa and the West Indian Ocean. This mission continues. The EU also launched a military training mission in Somalia, EUTM Somalia, from 10 April 2010 to help strengthen the Transitional Federal Government. And this mission continues. Finally, in line with UN Security Council resolutions, the EU launched the EUTM Mali training mission for the Malian armed forces on 18 February 2013. This mission is ongoing. In addition, Eurocorps was once again the ground component of the NATO Response Force NRF from 1 July 2010 to 10 January 2011, while from January 2012 to January 2013, 50% of the personnel were deployed to command structures in Kabul, Afghanistan, as part of the International Security Assistance Force (ISAF). The EU has also undertaken the civilian missions EUSSR Guinea-Bissau, from 12 February 2008 to 30 December 2010, in support of security reforms in GuineaBissau, EUMM Georgia, from 1 October 2008 to date, for a monitoring mission in Georgia, EULEX Kosovo, from 9 December 2008 to date, in support of the Kosovo authorities in the field of rule of law, EUCAP Sahel Niger, from 16 July 2012 to date, for capacity building of the Niger security forces, EUCAP Somalia, Operation Nestor, from 16 July 2012 to date, for capacity building of the naval and military forces in Somalia, EUAVSEC South Sudan, from 16 June 2012 to 17 January 2014, as a flight safety mission in South Sudan, and EUBAM Libya, from 22 May 2013 to date, as a border assistance mission.

11.2.9 The 2012 Nobel Peace Prize Is Awarded to the EU In 2012, the EU was awarded the Nobel Peace Prize for its role over six decades in transforming Europe from a continent of war to a continent of peace. In the relevant announcement, the award committee wanted to praise the EU for the restoration of the continent after the ravages of World War II and the overcoming of the differences after the fall of the regimes of existing socialism in Eastern Europe. He also stressed that the prize was awarded for the long-standing efforts to unify Europe and consolidate democracy. The EU’s most important achievement, according to the Norwegian commission, is “the successful struggle for peace, reconciliation, democracy and human rights”, an effort that continues at a time when the EU is experiencing serious economic difficulties and significant social unrest. The President of the European Parliament, Martin Schulz, said immediately after the announcement of the Nobel Prize Committee that “the Nobel Prize belongs to all EU citizens. The EU has united our continent by peaceful means and made friends of

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long-standing enemies. Despite economic difficulties, the Union remains a pole of stability, prosperity and democracy.” The award ceremony took place on 10 December 2012 at the City Hall in Oslo, Norway. The EU was represented by the President of the European Council Herman Van Rompuy, the President of the European Commission José Manuel Barroso, and the President of the European Parliament Martin Schulz, who received the award from the President of the Norwegian Commission. The speech on behalf of all EU citizens was delivered by European Council President Van Rumpai and Commission President Manuel Barroso. Announcement of the Nobel Prize Committee of 12 October 2012 “The Union and its predecessors have contributed for more than six decades to the promotion of peace and reconciliation, democracy and human rights,” the committee’s statement said. “In the interwar period, the Nobel Peace Prize committee had selected several personalities who sought reconciliation between Germany and France. Since 1945, this reconciliation has become a reality. The terrible disaster of the Second. World War II has shown the need for a new Europe. In 70 years, Germany and France fought three wars. Today a war between Germany and France is unthinkable. This shows how, through targeted efforts and mutual trust-building, historical enemies can become close allies. In the 1980s, Greece, Spain and Portugal joined the EU. The introduction of democracy was a condition for their entry. The fall of the Wall made it possible for several central and eastern European countries to enter, opening up a new era. The separation between East and West has largely come to an end, democracy has been strengthened and many ethnic conflicts have been settled. […] The Norwegian committee hopes that the EU will focus on what it considers its most important task: The successful struggle for peace, reconciliation, democracy and human rights.” Source: The Nobel Peace Prize 2012. NobelPrize.org. Nobel Prize Outreach AB 2023. Mon. 11 Sep 2023. https://www.nobelprize.org/prizes/ peace/2012/summary/

11.3

The Global Economic Crisis and the EU Response to It

The onset of the global financial crisis was initially marked by the slowdown in the US economy and the subsequent events in the country’s banking sector. From the early summer of 2007, the 2007 subprime mortgage crisis emerged in the USA. With the sole aim of making a profit (shadow banking system), these loans were granted to

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American households without the banks first checking their repayment capacity. This, combined with the housing market crisis and the fall in prices, led to a generalised crisis. Over-indebted US homeowners were unable to repay their mortgages, which led to foreclosures and thousands of evictions, a rapid fall in property prices, banks holding foreclosed properties of little value compared to the loans granted, and, finally, bankruptcy. It is estimated that for the period August– November 2007, around one million homes were repossessed by the banks, creating a huge social and economic problem. The central banks created liquidity facilities for financial institutions and issuers of financial instruments. The initial reaction of the Federal Reserve (Fed) was to cut the prime rate in September 2007 in the hope that commercial banks could provide working capital to businesses that were cut off from the market. However, the collapse of Lehman Brothers, the fourth largest US investment bank, on 15 September 2008 marked the biggest post-war global financial crisis. The crisis spread very quickly outside the USA to European countries whose banks held “toxic” bonds of troubled US banks, such as Iceland, Britain, France, and to a lesser extent Belgium, Italy, Luxembourg, and the Netherlands. The private debt incurred as a result of the housing bubble was transferred to public debt as a result of the bailout of the banking systems, as well as government policies to support sectors of the slowing economies. Gradually, the financial crisis affected other euro area Member States with different or similar economic problems, mainly fiscal or growth problems, such as Ireland, Greece, Portugal, Spain, and Cyprus.

11.3.1 The Transfer of the Economic Crisis to the EU The economic and financial crisis showed that the EU banking system was vulnerable to shocks. Thus, in some European countries governments faced accumulated problems in the banking sector when troubled banks started to turn to them for help. The high cost of bailing out banks as well as government policies to support sectors of slowing economies caused concerns in financial markets. As the recession began to spread across Europe, the fact that some countries had been borrowing excessively for several years to finance their budgets, accumulating huge debts, came to the fore. One of the reasons for the debt dependency of these states was that their economies were becoming less competitive as they failed to adapt to the economic reforms being carried out in other European states. Finally, in some Eurozone Member States, governments had not taken into account the rules of EMU and had not taken care to coordinate their economic policies after they agreed to share a common currency with a single monetary policy. As a result of all this, financial instability was caused, which hindered economic growth, which in turn reduced tax revenues and led to an increase in public debt. The level of debt then increased the cost of government borrowing, again contributing to financial instability. Thus, in 2009, Europe entered the deepest recession since the end of World War II, with a significant decline in GDP and industrial production and rising unemployment in many EU Member States, especially among young people.

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The financial crisis revealed inadequacies in the EU’s economic governance: (a) inadequate supervision of the competitiveness and financial institutions of Member States; (b) inadequate mechanisms to impose sanctions in a timely manner in cases of non-compliance with financial stability rules, especially for eurozone Member States; (c) delays in decision-making in cases of worrying macroeconomic developments; and d) lack of a financial support mechanism at the beginning of the crisis for Member States with financial difficulties.

11.3.2 Methods of Responding to the Economic Crisis in the EU In order to prevent the banking system from collapsing completely, European governments committed amounts of up to 1.6 trillion euros to their banks between 2008 and 2011 (see Sect. 11.2.5). The euro area currency has maintained its value at a heavy price, but it has protected the euro area Member States from the unexpected consequences of the financial crisis. At the same time, the following institutions were set up on a temporary basis in response to the financial crisis: (a) the European Financial Stabilisation Mechanism (EFSM) and (b) the European Financial Stability Facility (EFSF). However, both institutions were intended only as temporary measures (due to expire in 2013), partly due to the lack of a legal basis in the EU treaties. These instruments were adopted on 9 May 2010, at the extraordinary ECOFIN meeting. Of particular importance, however, is the fact that the loan programmes involved the active involvement of the International Monetary Fund (IMF), which was given a role in the internal affairs of the EU. The EMFF was one of the first temporary bodies established by a Regulation of the Council of EU of 11th May 2010, in response to the financial crisis. In particular, the EFSF was an emergency financing programme for euro area Member States, based on funds of up to 60 billion euros raised on the financial markets and guaranteed by the Commission, with a guarantee from the EU budget, in which all EU Member States participate. In particular, the EFSF provided 22.5 billion euros to Ireland and 24.3 billion euros to Portugal. In July 2015, the EFSF used 7.16 billion euros of the remaining 13.2 billion euros to finance Greece’s bridge programme, prompting objections from some non-eurozone Member States. It should be noted that the EMFS had the highest credit rating (AAA by Fitch Ratings and Standard & Poor’s and Aaa by Moody’s) (Fig. 11.6). The EFSF was a temporary special-purpose vehicle operating as a limited liability company (special-purpose vehicle), based in Luxembourg City, established by the euro area Member States on 7 June 2010, with the aim of maintaining economic stability in Europe by providing financial assistance to the euro area Member States. The total lending capacity of the EFSF amounted to 440 billion euros. The loans were financed by the EFSF bond and other debt instruments on the capital markets, and were guaranteed by the shareholders, i.e. the euro area Member States. The EFSF provided 18.4 billion euros to Ireland, 26 billion euros to Portugal, and 130.9 billion euros to Greece. The continuation of the financial crisis in the Southern European countries and Ireland and, above all, the need to address the debt problem

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Fig. 11.6 Klaus Regling, CEO of the EMS. Source: Press Conference—Informal Meeting of Ministers for Economic and Financial Affairs (Informal Ecofin) 2016-09-09. Author: EU2016 SK. https://flickr.com/ photos/142675453@N02/2 8938643543, Creative Commons CC0 1.0 Universal Public Domain Dedication (cropped)

in Greece forced the Member States to decide to upgrade the role of the Fund so that the facility provided could be combined with additional loans of up to 60 billion euros from the EFSF and up to 250 billion euros from the IMF to create a financial safety net of up to 750 billion euros. As of 1st July 2013, the EFSF ceased to participate in new financial support programmes, although it will continue to manage and repay any outstanding debt. The last EFSF support programme was the one for Greece, which ended on 30 June 2015. The EFSF originally had the maximum credit rating (AAA by Fitch Ratings and Standard & Poor’s and Aaa by Moody’s). On 16 January 2012, Standard & Poor’s downgraded its credit rating to AA+. On the initiative of the European Council, and following a necessary revision of Article 136 TFEU, the Treaty establishing the European Stability Mechanism (ESM), based in Luxembourg, was signed on 2 February 2012 by the representatives of the euro area Member States, a permanent EU financing programme for the 19 euro area Member States, which entered into force on 27 September 2012 and started its operations on 8 October 2012. Both the EFSF and the EFSF were replaced by the ESM. The lending capacity of the facility currently stands at 500 billion euros which is planned to increase to 700 billion euros. EUR 80 billion will be in the form of paid-in capital from euro area Member States, while EUR 620 billion will be in the form of committed capital from euro area Member States. The loans will come from ESM borrowing from international financial markets and will be guaranteed by the euro area Member States. It shall cooperate with other international institutions providing support for financial stability, in particular the IMF and the ECB. The Managing Director of the ESM is Klaus Regling (1950–), until then Managing Director of the EFSF, and the Chairman of the Board of Directors is the President

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Fig. 11.7 Jeroen Dijsselbloem, President of the Eurogroup. Source: Rijksoverheid.nl., Author: Rijksoverheid.nl., https:// commons.wikimedia.org/ wiki/File:Jeroen_ Dijsselbloem_2015_(1).jpg. Creative Commons CC0 1.0 Universal Public Domain Dedication (cropped)

of the Eurogroup, i.e. for the period in question Jeroen Dijsselbloem (1966–) (Fig. 11.7). Decisions in the ESM are taken unanimously by the shareholders, euro area Member States, except in cases of emergency, where a decision by 85% of the shareholders is allowed. The participation of the shareholders of Member States, after the entry of Latvia in 2014 and Lithuania in 2015 into the Eurozone, was for Germany 26.9616%, France 20.2471%, Italy 17.7917%, Spain 11.8227%, the Netherlands 5.6781%, Belgium 3.4534%, Greece 2.7975%, Austria 2.7644%, Portugal 2.4921%, Finland 1.7852%, Ireland 1.5814%, Slovakia 0.8184%, Slovenia 0.4247%, Lithuania 0.4063%, Latvia 0.2746%, Luxembourg 0.2487%, Cyprus 0.1949%, Estonia 0.1847%, and Malta 0.0726%. Among the measures to tackle the economic crisis were the “Six Pack” proposals presented by the Commission in September 2010 and promoted by the European Councils on 24 and 25 March 2011 and 23 and 24 June 2011. This comprised six legislative proposals, which entered into force on 13 December 2011, to strengthen economic governance through broader and enhanced surveillance of fiscal and macroeconomic policies and to seek to improve economic cooperation and mutual surveillance in economic policy matters, making the procedures of the SGP both in its preventive and repressive arms more operational and effective, and establishing the “European Semester” (see Sect. 11.2.2). Furthermore, the new “Euro Plus Pact”, adopted in the margins of the Brussels European Council of 24–25 March 2011, is a comprehensive package of measures to strengthen the European economy and is designed as a stronger successor to the SGP, which has not been consistently implemented. Elements of these measures took the form of a treaty between the then 17 eurozone Member States with the participation of 6 non-eurozone Member States at the time (Bulgaria, Romania, Latvia, Lithuania, Lithuania, Denmark, and Poland),

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as the Treaty on Stability, Coordination and Governance in EMU (SGP), also known as the Fiscal Compact, signed on 2 March 2012. The treaty requires balanced or surplus national budgets and a commitment to incorporate this rule into national law within one year of the treaty’s entry into force. The Treaty on Stability, Coordination and Governance in EMU entered into force in January 2013, following its ratification by signatory Member States as provided for in its provisions. In addition, two new “two pack” regulations came into force on 30 May 2013, strengthening the procedures for the supervision of Member States in financial difficulties. A euro area Member State requesting financial assistance must prepare a macroeconomic adjustment programme in agreement with the Commission and in consultation with the ECB and, where necessary, the IMF, to ensure that it carries out the necessary fiscal, economic, structural, and supervisory reforms. The financial assistance shall be provided in instalments and may be suspended if the Member State under surveillance fails to respect the obligations stemming from the adjustment programme. The policies that the Member State under surveillance is invited to pursue are decided on a case-by-case basis. Thus, in the case of Spain the conditions focused on the banks, while in the case of Cyprus the conditions were broader and covered changes in taxation, restrictions on government spending, and health and pension reform. These measures, applicable only to euro area Member States, attempted to complement the “Six Pack” arrangements, building on the experience gained from the 2010 crisis. The first programme executed by the ESM was a 41.3 billion euros loan to Spain in December 2012 and February 2013 to support the country’s banks. The only other programme executed was the one for Cyprus, with a provision of up to 9 billion euros for its financial needs and the recapitalisation of the country’s financial sector. In addition, the ECB, as the independent authority responsible for monetary policy in the euro area, played an important role in containing the crisis. Its decision to lend to banks at low interest rates with a repayment period of up to 3 years helped to stabilise the markets as banks were able to cover their short-term needs. Furthermore, the ECB created the Outright Monetary Transactions (OMT) programme on 6 September 2012, following a proposal by ECB President Mario Draghi, which would have allowed the ECB to buy bonds of Member States in difficulty in order to secure a reasonable interest rate, provided that these Member States committed themselves to implementing an economic reform programme supported by the ESM. It should be noted that the mere fact that this possibility existed helped to stabilise the international financial markets, even though no Member State made use of this programme. The EU can also provide financial assistance to Member States outside the euro area if they face difficulties in meeting their balance of payments. Balance of Payment assistance (BoP) is designed in accordance with a Regulation of 18 February 2002 of the Council of EU to facilitate the external financing of a non-euro area Member State in case of financial difficulties in the form of a mediumterm financial assistance (Fig. 11.8). Finally, under the Banking Union as the natural complement to EMU (see Sect. 11.2.4), in order to address the weaknesses revealed by the crisis, the banks of each

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Fig. 11.8 Mario Draghi, President of the ECB. Source: Cropped from File:Mario Draghi World Economic Forum 2013.jpg, original source Flickr: Special Address: Mario Draghi. Author: World Economic Forum, https://commons. wikimedia.org/wiki/File: Mario_Draghi_World_ Economic_Forum_2013_ crop.jpg. Creative Commons Attribution-Share Alike 2.0 Generic license (cropped)

euro area Member State will report to the ECB, while decisions on how to deal with a failing bank will be taken centrally, according to common rules to minimise the cost to taxpayers. In this way, a more efficient financial sector is being built, based on stronger and more resilient banks, and depositors across Europe will be better protected.

11.3.3 Providing Support to Eurozone and EU Member States In the Eurozone in particular, banking crises erupted in Ireland and to some extent in Spain, while sovereign debt crises erupted in Greece and Portugal. In Greece, Portugal, and Ireland, there was a spike in borrowing rates, resulting in their inability to borrow from international markets. Shortly afterwards, Cyprus followed suit, vulnerable due to its oversized banking sector and the negative impact on its economy of the Greek financial crisis. In Greece, it was initially agreed as a 1st programme to provide 110 billion euros on 2 May 2010 for the implementation of reforms to restore its economy, of which 80 billion euros would come from the special Greek Loan Facility (GLF) and the remaining 30 billion euros from the IMF. This amount was eventually reduced by 2.7 billion euros because Slovakia decided not to participate, while Ireland and Portugal withdrew from the Facility as they themselves were also requesting financial assistance. Thus, of these amounts, 73.0 billion euros was eventually disbursed between May 2010 and June 2013, 20.1 billion euros from the IMF, and 52.9 billion euros from the special Hellenic Lending Facility. Later, on 14 March 2012, a further 164.5 billion euros was agreed as a 2nd programme, of which 144.7 billion euros

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would come from the EFSF and the remaining 19.8 billion euros from the IMF. Ultimately, of these amounts, 142.9 billion euros was disbursed between March 2012 and June 2015, 130.9 billion euros from the EFSF, and 12.0 billion euros from the IMF. It was further agreed that, at the start of the 2nd programme, in order to improve the sustainability of Greek debt, there should be a Private Sector Involvement (PSI) in a process of swapping the country’s debt for bonds. The high level of private sector participation in the debt swap offer in the spring of 2012 contributed significantly to this goal, when, out of a total amount of 205.6 billion euros in bonds eligible for the swap offer, some 197 billion euros, i.e. 95.7%, were exchanged. Finally, on 26 and 27 November 2012, Eurozone finance ministers and the IMF agreed to extend the fiscal adjustment path by 2 years and to further assist the country by reducing the cost of their loans and providing more repayment time. However, Greece submitted new requests for financial assistance on 8 July and 23 July 2015 to the ESM and the IMF, respectively (see Sect. 12.2.6). In Ireland, 67.5 billion euros was initially agreed and later a further 0.7 billion euros. Of this amount, between November 2010 and December 2013, 22.5 billion euros was provided by the IMF, 22.5 billion euros by the EFSF, 18.4 billion euros by the EFSF, and 4.8 billion euros by EU Member States (3.8 billion euros by the UK, 0.4 billion euros by Denmark, and 0.6 billion euros by Sweden) to restore and rehabilitate its economy following the collapse of its largest banks. An additional amount of 17.5 billion euros was received by Ireland, which came from internal borrowing (from the National Treasury). The important reforms to stimulate Ireland’s economy were successfully completed, and in January 2014, the country exited the macroeconomic assistance programme and started borrowing from international markets. In Portugal, 79.0 billion euros was agreed, of which 76.8 billion euros was granted from May 2011 to June 2014. Of this amount, 26.5 billion euros was granted by the IMF, 24.3 billion euros from the EMFF, and 26.0 billion euros from the EFSF, to finance its budget deficit, reduce public debt, restore its banking sector, and finance reforms for stimulating economic growth and job creation. The reforms led to a significant improvement in public finances and the country’s economy. In Spain, 100 billion euros was agreed, from the EFSF and the ESM. However, between July 2012 and December 2013, only 41.3 billion euros was provided by the ESM, enabling Spain to ensure adequate funding for its viable banks and to safely wind down its non-viable banks. In Cyprus, a 10 billion euros loan was agreed between May 2013 and March 2016 to restructure its banking sector, restore public finances, and invest in a more balanced and healthy economy. The financial assistance, of which 9 billion euros comes from the ESM and 1 billion euros from the IMF, is disbursed in tranches, in parallel with the implementation of reforms, until 2016. An additional 2.5 billion euros was received by Cyprus, which came from Russia. Outside the euro area, the EU also provided financial assistance to non-euro area countries through the IMF, the WB, and the Balance of Payments support programme. In this way, (a) Hungary, from November 2008 to October 2010, received 9.1 billion euros from the IMF, 1.0 billion euros from the IF, and 5.5

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billion euros through the Balance of Payments support programme; (b) Latvia, prior to the adoption of the euro as its national currency, from December 2008 to December 2011, received 1.1 billion euros from the IMF, 0.4 billion euros from the IF, and 1.0 billion euros through the BoP support programme; (c) Latvia, prior to the adoption of the euro as its national currency, from December 2008 to December 2011, received 1.1 billion euros from the IMF, 0.4 billion euros from the BoP support programme, and 0.5 billion euros through the BoP support programme; (d) Hungary, prior to the adoption of the euro as its national currency, received 1.1 billion euros from the IMF, 0.4 billion euros from the BoP support programme, and 0.5 billion euros through the BoP support programme. (c) Romania, from May 2011 to September 2015, received an amount of 12.6 billion euros from the IMF, an amount of 4.65 billion euros from the IFI, an amount of 1.0 billion euros from the EIB/EBRD, and an amount of 5.0 billion euros through the Balance of Payments support programme; and (d) Romania, from May 2011 to September 2015, received an amount of 12.6 billion euros from the IMF, an amount of 4.65 billion euros from the IFI, an amount of 1.0 billion euros from the EIB/EBRD, and an amount of 5.0 billion euros through the Balance of Payments support programme.

11.3.4 The Recapitalisation of Banks and Their Supervisory Framework The EU’s response to the initial banking crisis of 2008 and 2009 was based on large financial facilities to national banking institutions (see Sects. 11.3.1 and 11.3.2), without actually addressing the issue of bad loans in their portfolios. Problems and malfunctions were perpetuated, while supervisors seemed unwilling or unable to investigate the root causes of the problems, with the result that a climate of uncertainty was maintained, and despite the large number of interventions and high amounts of state aid, the EU and in particular the Eurozone banking system remained weak and problematic. On 25 February 2009, the report of the EU High Level Group of Experts on Financial Supervision, chaired by Jacques de Larosière (“de Larosière Group”), former Managing Director of the IMF and Chairman of the EBRD, proposed the creation of the European System of Financial Supervisors (ESFS). The objectives of the ESFS would be to develop a common supervisory culture and contribute to the creation of a single European financial market. The end result would be a system of micro-prudential and macro-prudential supervision consisting of EU and national supervisory authorities. Micro-prudential supervision at EU level would be carried out by the three European Supervisory Authorities (ESAs), namely the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA), and the European Insurance and Occupational Pensions Authority (EIOPA), which would cooperate within the Joint Committee of the ESAs. Macro-prudential supervision would be exercised by the European Systemic Risk Board (ESRB). The respective competent supervisory authorities of the Member States would also form part of the ESRB (Fig. 11.9).

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Fig. 11.9 Jacques de Larosière, former Managing Director of the IMF and Chairman of the EBRD. Source: U.S. Department of the Treasury—G-20 Meeting of Finance Ministers and Central Bank Governors in Paris, 02/18/2011, https:// commons.wikimedia.org/ wiki/File:Jacques_de_Larosi %C3%A8re_(2011).jpg. Public Domain (cropped)

The ESRB, EBA, ESMA, and EIOPA were established by Regulations of the European Parliament and of the Council of EU of 24th November 2010, respectively. The Joint Committee of the ESAs performs tasks set out in articles of the same Regulations. Furthermore, the ESRB was established by Articles of the same Regulations, while a separate Regulation of the European Parliament and of the Council of EU of 24th November 2010 refers to the delegation of specific tasks to the ECB for the operation of the ESRB. The ESRB has been operational since 1st January 2011. The ECB culminated the massive 36-month Long-Term Refinancing Operation (LTRO) of the banking sector, while the European Council on 26 October 2011 adopted a package of measures to restore confidence in the viability of banking institutions. The measures included the immediate recapitalisation of the European banking sector so that all large banks have core regulatory capital above 9% of weighted assets, taking into account losses on government bonds held by them. The recapitalisation of banks was carried out at EU pan-European level, under the responsibility of Member States’ supervisory authorities, in cooperation with the EBA, established on 1 January 2011, which estimated the total capital shortfall at 115 billion euros. The process involved 27 large banks, excluding the Greek banks, whose recapitalisation would form part of the country’s second funding programme (see Sect. 11.3.3), and four other banks that were in the process of being restructured (the Austrian Öesterreichische Volksbank AG, the Belgian Dexia, the German WestLB AG, and the Spanish Bankia). The banks’ total capital needs amounted to 76 billion euros. In practice, however, more than 94 billion euros was made available, and most banks met their targets on time and in full. However, on the occasion of the ongoing negotiations for the Private Sector Involvement (PSI) in a debt-for-bond swap of Greece since July 2011 (see Sect.

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11.3.3), and the exposure of many European banks to the sovereign bonds of Greece and other countries with financial problems, more general doubts have been expressed again regarding the solvency of the EU and especially the Eurozone banking system. The idea of introducing the Banking Union (see Sect. 11.2.4) as a complement to EMU changed the shape of the European supervisory framework. Moreover, the European Parliament adopted on 11 March 2014 a resolution on the review of the European financial supervision system, with detailed recommendations to the Commission.

11.4

The Seventh Enlargement

Croatia’s European orientation started in 1998, during the prime ministry of Zlatko Mateša (1949 –), with the creation of the Ministry of European Integration. A few years later, on 21 February 2003, Croatia formally applied for EU membership. The Brussels European Council of 17 and 18 June 2004, on the basis of a positive opinion from the Commission and the fact that Croatia fulfilled the Copenhagen criteria, decided that the country could be considered a candidate for EU membership and that accession negotiations between the EU and Croatia should be launched. Furthermore, as of 1 February 2005, the Stabilisation and Association Agreement between the EU and Croatia, which had been signed on 29 October 2001, before Croatia’s formal application for EU membership was submitted, also entered into force. However, shortly before the scheduled opening date of the accession negotiations of 17 March 2005, the Prosecutor of the International Criminal Tribunal for the former Yugoslav Republic of the Hague, Carla Del Ponte (1947–), accused Croatia of not cooperating in the arrest and extradition of the fugitive for war crimes, Croatian General Ante Gotovina (1955–), who was convicted in 2001 for his role in the murder of Serb civilians and the deportation of thousands of others between 1991 and 1995, when the Council of Foreign Ministers of EU decided to postpone the start of accession negotiations. However, following a later declaration by Carla Del Ponte of Croatia’s full cooperation in the search and arrest of the Croatian general, EU accession negotiations with Croatia were opened on 3 October 2005, and Gotovina was finally arrested in Tenerife on 7 December 2005.

11.4.1 The Accession Negotiations with Croatia The first round of accession negotiations started with an examination of the applicability of the EU acquis in Croatia. A number of issues were raised with the candidate country, such as the return of refugees, improving legislation on minority rights, recognition and punishment of war crimes, the fight against corruption, reform of the judiciary and public administration, measures to ensure the freedom of the media, the obligation to end state subsidies to its shipyards, the removal of discrimination in

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the land market for all EU citizens, and the resolution of border issues, notably with Slovenia. However, the major enlargement with ten new Member States in 2004, the rejection of the TCE by France and the Netherlands through referendums in 2005, and the latest enlargement in 2007 with the accession of Bulgaria and Romania made it necessary to suspend any attempt at further enlargement in order to achieve convergence between the existing, older, and newer EU Member States and to address the necessary institutional changes within the EU. However, this temporary pause in enlargement did not undermine the accession negotiation process of Croatia, which was aspiring to become an EU Member State before the 2009 European Parliament elections. The accession negotiations were threatened once again in April 2009, however, by a dispute between Slovenia and Croatia over the picturesque Adriatic resort of Piran, a small coastal area between the two countries. The dispute dates back to the break-up of Yugoslavia in the early 1990s, with Croatia wanting the border to be drawn right in the middle of Piran Bay, and Slovenia arguing that such a division would cut it off from the country’s only access route to international waters. In the end Slovenia, already an EU Member State, relented on its objections to continue negotiations 5 months later.

11.4.2 The Signing and Ratification of Croatia’s Accession Negotiations for Croatia’s accession to the EU were concluded on 30 June 2011 and on 9 December 2011 the Treaty of Accession of Croatia was signed in Brussels. On 22 January 2012, in Croatia’s referendum on EU membership, 66.27% of the citizens were in favour of accession, but with a low turnout of only 43.51% of citizens. This gave rise to harsh criticism of both the EU and the Croatian government from a section of the opposition. Nevertheless, the accession was ratified by the Croatian Parliament, and Croatia became the twenty-eighth member of the EU as of 1st July 2013 (Fig. 11.10).

11.4.3 Institutional Changes Since the Seventh Enlargement Following the accession of Croatia, as of 1st July 2013, the Commission increased by one member to 28, with one Commissioner from each Member State, in accordance with the decision of the European Council of 22 May 2013 for the new Commission to take office on 1st November 2014 (see Sect. 11.1.3). As of 1 July 2013, in the Council of EU, Britain, France, Germany, and Italy had 29 votes each, Spain and Poland 27 votes each, Romania 14 votes, the Netherlands 13 votes, Belgium, Greece, Hungary, Greece, Portugal, and Czechia 12 votes each, Austria, Bulgaria, Bulgaria, and Sweden 10 votes, Denmark, Ireland, Croatia, Lithuania, Slovakia, and Finland 7 votes, Estonia, Cyprus, Latvia, Luxembourg, and Slovenia 4 votes, and finally Malta 3 votes. The total of 352 votes created a

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Fig. 11.10 The European Union in 2013

qualified majority requirement of 260 votes. As of 1st November 2014, the principle of “double majority” applies to qualified majority voting. Also, as of 1st July 2013, the date on which Croatia officially joined the EU, the number of 12 new Croatian MEPs was added to the remaining 754 MEPs, temporarily bringing the total number of MEPs in the European Parliament to 766. With the start of the new parliamentary term from June 2014, in accordance with the Treaty of Lisbon, as amended by the 2011 Accession Treaty of Croatia, the total number of MEPs in the European Parliament would be 751 with the following distribution: Germany 96 seats, France 74, Britain and Italy, 73 each, Spain 54, Poland 51, Romania 32, the Netherlands 26, Belgium, Greece, Greece, Hungary, Portugal, and Czechia 21 each, Sweden 20, Austria 18, Bulgaria 17, Denmark, Slovakia, and Finland 13 each, Ireland, Croatia, and Lithuania 11 each, Latvia and Slovenia 8 each, and Estonia, Cyprus, Luxembourg, and Malta 6 each. The 750 MEPs have the right to vote, as the President of the European Parliament will not have the right to vote.

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Developments in Europe Outside the EU and the EU’s Attitude

For the period 2007–2023, the IPA programme (see Sect. 10.5.1) entered into force on 1 January 2007, offering support to both candidate and potential candidate countries. In particular, it covered the candidate countries, Croatia, Turkey, and FYROM, as well as the potential candidate countries of the Western Balkans, Albania, Bosnia and Herzegovina, Montenegro, Serbia, and Kosovo in part, with a budget of 11.1 billion euros for the period. However, as of March 2014, this programme was replaced by IPA II. Also for the period 2007–2013, the TACIS II programme was replaced for the ENP countries and Russia by the ENPI (see Sect. 10.5.1), with a focus on financing cross-border projects, with a budget of 11.18 billion euros. Particularly important issues during this period have been the declaration of independence of Kosovo and its non-recognition by Serbia, the talks and developments related to Transnistria, the war in South Ossetia between Georgian forces and separatists in the region, and the unrest in Ukraine following the Ukrainian government’s suspension of the country’s accession negotiations with the EU.

11.5.1 The Declaration of Independence of Kosovo On 17 February 2008, the Kosovo Parliament in Pristina unilaterally declared independence from Serbia, which did not accept the secession and appealed to the UN. Kosovo was immediately recognised by some countries, including the USA and four major EU Member States, Britain, France, Germany, and Italy, while others, such as Russia and China, considered its secession illegal. Currently, more than 100 UN Member States have recognised Kosovo’s independence. On 8 October 2008, the UN General Assembly approved Serbia’s request to refer the issue of Kosovo’s unilateral decision to declare independence to the International Court of Justice in The Hague. As of 19 April 2013, the two countries concluded an agreement in Brussels, under the auspices of the EU, which provides for a degree of autonomy for the Serbs of northern Kosovo, but with their subordination to Pristina, while Serbia and Kosovo agreed that neither country would have a veto on the possible membership of either country in an international organisation, such as NATO or the EU. Despite the agreement, Serbia continued to refuse to recognise the breakaway Republic of Kosovo as independent, as did other EU Member States.

11.5.2 The Issue of Transnistria Although the issue of Transnistria started in 1990 (see Sects. 8.5.10, 9.4.2, and 10. 5.2), substantive talks started in February 2011, in Vienna. The talks came to be known as the “5 + 2 talks” due to the participation of 5 + 2 parties, i.e. Transnistria,

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Moldova, Ukraine, Russia, and the OSCE, as well as the USA and the EU as external observers. It should be noted that Russian troops are still present on the border between Moldova and Transnistria, causing negative reactions in NATO circles, culminating in the Alliance’s resolution of 18 November 2008, in which it called on Russia to withdraw its military forces from the region. However, Russia maintains that the existing military forces are a peacekeeping force under the 1992 ceasefire agreement. However, given Russia’s annexation of Crimea in March 2014, the head of the Transnistrian parliament called for the country to join the Russian Federation. It should be noted that the European Council has declared Transnistria as an area of “frozen conflict”.

11.5.3 The War in South Ossetia and Abkhazia South Ossetia’s claim for independence from Georgia in the early 1990s and the military conflicts from 5 January 1991 to 24 June 1992 (see Sect. 8.5.10) were the beginning of subsequent developments in the region. Despite the ceasefire that has prevailed since then, South Ossetia declared general conscription following an attack by Georgian forces on 4 July 2008. Despite the fact that there was a ceasefire on 7 July of the same year, as well as a strong diplomatic backdrop, fighting resumed from 8 August 2008 until 16 August of the same year, when Georgian forces violated the ceasefire by attacking the South Ossetian capital of Tskhinvali. The intervention of the Georgian troops provoked the intervention of the Russian army, which inflicted heavy losses on the Georgian troops. Around the same time, in July 2008, there were rumours of an imminent attack by Georgian troops in Abkhazia. Following Abkhazia’s rejection of a peace plan proposed by Germany on 18 July 2008, and in the wake of the war in South Ossetia, clashes between Abkhazian and Georgian forces began on 9 August. The following day there was intervention by Russian troops, which helped to remove Georgian troops from Abkhazian territory. Conflicts in the two regions ended with the withdrawal of Georgian and Russian forces and Russia’s recognition of the independence of both South Ossetia and Abkhazia. These events were the reasons for Georgia’s withdrawal from the CIS. In addition, on 11 August 2010, Russia announced that it had installed S-300 antiaircraft missiles in the region in order to protect the airspace of South Ossetia and Abkhazia (Fig. 11.11).

11.5.4 The Riots in Ukraine As mentioned above (see Sect. 8.5.10), relations between Ukraine and Russia depend on the attitude of the Ukrainian governments, which sometimes aspire to a European perspective and sometimes prefer to cling to Russia, on which they depend to a large extent economically, mainly because of the natural gas it supplies them.

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Fig. 11.11 Russian tank of the 58th army in South Ossetia. Source: Yana Amelina (Амелина Я. А.)—Yana Amelina (Яна Амелина), 2008, licensed under the Creative Commons AttributionShare Alike 3.0 Unported license, https://commons.wikimedia.org/wiki/File:South_Ossetia_war_ 58_army.jpg

In 2008, the pro-European Ukrainian government of Yulia Tymoshenko (1960–) accused Russia of providing Russian passports to Crimean residents, thus creating the conditions for the possibility of its intervention inside Ukraine to protect Russian citizens. However, in November 2013, Ukraine’s President Viktor Yanukovych (1950–), following a pro-Russian policy, refused to sign the Association Treaty with the EU, which had been initialled in July 2012, ending the accession negotiations with the EU. As a result of this action, protests broke out in Kiev, centred on Independence Square. Euromaidan (Europlate) was the wave of protests and mobilisations that started during the night of 21 November 2013, mainly demanding the resignation of the President and the Ukrainian government, accusing them of serving Russia’s plans, and calling for the resumption of the country’s accession negotiations with the EU.

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References Britannica, Countries of the World, The Maidan protest movement, https://www.britannica.com/ place/Ukraine/The-Maidan-protest-movement. Communication COM(2002) 394 final - Mid-Term Review of the Common Agricultural Policy, Commission of the European Communities, Brussels, 10 July 2002. Communication COM(2007) 722 final - Preparing for the 'health check' of the CAP reform, Commission of the European Communities, Brussels, 20 November 2007. Communication COM(2010) 2020 – ‘Europe 2020 - A strategy for smart, sustainable and inclusive growth, European Commission, Brussels, 3 March 2010. European Council, The European Semester explained, https://www.consilium.europa.eu/en/ policies/european-semester/. Finck, F., Border Check-Point, the Moldovan Republic of Transnistria, in Hohmann, J., (ed.), Joyce, D., (ed.), International Law's Objects, Pages 162–172, Oxford Academics, Published: December 2018, https://doi.org/10.1093/oso/9780198798200.003.0013. Official Journal of the European Union 17.12.2007, No C 306.Treaty of Lisbon, "Treaty of Lisbon amending the Treaty on European Union and the Treaty establishing the European Community", Lisbon, 13 December 2007. Regulation (EU) 407/2010 of Council of EU establishing a European financial stabilisation mechanism, Brussels, 11 May 2010. Regulation (EU) 439/2010 of the European Parliament and the Council of EU of 19 May 2010, for the European Asylum Support Office (EASO) which was developed as a tool for the development and implementation of the CEAS, which was established. FRONTEX and has been strengthened to enable it to respond more effectively. Regulation (EU) 1096/2010 of the Council of EU conferring specific tasks upon the European Central Bank concerning the functioning of the European Systemic Risk Board, Brussels, 17 November 2010. Regulation (EU) 1092/2010 of the European Parliament and the Council of EU on European Union macro-prudential oversight of the financial system and establishing a European Systemic Risk Board, Strasbourg, 24 November 2010. Regulation (EU) 1093/2010 of the European Parliament and the Council of EU establishing a European Supervisory Authority (European Banking Authority), amending Decision No 716/ 2009/EC and repealing Commission Decision 2009/78/EC, Strasbourg, 24 November 2010. Regulation (EU) 1094/2010 of the European Parliament and the Council of EU establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC, Strasbourg, 24 November 2010. Regulation (EU) 1095/2010 of the European Parliament and the Council of EU establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC, Strasbourg, 24 November 2010. Regulation (EU) 1177/2011 of the Council of EU amending Regulation (EC) No 1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure, Brussels, 8 November 2011. Regulation (EU) 1173/2011 of the European Parliament and the Council of EU on the effective enforcement of budgetary surveillance in the euro area, Strasbourg, 16 November 2011. Regulation (EU) 1174/2011 of the European Parliament and the Council of EU on enforcement measures to correct excessive macroeconomic imbalances in the euro area, Strasbourg, 16 November 2011. Regulation (EU) 1175/2011 of the European Parliament and the Council of EU amending Council Regulation (EC) No 1466/97 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies, Strasbourg, 16 November 2011.

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Regulation (EU) 1176/2011 of the European Parliament and the Council of EU on the prevention and correction of macroeconomic imbalances, Strasbourg, 16 November 2011. Regulation (EU) 472/2013 of the European Parliament and the Council of EU on the strengthening of economic and budgetary surveillance of Member States in the euro area experiencing or threatened with serious difficulties with respect to their financial stability, Strasbourg, 21 May 2013. Regulation (EU) 473/2013 of the European Parliament and the Council of EU on common provisions for monitoring and assessing draft budgetary plans and ensuring the correction of excessive deficit of the Member States in the euro area, Strasbourg, 21 May 2013. Regulation (EU) 604/2013 of the European Parliament and of the Council of EU on 26 June 2013 for the Dublin III Regulation. Regulation (EU) 1024/2013 of the Council of EU conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions, Luxembourg, 15 October. Regulation (EU) 1022/2013 of the European Parliament and the Council of EU amending Regulation (EU) No 1093/2010 establishing a European Supervisory Authority (European Banking Authority) as regards the conferral of specific tasks on the European Central Bank pursuant to Council Regulation (EU) No 1024/2013, Strasbourg, 22 October 2013. Speech by Christine Lagarde, IMF/CFP Policy Roundtable on the Future of Financial Regulation, Internal Monetgary Fund, April 17, 2012, https://www.imf.org/en/News/Articles/2015/09/2 8/04/53/sp041712. The Four Presidents’ Report: Towards a Genuine Economic and Monetary Union Report by President of the European Council Herman Van Rompuy in close cooperation the Presidents of the Commission, José Manuel Barroso, of the Eurogroup, Jean-Claude Juncker, and the European Central Bank, Mario Draghi, 26 June 2012. The Five Presidents’ Report: Completing Europe's Economic and Monetary Union’, by: JeanClaude Juncker in close cooperation with Donald Tusk, Jeroen Dijsselbloem, Mario Draghi and Martin Schulz, 22 June 2015. The Nobel Peace Prize 2012. NobelPrize.org. Nobel Prize Outreach AB 2023. Mon. 11 Sep 2023. https://www.nobelprize.org/prizes/peace/2012/summary/. Treaty on Stability, Coordination and Governance in the Economic and Monetary Union - not published in the Official Journal, Brussels, 2 March 2012. Treaty concerning the accession of the Republic of Croatia to the European Union, Official Journal of the European Communities, L 112, 24.04.2012. UNHCR, refworld, Russia's War with Georgia: 2008 Timeline, https://www.refworld.org/docid/53 e0e3e04.html. Warbrick, C., Kosovo: The Declaration of Independence. The International and Comparative Law Quarterly 57, no. 3, p. 675–90, 2008, http://www.jstor.org/stable/20488236.

From Britain’s EU Exit Referendum to the COVID-19 Pandemic (2014–2020)

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Britain’s Referendum to Leave the EU

The announcement by British Prime Minister David Cameron (1966–) to hold a referendum on whether or not his country should remain in the EU was finally implemented on 23 June 2016, with the final result being the rejection by the electorate of the country’s return to the EU. The negotiations that followed for Britain’s withdrawal—known internationally as Brexit (short for British exit)—were long and difficult, due to the lack of experience of previous withdrawal, but also due to the complexity of the issues that arose, mainly concerning the four freedoms of the Single Internal Market, but also a number of economic issues that were a consequence of the withdrawal. Britain finally formally withdrew on 31 January 2020, with the final agreement being reached just before the end of 2020. Britain’s exit, apart from economic consequences, also brought about institutional changes, due to the withdrawal of the country’s representatives from the EU institutions.

12.1.1 A Historical Review: The 1975 Referendum Britain’s exit from the EU has been the political target of groups and individuals (anti-marketeers) across the political spectrum in the country. This objective was also occasionally expressed as a party objective shortly after the country’s difficult accession to the then EC (see Sects. 5.2.4 and 5.3.2). The question of residence was the subject of two referendums, the first of which took place in 1975. After his defeat in the national elections of 19 June 1970, the pioneer of Britain’s attempt to join the EC, and Labour leader Harold Wilson, began to oppose the way the accession negotiations were being conducted by the new Prime Minister of the country and Conservative leader Edward Heath (see Sects. 6.5.1, 6.5.2 and 6.5.3), arguing that their outcome would be detrimental to Britain. Thus, from 1971 he # The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 P. Liargovas, C. Papageorgiou, The European Integration, Vol. 1, Springer Texts in Political Science and International Relations, https://doi.org/10.1007/978-3-031-47776-8_12

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urged his MPs to oppose EC membership on Conservative terms; however, 69 of them, under Roy Jenkins, later chairman of the EC Committee, supported membership. Subsequently, and after Britain joined the EC on 1 January 1973, Wilson rejected a proposal from the left wing of his party for a commitment to withdraw Britain from the Community once Labour was back in power. However, he was forced to pledge that he would hold a referendum on the issue once Labour was back in power. But Labour won the next two elections, on 28 February 1974 without a majority and on 10 October 1974 with a slim majority of just three seats, with a commitment to renegotiate the terms of Britain’s membership of the EC, believing them to be unfavourable, and then to hold a referendum on whether or not the country should remain in the EC on the new terms. In 1975 Wilson, as Prime Minister, renegotiated the terms of accession, seeking an extension of the preferential terms of the transitional period, a reduction in the country’s contribution to the Community budget, and the restoration of subsidies to small farmers. Despite French reservations, sufficient concessions were made to Britain in March 1975 (see Sect. 6.5.4), enabling Wilson to hold the referendum, with him arguing in favour of staying in, against the majority of his party’s cadres who were opposed to the country remaining in the EC. The Conservatives under Margaret Thatcher were in favour of remaining, with the exception of some extreme nationalist voices. The referendum was held on 5 June 1975 and 67.23% of the electorate voted to remain in the EC, with a turnout of 64.03% and with all but two regions voting to remain, the Western Isles and Orkney Islands.

12.1.2 The Referendum of 23rd July 2016 Before the general election on 7 May 2015, Prime Minister David Cameron pledged that if elected with an absolute majority, he would hold a referendum on whether or not Britain should remain in the EU. The re-election of Cameron’s government with an absolute majority in Parliament provided him with the opportunity to renegotiate with the EU on more favourable terms for the country to remain as an EU Member State, and then hold a referendum on whether or not the country should remain in the EU on the new terms (Fig. 12.1). The negotiations with the EU were concluded at the European Council of 18 and 19 February 2016, and the following day, it was announced that a referendum on whether or not the country should remain in the EU under the new terms would be held on 23 June of the same year. The new terms included the following main points, which would apply if the British people accepted to remain in the EU: (i) Regarding financial governance: Legal acts, including intergovernmental agreements between Member States directly linked to the functioning of the Eurozone, respect the competences, rights, and obligations of Member States that do not have the euro as their currency (such as Britain). EU banking union legislation conferring powers on the ECB, the Single Resolution Board, or Union bodies performing similar tasks

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Fig. 12.1 British Prime Minister David Cameron. Source File: Ministru_prezidenta_Valda_ Dombrovska_tikšanās_ar_Apvienotās_Karalistes_Ministru_prezidentu_Deividu_Kameronu_ (8514463969).jpg. Author: Valsts kanceleja/State Chancellery from Rīga, Latvija, licensed under the Creative Commons Attribution-Share Alike 2.0 Generic license, attribution: Toms Norde, Valsts kanceleja. https://commons.wikimedia.org/wiki/File:David_Cameron_%2 8cropped%29.jpg (cropped)

on credit institutions applies only to credit institutions established in Member States whose currency is the euro or in Member States that have concluded a close cooperation agreement with the ECB. Emergency and crisis measures to safeguard the financial stability of the euro area will not entail fiscal responsibility for Member States whose currency is not the euro (such as Britain). (ii) Regarding competitiveness: The relevant EU institutions and Member States will take concrete measures to improve regulation, which is a key driver for achieving the objectives of strengthening the internal market to keep pace with the changing international environment. This means reducing administrative burdens and compliance costs for economic operators, in particular small and medium-sized enterprises, and removing unnecessary legislation and implementing a more ambitious trade policy. (iii) Regarding sovereignty: It is recognised that Britain, because of its special position under the Treaties, has not committed itself to further political integration within the EU. On the principle of subsidiarity, if reasoned opinions, delivered within 12 weeks of the transmission of a draft action with a view to the adoption of a legislative act, representing more than 55% of the votes cast in national parliaments, consider that the draft EU legislative act does not comply with the principle of subsidiarity (red card), the Council Presidency will place the item on the Council’s agenda for detailed discussion and, at the end of the debate, the representatives of the Member States will adjourn the debate. It was also confirmed

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that the security of Member States remains the exclusive responsibility of each Member State. (iv) Regarding social benefits and freedom of movement: on the basis of objective assessments which do not take into account the nationality of the persons concerned, conditions may be imposed in relation to certain benefits in order to ensure that there is a real and substantial degree of connection between the person concerned and the labour market of the host Member State. Member States have the possibility of refusing social benefits to persons who exercise their right to free movement for the sole purpose of obtaining the social benefits of the Member States without having sufficient resources to be granted the right of residence. Member States may take measures to prevent the abuse of rights or fraud, such as the submission of false documents and to deal with cases of marriages of convenience or maintenance of marriages with third-country nationals aimed at using free movement as a means of regularising residence in a Member State. On a proposal from the Commission, after examining a notification submitted by a Member State, the Council may, by means of an implementing act, authorise the Member State concerned to restrict access of EU workers who have recently entered its labour market to employee benefits for a total period of up to 4 years from the start of employment. The Conservative Party maintained neutrality, but Cameron himself campaigned for the country to remain in the EU. Government and party officials and members were sharply divided. Labour under Jeremy Corbyn (1949–)—who in the 1975 referendum had opposed the country’s return to the EC—and most political parties, such as the Liberal Democrats, the Greens, and the Scottish National Party, were in favour of Britain remaining in the EU. Britain’s withdrawal from the EU was mainly advocated by Nigel Paul Farage’s (1964–) Independence Party and some smaller parties with a Eurosceptic orientation. However, even among the parties that formally supported remaining in the EU, there were influential figures who announced that they differed from the party line. It should be noted that shortly before the referendum, on 16 June 2016, there was the dark spot of the murder of Labour MP Helen Joanne “Jo” Cox (1974–2016) in Birstall, West Yorkshire, which resulted in the suspension of pre-referendum proceedings for 3 days. The referendum was held, as planned, on 23 June 2016, with a 72.21% turnout, in which the British people voted against the country’s remaining in the EU with 51.89%, although the polls showed a small lead of the positive vote for the country to remain in the EU, which reassured the British Prime Minister. In the referendum, all of the Scottish regions and most of Northern Ireland, as well as central London, voted to remain in the EU, unlike most of England and Wales. The result of the referendum caused changes in the political landscape of Britain. British Prime Minister David Cameron announced his resignation as Prime Minister, a position held by Theresa May (1956–), a Conservative Party member, on 13 July 2016, and on 12 September of the same year, Cameron announced his resignation as a member of the House of Commons, thus ending his political career. The new Prime Minister started the process of Britain’s withdrawal from the EU by announcing on 2 October 2016 that she would trigger Article 50 of the TEU for

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the withdrawal of a Member State from the EU before the end of March next year, which she did on 29 March 2017. However, her desire for a broad majority for her party in the British Parliament, to enable her to more easily handle the withdrawal process, led her to call a national election on 8 June 2017. However, it failed to get the desired result, resulting in the formation of a coalition government with the Northern Ireland Democratic Unionist Party. As a result, negotiations with the EU on the country’s withdrawal were delayed until 19 June 2017.

12.1.3 The Negotiations for Britain’s Withdrawal The European Council appointed the French politician Michel Bernard Barnier (1951–) as Chief EU Negotiator on behalf of the Commission, following a proposal by Commission President Jean-Claude Juncker. On behalf of the UK, the negotiating team was led by David Davis, the minister responsible for Britain’s exit from the EU. At the European Council meeting on 29 April 2017, the first EU guidelines for the forthcoming negotiation with Britain were adopted. With these, the EU aimed for the negotiations to be conducted in two phases: first, to finalise Britain’s Withdrawal Agreement and, after its exit, to conduct formal negotiations on the future EU-Britain relationship. In contrast, Britain envisaged a parallel negotiation of both the Withdrawal Agreement and the future UK-EU relationship. From Britain’s point of view, for the future EU-Britain relationship the priorities were (a) withdrawal from the Single Market, and ending the free movement of persons (EU citizens) within its territory; (b) ending the jurisdiction of the EU Court of Justice in Britain; and (c) concluding a new free trade agreement with the EU for goods and services; however, given that Britain was still an EU Member State, it was not possible, mainly for institutional reasons, to formally start negotiations on the future cooperation relations between the two sides before Britain’s formal exit from the EU. Thus, the EU’s logic of two-phase negotiations prevailed (Fig. 12.2). This is the logic behind the negotiations that started on 19 June 2017. Negotiating teams were set up on three main issues: (a) the rights of EU citizens living in Britain and British citizens living in EU Member States, (b) Britain’s outstanding financial obligations to the EU until the end of the current Multiannual Financial Framework 2014–2020, and (c) the border between Northern Ireland and the Republic of Ireland. Six months later, in December 2017, after six rounds of negotiations, a partial agreement was reached on the following issues: (a) full protection of the rights of British citizens and their family members already residing in EU Member States, as well as of citizens of EU Member States and their family members already residing in Britain, (b) a financial settlement between the two sides for about 35–39 billion euros, which Britain will continue to pay into the EU budget until the completion of the programmes, and (c) a financial settlement between the two sides for about 35–39 billion euros, which Britain will continue to pay into the EU budget until the completion of the programmes. This progress was noted at the extraordinary European Council (Article 50) on 15 December 2017. What was agreed became a legal text as a draft Withdrawal Agreement. In addition, the same European Council

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Fig. 12.2 Michel Barnier, head of the EU negotiating team in the negotiations on Britain’s exit from the EU. Source: Brexit debate— Michel Barnier, EU Brexit negotiator Author: European Parliament from EU. licensed under the Creative Commons Attribution 2.0 Generic license, https://commons. wikimedia.org/wiki/File: Brexit_debate_-_Michel_ Barnier,_EU_Brexit_ negotiator_%28cropped%29. jpg (cropped)

of 15 December 2017 agreed on the guidelines for the second phase of negotiations for the transition period and for preliminary consultations on the future relationship and a possible future trade agreement between the two sides. The seventh round (and first of the second phase) of negotiations started on 6 February 2018 in Brussels. The extraordinary European Council (Article 50) of 23 March 2018 agreed to the terms of a 21-month transition period, from 29 March 2019 to 31 December 2020, which were included in the legal text of the Withdrawal Agreement. A number of substantive details on the Irish border remained outstanding. The same European Council also agreed on the third in a row of guidelines for the negotiations on the future cooperation between the EU and the UK. Statement by the European Parliament’s Brexit Coordinator Guy Verhofstadt on Twitter on the rights of British citizens living permanently in EU Member States on 18 December 2019 “EU member states must grant UK citizens the full rights they have today. Automatically. Not ‘if’ but ‘now’. Let’s also return to the idea of ‘European linked citizenship’ for UK citizens who want to maintain their relationship with Europe.” Source: Guy Verhofstadt @guyverhofstadt, MEP @RenewEurope #IAmEuropeanEuropereneweuropegroup.eu// The informal European Council in Salzburg, on 19 and 20 September 2018, discussed the progress of the negotiations. The 27 confirmed their united stance in

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the negotiations and their insistence that there will be no Withdrawal Agreement without a strong, workable, and legally binding security mechanism for Ireland. On 14 November 2018, the negotiations were concluded and the negotiators’ representatives of both sides agreed on the legal text of the UK’s withdrawal agreement from the EU, as well as on the text of the accompanying Joint Political Declaration on the future relations between the two sides. The following day, the British Prime Minister secured the support of her Cabinet for both texts. In addition, the extraordinary European Council (Article 50) of 25 November 2018 approved the submitted Withdrawal Agreement and the Joint Political Declaration in the adopted Conclusions. However, the ratification of the Withdrawal Agreement by the British Parliament was not easy. After two postponements, the May government presented the Withdrawal Agreement for ratification in early January 2019 and put it to a vote on 15 January 2019, when it was voted down by around 75% of the members of parliament, marking the largest parliamentary defeat of a British government in its home parliament. Following an agreement between the British Prime Minister and Commission President Juncker to send clarifying texts on the Agreement, two further attempts were made to vote on the Withdrawal Agreement followed, on 12 March and 29 March 2019, without success, although the rejection rate was lower than the first time. Thus, the British Prime Minister was forced to resign on 24 July 2019. Meanwhile, in a request on 20 March 2019, May asked for an extension of the date of Britain’s exit from the EU (and the start of the 21-month transition period) to 30 June 2019. However, the informal European Council (Article 50) of 21 and 22 March 2019 accepted an extension until 22 May 2019, provided that the Withdrawal Agreement is ratified by the British Parliament on 29 March 2019; otherwise an extension is only accepted until 12 April 2019. In addition, if Britain were still an EU Member State during the period from 23 to 26 May 2019, then it would be obliged to participate in the European elections, calling them by 12 April 2019. After the UK parliament voted against the Withdrawal Agreement on 29 March 2019, Theresa May proposed a new extension until 30 June 2019, adding that the UK government will continue to be involved in the preparation of the European Parliament elections in case Britain is still a member at the time of the elections. Thus, at the extraordinary European Council on 10 April 2019, it was decided to extend until the end of October 2019 the deadline for Britain’s exit from the EU. Boris Johnson (1964–), a Conservative leader and former Mayor of London, became the new Prime Minister of Britain. The new Prime Minister immediately asked the EU to renegotiate the Withdrawal Agreement, in particular the “backstop” provided for in the Protocol on Ireland, which regulated the border regime between the Republic of Ireland (EU) and Northern Ireland (UK). The Protocol regulated the border regime in such a way as not to breach the provisions of the Good Friday Agreement of April 1998, which led to the cessation of armed action by the Irish Republican Army. The purpose was to avoid the need for the construction of border infrastructure and border customs controls (the creation of a “hard border”) between the Republic of Ireland and Northern Ireland following Britain’s withdrawal from

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the EU. The Protocol provided that if the EU and Britain failed to conclude a trade agreement by the end of the envisaged transition period, i.e. 31 December 2020 (with the possibility of an extension for 1 or 2 more years), Britain would remain in a customs union with the EU and at the same time Northern Ireland would continue to follow most of the Single Market rules. This arrangement, although temporary (it would continue in force until replaced by the future final UK-EU trade agreement), had no expiry date. An agreement was finally reached on 17 October 2019 after intensive negotiations. The Protocol was finally revised to include a permanent solution to the Irish issue, which would apply from the end of the transition period. Its main points are the following. The future UK-EU trade relationship would be limited to a Free Trade Agreement. (b) Northern Ireland would participate in the same customs regime as the rest of Britain and, at the same time, would continue to follow most of the Single Market rules for goods (products) in order to minimise customs, sanitary, phytosanitary, and veterinary controls at the border between Northern Ireland (Britain) and the Republic of Ireland (EU). (c) The Northern Ireland scheme will be reviewed every 4 years, starting in 2024, by the devolved administration of Northern Ireland, which will decide on its continuation. The extraordinary European Council on 17 October 2019 ratified the revised Withdrawal Agreement and approved the revised Joint Political Declaration on the future UK-EU relationship and the final Protocol on Ireland agreed on the same day. Two days later, the British Prime Minister called for a new extension of Britain’s exit from the EU, until 31 January 2020, in order to prepare the ground for the ratification of the Withdrawal Agreement by the British Parliament. On 29 October 2019, the extraordinary European Council adopted a decision to extend the deadline for Britain’s withdrawal from the EU. The deadline was extended until 31 January 2020 to allow time for the UK Parliament to ratify the Withdrawal Agreement. The revised Withdrawal Agreement including the revised Protocol for Ireland was ratified by the UK Parliament on 23 January 2020, signed by the President of the Commission and the President of the European Council on 24 January 2020, received the consent of the European Parliament on 29 January 2020, and finally approved by the European Council, by written procedure, on 30 January 2020. The revised Joint Political Declaration on the future UK-EU relationship was also approved by the UK Parliament, the European Parliament, and the Council of EU.

12.1.4 Withdrawal, Negotiations on the Future, and the Consequences Finally, Britain officially left the EU at midnight on 31 January 2020. The entry into force of the agreement marked the end of the period provided for in Article 50 TEU and the start of a transitional period that ended on 31 December 2020. During this period, Britain continued to apply EU law but was no longer represented in the EU institutions.

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Fig. 12.3 The European Union in 2020

As Britain was no longer an EU Member State, it was possible to start negotiations on the future partnership between the EU and Britain. The framework for this future relationship had already been defined through the Joint Political Declaration agreed by both sides in October 2019. The negotiations started on 2 March 2020, which were difficult. The negotiating team on behalf of the EU was again led by Michel Barnier. On 21 October 2020, the EU and the UK reached agreement on the principles for the continuation of the negotiations. Finally, the Council of EU adopted on 29 December 2020, by written procedure, a decision on the signature of the EU–UK Trade and Cooperation Agreement and its provisional application from 1 January 2021, pending its approval by the European Parliament and its conclusion by decision of the Council of EU. European Council President Charles Michel and Commission President Ursula von der Leyen signed the agreement with Britain on behalf of the EU in Brussels before the documents were taken to London for signature by British Prime Minister Boris Johnson later in the day (Fig. 12.3). Britain’s withdrawal from the EU has caused the following changes in the EU institutions from 1 February 2020: in the Commission, the number of

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Commissioners has been reduced by one. In the European Parliament, with the departure of 73 British MEPs, the total number of MEPs became 705, with the following additions of 27 MEPs: France +5, Spain +5, Italy +3, Netherlands +3, Ireland +2, Austria +1, Denmark +1, Estonia +1, Croatia +1, Poland +1, Romania +1, Slovakia +1, Sweden +1, and Finland +1. The Court of Justice would have 27 Judges and 11 Advocates General and the General Court would have 49 Judges. Finally, the Court of Auditors would have 27 members.

12.2

Developments in EU Policies: New Strategic Agenda

José Manuel Barroso was succeeded as Commission President by Jean-Claude Juncker on 1 November 2014, despite opposition to his nomination from British Prime Minister David Cameron. According to his statements before the European Parliament before taking office, the new Commission’s policy would revolve around the following ten pillars: (i) a new impetus for jobs, growth, and investment; (ii) a connected digital single market; (iii) a resilient energy union accompanied by a far-reaching policy on climate change; (iv) a deeper and fairer internal market with a strengthened industrial base; (v) a deeper and fairer economic and monetary union; (vi) a fair and balanced free trade agreement with the USA; (vii) an area of justice and fundamental rights based on mutual trust; (viii) towards a new migration policy; (ix) making the EU a stronger global player; and (x) a union for democratic change. When Juncker took office on 1 November 2014, the EU was facing many problems internally, mainly the problems of Member States’ economies, the refugee problem, and the creeping Euroscepticism. However, efforts were made to develop the EU’s core policies (the CAP and Regional Policy), the continuation of the CFSP missions and cooperation with NATO, the development of Social Policy with the presentation of the European Pillar of Social Rights, the EU’s participation in the Paris Conference on Climate Change, and efforts to develop the Banking Union.

12.2.1 The Proposal for the New CAP for the Period 2021–2027 On the basis of the new proposed Multiannual Financial Framework (MFF) for the period 2021–2027, on 1 June 2018, the Commission presented three legislative proposals for the CAP for the period 2021–2027, proposing to structure it around nine key objectives. The objectives are based on broader EU social, environmental, and economic objectives and will form the basis for the preparation of Member States’ individual Strategic CAP Plans for the CAP. The Commission’s proposals, which concern both Pillar I of direct payments and Pillar II of rural development, aim to strengthen a sustainable and competitive agricultural sector which can make a significant contribution to the implementation of the European Green Deal (then under preparation) (see Sect. 12.2.8), in particular the farm-to-table strategy and the biodiversity strategy.

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To explain the rationale behind each of the nine objectives, the Commission has produced a series of factsheets summarising the key elements as well as the importance of each objective. These objectives are as follows: (a) To ensure a fair income for farmers. Key objective: To support sustainable farm incomes and resilience across the Union to improve food security. (b) To increase competitiveness. Key objective: To increase the competitiveness and productivity of agriculture in a sustainable way, to meet the challenges of higher demand in a world characterised by limited resources and an uncertain climate. (c) Balancing power in the food chain. Key objective: To improve the position of farmers in the food value chain. (d) Action on climate change. Key objective: To contribute to climate change mitigation and adaptation and sustainable energy. (e) Environmental protection. Key objective: To promote sustainable development and efficient management of natural resources such as water, soil, and air. (f) Conservation of landscapes and biodiversity. Key objective: Contribute to the protection of biodiversity, enhance ecosystem services, and conserve habitats and natural landscapes. (g) Encouraging the renewal of generations. Key objective: To modernise the agricultural sector by attracting young people and improving their business development. (h) Stimulating rural areas. Key objective: To promote employment, economic growth, social inclusion, and local development in rural areas, including the bio-economy and sustainable forestry. (i) Protection of health and food quality. Key objective: To improve the responsiveness of EU agriculture to society’s food and health demands, including the requirement for safe, nutritious, and sustainable food, reduction of food waste, and good animal welfare. Another general objective of the new CAP is to simplify the CAP itself, given that: “Administrative expenditure is subject to supervision to ensure that taxpayers’ money is used for the purposes for which it is intended. Proportionality of the burden in relation to the benefits is crucial: an effective policy will minimise costs, including in terms of bureaucracy, in order to achieve the highest possible efficiency.” Following the adoption of the EU’s long-term budget for the period 2021–2027, the new CAP will be financed for Pillar I through the EAGF and for Pillar II through the EAFRD, including the Next Generation EU instrument, with a total of 386.6 billion euros, of which 291.1 billion euros will come from the EAGF and 95.5 billion euros from the EAFRD. The Next Generation EU instrument will boost the EAFRD budget to help rural areas make the structural changes needed to achieve the objectives of the European Green Deal and the digital switchover. However, the start date of the proposed CAP reform was postponed to 1 January 2023, due to the delay in the adoption of the EU MFF Regulation for the period 2021–2027, which contributed to the delay in the adoption of the proposed CAP reform for the period 2021–2027. On 10 November 2020, an agreement was reached between the European Parliament and the Council of EU on the next EU MFF and Next Generation EU. The Regulation on the EU MFF for the period 2021–2027 and the inter-institutional agreement agreed were adopted by the European Parliament on 17 December 2020.

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Following the allocation of the CAP funding for the period 2021–2027 from the long-term EU budget, a Transitional Regulation was agreed on 23 December 2020 for the years 2021 and 2022. The Transitional Regulation extends most of the CAP rules that were in place during the 2014–2020 period while including new elements to achieve stronger environmental ambition and ensure a smooth transition to the future CAP framework, as set out in the Commission’s proposals. It also covers the integration of a Next Generation EU envelope into the EAFRD, allowing rural economies in the 2021–2022 biennium to recover from the impact of the COVID19 pandemic while ensuring a green and digital recovery (see also Sect. 12.3.2). Also, during the 2-year transition period, Member States should at least maintain the current level of ambition of the CAP in terms of environmental and climate objectives, and contribute to the objectives of the European Green Deal. Under the future CAP, for the period 2023–2027, EU Member States will have more freedom to shape rules and funds according to the needs of their farmers and rural communities, always in line with EU standards and objectives. Member States will submit only one Strategic Plan, setting higher environmental targets than today, covering income support, sectoral strategies, and rural development, and allowing for smoother implementation and the least possible administrative burden. In addition, EU Member States will be able to transfer up to 25% of CAP resources between income support (Pillar I) and rural development (Pillar II) in order to better adapt the policy to the priorities of their agricultural sector.

12.2.2 The New Regional Policy for the Period 2021–2027 The new Commission proposal of 29 May 2018 for the Common Provisions Regulation (CPR) of the Structural Funds emphasised five key objectives replacing the previous eleven Thematic Objectives of the NSRF 2014–2020: (1) A smarter Europe through innovation, digitisation, economic transformation, and support for SMEs. (2) A greener, carbon-free Europe, implementing the Paris Agreement and investing in the energy transition and renewable energy and combating climate change. (3) A more connected Europe, with strategic transport networks and digital networks. (4) A more social Europe, implementing the European Pillar of Social Rights and supporting quality employment, education, skills, social inclusion, and equal access to healthcare. (5) A Europe closer to citizens, supporting locally developed development strategies and sustainable urban development across the EU. The assistance of seven funds is required: the ERDF, the CF, ESF+, EMFF, the Asylum, Migration and Integration Fund (AMIF), the Internal Security Fund (ISF), and the Border and Visa Management Mechanism (BAMM). The ERDF contributes 200.6 billion euros, the CF 41.3 billion euros, and ESF+ (a development of the ESF, for actions under the European Pillar of Social Rights for employment, education, and social inclusion) 88.6 billion euros. The Commission’s proposal for the financing of the EMFF, the AMIF, the BAMM, and the ISF will be set out in the specific Regulation for each Fund.

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Cohesion policy continues to invest in all regions, always taking three categories as a basis: the (less developed) regions, regions in transition, and the most developed regions, with 81% of the resources. However, in addition to the allocation of resources based on GDP per capita, new criteria are added, such as youth unemployment (15%), climate change (1%), and reception and integration of migrants (3%). Development strategies drawn up at local level are further supported and strengthen the role of local authorities in the management of funds. The urban dimension of Cohesion Policy is also being strengthened, with 6% of ERDF resources being allocated to sustainable urban development, and a new networking and capacity-building programme, the European Urban Initiative, is being developed. Fewer and clearer rules are developed for simplification. The Commission publishes 80 simplification measures in cohesion policy, a single rulebook now covering seven EU funds under joint “shared management” with Member States, easier control procedures for programmes with a track record of good performance, and an extension of the “single audit” principle to avoid double-checking. It will be possible to transfer funds within programmes without formal Commission approval. In the event of a natural disaster, it will be easier to transfer funds from day one. Finally, the notification of funded projects will be simplified, with a single label covering all funds, a single portal containing all available funding, and a single database managed by the Commission. A reinforced link with the European Semester and the economic governance of the Union is foreseen. Country-specific recommendations made in the context of the European Semester will be taken into account twice during the budgetary period: at the beginning, for the design of cohesion policy programmes, and at the mid-term review. There are more opportunities for synergies within the EU’s financial toolbox. The single rulebook covering the now seven EU funds will facilitate these synergies. In addition to the single rulebook, synergies with other EU instruments such as the Common Agricultural Policy and the Horizon Europe, LIFE, and Erasmus+ programmes will be facilitated. Inter-regional and cross-border cooperation will be facilitated thanks to the new possibility for regions to use part of their own share of resource allocation to fund projects anywhere in Europe jointly with other regions. The new generation of interregional and cross-border cooperation programmes (“Interreg”) will help Member States to eliminate cross-border barriers and develop common services. The Commission proposes to create a new instrument for this purpose, the European Crossborder Mechanism. An annual performance review shall be established. The performance of the programmes will also be assessed at the mid-term review. For transparency reasons, Member States will be required to submit every 2 months all available data on implementation, at which point the open data platform on cohesion will be automatically updated.

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Fig. 12.4 Donald Tusk, President of the European Council since 1 November 2014. Source: IMG_7386, Author: European People’s Party, 22 June 2017, licensed under the Creative Commons Attribution 2.0 Generic license, https://commons. wikimedia.org/wiki/File: Donald_Tusk_%28cropped% 29.jpg (cropped)

12.2.3 The CFSP and the EU’s Global Strategy Since the Treaty of Lisbon, the scope of the CFSP has been broadened, with a greater emphasis on the EU’s response to crises and on improving the effectiveness of the CFSP by developing its defence capabilities and strengthening its defence industry. However, for the first time, security and defence issues were raised at the European Council of 19 and 20 December 2013 with a view to (a) improving the effectiveness of the CSDP, (b) developing the EU’s defence capabilities, and (c) strengthening the defence industry of EU Member States. Gradually, it is becoming clear that the need to address international issues more effectively requires a “comprehensive strategy” on the part of the EU, thus enhancing the EU’s role at the international level (Fig. 12.4). The European Council of 25 and 26 June 2015 recognised that “Europe’s security environment has changed dramatically” and mandated the High Representative for Foreign Affairs and Security Policy to continue the strategic reflection process “with a view to preparing a comprehensive EU foreign and security policy strategy, in close cooperation with Member States, to be presented to the European Council by June 2016”. This need, combined with the necessary restructuring of existing structures, led the EU to review and reassess its international strategy, paving the way for the adoption of the EU Global Strategy (EUGS) on foreign policy and security issues. The EU Global Strategy (EUGS) was based on the recommendation to the European Council of 28 June 2016 by the High Representative for Foreign Affairs and Security Policy Federica Mogherini, who succeeded Catherine Ashton on 1 November 2014, with Donald Tusk as Permanent President of the European Council. The new EU Comprehensive Strategy (EUGS) aimed to change the philosophy of the 2003

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Fig. 12.5 Federica Mogherini, EU High Representative for Foreign Affairs and Security Policy since 1 November 2014. Source: U.S. Department of State—https://www.flickr. com/photos/9364837@N06/1 6334692581/, and https:// www.flickr.com/photos/9364 837@N06/16334692581/, Public Domain (cropped)

European Security Strategy, aiming at a comprehensive military-political approach to address newer security challenges, addressing global conflicts and crises, building relations with third partners, and protecting the security of EU citizens. The overall EU strategy identifies five priorities for the CFSP: (i) EU security; (ii) the resilience of states and societies beyond the EU’s eastern and southern borders; (iii) an integrated approach to conflict and crisis; (iv) regional cooperation structures; and (v) global governance in the twenty-first century (Fig. 12.5). The same European Council of 28 June 2016 called for a further strengthening of the EU-NATO relationship in cooperation with all Member States and for the benefit of all Member States, in the light of common goals and values and in the face of unprecedented global challenges. This was followed shortly afterwards, on 8 July 2016 in Warsaw, by the Joint Statement signed by the President of the European Council, the President of the Commission, and the Secretary General of NATO. It gave new impetus to EU-NATO cooperation in seven areas (see Sect. 12.2.4). On 14 September 2016, Commission President Jean-Claude Juncker, in his State of the Union Address 2016: Towards a better Europe—A Europe that protects, strengthens and defends, referred to the need for a stronger Europe that protects its citizens. This requires more cooperation to increase the efficiency of public defence spending and a strong and innovative industrial base. Furthermore, the informal European Council in Bratislava on 16 September 2016 confirmed the need to strengthen EU cooperation on external security and defence issues. This was followed by three particularly important actions that helped shape the post-Lisbon CFSP, known as the “winter defence package”: On 14 November 2016, and with a view to making the EU Comprehensive Strategy (EUGS) operational, the High Representative for Foreign Affairs and Security Policy presented to the Foreign

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Affairs Council of EU an implementation plan for the CSDP, which identified three sets of priorities: (i) responding to external conflicts and crises, (ii) building partner capacity, and (iii) protecting the Union and its citizens. The plan contained 13 proposals on security and defence, including a Coordinated Annual Review on Defence (CARD) with a focus on expenditure, improved EU rapid response capabilities (including through the use of EU combat units), and a new Permanent Structured Cooperation (PESCO) for Member States wishing to make greater commitments in the field of defence. On 30 November 2016, the High Representative for Foreign Affairs and Security Policy also presented a European Defence Action Plan (EDAP) to the Foreign Affairs Council of EU while proposing a European Defence Fund (EDF) focused on defence research and capacity building. Finally, the European Council of 15 December 2016 discussed strengthening EU cooperation on external security and defence and focused on three priorities: (i) the EU Comprehensive Security and Defence Strategy (EUGS), (ii) the European Defence Action Plan (EDAP), and (iii) the implementation of the joint package of proposals following the EU-NATO Joint Statement of 8 July 2016. The Foreign Affairs Council of EU on 6 March 2017 reviewed the progress made and agreed to improve and support CSDP missions and operations. One of the measures it envisaged was the creation of a Military Planning and Conduct Capability (MPCC), a structure to improve the EU’s ability to respond more quickly, effectively, and seamlessly to plan and conduct non-executive military missions. This would operate under the political control and strategic guidance of the MPCC, which would include the ambassadors of the EU Member States, based in Brussels. The military planning and conduct capability would work closely with its existing civilian counterpart, the Civilian Planning and Conduct Capability (CPCC). The Military Planning and Conduct Capability (MPCC) was finally created by a decision of the Foreign Affairs Council of EU on 8 June 2017. At the European Council of 22 June 2017, it was agreed that Permanent Structured Cooperation (PESCO) should be launched in order to strengthen European security and defence, an intention reiterated at the European Council of 19 October 2017. Finally, in the margins of the Foreign Affairs Council of EU meeting of 13 November 2017, 23 Member States signed a notification, taking the first step towards the establishment of Permanent Structured Cooperation (PESCO), and on 8 December of the same year, the Foreign Affairs Council adopted a decision establishing Permanent Structured Cooperation (PESCO) with the participation of 25 Member States. Britain, Denmark, and Malta remain outside the cooperation. On 12 December 2017, the Foreign Affairs Council also adopted its position on the proposal for a Regulation of the European Parliament and of the Council of EU establishing a European Defence Industrial Development Programme (EDIDP), stating that European security is a key priority for EU citizens. The aim of the programme was to support the competitiveness and innovation capacity of the Union’s defence industry, with a budget of 500 million euros for the period 2019–2020. The regulation is an integral part of the European Defence Fund (EDF).

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On 6 March 2018, the Foreign Affairs Council of EU adopted a roadmap with guidance and instructions for the implementation of Permanent Structured Cooperation (PESCO). Subsequently, on 28 May of the same year, the Foreign Affairs Council of EU adopted conclusions on strengthening civilian CSDP, considering it an essential element of the EU’s common approach, alongside other EU instruments. The European Council of 28 June 2018 also called for an agreement on a civilian CSDP pact to be signed by the end of 2018, while also calling for the fulfilment of commitments made in the framework of Permanent Structured Cooperation (PESCO), the rapid implementation of the European Defence Industrial Development Programme (EDIDP), and further progress on the European Defence Fund (EDF). On 10 July 2018, the President of the European Council, the President of the Commission, and the NATO Secretary General signed a new EU-NATO Joint Declaration on Cooperation. The new Joint Statement outlines the common vision of the EU and NATO and highlights the need for closer cooperation in new areas (see Sect. 12.2.4). Finally, by a joint decision of the European Parliament and the Foreign Affairs Council of EU, the European Defence Industrial Development Programme (EDIDP) was established on 18 July 2018 to support the competitiveness and innovation of the EU defence industry. Later, the European Council of 13 and 14 December 2018 recognised the progress made in the field of CSDP and endorsed the Civilian CSDP Compact (CCC), and on 30 April 2019, the Commission and the EEAS submitted a joint Action Plan to facilitate the implementation of the Civilian CSDP (CCC). In the context of the evaluation of the EU Comprehensive Strategy (EUGS), based on the third annual progress report of the High Representative for Foreign Affairs and Security Policy entitled “The EU Comprehensive Strategy: 3 years of implementation, perspectives”, the Foreign Affairs Council of 17 June 2019 expressed satisfaction with the substantial progress achieved in strengthening the EU’s security and its role as a security guarantor and international actor, including through CSDP. The effectiveness of the CFSP was also discussed in the light of the significant changes that were taking place on the world stage and the challenges the EU was facing, and it was concluded that a more effective foreign policy and a swift adoption and implementation of the European Defence Fund (EDF), which would strengthen the EU’s defence industry and technology, were needed. Finally, on 5 November 2020, the Foreign Affairs Council set out the general conditions under which third countries can exceptionally be invited to participate in individual PESCO projects, paving the way for stronger and more ambitious defence cooperation with EU partners. Meanwhile, on 2 July 2019, the extraordinary European Council in Brussels elected Charles Michel, Prime Minister of Belgium, as the third Permanent President and chose the Spanish politician Josep Borrell as EU High Representative for Foreign Affairs and Security Policy.

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12.2.4 EU-NATO Cooperation in the Context of ESDP In the EU-NATO Joint Statement on their Strategic Partnership, signed on 8 July 2016, ahead of the NATO Summit in Warsaw on 8 and 9 July 2016, European Council President Donald Tusk, Commission President Jean-Claude Juncker, and NATO Secretary General Jens Stoltenberg agreed to work together in the following seven areas: (i) countering hybrid threats; (ii) operational cooperation, including on maritime and irregular migration; (iii) cyber security and cyber defence; (iv) defence capabilities; (v) defence industry and research; (vi) exercises; and (vii) supporting capacity-building efforts of partners in the Western Balkans, Eastern and Southern Neighbourhood, and enhancing their resilience. On 6 December 2016, the Foreign Affairs Council of EU adopted conclusions adopting a plan to follow up on the decisions taken in Warsaw on EU-NATO cooperation, consisting of 42 proposals for concrete actions. On 5 December 2017, the Foreign Affairs Council of EU adopted conclusions on EU-NATO cooperation, adopting 32 new additional proposals for specific actions in areas such as military mobility, counter-terrorism, and women’s peace and security, subject to their adoption in a parallel process by NATO through the North Atlantic Council. Subsequently, on 10 July 2018, the EU and NATO signed a new Joint Statement in Brussels ahead of the NATO Summit on 11 and 12 July 2018. This statement outlines the common vision of the EU and NATO and highlights the need for cooperation in areas such as (i) military mobility; (ii) counter-terrorism; (iii) cyber security; (iv) hybrid threats; and (v) security and peaceful living for women. So far, five progress reports have been submitted jointly by the EU High Representative for Foreign Affairs and Security Policy and the NATO Secretary General. The latest, dated 16 June 2020, reports on a total of 74 actions adopted by the EU and NATO Councils on 6 December 2016 and 5 December 2017, highlighting key achievements in all areas of cooperation.

12.2.5 The CSDP Missions The following CSDP military missions were carried out in the period 2014–2020: EUFOR RCA from 10 February 2014 to 23 March 2015, as a military operation in the Central African Republic to stabilise the region after a one-year civil war. EUNAVFOR Med from 22 June 2015 until today, initially as naval operation SOPHIA and later as IRINI in the Mediterranean, to oversee the blockade to prevent the illegal import of arms into Libya. At the same time, as a naval operation, it was to oversee surveillance of the region to neutralise the activities of human traffickers in the Mediterranean. EUTM RCA from 16 July 2016 to date, as a military operation in the Central African Republic. The objective was to support the creation of a modernised, effective, and democratically accountable army.

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In addition, the EU has undertaken the civilian missions EUCAP Sahel Mali, from 15 April 2014 to date, in support of the security forces in Mali, EUAM Ukraine, from 1 December 2014 to date, for civilian security sector reform in Ukraine, EUMAM RCA, from 16 March 2015 to 15 July 2016, as an advisory mission to the Central African Republic, EUAM Iraq, from 22 November 2017 to date, as an advisory mission to Iraq, and EUAM RCA, from 9 December to date, as an advisory mission to the Central African Republic.

12.2.6 The European Pillar of Social Rights In order to build a fairer and more social Europe, the European Parliament, the Council of EU, and the Commission jointly proclaimed the European Pillar of Social Rights at the Social Summit on Fair Employment and Growth, held in Gothenburg on 17 November 2017. The Pillar was first announced by Commission President Jaen Claude Juncker in his State of the Union address on 9 September 2015, and the proposal was presented by the Commission on 26 April 2017. The pillar is the first set of social rights proclaimed by the EU institutions since the Charter of Fundamental Rights in 2000. It establishes 20 principles and rights of key importance and seeks to support a renewed effort of convergence towards improving the living and working conditions of citizens in Europe. These are divided into three categories (chapters): (a) equal opportunities and equal access to the labour market, (b) fair working conditions, and (c) access to adequate and sustainable social protection and inclusion. The implementation of the principles and rights set out in the pillar is a shared responsibility of the EU institutions, the Member States, the social partners, and other stakeholders. It will be supported by an online social scoreboard to monitor trends and performance across the EU Member States, and the Commission has launched specific initiatives at European level. Furthermore, the Commission announced further actions to implement the principles and rights contained in the Pillar, both in its speech before the European Parliament on 16 July 2019 and in its political guidelines for the next European Commission. In general, the structure and content of each chapter of the European Pillar of Social Rights is as follows: Chapter I: Equal opportunities and access to the labour market, covering (i) education, training, and lifelong learning, (ii) gender equality, (iii) equal opportunities, and (iv) active support for employment. Chapter II: Fair working conditions, including (v) safe and adaptable employment, (vi) fair and decent pay, (vii) information on employment conditions and protection in the event of dismissal, (viii) social dialogue and employee participation, (ix) work-life balance (leave—benefits), and (x) a healthy, safe, and appropriate working environment and protection of personal data. Chapter III: Social protection and integration, including (xi) childcare and support, (xii) social protection, (xiii) unemployment benefits, (xiv) minimum (guaranteed) income, (xv) income for the elderly and pensions, (xvi) healthcare, (xvii) integration of people with disabilities, (xviii) long-term care, (xix) housing and

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assistance (for people in need, vulnerable, homeless), and (xx) access to basic services.

12.2.7 Developments Related to the Crisis, EMU, and the Banking Union In response to the financial crisis, and given that the ESM was operating on an intergovernmental basis, on 22 June 2015, an updated EMU reform plan, entitled “The completion of the European Economic and Monetary Union”, with a completion horizon of 2025, known as the “Five Presidents’ Report”, was presented by Jean-Claude Juncker in cooperation with Donald Tusk, Jeroen Dijsselbloem, Mario Draghi, and Martin Schulz. The plan foresaw that in the medium term (from July 2017 to 2025) the ESM should be fully integrated into the EU legal framework applicable to all euro area Member States in accordance with the amended Article 136 TFEU. Among the Eurozone Member States, Greece continued to face severe economic problems. When the left-wing coalition SYRIZA, in cooperation with the right-wing party ANEL, took over the government of the country after the parliamentary elections of 25 January 2015, the new government started long negotiations with the EU institutions and the IMF, which ended in a deadlock. On 25 June, the Greek government received an ultimatum from the EU institutions as a single proposal consisting of two documents, one with reform proposals for the completion of the current programme and beyond and the second with a preliminary debt sustainability analysis. The Greek government has declared its intention to put the proposal to a referendum on 5 July 2015. However, Commission President Jean-Claude Juncker, German Chancellor Angela Merkel, and French President François Hollande, in a joint statement, expressed the view that the outcome of the referendum would be indicative of Greece’s intention to remain in the Eurozone or not. The referendum resulted in a 61.31% vote against the institutions’ final proposal. Despite the negative result, the Greek government of Alexis Tsipras (1974–) continued discussions with the lenders, in a climate of strong opposition within SYRIZA, and submitted on 8 July and 23 July 2015 new requests for financial assistance to the ESM and the IMF, respectively. On 13 July 2015, the Greek government reached an agreement with the EU institutions as a 3rd programme. The economic adjustment programme was to start on 19 August 2015 and was to be implemented by 20 August 2018. Financial support of up to 86 billion euros, as foreseen in the programme, would come from the ESM. In addition, the “Report of the Five Presidents” of 22 June 2015 set out a clear plan for deepening EMU, as well as measures to further limit the risks to financial stability. In particular, the “Report of the Five Presidents” proposed the creation, in the long term, of a European Deposit Guarantee Scheme as Pillar 3 of the Banking Union, together with banking supervision, which is entrusted to the EMU as Pillar 1, and bank resolution, which is entrusted to the EMU as Pillar 2.

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On 24 November 2015, the Commission proposed the creation of the European Deposit Insurance System (EDIS) for bank deposits in the euro area. The ESRB would act as Pillar 3 of the banking union. The proposal to establish an ESRB is based on the system of national Deposit Guarantee Systems (DGSs) regulated by a Directive of 16 April 2014. The scheme will be developed in different stages and the contributions of the ESRB will increase progressively over time. Initially, it will be a reinsurance scheme for national DGSs, which after 3 years will become a co-insurance scheme. In the final phase, in 2024, it will be a full deposit guarantee scheme of up to 100,000 € per person and bank, fully funded by the ESRB and supported by close cooperation with the national FVCs. When one of the banks goes into insolvency or resolution and it is necessary to pay out deposits or finance their transfer to another bank, the national FSCs and the ESRB will intervene. The ESRB would provide a uniform and stronger degree of insurance coverage in the euro area, which would reduce the vulnerability of national FVCs, ensuring that the level of depositors’ confidence in a bank would not depend on the bank’s location. This proposal was put forward as part of a broader package of measures to deepen economic and monetary union and complete the banking union. Banking union is an important milestone in the economic integration of the EU, following EMU. It provides the essential foundations for financial stability and helps to build resilience to crises and to strengthen the monitoring and assessment of risks. The Single Rulebook for banks provides a single set of prudential rules applicable across the EU. The banking union addresses the fragmentation of financial markets within the euro area and reduces the negative correlation between bank and sovereign debt.

12.2.8 The European Green Deal In its conclusions of 23 and 24 October 2014, the European Council adopted a 2030 energy and climate framework, based on four key objectives at Union level: (a) a reduction of at least 40% in economy-wide greenhouse gas emissions; (b) an indicative target for improving energy efficiency of at least 27%, with a provision to review by 2020, with a view to increasing the level to 30%; (c) a share of energy from renewable sources consumed in the EU of at least 27%; and (d) electricity interconnection of at least 15%. Furthermore, the European Council of 19 and 20 March 2015 decided to create an Energy Union and underlined the commitment to provide economic, secure, and sustainable energy in the EU. In addition, the Council of Ministers of Environment of EU on 18 September 2015 adopted conclusions to define the EU’s position ahead of the UN Climate Change Conference in Paris in December 2015. The EU would seek an ambitious, legally binding, and dynamic agreement to keep global temperature rise below 2 °C. The Council of EU also stressed that global greenhouse gas emissions should be reduced by 50% by 2050 compared to 1990 levels. From 30 November to 12 December 2015, the Paris Conference on Climate Change took place, with delegations from around 150 countries involved in

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negotiations for a new global and legally binding agreement on climate change. A new global agreement on climate change was reached on 12 December, which includes an action plan to keep global warming “well below” 2 °C and to continue efforts to limit it to 1.5 °C. The formal ratification of the Paris Agreement by the EU took place on 5 October 2016 by Decision (EU) 2016/1841 of the Council of EU. Finally, the agreement entered into force on 4 November 2016, a few days after it was ratified by 55 countries. As part of the implementation of the EU’s contribution under the Paris Agreement, a Regulation of the European Parliament and of the Council on binding annual greenhouse gas emission reductions (Effort Sharing Regulation—ESR) was adopted on 30 May 2018. Finally, on 11 December 2018, a Regulation of the European Parliament and of the Council of EU on the governance of the Energy Union and Climate Action was adopted. Later, on 11 December 2019, the new Commission from 1 November that year, under the presidency of Ursula von der Leyen (1958–), presented a European Green Deal for the EU and its citizens as a response to climate change and environmental challenges. The European Green Deal aims “to transform the EU into a just and prosperous society with a modern, competitive and resource-efficient economy, in which net greenhouse gas emissions are zero by 2050 and where economic growth is decoupled from resource use. It also aims to protect, preserve and enhance the EU’s natural capital and to protect the health and well-being of citizens from risks and impacts related to the environment. At the same time, this transition must be fair and inclusive.” Finally, the European Council of 10 and 11 December 2020 adopted a new binding target for a net domestic reduction of greenhouse gas emissions of at least 55% by 2030 compared to 1990 levels. It called on the Council of EU and the European Parliament to reflect this new target in a proposal for a European climate law and to adopt this law quickly. In particular, the European Council considers that the new target will (i) boost sustainable economic growth; (ii) create jobs; (iii) bring health and environmental benefits to EU citizens; and (iv) contribute to the long-term global competitiveness of the EU economy by promoting green innovation.

12.2.9 The New EU Strategic Agenda 2019–2024 At its meeting in Brussels on 20 June 2019, the European Council agreed on an EU agenda for the next 5 years, as part of its capacity to adopt “strategic agendas” for priority areas for longer-term EU attention and action. The New Strategic Agenda 2019–2024 focuses on four key priorities which will guide the work of the European Council to provide guidance for the work programmes of the other EU institutions. According to the strategic agenda—as set out on the European Council’s website—it focuses on specific areas and sets out how to implement them: I. Protection of citizens and freedoms. The European Council’s main priorities in this area are (a) effective control of the EU’s external borders; (b) combating

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illegal immigration and trafficking in human beings through better cooperation with countries of origin and transit; (c) reaching agreement on an effective asylum policy; (d) ensuring the proper functioning of the Schengen Agreement; (e) improving cooperation and exchange of information in the fight against terrorism and cross-border crime; (f) increasing resilience to terrorist attacks; and g) improving the fight against terrorism and cross-border crime. II. Developing a strong and dynamic economic base. In this area, the European Council focuses on (a) deepening the Economic and Monetary Union; (b) completing the Banking Union and the Capital Markets Union; (c) strengthening the international role of the euro; (d) enhancing cohesion in the EU; (e) working on all aspects of the digital revolution and artificial intelligence: infrastructure, connectivity, services, data, regulation, and investment; (f) reducing the fragmentation of European research, development, and innovation activities; (g) ensuring the fairness of the EU’s research, development, and innovation activities; and (h) ensuring that the EU’s competitiveness and competitiveness are strengthened. III. Building a climate-neutral, green, fair, and social Europe. The priority actions identified by the European Council include (a) ensuring the coherence of EU policies with the Paris Agreement; (b) accelerating the transition to renewable energy sources and increasing energy efficiency; (c) reducing dependence on external energy sources, diversifying supply, and investing in solutions for future mobility; (d) improving air and water quality; (e) promoting sustainable agriculture; (f) implementing the European Pillar of Social Rights in the context of the Paris Agreement; (g) promoting sustainable agriculture; and (h) implementing the European Pillar of Social Rights in the context of the Paris Agreement. IV. Promoting European interests and values on the international stage. In this area, the European Council endorsed the following key actions: (a) support for the UN and the main multilateral organisations; (b) promoting sustainable development and implementing the 2030 Agenda; (c) working with partner countries on migration; (d) maintaining the European perspective for those European countries that can and wish to join the EU; (e) developing an integrated partnership with Africa; (f) ensuring an ambitious and strong trade policy in the context of the reformed WTO, as well as in the context of the EU’s external relations; (g) ensuring that the EU’s external relations are not only a matter of concern to the EU but also of the EU’s external relations; and (h) ensuring that the EU’s external relations are not only a matter of concern to the EU but also of the EU’s external relations. In its conclusions, the European Council adds: “This strategic agenda is the first step in a process to be carried out by the EU institutions and Member States. The European Council will closely monitor the implementation of these priorities and will provide further general political guidance and priorities where necessary.”

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Increased Migration Flows and the COVID-19 Pandemic

The weaknesses of migration and asylum policies and the importance the EU should have attached to external borders became particularly evident with the unprecedented arrival of asylum seekers and irregular migrants in the EU, which peaked in 2015. At the same time, the inability of Member States to ensure the security of their borders on their own and the need for more fair sharing of responsibilities and solidarity between them became apparent. The need to reform immigration policy and to put in place appropriate arrangements for dealing with asylum applications appeared particularly urgent. In addition, housing, food, and integration of migrants were particularly serious problems that needed to be addressed. Around the end of 2019, the risk of transmission to Europe of a dangerous form of SARS-CoV-2 coronavirus, first detected in Wǔhàn, China, started to spread rapidly around the world. EU citizens were infected with the coronavirus in all Member States, and the World Health Organization on 11 March 2020 declared the transmission a pandemic. The EU has taken action, both from a health and social point of view and from an economic point of view, and has contributed financially and scientifically to research into the production of vaccines against the virus.

12.3.1 Rapid Increase in Migration Flows and How to Deal with It The European continent is a destination for migrants for many reasons, including political and social security, human rights, living conditions, finding work, and even climate change. In recent years, the EU has been confronted with particularly increased migration flows and the biggest refugee crisis since World War II. The entry of refugeesmigrants into the EU takes place through three well-known routes: (a) The Eastern Mediterranean route refers to irregular arrivals in Greece, Cyprus, and Bulgaria, mainly from Syria, trying to escape the war in their region, but also refugees from other countries in the region, mainly passing through Turkey, but also directly from the Asian coast of the Mediterranean by sea. In 2015, refugee arrivals in Europe by this route reached 885,386, of which 216,260 arrived during October of that year. (b) The Western Mediterranean route refers to irregular arrivals in Spain, both by sea to mainland Spain and by land to the Spanish enclaves of Ceuta and Melilla in North Africa, arriving from Algeria and Morocco, but also from many sub-Saharan African countries mainly to find work. In 2018, refugee arrivals in Europe through this route reached 57,034. (c) The Central Mediterranean route refers to irregular maritime arrivals in Italy and Malta by refugees from sub-Saharan and North Africa, passing through Tunisia and Libya. By this route, refugee arrivals in 2016 reached 181,376 (Fig. 12.6).

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Fig. 12.6 Rescue of refugees through Operation TRITON, June 2015. Source: Irish Defence Forces—https://www.flickr.com/photos/dfmagazine/18898637736/, 15 June 2015, licensed under the Creative Commons Attribution 2.0 Generic license, https://commons.wikimedia.org/wiki/File: LE_Eithne_Operation_Triton.jpg

Speech by Commission President Jean-Claude Juncker on the State of Europe, 9 September 2016 “Whatever the work programmes or legislative programmes say, the absolute priority today is and must be to address the refugee crisis. [...] First and foremost, it is a question of humanity and human dignity. For Europe, indeed, it is also a question of historical justice. We Europeans should remember well that Europe is a continent where almost everyone has been a refugee at some point in their lives. Our common history has been marked by millions of Europeans who have fled their country in an attempt to escape religious or political persecution, wars, dictatorships or oppression. [...] We Europeans must know and must never forget the reasons why it is so important to provide protection and respect the fundamental right of asylum. [...] Today it is Europe that is sought as a place of refuge and protection. Today it is Europe that acts as a beacon of hope, that represents an oasis of stability in the eyes of men and women from the Middle East and Africa. (continued)

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[...] This is something that should make us proud, not something that should scare us. [...] Therefore, it is now time to act to manage the refugee crisis. We have no other choice. [...] For me, it is clear that the Member States that are the first reception points for most of the refugees—at this moment, Italy, Greece and Hungary— cannot be abandoned in their efforts to face this challenge.” Source: https://commission.europa.eu/strategy-and-policy/strategicplanning/state-union-addresses/state-union-speeches/state-union-2016_en In addition to these Mediterranean routes there is the West African route which refers to arrivals in the Canary Islands in the Atlantic Ocean. This route is followed by refugees from Morocco, Western Sahara, Mauritania, Senegal, and Gambia, who account for more than 50% of maritime arrivals in Spain. FRONTEX figures show that in 2015 alone, there were around 1046 million irregular arrivals of refugees and migrants in the EU, while in the period 2015–2020, 18,536 refugees died, mainly at sea, trying to enter EU territory. Following the high number of refugee deaths in the Mediterranean in April 2015, an extraordinary European Council on 23 April 2015 agreed to make every effort to prevent further deaths at sea and to address the root causes of migration. The actions to be implemented will focus on four main points: (a) strengthening the presence at sea, (b) pursuing traffickers, (c) preventing irregular migration flows, and (d) strengthening solidarity and responsibility of Member States. It also called for a rapid reinforcement of the FRONTEX missions under the names TRITON and POSEIDON, with a tripling of the financial resources for 2015 and 2016 as a minimum. The Council of EU on 18 May 2015, at the urging of the European Council, agreed to establish an EU military mission, EUNAVFOR Med, Operation SOPHIA, to neutralise the activities of human traffickers in the Mediterranean and, at the same time, to enforce the blockade of illegal arms imports into Libya. Operation SOPHIA was launched on 22 June of the same year and concluded on 31 March 2020. It was succeeded on the same day by EUNAVFOR Med, Operation IRINI, which was geared more towards compliance with the UN-imposed blockade on the illegal import of arms into Libya and, at the same time, surveillance of the region in order to neutralise the activities of human traffickers in the Mediterranean. On 12 November 2015, a migration summit was held in Valletta, Malta, which brought together EU Heads of State and Government and their African counterparts on migration issues. A joint action plan was agreed which focused on addressing the root causes of irregular migration, better promoting and organising legal migration channels, strengthening the protection of migrants and asylum seekers, combating exploitation and trafficking of migrants, and improving cooperation on return, readmission and reintegration.

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On 3 February 2016, EU Member States agreed on how to finance the 3 billion euros refugee facility in Turkey. The assistance will mainly address immediate needs by providing food, health, and education services. The following day, 4 February 2016, at an international conference in London in support of Syria, the EU pledged through European Council President Donald Tusk to provide over 3 billion euros in 2016 to help the Syrian people. The assistance was for refugees residing inside Syria, as well as refugees and their host communities in neighbouring countries. At the European Council on 18 March 2016, EU and Turkish leaders agreed on a Joint Declaration to stop the flow of irregular migrants through Turkey to Europe, to dismantle the business model of traffickers, and to provide an alternative solution for migrants so that they do not put their lives at risk. As a result, there has been a significant reduction in the flow of refugees from the Eastern Mediterranean route. The Council of EU, on 14 September 2016, gave its final approval for the extension of the role of FRONTEX from a European Agency for the Management of Operational Cooperation at the External Borders (see Sect. 10.3.7) to a European Border and Coast Guard Agency, with expanded responsibilities, following a Commission proposal of 15 December 2015. Its main role would be to assist in the integrated management of the external borders and the fight against cross-border crime, thus ensuring a more efficient management of migration flows and a high level of security in the EU. The European Border and Coast Guard Agency with its expanded competences officially became operational on 6 October 2016. The operations of FRONTEX as a European Border and Coast Guard Agency have been (a) the continuation of the TRITON mission which had been launched on 1 November 2014 in the maritime space between Italy and Libya as Joint Operation TRITON (replacing the Italian mission MARE NOSTRUM launched on 18 October 2013), concluded on 31 January 2018 and replaced by the THEMIS mission as of 1 February 2018; (b) the continuation of the POSEIDON mission in the Aegean Sea and the Evros River, which operated as Joint Operation POSEIDON Sea from 26 March 2011 and then as Operation POSEIDON Rapid Intervention from 28 December 2015; and (c) the continuation of the INDALO mission in the maritime area of Spain towards North Africa, which operated as Joint Operation INDALO and was later renewed on 3 May 2017. On 29 June 2018, EU Member States agreed on a new 3 billion euros funding of the EU Refugee Facility for Turkey. The agreement on the second tranche of funding would ensure that projects in important areas, such as the education of refugee children, can continue without interruption when contracts under the first tranche expire. On 6 March 2020, and in response to the directional entry of migrants from the Evros land border into Greece, the Council of EU issued a statement in which the EU confirmed: “its full solidarity with Greece, which is facing an unprecedented situation, Bulgaria and Cyprus, as well as with other Member States that may face similar situations, including in their efforts to manage the EU’s external borders. [...] The Council recalls that it expects Turkey to fully implement the provisions of the 2016 Joint Declaration vis-à-vis all Member States. This Declaration is producing tangible results, including by supporting Turkey’s significant

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efforts to host migrants and refugees. The continuation of this cooperation and commitment is to the benefit of both the EU and Turkey.” Furthermore, in the framework of the FRONTEX-established Rapid Border Intervention Evros 2020 force, 100 border guard officers from 22 Member States started their deployment on 12 March 2020 at the land border of Greece. Member States had also committed to provide technical equipment, including vessels, maritime surveillance aircraft, and thermal imaging vehicles, for the FRONTEX-recommended Maritime Rapid Border Intervention Aegean 2020 force. The Rapid Border Intervention Force would last for 2 months and could be further extended if necessary. On 23 September 2020, the Commission presented a proposal for a New Pact on Immigration and Asylum, aiming at a general reform of EU immigration and asylum rules and the creation of a comprehensive common European framework for the management of immigration and asylum, replacing the Dublin Regulation.

12.3.2 Measures to Respond to the COVID-19 Pandemic The outbreak of the COVID-19 pandemic in early 2020 was the occasion for greater cooperation between EU Member States and major initiatives to address the social and economic problems it caused. The EU response is summarised by the Council of Ministers, the Commission, the European Parliament, and the European Council in the following actions, while also demonstrating the need to build a stronger Health Union, according to Commission President Ursula von der Leyen: 1. Supporting the EU’s recovery. By provisional agreement of the Council of EU and the European Parliament on 18 December 2020, a financial envelope of 672.5 billion euros (2018 prices) will be made available for the period 2021–2027 through the Recovery and Resilience Facility (RRF). The Facility is at the core of the EU’s exceptional “Next Generation EU” recovery instrument and will support public investment and reforms in Member States, helping them to address the socio-economic impact of the COVID-19 pandemic, as well as the challenges of the green and digital transition. At least 37% of the funds of each project should support the green transition and at least 20% should support the digital transformation. If the amounts to be made available through React-EU (47.5 billion euros), Horizon Europe (5 billion euros), InvestEU (5.6 billion euros), Rural Development (7.5 billion euros), the Fair Transition Fund (10 billion euros), and RescEU (1.9 billion euros) are added together, the amounts available through the Next Generation EU amount to 750 billion euros. In addition, the European Council of 21 July 2020 approved the Multiannual Financial Framework 2021–2027, adopted by the European Parliament on 16 December 2020, through which a total of 1074.3 billion euros will be made available for the EU-27 at 2018 prices, an amount that will stimulate growth and support citizens, businesses, and economies in the coming years. In total, allocations from the multiannual budget and the recovery fund amount to 1824.3 billion euros to support the recovery from the COVID-19 pandemic and

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the EU’s long-term priorities in various policy areas, including health. Finally, the EU has made available a 540 billion euros support package for workers, businesses, and Member States, while the European Central Bank is providing an additional 1350 billion euros under its bond purchase programme to help Member State governments during the crisis. Coordination of travel measures. EU Member States have established a common framework for travel measures to safeguard freedom of movement within the EU during the COVID-19 pandemic, taking into account common criteria and jointly defining red, yellow, and green zones. Every Thursday, the European Centre for Disease Prevention and Control publishes a colour-coded map of the EU, based on the information provided by Member States, for action to be taken. Information on new travel measures will be published 24 h before they come into force. To help plan safe travel, the EU has launched the “Re-open EU” website, which is available in all 24 EU languages. Slowing down the spread of the virus. To limit the spread of the virus in Europe and beyond, EU Member States have temporarily restricted non-essential travel to the EU. As the epidemiological situation in the EU improved, countries agreed to start phasing out travel restrictions for residents of certain third countries from 1 July 2020. The travel list is reviewed regularly and may be adjusted whenever necessary, based on the epidemiological situation and containment measures, including physical distancing, as well as economic and social parameters. Promotion of the COVID-19 vaccine. The EU has already approved two vaccines, and vaccination in Member States started on 27 December 2020. The EU has coordinated a joint effort to ensure that sufficient quantities of safe and effective vaccines are produced in Member States through pre-purchase agreements with vaccine manufacturers. So far six agreements have been signed with vaccine manufacturing companies to ensure a sufficient quantity of vaccines. In total, 2.3 billion doses of vaccines have been secured, and the EU is joining with the World Health Organization in the global effort to achieve universal access to vaccination. Supporting EU health systems. The EU has ensured crisis management and coordination throughout the COVID-19 pandemic through continuous contact between Member States and EU institutions and the provision of medical equipment by creating a common European stockpile of medical equipment under the RescEU civil protection mechanism. The EU has also proposed a new strengthened EU4Health programme to make a significant contribution to the post-COVID-19 recovery, to make health systems more resilient and to promote innovation in the health sector. Note that on 14 April 2020, an amending budget for 2020 was approved by the Council of EU, adding 3.5 billion euros, of which 3.1 billion euros would be used as follows: 2.7 billion euros for the Emergency Support Instrument (ESI) and 415 million euros for the RescEU Civil Protection Mechanism. Also, the Council of EU approved on 11 September 2020 an amending budget for 2020 to support actions against the COVID-19 pandemic, adding 6.2 billion euros. The amount of 1.09 billion euros will be used for the

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ESI as an advance for the pre-ordering of vaccine doses, while 5.1 billion euros will be allocated to the Corona Response Investment Initiative (CRII and CRII+). Protecting jobs. To support workers, the EU has set up a temporary instrument, the SURE programme, to reduce unemployment risks. The Council of EU in September and October 2020 approved financial support of 87.9 billion euros (potentially up to 100 billion euros) to 17 Member States in concessional loans to cover the cost of their reduced hours schemes. Financial support under SURE is granted to Member States as follows: Belgium: 7.8 billion euros, Bulgaria: 511 million euros, Greece: 2.7 billion euros, Spain: 21.3 billion euros, Italy: 27.4 billion euros, Croatia: 1 billion euros, Cyprus: 479 million euros, Latvia: 193 million euros, Lithuania: 602 million euros, Malta: 244 million euros, Poland: 11.2 billion euros, Hungary: 504 million euros, Portugal: 5.9 billion euros, Romania: 4.1 billion euros, Slovakia: 631 million euros, Slovenia: 1.1 billion euros, and Czechia: 2 billion euros. Subsequently, Ireland also requested support of 2.5 billion euros from the SURE, subject to agreement by the Council of EU. The total financial support will amount to 90.3 billion euros. The first tranches of 39.5 billion euros were disbursed by 1 December 2020. Financial assistance to EU Member States. The EU has supported Member States financially in responding to the crisis through the Corpus Christi Investment Initiative, providing Member States with around 37 billion euros from its structural funds, using the flexibility offered by the financial rules to support Member States’ health systems and businesses. In addition, the EU has relaxed state aid rules so that governments can provide liquidity to the economy to benefit businesses and keep jobs. Strengthening European solidarity. The EU in the spirit of solidarity facilitates the deployment of medical teams through the EU medical corps so that teams from different Member States can support the health systems most affected by the crisis. New rules have also been introduced under which Member States can request financial assistance from the EU Solidarity Fund to cover emergency health needs. The scope of the Fund has recently been widened, with up to 800 million euros being made available in 2020 to Member States to fight the coronavirus pandemic. Supporting the economic sectors that have suffered the greatest losses. To protect the food supply chain, the EU has adopted emergency measures to support the agricultural and fisheries sectors affected by the pandemic. The measures include direct support to farmers and fishermen and greater flexibility in EU funding. The introduction of “green lanes” for the circulation of food products across Europe, the recognition of seasonal workers as “critical workers”, and the introduction of emergency market measures to support wine and fruit and vegetable producers have also been typical initiatives to support economic sectors hit by the pandemic. Partnership to support EU partners around the world. The EU and its Member States are supporting the efforts of their partners in the fight against the pandemic by providing financial support to address the immediate health crisis and

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humanitarian needs. The total effort through the “Team Europe” package amounts to 38.5 billion euros, and the EU has also activated a humanitarian airlift of humanitarian aid where needed.

12.4

Developments on the European Continent and in Relation to the EU

As a consequence of the Euromaidan uprising in Kiev, the capital of Ukraine, on the night of 21 November 2013 (see Sect. 11.5.4), there was a generalisation of the riots. The uprising spread to many Ukrainian cities with occupations of government buildings and demands for the removal of President Viktor Yanukovych. However, following the removal of the pro-Russian president on 23 February 2014, protests by pro-Russian and counter-revolutionaries in the Russian-speaking region of Crimea began, calling for the annexation of the region to Russia or its independence. The Nagorno Karabakh region, historically inhabited by Azeris and Armenians, was the focus of conflict from 1988 to 1994, with an escalation between 1991 and 1994. In particular, on 10 December 1991, following a referendum boycotted by local Azeris, Armenians in Nagorno Karabakh approved the creation of an independent state. The ensuing war between Azerbaijan and Armenia-backed Nagorno Karabakh resulted in the creation of the unrecognised autonomous enclave of Nagorno Karabakh composed of Armenians, and the flight of Azeris from the region. However, skirmishes between Azeris and Armenians did not cease, and in July 2020 armed clashes between Armenia and Azerbaijan were widespread.

12.4.1 The Crisis in the Crimean Peninsula After the removal of President Yanukovych on 23 February 2014, pro-Russian and counter-revolutionaries in the Russian-speaking region of Crimea started demonstrations in many cities in eastern and southern Ukraine, demanding integration into Russia or possible independence for Crimea. On 27 February 2014, masked gunmen seized airports, as well as government and other important buildings in Crimea, and disrupted telecommunications and Internet services, thus preventing any contact between Crimea and the rest of Ukraine. At the same time, Russian troops stationed in Crimea under the bilateral agreement were put on alert, while Russian naval vessels violated Ukrainian waters. The Ukrainian government accused Russia of interfering in Ukraine’s internal affairs, which Russia officially denied. However, the Crimean parliament building in the capital city of Simferopol was occupied by Russian forces and Russian flags were placed over government buildings. Under siege, the Crimean Supreme Council dismissed the government of the autonomous republic and replaced the chairman of the Council of Ministers of the Autonomous Republic of Crimea, Anatoly Mohilioven, with the Russophile Serguey Valeryevich Aksyonov (1972–), who took office on 1 March 2014.

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On 6 March 2014, the Crimean Supreme Council decided to ask Russia for reunification. The appointed pro-Russian government of the Autonomous Republic of Crimea declared that it would hold a referendum in Crimea (and a separate one in Sevastopol) on its independence from Ukraine. This was held on 16 March 2014, when 97.5% of residents—with 83.1% of voters participating—expressed their intention to join Russia (while the corresponding results in Sevastopol were 95.6% in favour of joining Russia, with 89.5% of voters participating). Russia annexed Crimea on 18 March 2014, with the signing of a pact to this effect, signed in the Kremlin by Russian President Vladimir Putin, the leadership of the Republic of Crimea, and the mayor of Sevastopol. However, on 27 March 2014, the UN passed a non-binding resolution condemning Russia’s annexation of Crimea. The main supporters of the Ukrainian government have been the USA and the EU. The clashes between Ukrainians and separatists that had begun ended in an armed conflict between the separatist forces and the Ukrainian government. Between 22 and 25 August, Russian artillery, military forces, and the so-called “humanitarian convoy” reportedly crossed the border of Ukrainian territory without the permission of the Ukrainian government and moved both into areas under the control of pro-Russian forces and into areas not under their control, as well as into areas mainly in eastern Ukraine, demanding annexation to Russia. The war in Eastern Ukraine came to be known as the Donbass War, after the name of the area of hostilities. On 5 September 2014, after mediation by France, Germany, and Russia, the (First) Minsk Protocol for a cessation of hostilities and a ceasefire was signed by the Ukrainian government, the separatists, and the Organization for Security and Co-operation in Europe. However, in the ensuing period, the Protocol has been repeatedly violated. A series of ceasefire agreements followed, and finally, on 12 February 2015, the Second Minsk Protocol was signed, under which, in addition to what the First Protocol provided for, Russia would impose some of its own conditions on Ukraine (Fig. 12.7). It is noted that the EU has applied sanctions and pursued a policy of non-recognition of Crimea’s inclusion in Russia, based on the UN resolution of 27 March 2014 on the territorial integrity of Crimea. Today, Crimea is officially considered by the majority of states to be part of Ukraine.

12.4.2 Armed Clashes Between Armenians and Azeris in Nagorno Karabakh Despite the peace efforts of the Organization for Security and Co-operation in Europe’s Minsk Group, skirmishes between Azeris and Armenians have not ceased since May 1994. Armed clashes between Azeris and Armenians resumed on 27 September 2020, with Azeri bombing of targets in Nagorno Karabakh—the new name of Artsakh after a referendum on 20 February 2017—while the Azeri side says exactly the opposite. On the morning of 2 October 2020, Azerba ijani forces bombed Stepanakert, the capital of Artsakh, while Azeri military sources reported the capture of parts of

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Fig. 12.7 The leaders of Belarus, Russia, Germany, France and Ukraine, in Minsk, Belarus, at the signing of the Second Minsk Protocol, 12 February 2015. Source: Normandy format talks. Author: The Russian Presidential Press and Information Office, licensed under the Creative Commons Attribution 3.0 Unported license. Attribution: Kremlin.ru, https://commons.wikimedia.org/wiki/ File:Normandy_format_talks_in_Minsk_(February_2015)_03.jpeg

Nagorno Karabakh. Although Armenia denied Azeri claims of territory occupation, the authorities in Nagorno Karabakh acknowledged the loss of territory. Armenian forces launched missile attacks on the Azerbaijani town of Ganja on the afternoon of 4th October, the morning of 8 October, and the nights of 11th and 17th October 2020. However, Armenia denied the missile attacks, while Nagorno Karabakh authorities claimed responsibility in response to the Stepanakert bombing. Since the beginning of the fighting, the UN, the EU, the USA, France, and Russia have called on the parties involved to stop the fighting. Russia, a theoretical ally of Armenia, assumed the role of regional arbitrator. Turkey, a traditional ally of Azerbaijan, condemned the Armenian attack, but it was accused of sending equipment, aircraft, and Syrian mercenaries to fight alongside Azerbaijani forces. In early November, Armenia’s Prime Minister announced a ceasefire agreement with Azerbaijan, mediated by Russia, calling the text of the agreement painful. The Armenians were obliged to hand over to the Azeris Nagorno Karabakh provinces which they had controlled since 1994, when the Azeris were forced to leave them. Russia’s role in reaching the agreement highlighted its influence in the region, while the EU and the US involvement was rather meagre, with the result that Russia continues to maintain a leading role in interventions and problem-solving in the region.

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