The European Integration, Vol. 2: Institutions and Policies (Springer Texts in Political Science and International Relations) 303147175X, 9783031471759

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Springer Texts in Political Science and International Relations

Panagiotis Liargovas Christos Papageorgiou

The European Integration, Vol. 2 Institutions and Policies

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. 2 Institutions and Policies

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 978-3-031-47175-9 ISBN 978-3-031-47176-6 (eBook) https://doi.org/10.1007/978-3-031-47176-6 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 2024 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 all the young people to whom Europe belongs

Contents

1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 The Present Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

Theoretical Perspectives on European Integration and Its Evolutionary Trajectory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 The European Unification/Integration . . . . . . . . . . . . . . . . . . . . 2.1.1 Federalism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1.2 Functionalism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1.3 Neo-functionalism . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1.4 Intergovernmentalism . . . . . . . . . . . . . . . . . . . . . . . . 2.1.5 Other Integration Theories . . . . . . . . . . . . . . . . . . . . 2.2 The Integration Process and Attempts to Interpret It . . . . . . . . . 2.2.1 The Start of the Integration Process and the First Difficulties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.2 The Integration Process After the Single European Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.3 A Brief Assessment of the Integration Process . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

1 3 8 11 11 12 20 22 26 29 29 30 42 52 54

The Institutions of the European Union and the Legislative Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 3.1 The Institutions and Their Functioning . . . . . . . . . . . . . . . . . . . 57 3.1.1 The Commission: Historical Development and Operation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 3.1.2 The European Parliament: Historical Development and Functioning . . . . . . . . . . . . . . . . . . 68 3.1.3 The Council (of Ministers) of EU: Historical Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 3.1.4 The European Council: Historical Development and Functioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 3.1.5 The Court of Justice of the EU: Historical Development and Functioning . . . . . . . . . . . . . . . . . . 130

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3.1.6

The Court of Auditors: Historical Development and Functioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1.7 The European Central Bank . . . . . . . . . . . . . . . . . . . 3.1.8 Other Important EU Organisations . . . . . . . . . . . . . . . 3.2 Legislative Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2.1 The Consultation Procedure . . . . . . . . . . . . . . . . . . . 3.2.2 The Consent Procedure . . . . . . . . . . . . . . . . . . . . . . . 3.2.3 The Cooperation Procedure . . . . . . . . . . . . . . . . . . . . 3.2.4 The Ordinary Legislative Procedure (Formerly Co-decision Procedure) . . . . . . . . . . . . . . . 3.2.5 Other Special Legislative Procedures . . . . . . . . . . . . . Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

5

The Perception of “Democratic Deficit” in the European Union . . 4.1 Defining the “Democratic Deficit” . . . . . . . . . . . . . . . . . . . . . 4.1.1 Historical Background and Definition of the “Democratic Deficit” . . . . . . . . . . . . . . . . . . . . . . . 4.1.2 Legitimisation of the EU Political System by Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1.3 Legitimisation of the EU Political System by Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1.4 The Socio-Psychological Dimension and the “European Municipality” . . . . . . . . . . . . . . . . . . . . 4.2 Attempts to Assess the Sense of Democratic Deficit . . . . . . . . 4.2.1 Citizens’ Views on the EU Through the Eurobarometer . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2.2 Interest of European Citizens in Participating in the European Elections . . . . . . . . . . . . . . . . . . . . 4.2.3 Data from Referendums on Treaty Ratifications . . . . 4.2.4 Evidence from the British Referendum to Remain or Not in the EU . . . . . . . . . . . . . . . . . . 4.2.5 Citizens Need More Knowledge and Information . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

135 138 145 149 150 151 152 153 156 156

. 159 . 159 . 159 . 162 . 163 . 165 . 167 . 167 . 168 . 171 . 177 . 180 . 182

The Budget of the European Union and the Underpinning of the Union’s Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 The Budget of the European Union . . . . . . . . . . . . . . . . . . . . . 5.1.1 Evolution of the EU’s Finances and Budget . . . . . . . . 5.1.2 The EU’s Budget Revenue and Expenditure Until Today . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 The Future EU Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.1 The EU’s Budget Revenue According to MFF 2021–2027 . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.2 The EU’s Budget Expenditure According to MFF 2021–2027 . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.3 The EU’s Annual Budget Adoption Procedure . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

185 185 185 188 190 190 192 192 194

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6

7

The Common Agricultural Policy: Purpose, Evolution and Future Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1 Purpose and Creation of the Common Agricultural Policy . . . . . 6.1.1 The Different Agricultural Structures of the EU Member States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1.2 The Foundations of a Common Agricultural Policy . . . 6.2 The Launch and Reforms of the CAP . . . . . . . . . . . . . . . . . . . . 6.2.1 The Launch of the CAP (the Mansholt Plan) . . . . . . . 6.2.2 The 1992 Reform (the MacSharry Reform) . . . . . . . . 6.2.3 Relations with Trading Partners and the GATT Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2.4 Agenda 2000 (Fischler Reform I) . . . . . . . . . . . . . . . . 6.2.5 The 2003 Mid-Term Review (Fischler Reform II) . . . . 6.2.6 The 2008 “Health Check” (Boel Reform) . . . . . . . . . . 6.2.7 The 2013 Reform (Cioloş Reform) . . . . . . . . . . . . . . 6.2.8 The New CAP for the Period 2021–2027 . . . . . . . . . . 6.2.9 The LEADER Initiative . . . . . . . . . . . . . . . . . . . . . . 6.2.10 A Brief Assessment of the CAP . . . . . . . . . . . . . . . . . 6.2.11 Figures for the EU Agricultural Sector . . . . . . . . . . . . 6.3 The Common Fisheries Policy (CFP) . . . . . . . . . . . . . . . . . . . . 6.3.1 Launch of the CFP. The Financial Instrument for Fisheries Guidance . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3.2 The 2002 Reform. The European Fisheries Fund . . . . 6.3.3 Reform of 2013. The European Maritime and Fisheries Fund . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3.4 The CFP After 2020 . . . . . . . . . . . . . . . . . . . . . . . . . 6.3.5 EU Fisheries Sector Figures . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Regional Policy: Disparities, Development and Future Direction . . . 7.1 The Exercise of Regional Policy in the EU . . . . . . . . . . . . . . . . 7.1.1 The Existence of Regional Disparities in the EC and the EU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1.2 Arguments for the Establishment of European Regional Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2 Regional Policy Programmes in the EU . . . . . . . . . . . . . . . . . . 7.2.1 The Regional Policy of the EC up to 1986 . . . . . . . . . 7.2.2 The Integrated Mediterranean Programmes (1986–1989/1993) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2.3 The Community Support Frameworks After 1988: The First CSF (1989–1993) . . . . . . . . . . . . . . . . . . . . 7.2.4 Review of the Regulatory Framework: The Second CSF (1994–1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2.5 New Review of the Regulatory Framework: The Third CSF (2000–2006) . . . . . . . . . . . . . . . . . . .

xi

197 197 198 199 201 202 203 205 206 207 214 216 221 225 227 233 235 237 239 240 243 244 246 253 253 253 254 254 255 256 258 261 264

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7.2.6 7.2.7 7.2.8 7.2.9 References . 8

The National Strategic Reference Frameworks: The NSRF 2007–2013 . . . . . . . . . . . . . . . . . . . . . . . Review of Regional Policy: The NSRF 2014–2020 . . . The New Regional Policy for the Period 2021–2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assessment of the Evolution of European Regional Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...........................................

Economic and Monetary Policy: Origin, Evolution and Current Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1 The Necessity and Origins of an Economic Policy . . . . . . . . . . . 8.1.1 The Beginnings of a Single Economic Policy . . . . . . . 8.1.2 Plans for Economic and Monetary Union: The Werner Report . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1.3 The European Currency Snake . . . . . . . . . . . . . . . . . 8.1.4 The European Monetary System . . . . . . . . . . . . . . . . 8.1.5 The Single European Act and the Single Internal Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1.6 Progress of the Single Internal Market . . . . . . . . . . . . 8.2 The Implementation of Economic and Monetary Union . . . . . . . 8.2.1 The Delors’ Report on EMU . . . . . . . . . . . . . . . . . . . 8.2.2 The Implementation of the First Stage of EMU . . . . . . 8.2.3 Promoting EMU Through the Treaty on European Union . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2.4 The Functioning of the Single Internal Market After the TEU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2.5 The Stability and Growth Pact and the “Euro” . . . . . . 8.3 The EMU After the Euro: The Economic Crisis . . . . . . . . . . . . 8.3.1 The Course of EMU and the Eurogroup: The Revision of the SGP . . . . . . . . . . . . . . . . . . . . . 8.3.2 The “Europe 2020” Strategy . . . . . . . . . . . . . . . . . . 8.3.3 The Introduction of the “European Semester” . . . . . . . 8.3.4 The Global Economic Crisis and Its Transfer to the EU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3.5 The Reasons for the Transfer of the Economic Crisis to the EU . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3.6 The First Mechanisms for Responding to the Economic Crisis in the EU . . . . . . . . . . . . . . . . 8.3.7 The Permanent European Stability Mechanism (ESM) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3.8 Other European Economic Governance Measures in Response to the Crisis . . . . . . . . . . . . . . 8.3.9 Providing Support to Eurozone and EU Member States . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

268 271 275 279 283 287 287 287 288 290 292 295 296 297 298 299 300 302 303 308 308 310 311 314 314 315 316 318 321

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8.4

323 323

Towards a Banking Union . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.4.1 The Need for a Banking Union . . . . . . . . . . . . . . . . . 8.4.2 The European Banking Union as a Complement to EMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.4.3 Review of the Progress of EMU by the Relevant Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Foreign and Defence Policy: Historical Developments and Contemporary Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.1 The First Attempts at European Political Cooperation . . . . . . . . 9.1.2 The Failure to Establish a European Political Community . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.1.3 The “Re-Founding” of the Western European Union . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.1.4 Charles de Gaulle’s Positions and the Two Fouchet Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.1.5 Request for European Political Cooperation and the Davignon Report . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.1.6 The Copenhagen Report on the EPC and European Identity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.1.7 The European Council and the EPC: Tindemans Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.1.8 Evaluation of the Operation of the EPC . . . . . . . . . . . 9.1.9 The Genscher-Colombo Project and the Promotion of the EPA . . . . . . . . . . . . . . . . . . . . . . . . 9.1.10 The Mitterand-Kohl Initiative and the Dooge Committee Report . . . . . . . . . . . . . . . . . . . . . . . . . . 9.1.11 The Single European Act and the Institutionalisation of the EPC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.2 New Efforts After the SEA for a Common Foreign Policy . . . . . 9.2.1 A Europe with a Common Face and Official Symbols . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.2.2 Plans for Political Union: Joint Messages of Mitterand and Kohl . . . . . . . . . . . . . . . . . . . . . . . 9.2.3 The Intergovernmental Conference on Political Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.2.4 The Treaty on European Union and the CFSP Pillar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.2.5 EU Activity in the CFSP Area . . . . . . . . . . . . . . . . . . 9.2.6 Upgrading the WEU Through the CFSP . . . . . . . . . . . 9.2.7 The EU’s Attitude to the War in Yugoslavia . . . . . . . 9.3 The Common Foreign Policy After the TEU . . . . . . . . . . . . . . . 9.3.1 The Treaty of Amsterdam and Its Implications for the CFSP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

324 327 329 333 333 335 335 336 337 338 339 340 341 342 342 343 343 345 346 347 348 349 351 352 352

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9.3.2

Establishment of a European Security and Defence Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.3.3 The Treaty of Nice and Its Implications for the CFSP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.3.4 The Draft Constitution for Europe and Provisions for CFSP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.3.5 Progress of the ESDP in the Context of the CFSP: Relations with NATO . . . . . . . . . . . . . . . . . . . . . . . . 9.3.6 The Treaty of Lisbon and the EU’s External Representation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.3.7 After the Treaty of Lisbon: The EU’s Overall Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.3.8 EU-NATO Cooperation After the Treaty of Lisbon . . . 9.4 Diplomatic Representations and ESDP/CRPD Missions . . . . . . . 9.4.1 The EEAS and Diplomatic Delegations . . . . . . . . . . . 9.4.2 The Operations and Missions of the ESDP/CRDP to Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Social Policy: Evolution, Impact and Current Challenges . . . . . . . . 10.1 Social Thinking at the Start . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1.1 The Necessity of Social Policy . . . . . . . . . . . . . . . . . 10.1.2 The Origins of Social Policy . . . . . . . . . . . . . . . . . . . 10.1.3 The Single European Act and the European Social Charter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1.4 The Treaty on European Union and the Social Protocol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1.5 The Treaty of Amsterdam and the European Employment Strategy . . . . . . . . . . . . . . . . . . . . . . . . 10.1.6 The Lisbon Strategy for a Europe with a Social Face . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1.7 The Treaty of Nice and the European Social Agenda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1.8 The Treaty of Lisbon: The Charter of Fundamental Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1.9 After the Treaty of Lisbon: The “Europe 2020” Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1.10 The European Pillar of Social Rights . . . . . . . . . . . . . 10.1.11 The EU’s Social Contribution to Tackling COVID-19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.2 Statistics for the Evaluation of Social Policy . . . . . . . . . . . . . . . 10.2.1 The Demographic Problem and Social Security Costs in the EU . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.2.2 Unemployment, Education Level and Poverty Risk . . .

353 355 356 357 360 361 364 366 366 367 372 375 375 375 376 377 378 379 381 383 385 386 388 390 393 394 396

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10.2.3

Evidence from the Implementation of the Europe 2020 Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399 10.2.4 General Assessment of Social Policy in the EU . . . . . 400 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 402 11

12

Environmental Policy: Progress, Challenges and Future Directions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1 Environmental Protection as a Priority . . . . . . . . . . . . . . . . . . . 11.1.1 The Need for an Environmental Policy . . . . . . . . . . . 11.1.2 The First Steps to the Stockholm Conference . . . . . . . 11.2 The Environment Action Programmes . . . . . . . . . . . . . . . . . . . 11.2.1 The First Action Programme for the Environment 1973–1976 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2.2 The Second Action Programme for the Environment 1977–1981 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2.3 The Third Action Programme for the Environment 1982–1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2.4 The Fourth Action Programme for the Environment 1987–1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2.5 The Fifth Action Programme for the Environment 1993–2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2.6 The Sixth Action Programme for the Environment 2002–2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2.7 The Seventh Action Programme for the Environment 2013–2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2.8 Towards an Eighth Action Programme for the Environment 2021–2030 . . . . . . . . . . . . . . . . . . . . . . 11.3 Brief Assessment of the Environmental Policy . . . . . . . . . . . . . 11.3.1 Evidence from the Implementation of the “Europe 2020” Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.3.2 A Brief Assessment . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Migration Policy: Historical Progress, Current Status and Future Directions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.1 The Launch and Evolution of Migration and Asylum Policy . . . 12.1.1 The Schengen Agreement and Freedom of Movement Within the EU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.1.2 The Dublin Convention on Asylum and Immigration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.1.3 The Third Pillar of the TEU for Cooperation in JHA Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.1.4 The TEU and the Establishment of EUROPOL . . . . . .

405 405 405 406 406 407 408 409 411 415 417 419 420 422 423 424 425 429 429 430 431 433 434

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12.1.5

The Treaty of Amsterdam and the Changes in the JHA Sectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.1.6 Integration of the Schengen Agreement into the European Acquis . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.1.7 The AFSJ and the Tampere Programme (2000–2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.1.8 The Dublin II Regulation . . . . . . . . . . . . . . . . . . . . . 12.1.9 The AFSJ and the Hague Programme (2005–2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.1.10 The European Pact on Migration and Asylum . . . . . . 12.1.11 The Treaty of Lisbon and the Changes to the JHA and the AFSJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.1.12 The AFSJ and the Stockholm Programme (2010–2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.1.13 The Dublin III Regulation . . . . . . . . . . . . . . . . . . . . . 12.1.14 The AFSJ and the Newest Guidelines (2015–2019) . . 12.2 Data on Migration Flows in Recent Years and Related Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2.1 Large Migratory Flows and How to Deal with Them in Practice . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.2.2 New Measures on the Occasion of the Directed Entry of Immigrants in 2020 . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Overview: The European Integration, Volume I & Volume II . . . . . 13.1 The European Integration: History, Institutions and Policies . . . . 13.2 History: From Battles to Brotherhood . . . . . . . . . . . . . . . . . . . . 13.3 Institutions: The Pillars of Unity . . . . . . . . . . . . . . . . . . . . . . . 13.4 Policies: Crafting a Shared Destiny . . . . . . . . . . . . . . . . . . . . . 13.5 Challenges Faced by the EU . . . . . . . . . . . . . . . . . . . . . . . . . . Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

435 436 437 439 440 441 442 443 446 446 448 450 452 453 457 457 457 459 459 461 462

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 integration, 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 integration, 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 9 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 2024 P. Liargovas, C. Papageorgiou, The European Integration, Vol. 2, Springer Texts in Political Science and International Relations, https://doi.org/10.1007/978-3-031-47176-6_1

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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 integration 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 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

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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 attempts to present the workings of the European Union and the practicality of its policies. It describes the EU’s institutions, integration theory and the sense of a democratic deficit, which is often referred to as the question of the legitimacy of EU institutions. Furthermore, the most important EU policies are described, namely agricultural policy, regional policy, economic and monetary policy, foreign and defence policy, social policy, environmental policy and immigration policy. This book is aimed at readers who want a comprehensive understanding of the integration process and its functions, as well as more specialised readers who want a book that grasps important details about European institutions and policies. Furthermore, it can serve as an introductory guide for students whose fields of study relate to the field of European integration. This chapter is an introductory chapter which makes a general description of the contents of this volume. Chapter 2 focuses on the theories of European integration. Among these theories, federalism, functionalism, neo-functionalism, and intergovernmental cooperation are particularly prominent. Chapter 3 describes the seven main institutions of the European Union, namely, the Commission, the European Parliament, the Council (of Ministers) of the EU, the European Council, the Court of Justice, the Court of Auditors, the European Central Bank, as well as certain subsidiary bodies of the European Union. The Commission, the Council of the EU and the European Parliament comprise the so-called institutional triangle. This triad plays a pivotal role in shaping the laws and policies applicable within the EU. Chapter 4 delineates the definition and historical genesis of the term “Democratic Deficit” in the context of the European Union, and it documents varying perspectives on the political system’s legitimacy, thus shedding light on the perceived existence or absence of a democratic deficit. Chapter 5 outlines how the European Union’s budget supports shared goals and addresses collective challenges. It does so by applying a broad range of common policies, such as agricultural, regional, economic, foreign affairs and defence, social, environmental and immigration policies, among others. It also investigates the EU’s role in sectors like transport, space, health, education, culture, consumer protection, research and judicial cooperation, which have led to new demands on EU budgeting. Chapter 6 examines the purpose of the Common Agricultural Policy (CAP), exploring the diverse agricultural structures of EU Member States and the reasons

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underlying its inception. It lists the numerous reforms of the CAP, alongside its diagnostic assessments. Chapter 7 highlights the regional disparities within the European Union and discusses the need and rationale for a Regional Policy. It reviews various Regional Policy Programs, including the European Communities’ Regional Policy up to 1975, the Integrated Mediterranean Programmes spanning 1986–1989/93, the post-1988 regional policy, and the First Community Support Framework (1988–1993). It further discusses the regulatory framework’s revision and the Second Community Support Framework (1994–1999), the Action Programme 2000, another revision leading to the Third Community Support Framework, and the subsequent regional policy review and the National Strategic Reference Frameworks (2007–2013 and 2014–2020). Chapter 8 discusses the necessity and origins of an economic policy, with a detailed analysis of the Werner report, the European Monetary Snake, the European Monetary System and the advancement of the single internal market, especially following the Single European Act. The chapter also dissects the global financial crisis, the mechanisms and measures employed within the European Union to combat it, and the strides towards a Banking Union serving as a complement to the Economic and Monetary Union. Chapter 9 explores the initial efforts towards a European Political Cooperation, the attempted establishment of a European Defence Community and the unsuccessful bid to form a European Political Community. It delves into the stances of Charles de Gaulle and the two Fouchet Plans, the Genscher-Colombo Plan, the MitterrandKohl initiative, and the institutionalisation of European Political Cooperation brought about by the Single European Act. The chapter also covers new initiatives towards a shared foreign policy and the establishment of the Common Foreign and Security Policy as the European Union’s second pillar by the Treaty on European Union. It outlines the influence of the Treaty of Amsterdam and the Treaty of Nice on the Common Foreign and Security Policy, along with the formation of the European Security and Defence Policy and the Common Security and Defence Policy, and their relationships with NATO. Lastly, the chapter details the Treaty of Lisbon's impact on the Common Foreign and Security Policy, cooperation with NATO, and the areas this cooperation has addressed since the Treaty of Lisbon. Chapter 10 deliberates the need for a common social policy within the European Union and evaluates the impact on the development of such a policy by all treaties since the Treaty of Rome. It provides insights into the European Social Charter, the Social Protocol, the European Employment Strategy, the Lisbon Strategy, the European Social Agenda, the Charter of Fundamental Rights of the European Union and the Europe 2020 Strategy and assesses their influence on the implementation of Social Policy in the European Union. The chapter concludes with a comprehensive evaluation of the European Union’s Social Policy, touching on key issues like social security expenditure, unemployment rates, exposure to poverty risks and the demographic challenge facing the European Union. Chapter 11 underscores the importance of environmental protection and the necessity of a comprehensive Environmental Policy. It recounts the initial steps taken leading up to the Stockholm Conference and delves into the seven

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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

Environmental Action Programmes conceived and executed to date. The chapter also discusses the proposed provisions of the upcoming eighth Environmental Action Programme, framed within the New Strategic Agenda 2019–2024 and the European Green Deal aiming for climate neutrality by 2050. The chapter concludes with a succinct evaluation of the European Union’s Environmental Policy. Chapter 12 examines the evolution of migration and asylum policies, the incorporation of the Schengen Agreement into the European acquis, and the Dublin Convention along with Dublin II & III Regulations. It explores the Tampere, Hague and Stockholm Programmes, the European Pact on Immigration and Asylum and the latest policy guidelines. The chapter also presents data pertaining to migration trends in recent years, coupled with an exploration of the initiatives implemented to manage these migration flows. Finally, Chap. 13 makes an overview of the European Integration process which is the focus of Volumes I & II (Figs. 1.1 and 1.2).

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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 Republic, Romania, Republic of Slovenia, Slovak Republic, Republic of Finland, Kingdom of Sweden and 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, Czechia, 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, as well as regions with limited or no international recognition

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Recognised Independent States AZ FR IT Italy ME Azerbaijan France Montenegro AL DE KZ MD Albania Germany Kazakhstan Moldova AD GE HR Croatia MC Andorra Georgia Monaco AM DK CY Cyprus NO Armenia Denmark Norway AT CH LV Latvia NL Austria Switzerland Netherlands VA GR BY Belarus HU Vatican Greece Hungary BE EE LT UA Belgium Estonia Lithuania Ukraine BA IE LI MK Bosnia Ireland Liechtenstein N. Macedonia BG IS LU PL Poland Bulgaria Iceland Luxembourg UK ES Spain MT Malta PT Britain Portugal Dependent semi-autonomous and autonomous regions AX Alan ES-ML FO Ferroes GG Islands Melilla Islands Guernsey GI ES-CE JE Jersey Gibraltar Ceuta Areas with limited or no international recognition Abkhazia South Transistria Kosovo Ossetia Northern Cyprus

RO Romania RU Russia SM San Marino RS Serbia

SK Slovakia SI Slovenia SE Sweden TR Turkey CZ Czechia FI Finland

IM Isle of Man

NagornoKarabakh

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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. • 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 kilometres 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.

Bibliography Dinan, D. (2014). Europe recast: A history of European Union. Palgrave Macmillan. Gillingham, J. (2003). European Integration, 1950-2003: Superstate or New Market Economy? Cambridge University Press. Judt, T. (2006). Postwar: A History of Europe Since 1945. Penguin.

Bibliography

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Pinder, J., & Usherwood, S. (2018). The European Union: A very short introduction. Oxford University Press. Schuman, R. (1950). The Schuman Declaration at https://www.consilium.europa.eu/en/70schuman-declaration/. Monnet, J. (1978). Memoirs. Collins at: https://archive.org/stream/MonnetJeanMemoirs/Monnet% 2C%20Jean%20-%20Memoirs_djvu.txt. Wallace, H., Pollack, M. A., & Young, A. R. (2015). Policy-making in the European Union. Oxford University Press. Nugent, N. (2017). The government and politics of the European Union. Palgrave. Moravcsik, A. (1998). The choice for Europe: Social purpose and state power from Messina to Maastricht. Cornell University Press. European Union. (2012). The Charter of Fundamental Rights of the European Union, at: https:// www.europarl.europa.eu/charter/pdf/text_en.pdf Zielonka, J. (2018). Counter-revolution: Liberal Europe in retreat. Oxford University Press.

2

Theoretical Perspectives on European Integration and Its Evolutionary Trajectory

2.1

The European Unification/Integration

European integration is not a one-sided phenomenon, but a multi-faceted development, which is interpreted by certain theoretical approaches that examine it. Generally speaking, unification/integration is understood to be the set of processes leading to a new form of regional organisation, such as that of the supranational form of organisation of the European Communities (EC) and the subsequent European Union (EU), but with open characteristics as to its final form. In practice, integration aims to make similar the individual organisations of the states, on the basis of an intended and agreed regional organisation, which, in the context of the “European idea”, is being implemented on a voluntary basis. However, the question arises from the outset whether the nature of this process is economic and political, and also socio-cultural, and whether a process of economic integration, such as that of the EC and the EU, also creates the conditions for political and socio-cultural integration. Furthermore, the question arises as to whether integration and its evaluation should be understood only as a set of measures taken and procedures followed or also as a final measurable result. It is therefore possible to explore the integration process at a supranational or transnational level as the creation of new common economic functions, as the pursuit of new common policies, as the creation of new supranational or transnational institutions and as a social process of shifting citizens’ trust towards the new wider supranational or transnational environment of regional organisation and governance. The case of European integration is a sui generis phenomenon, without precedent. Over time, the evolutionary process of the various aspects of European integration has been interpreted by various political theories of regional integration, the most important of which are federalism, functionalism, neo-functionalism and intergovernmental cooperation. However, an initial reference to the different theoretical approaches to European integration is of particular importance in order to

# The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 P. Liargovas, C. Papageorgiou, The European Integration, Vol. 2, Springer Texts in Political Science and International Relations, https://doi.org/10.1007/978-3-031-47176-6_2

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subsequently make their role and their interpretations in the European integration process clearer.

2.1.1

Federalism

One of the most important theoretical approaches, which constituted the theoretical building block of the process of European integration, echoing the views mainly of the first two decades after the end of World War II, is that of federalism. The proposed system of political organisation is based on two levels, federal and state, with balanced power relations, combining and reconciling, as far as possible, unity and diversity. The federal level can sometimes play an important role, defining through a basic political agreement (e.g. in the form of a constitution) the rules of coexistence and even the common foreign policy of the states, and sometimes allowing the preservation of state autonomy in a confederal regime with loose relations between states and the federal centre. Starting with the publication of the book Pan Europa (Pan-Europe, 1923), by the Austrian diplomat and cosmopolitan Count Richard Nikolaus Eijiro von Coudenhove-Kalergi (1894–1972), in which he called for the convening of a European conference, the conclusion of a treaty, the drafting of a constitution and a customs union between European states, and the establishment of the “Pan-European Union” by him in 1924, which reflected the desire of certain pan-European political circles for European integration, it was launched in the pre-war period the idea of European integration with a federal perspective. Ideas for a federal Europe were expressed by Aristide Briand (1862–1932), honorary president of the Pan-European Union since 1927, who served as Foreign Minister and several times Prime Minister of France, who proposed, speaking at 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, 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 European federal union regime), seems to have failed to convince most European states, including Germany (Fig. 2.1). Later, 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 (n.d.), by the Italian politician Altiero Spinelli (1907–1986) and his fellow prisoner Ernesto Rossi (1897–1967), imprisoned and deported by the Italian fascist regime on the island of Ventotene. The Manifesto di Ventotene, released on behalf of the Italian resistance, called on the European resistance forces to work together to create a federal European state. It was the programme of the Movimento Federalista Europeo (European Federalist Movement), founded in Milan in August 1943 with Altiero Spinelli as its leader. The movement, sensing the crisis of nationalism, aimed at a federal union of European states that would prevent a new European war. Echoing

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Fig. 2.1 Aristide Briand, French politician, awarded the Nobel Peace Prize in 1926. Library of Congress, Washington. Creative Commons Attribution-Share Alike License 3.0. https:// historica.fandom.com/wiki/ Aristide_Briand (cropped)

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. After the end of the Second World War, in September 1946, a meeting of representatives of the federalist movements of fourteen 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 the fifty or so federalist movements, while from 27 to 31 August 1947 its first congress was held in Montreux, Switzerland. In Montreux Congress saw particularly important contributions from prominent federalists, including Denis de Rougemont (1906–1985) and Maurice Félix Charles Allais (1911–2010). Denis de Rougemont, in his essay entitled L’attitude fédéraliste (The federal attitude, 1947) set out six basic principles of federalism: (a) Federation presupposes the renunciation of any idea of hegemonic organisation. (b) Federation presupposes the abandonment of systemic obsessions while encouraging organisational partnerships between different nations, economic regions and political traditions. (c) In federalism, minority problems have no place given that minorities are definitely represented, not only electorally, but also politically and socially. (d) Federation does not aim to eliminate diversity but to protect it, considering that different nations function as different institutions in a single organisation. (e) Federalism is attracted by synthesis as opposed to the gross oversimplification that characterises any totalitarian mentality. (f) Federation is gradually created by individuals and groups rather than by centres of power or dictatorial governments (Sidjanski, 2003) (Figs. 2.2 and 2.3). Maurice Allais, in his presentation Aspects économiques du fédéralisme at the same conference, considers that it is necessary to transfer important economic powers to the federal government, such as the regulation of monetary matters, trade legislation, capital movements, movement of persons, etc. However, these

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Fig. 2.2 Denis de Rougemont, Swiss writer and federalist. Photo by Erling Mandelmann, licensed: CC BY-SA 4.0 Deed | Attribution-ShareAlike 4.0 https://en.wikipedia.org/wiki/ Denis_de_Rougemont#/ media/File:Denis_de_ Rougemont_by_Erling_ Mandelmann.jpg (cropped)

Fig. 2.3 Maurice Allais, French economist, federalist and winner of the Nobel Prize in Economics in 1988. Studio Harcourt Paris derivative work, licensed under the Creative Commons Attribution 3.0, https:// commons.wikimedia.org/ wiki/File:ALLAIS_PN_ Maurice-24x30-2001b.jpg (cropped).

powers should be delegated under the following conditions: (a) each federal state should have the maximum possible freedom and autonomy and (b) there should be no federal interference unless the decisions of the federal states cause difficulties in relations between them. However, in order to achieve the ultimate objective of a federation, the free movement of goods, capital and persons in markets organised on the basis of free competition and in a context of free movement of information is a necessary condition. In conclusion, the key elements of successful federalism are: (a) there cannot be a viable political federation without the coexistence of an economic federation; (b) economic federation cannot be implemented if political federation does not exist; and (c) economic and political federation are inseparable and any effort to establish a federation must begin by creating the conditions for their simultaneous completion (Sidjanski, 2003). Meanwhile, in Gstaad, Switzerland, on the initiative of Richard CoudenhoveKalergi, pro-European parliamentary groups from Western European states met in July 1947, under the name of the European Parliamentary Union (EPU), aiming to establish a European Federation within the framework of the UN. Richard Coudenhove-Kalergi also organised the first congress of the EPU from 8 to 10 September 1947, again in Gstaad, where 114 European parliamentarians and senators from 10 countries participated with the aim of effectively promoting European federalism, drafting a European constitution—federal or confederal— including executive, legislative and judicial body and a common European currency (Fig. 2.4).

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Fig. 2.4 Richard Coudenhove-Kalergi. Photo by ÖNB, Bildarchiv Austria, Inventarnummer Pf 3944:B (2) Public Domain (https:// www.bildarchivaustria.at/ Pages/ImageDetail.aspx?p_ iBildID=20223510) (cropped)

The interventions of the Montreux Congress formed the guidelines of the positions that the federalists would support at the Hague Conference on Europe (Sidjanski, 2003), from 7 to 10 May 1948. The conference was attended by sixteen former prime ministers and some 800 delegates from nineteen European states, representing different views on the path to be followed for the integration of Europe and the type of integration sought. However, two different ideological trends emerged during the discussions at the conference: those who believed in the federal perspective of Europe (mainly from continental Europe) and those who wanted a loose union through intergovernmental cooperation (mainly the British). Denis de Rougemont reported: “The only real internal division at the Congress was that between the [British] island front and the (tactically) fragmented initiatives of the continental states”. However, European federalism in the context of the EC and the later EU was not practically represented by any academic faculty. The view of the creation of a political supranational programme of a specific purpose, which would be drawn up and implemented through democratic procedures by the European populations themselves through their elected representatives, was mainly expressed by one of the most important members of the federalist group, Altiero Spinelli, through his article “The Growth of the European Movement Since the Second World War” in Michael Hodges’ book European integration: selected readings, 1972. Spinelli argued that independent European states would no longer be able to guarantee the security and well-being of their citizens. Thus, a body of elected representatives of their populations would draw up a constitution for the establishment of a European union of states, which would be approved by the European populations through a referendum (Spinelli, 1972) (Fig. 2.5). Extract from the Draft Treaty Establishing the European Union (Spinelli’s Plan) “Article 9: Objectives. The objectives of the Union shall be: – the attainment of a humane and harmonious development of society based principally on endeavours to attain full employment, the progressive (continued)

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Fig. 2.5 Altiero Spinelli, Italian politician and federalist, founder of the Crocodile Club in Strasbourg. Unknown Author, Public Domain, http:// www.dieeuros.eu/AltieroSpinelli-Vom,5235.html? lang=fr (cropped)

elimination of the existing imbalances between its regions, protection and improvement in the quality of the environment, scientific progress and the cultural development of its peoples, – the economic development of its peoples with a free internal market and stable currency, equilibrium in external trade and constant economic growth, without discrimination between nationals or undertakings of the Members States by strengthening the capacity of the States, their citizens and their undertakings to act together to adjust their organization and activities to economic changes, – the promotion in international relations of security, peace, cooperation, détente, disarmament and the free movement of persons and ideas, together with the improvement of international commercial and monetary relations, – the harmonious and equitable development of all the peoples of the world to enable them to escape from under-development and hunger and exercise their full political, economic and social rights.” Since 1980, Spinelli, gathering like-minded Members of European Parliament from different political parties at the Crocodile restaurant in Strasbourg, created a political club called the Crocodile Club. Once this group had reached a sufficient size, it submitted a proposal to the European Parliament to set up a special committee to draw up a proposal for the establishment of a European Union. The committee was finally set up in January 1982, as the Committee on Institutional Affairs, with Spinelli as general rapporteur. His main objective was to have the European Parliament act as the founding assembly of this union, which would give it federal characteristics and give the European Parliament the corresponding prestige. The Committee submitted a Draft Treaty establishing the European Union known as the Spinelli’s Plan for a Federal European Union. On 14 February 1984, the European Parliament adopted the draft treaty report by a substantial majority. However, the Draft Treaty establishing the European Union never became an actual founding treaty of a European Union. Important theoretical positions on the future of Europe were taken at the beginning of the twenty-first century by politicians who supported the European

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integration process in the past and left their mark on the course of integration. Former Commission President Jacques 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 preserve 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 (1918–2015) and former French President Valéry Giscard d’Estaing (1926–2020) expressed their views in the French newspaper Le Figaro on 10 April 2000 on the necessary institutional reforms with a federal perspective in view of the forthcoming enlargement. A federal perspective for a united Europe was called for 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 finalisation of European integration. Fischer considered the project of moving from a Union of States to a Federation, with one government and one parliament, to be necessary, as well as a constitutional treaty clearly defining the relationship between the Member States and the Federation (Fig. 2.6). Of particular importance were also 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 significant elements for a federal perspective. These included 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. 2.7). Furthermore, the Belgian Prime Minister Guy Verhofstadt (1953–), 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, 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. 2.8). Fig. 2.6 Joschka Fischer, German politician and federalist. Photo by USA Department of Defense, Author: Robert D. Ward, Public Domain https://en.m. wikipedia.org/wiki/File: Fischer_und_Paul_ Wolfowitz_%28Headshot%2 9.jpg, (cropped)

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Fig. 2.7 Lionel Jospin, French politician with federalist views. Photo by Édouard Hue (User: EdouardHue) - Own work, licensed under the Creative Commons Attribution-Share Alike 4.0 International license, https://en.wikipedia. org/wiki/Lionel_Jospin#/ media/File:Lionel_Jospin,_ mai_2014,_Rennes,_France_ (cropped).jpg, (cropped)

Fig. 2.8 Guy Verhofstadt, Belgian politician, federalist. Photo by European Parliament, licensed under Creative Commons license CC-BY-4.0: # European Union 2021– Source: EP https://en.wikipedia.org/wiki/ Guy_Verhofstadt#/media/ File:Guy_Verhofstadt_ June_2021 (cropped).jpg (cropped).

After the negative referendums on the European Constitution in France and the Netherlands, Belgian Prime Minister Guy Verhofstadt published in November 2005 his book Verenigde Staten van Europa (United States of Europe) based on the results of a Eurobarometer questionnaire according to which the average European citizen wants more Europe. Verhofstadt believed that a federal Europe should be created by the EU Member States that wanted it (as a form of enhanced cooperation), i.e. a centralised federal Europe operating within the existing EU. On 15 September 2010, on the initiative of Guy Verhofstadt, the Spinelli Group was set up to re-launch the debate on a federal future for the EU. In October 2012, in collaboration with the German politician Daniel Cohn-Bendit (1943–), co-chairman of the political group of the Greens—European Free Alliance, he published a manifesto entitled Debout l’Europe (Für Europe, For Europe, 2012), in six languages and in several European countries, proposing economic and political European integration in a federal Europe as the only viable solution for the future and the exit from the crisis. At the academic level, the proponents of federalism look forward to an efficient supranational state, operating with supranational institutions, as a result of a commonly agreed agreement or treaty, or even a passed constitution, which concentrates to some extent political competences and powers, as distinct from a confederation, in which the political competences and powers related mainly to the sovereignty of the federated states remain largely with the member states (see Fig. 2.9). They also

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Fig. 2.9 Simplified federalism diagram. Source: Authors’ work

consider that federalism has two main advantages: (a) the mitigation of the risk of a system being dominated by a group, thus preventing the creation of centralisation and hegemony, and (b) the strengthening against any external threat, fostering solidarity between member states. Every attempt to combine authoritarian and federal governance made in the past has proved historically unsustainable. At the same time, it is hoped that any underlying conflictual tendencies between the member states of a federation may gradually be overcome (Rosamond, 2006). As to how to establish a federation, the views of the federationists differ. The first view considers that the federation should be established with a directness through the immediate implementation of an approved constitution by the federated states, as a “revolutionary arrangement” (Héraud, 1968). The second view holds that the federation should be established gradually, through popular movements that will push political leaders to conclude federal agreements, as a “gradualistic process” (Brugmans, 1948). Moreover, some argue that federalism cannot be understood as a static construction of principles, structures and rigid rules governing a federation, but as a continuous process of shaping relations, trends and functions with the aim of

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federation (Friedrich, 1968). However, the latter view creates the impression of an endorsement of the gradualistic process. Federalism has received negative criticisms, among which the most prominent is the one that considers that the creation of a federal superstate on a European scale risks repeating the historical mistakes of smaller nation states on a larger scale, while at the same time increasing to a dangerous degree the distance between rulers and citizens, without providing guarantees for the preservation of individual freedoms, democratic legitimacy and the protection of minority rights (Rosamond, 2006). Furthermore, European federalists have been accused by functionalists of having in mind an ideal model of integration and governance that practically does not exist anywhere in the modern world (Mitrany, 1968).

2.1.2

Functionalism

Functionalism is a theoretical approach to integration, according to which the basic priority in societies is feasible well-being rather than adherence to unattainable doctrines or ideologies. This achievable well-being is achieved when social groups identify areas of activity (functions) of common interest and decide to work together to improve them for their common well-being on a global level. One of the key theorists of functionalism was David Mitrany (1888–1975) with works such as A Working Peace System (1943). Instead of federalism, Mitrany recommended the creation of international functional services to cooperate in areas related to mainly technical and economic issues. Description of the Functional Method from David Mitrany’s 1943 Article “A Working Peace System” “Here we discover a cardinal virtue of the functional method— what one might call the virtue of technical self-determination. The functional dimensions, as we have seen, determine themselves. In a like manner the function determines its appropriate organs. It also reveals through practice the nature of the action required under the given conditions, and in that way the powers needed by the respective authority. The function, one might say, determines the executive instrument suitable for its proper activity, and by the same process provides at need for the reform of that instrument at every stage. This would allow the widest latitude for variation between functions, and also in the dimension or organization of the same function as needs and conditions change. Not only is there in all this no need for any fixed constitutional division of authority and power, prescribed in advance, but anything beyond the most general formal rules would embarrass the working of these arrangements”.

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Fig. 2.10 Simplified functional diagram. Source: Authors’ work

According to the theory of functionalism, societies have and should highlight their common interests, on the basis of which they will cooperate. Wars do not facilitate the emergence of common interests and should be rejected as a solution because they are contrary to the interests of societies. The disastrous results of wars in Europe are proof of this view. The emergence by societies of common interests in certain areas at regional level is the driving force behind a regional functional cooperation process which, without political pre-planning, strict regulations and imposed supranational institutions, will develop smoothly sector by sector and function by function (see Fig. 2.10). Institutions predetermined by agreements or by constitution are neither necessarily strong nor democratic. Therefore, given that for a federal integration process supranational institutions and agreements (treaties, constitutions) are particularly difficult to impose on states, a functional integration process by sector, through technocratic support and transnational institutions, which will act effectively for the well-being of societies, without supranational political power, allowing the gradual integration of actions of states by function and the gradual acquisition of the trust of the states, is preferable. The functional process itself is capable of gradually determining the kind of transnational governing body that will work efficiently for the well-being of societies, having gained their trust (Mitrany, 1943).

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Functionalism, according to Mitrany, was the practical path followed by the European Communities in their first decade, although federalism was theoretically their building block, according to the Schuman Declaration. By emphasising an interdependence mainly on the economic factor followed by the political one, a significant level of integration was gradually achieved in some economic sectors, such as coal and steel production, which was the reason for the establishment of the ECSC in 1951, and conditions were appeared for demanding integration in other sectors through technocratic consultative mechanisms (Mitrany, 1968). Criticism of functionalism is directed at key elements of its theory. Thus, the identification of the needs of societies that should lead to functional cooperation is seen in practice mainly as a matter of policy, especially in economic sectors where there may be intense competition in a market economy. Consequently, decisions on sectoral cooperation are highly political and not simply socially technocratic. Moreover, the very mechanisms for determining the welfare needs of societies are not sufficiently defined. Finally, the way in which functionalism describes the coalescence of progressive economic integration across sectors highlights a certain lack of scientific rigour in the formulation of the theory (Rosamond, 2006; Thomson, 1980).

2.1.3

Neo-functionalism

An evolution of functionalism was neo-functionalism, which, while rejecting federal idealism, at the same time shifted “functionality” to the regional level, in contrast to the idealistic universality of functionalism, with the contribution of conscious pressure and interest groups and the acceptance of supranational institutions. This is because the recognition of common needs and interests by social groups, the technocratic support and the particular institutional organisation created to perform the specific integration functions sought that would lead to a single final desired outcome, as functionalism envisaged, could not in themselves bring about the desired results for societies. It requires the impetus and support of the pressure and interest groups concerned, which, acting in their own interest, push the process of integration towards a supranational framework, at the regional level, causing the creation of the necessary new supranational institutions leading to a continuous integration process with new objectives even through inertia, and in areas not initially foreseen, as well as a shift towards a new centre of governance as a result of the creation of a “new political community”. In the case of neo-functionalism, politics obviously follows the economy. Economic integration will become the driver of a subsequent political integration. By practically separating politics from the economy, the process of integration can be initiated from areas of “low politics” (Rosamond, 2006). This theory was formulated as a product of a new way of thinking by social science theorists in the 1950s in the USA, in contrast to the proposed peaceful forms of global politics, expressed as the mere wishes of groups of federalism intellectuals or as the theoretical positions of functionalism of limited scientific rigour. It emerged to explain the process of European integration initiated by the ideas and actions of

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Robert Schuman (1886–1963) and Jean Monnet (1888–1979) (Haas, 1964; Schmitter, 1969). One of the key theorists of neo-functionalism is Ernst Haas (1924–2003) with works such as The Uniting of Europe: Political, Social and Economic Forces 1950–1957 (1958) and later Beyond the Nation-State (1964). Haas defines political integration as a process in which political actors play a particularly important role. According to this definition, political actors transfer their loyalty from national to supranational institutions. This process is necessitated by the activation of “elite” groups that are driven by pan-European ideas and persuade other national “elites” to shift their trust (legitimacy) towards transnational cooperation. Other non-state actors (such as NGOs, clubs, etc.) are also involved in the process. Haas argues that the government, the “elite” groups and the non-state actors must be attracted to the same growing economic and other benefits of integration in order to move forward. Definition of Political Integration from Ernst Haas’ Book The Uniting of Europe: Political, Social and Economic Forces 1950–1957, 1958 “Political integration is the process whereby political actors in several distinct national settings are persuaded to shift their loyalties, expectations and political activities towards a new center, whose institutions possess or demand jurisdiction over the pre-existing nation states. The end result of a process of political integration is a new political community, superimposing over the pre-existing ones”. Furthermore, Haas refers to the technocratic significance of the integration project in neo-functional theory, emphasising the interests of the actors at the beginning of the integration process in Europe, with the example of the establishment of the ECSC in 1951. Haas considers the technocratic automaticity of the integration process to be particularly important, linked to the strategies of the founders of the ECSC, as well as the further path towards the EC (Rosamond, 2006). The new supranational institutions created will evolve technocratically and, by becoming stronger and more autonomous, will proceed to deepen integration in specific areas, which will require greater normative complexity and new strong supranational institutions, thus creating a cyclical process of continuous deepening of integration. The Technocratic Significance of the Integration Process from the Introduction to the 2nd Edition of Ernst Haas’ Book The Uniting of Europe: Political, Social and Economic Forces 1950–1957 of 1968 “The existing converging economic goals in the bureaucratic, polyphonic and industrial life of modern Europe were the crucial driving force. The economic technician, the planner, the innovative industrialist, and trade unionist advanced the movement and not the politician, the scholar, the poet, the writer”.

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Leon Lindberg (1932–), with his book The Political Dynamics of European Economic Integration (1963), introduced the term spillover into the theory of neo-functionalism, which refers to the integration process as a progressive process of gradual achievements that take place either automatically, as a process of spreading from one economic sector to another, or through the pressure of interest groups from other economic sectors, who foresee economic benefits from integration in their own sector as well. Spreading is characterised by two logics: expansion into different sectors of integration (economic, political and geographical) and deepening into similar sectors that further strengthen sectoral integration. The Definition of “Spillover” by Leon Lindberg’s 1963 Book The Political Dynamics of European Economic Integration “The process of spillover refers to a situation in which a given action related to a specific goal, creates a situation in which the original goal can be assured only by taking further actions, which in turn create a further condition and a need for more action and so forth”. Thus, in a neo-functional process of integration, the increased number of transactions at the regional level in an economic sector contributes to the demand for sectoral integration, which leads to the creation of new sectoral supranational institutions. This is implemented by political actors consisting of national governments and national institutions under pressure from interest groups and with the assistance of political elites and other non-state actors, who transfer their trust to supranational institutions. These bodies are becoming stronger and are gradually operating without reference to national governments and institutions. Integration in one economic sector creates strong incentives to spread integration by starting to deepen the integration process in other similar sectors, which further reinforce sectoral integration in order to fully exploit the benefits of integration in the sector from which it started. Greater regulatory complexity is therefore required and new institutions are usually needed at regional level. This process of proliferation, in the sense of deepening the integration process, functions as technocratic automation, in which technocratic support is considered essential. However, in this process, strong incentives are created for spreading integration by extending the integration process to other non-similar sectors, and similar processes of spreading and deepening the integration process are required in these new sectors (see Fig. 2.11). This is how the establishment of the EEC, as well as the ECSC, was interpreted in 1957, after the establishment and operation of the ECSC. Furthermore, the same reasoning determined the decisions on the customs union, the single internal market and the historic decision to move towards EMU (Balassa, 1962). Moreover, it is noted that neo-functionalism is often associated with Monnet’s functional federalism, a term used to explain the complex character of Monnet’s grandfathering approach by creating institutions that synthesise the transnational elements of functionalism with the supranational elements of federalism (Chryssochoou et al., 1999).

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Fig. 2.11 Simplified neo-functionalism diagram. Source: Authors’ work

The criticisms of neo-functionalism relate to the fact that nation-states and nationstate interests still play an important role, especially in the foreign policies of states (Hoffman, 1966; Rosamond, 2006). It is further argued that there are likely to be political groups within states that do not share the same political views of corresponding political groups in other states. Therefore, the adverse divergences of political developments at the domestic level, i.e. the problems that would arise in the process of integration from a possible takeover of the governance of a state by these divergent groups, are not taken into account (Eilstrup-Sangiovanni, 2006). Furthermore, it was argued that neo-functionalism does not take into account the exogenous environment of the regional integration area, as well as the international political environment (Hoffman, 1966). Finally, it is argued that the transition from economic to political integration is not possible. Economic integration starting from “low-policy” areas is usually a relatively easy process, but it is not followed with the same ease of integration in “high policy” areas, usually with a political content, such

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as foreign and defence policy, given that states are not easily willing to give up a significant part of their sovereignty (Hoffman, 1966).

2.1.4

Intergovernmentalism

While federalism and neo-functionalism operate transcendently, given that states delegate their powers to a higher level of collective governance, or supranational organisation, the alternative theory of intergovernmentalism, which emerged in the 1960s, gives priority to the non-interference with the sovereignty of states, with the consequence that their governments, in their decision-making processes, act in the interest of the state they represent. An important factor in this theory is therefore the political, and in particular the areas of “high politics”, namely mainly the foreign and defence policies of states, which are often an impediment to the process of integration. This theory took into account the stabilisation of states, after the Second World War, and in particular, their strengthening through the processes and objectives provided by cooperation for the purpose of integration. The theory of intergovernmentalism is described through the essays of Stanley Hoffmann (1928–2015), in his volume The European Sisyphus: Essays on Europe, 1964–1994 (1995). Intergovernmentalism treats the independent states represented by their national governments as the primary actors in the process of integration. Therefore, the unifying dynamic is limited insofar as it does not affect the sovereignty of independent states. Any possible progress of transnational activity is the consequence of deliberate action by the states and not by any transnational formations, which in practice have specific margins of action and do not acquire autonomy. Procedurally, once the domestic preference formation and the policy demand for each state have been established on the basis of state-national interests, then interstate bargaining begins, through which the common framework of convergence and interdependence is determined by compromises between the preferences and bargaining power of each state. This is precisely when the decision is taken to create supranational institutions for cooperation, which facilitate intergovernmental cooperation by reducing the costs of negotiation between governments. These institutions do not acquire autonomy, but have a specific scope of activity agreed by the states as a result of negotiations between them. The Importance of Units (States) in an International System, According to Stanley Hoffman from His 1966 Article “Obstinate or Obsolete”? “Every international system owes its inner logic and its unfolding to the diversity of domestic determinants, geo-historical situations, and outside aims among its units”.

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This approach sees European integration as a cooperation between governments in which the sovereignty of each state is kept intact. It thus interprets the creation and success of the EC as being due to intergovernmental negotiations and compromises (to the lowest common degree) between the governments of the states that cooperated on an intergovernmental basis in order to advance the process of integration while protecting their national sovereignty. Furthermore, the functioning of Europe is interpreted as cooperation between states, sometimes closer and sometimes looser, with states coexisting and cooperating with each other to varying degrees, with a case-by-case choice of their relations (à la carte). This also explains both the periods of acceleration of the integration processes, due to convergence of governmental preferences between states, and the periods of inertia due to differences in state interests. The continuation of the requirement for unanimous decisions on “high policy” issues is a necessary criterion and is directly interwoven with the core of the theory of intergovernmentalism. Thus, according to the same theory, European integration did not result from the failure of the nation state, but was the result of a successful attempt to rescue it. Neill Nugent’s Definition of Intergovernmentalism from His 2006 Book Government and Politics of the European Union “[. . .] arrangements whereby nation states, in situations and conditions they can control, cooperate with one another on matters of common interest. The existence of control, which allows all participating states to decide the extent and nature of this cooperation means that national sovereignty is not directly undermined”. A more recent version of intergovernmentalism is that of liberal intergovernmentalism, which incorporates the role of various political, economic, social, etc. interest groups that exist within a state or even above it or above a group of states, which through a liberal political process determine national preferences, without however neglecting the role of the state. Furthermore, an intergovernmental pattern of negotiation and a pattern of institutional organisation is defined which will provide credible commitments to the governments of independent states. The theory of liberal intergovernmentalism is described in Andrew Moravcsik’s (1957–) article “Preferences and Power in the European Community: A Liberal Intergovernmentalism Approach”, Journal of Common Market Studies (1993). The Role of Societal Interest Groups According to Andrew Moravcsik from His 1993 Article “Preferences and Power in the European Community: A Liberal Intergovernmentalism Approach” “National interests are, therefore, neither invariant nor unimportant, but emerge through domestic political conflict as societal groups compete for (continued)

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political influence, national and transnational coalitions form, and new policy alternatives are recognized by governments. An understanding of domestic politics is a precondition for, not a supplement to, the analysis of the strategic interaction among states”. Through Moravcsik’s liberal intergovernmental theory of European integration, an attempt is made to explain the evolution in the EC and then in the EU. The theory highlights the particular national interests of the member states on specific preference issues, which determine the processes of intergovernmental negotiations, which in turn lead to the formation of intergovernmental agreements covering the common interests of the member states. The process culminates in the establishment of cooperative institutions that make the implementation and processing of these negotiations credible (see Fig. 2.12). These institutions enhance the power of member states in two ways, as they increase the efficiency of transnational negotiations by reducing the cost of transnational transactions and they enhance the authority and autonomy of national governments vis-à-vis various domestic groups by adding legitimacy and credibility through agreed and implemented common policies.

Fig. 2.12 Simplified diagram of intergovernmentalism. Source: Authors’ work

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One of the main criticisms of the intergovernmental theory is the underestimation of the value of supranational institutions, which, despite being established through intergovernmental cooperation, still have a historical contribution to the development of European legislation and the process of integration that goes beyond intergovernmental cooperation (Wind, 1997). Furthermore, intergovernmentalism has failed to capture and explain the everyday life, the specificities of European politics and the multilevel governance of the EU (Rosamond, 2006).

2.1.5

Other Integration Theories

Another theory of the 1960s, which was closer to the European experience, is that of transactionalism, which expresses the practical need to develop trade and communication between states and their peoples through direct economic, social and cultural contacts. In this way, a “community spirit” would be achieved between the states of a region and, above all, between the peoples of those regions, which would ensure their aspirations for peaceful coexistence and ultimately lead to integration. The theory of transactionalism is directly linked to the works of Karl Deutsch (1912–1992), such as The Analysis of International Relations (1968). Finally, another more recent theory, that of neo-institutionalism, developed in the 1980s, recognises the importance of the formal central institutions of the European Communities, but also highlights the importance of informal institutions that operate and develop mobilities, collaborations, interdependencies and interrelationships between central and state institutions, in shaping the right climate for transactions and policy development. The theory of neo-institutionalism is developed in the article by James March (1928–2018) and Johan Olsen (1939–) “The New Institutionalism: Organizational Factors in Political Life”, American Political Science Review (1984).

2.2

The Integration Process and Attempts to Interpret It

Interpretations of the European integration process vary, with proponents of different integration theories trying to attribute to the different stages of the integration process explanations that are consistent with their theories. This is achieved, as the following analysis shows, sometimes to a greater and sometimes to a lesser extent, with the degree of success of the interpretations of the integration theories being more often than not dependent on the subjective perceptions and simplifications of their exponents or proponents. In practice, however, it is possible to consider the sui generis phenomenon of European integration as a phenomenon of multilevel governance, where power is shared between different levels of governance and between actors, with states neither declining nor losing their resilience and relevance. Complexity is a key feature of the EU morphology, with researchers feeling that the boundaries between the different levels of governance, namely European, state-national and local, are becoming less

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distinct over time (Rosamond, 2006). Thus, some have also explored the potential that multilevel governance offers for partitioning European integration into different levels of analysis, such that different theoretical approaches to integration are considered appropriate at each level (Peterson, 1995). The following analysis provides the possibility of such an exploration.

2.2.1

The Start of the Integration Process and the First Difficulties

With the end of the Second World War and the subsequent trend towards the devaluation of the nation-state, it became more urgent to seek political solutions based on broader cooperation between European states in various sectors, either through intergovernmental cooperation or through the establishment of supranational associations, with loose or strong ties between member states (Liargovas & Papageorgiou, 2017; Lavdas, 2002). The establishment of the ECSC, with the Treaty of Paris, signed on 18 April 1951, and later the EEC and the EAEC, with the Treaty of Rome, signed on 25 March 1957, had federalism as their structural element, mainly because of the ideological tendency of the founding fathers (Forsyth, 1996; Burgess, 1989). Besides, the Declaration of 9 May 1950 of Robert Schuman referred to the establishment of the ECSC as the first stage of a European federation (Monnet, 1970). However, according to functionalists, interdependence mainly in the economic factor triggered the establishment of the ECSC, and subsequently created the conditions for demanding integration in other areas as well. Thus, with the contribution of technocratic advisory mechanisms, the integration process led to the establishment of the EEC and the ECSC. Consequently, according to Mitrany, functionalism was the practical path followed by the ECs in the first decade after their establishment (Mitrany, 196) (Figs. 2.13 and 2.14. The proposal of the French Prime Minister René Pleven (1901–1993), with a plan submitted in 1950, for the establishment of the European Defence Community (EDC) and the creation of a common European army, was accepted with the signing of the Treaty establishing the EDC, signed in Paris on 27 May 1952 by the same six Fig. 2.13 Robert Schuman, French politician and pioneer of European integration. Bundesarchiv, Bild 18319000-2453, licensed under CC BY-SA 4.0 Deed | Attribution-ShareAlike 4.0, https://en.wikipedia.org/wiki/ Robert_Schuman#/media/ File:Bundesarchiv_Bild_18319000-2453, _Robert_Schuman.jpg, (cropped)

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Fig. 2.14 Jean Monnet, French politician, pioneer of European integration and first president of the ECSC High Authority. Author: Anonymous (Keystone France), Public Domain, https://en.wikipedia.org/wiki/ Jean_Monnet#/media/File: Jean_Monnet.jpg, (cropped)

Fig. 2.15 Alcide de Gasperi, Italian federalist politician. unknown author, Public Domain, https://www. ilpopolotortona.it/lanostalgiadi-alcide-de-gasperi/, https:// commons.wikimedia.org/ wiki/Category:Alcide_De_ Gasperi#/media/File:Alcide_ De_Gasperi_frontale.jpg (cropped)

Member States of the EDC. The establishment of the EAC could be interpreted as a continuation of the neo-functional process of expansion with a sectoral extension of integration, while its operation would be institutionally based on the model of the ECSC, with an intergovernmental function but with important federal characteristics (see below on “functional federalism”). However, the 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 the EDC, since the excessive ambitions of the federalists caused fears among the French Gaullists of a loss of sovereign rights and a military upgrade of Germany, while there were concerns on the left parties about possible manipulation of European defence policy by the USA. In addition, the federalists’ efforts to extend integration at the political level, with the inclusion of a specific article within the EDC treaty, which was the brainchild of the federalist Italian Prime Minister Alcide de Gasperi (1881–1954) and provided for the establishment of a federal or confederal structure that would coordinate the functioning of existing and future Communities, provoked the reaction of the new French Prime Minister from June 1954, Pierre Mendés France (1907–1982), who demanded the abolition of all supranational and federal features of the new treaty, which eventually led to its abolition. The failure of the integration effort in the defence field also contributed to the abandonment of the idea of integration in the political field with the creation of a European Political Community (EPC), based on a draft treaty submitted by the Belgian Foreign Minister, Paul-Henri Spaak (1899–1972), in 1953, while Jean Monnet’s declared in November 1954 that he did not wish to be

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Fig. 2.16 Paul-Henri Spaak, Belgian federalist politician. Photo by Bundesarchiv, Bild 183-39998-0427 / CC-BY-SA 3.0, https://en.wikipedia.org/ wiki/Paul-Henri_Spaak#/ media/File:Bundesarchiv_ Bild_183-39998-0427,_PaulHenri_Spaak.jpg (cropped)

Fig. 2.17 The functioning of the ECSC after the Treaty of Paris of 18 April 1951. Source: Authors’ work

re-chairman of the ECSC High Authority during its next term of office. The failure was interpreted as an inability of political actors at the national level to agree on a transfer of trust to supranational institutions for a neo-functional expansion process with sectoral expansion of high policy integration, maintaining it in low-policy areas (Figs. 2.15 and 2.16). The Treaty of Paris establishing the ECSC, signed by the six founding members in 1951, established five basic institutions (see Fig. 2.17): a Special Council of Ministers (later the Council of Ministers), a High Authority (first form of the European Commission), a Common Assembly (which evolved into the European Parliament), a Consultative Committee (which later evolved into the Economic and Social Committee) and a Court of Justice for the settlement of disputes. Neo-functionalism theorists attributed this development as a form of regional

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Fig. 2.18 The functioning of the EEC after the Treaty of Rome of 25 March 1957. Source: Authors’ work

integration, which through a technocratic automation contributed to further progress towards the EC (Rosamond, 2006). The new supranational institutions evolved gradually and technocratically and, by becoming stronger and more autonomous, contributed to the spread of integration in specific new areas, culminating in the founding Treaty of Rome establishing the EEC and the EAEC in 1957 (see Figs. 2.18 and 2.19). This process was practically a process of “functional federalism”, through which the complex nature of Monnet’s gradualist approach is explained, i.e. a different synthesis of elements of functionalism, derived from the functionality of transnational actors, and federalism, derived from the establishment of supranational institutions through treaties, but without complete agreement with either theory (Chryssochoou et al., 1999). Nevertheless, with the establishment of the EEC and the EAEC, the integration process moves to a form of organisation that combines the supranational and federal approach with the intergovernmental approach, each of which alone proved to be inadequate (Christodoulidis, 2010). The assumption of the French presidency by Charles de Gaulle (1890–1970), on 9 January 1959, marked the beginning of a crucial decade for the EC. The French president, considered as a supporter of the doctrine of the “Europe of the Homelands”, believed that the EC was an economic mechanism without political and efficiency and was also opposed to any supranational perspective in its 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 a statement he made on 23 November 1959 in Strasbourg. Looking forward to an intergovernmental cooperation between the

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Fig. 2.19 The functioning of the EAEC after the Treaty of Rome of 25 March 1957. Source: Authors’ work

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 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. The committee under Fouchet initially presented 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. However, the apparent downgrading of the supranational Commission and its possible future absorption by the Political Union provoked the reactions of the Benelux countries in particular, which considered that the Political Union would thus constitute an obstacle to the realisation of European integration. However, an amended draft submitted by the Fouchet Committee on 18 January 1962 also provided for an extension of the powers of the Political Union in the economic field, making it clearer that the Political Union was intended to replace the EC. The Benelux countries again raised objections, with the result that efforts to set up the Political Union were finally abandoned on 18 April 1962. Moreover, from 1 July 1965, de Gaulle, opposing proposals from the Commission which he considered to be the expression of federal views, forbade his ministers to participate in the Council of Ministers, recalled the French representative from

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Brussels and forbade his party’s members of the European Parliament to take part in votes on matters relating to the development of the Communities, thus applying the policy of “empty chair”. The Commission’s proposals mainly concerned 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. It seems that de Gaulle was during this period the central figure of a nationalist revival (Rosamond, 2006). However, it is argued by some that the “empty chair” crisis was the result of pressure from groups related to agricultural and commercial interests, which helped to limit an emerging supranational turn (Moravcsik, 1998). The Prime Minister of Luxembourg, Pierre Werner (1913–2002), who chaired the Council of Ministers, 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 integration process were limited, the CAP was strengthened, discussions on the introduction of an own resources system and the delegation of powers to Parliament were postponed and, lastly, the principle of unanimity in decision-making remained in force—in the French view, even though the compromise explicitly stated that in cases where the very important interests of one or more Member States are at stake, the members of the Council of Ministers would try to reach solutions that could be agreed by all Member States, while respecting their mutual interests. The establishment of the “vital national interest” as a reason for invoking the unanimously accepted solutions created a presumption in favour of the unanimity rule, which was an intergovernmental distortion for the supporters of the federal solution. 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 integration process of the Communities, by misinterpreting the text of the agreement, which required the continuation of negotiations until a commonly accepted solution was reached. This misinterpretation worked to the detriment of federalism, since it caused the Commission’s right to propose legislation to be restricted in the future, particularly after the increase in the number of Member States. However, a process of spreading integration by deepening is reflected in the Treaty of Merger of the executive bodies of the three ECs, signed in 1965. The treaty provided for the merger of the three executive institutions and the creation of a single supranational Commission for the EC and established a single Council (of Ministers) of ECs for intergovernmental cooperation, operating in parallel with the existing Assembly, which was renamed the European Parliament from 1962 (see Fig. 2.20). On 17 May 1960 the Assembly adopted a resolution for the direct election of its members by universal suffrage. Furthermore, the Assembly adopted a resolution to change its name to the European Parliament, which, on 27 June 1963, adopted a resolution to upgrade its powers and competences. However, France expressed its reservations about the direct election of Members of the European Parliament by the

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Fig. 2.20 The functioning of the EC after the Merger Treaty of 8 April 1965. Source: Authors’ work

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. However, no substantial and decisive steps in this direction were subsequently taken. Suffice it to say that the first elections to the European Parliament by universal suffrage took place much later on 7 and 10 June 1979. An important step towards economic integration with intergovernmental cooperation initially and federal prospects in its final phase was the “Werner Plan”. Based on the two plans submitted by Raymond Barre on 12 February 1969 and 4 March 1970 to deal with exchange rate instability, a committee of experts headed by the Prime Minister and Finance Minister of Luxembourg, Pierre Werner, submitted a report on the gradual creation of an Economic and Monetary Union, known as the “Werner Report”, to the Council of EC on 8 October 1970, drawn up in cooperation with the Committee of Central Bank Governors of the EEC. The “Werner Report” attempted to reconcile the German position, which initially wanted economic convergence to 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 ten years. In the second stage it would be possible to create a European Monetary Cooperation Fund, which would manage the progressively increasing foreign exchange reserves of the Member States, and he proposed the creation of two new institutions, the first as an independent economic decision-making centre accountable to the European Parliament, and the second as a central bank body responsible for monetary matters (Fig. 2.21).

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Fig. 2.21 Pierre Werner, Luxembourg politician and rapporteur of the eponymous report on EMU, Unknown author - Family Pierre Werner, licensed: CC BY-SA 4.0 Deed | Attribution-ShareAlike 4.0 International, https://en. wikipedia.org/wiki/Pierre_ Werner#/media/File:Pierre_ Werner_204g.jpg, (cropped)

Although the Commission adopted the “Werner Report” on 29 October 1970, in order to avoid opposition from Member States that did not wish to see their sovereign rights ceded to Community institutions, it made it clear that this could only be done to the extent necessary to meet the needs of the initial objectives of EMU. He even suggested that the first stage should be completed in the three-year period 1971–1973. However, France rejected the Commission’s “Werner Report”-based proposals for EMU, 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 of its currency in the context of an excessively lax economic policy, especially in view of a forthcoming period of high inflation. Thus an opportunity for further economic deepening by creating supranational institutions for this purpose did not go ahead. The attempt to establish a European Political Cooperation (EPC) was of an intergovernmental nature, as a result of the report of the committee headed by Etienne Davignon (1932–), Minister of Foreign Affairs of Belgium, known as the “Davignon Report” or “Luxembourg Report”, which was accepted by the Commission in July 1970 and adopted by the Council of EC on 27 October 1970. It was aimed at cooperation between the Member States in the field of their foreign policy and at undertaking joint actions wherever possible, in order to demonstrate internationally the political mission of Europe as well. Its operation would initially be outside the institutional framework of the Community, but would gradually be institutionalised through regular six-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 States. The Commission would provide opinions on matters within its competence, while the Political Affairs Committee of the European Parliament would be informed of the outcome of the meetings. However, no mention was made of security and defence issues, nor was it accepted by France that a permanent political secretariat based in Brussels should be set up to coordinate its activities. 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, while Britain’s participation in the EPC was also important, despite its continuous cooperation with the USA on the other side of the Atlantic. However, despite occasional

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Fig. 2.22 Etienne Davignon, Belgian politician, rapporteur of the "Davignon Report". Photo by FriendsofEurope https://www.flickr.com/ photos/friendsofeurope/574 6734340/, licensed CC BY 4.0 Deed | Attribution 4.0 International, https://en. wikipedia.org/wiki/%C3% 89tienne_Davignon#/media/ File:Etienne_Davignon.jpg cropped)

attempts to upgrade the role of the EPC, its machinery 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, while it failed to formulate a firm basis for a common foreign policy in practice, despite its contribution, notably in the formulation of the Helsinki Final Act of the CSCE on 30 July 1975. Its weaknesses became more apparent during the Soviet invasion of Afghanistan in 1979 and later during the wars in Yugoslavia in the period 1990–1995 (Fig. 2.22). An important effort with a federal perspective was the report of the federalist Belgian Prime Minister Leonard “Leo” Clemence Tindemans (1922–2014) on the European Union of 29 December 1975. In this report he advocated the pursuit of a common policy by the Member States in critical areas of foreign policy, the implementation of a common defence policy with enhanced cooperation in the field of armaments, the exercise of effective Community control over the monetary policy of the Member States, 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. At the institutional level, the “Tindemans Report” proposed the extension of the Commission’s powers and competences, 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. Despite its pragmatic tone, the “Tindemans Report” failed to convince many of the political leaders of the Member States who were not prepared to discuss any further loss of national sovereignty of the states they represented (Fig. 2.23). Initiatives with a federal perspective were also the coordinated interventions of the German Foreign Minister Hans-Dietrich Genscher (1927–2016) and his Italian counterpart, Emilio Colombo (1920–2013), which resulted in a draft “European Act” for the improvement of the mechanisms of the institutions, presented at 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

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Fig. 2.23 Leonard Tindemans, Belgian politician and federalist. Photo by Michiel Hendryckx, licensed: CC BY-SA 4.0 Deed | Attribution-ShareAlike 4.0 International, https:// commons.wikimedia.org/ wiki/Category:Leo_ Tindemans#/media/File:Cvp_ premiers_675.jpg (cropped)

of Foreign Ministers of EC in the formulation of the EPC and proposed the establishment of a secretariat for the EPC. This initiative paved the way for the signing of the Stuttgart Solemn Declaration on European Union on 19 June 1983, which contained the bulk of the project and proposed the drafting of a European act to complement the Treaty of Rome, while the Member States recognised the prominent political role of an institutionalised European Council in shaping the EPC, and expressed the intention to give the Commission, the Council of EC and the European Parliament the ability to express their opinion 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. However, the Stuttgart Declaration on the European Union was challenged by some member states, including Denmark and Greece, the project remained merely an advisory statement without emerging as a binding legislative text, and the way of its implementation remained unclear (Christodoulidis, 2010) (Figs. 2.24 and 2.25). Another important contribution was the recommendation of the committee set up in January 1982 as the Committee on Institutional Affairs, with Altiero Spinelli as general rapporteur (see Sect. 2.1.1), which had as its main objective the functioning of the European Parliament as the founding assembly of a European Union, which would give the European Parliament a clear federal character and the corresponding prestige. The report of the Committee on Institutional Affairs on the Draft Treaty establishing the European Union, also known as the Spinelli Plan for a Federal European Union, was submitted to the European Parliament for a vote on 14 February 1984. The European Parliament adopted the draft treaty report by 237 votes in favour, 31 against and 43 abstentions. Although the Spinelli Plan was not converted into a treaty, certain elements of it were included in the Maastricht’s Treaty on European Union of 1992. However, particularly important were the proposals of the ad hoc Dooge Committee in 1985, headed by former Irish Foreign Minister James Dooge (1922–2010). The Committee was set up at the initiative of French President François Mitterrand (1916–1996) having the assistance of German Chancellor Helmut Kohl (1930–2017) at the European Council in Fontainebleau on 25 and 26 June 1984. The Dooge Committee’s proposals, submitted to the Brussels European Council of 29 and 30 March 1985, were intended to improve European cooperation in a way

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Fig. 2.24 Hans-Dietrich Genscher. Photo by Bundesarchiv, B 145 BildF054876-0030 / Ludwig Wegmann, licensed: CC BYSA 4.0 Deed | AttributionShareAlike 4.0 International, https://en.wikipedia.org/wiki/ Hans-Dietrich_Genscher#/ media/File:Bundesarchiv_ FDP-Bundesparteitag,_ Genscher.jpg (cropped)

Fig. 2.25 Emilio Colombo. Photo by Unknown author https://www.cvce.eu/en/obj/ emilio_colombo-ene5861100-71c0-4cce- 84cc17cb08f9b70b.html , Public Domain, https://en.wikipedia. org/wiki/Emilio_Colombo#/ media/File:Emilio_Colombo_ crop.jpg (cropped)

that would demonstrate the political will of the Member States to move steadily towards the establishment of a political entity. The recommendations concerned 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 the need to integrate security issues into it, to create a permanent secretariat and to have a common representation of the “Ten” Member States 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 giving the European Parliament a real right of co-decision. The proposed progressive reforms, many with a federal orientation, but also intergovernmental cooperation practices, met the objections of Eurosceptics (Christodoulidis, 2010). Nevertheless, the Italian presidency at the Milan European Council of 28 and 29 June 1985 managed to overcome the looming difficulties with the support of French President Mitterand and German Chancellor Kohl, and to promote the Dooge Committee proposal.

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Another notable preparatory work, consistent with the theory of the spread of neo-functionalism, both as a deepening and as a widening in similar areas, was the “White Paper” presented by Jacques Delors (1925–), as President of the Commission, to the Council of EC on 14 June 1985, as a draft agreement on the completion of the single internal market. This draft 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 goods, services, capital and people 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. Thus, the Milan European Council of June 1985, which endorsed the “Dooge Report”, also approved the Commission’s draft White Paper on the single internal market. As a consequence of these decisions, an Intergovernmental Conference was prepared to accelerate the completion of the single internal market by 1992, to improve the functioning of the EC institutions and to implement a common foreign and security policy. At its meetings at Foreign Ministers’ level from 9 September to 28 November 1985, the Intergovernmental Conference examined a draft submitted by the Luxembourg Presidency and a French Draft European Act proposing an amendment to the Treaty establishing the EEC and, at the same time, a new treaty on political cooperation as a “Single Act”. Finally, the Luxembourg European Council of 2 and 3 December 1985, overcoming the obstacles raised by the Member States, adopted an important joint declaration as a political agreement that was the product of compromise. It provided for the completion of the single internal market, before 31 December 1992, the extension of the qualified majority voting method rather than unanimity in decisionmaking, 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. Subsequently, the Council of Foreign Ministers of EC, which met on 16 and 17 December 1985 in Luxembourg, undertook the transformation of the political agreement into a treaty text, with the title Single European Act (SEA) as a single document that includes both the amendments to the Treaties of the European Communities and the required cooperation measures of the Member States in the field of the EPC. France wanted the treaty to be called the Act of the European Union, 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.

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Despite the success of the efforts to draft such a treaty, some politicians, such as Leo Tindemans, considered the text to be “a good agreement, but not a good treaty”. In essence, the treaty, as a mere consensual text, was less progressive than the proposals made both by the Dooge Commission Report and Altiero Spinelli’s Draft Treaty establishing the European Union (Liargovas & Papageorgiou, 2017). It is obvious that the federal vision of European integration, as the long-term goal of its initiators, has been confronted at this time with the short-term concern of member-state governments about the possible loss of their independence and the prevalence, for the time being, of European intergovernmental cooperation as a practice of regulating economic governance in specific low-policy areas. Compared to the original treaties that laid the foundations for the EC, the scope of activity of supranational institutions was eventually limited to building the common market.

2.2.2

The Integration Process After the Single European Act

Despite the controversies expressed, mainly by the federalists, the Single European Act signed on 17 and 28 February 1986 is considered a turning point in the theory of European integration, given that it set the timetable for the completion of the Common Market, as a Single Internal Market, with provisions for the free movement of goods, services, capital and people, and culminating in monetary union. In addition, the formal recognition of the European Council, which until then had functioned as an informal institution, the extension of the qualified majority voting method instead of unanimity in decision-making, the extension of the powers of the European Parliament and the initiation of procedures to institutionalise the EPC with the commitment that Member States would make efforts to develop and implement a common European foreign policy were essential steps towards integration. A substantial step towards economic integration was the “Delors Report”, presented on 12 April 1989 by Commission President Jacques Delors. Its text adopted the main points of the 1970 “Werner Report” and set out as prerequisites for the completion of Economic and Monetary Union (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 a single currency. The “Delors Report” defined the completion of EMU in three stages. The final stage involved the transfer of all the monetary powers of the Member States to the Community institutions. This implied the establishment of the supranational independent European Central Bank (ECB) and the taking of initiatives for a single monetary and exchange rate policy by the European System of Central Banks (ESCB). However, the establishment of the ECB also required a revision of the Treaty of Rome for the EC (Fig. 2.26). The Madrid European Council of 26 and 27 June 1989, despite the initial opposition of Britain to EMU and the need to revise the original Treaty of Rome, as well as the differences expressed by some Member States, finally confirmed the determination of the Member States to gradually achieve EMU and decided to launch the first stage on 1 July 1990, with the full liberalisation of capital

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Fig. 2.26 Commission President Jacques Delors. Photo by Rob Croes for Anefo, Nationaal Archief, CC0, - http://proxy.handle. net/10648/ad6a7b96-d0b4102d-bcf8-003048976d84, (cropped)

Fig. 2.27 President François Mitterrand. Photo by SPC 5 James Cavalier, US Military, Public Domain, https:// commons.wikimedia.org/ wiki/File:Fran%C3%A7ois_ Mitterrand_and_Ronald_ Reagan_(r.)_1984.jpg (cropped)

movements. For the other two stages, the Strasbourg European Council of 8 and 9 December 1989, following the agreed common line of French President François Mitterrand and German Chancellor Helmut Kohl, decided, despite the refusal of Britain, to start preparations for an Intergovernmental Conference in order to identify the necessary amendments to the Treaty of Rome to enable the implementation of EMU, thus overriding the reservations and the alleged national interests of the Member States (Christodoulidis, 2010). The Franco-German initiatives of Mitterrand and Kohl continued with a joint message dated 19 April 1990, addressed to the Prime Minister of Ireland, President of the European Council, calling for the acceleration of the procedures for the Political Union of Europe and the convening of an Intergovernmental Conference for this purpose, in parallel with the one for EMU. In their message, they said that they considered that the time was right for the transformation of the EC into a European Union, with four main objectives: (a) to strengthen democratic legitimacy; (b) to make its institutions more effective by extending the application of qualified majority voting in the Council (of Ministers) and expanding the role of the European Council; (c) to ensure unity and coherence of activities in the economic, monetary and political framework and (d) to define and create a common foreign and security policy. Despite initial reactions and objections from some Member States, notably from the British Prime Minister Margaret Thatcher (1925–2013), who expressed her concern about a possible transfer of state sovereignty to a European Union, the

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Fig. 2.28 German Chancellor Helmut Kohl. Photo licensed under the Creative Commons Attribution 4.0 International license. Attribution: # European Communities, 1996, https://en.wikipedia. org/wiki/Helmut_Kohl#/ media/File:Helmut_Kohl_(1 996)_cropped.jpg, (cropped)

Dublin European Council of 25 and 26 June 1990 decided to initiate the procedures for convening an Intergovernmental Conference on Political Union, in parallel with the one decided on EMU (Figs. 2.27 and 2.28). On 6 December 1990, French President François Mitterrand and German Chancellor Helmut Kohl, in a second joint message, proposed extending the Community’s competences in the fields of the environment, health, social policy, energy, research and technology, consumer protection, immigration, asylum, visas, and international crime, the introduction of “European citizenship”, the extension of the competences of the Community institutions by promoting the co-decision procedure of the European Parliament, and the Council (of Ministers), the approval by the European Parliament of the appointment of the President of the Commission and the extension of the application of qualified majority voting in the Council (of Ministers), while also insisting on strengthening the position of the European Council, due to its contribution to the composition of the views and the role it is called upon to play in the common foreign and security policy. The historical events of the time, and in particular the collapse of socialist regimes of Central and Eastern Europe, made it necessary to speed up the process of extending integration by deepening it at the political level and extending it to new areas. Furthermore, Thatcher’s departure from the British prime ministership made it easier to overcome British objections. Thus, the Rome European Council of 14 and 15 December 1990 finally convened the two Intergovernmental Conferences: For EMU, chaired by Luxembourg’s Finance Minister Jean-Claude Juncker (1954–) in the first half of 1991 and by Dutch Finance Minister Wim Kok (1938–2018) in the second half of the same year, and for Political Cooperation, chaired by Luxembourg’s Foreign Minister Jacques Poos (1935–2022) in the first half of 1991 and by Dutch Foreign Minister Hans van den Broek (1936–) in the second half of the same year. In addition, 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 roof in the form of ancient Greek temple pillars supporting the single and unique pediment. The first one concerned 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 both operate

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Fig. 2.29 The three pillars of the EU under the Maastricht Treaty of 7 February 1992. Source: Authors’ work

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 Ministers) of EU would be the only institution with powers in all areas of activity. However, this structure was criticised by the Commission, which proposed a single Community structure, but with different decision-making procedures, depending on the area of interest. On the other hand, according to the Commission, the three-pillar structure could suspend the integration 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 proposed pillar structure 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. 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), known as the Maastricht Treaty, signed on 7 February 1992. The form of the EU launched by the Maastricht Treaty followed the model of three functional pillars that included (see Fig. 2.29): (a) The European Communities (EC), which included all known European Community structures and would operate in the known Community methods. (b) The Common Foreign and Security Policy (CFSP), which would be a typical example of pluralist intergovernmental cooperation, through a doctrine of a “common sovereignty”, but without the erosion of the sovereign rights of the member states and would rely very

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much on unanimity. The CFSP called for the upgrading of the Western European Union (WEU), both as a defence component of the EU and as the European arm of the North Atlantic Alliance, while maintaining its effective autonomy. (c) Cooperation in the fields of Justice and Home Affairs (JHA), with competences also in the areas of migration, political asylum and EU border crossing and operating through intergovernmental cooperation. The European Union of the three pillars was the product of a compromise, in order to overcome the objections of Britain in particular, which did not wish to extend the Community method of operation to both the CFSP and the JHA, which would operate through intergovernmental cooperation. The Commission, which had expressed its objections to the final draft of the Treaty, would ultimately have limited powers in the second and third pillars. The European Parliament also expressed objections to the content of the treaty. Furthermore, the compromise on the development of EMU and the self-exclusion clauses for states that did not want to participate in its third stage are indications of a move away from a federal perspective of the integration project. Nevertheless, the creation of the EU itself was a partial realisation of the vision, given that even its designation as a “Union” had been prohibited in the past. However, the collapse of the coalition of Central and Eastern European states raised issues concerning the forthcoming enlargement of the EU, which had not been settled even during the fourth enlargement of 1994. In addition, the institutional changes required also focused on the European Parliament’s request for a revision of the budget approval procedures, institutional issues and the extension of the scope of the co-decision procedure. Furthermore, there were issues that had been raised for more effective functioning of the CFSP, the second pillar of the EU, at the request of France and Germany, the improvement of cooperation in the areas of public utilities, the third pillar of the EU, at the request of Belgium, as well as addressing issues relating to security and civil protection, employment, the environment and energy. The Reflection Group, set up to present a report on how to address the above issues, consisting of representatives of the Foreign Ministers of the Fifteen, a representative of the Commission and two representatives of the European Parliament, chaired by the Spanish Minister of State for Foreign Affairs for European Affairs Carlos Westendorp y Cabeza (1937–), identified three areas where concrete action was needed: bringing the EU closer to its citizens, improving and making the functioning of its institutions more effective and efficient, and improving the quality of the EU’s relations with its citizens. However, the report of the Reflection Group presented to the Madrid European Council on 5 December 1995 contained only general guidelines. Thus, the Intergovernmental Conference convened to open negotiations on the subject formally began its work in Turin on 29 March 1996 with the aim of reaching a comprehensive agreement. The negotiations were conducted primarily within the group of ministerial representatives, in accordance with 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 negotiations, played a secondary role, while the European Parliament, which was periodically informed, expressed its views through its President at

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Fig. 2.30 French President Jacques Chirac. Photo by David Scull - Executive Office of the President of the United States, Public Domain, https:// en.wikiquote.org/wiki/ Jacques_Chirac#/media/File: ChiracUSA.jpg (cropped)

meetings of the Council of EU and the European Council. The agreement was reached after fifteen months of negotiations 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 (1932–2019) in their joint message of 9 December 1996 to the Presidency of the Dublin II European Council (Fig. 2.30). The form of the EU outlined in the Treaty of Amsterdam, signed on 2 October 1997, also followed the model of three functional pillars (see Fig. 2.31) comprising (a) the European Communities (EC), (b) the Common Foreign and Security Policy (CFSP) and (c) cooperation in the fields of Justice and Home Affairs (JHA). 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 role of the Commission has been strengthened by the more active role of the European Parliament in the appointment of its President and Commissioners, and the role of the President of the Commission in appointing its members and reorganising its services has been enhanced. In the Council of EU, the principle of qualified majority voting for the first pillar of the EU was extended to some extent. The Treaty simplified and extended the co-decision procedures which replaced the cooperation procedures. The CFSP was strengthened to some extent, and the post of High Representative for the CFSP was established, but further upgrading of the WEU as a military component of the EU was ruled out, mainly because of the opposition of Britain and Denmark, who did not want the EU to be withdrawn from the NATO framework, and the attitude of some neutral Member States, who did not want the EU to be involved in military operations. Shortly after the entry into force of the Treaty, an attempt was made to establish a substantial European Defence and Security Policy (EDSP) to be the operational arm of the CFSP instead of the WEU. Furthermore, particular importance was attached to the creation within the EU of an area of freedom, security and justice, the provisions of the Schengen Agreement were incorporated, from the obligations of which Britain and Ireland were exempted by means of a special protocol, and a common social policy was drawn up without derogations for the Member States. Finally, the first pillar was given responsibility for visa policy,

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Fig. 2.31 The three pillars of the EU under the Treaty of Amsterdam, 2 October 1997. Source: Authors’ work

asylum, immigration and judicial cooperation in civil matters, with the exception of criminal law, which remained in the third pillar. However, given that the progress made since the Treaty of Amsterdam on the reform of the EU institutions has been rather limited, the Member States agreed to conduct further negotiations before any further enlargement. Thus, preparatory work for an Intergovernmental Conference began in October 1999 with the publication of the report on the institutional changes required by enlargement, which had been drawn up at the request of Commission President Romano Prodi (1939–) by a group of experts chaired by former Belgian Prime Minister Jean-Luc Dehaene (1940–2014). 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, 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 the subject entitled: Adapting the institutions to make a success of enlargement, and the European Parliament submitted similar proposals on 3 February of the same year. The Intergovernmental Conference was launched in Brussels on 14 February 2000, and the European Council of Santa Maria da Feira on 19 and 20 June 2000 added the issue of enhanced cooperation. Eleven months of negotiations on the “Amsterdam leftovers” were concluded with the drafting of the Treaty of Nice, which was finalised at political level at the Nice European Council, the longest in

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Fig. 2.32 The three pillars of the EU under the Treaty of Nice, 26 February 1997. Source: Authors’ work

the history of the institution, from 7 to 11 December 2000, following marathon meetings of its members. Despite the French government’s satisfaction with 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, when the new treaty was presented, and the dissatisfaction of Commission President Romano Prodi was also evident. The reasons for this dissatisfaction were mainly due to the non-inclusion of the Charter of Fundamental Rights of the European Union (2000) as an integral part of the Treaty, and the restrictions placed on the extension of the co-decision procedure between the Council of EU and the European Parliament. Thus, the European Parliament, while approving the Treaty provisions on the Commission and on enhanced cooperation, adopted a resolution accusing the governments of giving priority to their short-term state interests rather than to the general interests of EU’s citizens. The Treaty of Nice was signed on 26 February 2001, while the form of the EU described by the Treaty also followed the model of three functional pillars (see Fig. 2.32): (a) the European Community (EC), (b) the Common Foreign and Security Policy (CFSP) and (c) cooperation in the fields of Justice and Home Affairs (JHA). In the end, the Treaty of Nice left institutional reform unfinished, making the decision-making mechanism more complex and tipping the balance against small and medium-sized countries. However, the termination of the EU’s relations with the WEU—which finally ceased its operation on 30 June 2011—the integration of

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ESDP into the CFSP and the provided ability from the European Council’s to the established Political and Security Committee (PSC), although on a temporary basis, to take critical decisions on EU security, are particularly important elements of an effort towards a more autonomous and effective foreign and defence policy (Liargovas & Papageorgiou, 2017). 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. The Convention on the Future of Europe, which began its work on 28 February 2002, chaired by Valéry Giscard d’Estaing and co-chaired by the former Prime Ministers of Italy Giuliano Amato (1938) and Belgium Jean-Luc Dehaene, came up with a draft constitution, which was presented in its final form on 18 July 2003. The Intergovernmental Conference convened to draw up a Treaty establishing a Constitution for Europe (TCE) began its work on 4 October 2003 in Rome, at the level of Heads of State or Government, assisted by the Ministers for 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. During the course of its work, many major problems arose, and finally, the TCE was adopted by the Brussels European Council on 17 and 18 June 2004, in a tense atmosphere among its members. It was signed on 29 October 2004 by the “Twenty-Five” at the Rome European Council, after the ten new Member States had already joined the EU. The TCE resulted 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 scrutinised and accessible to the citizens of the Member States. In practice, the TCE replaced, by consolidating into a single legal text, all the previous treaties, from the 1957 Treaty of Rome, the 1986 SEA, the 1992 TEU, the 1997 Treaty of Amsterdam and the 2000 Treaty of Nice. Among other things, 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; (c) the creation of the position of the President of the European Union, who would be elected by the Heads of State and Government for a two-and-a-half-year term of office, with the possibility of a further renewal; (d) the recognition of the role of the European Parliament in approving the entire budget by abandoning the distinction between compulsory and non-compulsory expenditure, (e) the upgrading of the role of national parliaments by providing them with timely information on the

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Commission’s proposed legislation and policies of the EU, (f) the election of the President of the Commission by the European Parliament following a proposal by the European Council, (g) the creation of the position of EU Minister of Foreign Affairs, which merges the positions of the High Representative for the CFSP and the Commissioner for Foreign Affairs Relationships, (h) the establishment of the Common Security and Defence Policy (CSDP), the earlier ESDP, as an integral element of the CFSP. The TCE eliminated the three-pillar structure of the EU, since the second pillar of the CFSP and the third pillar of the JHA, which had hitherto been 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. However, after the rejection of the TCE by the French and Dutch referendums, it was agreed to abandon it and to convene a new Intergovernmental Conference to negotiate a new reform treaty containing the amendments to the existing treaties. Thus, an important opportunity was missed to establish a constitution for the EU, which would have served as a tool to legitimise its institutions. 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 was to amend the TEU, as well as the Treaty of EEC, which would be renamed the Treaty on the Functioning of the European Union (TFEU). The new Reform Treaty would be based 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 the President of the European Council, creating the position of the High Representative of the Union for Foreign Policy and Security Policy Matters, strengthening the role of national parliaments and citizens’ initiative, etc. All references would be removed in the concept of the “Constitution”, as well as in symbols, such as the flag, anthem, emblem, etc., which Eurosceptics considered to hide the transformation of the EU into a superstate and the dissolution of the state entities of its Member States. The Treaty of Lisbon was signed on 13 December 2007. The 2007 Reform Treaty, or Treaty of Lisbon, did not achieve the ambitious objectives attempted through the TCE and, unlike the TCE, did not repeal the treaties in force until then in order to replace them with a single text, but amended them. Thus, although it has incorporated most of the provisions of the TCE, 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 Reform Treaty of Lisbon is a step forward in this direction. In general, the new Treaty gives the EU legal personality and the term Union replaces

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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, while the co-decision procedure, renamed the ordinary legislative procedure, is extended to almost the entire field of JHA under the abolished third pillar, and the implementation of the AFSJ, which covers the JHA subjects, is strengthened. 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 citizens. Emphasis was placed on the required spirit of solidarity between EU Member States, which must act together 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. 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, like the previous ESDP, is established as an integral part of the CFSP.

2.2.3

A Brief Assessment of the Integration Process

As Robert Schumann, the main inspirer of the idea of European integration, declared in his famous declaration of 9 May 1950, “Europe will not be created by magic or on the basis of a master plan. It will be built by concrete achievements which will first create a real solidarity”. He foresaw that the implementation of the project of European integration 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. As it turned out in practice, the vision of European integration and the immediate creation of a federation of European states met many obstacles. These were rooted in the complexity of the national interests of the Member States, as well as in their historical past, which had created political, social, economic and cultural differences and attitudes that were not easy to overcome immediately. But the ultimate goal never seems to have been abandoned, because throughout this integration process

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Fig. 2.33 Evolution of the EC and the EU from 1951 to the present. Source: Authors’ work

there were people who believed in the possibility of realising the vision and turning the original idea into a reality. What was needed in every difficulty was to find the right balance that would allay concerns, override obstacles and ensure a progressive development of the integration process without deviating from the final objective. The consequences of these balancing solutions have been inevitable changes in the size and intensity of the partnerships required, with direct consequences for the speed of implementation of the integration concept. The above is linked to Jean Monnet’s functional federalism, as a way of approaching federalism in a gradualist way, by creating institutions that synthesise the transnational elements of functionalism with the supranational elements of federalism. In practice, even the intergovernmental cooperation that exists today does not exclude the future federal perspective. It requires the gradual building of trust between Member States, the improvement of cooperation and the development of solidarity between them as first steps before demanding the partial or total transfer of national sovereignty to supranational institutions. In terms of the historical path of integration to date, the Treaty of the European Union is seen as a milestone in the transition from the construction of the single internal market to the construction of common policies and the shift towards society. Despite the sense of democratic deficit that pervades many EU citizens, as well as Eurosceptics for their own reasons (see Chap. 4), the integration process has contributed substantially to improving the life of the European citizens through reconciliation in Europe, economic cooperation, solidarity on a European scale, a practical commitment to human rights, social solidarity, fair distribution of wealth, the right to protect the environment, respect for cultural, linguistic and religious diversity, and the right to the protection of the environment. Figure 2.33 shows the evolution of the EC and the EU from 1951 to the present day.

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References Balassa, B., The Theory of European Integration, Allen & Unwin, London, 1962. Brugmans, H., Fundamentals of European Federalism, British Section of European Union of Federalists, London, 1948. Burgess, M., Federalism and European Union: Political Ideas, Influences and Strategies in the European Community, 1972-1987, Routledge, London, 1989 Charter of Fundamental Rights of the European Union, Official Journal of the European Communities 18.12.2000, No C 364. “Charter of Fundamental Rights of the European Union”, Brussels, 18 December 2000. Christodoulidis, Th., From the European Idea to the European Union – The Historic Dimension of the European Project 1923 – 2004, (in Greek Language), Sideris, Athens, 2010. Chryssochoou, D., Tsinisizelis, M., Stavridis, S., Ifantis, K., Theory and Reform in the European Union, Manchester University Press, Manchester, 1999. Cohn-Bendit, G., Verhofstadt G., Debout l'Europe (Für Europe, For Europe), suivi d'un entretien avec Jean Quatremer Broché, Actes Sud, André Versaille éditeur, 26 septembre 2012. Coudenhove-Kalergi, R.N., Pan-Europa (1923), Paneuropa Verlag; Pan-Europe, Knopf, 1926 Deutsch, K.W., The Analysis of International Relations,: Prentice-Hall, Inc., Englewood Cliffs, NJ, 1968. Eilstrup-Sangiovanni, M. (ed.), Debates on European Integration, Palgrave Macmillan Ltd, Hampshire, 2006. Friedrich, J.C., Trends in Federalism in Theory and Practice, Pall Mall Press, London, 1968 Forsyth, M., «The political Theory of Federalism: The Relevence of Classical Approaches», in Hesse, J., Wright, V., (ɛπιμ.), Federalising Europe? The Costs, Benefits, and Preconditions of Federal Political Systems, Oxford University Press, Oxford, 1996 Haas, E., Beyond the Nation-State: Functionalism and International Organization, Stanford University Press; Revised ed. Edition, December 1, 1964. Haas E., The Uniting of Europe: Political, Social and Economic Forces, 1950–1957, Stanford University Press, Stanford, 1958. Héraud, G., Les Principes du Fédéralisme et la Fédération Européenne, Presses d’ Europe, Paris, 1968. Hoffman, S., “Obstinate or Obsolete? The Fate of the Nation State and the Case of Western Europe”, in Daedalus, 95, 1966. Hoffmann, S., The European Sisyphus: Essays on Europe, 1964-1994, Routledge, New York, 1995. Lavdas, K.A., European Ideological Currents during the second half of the 20th Century and the Post-Soviet Period - Creation and Evolution of the European Communities, Volume II: Creation and Evolution of the European Communities, (in Greek Language), Greek Open University, Patras, 2002. Liargovas, P., Papageorgiou, C., The European Phenomenon – The Integration and the Efforts for the Implementation of the Idea, (in Greek Language), Tziolas, Thessaoloniki, 2017. Lindberg, L., The Political Dynamics of European Economic Integration, Stanford UP, Stanford, 1963. March, J.G, Olsen, J.P., «The New Institutionalism: Organizational Factors in Political Life», American Political Science Review, 78: 734–749, 1984. Mitrany, D., A Working Peace System: An Argument for the Functional Development of International Organization [and other essays], Oxford University Press, Quadrangle Books, Oxford, 1943. Mitrany, D., “The Prospect of Integration: Federation or Functional?” in Nye, J.S., (ed.), International Regionalism: Readings, Little, Brown and Company, Boston, 1968. Monnet, J., Mémoires, Fayard, Paris, 1970. Moravcsik, A., “Preferences and Power in the European Community: A Liberal Intergovernmentalism Approach”, Journal of Common Market Studies, 31, 473-524, 1993

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Moravcsik, A., The Choice for Europe: Social Purpose and State Power from Messina to Maastricht, Cornell University Press, Ithaca, 1998. Official Journal of the European Communities, Treaty on European Union, 29.07.1992, No C 192, “Treaty on European Union”, Maastricht, 7 February 1992. Official Journal of the European Communities, Treaty of Amsterdam, 10.11.1997, No C 340. “Treaty of Amsterdam amending the Treaty on European Union, the Treaties establishing the European Communities and certain related acts”, Amsterdam, 2 October 1997. Official Journal of the European Communities, Treaty of Nice, 10.03.2001, No C 80. “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 Union, Treaty of Lisbon, 17.12.2007, No C 306. “Treaty of Lisbon amending the Treaty on European Union and the Treaty establishing the European Community”, Lisbon, 13 December 2007. Peterson, J., «Decission-making in the European Union: Towards a Framework for Analysis», Journal of European Public Policy 2(1), 1995 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). Rosamond, B., Theories of European Integration, Metechmio, Athens, 2006 Rougemont (de), D., L’attitude fédéraliste (Octobre 1947), in: Rapport du premier congrés annuel de l’Union européenne des Fédéralistes á Montreux. - Genéve, août 1947, p.p. 8-16. Schmitter, Ph., “Further Notes on Operationalizing Some Variables Related to Regional Integration”, International Organization, XXIII, 2 (1969), 327-336.1969. Schuman, R., Declaration of 9 May 1950, European Union, 2020, Available: https://europeanunion.europa.eu/principles-countries-history/history-eu/1945-59/schuman-declaration-may-1 950_en. Sidjanski, D., The Federal Future of Europe: From the European Community to the European Union, University of Michigan Press, 2003. Single European Act, Official Journal of the European Communities 29.06.1987, No L 169. “Single European Act”, Luxembourg, 17 February 1986 and The Hague, 28 February 1986 Solemn Declaration on European Union, Bulletin of the European Communities, No 6, “Solemn Declaration on European Union (Stuttgart, 19 June 1983)”, Office for official publications of the European Communities, Luxembourg, June 1983, pp.. 24-29. Spinelli, A., “The Growth of the European Movement Since the Second World War” in Michael Hodges' European integration: selected readings, 1972. Spinelli, A., Rossi, E., The Ventotene Manifesto, The Altiero Spinelli Institute for Federalist Studies, Ventotene [s.d.]. p. 75-96. Thomson, K.W., Masters of International Thought, Baton Rouge, Louisiana State University Press, London, 1980. 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. Wind, M., “Rediscovering Institutions: A Reflectivist Critique of Rational Instirurionalisme”, in Jørgensen, K.Ε., (ed.), Reflective Approaches to European Governance, Macmillan Press, Houndsmills, 1997. Verhofstadt, G., Verenigde Staten van Europa, Houtekiet, 2005.

3

The Institutions of the European Union and the Legislative Procedures

3.1

The Institutions and Their Functioning

The EU has an institutional framework through which it promotes its values, achieves its objectives, ensures its coherence and effectiveness and serves the interests of its Member States and their citizens. However, each EU institution acts within the limits defined to a satisfactory degree by the Treaties. Furthermore, the EU institutions cooperate with each other in accordance with the provisions of the Treaties. The main institutions of the European Union are the Commission, which represents the interests of the EU, the European Parliament, which represents the citizens, the Council (of Ministers) of EU, which represents the governments of the Member States, the European Council, which represents the Member States, the European Court of Justice, which ensures that EU law is respected, the Court of Auditors, which monitors EU finances and the European Central Bank, which sets and implements monetary policy. The Commission, the Council of EU and the European Parliament form the so-called institutional triangle, which shapes the laws and policies that apply in the EU.

3.1.1

The Commission: Historical Development and Operation

The first Commission to serve the interests of the EC was the High Authority of the then newly established ECSC under the Treaty of Paris, from 18 April 1951. The High Authority, chaired by Jean Monnet, began its work as a supranational institution on 24 July 1952 and met for the first time in August of the same year. Composed of nine members, up to two of whom could come from the same Member State, it functioned as an executive body independent of the governments of the Member States, refraining from any action that would call into question its supranational character. However, the High Authority also had more general responsibilities. It # The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 P. Liargovas, C. Papageorgiou, The European Integration, Vol. 2, Springer Texts in Political Science and International Relations, https://doi.org/10.1007/978-3-031-47176-6_3

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Fig. 3.1 The first seat of the High Authority in Place de Metz, Luxembourg, until the merger of the three Communities in 1967. Photo by VT98Fan - Own work. Headquarters of the Banque et caisse d'épargne de l'Etat at Place de Metz, Luxembourg, licensed: CC BY-SA 4.0 Deed | AttributionShareAlike 4.0 International, https://en.wikipedia.org/wiki/High_Authority_of_the_European_ Coal_and_Steel_Community#/media/File:BCEE_Place_de_Metz_Luxembourg_2013_02.JPG

was responsible for ensuring that the objectives of the Paris Treaty were achieved, being responsible for the establishment and proper functioning of the common market for coal and steel and, in general, supervising the proper functioning of the ECSC. If it found that a Member State was in breach of the provisions of the Treaty, it was required to take certain initiatives to bring that State into compliance, failing which the High Authority, with the agreement of the Special Council of Ministers, could take action against that Member State (Article 88 of the Paris Treaty establishing the ECSC). It could issue three types of legal acts: (i) Decisions, which were fully binding; (ii) Recommendations, which had a binding effect but in accordance with the methods defined by the Member States; (iii) Opinions, which were merely advisory in nature and had no legal force. Initially, there was disagreement over the seat of the High Authority. However, the view of the former Prime Minister of Luxembourg, Joseph Bech, prevailed, who proposed Luxembourg as the provisional seat of the High Authority, which remained its seat until the Merger Treaty of 8 April 1965 (Figs. 3.1 and 3.2). The course of the High Authority immediately after the establishment of the ECSC, and subsequently, under the presidency of the French politician René Mayer (1895–1972), from 4 June 1955, the Belgian politician Paul Finet (1897–1965), from 7 January 1958, the Italian politician Piero Malvestiti (1899–1964), from

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Fig. 3.2 Label reminding the beginning of the work of the High Authority of ECSC, in the building of Place de Metz, Luxembourg, on 10 August 1952. Authors own photo

16 September 1959, and the Italian politician Rinaldo del Bo (1916–1991), from 23 October 1963, was successful, developing mechanisms to rationalise coal and steel production, in the determination of prices, wages and labour movement procedures, as well as in the ECSC’s trade policy with third parties. However, in the 1960s, because of the weakening of Community solidarity, mainly due to the attitude of Charles de Gaulle’s France, it was unable to continue at the same pace as before, in an era of overproduction of oil, cheap coal imports from the USA and cheap steel imports from third countries. On 25 March 1957, the Treaties of Rome created two new Communities alongside the ECSC and subsequently two new Commissions whose functions began on 1 January 1958: the nine-member EEC Commission chaired by the German politician and academic Walter Hallstein (1901–1982) and the five-member EAEC Commission chaired by the engineer Louis Armand. They were simply called Commissions, in contrast to the ECSC High Authority, following the reservations expressed by some Member States, notably France, about the authority of the High Authority, wishing to limit it by giving more power to the Council of Ministers. As a general rule, the Commissions would meet mainly in Brussels or Luxembourg. The responsibilities of the EEC and EAEC Commissions were different from those of the ECSC High Authority, given that the latter played an essential

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role in the decision-making process. In contrast, and in accordance with the Treaties of Rome, decision-making was primarily the responsibility of the Council of Ministers, while the Commissions were primarily responsible for proposing legislation. Thus, the Commissions fulfilled certain basic functions: They acted as the guardians of the Treaties of Rome, they had the right to propose legislation, they were the executive body of the Communities and, finally, they negotiated with third parties, representing the Communities in their external relations. The EEC Commission under Hallstein held its first official meeting in January 1958 at the Château de Val Duchesse on the outskirts of Brussels. Among its achievements were the agreement on cereal prices, successful participation in the Dillon and Kennedy Round Tables of the GATT, efforts to unify the law of the Member States relating to the competences of the Community, and the start of the procedures for the implementation of the common market. Hallstein remained President of the EEC Commission for the next term of office. The EAEC Commission, under Armand and the two subsequent presidents, the French engineer Étienne d’ Anjou Hirsch (1901–1994), from 2 February 1959 and the French politician Pierre Chatenet (1917–1997), from 10 January 1962, had similar results, particularly in the fields of research, health protection, control of installations, peaceful use of nuclear materials and international relations in the field of atomic energy. However, the problems arising mainly from the attitude of Charles de Gaulle’s France and the friction between the French Government and the Commissions, as well as the “reactor war” which was at its height at the time and which affected the operation of the EAEC in particular, prevented the two Commissions from taking more decisive steps. The three institutions coexisted until 1 July 1967, when, under the Merger Treaty of 8 April 1965, they were merged into a single Commission of the European Communities, based in Brussels, under the presidency of the Belgian politician Jean Rey. Due to the merger, the new Commission under Rey’s chairmanship had a temporary increase in the number of its members to 14. This Commission completed the customs union in 1968 and promoted the “Agricultural Programme 1980”, known as the “Mansholt Plan”, to reform the Common Agricultural Policy (CAP). However, the number of members of the subsequent Commission, from 1 July 1970, was again reduced to 9, following the logic of the earlier EEC Commission, i.e. one member for the small Benelux Member States and two members for the other larger three Member States. The subsequent Commissions of the Italian politician Franco Maria Malfatti (1927–1991), from 1 July 19750 and the Dutch politician Sicco Leendert Mansholt, from 22 March 1972, promoted monetary cooperation on the basis of the “Werner Report”. Following the first enlargement since 1 January 1973, the Commission’s membership under the presidency of the French politician François-Xavier Ortoli (1925–2007) has increased to 13, with Britain adding two more members and Denmark and Ireland one each. The next President of the Commission, the British politician Roy Jenkins (1920–2003), from 6 January 1977, promoted the idea of creating a European

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Monetary System (EMS), which was the starting point for a new path towards EMU. He represented the EC for the first time at a G8 summit. The next Commission, chaired by the Luxembourg politician Gaston Thorn (1928–2007), had 14 members, increasing the number of members by one from 6 January 1981, due to Greece’s accession to the EC. The next Commission from 6 January 1985, under the presidency of the French politician Jacques Delors, saw a further increase in its membership due to the accession of Spain and Portugal from 1 January 1986, bringing the number of members to 17, with 2 new members from Spain and 1 new member from Portugal. Delors was President of the Commission for three consecutive terms. The Commissions under Delors promoted the completion of the single internal market with the publication of a White Paper and the participation of the Member States of the European Free Trade Association (EFTA) through the establishment of the European Economic Area (EEA). It also promoted the financing of economic cohesion for the periods 1989–1993 and 1994–1999, by increasing the structural resources of the ERDF and other social funds, through the well-known “Delors packages” I and II. It also promoted the reform of the CAP, known as the “MacSharry reform”, and the stabilisation of agricultural production. It also contributed to the signing of the Single European Act and the Treaty on European Union and promoted the implementation of EMU in three stages, with the introduction of the single currency as the ultimate goal, the first stage of which began in 1990 and the second in 1994. Meanwhile, at the Edinburgh European Council of 11 and 12 December 1992, it was decided that the Commission’s permanent seat would be in Brussels. The assumption of the Commission’s presidency on 23 January 1995 by Luxembourg politician Jacques Santer (1937–) coincided with the increase in its membership to 20, with one member from each of the newly acceded Member States, namely Austria, Sweden and Finland. It was during this Commission’s term of office that the Treaty of Amsterdam was signed and the third stage of EMU began with the establishment of the euro as the single currency of the Eurozone. To address the forthcoming enlargement and the problems that would arise, the Commission presented its Agenda 2000. On the basis of this Agenda, the new regional policy for the period 2000–2006 was defined and the new CAP reform was carried out. However, the 20 members Commission resigned on 15 March 1999, at the request of the European Parliament, following allegations of scandals and corruption. On 16 September 1999, the Commission was chaired by former Italian Prime Minister Romano Prodi. It was during this Commission’s term of office that the Treaty of Nice was signed, with many parts of which Prodi himself did not agree, pointing out the weaknesses of intergovernmental cooperation as a method of running the EU. Furthermore, the euro was officially launched in 2002 as the single currency of the Eurozone. The Lisbon Strategy was also adopted, aimed at developing information for all, liberalising telecommunications markets and developing e-commerce, although the progress in its implementation has remained limited. Prodi participated in the Intergovernmental Conference for the drafting of a Constitutional Treaty for Europe and supported its signature, but it was not ratified and was

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abandoned. The Commission under Prodi also presented proposals for a new reform of the CAP, as well as proposals for EU structural policy until 2013. The membership of the Commission under Prodi increased from 1 May 2004 to 30 members, with 10 new members coming from the ten new Member States that joined the EU, namely Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovakia, Slovenia and Czechia. The Prodi Commission, whose term of office expired on 31 December 2004, resigned on 31 October that year, thus allowing a new Commission to be set up in line with the institutional reforms of the Treaty of Nice. Thus, the new Commission of 25 members—one from each Member State—chaired by José Manuel Durão Barroso (1956–), former Prime Minister of Portugal, took office on 1 November 2004. Barroso remained President of the Commission for two terms of office. During his first term of office, from 1 January 2007, the membership of the Commission was increased by 2 with 1 new member from each of the two new Member States, Bulgaria and Romania. However, according to the Lisbon Treaty, signed during the first term of the Commission under the Barroso presidency, the Commission would have a number of members equal to two-thirds of the number of Member States from 2014, and their selection would be made 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. However, the European Council on 22 May 2013 adopted a decision to maintain the current situation of one Commissioner from each Member State for the new Commission that would take office on 1 November 2014. Thus, during Barroso’s second term, the Commission’s membership became 28, due to the accession of Croatia, as of 1 July 2013. During Barroso’s first term of office, proposals for EU regional policy for the period 2007–2013 were made, as well as proposals for a “health check” of the CAP. During the second term of the Barroso Commission, the “Europe 2020” Strategy for smart, sustainable and inclusive growth was proposed, and a new review of the CAP was implemented with Commission proposals. Barroso also supported the creation of a Banking Union as the EU’s unified financial framework (Figs. 3.3 and 3.4). Barroso was succeeded as Commission President by Jean-Claude Juncker on 1 November 2014. The Commission published its “White Paper” on the Future of Europe on 1 March 2017, presenting five scenarios of how the EU could evolve, depending on the choices made. In April 2017 the Commission presented the European Pillar of Social Rights, which was formally presented on 17 November of the same year at the Gothenburg European Council. Following the “White Paper”, on 24 October 2017, it adopted the Work Programme 2018: An agenda for a more united, stronger and more democratic Europe on 24 October 2017, setting out its plans for completing work on the implementation of President Juncker’s ten policy priorities. It also presented on 11 December 2019 a European Green Deal for the EU and its citizens. During this period 2014–2019, the Commission took action to help Member States’ economic recovery after the global financial crisis, deepen the single internal market, reduce unemployment, tackle climate change and improve immigration policy, and negotiated with the UK to conclude an agreement on the latter’s withdrawal from the EU.

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Fig. 3.3 The Commission’s renovated and new winged privately owned Berlaymont building in the “European Quarter” in Brussels, where the Commission has been located after its renovation and extension since 1 July 2004. Photo by European Commission—Audiovisual Service

Fig. 3.4 The current Commission logo

Jean-Claude Juncker was succeeded as President of the Commission by Ursula von der Leyen (1958–) as of 1 December 2019. The number of Commissioners, as of 1 February 2020, was officially reduced by one due to the official withdrawal of Britain from the EU. One of the first problems the new Commission faced was that of the COVID-19 pandemic (Fig. 3.5).

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Fig. 3.5 Front of the Commission’s Berlaymont building in Brussels

The Commission currently consists of 27 Commissioners, one from each Member State, who make up the “College of Commissioners”. Their term of office is five years and they work under the President of the Commission, who is one of the twenty seven. The College currently has the following composition: A President, a First Vice-President, a Vice-President and High Representative of the CFSP, four Vice-Presidents and twenty Commissioners. Commissioners, although appointed by the Member States, are obliged to work in the EU’s interest. They take joint decisions on the Commission’s strategy and political priorities and propose laws, financial programmes and the annual budget for discussion and approval by the European Parliament and the Council of EU. They also participate in thematic groups, which focus on specific policy areas and are led by the Vice-Presidents. The Commission is also made up of thematic directorates, known as “Directorates-General” (DGs), which are responsible for different policy areas. The Directorates-General prepare, implement and manage EU policies, laws and financial programmes. In addition, the existing service departments deal with administrative matters, while the existing executive agencies manage programmes drawn up and implemented by the Commission. The Commission has delegations in all EU Member States, as well as many delegations in third countries and international organisations. Within the EU, delegations act on behalf of the Commission in the host country. Delegations outside

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the EU operate under the responsibility of the European External Action Service (EEAS), helping to promote EU interests and policies and implementing approved EU programmes. The Commission also employs experts, usually on fixed-term contracts, and civil servants from Member States, who are seconded for a limited period of time to Commission departments, either at Commission headquarters or in the Commission’s local delegations. Table 3.1 refers to the history of the movements of the Commission’s headquarters. Table 3.2 below shows the Commission-related provisions of the EC and EU Treaties historically. Tables 3.3, 3.4, 3.5 and 3.6 show the Presidents and the evolution of the number of members of the ECSC High Authority, the EEC and EAEC Commission and the single EC and EU Commission. Table 3.1 Commission’ seats Commission EAEC (High Authority) 1952–1967 EEC 1958–1967 EAEC 1958–1967 EC 1967–1991 EC 1991–1993 EU 1993–2004 EU 2004–today

Seat The first seat of the High Authority of ECSC was in Place de Metz, Luxembourg, until the merger of the three Communities in 1967 The EEC Commission seat was in the Avenue de la Joyeuse Entrée/Blijde Inkomstlaan in Brussels, from 1958 until the merger of the three Communities in 1967. At the same time the EAEC Commission was housed in a building allocated to the European institutions at 51–53 Rue Belliard/ Belliardstraat, Brussels The Commission’s seat was in the Berlaymont building in Brussels, from 1967 to 1991, when the removal of asbestos from its building materials, renovation and extension began The Commission’s seat was in the Breydel building in Brussels, at the Schuman roundabout, from 1991 to 2004, during the renovation and extension of the Berlaymont building The Commission’s renovated and new winged privately owned Berlaymont building in the “European Quarter” in Brussels is the place where the Commission has been located after its renovation and extension since 1 July 2004

Table 3.2 Provisions of the Treaties relating to the Commission Treaty Treaty of Paris for the ECSC

Provisions relating to the Commission The High Authority, consisting of nine members, of which up to two could come from the same Member State, functioned as an executive body with increased powers, independent of the governments of the Member States. It was responsible for ensuring the achievement of the objectives of the Treaty of Paris and the proper functioning of the ECSC. When it found a breach of the provisions of the Treaty by a Member State, it had to take certain initiatives to bring that State into compliance. Otherwise the High Authority, with the agreement of the Special Council of Ministers, could take action against that Member State. (continued)

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Table 3.2 (continued) Treaty Treaty of Rome on the EEC

Treaty of Rome on the EAEC

Merger Treaty of the Community institutions

Single European Act

Treaty on the European Union

Treaty of Amsterdam

Provisions relating to the Commission The Commission, consisting of nine members, up to two of whom could come from the same Member State as independent persons appointed jointly by the governments of the Member States, had four main functions: It acted as the guardian of the Treaty of Rome; it had the right to propose legislation; it was the executive body of the EEC; and finally, it negotiated with third parties, representing the EEC in its external relations. The Commission, consisting of five members, as independent persons appointed jointly by the governments of the Member States, had four main functions: It acted as the guardian of the Treaty of Rome; it had the right to propose legislation; it was the executive body of the EAEC; and finally, it negotiated with third parties, representing the EAEC in its external relations. The new Commission was made up of fourteen members, for a transitional period of three years, during which each Member State had at least one Commissioner, but this number could not exceed three for any one Member State. From 1970 the Commission became a nine-member Commission, with France, Germany and Italy each having two members and the Netherlands, Belgium and Luxembourg each having one member. The responsibilities of the single Commission were similar to those of the EEC and the EAEC. The Commission’s responsibilities remain broadly unchanged. However, the Council of EC could meet not only on the initiative of its President, but also at the request of the Commission, if a majority of its members agree, within a two-week period. The Commission’s responsibilities remain broadly unchanged. 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 (first pillar) affairs. However, its term of office would be increased from four to five years to bring it into line with that of the European Parliament. In addition, the European Parliament would be actively involved in the process of appointing the members of the Commission by the governments of the Member States. Candidate members would appear before the European Parliament and submit their programme for approval. The Commission’s responsibilities remain broadly unchanged. However, the European Parliament would now have to approve, rather than simply advise, on the appointment of the President of the Commission by the governments of the Member States, which in turn would have to consult the European Parliament before appointing new Commissioners. The latter would ultimately be appointed following agreement between the President of the Commission and the governments of the Member States. The role of the Commission was thus strengthened by the more active role of the European Parliament (continued)

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Table 3.2 (continued) Treaty

Treaty of Nice

Treaty of Lisbon

Provisions relating to the Commission in the appointment of its President and Commissioners, while the role of the President of the Commission was also strengthened in terms of appointing its members and reorganising its services. However, the question of the total number of Commissioners was not resolved, particularly in view of a further increase in the number of Member States following the planned major enlargement. In view of the enlargement expected at that time, 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. 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’s 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. 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. But with facts: (a) the initial rejection of the ratification of the Treaty in the first Irish referendum of 17 June 2008; (b) the Irish request to retain one Commissioner from each Member State 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 on changing the number of Commissioners under Article 17 TEU, the Brussels European Council of 11 and 12 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. (continued)

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Table 3.2 (continued) Treaty

Provisions relating to the Commission Furthermore, the way in which the members of the Commission are selected and the powers of the President of the Commission have been maintained. The post of High Representative of the EU for CFSP, who will also be Vice-President of the Commission, has also been introduced, appointed by qualified majority by the European Council, with the agreement of the President of the Commission.

Table 3.3 High authority of the ECSC (from 07.08.1952 to 06.07.1967) Period of time 07.08.1952–03.06.1955

President Jean Monnet

04.06.1955–06.01.1958

René Mayer

07.01.1958–15.09.1959

Paul Finet

16.09.1959–22.10.1963

Piero Malvestiti

23.10.1963–28.02.1967

Rinaldo del Bo

01.03.1967–05.07.1967

Albert Coppé (transitional)

Number of members Belgium 1, France 2, Germany 2, Italy 2, Luxembourg 1, Netherlands 1 Total 9 Belgium 1, France 2, Germany 2, Italy 2, Luxembourg 1, Netherlands 1 Total 9 Belgium 1, France 2, Germany 2, Italy 2, Luxembourg 1, Netherlands 1 Total 9 Belgium 1, France 2, Germany 2, Italy 2, Luxembourg 1, Netherlands 1 Total 9 Belgium 1, France 2, Germany 2, Italy 2, Luxembourg 1, Netherlands 1 Total 9 Belgium 1, France 2, Germany 2, Italy 2, Luxembourg 1, Netherlands 1 Total 9

Table 3.4 EEC Commission (from 01.01.1958 to 06.07.1967) Period of time 10.01.1958–09.01.1962

President Walter Hallstein

10.01.1962–06.07.1967

Walter Hallstein

3.1.2

Number of members Belgium 1, France 2, Germany 2, Italy 2, Luxembourg 1, Netherlands 1 Total 9 Belgium 1, France 2, Germany 2, Italy 2, Luxembourg 1, Netherlands 1 Total 9

The European Parliament: Historical Development and Functioning

The European Parliament represents the citizens of the EU and EC as its predecessor, whose members have been elected since 1979 by direct universal suffrage by the citizens of the Member States. The forerunner of the European Parliament was,

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Table 3.5 Commission of the EAEC (from 01.01.1958 to 06.07.1967) Period of time 10.01.1958–14.01.1959

President Louis Armand

02.02.1959–09.01.1962

Étienne Hirsch

10.01.1962–06.07.1967

Pierre Chatenet

Number of members Belgium 1, France 1, Germany 1, Italy 1, Netherlands 1 Total 5 Belgium 1, France 1, Germany 1, Italy 1, Netherlands 1 Total 5 Belgium 1, France 1, Germany 1, Italy 1, Netherlands 1 Total 5

Table 3.6 EC and EU Commission (since 06.07.1967) Period of time 06.07.1967–30.06.1970

President Jean Max Georges Rey

01.07.1970–21.03.1972

Franco Maria Malfatti

22.03.1972–05.01.1973

Sicco Leendert Mansholt

06.01.1973–05.01.1977

François-Xavier Ortoli

06.01.1977–05.01.1981

Roy Harris Jenkins

06.01.1981–05.01.1985

Gaston Thorn

06.01.1985–05.01.1989

Jacques Lucien Jean Delors

06.01.1989–05.01.1993

Jacques Lucien Jean Delors

06.01.1993–22.01.1995

Jacques Lucien Jean Delors

Number of members Belgium 2, France 3, Germany 3, Italy 3, Luxembourg 1, Netherlands 2 Total 14 Belgium 1, France 2, Germany 2, Italy 2, Luxembourg 1, Netherlands 1 Total 9 Belgium 1, France 2, Germany 2, Italy 2, Luxembourg 1, Netherlands 1 Total 9 Belgium 1, Britain 2, France 2, Germany 2, Denmark 1, Ireland 1, Italy 2, Luxembourg 1, Netherlands 1 Total 13 Belgium 1, Britain 2, France 2, Germany 2, Denmark 1, Ireland 1, Italy 2, Luxembourg 1, Netherlands 1 Total 13 Belgium 1, Britain 2, France 2, Germany 2, Denmark 1, Greece 1, Ireland 1, Italy 2, Luxembourg 1, Netherlands 1 Total 14 Belgium 1, Britain 2, France 2, Germany 2, Denmark 1, Greece 1, Ireland 1, Italy 2, Luxembourg 1, Netherlands 1 From 01.01.1986: Spain 2, Portugal 1 Total 14/17 Belgium 1, Britain 2, France 2, Germany 2, Denmark 1, Greece 1, Ireland 1, Spain 2, Italy 2, Luxembourg 1, Netherlands 1, Portugal 1 Total 17 Belgium 1, Britain 2, France 2, Germany 2, Denmark 1, Greece 1, Ireland 1, Spain 2, Italy 2, Luxembourg 1, Netherlands 1, Portugal 1 Total 17 (continued)

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Table 3.6 (continued) Period of time 23.01.1995–15.03.1999

President Jacques Santer

25.03.1999–15.09.1999

Manuel Martin González (Transitional)

16.09.1999–31.10.2004

Romano Prodi

01.11.2004–31.10.2009

Jose Manuel Durão Barroso

01.11.2009–31.10.2014

Jose Manuel Durão Barroso

01.11.2014–30.11.2019

Jean-Claude Juncker

01.12.2019–

Ursula von der Leyen

Number of members Belgium 1, Britain 2, France 2, Germany 2, Denmark 1, Greece 1, Ireland 1, Spain 2, Italy 2, Luxembourg 1, Netherlands 1, Portugal 1 Since 23.01.1995: Austria 1, Sweden 1, Finland 1 Total 17/20 Austria 1, Belgium 1, Britain 2, France 2, Germany 2, Denmark 1, Greece 1, Ireland 1, Spain 2, Italy 2, Luxembourg 1, Netherlands 1, Portugal 1, Sweden 1, Finland 1 Total 20 Austria 1, Belgium 1, Britain 2, France 2, Germany 2, Denmark 1, Greece 1, Ireland 1, Spain 2, Italy 2, Luxembourg 1, Netherlands 1, Portugal 1, Sweden 1, Finland 1 From 01.05.2004: Estonia 1, Cyprus 1, Latvia 1, Lithuania 1, Malta 1, Hungary 1, Poland 1, Slovakia 1, Slovenia 1, Czechia 1 Total 20/30 Austria 1, Belgium 1, Britain 1, France 1, Germany 1, Denmark 1, Greece 1, Estonia 1, Ireland 1, Spain 1, Italy 1, Cyprus 1, Latvia 1, Lithuania 1, Luxembourg 1, Malta 1, Netherlands 1, Hungary 1, Poland 1, Portugal 1, Slovakia 1, Slovenia 1, Sweden 1, Czechia 1, Finland 1 From 01.01.2007: Bulgaria 1, Romania 1 Total 25/27 Austria 1, Belgium 1, Bulgaria 1, Britain 1, France 1, Germany 1, Denmark 1, Greece 1, Estonia 1, Ireland 1, Spain 1, Italy 1, Cyprus 1, Latvia 1, Lithuania 1, Luxembourg 1, Malta 1, Netherlands 1, Hungary 1, Poland 1, Portugal 1, Romania 1, Slovakia 1, Slovenia 1, Sweden 1, Czechia 1, Finland 1 From 01.01.2007: Croatia 1 Total 27/28 Austria 1, Belgium 1, Bulgaria 1, Croatia 1, Britain 1, France 1, Germany 1, Denmark 1, Greece 1, Estonia 1, Ireland 1, Spain 1, Italy 1, Cyprus 1, Latvia 1, Lithuania 1, Luxembourg 1, Malta 1, Netherlands 1, Hungary 1, Poland 1, Portugal 1, Romania 1, Slovakia 1, Slovenia 1, Sweden 1, Czechia 1, Finland 1 Total 28 Austria 1, Belgium 1, Bulgaria 1, Croatia 1, France 1, Germany 1, Denmark 1, Greece 1, Estonia 1, Ireland 1, Spain 1, Italy 1, Cyprus 1, Latvia 1, Lithuania 1, Luxembourg 1, Malta 1, Netherlands 1, Hungary 1, Poland 1, Portugal 1, Romania 1, Slovakia 1, Slovenia 1, Sweden 1, Czechia 1, Finland 1 Total 27

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according to the Treaty of Paris of 18 April 1951, the Common Assembly of the ECSC, from 24 July 1952, with 78 members from the parliaments of the six Member States and the Belgian politician Paul-Henri Spaak as President. In the Common Assembly, France, Germany and Italy each had 18 representatives, Belgium and the Netherlands each had 10 representatives, and Luxembourg had 4 representatives. The seat of the Common Assembly, which met for the first time on 10 September 1952, was the Maison de l’ Europe, i.e. the seat of the Council of Europe in Strasbourg. The method of selecting the members of the Common Assembly did not give them any form of legitimacy, and the Treaty of Paris itself of 18 April 1951 did not provide for any substantive legislative powers. Thus the role of the Common Assembly was to monitor the functioning of the ECSC and to express opinions. However, by a two-thirds majority of its members, it could disagree with the High Authority’s annual report and vote in favour of a motion of censure demanding its resignation (Fig. 3.6). Spaak was succeeded on 1 January 1954 by the Italian politician Alcide de Gasperi, who died on 19 August of the same year, and was succeeded by the Italian politician Giuseppe Pella (1902–1981), for the two years 1954–1956, during a period in which there was a failure to establish a European Defence Community. However, Pella made efforts for a progressive transfer of sovereignty from the

Fig. 3.6 The seat of the ECSC Common Assembly from 1952, of the ECSC, EEC and EAEC Assembly from 1958, and of the European Parliament from 1962 until the merger of the three Communities in 1967, as well as the main seat of the European Parliament from 1967 to 1977, was the Maison de l’ Europe, i.e. the seat of the Council of Europe in Strasbourg. Photo by Council of Europe https://en.wikipedia.org/wiki/Palace_of_Europe#/media/File:Council_of_Europe_Palais_ de_l'Europe.JPG

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Member States to the European institutions. Pella was succeeded by the German politician Hans Furler (1904–1975) for the two-year period 1956–1958. He was the last President of the Common Assembly, since, under the Treaty of Rome of 25 March 1957, establishing and operating the EEC and the EAEC, as of 1 January 1958, the Common Assembly was renamed the Assembly (or European Parliamentary Assembly) and was common to all three European Communities. The Assembly, as a legislative body, now had 142 members. France, Germany and Italy each had 36 representatives, Belgium and the Netherlands 14 and Luxembourg 6. It had almost the same powers as the Common Assembly, except that a motion of censure could be proposed not only on the annual report of the High Authority and the other two Commissions, but at any time and in relation to any of their acts. This gave the Assembly some political power, but it was limited by the high majority required for its implementation. In addition, the Assembly, with the Treaties of Rome, could have a continuous flow of information from the other institutions and provide opinions of an advisory nature before taking decisions. The first President of the Assembly for the period 1958–1960 was the French politician Robert Schuman, the pioneer of European integration and author of the Schuman Declaration. Schuman was succeeded by the former President of the ECSC Common Assembly, Hans Furler, for the period 1960–1962. The drive for institutional change began in the early 1960s. On 17 May 1960, the Assembly adopted a resolution by a very large majority for the direct election of its members by universal suffrage, and on 24 November 1960 it adopted a report by the French politician Maurice Faure on the merger of the executive bodies of the European Communities. On 30 March 1962, the Assembly adopted a resolution to change its name to European Parliament. On the same day, the Italian politician Gaetano Martino was elected President of the European Parliament for the period 1962–1964. On 27 June 1963, the European Parliament adopted a resolution to upgrade its powers and competences. 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. Martino was succeeded by the Belgian politician Jean Duvieusart (1900–1977), for the period 1964–1965, followed by his compatriot politician Victor Leemans (1901–1971), for the period 1965–1966 and the French politician Alain Poher (1909–1996), for the period 1966–1969, under whose presidency the Treaty of Merger of the Institutions of the Communities was implemented from 1 July 1967. This treaty designated Strasbourg, Luxembourg and Brussels as the seats of the European Parliament, so that some sittings were held in both cities in addition to Strasbourg. The Italian politician Mario Scelba (1901–1991) was the next president of the European Parliament, from 1969 to 1971. During his presidency, the Council of EC confirmed the validity of the resolution adopted by the then Assembly in May 1960 on the direct election of its members by the citizens of the European Communities.

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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 the division of powers 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. Under the presidency of his successor, the German politician Walter Behrendt (1914–1997), for the period 1971–1973, the number of the member of the European Parliament increased to 198 due to the first enlargement of 1 January 1973, with 36 new MEPs from Britain and 10 from Denmark and Ireland. Furthermore, on 25 March 1972, the Commission’s detailed “Vedel Report” was published, drawn up by an ad hoc committee of independent experts chaired by Georges Vedel, a university academic. The report 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 proposed that the European Parliament should ratify the appointment of the President of the Commission by the Council of EC before the appointment of the Commissioners and that members of European Parliament should be elected by direct election, without specifying the electoral procedure. Finally, it proposed the implementation of a system of consultation between national parliaments and the European Parliament. Under the presidency of the Dutch politician Cornelis Berkhouwer (1919–1992), for the period 1973–1975, and based on the initiatives of the French President Giscard d’Estaing, in December 1974, the question of electing the members of the European Parliament by direct general election was again raised, with a view to holding the election in 1978 or later. The debate on the election of members of the European Parliament by direct general election continued under the presidency of the French politician Georges Spénale (1913–1983) for the period 1975–1977. Under his presidency, the Treaty of Brussels (Second Budget Treaty) was signed on 22 July 1975, which strengthened the powers of the European Parliament with the right to reject the Community budget and to grant discharge to the Commission in respect of its implementation. Furthermore, at the Brussels European Council of 12 and 13 July 1976, a series of decisions were taken on the election of members of the European Parliament by direct general election, and later, on 20 September of the same year, the Act concerning the election of the members of European Parliament was signed by the Council of EC and ratified by all the EC Member States. The number of members of the European Parliament was increased from 198 to 410. The last president of the appointed European Parliament was the Italian politician Emilio Colombo, for the period 1977–1979. In the meantime, the seat of the European Parliament moved to the Palais de l’ Europe, i.e. the newly built seat of the Council of Europe in Strasbourg, from 1977. 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,

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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 provided for in the Act concerning the elections of the members of European Parliament, 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 members of European Parliament 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 members of European Parliament, such as the British Conservatives and the French Gaullists, remained unattached. The first President of the elected European Parliament was the French Simone Veil, elected on 17 July 1979, for the period July 1979–January 1982, which was half of the five-year parliamentary term. During this period, the number of members of the European Parliament increased by 24, reaching 434, due to the accession of Greece to the EC on 1 January 1981. During the second half of the five-year parliamentary term, i.e. from January 1982 to July 1984, the Dutch politician Piet Dankert (1934–2003) was elected President of the European Parliament. During his presidency, the European Parliament, on 14 February 1984, adopted the draft Treaty establishing the European Union, drawn up by the committee under Altiero Spinelli, which provided for the Commission to exercise legislative initiative exclusively and for the Council of EC and the European Parliament to exercise legislative power, the former taking its decisions by simple or qualified majority. The French politician Pierre Pflimlin (1907–2000) was the first president of the second five-year parliamentary term, i.e. for the period July 1984–January 1987, during which the members of the European Parliament increased from 434 to 518, due to the third enlargement from 1 January 1986, with the arrival of 60 new members from Spain and 24 new members from Portugal, appointed by their national parliaments. This period also saw the signing of the Single European Act, which strengthened the powers of the European Parliament, given that a consent procedure was required for the conclusion of an enlargement or association agreement with new states, and introduced the cooperation procedure, which enabled it, by means of a majority decision, to refuse to accept a decision of the Council of EC, thus allowing double reading of proposed legislation, while being able to make limited amendments to Commission 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 event of disagreement, the Council of EC had the final say. Furthermore, the name “European Parliament”, adopted by the Convention in 1962, was officially used for the first time by means of a reference to the SEA. The second president of the second five-year parliamentary term, i.e. for the period January 1987–July 1989, was the British politician Henry Plumb (1925–2022), under whose presidency the dissolution of the Eastern European coalition under the USSR began. The Spanish politician Enrique Barón Crespo (1944–) was the first president of the third five-year parliamentary term, i.e. for the period July 1989 to January 1992,

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which saw the reunification of Germany and the sending of 18 German observers to the European Parliament to represent, as observers only, the former East Germany. The second president of the third five-year parliamentary term, from January 1992 to July 1994, was the German politician Egon Klepsch (1930–2010), under whose presidency the Treaty on European Union was signed. Institutionally, according to the TEU, the role of the European Parliament was further enhanced for the first pillar, with the extension of the existing consensus procedure to new important areas and the introduction of a uniform procedure by all Member States for the election of the members of the European Parliament. The upgrade also included the extension of the cooperation procedure to new areas and the creation of the new co-decision procedure, which allowed the European Parliament to adopt acts jointly with the Council of EU. This procedure implied the need to strengthen a consultation procedure 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 of people, health, research, 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. In the meantime, the Edinburgh European Council of 11 and 12 December 1992 established Strasbourg as the European Parliament’s principal seat, with some meetings being held in Brussels. The German politician Klaus Hänsch (1938–) was the first president of the fourth five-year parliamentary term, i.e. for the period July 1994 to January 1997, during which the number of MEPs in the European Parliament became 567 in total, to compensate for the increase in the number of German members of European Parliament due to the reunification of Germany. In particular, Germany is represented by 99 members, Britain, France and Italy by 87, Spain by 64, the Netherlands by 31, Belgium, Greece and Portugal by 25, Denmark by 16, Ireland by 15 and Luxembourg by 6. However, during this period, the number of members of the European Parliament increased to 626 due to the fourth enlargement since 1 January 1995, with 21 members from Austria, 22 from Sweden and 16 from Finland. Under Hänsch’s presidency, the European Ombudsman’s office became operational for the first time. The European Ombudsman is appointed by the European Parliament for a renewable five-year term of office and investigates complaints of maladministration by the EU institutions or other EU services. These complaints can be made by citizens, permanent residents of EU countries, associations and companies based in the EU. The second president of the fourth five-year parliamentary term, from January 1997 to July 1999, was the Spanish politician José María Gil-Robles (1935–2023).

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During his presidency the Treaty of Amsterdam was signed, which 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 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 members of the European Parliament would reach 700, with no numerical changes to the current figure. However, this number changed with the subsequent Treaty of Nice. Furthermore, at the request of the European Parliament, the Cologne European Council in June 1999 decided to launch the project of codifying the rights of European citizens in a charter, which was to be incorporated into the European Treaties so that every European citizen could refer to it. The French politician Nicole Fontaine (1942–) assumed the first presidency of the fifth five-year parliamentary term, i.e. for the period July 1999–January 2002. During her presidency, the Treaty of Nice was signed, which strengthened the role of the European Parliament 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, judicial cooperation in civil matters, etc. Furthermore, the number of members of the European Parliament to be elected by the current and future Member States was modified. 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, with the admission of the twelve new Member States, this number would reach 732. However, no provision was made for the possibility of a larger increase in the number of Member States than 27. The European Parliament also adopted in November 2000 the draft Charter of Fundamental Rights of the European Union, which was drawn up at its request. The second president of the fifth five-year parliamentary term, from January 2002 to July 2004, was the Irish politician Patrick Cox (1952–). Cox participated in the Intergovernmental Conference for the drafting of a Constitutional Treaty for Europe, which was not ratified and was abandoned. With the fifth enlargement from 1 May 2004, the number of members of the European Parliament was temporarily increased to 788 with 162 new Members added to the existing 626 members, coming from Estonia 6, Cyprus 6, Latvia 9, Lithuania 13, Malta 5, Hungary 24, Poland 54, Slovakia 14, Slovenia 7 and Czechia 24. The first president of the sixth five-year parliamentary term, i.e. for the period July 2004 to January 2007, was the Spanish politician Josep Borrell (1947–). During this period the European Parliament had 732 members, as provided for in the Treaty of Nice, with the following composition: Austria 18, Belgium 25, Britain 78, France 78, Germany 99, Denmark 14, Greece 24, Estonia 6, Ireland 13, Spain 54, Italy 78, Cyprus 6, Latvia 9, Lithuania 13, Luxembourg 6, Malta 5, Netherlands 27, Hungary 24, Poland 54, Portugal 24, Slovakia 14, Slovenia 7, Sweden

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18, Czechia 24, Finland 14. To these were added 18 new members with the sixth enlargement, since 1 January 2007, from Bulgaria and 35 from Romania, bringing the total number of members of the European Parliament to 785. This number of members of the European Parliament remained under the presidency of the German politician Hans-Gert Pöttering (1945–), the second president of the sixth five-year parliamentary term, i.e. for the period January 2007–July 2009. This period also saw the signing of the Treaty of Lisbon, which provided for significant 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, immigration, etc. 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 members of the European Parliament will be increased to 751 compared to the previous number provided by the Treaty of Nice, at the start of the parliamentary term, from June 2014, with the largest number of members from a Member State being 96 members and the smallest being 6 members, distributed in a “digressively proportional order” according to the population of the Member States. The first president of the seventh five-year parliamentary term, i.e. for the period from July 2009 to January 2012, was the Polish politician Jerzy Buzek (1940–). The composition of the European Parliament during this period followed the rules laid down in the Treaty of Nice, as amended by the 2005 Treaty of Accession of Bulgaria and Romania, with 736 members, as follows: Austria 17 seats, Belgium 22, Bulgaria 17, Britain 72, France 72, Germany 99, Denmark 13, Greece 22, Estonia 6, Ireland 12, Spain 50, Italy 72, Cyprus 6, Latvia 8, Lithuania 12, Luxembourg 6, Malta 5, Netherlands 25, Hungary 22, Poland 50, Portugal 22, Romania 33, Slovakia 13, Slovenia 7, Sweden 18, Czechia 22, Finland 13. However, 18 members 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 an Intergovernmental Conference, temporarily increasing the number of members of the European Parliament to 754. This increased the number of members of Austria by 2, Bulgaria by 1, Britain by 1, France by 2, Spain by 4, Italy by 1, Latvia by 1, Malta by 1, Netherlands by 1, Poland by 1, Slovenia by 1 and Sweden by 2. This number of members remained under the presidency of the German politician Martin Schulz (1955–), the second president of the seventh five-year parliamentary term, i.e. for the period January 2007–July 2014. However, with the accession of Croatia during the seventh enlargement from 1 July 2013, the number of members of the European Parliament reached 766, with 12 new members from Croatia. Schulz was also the first president of the eighth five-year parliamentary term, from July 2014 to January 2017. With the start of the seventh parliamentary term from July 2014, in accordance with the Treaty of Lisbon, as amended by the Treaty of Accession of Croatia, the number of Members of the European Parliament is 751, with the following distribution: Germany 96 seats, France 74, Britain and Italy, 73 each, Spain 54, Poland 51, Romania 32, Netherlands 26, Belgium, Greece, Hungary, Portugal and Czechia 21 each, Sweden 20, Austria 18, Bulgaria 17, Denmark, Slovakia and Finland 13 each, Ireland, Croatia and Lithuania

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Fig. 3.7 The current logo of the European Parliament

11 each, Latvia and Slovenia 8 each, Estonia, Cyprus, Luxembourg and Malta 6 each. The 750 members of the European Parliament will have the right to vote, as the President of the European Parliament does not have the right to vote. Schulz was succeeded as the second president of the eighth five-year parliamentary term, from January 2017 to July 2019, by the Italian politician Antonio Tajani (1953–). It was under his presidency that the decision of Britain to leave the EU was officially communicated (Fig. 3.7). As of July 2019, Tajani was succeeded by the Italian politician David Sassoli (1956–2022) as the first president of the ninth parliamentary term. Under his presidency, and after Britain’s formal withdrawal from the EU as of 1 February 2020, the number of members of the European Parliament was reduced to 705, based on the European Parliament’s proposal of February 2018, which was approved by the European Council of 28 and 29 June 2018. With this decision, of the 73 seats left vacant due to Brexit, 27 are redistributed to better take into account the principle of “digressively proportional order”. These are distributed as follows: 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, Finland +1. No Member State loses seats. Today the European Parliament, as the EU’s legislative body, is located in Strasbourg, Brussels and Luxembourg. Every year, twelve regular four-day plenary sessions are held in Strasbourg and six two-day plenary sessions in Brussels, where members of the European Parliament have offices, while Luxembourg hosts some of its administrative services (Fig. 3.8). Members of the European Parliament are directly elected by EU citizens every 5 years. The last elections were held in May 2019, when 751 members were elected, in accordance with the Treaty of Lisbon. Of these, one is elected President of the European Parliament for two and a half years by its members, renewable, without having the right to vote in the votes held. In addition, 14 Vice-Presidents are elected, who may take turns to replace the President of the European Parliament in the performance of his or her duties whenever necessary. However, as mentioned above, from 1 February 2020, the number of Members of European Parliament,

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Fig. 3.8 View of the hemicycle, inside the Louise Weiss building of the European Parliament in Strasbourg, where regular plenary sessions are held. Mehr Demokratie - EU-Parlament reformiert EU-Bürgerinitiative, lisenced: CC BY-SA 4.0 Deed | Attribution-ShareAlike 4.0 International, https://en.wikipedia.org/wiki/Seat_of_the_European_Parliament_in_Strasbourg#/media/File: European_Parliament_Strasbourg_2015-10-28_01.jpg

after the departure of Britain, is 705. Members of the European Parliament are organised into political groups which are not—although often related—to parties or political groups in the Member States from which the members come. There are currently seven political groups in the European Parliament, with specific political and ideological positions. To form a political group, at least 25 members representing at least a quarter of all Member States are required, and membership of more than one political group is prohibited. However, there is a small number of members who are not affiliated to any of the existing political groups. The European Parliament has three main powers: (a) Approves EU legislative acts, together with the Council of EU, on the basis of Commission’s proposals, decides on international agreements and enlargement issues, examines the Commission’s work programme and asks it to submit legislative proposals, etc. (b) Exercises democratic control over all EU institutions, elects the Commission President, approves the Commission as a body, has the power to table a “motion of censure”, forcing the Commission to resign, grants discharge, gives the Commission the power to make a decision on the Commission’s own proposals, etc. The President directs the work of Parliament and its bodies and debates in plenary and ensures that Parliament’s Rules of Procedure are observed. After Parliament has adopted the budget of the European Union, the President shall make it enforceable by signing it. The President of the European Parliament, together with the President of the Council of EU, shall sign all legislative acts adopted under the ordinary legislative procedure. The Vice-Presidents may also chair plenary sittings (Fig. 3.9).

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Fig. 3.9 The European Parliament building in Place de Luxembourg, Brussels, where additional extraordinary plenary sessions and parliamentary committee meetings are held. Authors own photo

To carry out their legislative work, Members of the European Parliament are divided into Committees. Today the European Parliament has 20 committees, each of which consists of between 25 and 73 members, has a bureau and secretariat and deals with a specific policy area. Their political composition mirrors that of the plenary. The committees draw up, amend and adopt legislative proposals, examine proposals from the Commission and the Council of EU, and, where necessary, draw up reports and submit them to plenary. The European Parliament may also set up temporary committees on specific issues and committees of inquiry to investigate cases of misapplication or infringement of EU law. Finally, the European Parliament has delegations that maintain relations and exchange information with parliaments in third countries, thus contributing to the EU’s representation in third countries. Table 3.7 refers to the history of the movements of the European Parliament’s Seats. Table 3.8 below shows the historical European Parliament-related provisions of the EC and EU Treaties. Tables 3.9, 3.10, 3.11 and 3.12 show the Presidents and the evolution of the number of Members of the Common Assembly, the Assembly (European Parliamentary Assembly), the European Parliament in office and the

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Table 3.7 European Parliament’s Seats European Parliament ECSC Common Assembly 1952–1958 ECSC, EEC, EAEC Assembly 1958–1962 European Parliament 1962–1967 (Merger Treaty) & 1967–1977 European Parliament 1977–1999

European Parliament 1999–today

European Parliament’s Other seats

Seat The seat of the ECSC Common Assembly from 1952, of the ECSC, EEC and EAEC Assembly from 1958, and of the European Parliament from 1962 until the merger of the three Communities in 1967, as well as the main seat of the European Parliament from 1967 to 1977, was the Maison de l’ Europe (House of Europe), i.e. the seat of the Council of Europe in Strasbourg

The seat of the European Parliament from 1977 to 1999 was the Palais de l’ Europe (Palace of Europe), the newly built seat of the Council of Europe in Strasbourg, which replaced the adjacent Maison de l’ Europe, which was demolished immediately after the inauguration of the new building in January 1977 The European Parliament’s privately owned building in Strasbourg, officially opened on 14 December 1999. Its central tower called the Louise Weiss building, dedicated to the French feminist and politician Louise Weiss (1893–1983), appears unfinished; symbolising the “unfinished nature of Europe” The European Parliament building in Place de Luxembourg, Brussels, where additional extraordinary plenary sessions and parliamentary committee meetings are held. Also, Luxembourg hosts some of its administrative services

Table 3.8 Provisions of the Treaties relating to the European Parliament Treaty Treaty of Paris for the ECSC

Treaty of Rome on the EEC Treaty of Rome on the EAEC

Treaty of Luxembourg/First Budget Treaty

European Parliament-related forecasts The role of the Common Assembly of 78 members was to monitor the functioning of the ECSC and to express its views. However, with a two-thirds majority of its members, it could disagree with the High Authority’s annual report and vote in favour of a motion of censure demanding resignation. The Assembly (European Parliamentary Assembly) increased its membership to 142. It had almost the same powers as the Common Assembly, except that a motion of censure could be proposed not only on the annual report of the High Authority and the other two Committees, but at any time and in relation to any of their acts. In this way the Assembly acquired some political power, but it was limited by the high majority required for its implementation. A special provision was made for the direct election of members, which was implemented finally in 1979. It provided for a division of responsibilities for adopting the budget so that the Council of EC would approve compulsory expenditure and the European Parliament would approve non-compulsory expenditure. (continued)

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Table 3.8 (continued) Treaty Treaty of Brussels/Second Budget Treaty Single European Act

Treaty on the European Union

Treaty of Amsterdam

European Parliament-related forecasts The European Parliament’s powers were strengthened by the right to reject the Community budget and to grant discharge to the Commission for its implementation. It 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 enabled it to reject a decision of the Council of EC by majority vote, thus allowing for a 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 event of disagreement, the Council of EC had the final say. It is also worth noting that the name “European Parliament”, which had been adopted by the Assembly in 1962, was also used officially for the first time through a reference in the SEA. The role of the European Parliament has been further enhanced for the first pillar, with the extension of the existing consensus procedure to new important areas and the introduction of a single procedure for all Member States to elect members of the European Parliament. The upgrade also included the extension of the cooperation procedure to new areas and the creation of the new co-decision procedure, which allowed the European Parliament to adopt acts jointly with the Council of EU. This procedure implied the need to strengthen a consultation procedure 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 of people, health, research, 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. Furthermore, the European Parliament would appoint the European Ombudsman. However, the European Parliament’s role in the second and third pillars would be merely advisory. It 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 would have to consult the European Parliament before appointing new (continued)

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Table 3.8 (continued) Treaty

European Parliament-related forecasts

Treaty of Nice

Treaty of Lisbon

Commissioners. The latter would ultimately be appointed following 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. 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, judicial cooperation in civil matters, etc. 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, with the admission of the twelve new Member States, this number would reach 732. However, no provision was made for the possibility of a larger increase in the number of Member States than 27. Important new powers were envisaged for the European Parliament, in terms of legislation, the EU budget, but also in 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, immigration, etc., 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, compared to the Treaty of Nice, will increase to 751 at the start of the new parliamentary term, from June 2014, with the largest representation of Member States being 96 MEPs and the smallest being 6 MEPs. They will be distributed in a “digressively proportional order” according to the population of the Member States.

European Parliament in election, respectively. Furthermore, Table 3.13 shows the composition of the European Parliament, in terms of its political groups, at the first plenary session following the last election in 2019.

3.1.3

The Council (of Ministers) of EU: Historical Development

The Council (of Ministers) of EU represents the governments of the Member States. The first form of the Council under the Treaty of Paris of 18 April 1951, establishing the ECSC, was the six-member Special Council of Ministers, which was the only legislative power in the Community, since the Treaty of Paris did not provide for any

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Table 3.9 The ECSC Common Assembly (from 10 September 1952) Period of time 1952–1954

President Paul-Henry Charles Spaak

1954

Alcide de Gasperi

1954–1956

Giuseppe Pella

1956–1958

Hans Furler

Number of members Belgium 10, France 18, Germany 18, Italy 18, Luxembourg 4, Netherlands 10 Total 78 Belgium 10, France 18, Germany 18, Italy 18, Luxembourg 4, Netherlands 10 Total 78 Belgium 10, France 18, Germany 18, Italy 18, Luxembourg 4, Netherlands 10 Total 78 Belgium 10, France 18, Germany 18, Italy 18, Luxembourg 4, Netherlands 10 Total 78

Table 3.10 The Assembly of the three Communities (as of 19 March 1958) Period of time 1958–1960

1960–1962

President Robert Schuman

Hans Furler

Number of members Belgium 14, France 36, Germany 36, Italy 36, Luxembourg 6, Netherlands 14 Total 142 Belgium 14, France 36, Germany 36, Italy 36, Luxembourg 6, Netherlands 14 Total 142

Table 3.11 The European Parliament of the EC (since 30 March 1962) Period of time 1962–1964

President Gaetano Martino

1964–1965

Jean Pierre Duvieusart

1965–1966

Victor Leemans

1966–1969

Alain Emile Louis Marie Poher

1969–1971

Mario Scelba

1971–1973

Walter Behrendt

Number of members Belgium 14, France 36, Germany 36, Italy 36, Luxembourg 6, Netherlands 14 Total 142 Belgium 14, France 36, Germany 36, Italy 36, Luxembourg 6, Netherlands 14 Total 142 Belgium 14, France 36, Germany 36, Italy 36, Luxembourg 6, Netherlands 14 Total 142 Belgium 14, France 36, Germany 36, Italy 36, Luxembourg 6, Netherlands 14 Total 142 Belgium 14, France 36, Germany 36, Italy 36, Luxembourg 6, Netherlands 14 Total 142 Belgium 14, France 36, Germany 36, Italy 36, Luxembourg 6, Netherlands 14

(continued)

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Table 3.11 (continued) Period of time

President

1973–1975

Cornelis Berkhouwe

1975–1977

Georges Spénale

1977–1979

Emilio Colombo

Number of members From 01.01.1973: Britain 36, Denmark 10, Ireland 10 Total 198 Belgium 14, Britain 36, France 36, Germany 36, Denmark 10, Ireland 10, Italy 36, Luxembourg 6, Netherlands 14 Total 198 Belgium 14, Britain 36, France 36, Germany 36, Denmark 10, Ireland 10, Italy 36, Luxembourg 6, Netherlands 14 Total 198 Belgium 14, Britain 36, France 36, Germany 36, Denmark 10, Ireland 10, Italy 36, Luxembourg 6, Netherlands 14 Total 198

Table 3.12 The elected European Parliament of the EC and the EU since 17 July 1979 Period of time July 1979– January 1982

President Simone Veil

January 1982–July 1984

Piet Dankert

July 1984– January 1987

Pierre Eugene Jean Pflimlin

January 1987–July 1989

Henry Plumb

July 1989– January 1992

Enrique Barón Crespo

January 1992–July 1994

Egon Alfred Klepsch

July 1994– January 1997

Klaus Hänsch

January 1997–July 1999

José María Gil-Robles

Number of members Belgium 24, Britain 81, France 81, Germany 81, Denmark 16, Ireland 15, Italy 81, Luxembourg 6, Netherlands 25 From 01.01.1981: Greece 24 Total 410/434 Belgium 24, Britain 81, France 81, Germany 81, Denmark 81, 16, Greece 24, Ireland 15, Italy 81, Luxembourg 6, Netherlands 25 Total 434 Belgium 24, Britain 81, France 81, Germany 81, Denmark 81, 16, Greece 24, Ireland 15, Italy 81, Luxembourg 6, Netherlands 25 From 01.01.1986: Spain 60, Portugal 24 Total 434/518 Belgium 24, Britain 81, France 81, Germany 81, Denmark 16, Greece 24, Ireland 15, Spain 60, Italy 81, Luxembourg 6, Netherlands 25, Portugal 24 Total 518 Belgium 24, Britain 81, France 81, Germany 81, Denmark 16, Greece 24, Ireland 15, Spain 60, Italy 81, Luxembourg 6, Netherlands 25, Portugal 24. Total 518 Belgium 24, Britain 81, France 81, Germany 99, Denmark 16, Greece 25, Ireland 15, Spain 60, Italy 81, Luxembourg 6, Netherlands 25, Portugal 25 Total 518 Belgium 25, Britain 87, France 87, Germany 99, Denmark 16, Greece 25, Ireland 15, Spain 64, Italy 87, Luxembourg 6, Netherlands 31, Portugal 25 From 01.01.1995: Austria 21, Sweden 22, Finland 16 Total 567/626 Austria 21, Belgium 25, Britain 87, France 87, Germany 99, Denmark 16, Greece 25, Ireland 15, Spain 64, Italy 87, Luxembourg 6, Netherlands 31, Portugal 25, Sweden

(continued)

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Table 3.12 (continued) Period of time

President

July 1999– January 2002

Nicole Fontaine

January 2002–July 2004

Patrick Cox

July 2004– January 2007

Josep Borrell Fontelles

January 2007–July 2009

Hans-Gert Pöttering

July 2009– January 2012

Jerzy Karol Buzek

January 2012–July 2014

Martin Schulz

Number of members 22, Finland 16 Total 626 Austria 21, Belgium 25, Britain 87, France 87, Germany 99, Denmark 16, Greece 25, Ireland 15, Spain 64, Italy 87, Luxembourg 6, Netherlands 31, Portugal 25, Sweden 22, Finland 16 Total 626 Austria 21, Belgium 25, Britain 87, France 87, Germany 99, Denmark 16, Greece 25, Ireland 15, Spain 64, Italy 87, Luxembourg 6, Netherlands 31, Portugal 25, Sweden 22, Finland 16 From 01.05.2004: Estonia 6, Cyprus 6, Latvia 9, Lithuania 13, Malta 5, Hungary 24, Poland 54, Slovakia 14, Slovenia 7, Czechia 24 Total 626/788 Austria 18, Belgium 25, Britain 78, France 78, Germany 99, Denmark 14, Greece 24, Estonia 6, Ireland 13, Spain 54, Italy 78, Cyprus 6, Latvia 9, Lithuania 13, Luxembourg 6, Malta 5, Netherlands 27, Hungary 24, Poland 54, Portugal 24, Slovakia 14, Slovenia 7, Sweden 18, Czechia 24, Finland 14 From 01.01.2007: Bulgaria 18, Romania 35 Total 732/785 Austria 18, Belgium 25, Bulgaria 18, Britain 78, France 78, Germany 99, Denmark 14, Greece 24, Estonia 6, Ireland 13, Spain 54, Italy 78, Cyprus 6, Latvia 9, Lithuania 13, Luxembourg 6, Malta 5, Netherlands 27, Hungary 24, Poland 54, Portugal 24, Romania 35, Slovakia 14, Slovenia 7, Sweden 18, Czechia 24, Finland 14 Total 785 Austria 17, Belgium 22, Bulgaria 17, Britain 72, France 72, Germany 99, Denmark 13, Greece 22, Estonia 6, Ireland 12, Spain 50, Italy 72, Cyprus 6, Latvia 8, Lithuania 12, Luxembourg 6, Malta 5, Netherlands 25, Hungary 22, Poland 50, Portugal 22, Romania 33, Slovakia 13, Slovenia 7, Sweden 18, Czechia 22, Finland 13. From 01.12.2011: Austria +2, Bulgaria +1, Bulgaria +1, Britain +1, France +2, Spain +4, Italy +1, Latvia +1, Malta +1, Netherlands +1, Poland +1, Slovenia +1, Sweden +2 Total 736/754 Austria 19, Belgium 22, Bulgaria 18, Britain 73, France 74, Germany 99, Denmark 13, Greece 22, Estonia 6, Ireland 12, Spain 54, Italy 73, Cyprus 6, Latvia 9, Lithuania 12, Luxembourg 6, Malta 6, Netherlands 26, Hungary 22, Poland 51, Portugal 22, Romania 33, Slovakia 13, Slovenia 8, Sweden 20, Czechia 22, Finland 13 (continued)

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Table 3.12 (continued) Period of time

President

July 2014– January 2017

Martin Schulz

January 2017–July 2019

Antonio Tajani

July 2019–

David Sassoli

Number of members From 01.07.2013: Croatia 12 Total 754/766 Austria 18, Belgium 21, Bulgaria 17, Britain 73, France 74, Germany 96, Denmark 13, Greece 21, Estonia 6, Ireland 11, Spain 54, Italy 73, Croatia 11, Cyprus 6, Latvia 8, Lithuania 11, Luxembourg 6, Malta 6, Netherlands 26, Hungary 21, Poland 51, Portugal 21, Romania 32, Slovakia 13, Slovenia 8, Sweden 20, Czechia 21, Finland 13 Total 751 Austria 18, Belgium 21, Bulgaria 17, Britain 73, France 74, Germany 96, Denmark 13, Greece 21, Estonia 6, Ireland 11, Spain 54, Italy 73, Croatia 11, Cyprus 6, Latvia 8, Lithuania 11, Luxembourg 6, Malta 6, Netherlands 26, Hungary 21, Poland 51, Portugal 21, Romania 32, Slovakia 13, Slovenia 8, Sweden 20, Czechia 21, Finland 13 Total 751 Austria 18, Belgium 21, Bulgaria 17, Britain 73, France 74, Germany 96, Denmark 13, Greece 21, Estonia 6, Ireland 11, Spain 54, Italy 73, Croatia 11, Cyprus 6, Latvia 8, Lithuania 11, Luxembourg 6, Malta 6, Netherlands 26, Hungary 21, Poland 51, Portugal 21, Romania 32, Slovakia 13, Slovenia 8, Sweden 20, Czech Republic 21, Finland 13. From 01.02.2020: Britain -73, 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, Finland +1 Total 751/705

substantive legislative powers for the Common Assembly, but only for monitoring the functioning of the ECSC and expressing opinions. It should be mentioned that the Special Council of Ministers was not foreseen by the Schuman Plan, but was imposed by the Benelux countries as an intergovernmental body to mitigate the supranationality represented by the High Authority. The Special Council of Ministers therefore defended the interests of the Member States, which were represented in it by a minister as a member. Furthermore, the Treaty of Paris provided that the role of the Special Council of Ministers was to harmonise the action of the High Authority and the governments responsible for the general economic policy of their States. To this end, the Special Council of Ministers and the High Authority consult together and exchange information. The Special Council of Ministers could request the High Authority to examine all proposals and measures it considers necessary or appropriate for the implementation of the common objectives (Fig. 3.10). Initially, the ECSC’s Special Council of Ministers was composed of the Foreign Ministers of the Member States, mainly because of their role in the negotiations for

182 European People’s Party

154 Progressive Alliance of Socialists and Democrats

108 Renew Europe 74 Greens/European Free Alliance

73 Identity and Democracy

62 European Conservatives and Reformists

41 The Left in the European Parliament

57 Not included in a parliamentary group

Table 3.13 Distribution of seats in the European Parliament between political groups at the first sitting after the 2019 European elections 751 TOTAL European Parliament

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Fig. 3.10 The Cercle Municipal building in Place d' Armes, Luxembourg, seat of the Special Council of Ministers from 1952 to 1967. Photo by Johnny Chicago at lb.wikipedia, licensed under the Creative Commons Attribution-Share Alike 3.0 Unported, https://en.m.wikipedia.org/wiki/File: Cercle-Municipal-Luxembourg.JPG

the Treaty of Paris establishing the ECSC, but also given the strategic importance of coal and steel in the external relations between Member States and third countries. Gradually, however, the Ministers for Economic Affairs, Industry, Trade and Energy replaced the Ministers for Foreign Affairs, in particular for dealing with technical issues, while the Ministers for Foreign Affairs continued to meet mainly for diplomatic and external relations matters. The Special Council of Ministers was chaired for each quarter by the ministerrepresentative of a Member State in rotation. In cases where a simple majority was required for proposals to be voted on by the High Authority, then: (a) In the case of a counted absolute majority, the majority of Member States should include a Member State producing at least one-fifth of the total value of Community coal and steel production. (b) In the event of a tied vote, and if the High Authority maintains its proposal after a second reading, then the view of the Member States including two Member States each producing at least one-fifth of the total value of Community coal and steel production would prevail. There were, however, cases provided for in the Treaty of Paris in which decisions required unanimity or a qualified majority, determined on a case-by-case basis. However, the legislative and administrative interventions of the Special Council of Ministers did not affect the functioning of the ECSC High Authority, which largely retained its supranational character.

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The Treaties of Rome of 25 March 1957, establishing the EEC and the EAEC, created the Council of Ministers for the EEC and the Council of Ministers for the EAEC, composed of six representatives of the Member States, had the power to reject or amend the proposals of the respective Commission and, in general, as intergovernmental bodies, had relatively more power than the Special Council of Ministers of the ECSC, thus limiting the supranational power of the Commissions compared to that of the ECSC High Authority. The presidency of the two new Councils of Ministers alternated every six months on a rotating basis, while decisions of the Ministers were taken either by simple majority, qualified majority or unanimity, depending on the subject matter and the relevant provisions of the Treaties. For qualified majority voting, France, Germany and Italy each had 4 votes, Belgium and the Netherlands 2 votes and Luxembourg 1 vote, with a qualified majority threshold of 12 votes for Commission proposals, and 12 votes in favour with at least four Member States voting in favour for other voting cases. However, the first clouds in the atmosphere of the EEC Council of Ministers appeared when de Gaulle, on 1 July 1965, opposed the proposals of the Commission, presented by its President Walter Hallstein on 23 March of the same year, for 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 banned his ministers from participating in the Council of Ministers, recalled France’s representative from Brussels and banned his party’s MEPs from taking part in votes on matters relating to the development of the Communities, thus implementing the “empty chair” policy. The Luxembourg compromise reached on 30 January 1966 accepted many French positions, including—in the French view—the principle of unanimity in decision-making, although the compromise explicitly stated that in cases where the very important interests of one or more States are at stake, the members of the Council of Ministers would try to reach solutions which could be approved by all the States, while respecting their mutual interests. With the Treaty of Merger of the Communities Institutions of 8 April 1965, a single Council of Ministers was established on 1 July 1967 for all three ECs, as the Council (of Ministers) of EC. Decisions of the new Council of the EC were taken either by simple majority, qualified majority or unanimity, depending on the subject matter and the relevant provisions of the Treaties. For cases of qualified majority voting, for all three Communities, France, Germany and Italy each had 4 votes, Belgium and the Netherlands 2 votes and Luxembourg 1 vote, with a qualified majority threshold of 12 votes for Commission proposals, and 12 votes in favour with at least four Member States voting in favour for other voting cases. In particular for ECSC matters requiring a simple majority, then in the case of a counted absolute majority, the majority of Member States should include among the majority a Member State producing at least one sixth of the total value of Community coal and steel production.

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Among the main decisions of the Council of EC during this period were the adoption, in October 1970, of the “Davignon Report” or “Luxembourg Report” on the operation of European cooperation policy outside the institutional framework of the Community, and the adoption, in March 1971, of the Commission’s proposals based on the Werner Report for gradual monetary integration over a ten-year period, with retroactive effect from 1 January 1971, and the adoption in April 1972 of the Commission’s “Agricultural Programme 1980” or “Mansholt Plan” for the reform of the CAP, but with meagre results in the form of only three Directives in 1972 and one in 1975, The first enlargement, from 1 January 1973, resulted in a change in the number of votes in the Council of EC, with Britain, France, Germany and Italy now having 10 votes each, Belgium and Netherlands 5, Denmark and Ireland 3 and Luxembourg 2, with a qualified majority threshold of 41 votes, with at least six Member States voting in favour in other cases. The second enlargement, from 1 January 1981, resulted in an increase in the number of votes in the Council of Ministers by 5 votes of Greece, with a qualified majority of 45 votes, with at least six Member States voting in favour in other cases, while the third enlargement, as from 1 January 1986, resulted in an increase in the number of votes in the Council of Ministers by 13 votes, with 8 votes for Spain and 5 votes for Portugal, with a qualified majority of 54 votes, with at least eight Member States voting in favour in other cases. The signing of the Single European Act on 17 February 1986 increased the number of cases where the Council of EC would decide by qualified majority in order to facilitate the completion of the internal market. In particular, it provided for the replacement of the unanimity procedure for cases concerning the 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 people 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 two-week period. During this period the Council of EC took certain important decisions, such as the adoption of the “Delors I Package” in 1988 and the financing of economic cohesion policy for the period 1989–1993, while the first stage of EMU was launched on 1 July 1990. The Dublin Convention on asylum and immigration was also signed in 1990. The signing of the Treaty of the European Union on 7 February 1991 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 crucial areas, such as the revision of the Treaties, the entry of new Member States into the European Union, approval of the budget’s own resources, as well as decisions concerning economic and social cohesion, taxation, the framework program for

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research, industry, culture, the environment, etc. For the operation of the CFSP of the second pillar, it was foreseen that the Council of EU can unanimously determine the “common position” and “common action” of the Member States in areas of general interest. The required implementing measures can be approved by a qualified majority, provided that the unanimous decision for joint action by the Council of EU has been preceded. However, for decisions that require unanimity, Member States are urged, as far as possible, not to prevent a unanimous decision when a qualified majority in favour of the decision in question appears to exist. For the third pillar of JHA issues, the Council of EU shall decide by unanimity on “common position” and “common action” of the Member States, while decisions on implementing measures may be taken by qualified majority. However, on the question of qualified majority voting in general, and in view of the enlargement of the EU with four new Member States, a decision was taken by the Council of Foreign Ministers of EU at their informal meeting in Ioannina, Greece, on 29 March 1994, known as the Ioannina Compromise (see below). It is noteworthy that the Council of EU would now play a leading role, as its competences would cover all three pillars of the EU. During this period the Council of Ministers took certain important decisions, such as the reform of the CAP in 1992, known as the “MacSharry reform”, the establishment of the European Economic Area in 1992, the adoption of the “Delors II Package” in 1993 and the financing of economic cohesion for the period 1994–1999, etc., while the single internal market for the then 12 member states was completed on 1 January 1993. Furthermore, on 26 July 1995, the Treaty establishing EUROPOL was signed, but it did not enter into force until July 1999. Also, the second stage of EMU was launched on 1 January 1994 and the Stability and Growth Pact was adopted in 1997, aimed at ensuring fiscal discipline within EMU. The fourth enlargement since 1 January 1995 has resulted in the number of votes in the Council of Ministers being set at 4 for Austria and Sweden and 3 for Finland, with a qualified majority of 62 votes out of a total of 87, with at least ten Member States voting in favour in other cases and a blocking minority of 26 votes. 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 required a qualified majority, and would more often impede decision-making 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 not provided for in the Treaty of the European Union, 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 Ministers were very close numerically 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 the qualified majority within a reasonable period of time. One day after the compromise, the conclusion of the accession negotiations was officially announced.

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With the signing of the Treaty of Amsterdam on 2 October 1997, the principle of qualified majority voting in the Council of EU was extended to some extent for the first pillar of the EU, to which immigration and civil law judicial matters were transferred from the third pillar. However, this process was made even more difficult by the re-weighting of votes resulting from the increase in the number of EU Member States from twelve to fifteen, without the method of determining the blocking minority having changed. This made it more difficult to take decisions on the basis of the qualified majority principle, largely to the benefit of Britain, which wanted to weaken the supranational character of the EU. 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 an obstructive minority. As regards the second pillar, and in order to facilitate decision-making in the CFSP, the practice of “constructive abstention” was introduced, so that those Member States that did not wish to adopt a decision could 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. The third pillar was limited to judicial cooperation in criminal law and police cooperation, since immigration and judicial cooperation in civil law matters were transferred to the Community area of the first pillar, while the Council of EU would continue to decide by unanimity. During this period, a number of important decisions are taken, such as the adoption of the Agenda 2000 and the financing of economic cohesion for the period 2000–2006, as well as the revision of the CAP in 1999. Furthermore, the informal Eurogroup was set up in 1997, consisting of the Finance Ministers of the Eurozone Member States, the Vice-President of the Commission responsible for economic affairs and the euro, and the President of the European Central Bank, in view of the start of the third and final stage of EMU on 1 January 1999. The meetings of the Eurogroup would be chaired by its President-designate, who would represent the Eurogroup. The Tampere Programme on AFSJ issues for the period 2000–2004 was also drawn up in 1999 and the Lisbon Strategy for EU competitiveness up to 2010 was adopted in 2000. With the signing of the Treaty of Nice on 26 February 2001, the Council of EU increased the cases in which the qualified majority principle would apply, even in the area of the JHA, but without applying it to crucial 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 regional 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, 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

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Member States’ 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, for a decision to be taken by qualified majority, it must be supported by: (a) the 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 a total of 345 that would result from the fifth and sixth enlargement (see below), and (c) the so-called demographic verification, according to which the majority member states must represent at least 62% of the total EU population. This period saw the introduction of the euro as the common currency of the Eurozone Member States on 1 January 2002, and the mid-term review of the CAP and its new reform in 2003. The revision of the Stability and Growth Pact was also adopted in 2005, allowing for greater flexibility in cases of deficits caused by economic downturns, and the new regional policy for the period 2007–2013 was formulated in 2005. The Council of EU also adopted the Dublin II Regulation on asylum and immigration in 2003 and the Hague Programme on AFSJ issues for the period 2005–2009 in 2004. With the fifth enlargement and during the transitional period, from 1 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 EU, 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, 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 the Czech Republic 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, Malta 2 votes. Therefore, the total of 321 votes made a qualified majority requirement of 232 votes for Commission proposals, while for issues not originating from a Commission proposal, 232 votes from two-thirds of the Member States were required, as well as “demographic verification” for the coverage by these Member States of at least 62% of the total

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EU population. Furthermore, until the end of 2006, only the old Member States would continue to chair the Council of Ministers every six months, giving the new Member States the opportunity to familiarise themselves with the institutions. After the sixth enlargement, from 1 January 2007, in the Council of EU, Britain, France, Germany and Italy each had 29 votes, Spain and Poland 27 votes, 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 made a qualified majority requirement of 255 votes for Commission proposals, while for issues not originating from a Commission proposal, 255 votes from two-thirds of the member states were required, as well as “demographic verification” for these member states to cover at least 62% of the total EU population. With the Treaty of Lisbon of 13 December 2007, which abolished the three pillars of the EU, qualified majority voting in the Council of EU was extended to other 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, coordination of economic policies, etc., while the procedure is also applied to newly introduced policies for areas such as energy, sports, tourism, cooperation in space activities, etc. However, in the decisions on the free movement of workers and cooperation 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. Unanimity shall be 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, 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, family law, etc. For the qualified majority system, transitional provisions apply until 31 October 2014, which are based on the current system of the “triple majority” of Member States, votes and populations, of the Treaty of Nice. From 1 November 2014, and until 31 March 2017, qualified majority voting is 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 the Member States, representing at least 65% of the EU population, whereas, if the decision of the Council of EU does not result from a Commission proposal, a qualified majority is taken by 72% of the Member States, representing at least 65% of the EU population. The blocking minority must include at least the minimum number of Council of EU members representing more than 35% of the population of the participating Member States, plus one member, otherwise a qualified majority shall be deemed to have been reached. However, for this period it is also possible to apply the Ioannina Compromise, which allows

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Member States representing at least 75% of the EU population or 75% of the number of Member States required to constitute an obstructing (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. The most important activities of this period include the 2008 CAP “health check”, the “Europe 2020” Strategy for smart, sustainable and inclusive growth and the regional policy for the period 2014–2020 in 2010, the Stockholm Programme for the period 2010–2014 for the AFSJ, the new Dublin III Regulation which complemented the two previous ones on asylum and immigration issues in 2013. Furthermore, important decisions were taken to deal with the global economic crisis, with the establishment of mechanisms to support the Member States, since 2010, while the foundations were laid for a Banking Union, since 2012. With the seventh enlargement, 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, Netherlands 13 votes, Belgium, Greece, Hungary, Portugal and Czechia 12 votes each, Austria, Bulgaria and Sweden 10 votes each, Denmark, Ireland, Croatia, Lithuania, Slovakia and Finland 7 votes each, Estonia, Cyprus, Latvia, Luxembourg and Slovenia 4 votes each and, finally, Malta 3 votes. The total of 352 votes makes a qualified majority of 260 votes. Addressing climate change issues, migratory flows to EU Member States, the negotiation with Britain for a withdrawal agreement from the EU, the adoption of the European Pillar of Social Rights, the renewal of the CAP and the regional Policy were some of the issues that the Council of EU dealt with during this period. The result of the referendum of 23 June 2016 in the UK, which launched the country’s exit from the EU, resulted in Britain’s resignation from its planned presidency of the Council of EU for the period from July to December 2017, with Estonia taking over the presidency six months earlier. As mentioned above, the Council of EU was initially composed of the Foreign Ministers of the member states. Gradually the Council of EU acquired other compositions, related to the topics of the meetings. The composition of the Council varies according to the agenda of each meeting. Thus, the new configurations consisted of the Ministers for Economic Affairs for economic matters, Agriculture for agricultural and livestock matters, Labour for employment matters, etc. However, the configurations of the Council of EU changed from time to time, and sometimes increased considerably, with the result that its work became too fragmented. Thus, the Helsinki European Council of 10 and 11 December 1999 decided to recommend that the number of Council of EU configurations be reduced to a maximum of fifteen. Furthermore, on 22 July 2002, in implementation of the decisions of the Seville European Council of 21 and 22 June 2002, which set out the nine configurations of the Council of EU, the latter amended its rules of procedure in order to establish a shorter list of its configurations (Figs 3.11 and 3.12).

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Fig. 3.11 The new logo of the Council of the European Union (Council of Ministers) and the European Council

This list established ten different configurations, involving ministers with responsibility for the areas relevant to each configuration. In particular, it retained eight of the nine configurations proposed by the European Council. However, the ninth proposed configuration of “General Affairs and External Relations Council”, known until then as the “General Affairs” configuration, covered, respectively, two main areas of activity: (a) the preparation of European Council meetings, institutional and administrative matters, the overall coordination of EU policies, as well as the examination of any matter referred to the Council of EU by the European Council, and (b) the conduct of the whole of the EU’s external action, i.e. the CFSP, ESDP/CSDP, external trade and security policy, and the implementation of the EU’s external relations. Given that this dual competence of the configuration was not considered operational, it was decided to split it into two new configurations, that of the “General Affairs Council” and that of the “Foreign Affairs Council”, replacing the proposed “General Affairs and External Relations Council”. This split thus put an end to the paradoxical tradition of foreign ministers overseeing institutional and administrative matters and the preparation of European Councils. The current final list of the ten Council of Ministers is as follows: The General Affairs Council (GAC): coordinates the work of the Council, prepares the European Council meetings and deals with organisational matters for all Council meetings. The Foreign Affairs Council (FAC): chaired by the EU High Representative for Foreign Affairs and Defence, it manages the CFSP, CSDP, external trade and development cooperation. It sometimes meets in the presence of the defence and trade ministers of the Member States. The Economic and Financial Affairs Council (ECOFIN): is responsible for economic policy, taxation and the regulation of EU financial services.

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Fig. 3.12 View of the Justus Lipsius building in Brussels. Photo by JLogan - Own work, licensed: CC BY 4.0 Deed | Attribution 4.0 International, https://en.wikipedia.org/wiki/Justus_Lipsius_ building#/media/File:Justus_Lipsius_tout_le_nord-est_689.jpg (cropped)

The Agriculture and Fisheries Council (AGRIFISH): is responsible for EU agriculture, fisheries, food safety, veterinary and public health issues. The Justice and Home Affairs Council (JHA): develops cooperation and common policies on cross-border issues to build an area of freedom, security and justice in the EU. The Employment, Social Policy, Health and Consumer Affairs Council (EPSCO): deals with employment and working conditions, social protection, consumer protection and equal opportunities for EU citizens. The Competitiveness Council (COMPET): helps boost competitiveness and growth in the EU through four policy areas, namely the internal market, industry, research and innovation, and space. The Transport, Telecommunications and Energy Council (TTE): is concerned with implementing the EU’s transport, telecommunications and energy sectors, shaping modern, competitive and efficient markets and infrastructures and creating trans-European transport, communications and energy networks. The Environment Council (ENVI): deals with EU environmental policy, covering environmental protection, the prudent use of resources, the protection of citizens’ health and international environmental issues, especially in the field of climate change. The Education, Youth, Culture and Sport Council (EYCS): provides a framework for cooperation between Member States for the exchange of information and experience in the fields of education, youth, culture and sport.

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The different configurations of the Council of Ministers can coexist if the areas they are to deal with go beyond the competences of a particular configuration. These are the enlarged Councils of EU (Jumbo Councils). Table 3.14 refers to the history of the movements of the Council of EU Seats. Table 3.15 below shows historically the relevant provisions of the EC and EU Treaties relating to the Council of EC/EU. Tables 3.16, 3.17 and 3.18 show the presidencies and the evolution of the number of votes of the ECSC Special Council Table 3.14 Council of EU seats Council of EU Special Council of Ministers of ECSC 1952–1967 Council of Ministers of EEC and EAEC Until autumn 1958 Council of Ministers of EEC and EAEC 1958–1967 (Merger Treaty) Council of EC 1967–1971 Council of EC 1971–1993 Council of EU 1993–1995 Council of EU 1995–2017 Council of EU 2017–today

Seat The Cercle Municipal building in Place d’ Armes, Luxembourg, was the first seat of the Special Council of Ministers of ECSC from 1952 to 1967 The Château de Val Duchesse in Brussels was the first seat of the EEC and EAEC Councils of Ministers until the autumn of 1958 The Ravenstein Building, 2 Ravenstein Street, Brussels, was the seat of the Councils of Ministers of the EEC and the EAEC from the autumn of 1958 until the merger of the three Communities in 1967, and the seat of the single Council of Ministers of the three Communities until 1971 The Charlemagne building in Brussels was seat of the Council of Ministers of EC from 1971 until 1993 and of the Council of EU from 1995 until 1995, before its renovation. The Justus Lipsius building in Brussels was the seat of the Council of Ministers from 1995 to 2017 The Europa building in Brussels is the meeting place of the Council of the EU (and the European Council) since March 2017

Table 3.15 Provisions of the Treaties relating to the Council of Ministers Treaty Treaty of Paris for the ECSC

Provisions relating to the Council of Ministers The Special Council of Ministers was chaired for each quarter by the minister-representative of a Member State in rotation. In cases where a simple majority was required for proposals to be voted on by the High Authority, then: (a) In the case of a counted absolute majority, the majority of Member States should include a Member State producing at least 20% of the total value of Community coal and steel production. (b) In the event of a tied vote, and if the High Authority maintains its proposal after a second reading, then the view of the Member States including two Member States each producing at least 20% of the total value of Community coal and steel production would prevail. There were, however, cases provided for in the Treaty of Paris in which decisions required unanimity or a qualified majority, determined on a case-by-case basis. (continued)

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Table 3.15 (continued) Treaty Treaty of Rome on the EEC Treaty of Rome on the ECSC

Merger Treaty of the Community institutions

Single European Act

Treaty on the European Union

Provisions relating to the Council of Ministers The presidency of the two new Councils of Ministers rotated every six months, while the decisions were taken either by simple majority, qualified majority or unanimity, depending on the subject matter and the relevant provisions of the Treaties. For qualified majority voting, France, Germany and Italy each had 4 votes, Belgium and the Netherlands 2 votes and Luxembourg 1 vote, with a qualified majority threshold of 12 votes for Commission proposals, and 12 votes in favour with at least four Member States voting in favour for other voting cases. Decisions of the new Council of the EC were taken either by simple majority, qualified majority or unanimity, depending on the subject matter and the relevant provisions of the Treaties. For the cases of qualified majority, for all three Communities, France, Germany and Italy each had 4 votes, Belgium and the Netherlands 2 votes and Luxembourg 1 vote, with a qualified majority threshold of 12 votes for Commission proposals, and 12 votes in favour with at least four Member States voting in favour for other voting cases. In particular for ECSC matters requiring a simple majority, then in the case of a counted absolute majority, the majority of Member States should include among the majority a Member State producing at least one sixth of the total value of Community coal and steel production. It increased the cases where the Council of EC would decide by qualified majority in order to facilitate the completion of the internal market. In particular, it provided for the replacement of the unanimity procedure in the cases of amendments to 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 people 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 two-week period. It 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 crucial areas, such as the revision of the Treaties, the entry of new Member States into the European Union, approval of the budget’s own resources, as well as decisions concerning economic and social cohesion, taxation, the framework program for research, industry, culture, the environment, etc. For the operation of the CFSP of the second pillar, it was foreseen that the Council of EU can unanimously determine the “common position” and “joint action” of the Member States in areas of general interest. The required implementing measures can be approved by a qualified majority, (continued)

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Table 3.15 (continued) Treaty

Ioannina Compromise

Treaty of Amsterdam

Treaty of Nice

Provisions relating to the Council of Ministers provided that the unanimous decision for joint action by the Council of EU has been preceded. However, for decisions that require unanimity, Member States are urged, as far as possible, not to prevent a unanimous decision when a qualified majority in favour of the decision in question appears to exist. For the third pillar of JHA issues, the Council of EU shall decide by unanimity on “common position” and “joint action” of the Member States, while decisions on implementing measures may be taken by qualified majority. However, on the question of qualified majority voting in general, and in view of the enlargement of the EU with four new Member States, a decision was taken by the Council of Foreign Ministers of EU at their informal meeting in Ioannina, Greece, on 29 March 1994, known as the Ioannina Compromise (see below). It 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 of EU would try to reach an acceptable solution with a majority greater than the qualified majority within a reasonable period of time. The principle of qualified majority voting in the Council of EU was extended to some extent for the first pillar of the EU, to which immigration and civil law judicial matters were transferred from the third pillar. As regards the second pillar, and in order to facilitate decision-making in the context of the CFSP, the practice of “constructive abstention” was introduced, so that those Member States that did not wish to adopt a decision could 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. The third pillar was limited to judicial cooperation in criminal law and police cooperation, since immigration and judicial cooperation in civil law matters were transferred to the Community area of the first pillar, while the Council of EU would continue to decide by unanimity. The number of cases where the qualified majority principle will be applied has increased, even in the area of the JHA, but it will not be applied in critical social policy and taxation issues, as well as in trade policy, immigration, visas, asylum, environment and structural policy. In order to maintain the balance, the principle of the “triple majority” of Member States, votes and populations was adopted, according to which, 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, reaching 258 votes out of a total of 345 resulting from the fifth and sixth enlargements (see Table 3.15 below for variations from the accession treaties), and (c) the so-called demographic control (continued)

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Table 3.15 (continued) Treaty

Treaty of Lisbon

Provisions relating to the Council of Ministers clause, according to which the majority Member States must represent at least 62% of the total population of the EU. Qualified majority voting in the Council of EU was extended to other 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, coordination of economic policies, etc., while the procedure is also applied to newly introduced policies for areas such as energy, sports, tourism, cooperation in space activities, etc. However, in the decisions on the free movement of workers and cooperation 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. Unanimity shall be 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, 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, family law, etc. For the qualified majority system, transitional provisions apply until 31 October 2014, which are based on the current system of the “triple majority” of Member States, votes and populations, of the Treaty of Nice. From 1 November 2014, and until 31 March 2017, qualified majority voting is 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 the Member States, representing at least 65% of the EU population, whereas, if the decision of the Council of EU does not result from a Commission proposal, a qualified majority is taken by 72% of the Member States, representing at least 65% of the EU population. The blocking minority must include at least the minimum number of Council of EU members representing more than 35% of the population of the participating Member States, plus one member, otherwise a qualified majority shall be deemed to have been reached. However, for this period it is also possible to apply the Ioannina Compromise, which allows Member States representing at least 75% of the EU population or 75% of the number of Member States required to constitute an obstructing (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.

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Table 3.16 The special Council of Ministers of the ECSC, as of 6 September 1952 Period of time and Presidency 6 September 1952–5 December 1952 6 December 1952–5 March 1953 6 March 1953–5 June 1953 6 June 1953– 5 September 1953 6 September 1953– 5 December 1953 6 December 1953– 5 March 1954 6 March 1954–5 June 1954 6 June 1954– 5 September 1954 6 September 1954– 5 December 1954 6 December 1954– 5 March 1955 6 March 1955–5 June 1955 6 June 1955– 5 September 1955 6 September 1955– 5 December 1955 6 December 1955– 5 March 1956 6 March 1956–5 June 1956 6 June 1956– 5 September 1956 6 September 1956– 5 December 1956 6 December 1956– 5 March 1957 6 March 1957–5 June 1957 6 June 1957– 5 September 1957 6 September 1957– 5 December 1957 6 December 1957– 5 March 1958 6 March 1958–5 June 1958

Council members and number of votes Belgium 1, France 1, Germany 1, Italy 1, Luxembourg 1, Netherlands 1 Total number of members: 6—votes cast: 6 Decisions of the Council of Ministers are taken by unanimity, qualified majority or simple majority, on a case-by-case basis. In cases where a simple majority is required for proposals to be voted on by the High Authority, then: (a) in the case of a counted absolute majority, a Member State producing at least one-fifth of the total value of the Community production of coal and steel shall be included among the majority of Member States. (b) in the event of a tied vote, and if the High Authority maintains its proposal after a second reading, then the view of the Member States including two Member States each producing at least one- fifth of the total value of Community coal and steel production would prevail. For cases of qualified majority, the method of calculation is described on a case-bycase basis.

(continued)

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Table 3.16 (continued) Period of time and Presidency 6 June 1958– 5 September 1958 6 September 1958– 5 December 1958 6 December 1958– 5 March 1959 6 March 1959–5 June 1959 6 June 1959– 5 September 1959 6 September 1959– 5 December 1959 6 December 1959– 5 March 1960 6 March 1960–5 June 1960 6 June 1960– 5 September 1960 6 September 1960– 5 December 1960 6 December 1960– 5 March 1961 6 March 1961–5 June 1961 6 June 1961– 5 September 1961 6 September 1961– 5 December 1961 6 December 1961– 5 March 1962 6 March 1962–5 June 1962 6 June 1962– 5 September 1962 6 September 1962– 5 December 1962 6 December 1962– 5 March 1963 6 March 1963–5 June 1963 6 June 1963– 5 September 1963 6 September 1963– 5 December 1963 6 December 1963– 5 March 1964

Council members and number of votes

(continued)

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Table 3.16 (continued) Period of time and Presidency 6 March 1964–5 June 1964 6 June 1964– 5 September 1964 6 September 1964– 5 December 1964 6 December 1964– 5 March 1965 6 March 1965–5 June 1965 6 June 1965– 5 September 1965 6 September 1965– 5 December 1965 6 December 1965– 5 March 1966 6 March 1966–5 June 1966 6 June 1966– 5 September 1966 6 September 1966– 5 December 1966 6 December 1966– 5 March 1967 6 March 1967–5 June 1967 6 June 1967–30 June 1967

Council members and number of votes

of Ministers, the EEC and EAEC Council of Ministers and the single Council (of Ministers) of the EC and EU, respectively. The Eurogroup is an informal body in which the finance ministers of the euro area Member States participate. The Luxembourg European Council of 12 and 13 December 1997 adopted the French proposal for the establishment of the Eurogroup, consisting of the Finance Ministers of the euro area Member States, the Vice-President of the Commission responsible for economic and euro affairs, and the President of the then European Central Bank. The first informal meeting of the Eurogroup of the 11 candidate euro area Member States took place at the Chateau de Senningen in Luxembourg on 4 June 1998. At the informal Economic and Financial Affairs Council of EU (ECOFIN) meeting on 10 September 2004 in Scheveningen, Jean-Claude Juncker was elected as the first permanent President of the Eurogroup. His term of office would run from 1 January 2005 to 31 December 2006. However, Juncker was re-elected on

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Table 3.17 The Councils of Ministers of the EEC and the EAEC, from 1 January 1958 Period of time and Presidency 1 January 1958– 30 June 1958 1 July 1958– 31 December 1958 1 January 1959– 30 June 1959 1 July 1959– 31 December 1959 1 January 1960– 30 June 1960 1 July 1960– 31 December 1960 1 January 1961– 30 June 1961 1 July 1961– 31 December 1961 1 January 1962– 30 June 1962 1 July 1962– 31 December 1962 1 January 1963– 30 June 1963 1 July 1963– 31 December 1963 1 January 1964– 30 June 1964 1 July 1964– 31 December 1964 1 January 1965– 30 June 1965 1 July 1965– 31 December 1965 1 January 1966– 30 June 1966 1 July 1966– 31 December 1966 1 January 1967– 30 June 1967

Council members and number of votes Belgium 2, France 4, Germany 4, Italy 4, Luxembourg 1, Netherlands 2 Total number of members: 6—votes cast: 17 The decisions of the Ministers in both Councils of Ministers, the EEC and the EAEC, were taken either by simple majority, by qualified majority or by unanimity, depending on the subject matter and the relevant provisions of the Treaties. The general threshold for a qualified majority was 12 votes for Commission proposals and 12 votes in favour with at least four Member States voting in favour in other cases.

1 September 2006 for a second term of office, from 1 January 2007 to 31 December 2008. The Eurogroup was recognised as an institution by a special protocol to the Treaty of Lisbon, which entered into force on 1 December 2009, and also provided for the election and term of office of its President for two and a half years. Furthermore, according to the same Treaty, only members of the Eurogroup are

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Table 3.18 The Council (of Ministers) of the EC and the EU, after the Merger Treaty of 1 July 1967 Period of time and Presidency 1 July 1967– 31 December 1967 1 January 1968– 30 June 1968 1 July 1968– 31 December 1968 1 January 1969– 30 June 1969 1 July 1969– 31 December 1969 1 January 1970– 30 June 1970 1 July 1970– 31 December 1970 1 January 1971– 30 June 1971 1 July 1971– 31 December 1971 1 January 1972– 30 June 1972 1 July 1972– 31 December 1972 1 January 1973– 30 June 1973 1 July 1973– 31 December 1973 1 January 1974– 30 June 1974 1 July 1974– 31 December 1974 1 January 1975– 30 June 1975 1 July 1975– 31 December 1975 1 January 1976– 30 June 1976 1 July 1976– 31 December 1976 1 January 1977– 30 June 1977 1 July 1977– 31 December 1977 1 January 1978– 30 June 1978

Council members and number of votes Belgium 2, France 4, Germany 4, Italy 4, Luxembourg 1, Netherlands 2 Total number of members: 6—votes cast: 17 The decisions of the Ministers were taken either by simple majority, by qualified majority or by unanimity, depending on the subject matter and the relevant provisions of the Treaties. The general threshold for a qualified majority was 12 votes in favour for Commission proposals and 12 votes in favour with at least four Member States voting in favour in other cases. For simple majority voting on ECSC matters, as provided for in the Treaty of Paris, by replacing one-fifth of the total value of Community production mentioned in the Treaty, with one sixth of the total value of Community production, where this is indicated.

Belgium 5, Britain 10, France 10, Germany 10, Denmark 10, Ireland 3, Italy 10, Luxembourg 2, Netherlands 5 Total number of members: 9—votes cast: 58 The decisions of the Ministers were taken either by simple majority, by qualified majority or by unanimity, depending on the subject matter and the relevant provisions of the Treaties. The general threshold for a qualified majority was 41 votes for Commission proposals and 41 votes in favour with at least six Member States voting in favour in other cases. For simple majority voting on ECSC matters, as provided for in the Treaty of Paris, by replacing one-fifth of the total value of Community production mentioned in the Treaty, with one sixth of the total value of Community production, where this is indicated. It should be noted that the figures quoted are different from those in the Accession Treaty due to the non-accession of Norway

(continued)

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Table 3.18 (continued) Period of time and Presidency 1 July 1978– 31 December 1978 1 January 1979– 30 June 1979 1 July 1979– 31 December 1979 1 January 1980– 30 June 1980 1 July 1980– 31 December 1980 1 January 1981– 30 June 1981 1 July 1981– 31 December 1981 1 January 1982– 30 June 1982 1 July 1982– 31 December 1982 1 January 1983– 30 June 1983 1 July 1983– 31 December 1983 1 January 1984– 30 June 1984 1 July 1984– 31 December 1984 1 January 1985– 30 June 1985 1 July 1985– 31 December 1985 1 January 1986– 30 June 1986 1 July 1986– 31 December 1986 1 January 1987– 30 June 1987 1 July 1987– 31 December 1987 1 January 1988– 30 June 1988 1 July 1988– 31 December 1988 1 January 1989– 30 June 1989

Council members and number of votes

Belgium 5, Britain 10, France 10, Germany 10, Denmark 10, Greece 5, Ireland 3, Italy 10, Luxembourg 2, Netherlands 5 Total number of members: 10—votes cast: 63 The decisions of the Ministers were taken either by simple majority, by qualified majority or by unanimity, depending on the subject matter and the relevant provisions of the Treaties. The general threshold for a qualified majority was 45 votes for Commission proposals and 45 votes in favour with at least six Member States voting in favour in other cases. For simple majority voting on ECSC matters, as provided for in the Treaty of Paris, by replacing one-fifth of the total value of Community production mentioned in the Treaty, with one sixth of the total value of Community production, where this is indicated.

Belgium 5, Britain 10, France 10, Germany 10, Denmark 3, Greece 5, Ireland 3, Spain 8, Italy 10, Luxembourg 2, Netherlands 5, Portugal 5 Total number of members: 12—votes cast: 76 The decisions of the Ministers were taken either by simple majority, by qualified majority or by unanimity, depending on the subject matter and the relevant provisions of the Treaties. The general threshold for a qualified majority was 54 votes for Commission proposals and 54 votes in favour with at least eight Member States voting in favour in other cases. For simple majority voting on ECSC matters, as provided for in the Treaty of Paris, by replacing one-fifth of the total value of Community production by one-ninth of the total value of Community production, where this is indicated, and in the event of a tie, the Member States which include three Member States each producing at least one-ninth of the total value of Community production shall have the casting vote. (continued)

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Table 3.18 (continued) Period of time and Presidency 1 July 1989– 31 December 1989 1 January 1990– 30 June 1990 1 July 1990– 31 December 1990 1 January 1991– 30 June 1991 1 July 1991– 31 December 1991 1 January 1992– 30 June 1992 1 July 1992– 31 December 1992 1 January 1993– 30 June 1993 1 July 1993– 31 December 1993 1 January 1994– 30 June 1994 1 July 1994– 31 December 1994 1 January 1995– 30 June 1995 1 July 1995– 31 December 1995 1 January 1996– 30 June 1996 1 July 1996– 31 December 1996 1 January 1997– 30 June 1997 1 July 1997– 31 December 1997 1 January 1998– 30 June 1998 1 July 1998– 31 December 1998 1 January 1999– 30 June 1999 1 July 1999– 31 December 1999 1 January 2000– 30 June 2000

Council members and number of votes

Austria 4, Belgium 5, Britain 10, France 10, Germany 10, Denmark 3, Greece 5, Ireland 3, Spain 8, Italy 10, Luxembourg 2, Netherlands 5, Portugal 5, Sweden 4, Finland 3, UK 10, Finland 3, Germany 10, Denmark 3, Greece 5, Ireland 3, Spain 8, Italy 10, Luxembourg 2, Netherlands 5, Portugal 5, Sweden 4, Finland 3 Total number of members: 15—votes cast: 87 The decisions of the Ministers were taken either by simple majority, by qualified majority or by unanimity, depending on the subject matter and the relevant provisions of the Treaties. The general threshold for a qualified majority was 62 votes for Commission proposals and 62 votes in favour by at least ten Member States in other cases. For simple majority voting on ECSC matters, as provided for in the Treaty of Paris, by replacing one-fifth of the total value of Community production by one tenth of the total value of Community production, where this is indicated, and in the event of a tie, the Member States which include three Member States each producing at least one tenth of the total value of Community production would prevail.

(continued)

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Table 3.18 (continued) Period of time and Presidency 1 July 2000– 31 December 2000 1 January 2001– 30 June 2001 1 July 2001– 31 December 2001 1 January 2002– 30 June 2002 1 July 2002– 31 December 2002 1 January 2003– 30 June 2003 1 July 2003– 31 December 2003 1 January 2004– 30 June 2004 1 July 2004– 31 December 2004 1 January 2005– 30 June 2005 1 July 2005– 31 December 2005 1 January 2006– 30 June 2006 1 July 2006– 31 December 2006 1 January 2007– 30 June 2007 1 July 2007– 31 December 2007 1 January 2008– 30 June 2008 1 July 2008– 31 December 2008 1 January 2009– 30 June 2009 1 July 2009– 31 December 2009 1 January 2010– 30 June 2010 1 July 2010– 31 December 2010 1 January 2011– 30 June 2011

Council members and number of votes

From 01.05.2004: transitional provisions apply (see Sect. 3.1.3) From 01.11.2004: Austria 10, Belgium 12, Britain 29, France 29, Germany 29, Denmark 7, Greece 12, Estonia 4, Ireland 7, Spain 27, Italy 29, Cyprus 4, Latvia 4, Lithuania 7, Luxembourg 4, Malta 3, Netherlands 13, Hungary 12, Poland 27, Portugal 12, Slovakia 7, Slovenia 4, Sweden 10, Czechia 12, Finland 7 Total number of members: 25—votes cast: 321 A qualified majority requires 232 votes and the “triple majority” principle (see Table 3.15—Treaty of Nice)

Austria 10, Belgium 12, Bulgaria 10, Britain 29, France 29, Germany 29, Denmark 7, Greece 12, Estonia 4, Ireland 7, Spain 27, Italy 29, Cyprus 4, Latvia 4, Lithuania 7, Luxembourg 4, Malta 3, Netherlands 13, Hungary 12, Poland 27, Portugal 12, Romania 14, Slovakia 7, Slovenia 4, Sweden 10, Czech Republic 12, Finland 7, Spain 27, Portugal 12, Romania 14, Slovakia 7, Slovenia 4, Sweden 10, Czechia 12, Finland 7 Total number of members: 27—votes cast: 345 A qualified majority requires 255 votes and the “triple majority” principle (see Table 3.15—Treaty of Nice).

(continued)

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Table 3.18 (continued) Period of time and Presidency 1 July 2011– 31 December 2011 1 January 2012– 30 June 2012 1 July 2012– 31 December 2012 1 January 2013– 30 June 2013 1 July 2013– 31 December 2013 1 January 2014– 30 June 2014 1 July 2014– 31 December 2014 1 January 2015– 30 June 2015 1 July 2015– 31 December 2015 1 January 2016– 30 June 2016 1 July 2016– 31 December 2016 1 January 2017– 30 June 2017 1 July 2017– 31 December 2017 1 January 2018– 30 June 2018 1 July 2018– 31 December 2018 1 January 2019– 30 June 2019 1 July 2019– 31 December 2019 1 January 2020– 30 June 2020 1 July 2020– 31 December 2020 1 January 2021– 30 June 2021

Council members and number of votes

Austria 10, Belgium 12, Bulgaria 10, Britain 29, France 29, Germany 29, Denmark 7, Greece 12, Estonia 4, Ireland 7, Spain 27, Italy 29, Croatia 7, Cyprus 4, Latvia 4, Lithuania 7, Luxembourg 4, Malta 3, Netherlands 13, Hungary 12, Poland 27, Portugal 12, Romania 14, Slovakia 7, Slovenia 4, Sweden 10, Czechia 12, Finland 7 Total number of members: 28—votes cast: 352 A qualified majority requires 260 votes and the principle of a “triple majority”. As of 01.11.2014, the “double majority” principle applies to qualified majority voting (see relevant part of Table 3.15).

From 01.02.2020: Britain officially leaves the EU Total number of members: 27 For qualified majority voting, the principle of “double majority” applies (see the relevant section of Table 3.15).

entitled to vote in the Economic and Financial Affairs Council of EU (ECOFIN) on matters relating to the euro area. Under the Treaty of Lisbon, Juncker retained the position of President of the Eurogroup until 21 January 2013. On 21 January 2013, Jeroen Dijsselbloem (1966–)

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was elected as the second permanent President of the Eurogroup for two and a half years and was re-elected on 13 July 2015 for a second term of office until 12 January 2018. Mário Centeno (1966–) was elected as the third President of the Eurogroup on 4 December 2017 for a two-and-a-half-year term of office from 13 January 2018. On 9 July 2020, Irish politician Paschal Donohoe (1974–) was elected the fourth President of the Eurogroup, taking office on 13 July 2020. Among the tasks of the Eurogroup is to ensure the coordination of economic and budgetary policies among the euro area Member States with a view to ensuring stability in the euro area as a whole, to promote the conditions for stronger economic growth in the euro area Member States and to prepare the euro area summits (see Sect. 3.1.4). The President of the Eurogroup represents it in the other EU institutions. The Eurogroup usually meets once a month, before the Economic and Financial Affairs Council of EU (ECOFIN) meeting. The Vice-President of the Commission responsible for economic and monetary affairs and the President of the European Central Bank also participate in Eurogroup meetings. The Managing Director of the European Stability Mechanism is also invited to participate in the meetings, while the IMF is invited to participate in discussions on the economic programmes in which it is involved. The Eurogroup Working Group is a preparatory body composed of representatives of the euro area Member States in the Economic and Financial Committee, the Commission and the European Central Bank. It assists the Eurogroup and its President in the preparation of Eurogroup meetings and ministerial discussions. It usually meets once a month before Eurogroup meetings. The members of the Eurogroup Working Party elect its chairman for a two-year term of office, which may be extended. The office of the President of the Working Party is located at the General Secretariat of the Council of the EU in Brussels.

3.1.4

The European Council: Historical Development and Functioning

The European Council is the EU institution that sets the EU’s general political orientations and priorities and is made up of the Heads of State or Government of the Member States. It does not adopt legislation, but at the end of each meeting it adopts its conclusions, which identify the most important issues to be considered by the Council (of Ministers) of EU and often asks the Commission to submit its proposals on specific issues. Historically, the first informal summit of the heads of state or government of the six partners was held in Paris on 10 February 1961. Summits have continued at regular intervals. One of the most important summits of this period was the Hague Conference, held on the initiative of the French President Pompidou on 1 and 2 December 1969, where the next steps for the implementation of the triptych of integration, deepening and enlargement of European unification were agreed, and it was also agreed that, over time, the Member States’ national financial contributions to the financing of the EC should be replaced by the Community’s own resources.

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Following a proposal by 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. The European Council was to act as an intergovernmental coordinating body and a forum for discussion, but also promoting the policies of the EC, and the EPC in particular, and would meet three times a year. The inaugural meeting of the European Council was held in Dublin on 10 and 11 March 1975 during the first Irish Presidency. Among the most important initiatives of the European Council in this period were: The establishment of the TREVI group at the European Council in Rome on 1 and 2 December 1975, aimed at combating serious crime, terrorism and drug trafficking. The assignment of Leonard Tindemans to draw up a report on the transformation of the EC into a European Union, which was presented as the “Tindemans Report” at the Luxembourg European Council on 2 April 1976. The taking of decisions concerning the election of Members of the European Parliament at the Brussels European Council of 12 and 13 July 1976. The definition of the main features of the European Monetary System at the Brussels European Council of 5 and 6 December 1978. The commissioning of the “Three Wise Men” to draw up a report on the improvement of the EC institutions, which was presented as the “Report on the European Institutions” to the Dublin European Council on 29 and 30 November 1979 and studied at the Luxembourg European Council on 1 and 2 December 1980. The signing of the Solemn Declaration on European Union at the Stuttgart European Council on 19 June 1983, based on the Genscher-Colombo initiative of 1981. The adoption of the Mediterranean Integrated Programmes at the Brussels European Council of 29 and 30 March 1985. At the same Brussels European Council of 29 and 30 March 1985, the first report of the Committee chaired by Pietro Adonnino (1929–2013) was presented, which included measures to improve the free movement of people, the mutual recognition of higher education diplomas and even the introduction of a European vocational training certificate for all qualified professionals, while a second report of the Adonnino Committee was presented to the Milan European Council of 28 and 29 June 1985, with which he proposed a uniform procedure for all Member States for the elections of the European Parliament, and raised some important issues, such as cooperation between universities and student exchange programs, etc. As a consequence of the proposals of the Adonnino Committee, the first European driving licenses were issued by the member states from January 1, 1986. Furthermore, the model of the single European passport was officially presented at the Fontainebleau European Council on 25 and 26 June 1984, while the Brussels European Council on 29 May 1986 established the blue flag with twelve gold stars, the symbol of the Council of Europe since 1955, as the flag of the EC, and established Ludwig van Beethoven’s “Ode to Joy” from the Ninth Symphony as the anthem of the EC. Furthermore, the committee, which was set up under James Dooge, submitted to the Brussels European Council of 29 and 30 March 1985 the “Dooge Report”, which 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

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development of common policies on social, environmental and cultural issues, etc. The Commission was also given the task of drafting a report on a single internal market by the end of 1992, which took the form of a White Paper, a work of the British Francis Arthur Cockfield. The adoption of the last two reports, at the Milan European Council of 28 and 29 June 1985, the initiatives of French President François Mitterrand and German Chancellor Helmut Kohl and the convening of the Intergovernmental Conference for the conclusion of a new treaty, resulted in the signing of the Single European Act on 17 February 1986. With the Single European Act, the informal European Council was established as a regular institution of the EC, with a legal basis, which enshrined its existence and determined its composition, with the power to define general policy, promote integration procedures and reach agreements on particularly difficult issues. Although its powers were not defined in the Single European Act, the European Council continued to contribute to the most important developments in the integration process. During this period, the Brussels European Council, from 11 to 13 February 1988, approved the Commission’s plan presented on 15 February 1987, entitled Making a success of the Single Act: A new frontier for Europe, known as the “Delors I package”. Furthermore, the Edinburgh European Council of 11 and 12 December 1992 approved the continuation through the new Commission plan submitted on 11 February 1992, entitled From the Single Act to Maastricht and beyond: The means to match our ambitions, known as the “Delors II package”. The immediate results of the adoption of the two plans were the 1992 CAP reform, known as the “MacSharry reform”, and the adoption of the EC’s structural/regional policy for the period 1987–1992, based on the “Delors I package”, and the EU’s structural/regional policy for the period 1993–1999, based on the “Delors II package”. In addition, the Madrid European Council of 26 and 27 June 1989, following a Commission report on the implementation of EMU presented on 12 April 1989, decided to launch its first stage on 1 July 1990, with the full liberalisation of capital movements. During this period, the Agreement on the EEA was signed in Porto, Portugal, on 2 May 1992, and efforts were made to implement the single internal market, with a deadline of 31 December 1992, as set by the EEA. Given the initiatives of French President François Mitterrand and German Chancellor Helmut Kohl, as well as the decisions of the Strasbourg European Council of 8 and 9 December 1989 to prepare an Intergovernmental Conference on EMU and the Dublin European Council, on 25 and 26 June 1990, in preparation for an Intergovernmental Conference on Political Union, the Rome European Council of 14 and 15 December 1990 finally convened the two Intergovernmental Conferences, one on EMU and one on Political Cooperation. The parallel Intergovernmental Conferences culminated in the conclusion of the revision project at the Maastricht European Council on 9 and 10 December 1991, when all the new reforms and provisions proposed were brought together in a single Treaty on European Union, known as the Treaty of Maastricht, which was signed on 7 February 1992. With the Treaty on European Union, the European Council was redefined as the EU’s coordinating institution, which would define and promote the necessary

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policies and general political orientations of the Union. As a consequence of the European Parliament’s increased powers, the Treaty provided that the European Council should report to the European Parliament after each of its meetings and submit an annual written report on the progress made by the European Union. Following the signing of the Treaty, 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 that action is more effective than action at national, regional or local level. Furthermore, the same European Council decided that the seat of the European Parliament should remain in Strasbourg. In view of an imminent major enlargement, the Copenhagen European Council of 21 and 22 June 1993 defined the economic and political criteria for the accession of new EU candidate countries, known as the Copenhagen criteria, which should have (a) stable institutions guaranteeing democracy and the rule of law, human rights and the protection of minorities; (b) a viable market economy and the ability to cope with competitive pressure and market forces within the EU and (c) the ability to assume the obligations of full membership, including the objectives of political, economic and monetary union. Later, the Madrid European Council of 15 and 16 December 1995 further clarified the Copenhagen criteria. Given that the second stage of EMU began on 1 January 1994, the European Council in Madrid on 15 and 16 December 1995 defined the name of the new currency, the “euro”, and set out the procedures for the changeover to the single currency, which was to be introduced on 1 January 1999 and officially circulated as a currency on 1 January 2002. Later, the Amsterdam European Council of 16 and 17 June 1997 reached agreement on the Stability and Growth Pact (SGP), with a view to coordinating and monitoring the national budgetary policies of the euro area Member States. At the Corfu European Council of 24 and 25 June 1994, it was decided to set up a “Reflection Group”, chaired by Carlos Westendorp y Cabeza, to prepare an Intergovernmental Conference on the revision of the TEU. The report of the “Reflection Group” was submitted to the Madrid European Council on 15 December 1995, where it was decided to convene an Intergovernmental Conference on the revision of the TEU. Agreement was reached at the Amsterdam European Council on 16 and 17 June 1997. The Treaty of Amsterdam was signed on 2 October 1997. The Treaty of Amsterdam defined the powers of the European Council in relation to the CFSP. The European Council was to lay down the principles and general guidelines for foreign and security policy, as well as for matters with defence implications. It would also decide on common strategies to be implemented by the EU in areas where Member States have important common interests. In view of the imminent start of the third stage of EMU, the Luxembourg European Council of 12 and 13 December 1997 adopted the French proposal for the establishment of the Eurogroup, consisting of the finance ministers of the euro area Member States, the Vice-President of the Commission responsible for economic affairs and the euro, and the President of the European Central Bank.

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To address the forthcoming enlargement and the problems that would arise, the Commission presented on 16 July 1997, Agenda 2000: For a stronger and wider Union. This was an action plan responding to the demands of the Madrid European Council of 15 and 16 December 1995, with the main objectives of promoting EU regional/cohesion 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 Berlin European Council of 24 and 25 March 1999, in the context of the Agenda 2000, decided to reform the CAP for the period 2000–2006 on a limited scale and drew up the necessary guidelines to make regional policy for the same period more effective. However, the inability of the EU to intervene decisively in the Kosovo incidents forced the Cologne European Council of 3 and 4 June 1999 to transfer some of the functions and responsibilities of the WEU to the EU side, by transferring responsibilities to the European Security and Defence Policy (ESDP), which has since been established, to the Council of Ministers, so that it would be the operational arm of the CFSP, with the most important operational responsibility being the undertaking of Petersberg missions, which until then had been the responsibility of the WEU. Furthermore, the Helsinki European Council of 11 and 12 December 1999 established the Headline Goal 2003, which stated that “Member States, cooperating voluntarily in EU-led operations, should be able by 2003 to deploy within 60 days and sustain for at least one year forces of 50,000–60,000 soldiers capable of carrying out the full range of Petersberg tasks”. In addition, the Santa Maria da Feira European Council of 19 and 20 June 2000 defined more clearly the relationship between the EU’s ESDP and NATO in the field of crisis management, which would be governed by cooperation but also respect for the EU’s autonomy. Considering internal security as one of the main priorities of the EU, the Tampere European Council in Finland, held on 15 and 16 October 1999, drew up the Tampere Programme for the period 2000 to 2004, with the aim of developing a common European policy on asylum and immigration and creating a European area of justice, In order to resolve the institutional issues that had not been settled in Amsterdam prior to enlargement, the Cologne European Council of 3 and 4 June 1999 confirmed the need to convene an Intergovernmental Conference to this end. The negotiations 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, after marathon meetings of its members, and the Treaty of Nice was signed on 26 February 2001 in Nice. A declaration annexed to the Treaty of Nice stipulated that from 2002, one European Council meeting per Presidency would be held in Brussels, and from the time the EU had eighteen Member States, all European Council meetings would be held in Brussels. This statement only applies to formal meetings of the European Council, while the six-monthly Presidencies are free to organise informal meetings of the European Council wherever they choose. Furthermore, the termination of EU– WEU relations with the TEU by the Treaty of Nice, the integration of ESDP into the CFSP and the European Council’s delegation to the PSC, even on a temporary basis,

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of the ability to take critical decisions on EU security, are particularly important elements in an effort towards a more autonomous and effective EU foreign policy. In order to propose solutions to overhaul the European education system and to ensure lifelong access to vocational training through knowledge and the use of modern technologies, the Lisbon Strategy, adopted by the Lisbon European Council of 22–24 March 2000, was developed 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, as well as 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. 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. The Constitutional Treaty for Europe was adopted by the Brussels European Council on 17 and 18 June 2004 and signed by the TwentyFive in Rome on 29 October 2004, without, however, being ratified by all the Member States. The Brussels European Council of 21 and 22 June 2007 therefore agreed to abandon the Constitutional Treaty and to convene a new Intergovernmental Conference to negotiate a new reform treaty containing the amendments to the existing treaties. The Commission’s proposals for EU fiscal policy for the period 2007–2013, which also covered regional/cohesion policy, were presented from July 2004. 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, without major differences from the Commission’s proposals. At the Brussels European Council of 17 and 18 June 2004, and in line with the adopted by the Brussels European Council on 12 and 13 December 2003 new European Security Strategy (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 include also joint disarmament operations, support to third countries in the fight against terrorism and the upgrading of the security sector. Furthermore, the Brussels European Council of 16 and 17 December 2004 also identified Non-Military Headline Goals of 2008 for civilian crisis management missions of the ESDP. With a view to strengthening the EU’s internal security and justice area 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, following on from the earlier Tampere Programme. As a result of the decision of the Brussels European Council of 21 and 22 June 2007, the convening of 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, which would

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amend the existing treaties, was completed. 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 and the Treaty of Lisbon was signed on 13 December 2007. The Treaty of Lisbon gave the European Council a legal status similar to that of the other institutions of the Union, which means that its acts can be challenged before the Court of Justice. Thus, as of 1 December 2009, the European Council became one of the seven main institutions of the European Union. The Treaty also provided for a stable presidency for the European Council, with a president elected by its members for a term of two and a half years, renewable once. In practice, since the entry into force of the Treaty of Lisbon, the European Council has been the source of all major decisions taken by the Union. On 19 November 2009, the extraordinary European Council in Brussels elected Herman Van Rompuy, a Belgian politician, as the first permanent President and Catherine Ashton, a British Commissioner, as the EU High Representative for Foreign Affairs and Security Policy for a two-and-ahalf-year term of office. Both were renewed once more by the European Council of 1 and 2 March 2012. 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 in the area of justice, freedom and security for the period 2010 to 2014. The new programme, known as the Stockholm Programme, which replaced the Tampere and Hague Programmes, was adopted in Brussels by the European Council under the Swedish Presidency on 10 and 11 December 2009. 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 “spillovers” 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. The strategy was adopted by the European Council on 26 March 2010. On the basis of the “Europe 2020” Strategy, the CAP was revised for the period 2014–2020 and structural policy was defined for the same period. Furthermore, in the context of the European Council of 24 and 25 March 2011, a comprehensive package of measures to strengthen the European economy was finalised as the Euro Plus Pact, created to better coordinate economic policies in EMU. On the initiative of the European Council, and following a necessary revision of Article 136 of the Treaty on the Functioning of the EU, the Treaty Establishing the European Stability Mechanism (ESM) was signed on 2 February 2012 by the representatives of the euro area Member States, and the Treaty on Stability, Coordination and Governance in EMU, on 2 March 2012, by the then 17 euro area Member States and 6 Member States that were then outside the euro area (Bulgaria, Romania, Latvia, Lithuania, Denmark and Poland) (Fig. 3.13). The issue of a banking union was raised by José Manuel Barroso, President of the Commission, during the informal European Council of 23 May 2012. The issue was discussed again at the European Councils of 28 and 29 June 2012. In particular, a report entitled Towards a Genuine Economic and Monetary Union was presented

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Fig. 3.13 The historic Solvay Library in Brussels, where the first informal meeting of the new European Council was held in February 2010. This file is lacking author information, licensed: CC BY-SA 4.0 Deed https://commons.wikimedia.org/wiki/Category:Biblioth%C3%A8que_de_ sociologie_Solvay#/media/File:Parc_Leopold_Bruxelles,_ancienne_biblioth%C3%A8que_ Solvay.JPG

and adopted by the Presidents of the European Council, Herman Van Rompuy, the Commission, José Manuel Barroso, the Eurogroup, Jean-Claude Juncker, and the ECB, Mario Draghi, known as the “Report of the Four Presidents”. The report set out 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 13 and 14 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. On 30 August 2014, the European Council elected Polish politician Donald Tusk as President of the European Council and Italian politician Federica Mogherini as EU High Representative for Foreign Affairs and Security Policy for a two-and-ahalf-year term of office, starting on 1 December 2014. At this time the European Council is taking a number of important decisions. On the environment, the Brussels European Council on 23 and 24 October 2014 agrees on a number of ambitious climate targets. It is foreseen that by 2030, harmful

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emissions should be reduced by 40% compared to 1990. Furthermore, the European Council of 19 and 20 March 2015 decided to create an Energy Union and underlined the commitment to provide the EU with affordable, secure and sustainable energy. Furthermore, the European Council of 17 and 18 March 2016 urged EU Member States to ratify in time the Paris Climate Agreement of 12 December 2015. To take action on migration, following the loss of many lives in dangerous sea voyages to European shores, four priority areas were agreed at the extraordinary European Council in Brussels on 23 April 2015. These areas include taking action to prosecute traffickers, a new programme for the return of irregular migrants, greater protection for refugees from conflict zones and a tripling of resources for the search and rescue operations the EU undertaken in the central Mediterranean. Furthermore, at the European Council meeting in Brussels on 17 and 18 March 2016, the EU reached an agreement with Turkey to limit irregular migration by sea from Turkey to Greece. The agreement stipulated that Turkey would accept the return of people who have arrived in Greece by sea, some refugees from Turkey would be resettled in the EU and the EU would increase funding to Turkey to assist refugees. Furthermore, at the Social Summit for Fair Employment and Development in Gothenburg on 17 November 2017, participants formally proclaimed the European Pillar of Social Rights. On 2 July 2019, Belgian politician Charles Michel was elected President of the European Council, succeeding Tusk, for the period from 1 December 2019 to 31 May 2022. The Spanish politician Josep Borrell has been selected as High Representative for Foreign Affairs and Security Policy. On 20 July 2020, the President of the European Council Charles Michel presented the Next Generation EU recovery package and the EU budget 2021–2027 to support Member States affected by pandemic COVID-19. In August 2020, Michel expressed “full solidarity” with Greece and Cyprus in their dispute with Turkey. Today, the European Council, as the summit of the Heads of State or Government of all EU Member States, is the highest level of intergovernmental cooperation between Member States. The President of the Commission and the EU High Representative for Foreign Affairs and Security Policy also participate in its meetings when foreign affairs are discussed. At the end of each meeting it adopts Conclusions, which reflect the main findings of the discussions and record the decisions taken as well as the follow-up to them. The Conclusions identify the most important issues to be considered by the Council of EU. The Commission is often asked to make proposals on certain specific issues. In essence, through its Conclusions, the European Council sets out the EU’s general political orientations and priorities. It is not an EU legislative institution, so it does not negotiate or adopt EU legislative acts. Decisions are most often taken by consensus. In some cases, however, unanimity or qualified majority voting applies, such as in the election of the President of the European Council, and in the case of the appointment of the Commission and the High Representative of the Union for Foreign Affairs and Security Policy. In cases of voting, only the Heads of State or Government may vote. The European Council normally meets at least twice every six months. Additional (extraordinary or informal) meetings may be convened to deal with urgent issues that

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Fig. 3.14 The Europa building in Brussels, the meeting place of the Council (of Ministers) of the EU and the European Council since March 2017. Until then, the two institutions met in the adjacent Justus Lipsius building. Photo by Samynandpartners—Own work, licensed: CC BY-SA 4.0 Deed I Attribution-ShareAlike 4.0 International, https://en.wikipedia.org/wiki/Europa_building#/media/ File:Europa_building_February_2016_(cropped).jpg

require decisions at the highest level, e.g. on economic or foreign policy issues. The European Council also holds informal or extraordinary meetings with representatives of third countries outside the EU. At the end of these meetings, a declaration is adopted rather than formal conclusions (Fig. 3.14). The work of the European Council is coordinated by the President, who is responsible for convening and chairing the meetings of the European Council and promoting its work. The President of the European Council also represents the EU to the rest of the world. Together with the High Representative of the Union for Foreign Affairs and Security Policy, he or she represents the EU’s interests in foreign and security policy matters. The President is elected by the European Council for a two-and-a-half-year term of office, renewable once. The European Council is assisted by the General Secretariat of the Council. Table 3.19 refers historically to the places of meetings of the European Council. Table 3.20 below shows the historical European Council-related provisions of the EC and EU Treaties. Table 3.21 shows the Informal meetings of the European Council up to December 1974. Table 3.22 shows the meetings of the European Council from March 1975 to December 2009 and Table 3.23 shows the meetings of the European Council with its new legal status since February 2010.

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Table 3.19 European Council Seats European Council European Council Informal Meetings Up to December 1974 European Council Meetings March 1975–December 2009 European Council Meetings February 2010–February 2017 European Council Meetings March 2017–today

Seat European Council meetings are usually held in a town of the Member State having the presidency of the EC or the EU

The historic Solvay Library in Brussels is the place of the first informal meeting of the new European Council held in February 2010. Then the European Council was using the Justus Lipsius building in Brussels for its meetings The Europa building in Brussels is the meeting place of the European Council (and the Council of EU) since March 2017

Table 3.20 Provisions of the Treaties relating to the European Council Treaty Single European Act

Treaty on the European Union

Treaty of Amsterdam

Treaty of Nice

Provisions relating to the Council of Ministers It provided the European Council with a legal basis, which guaranteed its existence and determined its composition: “The European Council shall consist of the Heads of State or Government of the Member States and the President of the Commission of the European Communities. He shall be assisted by the Ministers for Foreign Affairs and by a Member of the Commission”. The European Council shall meet at least twice a year. Although its powers are not defined in the Single European Act, the European Council has continued to contribute to major developments in the integration process. It clarified the role of the European Council and defined how the presidency is held by the head of state or government of the country holding the Presidency of the Council (of Ministers) of the EU. In addition, as a result of the increase in the European Parliament’s powers, the Treaty provided that the European Council must submit a report to the European Parliament after each of its meetings and an annual written report on the progress made by the European Union. Finally, the Treaty defined the powers of the European Council as follows: “The European Council shall provide the Union with the necessary impetus for its development and shall define its general political guidelines”. It defined the powers of the European Council in relation to the CFSP as follows: “The European Council shall establish the principles and general guidelines for foreign and security policy and for matters with defence implications. It decides on common strategies to be implemented by the Union in areas where Member States have important common interests”. A declaration annexed to the final act of this Treaty on the venue of meetings provides that: “From 2002, one meeting of the European Council per Presidency will be held in Brussels. When the Union has 18 Member States, all meetings of the European Council will be held in Brussels”. (continued)

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Table 3.20 (continued) Treaty Treaty of Lisbon

Provisions relating to the Council of Ministers Among other things, it gave the European Council a legal status similar to that of the other institutions of the Union, so that its acts could be subject to an action before the Court of Justice. The Treaty also provided for a stable presidency of the European Council, with a president elected by its members for a term of two and a half years, renewable once. In practice, since the entry into force of the Treaty of Lisbon, the European Council has been the source of all major decisions taken by the Union.

Table 3.21 Informal meetings of the European Council up to December 1974 Date and Presidency 10–11 February 1961 18 July 1961 29–30 May 1967 1–2 December 1969 19–20 October 1972 14–15 December 1973 9–10 December 1974

Charles de Gaulle Konrad Adenauer Aldo Moro Piet de Jong Barend Blesheuvel Anker Jørgensen Valéry Giscard d’Estaing

Place Paris Bonn Rome The Hague Paris Copenhagen Paris

Table 3.22 European Council meetings from March 1975 to December 2009 Date and Presidency 10–11 March 1975 16–17 July 1975 1–2 December 1975 1–2 April 1976 12–13 July 1976 29–30 November 1976 25–26 March 1977 29–30 June 1977 5–6 December 1977 7–8 April 1978 6–7 July 1978 4–5 December 1978 12–13 March 1979 21–22 June 1979 29–30 November 1979 17–18 April 1980 12–13 June 1980 1–2 December 1980 23–24 March 1981 29–30 June 1981 26–27 November 1981

Liam Cosgrave Aldo Moro Aldo Moro Gaston Thorn Joop the Uyl Joop the Uyl James Callaghan James Callaghan Leo Tindeman Anchor Jørgense Helmut Schmidt Helmut Schmidt Valéry Giscard d’Estaing Valéry Giscard d’Estaing Jack Lynch Francesco Cossiga Francesco Cossiga Pierre Werner Dries van Agt Dries van Agt Margaret Thatcher

Place Dublin Brussels Rome Luxembourg Brussels The Hague Rome London Brussels Copenhagen Bremen Brussels Paris Strasbourg Dublin Luxembourg Venice Luxembourg Maastricht Luxembourg London

(continued)

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Table 3.22 (continued) Date and Presidency 29–30 March 1982 28–29 June 1982 3–4 December 1982 21–22 March 1983 17–19 June 1983 4–6 December 1983 19–20 March 1984 25–26 June 1984 3–4 December 1984 29–30 March 1985 28–29 June 1985 2–3 December 1985 26–27 June 1986 5–6 December 1986 29–30 June 1987 4–5 December 1987 11–12 February 1988 27–28 June 1988 2–3 December 1988 26–27 June 1989 18 November 1989 8–9 December 1989 28 April 1990 25–26 June 1990 27–28 October 1990 14–15 December 1990 8 April 1991 28–29 June 1991 9–10 December 1991 26–27 June 1992 16 October 1992 11–12 December 1992 21–22 June 1993 29 October 1993 10–11 December 1993 24–25 June 1994 15 July 1994 9–10 December 1994 26–27 June 1995 22–23 September 1995 15–16 December 1995 29 March 1996 21–22 June 1996

I E

I

Ε

E

E

I

Wilfried Martens Wilfried Martens Poul Schlüter Helmut Kohl Helmut Kohl Andreas Papandreou François Mitterrand François Mitterrand Garret FitzGerald Bettino Craxi Bettino Craxi Jacques Santer Ruud Lubbers Margaret Thatcher Wilfried Martens Poul Schlüter Helmut Kohl Helmut Kohl Andreas Papandreou Felipe González François Mitterrand François Mitterrand Charles Haughey Charles Haughey Giulio Andreotti Giulio Andreotti Jacques Santer Jacques Santer Ruud Lubbers Aníbal Cavaco Silva John Major John Major Poul Nyrup Rasmussen Jean-Luc Dehaene Jean-Luc Dehaene Andreas Papandreou Helmut Kohl Helmut Kohl Jacques Chirac Felipe González Felipe González Lamberto Dini Romano Prodi

Place Brussels Brussels Copenhagen Brussels Stuttgart Athens Brussels Fontainebleau Dublin Brussels Milan Luxembourg The Hague London Brussels Copenhagen Brussels Hanover Rhodes Madrid Paris Strasbourg Dublin Dublin Rome Rome Luxembourg Luxembourg Maastricht Lisbon Birmingham Edinburgh Copenhagen Brussels Brussels Corfu Brussels Essen Cannes Majorca Madrid Turin Florence (continued)

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Table 3.22 (continued) Date and Presidency 5 October 1996 13–14 December 1996 23 May 1997 16–17 June 1997 20–21 November 1997 12–13 December 1997 3 May 1998 15–16 June 1998 24–25 October 1998 11–12 December 1998 26 February 1999 24–25 March 1999 14 April 1999 3–4 June 1999 15–16 October 1999 10–11 December 1999 23–24 March 2000 19–20 June 2000 13–14 October 2000 7–11 December 2000 23–24 March 2001 15–16 June 2001 21 September 2001 19 October 2001 14–15 December 2001 15–16 March 2002 21–22 June 2002 24–25 October 2002 12–13 December 2002 17 February 2003 20–21 March 2003 16 April 2003 19–20 June 2003 4 October 2003 16–17 October 2003 12–13 December 2003 25–26 March 2004 17–18 June 2004 4–5 November 2004 16–17 December 2004 22–23 March 2005 16–17 June 2005 27 October 2005

E I

E E I I I

I

E I

E I L E

I

John Bruton John Bruton Wim Kok Wim Kok Jean-Claude Juncker Jean-Claude Juncker Tony Blair Tony Blair Victor Climate Victor Climate Gerhard Schröder Gerhard Schröder Gerhard Schröder Gerhard Schröder Paavo Lipponen Paavo Lipponen António Guterres António Guterres Jacques Chirac Jacques Chirac Göran Persson Göran Persson Guy Verhofstadt Guy Verhofstadt Guy Verhofstadt José María Aznar López José María Aznar López Anders Fogh Rasmussen Anders Fogh Rasmussen Costas Simitis Costas Simitis Costas Simitis Costas Simitis Silvio Berlusconi Silvio Berlusconi Silvio Berlusconi Bertie Ahern Bertie Ahern Jan Peter Balkenende Jan Peter Balkenende Jean-Claude Juncker Jean-Claude Juncker Tony Blair

Place Dublin Dublin Noordwijk Amsterdam Luxembourg Luxembourg Brussels Cardiff Pörtschach Vienna Königswinter Berlin Brussels Cologne Tampere Helsinki Lisbon Santa Maria da Feira Biarritz Nice Stockholm Gothenburg Brussels Ghent Laeken Barcelona Seville Brussels Copenhagen Brussels Brussels Athens Thessaloniki Rome Brussels Brussels Brussels Brussels Brussels Brussels Brussels Brussels Hampton Court

(continued)

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Table 3.22 (continued) Date and Presidency 15–16 December 2005 23–24 March 2006 15–16 June 2006 14–15 December 2006 8–9 March 2007 21–22 June 2007 18–19 October 2007 14 December 2007 13–14 March 2008 19–20 June 2008 1 September 2008 15–16 October 2008 7 November 2008 11–12 December 2008 1 March 2009 19–20 March 2009 18–19 June 2009 17 September 2009 29–30 October 2009 19 November 2009 10–11 December 2009

I

E I I

I Ε

Tony Blair Wolfgang Schüssel Wolfgang Schüssel Matti Vanhanen Angela Merkel Angela Merkel José Sócrates José Sócrates Janez Janša Janez Janša Nicolas Sarkozy Nicolas Sarkozy Nicolas Sarkozy Nicolas Sarkozy Mirek Topolánek Mirek Topolánek Jan Fischer Fredrik Reinfeldt Fredrik Reinfeldt Fredrik Reinfeldt Fredrik Reinfeldt

Place Brussels Brussels Brussels Brussels Brussels Brussels Lisbon Brussels Brussels Brussels Brussels Brussels Brussels Brussels Brussels Brussels Brussels Brussels Brussels Brussels Brussels

I, informal; E, extraordinary—special; L, last scheduled European Council outside Brussels

The Euro Summit is an informal institution composed of the heads of state or government of the euro area Member States. It was launched in 2008, following a proposal by then French President Nicolas Sarkozy, as a subset of the European Council for the Eurozone Member States, and its first meeting was held on 12 October 2008 in Paris. In application of the provisions of the Treaty of Lisbon, and given that no president has been chosen specifically for the Euro Summit, the meetings are chaired by the President of the European Council and attended by the President of the Commission and the President of the European Central Bank. The President of the European Parliament may also be invited to attend the Euro Summit. The Euro Summit is formally established by the Treaty establishing the European Stability Mechanism, which entered into force on 27 September 2012. The Euro Summit meetings (see Table 3.24) discuss the economic governance of the Eurozone, as well as major economic policy reforms. The president of the euro summit is appointed by the heads of state or government of the euro area member states. The appointment takes place at the same time as the appointment of the President of the European Council and his or her term of office is the same as that of the President of the European Council. The same person may hold both positions, as is currently the case.

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Table 3.23 European Council meetings since February 2010 Date & Member State Presidency of the Council (of Ministers) of EU 11 February 2010 I 25–26 March 2010 17 June 2010 16 September 2010 E 28–29 October 2010 16–17 December 2010 4 February 2011 11 March 2011 E 24–25 March 2011 23–24 June 2011 23 October 2011 26 October 2011 I 8–9 December 2011 30 January 2012 I 1–2 March 2012 23 May 2012 I 28–29 June 2012 18–19 October 2012 22–23 November 2012 E 13–14 December 2012 7–8 February 2013 14–15 March 2013 22 May 2013 27–28 June 2013 24–25 October 2013 19–20 December 2013 6 March 2014 E 20–21 March 2014 27 May 2014 I 26–27 June 2014 16 July 2014 E 30 August 2014 E 23–24 October 2014 18 December 2014 12 February 2015 I 19–20 March 2015 23 April 2015 E 25–26 June 2015 23 September 2015 I 15 October 2015 12 November 2015 I 17–18 December 2015

Presidency of the European Council Herman Van Rompuy

Herman Van Rompuy

Donald Tusk

(continued)

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Table 3.23 (continued) Date & Member State Presidency of the Council (of Ministers) of EU 18–19 February 2016 17–18 March 2016 28 June 2016 P* 29 June 2016 I* 16 September 2016 I* 20–21 October 2016 15 December 2016 3 February 2017 I 3 February 2017 (afternoon) I* 9–10 March 2017 10 March 2017 I* 29 April 2017 E* 22–23 June 2017 June 22, 2017 (afternoon) E* 19–20 October 2017 20 October 2017 Ε* 14–15 December 2017 15 December 2017 Ε* 22–23 March 2018 23 March 2018 Ε* 28–29 June 2018 29 June 2018 Ε* 19–20 September 2018 I 20 September 2018 I* 17 October 2018 Ε* 18 October 2018 13–14 December 2018 13 December 2018 Ε* 21 March 2019 Ε* 22 March 2019 10 April 2019 Ε* 9 May 2019 I 28 May 2019 I 20 June 2019 21 June 2019 Ε* 30 June–2 July 2019 Ε

17 October 2019 17–18 October 2019 12–13 December 2019 13 December 2019 10 March 2020

Presidency of the European Council

Donald Tusk

Ε* Charles Michel Ε* T,I (continued)

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Table 3.23 (continued) Date & Member State Presidency of the Council (of Ministers) of EU 17 March 2020 T,I Τ 26 March 2020 23 April 2020 T,I 19 June 2020 Τ 17–21 July 2020 Ε 1–2 October 2020 Ε 15–16 October 2020 29 October 2020 T,I 10–11 December 2020

Presidency of the European Council

Notes: Since 2010, all official (scheduled or extraordinary) meetings of the European Council are held in Brussels. In particular, in February 2010 the meeting was held in the Solvay Library, while subsequent meetings were held in the Justus Lipsius building and, since March 2017, in the Europa building I, informal; E, extraordinary—special; T, videoconferencing; P*, postponed due to the results of the UK referendum of 23.06.2016; I*, informal without the participation of the UK (Symbolism valid until 31.01.2020); E*, extraordinary without the participation of the UK (Symbolism valid until 31.01.2020) Table 3.24 Summits of Heads of State and Government of the euro area Member States (Euro Summits) Date & Member State Presidency of the Council (of Ministers) of EU 12 October 2008 25 March 2010 7 May 2010 11 March 2011 21 July 2011 23–26 October 2011 9 December 2011 30 January 2012 2 March 2012 28–29 June 2012 14 March 2013 24 October 2014 22 June 2015 7 July 2015 12 July 2015 15 December 2017 23 March 2018 29 June 2018 18 October 2018 14 December 2018 21 June 2019 13 December 2019 11 December 2020

Presidency of the Summit of the Eurozone Nicolas Sarkozy Paris Herman Van Rompuy

Herman Van Rompuy

Donald Tusk

Donald Tusk

Charles Michel

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The Court of Justice of the EU: Historical Development and Functioning

It is the EU’s judicial authority and ensures, in cooperation with the courts of the Member States, that EU law is uniformly applied and interpreted. It settles legal disputes between the governments of the Member States and the EU institutions. Individuals, companies and organisations can also bring cases before the Court of Justice if they feel that their rights have not been respected by an EU institution. The Court of Justice was established in 1952 by the Treaty of Paris of 18 April 1951, in the context of the creation of the ECSC, with its seat in Luxembourg. It consisted of seven judges, one judge from each of the six Member States, while the redundant number of judges serving to avoid a tie. The seventh judge came from one of the three largest Member States, namely France, Germany and Italy, on a rotating basis. The Court of Justice became an institution of both the new Communities of the Treaty of Rome of 25 March 1957, namely the EEC and the EAEC, as the Court of Justice of the European Communities (Fig. 3.15). The Treaty of Merger of the Community Institutions, signed on 8 April 1965, finally confirmed Luxembourg as the seat of the Court of Justice of the EC, a fact that was reconfirmed at the Edinburgh European Council of 11 and 12 December 1992. The Single European Act of 17 February 1986 provided for the creation of a Court of First Instance of the European Communities, with the aim of relieving the overburdened Court of Justice by the creation of another institution for the administration of justice, which would take over cases at first instance.

Fig. 3.15 Villa Vauban, seat of the Court of Justice in Luxembourg, from 1952 to 1959. Photo by Daderot—Own work. CCO 1,0 DEED, CCO 1.0 Universal, https://commons.wikimedia.org/wiki/ Category:Villa_Vauban,_Mus%C3%A9e_d%27art_de_la_Ville_de_Luxembourg#/media/File: Villa_Vauban_-_Luxembourg_City_-_DSC06363.JPG

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According to the Treaty on European Union of 7 February 1992, the Court of Justice has the power to impose fines on Member States that fail to comply with or infringe the EU decisions and directives. The Treaty of Amsterdam of 2 October 1997 clarified the role of the Court of Justice in areas such as fundamental rights and certain aspects relating to the internal security of the EU. Under the Treaty of Nice of 26 February 2001, the Court of Justice would be composed of the same number of judges as the Member States. The number of Advocates General would remain eight, but the Council of EU could, by unanimous decision, increase this number. 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. In addition, the Court of First Instance would 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 was introduced. The Court of Justice, as the EU’s highest judicial body, retained jurisdiction over other disputes relating to fundamental matters of Community law and exercised this function through the preliminary ruling procedure in cases brought by the courts of the Member States. However, it could confer pre-trial jurisdiction on the Court of First Instance in specific areas. The Court of First Instance would have jurisdiction in common law cases at first instance, in particular in actions for annulment, for failure to act and for liability, with the exception of those which were to be brought before the Court of Justice. By the Treaty of Lisbon, of 13 December 2007, the term Court of Justice of the European Union is formally defined as: (a) the Court itself (b) the Court of First Instance renamed the General Court and (c) the Civil Service Tribunal. The Court of Justice of the EU extends its jurisdiction to all areas of EU activity. Thus, the Court of Justice of the EU acquires competences in police cooperation and judicial cooperation in criminal matters. The Court itself deals with cases brought by the EU institutions and Member States. It hears appeals against decisions of the General Court and, if the case is ripe for judgement, may itself give judgement on the dispute. It reviews, subject to conditions, decisions of the General Court on appeals against decisions of the Civil Service Tribunal (Fig. 3.16). The General Court deals with cases brought by individuals, companies and certain organisations, as well as cases relating to competition law. The Civil Service Tribunal rules on disputes between the EU and its staff members. The most common types of cases brought before the Court for judgements are: (a) Applications for preliminary rulings, where national courts ask the Court to interpret a point of EU law. (b) Appeals against EU governments, for failure to apply EU law. (c) Actions for annulment against EU laws, which are considered to be in breach of the EU Treaties or fundamental rights. (d) Actions for failure to act against EU institutions, which fail to take the required decisions even though they have been asked to do so. (e) Appeals, limited to points of law, against decisions and provisions adopted by the General Court (Fig. 3.17).

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Fig. 3.16 The current seat of the Court of Justice, in a group of buildings in Kirchberg, Luxembourg. Photo by Luxofluxo - Own work, licensed: CC BY-SA 4.0 DEED I AttributionShareAlike 4.0 International, https://commons.wikimedia.org/wiki/Category:Buildings_of_the_ Court_of_Justice_of_the_European_Union#/media/File:Sign_in_front_of_the_CJEU_complex_ March_2023.png Fig. 3.17 The current logo of the Court of Justice of the European Union

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Some of the most important judgements to date, which highlight the validity of Court of Justice decisions in the Member States are: (a) Case law (starting with the 1963 Van Gend & Loos judgement), in which the Court of Justice formulated the principle of direct effect so that European citizens can directly invoke the rules of EU law before their national courts. (b) The Costa judgement (1964), which formulated the principle of the primacy of Community law over the domestic law of the Member States. (c) The Francovich and Others judgement (1991), in which the Court of Justice established the principle that Member States are liable to individuals for the damage caused to them by breaches of Community law committed in the Member State and thus established the right of action for damages which individuals have against the Member State which has infringed the Community rule. Today, the Court is composed of one judge per Member State, making a total of 28 judges (27 from 1 February 2020), and there are 11 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. It has 54 judges in 2019 (after the withdrawal of Britain), with two judges from each EU Member State. The General Court has no permanent advocates general. The Civil Service Tribunal is composed of 7 judges. The judges and advocates general are chosen from among persons whose independence is beyond doubt and are appointed by common accord of the governments of the Member States for a renewable six-year term of office, after consultation with a competent committee composed of 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 is proposed by the European Parliament. The judges of the Court elect the President and Vice-President of the Court from among their number for a renewable term of three years. The President shall direct the work of the Court and preside at meetings and conferences of the larger formations of the Court. The Vice-President shall assist the President in the performance of his duties and shall replace him in the event of his being prevented from attending. The Judges of the General Court (and formerly the Court of First Instance) also elect the President from among their number for a renewable term of three years. Table 3.25 refers historically to the seats of the Court of Justice of the EU. Tables 3.26 and 3.27 below show the Presidents of the Court of Justice and of the General Court (formerly the Court of First Instance). Table 3.25 Court of Justice of the EU Seats Court of Justice of the EU Court of Justice 1952–1959 Court of Justice 1959–1972 Court of Justice 1973–1999 Court of Justice 1999–today

Seat Villa Vauban, seat of the Court of Justice in Luxembourg, from 1952 to 1959 The Côte d’Eich building in Luxembourg was the seat of the Court of Justice from 1959 to 1972 The Palais Building in Luxembourg was the seat of the Court of Justice from 1973 to 1999 The current seat of the Court of Justice is in a group of buildings in Kirchberg, Luxembourg

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Table 3.26 Presidents and number of judges and prosecutors of the Court of Justice Period of time 10.12.1952–07.10.1958

Presidency of the Court of Justice Massimo Pilotti

Number of judges 7

Number of prosecutors

07.10.1958–08.10.1964

Andreas Matthias Donner

7

2

08.10.1964–07.10.1967

Charles Léon Hammes

7

2

07.10.1967–07.10.1976

Robert Lecourt

2 4 from 01.01.1973

07.10.1976–30.10.1980

Hans Kutscher

7 9 from 01.01.1973 9

30.10.1980–10.04.1984

Josse Mertens de Wilmars

4 5 from 01.01.1981

10.04.1984–07.10.1988

Alexander MackenzieStuart

07.10.1988–07.10.1994

Ole Due

9 10 from 01.01.1981 11 from 01.03.1981 11 13 from 01.01.1986 13

07.10.1994–07.10.2003

Gil Carlos Rodriguez Iglesias

07.10.2003–07.10.2015

Basil Skouris

6 9 from 01.01.1995 8 from 06.10.2000 8

07.10.2015–

Koen Lenaerts

13 15 from 01.01.1995 15 25 from 01.05.2004 27 from 01.01.2007 28 from 01.07.2013 28 27 from 01.02.2020

4

5 and 6 from 01,01,1986 6

11

Table 3.27 Presidents and number of Judges of the General Court and the former Court of First Instance Period of time 01.09.1989–18.09.1995

18.09.1995–04.03.1998

Presidency of the Court of Justice José Luís da Cruz Vilaça Antonio Saggio

Number of judges 12 15 from 01.01.1995 15 (continued)

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Table 3.27 (continued) Period of time 04.03.1998–17.09.2007

Presidency of the Court of Justice Bo Vesterdorf

17.09.2007–26.09.2019

Marc Jaeger

27.09.2019–

Marc van der Woude

Number of judges 15 25 from 01.05.2004 27 from 01.01.2007 28 from 27 01.07.2013 35 from 38 from 06.2016 04.2016 45 from 06.2017 44 from 09.2016 46 of 10.2017 49

Fig. 3.18 The building at 29 Aldringen Street, Luxembourg, originally the seat of the Court of Auditors. Photo by # European Union—European Parliament’s audiovisual library

3.1.6

The Court of Auditors: Historical Development and Functioning

The Court of Auditors is the EU institution responsible for auditing the EU’s finances. It was established by the Treaty of Brussels or Second Budget Treaty on 22 July 1975, with its seat in Luxembourg, to audit the management of EC funds, and began operating on 18 October 1977 and held its first meeting on 25 October of the same year (Fig. 3.18).

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With the Treaty on European Union, of 7 February 1992, the Court of Auditors became a formal EU institution to control the management of the EU’s first pillar EC funds. The Edinburgh European Council of 11 and 12 December 1992, deciding on the seats of the EU institutions, designated Luxembourg as the seat of the Court of Auditors. The Treaty of Amsterdam of 2 October 1997 strengthened the institutional role of the Court of Auditors by giving it the possibility of bringing actions for annulment before the Court of Justice under the same conditions as the European Parliament and the ECB. Therefore, in addition to auditing the EC finances (first pillar), the Court of Auditors would also be responsible for auditing expenditure relating to the common foreign and security policy and police and judicial cooperation in criminal matters (second and third pillars of the EU). According to the Treaty of Nice of 26 February 2001, the Court of Auditors was to consist of one representative from each Member State, replacing the previous method of determining a specific number of members, which in practice was still equal to the number of Member States. The mission of the Court of Auditors is to contribute to improving the financial management of the EU, to promote accountability and transparency and to act as the independent guardian of the financial interests of EU citizens. In particular, the Court of Auditors carries out three types of audits on bodies and persons managing European funds: (a) Financial audit, which checks that the accounts accurately reflect the financial situation, results and cash flow for the financial year. (b) Compliance audit, which checks that financial transactions are carried out in accordance with the applicable rules. (c) Performance audit, which checks whether the European funds achieve their objectives with the least possible resources and in the most cost-effective manner. As part of the audit reports, it makes findings and recommendations addressed to the Commission and Member State governments, reports any suspected fraud, corruption or other illegal activity to the European Anti-Fraud Office (Office européen de Lutte AntiFraude, OLAF) and prepares an annual report for the European Parliament and the Council of EU, which the European Parliament examines before deciding whether to give its approval to the European Commission’s management of the EU budget. The Court of Auditors’ audits mainly target the European Commission, which is responsible for implementing the EU budget. At the same time, it works closely with Member State authorities, as the Commission manages most EU funds (around 80%) jointly with them (Fig. 3.19). The members of the Court of Auditors—one from each Member State—are appointed by the Council of Ministers, after consulting the European Parliament, for a renewable six-year term of office. The members are chosen from persons who have served in national audit institutions and who are distinguished by their impartiality and integrity. While serving the Court of Auditors, members may not engage in any other professional activities.

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Fig. 3.19 The new building complex of the Court of Auditors, at 12 Alcide de Gasperi Street, Kirchberg Plateau, Luxembourg, inaugurated on 7 June 1988. Photo by Euseson. European Court of Auditors, licensed: CC BY-SA 4.0 DEED I Attribution-ShareAlike 4.0 International, https://en. wikipedia.org/wiki/European_Court_of_Auditors#/media/File:Europ%C3%A4ischer_ Rechnungshof.jpg

From these members, a President shall be elected for a three-year term, also renewable by secret ballot and by a two-thirds majority of those voting. The President shall convene the meetings over which he presides and ensure the smooth conduct of discussions, ensure the implementation of the Court of Auditors’ decisions, the smooth running of the services and the good management of the Court of Auditors’ various activities, appoint the Court of Auditors’ representatives in legal proceedings in which it is involved and represent the Court of Auditors in its external relations (Fig. 3.20). The Court of Auditors also elects the Secretary General by secret ballot, who assists the President, prepares the meetings, draws up draft minutes of meetings, ensures that the procedures are followed and keeps records of all decisions of the Court of Auditors and audit teams, including the minutes of meetings. He ensures the notification and publication of the Court of Auditors’ documents in the Official Journal of the EU and is responsible for the management of the Court of Auditors’ staff and administration. Members of the Court of Auditors are assigned to one of the five audit chambers. They are responsible for leading audits and guiding reports through the adoption procedure at chamber or Court level. When a report has been adopted, it is presented

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Fig. 3.20 The current logo of the European Court of Auditors

Table 3.28 EU Court of Auditors Seats Court of Auditors of the EU Court of Auditors From 1977 Court of Auditors 1988–today

Seat The building at 29 Aldringen Street, Luxembourg, was originally the seat of the Court of Auditors The new building complex of the Court of Auditors, at 12 Alcide de Gasperi Street, Kirchberg Plateau, Luxembourg, inaugurated on 7 June 1988 is the new seat of the Court of Auditors

to the institutional stakeholders such as the European Parliament and the Council of EU, and to the media. Table 3.28 refers historically to the seats of the EU Court of Auditors. Table 3.29 below shows the Presidents of the Court of Auditors.

3.1.7

The European Central Bank

The European Central Bank (ECB) is the central bank of the EU Member States, based in Frankfurt, Germany. Its main task is to maintain price stability in the euro area and thus preserve the purchasing power of the single currency. The ECB, established together with the European System of Central Banks (ESCB) on 1 June 1998, by virtue of the Treaty on European Union, with its headquarters in Frankfurt, replaced the European Monetary Institute (EMI), and on 31 December of the same year, the exchange rates between the euro and the currencies of the euro area Member States were irrevocably fixed. On 1 January 1999, the start of the third stage of EMU, the euro was officially introduced (Fig. 3.21). The ESCB comprised the ECB and the Central Banks of all EU Member States, with the primary objective of maintaining price stability. It also provides its support to the EU’s general economic policies in order to contribute to the stability of EMU. The Eurosystem consisted of the ECB and the Central Banks of the euro area Member States and assumed responsibility for monetary policy in the euro area.

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Table 3.29 Presidents of the EU Court of Auditors since its establishment Period of time 18.10.1977–10.11.1977

Presidency of the Court of Auditors Norman Price

Number of members 9 9 10 from 01.01.1981 10

11.11.1977–17.10.1981

Michael Murphy

18.10.1981–17.10.1984

Pierre Lelong

18.10.1984–17.10.1989

Marcel Mart

09.01.1990–21.12.1992

Aldo Angioi

12.01.1993–20.12.1995

André Middelhoek

18.01.1996–17.01.1999

Bernhard Friedmann

12 15 from 01.01.1995 15

18.01.1999–31.12.2001

Jan O. Karlsson

15

01.01.2001–15.01.2005

Juan Manuel Fabra Vallés

16.01.2006–15.01.2008

Hubert Weber

16.01.2008–30.09.2016

Vítor Manuel da Silva Caldeira

01.10.2016–

Klaus-Heiner Lehne

15 25 from 01.05.2004 25 27 from 01.01.2007 27 28 from 01.07.2013 28 27 from 01.02.2020

10 12 from 01.01.1986 12

The Eurosystem and the ESCB will coexist as long as there are EU Member States that are not part of the euro area. In particular, the ECB (a) sets the interest rates at which it lends to commercial banks in the Eurozone, thereby controlling the money supply and inflation, (b) manages the Eurozone’s foreign exchange reserves and the purchase or sale of currencies, so as to maintain exchange rate parity, (c) ensures the proper supervision of financial markets and institutions by national authorities, as well as the smooth functioning of payment systems, (d) ensures the safety and soundness of the European banking system, (e) authorises the Eurozone countries to issue euro banknotes and (f) monitors price trends and assesses the resulting risks to their stability. Furthermore, the ECB maintains cooperative relations with corresponding institutions, organisations and bodies within the EU, but also internationally (Fig. 3.22). The existing Statute establishes the principle of independence of both the ESCB and the ECB. The ECB’s institutional independence is reinforced by its financial independence, as the ECB has its own budget. The decision-making bodies of the ECB are the Governing Council, the Executive Board and the General Council. The Governing Council, as the supreme decision-making body, is responsible for adopting guidelines and taking the decisions necessary to ensure the fulfilment of the

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Fig. 3.21 The buildings of the European Central Bank at Kaiserstraße 29, Frankfurt, from its foundation until 2014. Photo by Andreas Praefcke, licensed: CC BY 4.0 Deed I Attribution 4.0 International, https://en.wikipedia.org/wiki/Commerzbank_Tower#/media/File:Frankfurt_ Commerzbank_vom_Schaumainkai.jpg (cropped)

tasks entrusted to the ESCB. It formulates the monetary policies of the EU and adopts the necessary guidelines for their implementation. In particular, as set out in the Statute, among the responsibilities of the Governing Council are: to authorise the issue of banknotes within the EU; to take the necessary measures to ensure that Central Banks of Member States comply with ECB guidelines and directives; to define the minimum reserves that credit institutions of the Member States must hold with the ECB and the Central Banks of Member States; to adopt regulations to ensure efficient and reliable clearing and settlement systems; to adopt the necessary

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Fig. 3.22 The new European Central Bank building, from 2014, in Ostend Frankfurt am Main. Photo by Oliver Wendel, licensed: CCO https://www.wikiwand.com/en/European_Central_ Bank#Media/File:Frankfurt_am_Main,_Deutschland_(Unsplash).jpg (cropped)

rules for standardising the accounting and reporting of operations undertaken by Central Banks of Member States; to determine the amount of ECB capital to be held by Central Banks of Member States and the form of its settlement; to decide on the transfer of foreign exchange reserves from Central Banks of Member States to the ECB, as well as on the foreign exchange reserves that remain in the Central Banks; to approve the internal regulation that defines the internal organisation of the ECB and the decision-making bodies; to approve the annual report on the activities of the ESCB and the monetary policy, both the previous and the current year; to approve the budget of the ECB and finally, to appeal to the Court of Justice of the EU whenever required. The Governing Council is composed of the six members of the Executive Board (see below), i.e. the President, the Vice-President and four members, as well as the

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Fig. 3.23 The logo of the European Central Bank

governors of the Central Banks of the euro area Member States. It meets twice a month and, in addition to the members of the Governing Council, the President of the Council of EU and a member of the Commission may attend the meetings. In order to maintain the efficiency of decision-making in the Board of Governors, the Statute provides that, once the euro area has more than 18 members, the members of the Executive Board will have permanent voting rights, while the number of governors of national central banks with voting rights will be limited to 15. The governors of Central Banks of Member States will exercise this right on a rotating basis, divided into different groups according to the frequency with which they can vote. This ranking also takes into account the relative size of the economy of each euro area Member State. Currently, the top five national central bank governors in the ranking are Germany, France, Italy, Spain and the Netherlands, who share four votes. The remaining Central Bank of Member States’ governors share 11 votes. Central Bank governors exercise their voting rights on a rotating basis on a monthly basis. This process was first initiated when Lithuania joined the euro area on 1 January 2015 as a 19th member of the euro area. Unless otherwise specified, decisions are taken by a simple majority of the members with voting rights. A quorum shall be defined as two-thirds of the members with that right (Fig. 3.23). The Executive Board is the body responsible for implementing monetary policy in accordance with the guidelines and decisions adopted by the Governing Council. In this capacity, it issues the necessary instructions to the Central Banks of Member States. In addition, the Executive Board may be entrusted with certain additional responsibilities by decision of the Governing Council. Furthermore, the Executive Board is responsible for the day-to-day management of the ECB. In addition, the Statute stipulates that among the tasks of the Executive Board are the preparation of the meetings of the Governing Council, the approval and publication of quarterly reports on the activities of the ESCB, the weekly consolidated financial statement of the ESCB and the consolidated balance sheet of the ESCB, and the preparation of the annual accounts of the ECB. As mentioned above, the members of the Executive Board are the President, the Vice-President and four members. According to the Article 11.2 of the ESCB Statute, they are selected for an eight-year non-renewable term of office “from among persons of recognised standing and professional experience in monetary

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or banking matters by common accord of the governments of the Member States at the level of Heads of State or Government, on a recommendation from the Council [of EU], after it has consulted the European Parliament and the Governing Council of the ECB”. Each member of the Executive Board attending meetings shall have the right to vote. Unless otherwise specified, decisions shall be taken by a simple majority of those voting. The General Council carries out the transitional tasks of the ECB, having taken over the tasks of the former EMI, in order to steer the Member States not participating in the single currency towards the third phase of EMU. In doing so, it contributes in particular to the preparation of the irrevocable fixing of the exchange rates for the currencies of the Member States with a derogation in relation to the currencies or the single currency of the participating Member States. It has more of an advisory and coordinating role. According to the Statute, the General Council will be dissolved when all EU Member States have adopted the single currency. It contributes to the ECB’s advisory role, the collection of statistical information, the preparation of the annual reports on the ECB’s activities, the adoption of the necessary rules for standardising the accounting and reporting on the operations of the Central Banks of Member States, the adoption of measures concerning the determination of the key for subscription to the ECB’s capital, the determination of the conditions of employment of the ECB’s staff and the irrevocable fixing of the exchange rates of the currencies of the Member States. The members of the General Council are the President and Vice-President of the ECB and the governors of all the Central Banks of all EU Member States, all with voting rights. The other members of the ECB’s Executive Board, the President of the Council of EU and one member of the Commission may participate in General Council meetings, but without voting rights. The Governing Council is allowed to establish committees responsible for assisting the ECB’s decision-making bodies in the performance of their tasks. Ad hoc committees with a specific advisory role may also be established. Central Banks of Member States retain legal personality, even though they are part of the ESCB. In practice, Central Banks of Member States participate in the decision-making process, which takes place at the “central” level within the ECB, while implementing these decisions in a “decentralised” manner in the Member States. The Central Banks are the sole shareholders and capital holders of the ECB and their capital is subscribed according to a capital key which takes into account each Member State’s share in the population and GDP of the EU. Each Central Bank’s contribution to the ECB’s foreign reserve assets is determined in proportion to its share in the ECB’s subscribed capital. The amounts of these funds for each Central Bank as of 1 January 2015 are shown in Table 3.24 below. The ECB adjusts the shares every five years and each time a new country joins the EU (Table 3.30). Each Member State must ensure that its national legislation, including the Statute of its Central Bank, is compatible with the ECB’s intended function and Statute, so as to safeguard the principle of its independence from the Member State’s government. However, Central Banks of Member States shall continue to perform functions

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Table 3.30 National central banks’ contributions to the ECB’s capital from 01.01.2015 National Central Bank Close distribution (%) EU Member States belonging to the euro area National Bank of Belgium 2.4778 National Bank of Germany 17.9973 Bank of Estonia 0.1928 Central Bank of Ireland 1.1607 Bank of Greece 2.0332 Bank of Spain 8.8409 Bank of France 14.1792 Bank of Italy 12.3108 Central Bank of Cyprus 0.1513 Bank of Latvia 0.2821 Bank of Lithuania 0.4132 Central Bank of Luxembourg 0.2030 Central Bank of Malta 0.0648 Bank of the Netherlands 4.0035 National Bank of Austria 1.9631 Bank of Portugal 1.7434 Bank of Slovenia 0.3455 National Bank of Slovakia 0.7725 Bank of Finland 1.2564 Total 70.3915 EU member states that are not members of the euro area National Bank of Bulgaria 0.8590 National Bank of the Czech Republic 1.6075 National Bank of Denmark 1.4873 National Bank of Croatia 0.6023 1.3798 National Bank of Hungary National Bank of Poland 5.1230 2.6024 National Bank of Romania Central Bank of Sweden 2.2729 Bank of England 13.6743 Total 29.6085

Paid capital (€) 268,222,025.17 1,948,208,997.34 20,870,613.63 125,645,857.06 220,094,043.74 957,028,050.02 1,534,899,402.41 1,332,644,970.33 16,378,235.70 30,537,344.94 44,728,929.21 21,974,764.35 7,014,604.58 433,379,158.03 212,505,713.78 188,723,173.25 37,400,399.43 83,623,179.61 136,005,388.82 7,619,884,851.40 3,487,005.40 6,525,449.57 6,037,512.38 2,444,963.16 5,601,129.28 20,796,191.71 10,564,124.40 9,226,559.46 55,509,147.81 120,192,083.17

other than those assigned to them within the ESCB, provided that such functions do not interfere with the objectives and tasks of the ESCB. Table 3.31 refers historically to the seats of the European Central Bank. Table 3.32 below shows the Presidency of the European Central Bank.

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Table 3.31 European Central Bank Court of Auditors of the EU European Central Bank 1977–2014 European Central Bank 2014–today

Seat The buildings of the European Central Bank at Kaiserstraße 29, Frankfurt, was the seat of the European Central Bank from its foundation until 2014 The new seat of the European Central Bank building, from 2014, is in Ostend Frankfurt am Main

Table 3.32 Presidents of the European Central Bank since its establishment

Period of time 01.06.1998–31.10.2003

Presidency of the European Central Bank Wim Duisenberg

01.11.2003–31.10.2011

Jean-Claude Trichet

01.11.2011–31.10.2019

Mario Draghi

01.11.2019–

Christine Madeleine Odette Lagarde

3.1.8

Number of members Board of Directors 6 + 11 6 + 12 from 01.01.2001 6 + 12 6 + 13 from 6 + 15 from 01.01.2007 01.01.2008 6 + 16 from 6 + 17 from 01.01.2009 01.01.2011 6 + 17 6 + 18 from 01.01.2014 6 + 19 from 01.01.2015 6 + 19

Other Important EU Organisations

Some other organisations that have a subsidiary but important role in the functioning of the EU institutions and contribute to the smooth running of the EU include: The European Economic and Social Committee (EESC), established in 1957 by the Treaty of Rome, is an EU consultative body made up of representatives of employers’ and workers’ organisations and other interest groups, based in Brussels. It provides opinions on EU matters for the Commission, the Council of EU and the European Parliament, acting as an intermediary between EU decision-makers and citizens. It can also deliver opinions on its own initiative. In practice it (a) ensures that EU policies and legislation are in line with prevailing economic and social conditions, seeking consensus; (b) encourages participatory EU processes by enabling workers’ and employers’ organisations, as well as other interest groups, to express their views and (c) promotes European integration, participatory democracy and the role of civil society organisations. The members of the EESC represent employers’ and workers’ organisations and social interest groups in the EU Member States. They are nominated by the governments of the Member States and appointed by the Council of EU for a

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Table 3.33 Number of EESC members by Member State of origin today Member state France, Germany, Italy Spain, Poland Romania Austria, Belgium, Bulgaria, Czechia, Greece, Hungary, Netherlands, Portugal, Sweden, Greece, Netherlands, Portugal Denmark, Ireland, Croatia, Finland, Ireland, Lithuania, Slovakia Estonia, Latvia, Slovenia Cyprus, Luxembourg Malta Total

Members 24 21 15 12 9 7 6 5 329

Fig. 3.24 The logo of the European Economic and Social Committee

renewable five-year term of office. The number of members per Member State depends on the size of its population (see Table 3.33). Once appointed, members work in the interests of the EU, independently of their home Member State governments. The members of the Committee elect a President and two Vice-Presidents for a term of two and a half years. They meet 9 times a year, delivering opinions which are adopted by a simple majority. Meetings are prepared by the EESC’s specialised sections and the EESC’s Consultative Commission on Industrial Change (CCMI). In addition, the EESC’s “observatories”, i.e. the expert groups on the digital transition and the single market (DSMO), the labour market (LMO) and sustainable development (SDO), in addition to the Ad hoc Group on the European Semester Group (ESG) and the Ad hoc Group on Fundamental Rights and the Rule of Law (Fig. 3.24). The European Committee of the Regions (CoR) is an EU consultative body made up of elected local and regional representatives from all Member States, based in Brussels. Representatives are given the opportunity to express their opinion on EU legislation that has a direct impact on their regions and cities of origin. The CoR was established in 1994 through the Treaty on European Union, given that the majority of European law is implemented at local or regional level, while there was a perception that the gap between citizens and European decision-making centres was widening. One way to improve the situation was to ensure the involvement of an elected level of government that is close to the citizens.

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Table 3.34 Number of CoR members by Member State of origin today Member state France, Germany, Italy Spain, Poland Romania Austria, Belgium, Bulgaria, Czechia, Greece, Hungary, Netherlands, Portugal, Sweden, Greece, Netherlands, Portugal Denmark, Ireland, Croatia, Finland, Ireland, Lithuania, Slovakia Estonia, Latvia, Slovenia Cyprus, Luxembourg Malta Total

Members 24 21 15 12 9 7 6 5 329

Whenever legislation is drafted on local and regional government issues such as health, education, employment, social policy, economic and social cohesion, transport, energy, climate change, etc., the Commission, the Council of EU and the European Parliament must consult the CoR. Otherwise, the CoR can refer the matter to the EU Court of Justice. For each legislative proposal, the CoR prepares and adopts an opinion, which it forwards to the relevant EU institutions. The CoR also adopts opinions on its own initiative. The members of the CoR are elected representatives of local or regional authorities. Each Member State nominates members of its choice, who are appointed by the Council of EU for a renewable five-year term of office. The number of members per Member State depends on the size of its population (see Table 3.34). Thus, members from one Member State make up the national representation which reflects the political, geographical, regional and local balance of that country. Each member may also choose to belong to a political group of the CoR. The members of the CoR elect a president from among its members for a two-and-a-half-year term of office. It also appoints a rapporteur (from among its members) who consults with stakeholders and prepares the opinion. The text is discussed and approved by the CoR committee responsible for the policy area concerned and then submitted to all members, who vote on its amendment or adoption at a plenary session. The final text, as an opinion, is circulated to all relevant EU institutions. Up to 6 plenary meetings are held each year (Fig. 3.25). The European Ombudsman, established in 1992 by the Treaty on European Union and based in Strasbourg, investigates complaints of maladministration by EU institutions or other EU bodies. Such complaints include various types of improper actions, discriminatory treatment, abuse of power, unjustified delays, irregular procedures, lack of information, etc. These complaints can be submitted by citizens or permanent residents of EU countries, or even by associations or companies based in the EU (Fig. 3.26). The European Parliament elects the Ombudsman for a five-year renewable term of office. The Ombudsman’s office conducts an inquiry either on receipt of a complaint or on its own initiative on the basis of information received. It does not

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Fig. 3.25 The logo of the European Committee of the Regions

Fig. 3.26 The logo of the European Ombudsman

take instructions from any government or other EU body or institution. It submits an annual activity report to the European Parliament. In some cases, the Ombudsman can solve the problem simply by informing the competent institution. Then, if necessary, every effort is made to find a consensual solution that will make things right. If this fails, the Ombudsman can make recommendations to the EU institution concerned. If these recommendations do not have the expected effect, then the Ombudsman may draw up a special report to the European Parliament, which must take appropriate compliance measures. The European Investment Bank (EIB), established in 1957 by the Treaty of Rome, is based in Luxembourg and is jointly owned by the Member States of the European Union. Its objectives are: (a) to boost Europe’s potential for jobs and growth, (b) to support actions to combat climate change and (c) to promote European policies beyond the Union’s borders. EIB is both an EU body and a bank (Fig. 3.27). The EIB borrows money from the capital markets and then makes it available in the form of loans on favourable terms to projects that contribute to EU objectives. Around 90% of the loans are made within the EU, but none of the money comes from the EU budget. The EIB provides 3 main types of products and services: (a) It provides loans to clients of all economic sizes to help businesses grow and create new jobs, and this support often helps to attract other investors. (b) It allows its

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149

Fig. 3.27 The logo of the European Investment Bank

clients to combine EIB financing with other sources of finance. (c) It provides advice and technical support to maximise the efficiency of businesses. All EU Member States are shareholders in the EIB. Decisions are taken by the following bodies: (a) The Board of Governors, usually consisting of the finance ministers of all Member States and defines general lending policy; (b) The Board of Directors, chaired by the President of the EIB, consisting of 28 members appointed by the EU Member States and one member appointed by the Commission. It approves lending and borrowing operations. (c) The Management Committee, the executive body of the Bank, which manages the day-to-day affairs; (d) The Audit Committee, which examines whether the EIB’s operations are being conducted in an appropriate manner; (e) The Bank’s departments which implement the management decisions. Within the EU, it has specific lending priorities as mentioned above. Outside the EU, it supports development and cooperation policies around the world, as designed, decided and implemented by the EU institutions. As an independent body, the Bank takes its own decisions on borrowing and lending, while cooperating with other EU institutions, in particular the Commission, the Council of EU and the European Parliament.

3.2

Legislative Procedures

Legislative procedures are particularly important in the EU, as they reflect the democratic legitimacy of its institutions. In general, the Commission puts forward a proposal for new legislation, but it is usually the Council of EU and the European Parliament that decide whether it will have “legal force” in the EU and Member States. In certain cases provided for by the treaties, the Council of EU can decide on its own. In the legislative procedure some other EU institutions and organisations also have important roles, either by proposing to the Commission the submission of a proposal for new legislation or by providing an opinion related to the legislative

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proposal to be voted on or by participating in a consultation procedure with the Commission, the Council of EU and the European Parliament for the legal proposal submitted by the Commission. The basic forms of Community law are Regulations, Directives, Decisions, Recommendations and Opinions. Regulations are a general measure binding on all Member States and the EU itself, and apply directly to all, without further action on the part of the Member States. Directives are binding on the Member States, which, however, are given the option of choosing the form and method they will adopt for the implementation of their objectives, so as to be included in their internal legal order. Decisions are binding on those to whom they are addressed, i.e. a EU Member State or an individual company and is directly applicable. Recommendations and Opinions are non-binding acts. The legislative procedures to be followed are determined by the treaties. Throughout time, the key procedures have been Consultation, Consent, Cooperation and Co-decision. The latter procedure now is known as the Ordinary Legislative Procedure, as described in the Treaty of Lisbon, and is used to approve the majority of EU legislation, which exceeds 85% of the total. In this procedure, the European Parliament shares legislative power equally with the Council of EU. The Cooperation procedure was abolished with the entry into force of the Treaty of Lisbon, while the Consultation procedure and the Consensus procedure are now considered as Special Legislative Procedures. However, there are other special legislative procedures that are applied for special cases, such as approval of the balance sheet, amendment of treaties, special policies, etc. The voting rules and procedures for taking decisions—mainly for the Council of EU—are also determined by the treaties, depending on the subject to be voted on. These are usually the unanimity, simple majority and qualified majority mentioned earlier (see Sect. 3.1.3).

3.2.1

The Consultation Procedure

The Consultation Procedure allows the European Parliament to issue an opinion on Commission proposals. The Council of the EU requests the opinion and the positions of the European Parliament, without being bound by them, but according to the jurisprudence of the Court of Justice, it does not have the possibility to decide if it has not received them (Fig. 3.28). This procedure applies to a limited number of legislative proposals, such as for acts in the field of the right to vote and to be elected by European citizens in municipal elections and in elections for the nomination of the European Parliament, for internal market exemptions and competition law, for executive regulations on matters of state aid, harmonisation of legislation concerning certain taxes or for the approval of framework programs in the field of research and technological development, as well as for the issuance of non-binding acts such as recommendations and opinions of the Council of EU and the Commission.

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151

Fig. 3.28 The Consultation Procedure. Source: Authors’ work

3.2.2

The Consent Procedure

The Consent Procedure (Assent) was established by the Single European Act. The principle of consensus is based on a single reading. The Council of EU needs the consent of the European Parliament to take some major decisions. For its part, the European Parliament can accept or reject a proposal, but without having the possibility to amend it. The absence of consent from the European Parliament precludes the adoption of the legislative act (Fig. 3.29). This procedure applies to the ratification of certain agreements negotiated by the EU, to issues of EU citizenship, to special tasks of the ECB and to amendments to the Statutes of the ESCB and the ECB, to the Structural Funds and the Cohesion Fund, to the procedure for conducting of the elections for the election of the European Parliament, while it is also applied in case of serious violations of fundamental rights based on the Treaty on the European Union, as well as for the accession of new Member States to the EU or the negotiations for the withdrawal from the EU.

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Fig. 3.29 The Consent Procedure. Source: Authors’ work

3.2.3

The Cooperation Procedure

The Cooperation Procedure was established with the Single European Act. It was a first attempt to increase the legislative powers of the European Parliament. The Council of EU with the approval of the European Parliament could accept a legislative proposal by a qualified majority. However, the Council of EU could accept a legislative proposal even if it was rejected by the European Parliament, with the difference that in this case it would have to be approved unanimously. If the European Parliament proposed amendments to the legislative proposal, the Commission would reconsider its proposal. In this case, the Council of EU could: (a) Accept the amendments that the Commission did not include in its revised proposal, by unanimity. (b) Accept the amendments that the Commission included in its revised proposal, by qualified majority. (c) Amend the reconsidered Commission proposal and accept it but only by unanimity. If the Council of EU should not decide within three months, the Commission’s revised proposal is considered as rejected. It was applied to legislative proposals mainly concerning the Single Internal Market, while it was limited by the Treaty of Amsterdam. With the Treaty of Nice it was even more limited to some aspects of economic and monetary policy, while with the Treaty of Lisbon it was abolished (Fig. 3.30).

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Fig. 3.30 The Cooperation Procedure. Source: Authors’ work

3.2.4

The Ordinary Legislative Procedure (Formerly Co-decision Procedure)

The Co-decision procedure, now known as the Ordinary Legislative Procedure, was established by the Treaty on European Union. This procedure was expanded with the Treaty of Amsterdam, while with the Treaty of Lisbon, it was renamed as Ordinary Legislative Procedure which now constitutes the basic legislative procedure of the EU. This procedure is used to approve the majority of EU legislation, which exceeds 85% of the total. In this procedure, the European Parliament shares legislative power equally with the Council of the EU. The procedure is broadly described as follows: The Commission prepares legislative proposals on its own initiative or at the request of other EU institutions or Member States or at the initiative of citizens, often following public consultations. The final proposal is sent simultaneously to the European Parliament, the Council of the EU and national parliaments and, in some cases, to the CoR and the EESC. The President of the European Parliament refers the proposal to a parliamentary committee, which appoints a rapporteur who is responsible for drawing up a draft report containing amendments to the proposed text. The committee votes on this report and any amendments to it submitted by other committee members. The European Parliament then debates and votes on the legislative proposal in plenary based on the committee’s report and amendments. The result is the Parliament’s first reading position. The European Parliament can accept the proposal without any changes or make amendments. In rare cases, the President may ask the Commission to withdraw its proposal. Parliament’s first reading position is forwarded to the Council of EU.

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In parallel with the first reading of the European Parliament, preparatory work is carried out in the Council of EU, but it cannot officially carry out its first reading except on the basis of the position of the European Parliament. The Council of EU has the following options: (a) it can accept the first reading position of the European Parliament (with or without amendments), in which case the legislative act is adopted, (b) it can make changes to the amendments of the Parliament, which leads to the formulation of the position of the first reading position of the Council of EU, which is sent to Parliament for a second reading. The European Parliament has three months (extendable to four) to consider the first reading position of the Council of EU. The Council’s position is first transmitted to the competent committee, which draws up a recommendation for Parliament’s second reading. The plenary votes on the recommendation, including possible, usually limited, amendments. The second reading has four possible outcomes: (a) the European Parliament approves the first reading position of the Council of the EU and the act is adopted, (b) the European Parliament does not take a decision within the time limit, so the act is adopted as amended by the Council of EU in its first reading, (c) the European Parliament rejects the first reading position of the Council of EU, in which case the act is rejected and the procedure is terminated, (d) the European Parliament proposes new changes to the amendments of the EU Council’s first reading position and transmits its second reading position to the Council of EU for a second reading. The Council of EU has a period of three months (extendable to four) to consider the second reading position of the European Parliament. It is also informed about the Commission’s position on the European Parliament’s second reading amendments. The Council of EU has two options: (a) approve the second reading position of the European Parliament, in which case the legislative act is adopted, (b) do not approve the second reading position of the European Parliament. In this case, the President of the Council of EU, in agreement with the President of the European Parliament, convenes a meeting of the Conciliation Committee. Within six weeks (extendable to eight) of the Council of EU’s refusal to approve the second reading position of the European Parliament, the Presidents of the Council of EU and the European Parliament convene the Conciliation Committee, with an equal number of MEPs and representatives of the Council of EU. The Conciliation Committee has six weeks (extendable to eight) to decide on a joint text based on the second reading positions of the European Parliament and the Council of EU. If the Conciliation Committee does not approve a joint text, the proposed legislative act is rejected and the procedure is terminated. If the Conciliation Committee approves a joint text, the text is sent for a third reading to simultaneously the European Parliament and the Council of EU (Fig. 3.31). There is no specific order in which the co-legislators must decide for the approval of the joint text. They have six weeks (or eight by mutual agreement) to decide and cannot amend the text. In the European Parliament, the vote on the joint text is preceded by a plenary debate. If the European Parliament and the Council of EU approve the joint text, the legislative act is adopted. If one or both bodies reject it or

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155

Fig. 3.31 Simplified diagram for the presentation of the Ordinary Legislative Procedure (former Co-decision Procedure). Source: Authors’ work

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fail to respond in time, the legislative act is rejected and the procedure is terminated. It can only resume with a new proposal from the Commission.

3.2.5

Other Special Legislative Procedures

The EU also uses some other special legislative procedures. These procedures are used only when the Treaties expressly state that this procedure is to be used for a specific policy area. Such examples of special legislative procedures are: The Standard Budgetary Procedure, used for the annual budget adoption. The Discharge Procedure, used to approve the budget discharge. The Treaty Amendment Procedures, which are rarely used to amend the treaties, are (a) the Ordinary Review Procedure, (b) the Simplified Review Procedure and (c) the Simple Passarelle.

Bibliography Communication COM(68) 1000 - Memorandum on the Reform of Agriculture in the European Economic Community and Annexes, Parts A and B, Commission of the European Communities, Brussels, 21 December 1968. Communication (COM(83) 500 - Common agricultural policy - Commission report and proposals, Commission of the European Communities, Brussels, 29 July 1983. 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. Communication COM(85) 333 final - Perspectives for the Common Agricultural Policy – Green Paper, Commission of the European Communities, Brussels, 15 July 1985. Communication COM(87) 100 - The Single Act: A New Frontier for Europe, Commission of the European Communities, Brussels, 15 February 1987. Communication COM(91) 100 final - The development and future of the Cap, Commission of the European Communities, Brussels, 1 February 1991. Communication COM(91) 258 final/3 - The development and future of the Cap, Commission of the European Communities, Brussels, 22 July 1991. 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. Communication COM(97) 2000 final - Agenda 2000: For a stronger and wider Union, Commission of the European Communities, Brussels, 15 July 1997. Communication COM(2002) 394 final - Mid-Term Review of the Common Agricultural Policy, Commission of the European Communities, Brussels, 10 July 2002. Communication COM(2005) 509 - Simplification and Better Regulation for the Common Agricultural Policy, Commission of the European Communities, Brussels, 19 October 2005. 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) 672 final The CAP towards 2020: meeting the future the food, natural resources and soil, Commission of the European Communities, Brussels, 18 November 2010. Communication COM(2010) 2020 – ‘Europe 2020 - A strategy for smart, sustainable and inclusive growth, European Commission, Brussels, 3 March 2010.

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Communication COM(2017) 713 final - The future of food and farming, European Commission, Brussels, 29 November 2017. Communication COM(2019) 640 final – The European Green Deal, European Commission, Brussels, 11 December 2019. European Council, Conclusions of European Council of 23-24 March 2000, Lisbon, 23-24 June 2000 European Council, Conclusions of European Council of 17 June 2010, Brussels, 17 June 2010 Directive 72/159/EEC, of the Council of EC on the modernisation of agricultural Øholdings produced meagre results, 17 April 1972. Directive 72/160/EEC, of the Council of EC on the early retirement and retirement of farmers over 55 years of age, 17 April 1972. Directive 72/161/EEC of the Council of EC) on the training of farmers, 17 April 1972 Directive 75/268/EEC of the Council of EC on compensation for farmers living in mountainous and problematic areas, 28 April 1975. European Parliament, Council of the EU, European Commission, European Pillar of Social Rights, EU Publications, Brussels, 2017. Official Journal of the European Communities, Act concerning the election of the members of the European Parliament by direct universal suffrage, 278, 8 October 1976. 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, 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. Regulation (EEC) 2078/92 of the Council of EC on agricultural production methods compatible with the requirements of the protection of the environment and the maintenance of the countryside, 30 June 1992. Regulation (EEC) 2079/92 of the Council of EC instituting a Community aid scheme for early retirement from farming, 30 June 1992. Regulation (EEC) 2080/92 of the Council of EC instituting a Community aid scheme for forestry measures in agriculture, 30 June 1992. Regulation (EU) 1305/2013 of the European Parliament and the Council of EU on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) and repealing Council Regulation (EC) No 1698/2005, 17 December 2013. Regulation (EU) 1306/2013 of the European Parliament and the Council of EU on the financing, management and monitoring of the common agricultural policy and repealing Council Regulations (EEC) No 352/78, (EC) No 165/94, (EC) No 2799/98, (EC) No 814/2000, (EC) No 1290/2005 and (EC) No 485/2008, 17 December 2013. Regulation (EU) 1307/2013 of the European Parliament and the Council of EU establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy and repealing Council Regulation (EC) No 637/2008 and Council Regulation (EC) No 73/2009, 17 December 2013. Regulation (EU) 1308/2013 of the European Parliament and the Council of EU establishing a common organisation of the markets in agricultural products and repealing Council Regulations (EEC) No 922/72, (EEC) No 234/79, (EC) No 1037/2001 and (EC) No 1234/2007, 17 December 2013. Regulation (EU) 1310/2013 of the European Parliament and the Council of EU laying down certain transitional provisions on support for rural development by the European Agricultural Fund for Rural Development (EAFRD), amending Regulation (EU) No 1305/2013 of the European Parliament and of the Council as regards resources and their distribution in respect of the year 2014 and amending Council Regulation (EC) No 73/2009 and Regulations (EU) No 1307/2013, (EU) No 1306/2013 and (EU) No 1308/2013of the European Parliament and of the Council as regards their application in the year 2014, 17 December 2013.

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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 of the Working Party examining the problem of the enlargement of the powers of the European Parliament. Bulletin of the European Economic Community, No 4, April 1972, Luxembourg, 25 March 1972 (Vedel 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). 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). Report to the European Commission - The institutional implications of enlargement. European Commission, Brussels, 18 October 1999 (Dehaene Report - Von Weizsäcker, R., Dehaene, J.L., Simon, D.). “Single European Act”, Luxembourg, 17 February 1986 and The Hague, 28 February 1986. Solemn Declaration on European Union, Bulletin of the European Communities, No 6. 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. Treaty of Luxembourg (First Budget Treaty), Official Journal of the European Communities 02.01.1971, No L 2, “Treaty amending certain budgetary provisions of the treaties establishing the European Communities and of the Treaty establishing a single Council and a single Commission of the European Communities”, Luxembourg, 22 April 1970. Treaty of Brussels (Second Budget Treaty), Official Journal of the European Communities 31.12.1977, No L 359, “Treaty amending certain financial provisions of the Treaties establishing the European Economic Communities and of the Treaty establishing a single Council and a single Commission of the European Communities”, Brussels, 22 July 1975. 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 of Amsterdam, Official Journal of the European Communities 10.11.1997, No C 340. “Treaty of Amsterdam amending the Treaty on European Union, the Treaties establishing the European Communities and certain related acts”, Amsterdam, 2 October 1997. Treaty of Nice, Official Journal of the European Communities 10.03.2001, No C 80. “Treaty of Nice amending the Treaty on European Union, the Treaties establishing the European Communities and certain related acts”, Nice, 26 February 2001. 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. Treaty of Lisbon, Official Journal of the European Union 17.12.2007, No C 306. “Treaty of Lisbon amending the Treaty on European Union and the Treaty establishing the European Community”, Lisbon, 13 December 2007. 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.

The Perception of “Democratic Deficit” in the European Union

4.1

4

Defining the “Democratic Deficit”

The sense of a democratic deficit within the EU is the result of a prevailing view that EU governance lacks democratic legitimacy. Reports on the existence of a democratic deficit in the EU occasionally take on dimensions, which are particularly pronounced in times of economic or political crises and uncertainty. In practice, the democratic deficit as a concept expresses the alienation of the EU institutions and decision-making centres from the citizens of the Member States, and indicates the operational distortions of the EU institutions that make them inaccessible to the average citizen, as the way they operate is particularly complex. The perception of the presence of this sense of a democratic deficit by the average EU citizen has become of particular importance, which has been and continues to be a matter of concern for the EU institutions, as well as for the governments of the Member States, and was taken seriously in the drafting of the treaties, both of the EC and the EU, with obvious efforts to reform the EU institutions to operate with more transparency and less bureaucracy, as well as to improve the way decisions are taken so that they are surrounded by the necessary democratic legitimacy. The views of many researchers differ as to the existence and nature of the democratic deficit in the EU. Some, mainly intergovernmentalists, question its existence, while others argue that it exists and that the necessary measures should be taken to address it. However, the latter also differ as to why it exists and how to deal with it. Federalists argue that the EU should reform its institutions to give them the required democratic legitimacy and operational transparency, with the consent of the citizens of the Member States, to arrive at a form of federation, while Eurosceptics argue that the EU should reduce its powers which deprive Member States and their citizens of the possibility of democratic expression.

# The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 P. Liargovas, C. Papageorgiou, The European Integration, Vol. 2, Springer Texts in Political Science and International Relations, https://doi.org/10.1007/978-3-031-47176-6_4

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4 The Perception of “Democratic Deficit” in the European Union

Historical Background and Definition of the “Democratic Deficit”

The establishment of the EC in the 1950s in the form of technocratic and bureaucratic administrative systems with the ultimate aim of converging the policies of the Member States towards specific technocratic and economic objectives, such as those of coal and steel co-production (ECSC), atomic energy production (EAEC), and the customs union and the common market (EEC), did not require from the outset the existence of a strict democratic legal order, despite the existence and operation of the Joint Assembly and, since 1962, the European Parliament. Historically, the first attempt to strengthen democratic legitimacy in the EC, through the European Parliament, was the “Vedel Report” of 1971, by the Committee of Experts under Georges Vedel (1910–2002), concerning the strengthening of the institutional and budgetary powers of the European Parliament, through the progressive increase of its legislative powers, the guarantee of real co-decision powers with the Council of Ministers, and the election of MEPs by direct universal suffrage. However, the expression “democratic deficit” is considered to have been first recorded in 1977 by the Young European Federalists, in Chapter One of the Jeunes Européens Fédéralistes (JEF) Manifesto, which was drafted by Richard Corbett (1955–) (European Parliament, 2008). Furthermore, in 1979 the term was used by the British political scientist David Marquand (1934–) in relation to the European Parliament, arguing that it suffered from a democratic deficit as it was not directly elected by the citizens of the EC (Marquand, 1979), specifically pointing out that “The resulting ‘democratic deficit’ would not be acceptable in a Community committed to democratic principles” Fig (4.1). Thus, the democratic deficit was understood as the gap between the powers devolved to the community level and the control of these powers by elected parliaments (Williams, 1990). Manifestations of this democratic deficit included confusion of powers, insufficient legitimacy of institutions, opacity, insufficient democratic control and insufficient influence of national parliaments (Stefanou, 1996).

Fig. 4.1 Richard Corbett, author of the JEF Manifesto, 1977, in Chapter One of which the “Democratic Deficit” is mentioned for the first time. Photo licensed: CC BY-SA 4.0 Deed I Attribution ShareAlike 4.0 International, https://en.wikipedia.org/wiki/ Richard_Corbett#/media/File: Richard_Corbett.jpg (cropped)

4.1 Defining the “Democratic Deficit”

161

Excerpt from Chapter One of the JEF Manifesto, Entitled “The Democratic Deficit”, Dated 10 October 1977 Looking at Europe today, it is clear that there is throughout our continent a “malaise”, a sense of alienation and a lack of confidence in the ability of the economic and political system to solve our problems. The spectacular increase in the number of campaigning pressure-groups, citizen’s action groups, and even spontaneous revolts is a symptom of the inadequacy of the current system to take into account people’s needs. Be it in the dole queue, in schools and universities, in underprivileged regions, in the neighbourhood of a proposed nuclear power station, at the place of work, in a migrant workers’ ghetto, or on the proposed route of a highway, people are fighting arbitrary decisions taken without regard to their needs and without them having participated in the making of a decision that affects their own lives. [. . .] The few measures that have been taken to tackle European-level problems have been in an inter-governmental framework. Even the European Community, which contains the embryo of a European federation, is still essentially inter-governmental, with the decision-making power concentrated in the Council of (national) Ministers and its sub-structure, the Committee of Permanent Representatives (‘COREPER’). This system, aggravated by the practice of veto-right for each country, merely achieves a compromise of national approaches, not a European solution.. In the early 1990s, a new integration process began with the establishment of the EU, as a result of the Treaty on European Union (TEU), known as the Maastricht Treaty of 1992. Since then, it has become more evident that a period has begun in which the EU’s has moved towards a form of international political system rather than an at least idiosyncratic international technocratic and bureaucratic organisation, which enjoyed a latent consensus among European citizens. As a consequence of this development, a new round of debates and reflections on the existence or not of a democratic deficit in the EU has begun. In general, the prevailing view is that the “democratic deficit” in relation to the EU refers to a perceived limited ability of ordinary citizens to influence the functioning of EU institutions, as a consequence of their limited representation in these institutions and their lack of accountability to the European citizen (Chryssochoou, 2007), that is, “the gap between democratic theory and practice” (Zweifel, 2002). This means that the democratic deficit is considered to be the perception of European citizens that they do not know how critical decisions concerning them and their countries are made, and as a consequence, they consider that there is a deficit of transparency and democracy in the exercise of political power in the EU. According to the Eur-Lex glossary: “‘Democratic deficit’ is a term used to denote a situation where institutions and their ‘decision-making procedures may suffer from a lack of democracy and accountability. In the case of the European Union (EU), it refers to a perceived lack of accessibility or lack of representation of the

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4 The Perception of “Democratic Deficit” in the European Union

ordinary citizen with respect to the EU institutions—a sense of there being a gap between the powers of those institutions and a perceived inability of citizens to influence those institutions’ decisions” (Eur-Lex). However, “the problem of legitimacy of EU policies is a defining characteristic of the Union’s framework and concerns the democratic deficit” (Voskopoulos, 2009). Therefore, the legitimacy of the EU political system is essentially the affirmation of its democratic functioning. According to the researchers’ views, legitimacy could consist of the existence of specific democratic procedures of decision-making and decisions’ execution. Furthermore, according to other views, legitimacy could consist in the ability of the political system to act in a regulatory way and, from the effectiveness of outcomes of its actions, to maintain the belief that it is the most appropriate for the general interest.

4.1.2

Legitimisation of the EU Political System by Procedures

For a legitimacy by procedures (input legitimacy), every democratically established body adopts a statute setting out its objectives, the way regulators are appointed through elected representatives, and the procedures for taking reasoned decisions based on formal rules sometimes requiring public participation and approval, and judicially reviewable. Thus, an adequate legitimacy of the EU political system would require: (a) the existence of specific rules according to which political power is exercised; (b) these rules derive from accepted beliefs of the society from which the power derives; (c) the exercise of power is done with the explicit consent of the society or its representatives (Beetham & Lord, 1999; see also Schmidt, 2013). However, the EU is described as non-democratic because of the absence of a directly democratic system. According to Andreas Føllesdal (1957–) and Simon Hix (1968–), the prevailing version of the democratic deficit—and thus the lack of sufficient legitimacy by procedures—includes the following five elements: (a) The EU has increased executive power against a limited national parliamentary control. (b) The loss of national parliamentary control has not been sufficiently compensated by a corresponding increase in the powers of the European Parliament. (c) Member State elections for members of the European Parliament are not treated as European elections, but as intermediate national elections. (d) The EU is at a distance from European citizen-voters, who do not understand how it works and therefore find it difficult to assess the EU political system as democratic. (e) As a consequence of the above, the implementation of policies adopted in the EU is not supported by a majority of citizens in many Member States, and it is notable that there is a lack of political struggle and competition for the control of political power at European level (Føllesdal & Hix, 2005; Hix, 2005, 2008). According to Hix, the democratic deficit due to insufficient legitimacy of the procedures can be addressed by providing the citizens of the Member States with the possibility of politicisation within the European integration process, so that they become formal and effective citizens of the EU, actively participating in the European political process, with meaningful representation in the institutions and

4.1 Defining the “Democratic Deficit”

163

active participation in decision-making, ultimately providing support to the policies adopted by the EU (Hix, 2008). The realisation of this politicisation of European citizens, however, presupposes the possibility of creating and operating a European “municipality”, as described below (see Sect. 4.1.4).

4.1.3

Legitimisation of the EU Political System by Outcomes

In legitimacy by outcomes (output legitimacy), the question of consistency, technical expertise, efficiency and the ability to regulate authorities to defend the public interest is raised (Majone, 1996). Giandomenico Majone (1932–) distinguishes between regulatory and non-regulatory policies. Non-regulatory policies are divided into redistributive and non-redistributive policies. Majone accepts that the EU is essentially a regulatory state and that its regulatory policies are intended to correct “market failures” such as monopolistic concentration and inadequate public goods. Therefore, by definition, regulatory policy outputs are Pareto efficient, since they provide benefits in terms of social welfare for all, serving the general interest, given that there is always some benefit and no one is harmed (see Fig. 4.2) (Hix, 2008; Missira, 2014). On the contrary, in redistributive policies there are always winners and losers. The governments of the EC and EU Member States have transferred regulatory policy competences to the European level and thus the creation of the single market, the harmonisation of product standards, health and safety rules or even monetary policy, as results of regulatory efficiency policies, have been beneficial for all European citizens, since they have consolidated European cooperation and have been a motivation for an era of prosperity and economic growth, given that

Fig. 4.2 The Pareto efficient policy compared to redistributive policies. Source. Hix (2008), Missira (2014)

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4 The Perception of “Democratic Deficit” in the European Union

the governments of the Member States would not be able to implement them and would necessarily be limited to redistributive policies only. The depoliticisation of the European integration venture and the marginalisation of democracy contributed to the achievement of these objectives (Majone, 1998; Missira, 2014). In this vein, Majone argues that if EU policies were carried out by the “supreme” institutions (elected European Parliament, elected Commission, etc.) through its defined democratic procedures, these would be merely redistributive rather than Pareto efficient, since the EU political majority would decide to have outcomes that would satisfy its immediate policy preferences, even though these would be to the detriment of the interests of the people, in the long run, thus undermining rather than increasing the legitimacy of the EU system (Majone, 1998, 2000a, b). Therefore, for Majone, the problem for the EU is not a democratic deficit but a “legitimacy deficit” due to the incomplete formulation and implementation of regulatory efficient policies and their ex-post criticism, i.e. a question of “democratic accountability deficit” or “credibility crisis”. What the EU needs is not more democratic decision-making and implementation of decisions, but more transparent decision-making procedures based on a set of efficient policies, their ex-post review by courts and ombudsmen, greater professionalism and technical expertise in their formulation and implementation, the establishment of rules to protect the rights of minorities, and better scrutiny and criticism by private actors, the media and parliamentarians both in the EU and in the Member States. In essence, “checks and balances” are needed to monitor the cross-border effects of policies and to limit the “tyranny of the majority” in the common interest. The European Parliament should focus on scrutinising Commission and EU spending and, where appropriate, on improving the quality of EU legislation. It should not be preoccupied with changing or voting against EU legislation accepted by elected Member State governments or trying to influence the Commission’s policy positions (Majone, 2000a, b). However, Mahone himself later admits that “if EU was a state it could not become a member of the EU” since the EU is not a fully developed democratic state. In the view of Andrew Moravcsik, a liberal intergovernmental theorist, existing checks and balances, indirect democratic control through Member State governments and the increasing powers of the European Parliament are sufficient to ensure that EU policy-making is almost entirely clean, transparent, efficient and politically responsive to the demands of European citizens (Moravcsik, 2002). Therefore, “the EU is as democratic as it should or could be” (Moravcsik, 2008). He accepts the regulatory role of the EU institutions, which formulate policies that restore normality for all citizens versus the absolute imposition of the will of the majority. Majone and Moravcsik’s views are criticised by many researchers, among them Andreas Føllesdal and Simon Hix, who argue that in democracies citizens’ preferences are created and shaped through political debates and contestations, while institutions credibly ensure that their policies correspond to citizens’ preferences, rather than being found ex post to coincide with them. It is therefore an important democratic challenge to create institutions that provide such

4.1 Defining the “Democratic Deficit”

165

opportunities and responsiveness to citizens’ preferences. It is much more difficult to assume that EU policies should be Pareto efficient as a rule (Føllesdal & Hix, 2005). Moreover, indirect control through Member States’ governments certainly provides some control over EU policy outcomes, especially in areas of intergovernmental cooperation (see Sect. 2.1.4), such as foreign policy, defence policy and police cooperation, but it is no substitute for proactive control by the European Parliament, whose increased powers have improved the legitimacy of policies ex ante (and thus ex post) in those areas where indirect control of Member States’ governments has been weakened due to the use of qualified majority voting.

4.1.4

The Socio-Psychological Dimension and the “European Municipality”

The democratic deficit, according to some researchers, takes on two dimensions: the institutional and/or the socio-psychological dimension (Weiler, 1991). The institutional dimension refers to the inability of European citizens of the Member States to influence the policy-making process due to their inadequate representation in the institutions of the EC and later the EU. This dimension is largely related to the democratic deficit due to insufficient legitimacy by procedures, as described earlier (see Sect. 4.1.2). The socio-psychological dimension refers to the existence or not of a common European identity, and by extension a European “demos” (from the ancient Greek word “δήμoς”, meaning “people”, and nowadays “municipality”). In practical terms, this component of the democratic deficit relates to the social acceptance and democratic legitimacy of the EU system and its institutions by the citizens of the Member States, to the extent that they consider themselves European citizens, constituting a European “demos”, in which citizens have a transnational (European) consciousness. A “demos” is defined as “[. . .] a group of people, the vast majority of which feels sufficiently attached to each other to be willing to engage in democratic discourse and binding decision-making” (Cederman, 2001). By extension, “if there is no “demos”, there can be no democracy” (Weiler, 1999). Therefore, without the existence of a “demos”, it is not easy for the minority to accept the legitimacy of the majority’s decision (Dahl, 1998). However, views on the existence or possibility of the existence of a European “demos” differ (Papadopoulou, 2001). One view considers that a European “demos” is non-existent (“no demos theory”) given that its basic elements are missing, namely, common collective identity and legitimacy as subjective elements, as well as common cultural and historical origins as objective elements of ethno-cultural identification, which are sufficient conditions for the creation of the subjective elements (Dellavalle, 1993). This view based on ethno-cultural identification considers the existence of a European “demos” possible only as a result of the existence of a European nation, thus identifying the “demos” with the nation, which is the subjective basis for the legitimation of European democracy. This view is

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4 The Perception of “Democratic Deficit” in the European Union

reinforced by claims that the nation is the only possible means of democracy (Miller, 2000). Therefore, given that there is no European “demos”, then the legitimacy of the EU derives primarily from the Member States and their citizens, and as a result there is no primary legitimacy. There is, of course, a counter argument that tries to refute the theory that a European “demos” cannot exist on the basis of ethno-cultural identification. This is based on the claim that in reality there is in fact a largely common European history, common cultural habits and common religion, which constitute preconditions for the existence of a common European identity and legitimacy towards the EU institutions, which gives them democratic legitimacy (Mayer & Palmowski, 2004). A milder version of this view is the assumption that although historically the nation has usually been the genesis of state formation, there have been cases where the state constructed the nation. Therefore, the construction of a nation (and by extension a European nation) is not impossible in the future, provided of course that the right conditions are in place (Hall, 1992), thus allowing for the existence and functioning of a European “demos”. However, it is obvious that both previous approaches consider that the existence of a European “demos” requires the pre-existence of ethno-cultural identification and homogeneity. These views have been criticised both for the identification of the “demos” with the nation (Tsatsos, 2007; Weiler, 1995a, b) and for the need for the existence of ethno-cultural homogeneity for the functioning of democracy (Innerarity, 2014), given that there are historical examples that refute them. The “no demos theory” in all its versions refers to an overly demanding definition of “demos”, utopian for federalists and static (anchored) for intergovernmentalists. What the EU needs is the creation of a European public space—a “demos”, not characterised by its ethno-cultural homogeneity and its limitations, but by European citizens with a common European identity derived from shared values and aspirations, and common understandings of rights and obligations that transcend state-national differentiations, as well as the need for social solidarity and interdependence to address common challenges and common risks (Innerarity, 2014). The citizens of this European municipality will be able to belong to other smaller municipalities, state-national and local, thus carrying multiple identities. Therefore, the separation of the “demos” from the nation makes theoretically possible the model of multiple “demoi” (plural of “demos” in Greek language), which will coexist. The nature of the EU, as a multi-ethnic political system based on an institutionally multilevel and multi-state coexistence, does not preclude the formation of such a European “demoi”, composed of different European peoples, belonging to different state-national and local “demoi” (Weiler 1995a, b; Chryssochoou, 2007), and will function as a multi-ethnic European “demoi-cracy” (Nicolaidis, 2004; Liebert, 2010), implementing the EU motto “unity in diversity”. At this point, it is useful to refer to the concept of “europanisation” and its positive contribution to the creation of the aforementioned European unity, through a two-way process in which institutions, policies and societies at the state-national level are shaped by the integration process and are brought into conjunction with the corresponding elements at the EU (European) level (Schmidt & Radaelli, 2004).

4.2 Attempts to Assess the Sense of Democratic Deficit

167

According to an apt definition, Europeanisation is understood as the “processes of (a) construction (b) diffusion and (c) institutionalization of formal and informal rules, procedures, policy paradigms, styles, ‘ways of doing things’ and shared beliefs and norms which are first defined and consolidated in the making of EU public policy and politics and then incorporated in the logic of domestic discourse, identities, political structures and public policies” (Radaelli, 2003).

4.2

Attempts to Assess the Sense of Democratic Deficit

The sense of a democratic deficit within the EU is reflected in the Eurobarometer, a public opinion survey conducted for the European Commission. The responses of European citizens, presented below, show that over time, with few exceptions, less than half of European citizens believe that they are to some extent satisfied with the level of democratic functioning of the EU and the image they have of it. Furthermore, European citizens’ views on whether they feel European are not particularly encouraging, as indicated by their responses, which probably highlights the distance between them and their sense of belonging to a single European demos. However, the lack of interest of European citizens in the functioning of the EU is particularly striking, reflected in the low turnout rate in the European elections, which reached an all-time low in 2014, when the EU average was only 42.61%. Some attribute this distancing of European citizens to a strong sense of democratic deficit, which distances them from the EU institutions and decision-making centres. Moreover, while at each new stage of the upgrading of European integration, the issue of democratic legitimacy was raised with greater emphasis, the reactions of European citizens were not always as expected. Thus, while the Treaties of Maastricht, Amsterdam, Nice and Lisbon took important steps towards incorporating the principle of democratic legitimacy into the EU institutional system by strengthening the powers of the Parliament and broadening the scope of the co-decision procedure, European citizens in some Member States have rejected the ratification of the Treaties by means of referendums, thus expressing their dissatisfaction, mainly—according to some researchers—because of a sense of democratic deficit. The EU Constitutional Treaty was also rejected by referendum, apparently for exactly the same reasons.

4.2.1

Citizens’ Views on the EU Through the Eurobarometer

Despite the strong criticism it has received from time to time, the Eurobarometer provides a systematic record of trends in public opinion of European citizens at regular intervals, both per Member State and overall, thus allowing comparisons both in time and geographically. Given that there are no other opinion polls that provide data on public opinion trends at European level with the frequency and geographical distribution mentioned above, Eurobarometer data can be used for policy formulation and drawing conclusions from their implementation.

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4 The Perception of “Democratic Deficit” in the European Union

One of the questions concerning European citizens’ opinions on the functioning of democracy in the EU is indicative of their feeling of a democratic deficit. From 1993 to 2019, the percentage of citizens who say they are satisfied to some extent with the functioning of democracy in the EU does not exceed 55% (see Fig. 4.3). This means that there is a constant sense of a democratic deficit among European citizens, who either do not know how the EU works and feel that they are far removed from decisions, which are taken without their opinion being heard, or they know how the EU works and believe that the EU indeed does not function democratically. Another important question concerning the image that European citizens have of the EU itself is indicative of the neutral or even negative impression that the majority have of the EU. Thus, from 2002 to 2019, the positive image to some extent of European citizens about the EU does not exceed 50%, with only three exceptions, in which the percentage still does not exceed 53% (see Fig. 4.4). These percentages are indicative of the EU’s inability to convince European citizens of its usefulness and effectiveness, while the relatively high percentages who say they have a neutral image of the EU probably conceal ignorance or indifference to the EU and its functioning, which is not encouraging for the necessity of a “European demos”. More indicative of European citizens’ sense of belonging to a European unity in which they will coexist as citizens-citizens are the answers to the question whether, apart from their nationality, citizens also feel European. Responses to this question are divided over time, with about half of them considering themselves to be European at least some of the time (see Fig. 4.5). The responses to this question are indicative of the distance that needs to be covered for the majority of European citizens to realise that they belong to a “European demos”. A related question is whether citizens will identify themselves in the future as European in addition to their nationality (see Fig. 4.6). The responses from 1992 to 2019 show that a percentage of between about 35% and 45% of the total identify themselves by their nationality alone. However, of the remainder who also identify themselves as European, a percentage between about 45% and 55% of the total consider their nationality to be their main identification. Although the majority believes that in the future they will be able to identify themselves as European— either as a main or secondary identifier—a significant proportion will still identify themselves only by their nationality, which confirms for the future the difficulty for European citizens to realise that they all belong to a “European demos”.

4.2.2

Interest of European Citizens in Participating in the European Elections

The lack of interest of European citizens in the functioning of the EU was also reflected in the low turnout rate in the European elections since 1979, which reached an all-time low in 2014, when the EU average was only 42.61%; however, the 2019 European elections saw a promising increase in the turnout rate to 50.62% (see Fig. 4.7). It becomes clear that this problem has two components: (a) an indifference

4.2 Attempts to Assess the Sense of Democratic Deficit

169

How do you feel democracy works in the European Union November 2019

4.69%

June 2019

6.21%

November 2018

4.28%

47.16%

29.70%

49.28% 46.16%

March 2018

4.60%

44.59%

November 2017

4.02%

44.17%

10.08% 8.38%

27.33%

8.68% 8.49%

31.21%

9.85% 8.50%

30.87%

10.10% 9.83%

31.17%

May 2017

3.59%

November 2016

3.97%

May 2016

3.45%

38.89%

33.55%

November 2015

4.31%

38.61%

32.88%

43.35%

10.37% 10.28%

30.72%

40.82%

10.86% 11.49%

33.46%

11.77% 13.59%

9.98% 10.52%

11.81%

12.39%

10.18%

12.79%

May 2015

4.38%

November 2014

3.55%

39.71%

31.08%

13.67%

12.00%

May 2014

3.74%

39.92%

31.81%

11.68%

12.86%

November 2013

4.45%

38.59%

32.00%

14.04%

10.93%

May 2013

4.01%

39.37%

32.85%

12.78%

10.99%

November 2012

4.06%

40.35%

33.25%

May 2012

3.77%

39.90%

33.10%

November 2011

4.25%

42.07%

30.58%

41.06%

11.96% 10.38% 10.94%

32.89%

12.29%

10.37% 11.42%

May 2010

4.88%

October 2009

5.74%

September 2007

6.63%

March 2006

6.11%

May 2005

4.56%

44.28%

26.52%

8.14%

16.50%

October 2004

4.89%

43.44%

27.58%

7.52%

16.56%

February 2004

3.97%

38.90%

October 2003

3.83%

37.97%

October 2002

4.67%

October 2001

4.41%

November 2000

4.10%

April 2000

4.30%

October 1999

3.52%

March 1999

5.81%

44.98%

28.09%

47.77%

7.50%

26.43%

45.11%

26.04%

43.84%

6.98%

27.07%

28.96%

42.54%

27.07%

31.09%

39.07%

8.48%

17.24%

9.50%

18.51% 16.70%

11.16%

29.40%

36.20%

17.71% 18.83%

12.04%

26.30%

36.26%

14.84%

10.99%

28.04%

36.07%

15.24%

8.13%

10.46%

28.37%

39.55%

14.55%

6.50% 13.56%

26.71%

19.17%

11.27%

19.55%

10.86%

20.43%

April 1998

3.27%

32.10%

31.20%

12.64%

20.79%

October 1997

2.89%

32.45%

32.14%

12.00%

20.52%

November 1994

2.52%

36.03%

April 1994

1.89%

37.88%

October 1993

2.91%

March 1993

2.55%

0% Very satisfied

10%

35.35% 37.79%

41.50%

34.09%

37.90%

20%

Enough satistfied

12.42%

35.18%

30%

40%

50%

Not Very satisfied

60%

13.62%

9.83%

12.60%

9.47%

12.03%

12.05%

70%

80%

Νοτ satistfied

12.32%

90%

100%

I don't know

Fig. 4.3 European citizens’ views on their satisfaction with the way democracy works in the EU. Source: Eurobarometer. Processed by the authors

4 The Perception of “Democratic Deficit” in the European Union

170

In general, does the European Union have a very positive, quite positive, neutral, quite negative or very negative image? November 2019

6.69%

June 2019

7.80%

November 2018

5.83%

March 2018

5.17%

35.37%

November 2017

5.03%

35.38%

36.97%

16.04%

4.81% 1.78%

May 2017

5.16%

35.27%

36.79%

15.80%

5.00% 1.99%

November 2016

4.29%

May 2016

3.86%

November 2015

4.34%

May 2015

4.91%

November 2014

4.09%

May 2014

3.80%

November 2013

2.90%

35.51%

37.06%

36.83%

14.65%

36.47%

36.93%

36.53%

14.87%

37.16%

30.81%

19.11%

37.62%

32.78%

34.78%

30.67%

5.37% 1.70%

15.76%

37.11%

17.35%

38.31%

27.83%

7.01% 1.62%

17.53%

37.92%

5.06% 1.50%

5.50% 1.83%

19.97%

38.27%

35.86%

4.81%1.03%

15.74%

38.45%

29.93%

4.83%1.28%

13.12% 4.31%1.47%

19.05%

39.32%

3.78%1.77% 4.96% 1.70%

6.12% 2.06%

21.24%

6.86% 1.86%

May 2013

3.16%

27.00%

39.34%

21.66%

7.02% 1.82%

November 2012

3.01%

27.27%

38.64%

22.11%

7.26% 1.71%

38.88%

21.80%

6.67% 1.96%

May 2012

2.82%

27.87%

November2011

2.84%

28.49%

May 2011

4.84%

November 2010

3.98%

May 2010

5.60%

October 2009

7.20%

40.93%

34.68% 34.23% 35.98%

19.64%

6.45% 1.66%

37.99%

16.38%

4.30% 1.82%

39.42%

15.88%

4.18% 2.31%

15.13%

4.51% 1.96%

36.82%

40.68%

35.05%

11.83% 3.30%1.95%

June 2009

6.28%

38.93%

36.08%

12.29% 3.81% 2.61%

October2008

6.58%

38.90%

35.77%

12.66% 3.75% 2.35%

March 2008

6.57%

September 2007

8.45%

April 2007

41.41% 42.18%

10.86% 7.36%

March 2006

8.74%

October 2005

6.66%

May 2005

8.40%

October 2004

9.51%

October 2003

8.06%

October 2002

8.45%

41.28%

March 2002

9.54%

39.42%

0%

10%

11.62% 3.26%2.21%

33.97%

38.38%

32.14%

40.30%

15.13%

4.63% 2.17%

14.44%

4.25% 2.39%

32.62%

36.25%

Neutral

13.16% 3.57% 2.42%

32.22%

37.44%

30%

11.47% 2.75%1.70%

34.11%

41.96%

20%

9.85% 3.26% 2.42%

31.09%

39.37%

Quite positive

11.44% 2.97%2.28%

33.83%

42.13%

September 2006

Very positive

35.33%

12.12% 3.35%2.09%

32.11%

13.15% 5.27% 5.17%

31.46%

10.34%3.28% 5.18%

30.84%

40%

50%

60%

Quite negative

70%

9.98% 3.59% 6.62%

80%

Very negative

90%

100%

I don't know

Fig. 4.4 European citizens’ views on their general image of the EU. Source: Eurobarometer. Processed by the authors

stemming from ignorance of the functioning and importance of the EU, as a consequence of a lack of information that the European citizen has—known as “information deficit”—either from his own indifference or from the indifference of

4.2 Attempts to Assess the Sense of Democratic Deficit

171

Do you ever consider yourself as not only (your nationality) but also European? Does this happen often, sometimes or never? September 2006

16.62%

39.06%

42.26%

2.06%

October 2005

17.33%

38.29%

42.18%

2.19%

March 1992

14.09%

October 1991

15.44%

March 1991

32.25% 32.52%

20.68%

March 1990

31.64%

15.39%

0%

10% Often

30% 40% Sometimes

2.29%

48.87%

3.16%

44.86%

30.52%

20%

51.37%

2.81%

51.21%

50% Never

60%

70% 80% I don't know

2.88%

90%

100%

Fig. 4.5 Views of European citizens on whether they consider themselves to hold not only their nationality but also their European nationality. Source: Eurobarometer. Processed by the authors

the competent EU institutions to inform him correctly and in a timely manner; and (b) an aversion to the EU and its institutions, considering that he participates in an electoral procedure by voting for people who do not in fact represent him, since, in his view, decisions are taken in his absence. Both components contribute to the existence of a sense of democratic deficit, but also to the difficulty of establishing a “European demos” that would function democratically, giving “European citizens” the certainty that they belong to a single demos as equal citizens, with freedom of expression, judgement and control over its institutions, which theoretically represent them and operate in their interests. However, there are also the more cool-headed views, according to which “the disengagement of citizens from politics is not only characteristic of the EC/EU, but of almost all representative democracies, where a large part—if not the majority of citizens—abstain from national elections” (Mousis, 2011). If one looks back at the statistics of the elections for representatives to regional and central parliaments of the Member States, one will see the existence to a considerable extent of this abstention, which reflects the withdrawal of the citizen from political events also within the EU Member States.

4.2.3

Data from Referendums on Treaty Ratifications

The issue of democratic legitimacy, which had been raised since the late 1970s, became particularly urgent and was initially addressed by the Single European Act, which entered into force in 1986, the institutional dimension of which focused on strengthening the powers of the European Parliament, given that the consent procedure was now required for the conclusion of an enlargement or association agreement with new states, while the cooperation procedure was introduced, which gave it the possibility, through a majority decision, to refuse to accept a decision of the Council of EC, thus allowing the proposed legislation to be read twice, while it could make limited amendments to the Commission’s proposals. This made the European Parliament a sort of equal partner of the Council of the EC in the legislative work.

4 The Perception of “Democratic Deficit” in the European Union

172

In the near future. Consider yourself as...? June 2019

32.71%

54.98%

8.17% 2.02%2.12%

November 2018

32.91%

54.74%

8.72%

March 2018

35.12%

1.73%1.91%

54.78%

6.12% 1.73%2.22%

November 2017

35.17%

54.35%

6.61% 1.77%2.10%

May 2017

34.86%

54.04%

6.92% 1.63%2.54%

November 2016

36.54%

May 2016

53.04%

38.95%

November 2015

51.32%

40.44%

50.84%

6.03% 1.67%2.72% 6.00% 1.36%2.38% 5.29% 1.19%2.24%

May 2015

37.86%

52.07%

5.83% 1.89%2.35%

November 2014

38.77%

51.60%

5.68% 1.75%2.20%

May 2014

39.44%

50.73%

November 2013

42.26%

47.29%

5.59% 1.60%2.63% 5.29% 2.20%2.96%

May 2013

37.69%

49.48%

6.95% 2.76%3.12%

May 2012

38.49%

48.99%

6.15% 2.58%3.79%

May 2010

46.29%

41.16%

October 2005

40.77%

47.97%

October 2004

20.75%

23.51%

February 2004

40.58%

6.77% 2.85%2.93% 6.52% 2.28%2.46% 3.46% 1.55%0.90%

46.12%

6.33% 4.16% 2.82% 7.08% 3.35% 2.92%

October 2003

39.77%

46.88%

October 2002

38.36%

48.86%

7.03% 3.12% 2.63%

March 2002

38.42%

47.87%

7.17% 4.05% 2.50%

October 2001

43.90%

43.78%

6.22% 3.43% 2.66%

October 1999

44.87%

42.19%

6.22% 3.82% 2.91%

October 1998

45.10%

April 1998

44.09%

November 1994

32.58%

October 1993

40.08%

March 1992 0% (Nationality) only European only

37.98%

10%

20%

42.76% 41.07% 46.19% 45.52% 47.83%

30% 40% 50% 60% (Nationality) and European None/No answer/I don't know

6.02% 4.11% 2.01% 6.15% 4.60% 4.09% 10.38%

7.00% 3.73%

7.36% 3.58% 3.46% 6.50% 3.95% 3.73%

70% 80% 90% 100% European and (Nationality)

Fig. 4.6 European citizens’ views on how they see themselves in the future in terms of their nationality. Source: Eurobarometer. Processed by the authors

However, the scope of this procedure remained limited and, in the event of disagreement, the Council of the EC had the final say. The Treaty was ratified by referendums in Denmark and Ireland. In Denmark, on 27 February 1986, with a turnout of 75.4%, 56.2% voted in favour of the Treaty. In Ireland, on 26 May 1987, with a turnout of 44.1%, 69.9% also voted in favour of the Treaty. With the Treaty on European Union (Treaty of Maastricht), in force since 1993, the role of the European Parliament has been further enhanced for the first pillar of the EU, by extending the existing consensus procedure to a number of important areas other than the accession of new Member States or the association of third countries. The upgrade also included extending the cooperation procedure to new

4.2 Attempts to Assess the Sense of Democratic Deficit

173

Member State voter turnout rates in the European elections 70% 58.41%

56.67% 49.51%

40%

50.62% 45.47%

42.97%

42.61%

30% 20% 10% 2019 EU-27

2004 EU-25

1999 EU-15

1994 EU-12

1989 EC-12

1984 EC-10

0% 1979 EC-9

Participation rate

58.98%

2014 EU-28

61.99%

50%

2009 EU-27

60%

Year of European elections and number of Member States

Fig. 4.7 Voter turnout rates of Member States in the European elections. Source: Eurobarometer. Processed by the authors

areas and creating the new co-decision procedure, which allowed the European Parliament to adopt acts jointly with the Council of the EU. This procedure implied the need to strengthen a consultation procedure between the European Parliament and the Council of the EU with a view to reaching an agreement. This agreement had to be approved by a qualified majority of the Council of the 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 procedure 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 of the EU would be advisory. Prior to its signature, the Treaty was ratified by referendums in Ireland, France and Denmark. In the Irish referendum on 18 June 1992, with a turnout of 57.3%, a majority of 69.1% voted in favour of the Treaty. In the French referendum on 20 September 1992, with a turnout of 69.7%, a narrow margin of 51.0% voted in favour of the Treaty. However, in the Danish referendum on 2 June 1992, with a turnout of 82.9%, the Maastricht Treaty was not accepted, with 49.3% voting in favour of the treaty. Denmark then negotiated and achieved four specific opt-out clauses from the single currency, common defence, citizenship and EU competences in the fields of justice and policing. Thus, in a new referendum held on 18 May 1993, the Danish people, with a large turnout of 86.5%, accepted ratification of the TEU with 56.7% of the vote.

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4 The Perception of “Democratic Deficit” in the European Union

The Treaty of Amsterdam, which came into force in 1999, although it did not resolve key EU institutional issues, simplified and extended the co-decision procedures that replaced the cooperation procedures and strengthened 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. Prior to its signature, the Treaty was ratified by referendums in Ireland and Denmark. In the Irish referendum on 22 May 1998, with a turnout of 56.2%, a majority of 61.7% voted in favour of the Treaty. In the Danish referendum on 28 May 1998, with a turnout of 76.2%, a majority of 55.1% voted in favour of the Treaty. The Treaty of Amsterdam was the only treaty that was not rejected by an EU Member State referendum. With the Treaty of Nice, which came into force in 2003, the institutional reforms carried out were described as “technical” and “limited”. 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 the EU by a qualified majority, covering a number of important areas such as industry, immigration and judicial cooperation in civil matters. Ireland was the only country to introduce the Treaty by referendum, being constitutionally obliged to do so. Thus, in the referendum held on 8 June 2001, with a turnout of only 34.8%, the Treaty of Nice was not accepted, with 46.1% voting in favour. In order to overcome the problems of ratification of the Treaty, the EU provided guarantees that Ireland would not be obliged to participate in the Common Defence Policy, but without any opt-out clauses in the Treaty. Thus, in the new referendum held in Ireland on 19 October 2002, with a turnout of 49.5%, a majority of 62.9% voted in favour of the Treaty. However, the attempt to establish a Treaty establishing a Constitution for Europe (TCE) has brought to the fore significant problems regarding European citizens’ views on the way the EU operates and the existence of a sense of democratic deficit. The TCE envisaged more democratic procedures and functions, which would be more scrutinised and accessible to the citizens of the Member States. Broadly speaking, it provided for, inter alia: a) strengthening citizens’ rights by incorporating the Charter of Fundamental Rights of the European Union, which would thus acquire legal force; b) strengthening the powers of the European Parliament, which would become, together with the Council of the EU, the main legislative body of the EU, and would also decide on the budget; and c) enhancing the role of national parliaments by informing them in a timely manner of proposed Commission legislation and EU policies and introducing a new, more transparent system of EU law. The TCE was approved by a referendum held in Spain on 20 February 2005 by 81.8% with a 41.8% turnout. A similar referendum in Luxembourg, on 10 July 2005, approved the TCE by 56.5% of the votes with a 90.4% turnout. However, on 29 May of the same year, the TCE was rejected in a referendum in France by 54.7%, with a turnout of 69.4%, and the same happened shortly afterwards in the Netherlands, on 1 June of the same year, by 61.5% and with a turnout of 63.3%. Following these results, the remaining planned referendums in the Member States were cancelled, and efforts to establish a European Constitution were abandoned. Some analysts

4.2 Attempts to Assess the Sense of Democratic Deficit

175

interpret the results of the referendums in France and the Netherlands, two founding states of the EC and protagonists of European integration, as the result of insufficient information on the subject of the referendums and poor organisation of the referendums, as well as dissatisfaction with the national governments expressed in this way. Others attribute them to a strong sense of democratic deficit among European citizens. The Reform Treaty of Lisbon, as a substitute for the TCE, with effect from 2009, 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, regional funds and immigration, with the result that the European Parliament is now on an equal footing with the Council of the EU, which is now obliged to meet in public. Furthermore, the supervisory role of national parliaments is also strengthened, in parallel with 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 will have to re-examine its proposal and decide whether to maintain, amend 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 the 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 1 million EU citizens and obliges the Commission to examine it. The Treaty incorporated the Charter of Fundamental Rights of the European Union into European primary law and strengthened the four freedoms of the single internal market as well as the political, economic and social freedom of European citizens. Ireland was again the only country to introduce the Treaty in a referendum, being constitutionally obliged to do so. Thus, in the referendum held on 12 June 2008, with a turnout of 53.1%, the Treaty of Lisbon was not accepted, with 46.6% voting in favour of the Treaty. 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 result. The second referendum ratified the treaty with 67.1% of those voting in favour and 59.0% turnout. Particularly interesting are the results of a survey conducted at the initiative of the Commission between 15 and 18 June 2008 to investigate the reasons for rejecting the Treaty of Lisbon in the referendum held in Ireland on 12 June 2008 (European Commission 2008). Irish citizens stated that they rejected the Treaty because they

176

4 The Perception of “Democratic Deficit” in the European Union

were not sufficiently informed about the Treaty at 22%, because of the protection of Irish identity at 12%, because it is against European integration at 5%, to avoid being represented internationally through the EU at 4%, because large states decide for themselves at 4% and because they must protect the existing influence of smaller states at 3% (see Fig. 4.8). However, 6% said they voted against the treaty because they do not trust politicians, while 4% saw their vote as a protest against government policies.

Fig. 4.8 Reasons for voting against the Lisbon Treaty in the Irish referendum on 12 June 2008. Source: European Commission—Flash Eurobarometer (2008). Processed by the authors

4.2 Attempts to Assess the Sense of Democratic Deficit

177

Noteworthy is the reference to two other referendums that have been held in Denmark and Sweden on joining the Eurozone. Both referendums were negative. In particular, in the referendum held in Denmark on 28 September 2000, 53.2% of voters voted against accession, with a turnout of 87.6%. Similarly, in the referendum held in Sweden on 14 September 2003, 55.9% of voters voted against accession, with a turnout of 82.6%. It is therefore obvious that despite the constant provisions in the treaties to be adopted for more democratic procedures and functions of the EU, citizens of the Member States where referendums were held for their approval, sometimes considering that they were not sufficiently informed, sometimes that bureaucrats and the governments of the more powerful Member States decide for them, sometimes in protest at the policies of their own government, and sometimes for purely national and utilitarian reasons, usually rejected them. And while it is obvious that their adoption would have led to more democratic procedures in the EU, the aforementioned reasons, with the dominant one being the lack of information, have been the catalysts for their rejection, thus intensifying the sense of a democratic deficit in the EU. However, it is important to mention the decision of 12 October 1993 of the Federal Constitutional Court of Germany, in relation to the Treaty on European Union, which stressed that, given the stage of European integration at that time, the democratic legitimacy of the activities of the European institutions derives also from the competences of the national parliaments. According to the same Constitutional Court judgment, democratic legitimacy is also conferred by the European Parliament, whose members are elected by the citizens of the Member States.

4.2.4

Evidence from the British Referendum to Remain or Not in the EU

Of particular importance is the reference to Britain’s referendum on whether or not to remain in the EU, held on 23 June 2016, in which 51.9% of voters voted in favour of leaving, with a turnout of 72.2%. For those who voted against the country remaining in the EU, some of their responses about the reasons for this decision can be related to a sense of democratic deficit in the EU (Lord Ashcroft, 2016). Of the voters who voted against remaining (see Fig. 4.9), almost half (49%) said that the main and only reason they wanted to leave the EU was that “decisions about the UK should be made in the UK”. A third (33%) said the main reason was that leaving would “offer the UK the best opportunity to regain control of immigration and its own borders”. Just over one in eighth (13%) said that remaining would mean there would be no possibility of reacting “to the way the EU expands its membership or powers in the years ahead”. Almost one in twenty (6%) said the main reason for leaving was that “especially for trade and the economy, the UK would benefit more by being outside the EU’s borders than being part of it”. Of the voters who voted to remain (see Fig. 4.10), a significant proportion (43%) consider that the most important reason for their decision was that “the risks of

178

4 The Perception of “Democratic Deficit” in the European Union Reasons for voting against remaining in the EU in the UK referendum on 23 June 2016

Decisions about the United Kingdom must be made in the United Kingdom

49%

Withdrawal would provide the best opportunity for the UK to regain control of immigration and its own borders

33%

There would be no possibility of reacting to the way the EU is expanding its membership or powers in the coming years

13%

Especially for trade and the economy, the UK will benefit more from being outside the EU than from being part of it

6%

0%

5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Fig. 4.9 Reasons for voting against remaining in the EU in the UK referendum on 23 June 2016. Source: Lord Ashcroft (2016). Processed by the authors

Reasons for voting to remain in the EU in the UK referendum on 23 June 2016 The risks of leaving the EU seemed too great especially for the economy, job and product prices

43%

The UK will have the best of both worlds, with access to the EU single market without the single euro currency and without the implementation of the Schengen agreement

31%

The United Kingdom would be more isolated from its friends and neighbors

17%

It is a strong commitment to the EU and its common history, culture and traditions

9% 0%

5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Fig. 4.10 Percentages of voters who voted for or against Britain remaining in the EU in the UK referendum on 23 June 2016, by age group. Source: Lord Ashcroft (2016). Processed by the authors

leaving the EU seemed too great, especially for the economy, jobs and prices of products”. Just over three in ten (31%) argued that remaining would mean that the UK would have “the best of both worlds”, i.e. having access to the EU single market, without the single euro currency and without implementing the Schengen agreement. Less than one in five (17%) said that the main reason for staying was that the UK would be “more isolated from its friends and neighbours”, while less than one in ten (9%) said that there was “a strong commitment to the EU and its shared history, culture and traditions”. The responses of those who voted against the country remaining in the EU show that there is a significant sense of democratic deficit in the UK, given that three out of the four responses that garner the highest percentage of negative votes (95%) highlight the prevailing view of these voters that the decisions taken by the EU are against the interests of the country, which does not have the ability to decide for itself, to control its borders and to prevent “unprofitable” enlargements.

4.2 Attempts to Assess the Sense of Democratic Deficit

179

Percentage of voters who voted for or against Britain remaining in the EU in the UK referendum, on 23 June 2016, by age group 100% 27%

38%

48%

56%

57%

60%

52%

44%

43%

40%

55-64

65+

50% 73%

62%

0% 18-24

25-34

35-44 In favour of staying

45-54 Against staying

Fig. 4.11 Reasons for voting to remain in the EU in the UK referendum on 23 June 2016. Source: Lord Ashcroft (2016). Processed by the authors

In terms of the age groups of voters who participated, almost three quarters (73%) of the 18–24 age group, less than two thirds (62%) of the 25–34 age group and just over half (52%) of the 35–44 age group voted in favour of the country remaining in the EU. The age groups 45 to 54, 55 to 64 and over 65 voted against the country remaining in the EU by 54%, 57% and 60% respectively (see Fig. 4.11). This means that the older age groups of voters voted against the will of Britain’s younger generations, who are the future of the country. Furthermore, according to a YouGov survey (YouGov, 2016), the most frequently chosen reason among voters who voted against remaining in the EU, at 45%, was “to achieve a better balance between Britain’s right to act independently and an appropriate level of cooperation with other countries”. The second most frequently chosen reason, at 26%, was “to better address the issue of immigration” (see Fig. 4.12). Also, according to the same survey, the most frequently chosen reason among voters who voted to remain in the EU, at 40%, was “to improve jobs, investment and the economy in general”. The second most frequently chosen reason among the same voters, at 21%, was “to achieve a better balance between Britain’s right to act independently and an appropriate level of cooperation with other countries” (see Fig. 4.13). It should also be noted that in terms of the age groups of voters who participated, according to the YouGov survey (YouGov, 2016), 75% of the 18–24 age group and 56% of the 25–49 age group voted in favour of the country remaining in the EU. The 50 to 64 and over 65 age groups voted against the country remaining in the EU by 56% and 61% respectively (see Fig. 4.14). This again confirms that the older age groups of voters voted against the will of Britain’s younger generations, who are the future of the country. In this case too the responses of those who voted against the country remaining in the EU show that there is a significant sense of a democratic deficit in the EU, given that most of the responses that garnered the highest percentage of negative votes

4 The Perception of “Democratic Deficit” in the European Union

180

Reasons for voting against remaining in the EU in the UK referendum on 23 June 2016 It is possible to strike a better balance between Britain's right to act independently and the appropriate level of cooperation with other countries

45% 26%

It may help us to better address the issue of immigration

It may be better for my family and me

5%

They are likely to be better for jobs, investment and the economy in general

5% 4%

It is likely to be better for the National Health System

3%

It is likely to maximize Britain's influence in the world

2%

It is the result I believe in the most

1%

It is the result that the politicians I trust support

7%

Something else

2%

None of the above

0%

5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Fig. 4.12 Reasons for voting against remaining in the EU in the UK referendum on 23 June 2016. Source: YouGov (2016). Processed by the authors

(90%) highlight the prevailing view of these voters that the country’s participation in the EU is to the detriment of the country’s interests.

4.2.5

Citizens Need More Knowledge and Information

From the previous analysis it follows in practice that the democratic deficit as a concept expresses the distance of the EU institutions and decision-making centres from the citizens of the Member States, while it indicates the operational distortions of the EU institutions that make them inaccessible to the average citizen, as their functioning is considered by many to be particularly complex. The perception of the presence of this sense of a democratic deficit was taken seriously during the drafting of the treaties, with visible efforts to reform the EU institutions to operate with greater transparency and less bureaucracy, as well as to improve the way in which decisions are taken so that they are surrounded by the necessary democratic legitimacy. However, the views of many researchers differ as to the existence and nature of the democratic deficit in the EU. Some, mainly advocates of intergovernmental cooperation, question its existence; federalists argue that the EU needs to reform

4.2 Attempts to Assess the Sense of Democratic Deficit

181

Reasons for voting to remain in the EU in the UK referendum on 23 June 2016 It is likely to be better for jobs, investment and the economy in general

40%

It is possible to strike a better balance between Britain's right to act independently and the appropriate level of cooperation with other countries

21% 13%

It may be better for my family and me It is likely to maximize Britain's influence in the world

5%

It is likely to be better for the National Health System

2%

It is the result I believe in the most

2%

It is the result that the politicians I trust support

2%

It may help us to better address the issue of immigration

1% 12%

Something else

2%

None of the above

0%

5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Fig. 4.13 Percentages of voters who voted for or against Britain remaining in the EU in the UK referendum on 23 June 2016, by age group. Source: YouGov (2016). Processed by the authors

Percentage of voters who voted for or against Britain remaining in the EU in the UK referendum, on 23 June 2016, by age group 100% 25% 44%

56%

61%

44%

39%

50% 75% 56% 0% 18-24

25-49 In favour of staying

50-64 Against staying

65+

Fig. 4.14 Reasons for voting to remain in the EU in the UK referendum on 23 June 2016. Source: YouGov (2016). Processed by the authors

its institutions in order to gain the required democratic legitimacy and operational transparency, with the consent of the citizens of the Member States, to arrive at a form of federation, while Eurosceptics argue that the EU should reduce its powers which deprive Member States and their citizens of the possibility of democratic expression.

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4 The Perception of “Democratic Deficit” in the European Union

The legitimacy of the EU’s political system is essentially the confirmation of its democratic function. This could consist of the existence of specific democratic procedures for decision-making and implementation of decisions (legitimacy by inputs). However, according to other views, legitimacy may consist in the capacity of the political system to act in a regulatory way and, by virtue of its positive effect, to maintain the belief that it is the most appropriate for the general interest (legitimacy by outcomes). Moreover, there is also the socio-psychological dimension as a component of the sense of democratic deficit, which is related to the social acceptance and democratic legitimacy of the EU system and its institutions by the citizens of the member states, to the extent that they consider themselves European citizens, constituting a European “demos”, in which citizens have a transnational (European) consciousness. The citizens of this European demos will be able to belong in parallel to other smaller “demoi”, state-national and local, thus carrying multiple identities. The nature of the EU, as a multi-ethnic political system based on an institutionally multi-level and multi-state coexistence, does not preclude the formation of such a European “demos”, composed of individual European peoples, belonging to individual state-national and local “demoi”, and functioning as a multi-ethnic European “demoi-cracy”. Opinion polls through Eurobarometer and other surveys assessing the results of referendums on treaty ratification or on questions of staying or leaving the EU highlight an underlying Euroscepticism among EU citizens, due, in our view, to the lack of information on the European citizen by the EU institutions, and in particular, by the politicians and governments of the Member States, who, for reasons sometimes of petty politics or populism and sometimes of excessive certainty of the citizens’ agreement, do not provide adequate and necessary information about the positive effects of the treaties towards the democratisation of the EU political system or the negative effects of a withdrawal from the EU. If we add to this the lack of general knowledge about the aims, institutions and functioning of the EU (Europeanisation?), then the issue of a sense of democratic deficit in the EU becomes more understandable.

References Beetham D. & Lord C., “Legitimacy and the European Union”, in: Nentwich, M., & Weale, A. Political Theory and the European Union, Routledge, London, pp. 15–33, 1999. Cederman, L.E., “Nationalism and Bounded Integration: What It Would Take to Construct a European Demos”, European Journal of International Relations 7(2), pp. 139–174, 2001. Chryssochoou, D.N., “Democracy and the European polity”, in Cini, M., European Union politics (2nd ed.), Oxford University Press, 2007. Dahl, R. A., On Democracy, Yale University Press, London, 1998. Dellavalle, S., “Für einen normativen Begriff von Europa: Nationalstaat und europäische Einigung im Lichte der politischen Theorie”, in: v. Bogdandy, A. (ed.), Die europäische Option, Nomos, Baden-Baden, σ. 237 επ. (253), 1993. European Commission, ‘Post-referendum survey in Ireland - Preliminary results’, Flash Eurobarometer, Fieldwork: 13–15 June 2008, Report: June 18 2008

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European Parliament, Working Document on Challenge of Democracy: empowering the EU citizen, DT\755803EN.doc, 27.11.2008. Føllesdal, A., Hix, S., “Why there is a Democratic Deficit in the EU: A Response to Majone and Moravcsik”, European Governance Papers, No C-05-02, 2005. Hall, S., “The Question of Cultural Identity”, In Hall, S., Held, D., McGrew, (Eds), Modernity and Its Futures, Milton Keynes, Open University Press, Cambridge, 1992 Hix, S., The Political System of the European Union, 2nd ed. Palgrave, London, 2005. Hix, S., What’s wrong with the European Union and how to fix it. Cambridge & Madlen, MA:Polity Press, 2008. Innerarity, D., “Does Europe Need a Demos to Be Truly Democratic?”, LSE ‘Europe in Question’ Discussion Paper Series, London School of Economics and Political Sciences, London, 2014. Liebert, U., “Contentious European Democracy: National Intellectuals in Transnational Debates”, in Lacroix, J., Nicolaidis, K., (eds), European Stories. Intellectual Debates on Europe in National LOrContexts, Oxford University Press, Oxford, 2010. Lord Ashcroft, “How the United Kingdom voted on Thursday. . . and why”, Lord Ashcroft Polls, published online, 2016. Majone, G., “Delegation of regulatory Powers in a mixed Polity”, European Law Journal, 8/3, pp. 319–339, 2002. Majone, G., “Europe’s ‘Democratic Deficit’: The Question of Standards”, European Law Journal 4 (1): 5–28, 1998. Majone, G., Regulating Europe, Routledge, London and New York, σ. 291, 1996 Majone, G., “The Credibility Crisis of Community Regulation”, Journal of Common Market Studies 38 (2): 273–302, 2000a. Majone, G., “The European Commission: The Limits of Centralization and the Perils of Parliamentarization”, Governance 15 (3): 375–392, 2000b. Marquand, D., Parliament for Europe, Jonathan Cape Ltd, London, 1979. Mayer, F., Palmowski, J., “European Identities and the EU – The Ties that Bind the Peoples of Europe”, Journal of Common Market Studies, 42(3):573–598, 2004. Miller, D., Citizenship and National Identity, Blackwell, London, 2000. Missira, D., “New Economic Governance: From Democratic Deficit to Democratic Default”, in IRTEA (2013-2014), The Contemporary European Economic and Social Crisis, the Democratic Deficit and the Rise of Euroscepticism, (in Greek Language), Institute of Research & Training on European Affairs, Athens, 2014. Moravcsik, A., “In Defence of the ‘Democratic Deficit’: Researching the Legitimacy of the European Union”, Journal of Common Market Studies, 40 (4): 603 – 634, 2002. Moravcsik, A., “The Myth of Europe's Democratic Deficit”, Intereconomics, Journal of European Public Policy, November-December 2008. Mousis, N., European Union: law, economy, policies, (in Greek Language), Papazisis, Athens, 2011. Nicolaidis, K., “We, the peoples of Europe. . . ..”, Foreign Affairs 83 (6), 97–110, 2004. Papadopoulou, L., “Thoughts on the Municipality and Democracy in the European Union”, in: Manitaki, A., (ed.), Democracy between Utopia and Reality, Studies in the Life of Zisis Papadimitriou, (in Greek Language), Savvalas, Athens, 2011, pp. 152–174», 2001. Radaelli, C., “The Europeanization of Public Policy”» in Featherstone, K., Radaelli, C., The Politics of Europeanization, pp. 27–56. Oxford: Oxford University Press, 2003. Schmidt, V.A., “Democracy and Legitimacy in the European Union Revisited: Input, Output and ‘Throughput’”, Political Studies, 61, pp. 2–22, 2013. Schmidt, V., & Radaelli, C., “Policy change and discourse in Europe: conceptual and methodological issues”, West European Politics, 27(2):183–210, 2004. Stefanou, K.A., The Institutional Reform of the European Union, (in Greek Language), Papazisis, Athens, 1996. Tsatsos, D.Th., The Meaning of Democracy in the European Commonwealth, Polis, Athens, 2007

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Voskopoulos, G., The European Union – Institutions, policies, challenges, concerns, (in Greek Language), Epikentro, Thessaloniki, 2009. Weiler, J.H.H., ‘Demos, Telos and the German Maastricht Decision’, European Law Journal, pp 224–245, 1995a Weiler, J.H.H. “Does Europe Need a Constitution?’, Demos, Telos and the German Maastricht Decision”, European Law Journal v1 (3), pp. 219–245, November 1995b. Weiler, J.H.H., “The Transformation of Europe”, The Yale Law Journal vol. 100, p. 2403, 1991. Weiler, J.H.H., The Constitution of Europe, Cambridge University Press, London, 1999 Williams, S., “Sovereignty and Accountability» in The New European Community”, The Political Quarterly, Volume 61, Issue 3, pages 299–317, 1990. YouGov, “On the day poll [Sample Size: 4772 UK Adults; Fieldwork: 23rd June 2016]”, YouGov, published online, 2016. Zweifel, T.D., Democratic Deficit? Institutions and Regulation in the European Union, Switzerland, and the United States, Lexington Books, New York, 2002.

5

The Budget of the European Union and the Underpinning of the Union’s Policies

5.1

The Budget of the European Union

The EU budget supports common objectives and helps tackle common challenges. Since the establishment of the first Common Agricultural Policy in the 1960s, the EU budget has gradually changed. Moreover, changes in the EU Treaties have broadened the scope of EU competences, particularly in the 1980s and 1990s. The increase in the resources of the Structural Funds to support economic, social and territorial cohesion contributed to changes in the structure of the EU budget. In addition, the strengthening of the EU’s role in areas such as transport, space, health, education, culture, consumer protection, environment, research, judicial cooperation and foreign policy has created new realities in EU budgeting. However, the EU budget represents in the last Multiannual Financial Period 2014–2020 less than 1% of EU income and has decreased over time, as shown in the histogram in Fig. 5.1.

5.1.1

Evolution of the EU’s Finances and Budget

The EU, unlike the Member States, cannot borrow. Originally, budget revenue came from financial contributions from the Member States. At the Hague Conference on 1 and 2 December 1969, it was agreed that, over time, the Member States’ contributions should be replaced by the Community’s own resources. Thus, the Treaty of Luxembourg (the First Budget Treaty) of 22 April 1970 and Decision 70/243/ECSC, EEC, Euratom of the Council of the EC of 21 April 1970 established a new financing system with effect from 1 January 1971. From 1 January 1975, financing was to be provided exclusively from the Community Own Resources. However, in order to ensure that the transition to the new financing system was gradual, for the first transitional three-year period (1975–1977) provision was made for mixed financing from both Member States’ contributions and own resources.

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The EU's budget as a percentage of total GNI of EU Member States 1.2% 1.18% 1.0%

1.06%

1.07% 0.98%

0.8% 0.6% 0.4% 0.2% 0.0% Mean Value 1993-1999

Mean Value 2000-2006

Mean Value 2007-2013

Mean Value 2014-2020

Fig. 5.1 The EU budget as a percentage (ceilings) of the total Gross National Income (GNI) of EU Member States. Source: Communication COM (2017) 358 final. Processed by the authors

There would be three categories of Community Own Resources. The two “traditional” resources consisted of (a) agricultural levies derived from imports of agricultural products from third countries, introduced in 1962, and levies on the production and stocks of sugar and isoglucose imposed on the Member States, and (b) common customs tariff duties on imports imposed at 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 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 85/257/EEC, Euratom of the Council of the EC of 7 May 1985 raised this maximum rate to 1.4%, with effect from 1 January 1986. It should be noted that the First Budget Treaty of 22 April 1970 provided for the division of responsibilities for the adoption of the budget so that the Council of the EC would approve compulsory expenditure and the European Parliament would approve non-compulsory expenditure. With the Treaty of Brussels (the 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. Based on the Communication from the Commission to the Council of the EC, with title The Single Act: A New Frontier for Europe (COM(87) 100) of 15 February 1987, promoting the “Delors I Package” and with a view to securing the financing of the Community budget, which was accepted by the Brussels European Council from 11 to 13 February 1988, Decision 88/376/EEC, Euratom of the Council of the EC of 24 June 1988 was adopted, which established a fourth Community Own Resource consisting of a percentage of the Gross Domestic Product (GDP) of the Member States, determined in such a way as to balance the Community budget. The fourth

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own resource was calculated in relation to the difference between expenditure and the contribution of the other Community Own Resources. 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 Own 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—the First Interinstitutional Agreement—between the Council of the EC, the Commission and the European Parliament on 29 June 1988, which established rules for enhanced Community budgetary discipline for a period of five years, in the form of a Multiannual Financial Framework (MFF), from 1988 to 1992, setting priorities for specific Community policies which would also identify the expenditure required and set limits for its increase, in accordance with the identified upper limits of Community Own Resources. The system worked well for five years, leading the Commission to compose a Communication with title From the Single Act to Maastricht and beyond: the means to achieve our ambitions (COM(92) 2000 final) of 11 February 1992, promoting 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 between 1993 and 1999. On the basis of this plan, Decision 94/728/EC, Euratom of the Council of the EU of 31 October 1994 was adopted, according to which the ceiling for the total amount of Community resources as a percentage of Gross Community Product would increase from 1.20% in 1993 to 1.27% in 1999, while it also provided for a gradual reduction in the rate of contribution from the VAT levied by the Member States as a third Community Own Resource of the budget from 1.4% to 1% between 1995 and 1999, which would necessarily increase the amount of the fourth Community Own Resource, based on the GDP of the Member States, still further. In addition, a new agreement—the Second Interinstitutional Agreement—was reached on 29 October 1993 between the Council of the EU, the Commission and the European Parliament on the procedures for establishing and maintaining the Community budget as an MFF, providing for similar procedures to the previous one for a period of seven years, from 1993 to 1999. However, from 1995, with the extension of the application of the European System of Accounts of 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 Community Own Resources ceiling was adjusted as a percentage, to 1.24% of EU GNI. This was followed by Council Decisions 2000/597/EC, Euratom, of 29 September 2000, 2007/436/EC, Euratom, of 7 June 2007 and 2014/335/EU, Euratom, of 26 May 2014 on the system of Communities’ Own Resources. The Third Interinstitutional Agreement on the MFF for the period 2000–2006 was signed on 6 May 1999, following the Commission’s Communication with title Agenda 2000: For a stronger and wider Union (COM(97) 2000 final) of 15 July

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1997, related to the Agenda 2000 project. Also there was the Fourth Interinstitutional Agreement on the MFF for the period 2007–2013, signed on 17 May 2006, and the Fifth Interinstitutional agreement on the MFF for the period 2014–2020, adopted on 2 December 2013. The latter MFF was the first to be adopted under the new provisions of the Treaty of Lisbon, according to which the Council of the EU, following the special legislative procedure, must adopt the MFF unanimously, after obtaining the consent of the European Parliament. This was followed by Regulations (EU, Euratom) 608/2014 of the Council of the EU of 26 May 2014 on the adoption of implementing measures for the system of EU Own Resources and (EU, Euratom) 609/2014 of the Council of the EU, of 26 May 2014 on the methods and procedure for rendering traditional Own Resources and Own Resources based on VAT and GNI and on measures to address cash needs.

5.1.2

The EU’s Budget Revenue and Expenditure Until Today

The EU budget is currently based on Own Resources funding. There are currently three main types of Own Resources: GNI-based contributions from Member States, VAT-based contributions collected by Member States and customs duties collected at the EU’s external borders (see Fig. 5.2). Also included are taxes on the salaries of EU staff, contributions from third countries for certain EU programmes, and fines collected, thus constituting other budget’s revenue. In 2018, almost 83% of the EU budget was financed by Member States’ national contributions based on GNI (71%) and VAT (12%). Also, almost 16% of the EU budget was financed by Custom Duties. In particular, GNI-based contributions reflect the relative “ability to pay” of

Fig. 5.2 Sources of financing for the EU budget. Source: Communication COM (2017) 358 final. Data for years 2019 and 2020 were estimated by the authors

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Sources of financing in selected years 100%

1%

3%

1%

90% 80% 70%

55%

41% 71%

60% 50% 40%

39%

30% 20%

44%

10%

12% 17%

16%

0% 1978 Financial Contributions GNI-based Own Resource

1998 Custom Duties Other Revenue

2018 VAT-based Own Resource

Fig. 5.3 Sources of financing for selected years for the EU budget. Source: Communication COM (2017) 358 final. Processed by the authors

Member States. It should be noted that customs revenue comes from the implementation of the common commercial policy (Communication COM (2017) 358 final). Looking for the changes in the contribution of the Own Resources as sources for the financing of the EU budget, and as it is shown in Fig. 5.3 for the years 1978, 1998 and 2018, over time, the share of Member States’ Financial Contributions was almost zeroed out, while the share of Custom Duties was decreased sufficiently, both replaced by the VAT-based and the GNI-based Own Resources. But also, the share of VAT-based Own Resource was decreased and replaced by the GNI-based Own Resource, specifically during the last two decades (Communication COM (2017) 358 final). The budget expenditure relates to (a) the Common Agricultural and Fisheries Policy, (b) the Economic, Social and Regional Cohesion/Structural Funds, (c) Other programmes (Research and Innovation, Trans-European Policies, External Actions, Space, Education and Youth, Justice and Home Affairs, Competitiveness, etc.) and (d) Administrative expenditure (see Fig. 5.4). Over time, the share of expenditure for the agricultural sector has decreased; however, the combination of the agricultural sector and that of regional policy accounts for more than 70% of the total. Expenditure in recent periods has been increasingly concentrated in areas such as research, trans-European networks and external action. Table 5.1 refers to revenue and expenditure during 2020, the last year of MFF 2014–2020.

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Fig. 5.4 Evolution of budget percentages for spending on key EU policies. Source: Communication COM (2017) 358 final. Processed by the authors

5.2

The Future EU Budget

On 2 May 2018, the Commission presented legislative proposals on MFF for the period from 2021 to 2027. On 10 November 2020, an agreement was reached between the European Parliament and the Council of the EU on the next EU MFF and the NextGenerationEU recovery instrument. To finance the post-coronavirus NextGenerationEU recovery instrument, the EU agreed on a worth of €750 billion (2018 prices), to come on top of the 2021–2027 long-term budget. To finance it, the EU will borrow funding on the markets. The Regulation on the EU MFF for the period from 2021 to 2027 and the Sixth Interinstitutional agreement they reached were adopted by the European Parliament on 17 December 2020, and the Council of the EU adopted the relevant Regulation (EU, Euratom) 2020/2093 of 17 December 2020.

5.2.1

The EU’s Budget Revenue According to MFF 2021–2027

The EU budget has the EU’s Own Resources as the main sources of revenue and it operates a balanced budget so that its annual expenditure may not exceed its revenue. Today, and according to the Decision (EU, Euratom) 2020/2053 of the Council of the EU of 14 December 2020, there are: (a) The Traditional Own Resource which mainly comprises customs duties on imports to the EU. In order to cover their collection costs, Member States retain 25% of the collected duties as of 1 January 2021; (b) The VAT-based Own Resource, resulting from a rate of 0.3%, applies to each EU Member State’s harmonised VAT base, which is capped at 50% of its GNI,

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Table 5.1 Revenue and expenditure during 2020, last year of MFF 2014–2020 Revenue and expenditure during 2020, last year of MFF 2014–2020 Member State Revenue Austria 3,759.7 Belgium 6,595.0 Bulgaria 673.0 Croatia 540.9 Cyprus 245.0 Czechia 2,273.1 Denmark 3,157.4 Estonia 311.6 Finland 2,457.6 France 25,342.2 Germany 31,935.0 Greece 1,857.2 Hungary 1,475.6 Ireland 2,614.9 Italy 18,180.4 Latvia 323.5 Lithuania 547.8 Luxembourg 407.4 Malta 129.3 Netherlands 9,021.3 Poland 5,673.8 Portugal 2,173.0 Romania 2,236.0 Slovakia 957.0 Slovenia 534.4 Spain 12,378.5 Sweden 4,580.1 Britain 19,709.4 Total EU 160,089.9 Surplus 2019 3,218.4 Earmarked Other 10,997.3 Other Non-EU Total 174,305.6

Expenditure 2,115.9 9,051.5 2,229.1 2,688.4 232.8 5,536.4 1,530.4 1,084.7 1,557.7 15,848.9 12,565.6 7,414.5 6,143.7 2,254.7 11,862.7 1,323.5 2,593.8 2,444.7 204.7 2,735.2 18,091.8 5,310.0 6,978.0 2,593.6 1,050.7 12,810.1 2,190.7 6,826.7 147,270.5 9,919.5 4,373.0 11,747.0 173,309.9

while the proceeds are transferred to the EU; (c) The GNI-based Own Resource, by which every EU Member State transfers to the EU a uniform percentage of its GNI, which is adjusted so that overall revenue matches the agreed level of payments. This own resource is now the largest source of revenue of the EU; (d) As of 1 January 2021, a new own resource is applied, the Plastic Own Resource, based on the quantity of non-recycled plastic packaging waste. This own resource is closely linked to the EU policy priorities in order to encourage Member States to reduce

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packaging waste. A uniform call rate of €0.80 per kilogram will be applied to the weight of plastic packaging waste that is not recycled, with a mechanism to avoid excessive contributions from less wealthy Member States. The contributions will be calculated based on Eurostat data, following the packaging and packaging waste Directive 94/62/EC of the European Parliament and the Council of the EU of 20 December 1994 and its Commission Implementing Decision (EU) 2019/665 of 17 April 2019. According to the Decision (EU, Euratom) 2020/2053 of the Council of the EU of 14 December 2020, the maximum amount of resources that can be called from EU countries in any given year to finance EU expenditure—the own-resources ceiling— was raised from 1.20% to 1.40% of the sum of the EU-27 GNI. This raise reflects the integration of the European Development Fund into the EU budget and addresses the withdrawal of Britain from the EU, a former net contributor to the budget. Also, the Commission was authorised by the same Decision, on an exceptional basis, to borrow temporarily up to €750 billion in 2018 prices on the capital markets to finance the NextGenerationEU recovery instrument. In parallel, the own-resources ceiling will be exceptionally and temporarily increased by a further 0.6% to cover all liabilities of the EU resulting from this borrowing. To enter into force, this Decision needs to be approved by all 27 EU countries in accordance with their constitutional requirements.

5.2.2

The EU’s Budget Expenditure According to MFF 2021–2027

The EU’s 2021–2027 long-term budget, together with the NextGenerationEU recovery instrument, amounts to €2.018 trillion in current prices (€1.800 trillion in 2018 prices). This amount consists of: (a) the long-term budget, i.e. the 2021–2027 MFF, made up of €1.211 trillion in current prices (€1.074 trillion in 2018 prices), combined with the temporary recovery instrument, NextGenerationEU, of €806.9 billion (€750 billion in 2018 prices) (see Fig. 5.5). The share of the main policy areas in the MFF for the period from 2021 to 2027 (€1211 trillion or €1.074 trillion in 2018 prices) is: (a) Common Agricultural and Fisheries Policy, 30.9%, (b) Economic, Social and Territorial Cohesion, 30.4%, (c) New and Reinforced Priorities, 31.9%, and (d) European Public Administration, 6.7%. The NextGenerationEU, for the period from 2021 to 2027 and particularly in the period from 2021 to 2023 (€806.9 billion or €750 billion in 2018 prices), consists of (a) €338.0 billion for grants, (b) €385.8 billion for loans and (c) €83.1 billion as contribution to other programmes.

5.2.3

The EU’s Annual Budget Adoption Procedure

The drawing up and adoption of the EU’s annual budget follows the procedure described in Article 314 of the TFEU. Budget estimates for the next year are forwarded by EU institutions and bodies to the Commission, not later than 1 July.

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Share of the main policy areas in the Multiannual Financial Frameworks 2021 - 2027

Share of several programmes where the money from NextGenerationEU will be invested

6.7%

6.5% 30.9%

26.5%

31.9% 30.2% 30.4%

Common Agricultural and Fisheries Policy Economic, Social and Territorial Cohesion New and Reinforced Priorities European Public Administration

Grants Loans Contribution to other programmes

Fig. 5.5 Share of the main policy areas in the MFF 2021–2027 and share of several programmes where the money from NextGenerationEU will be invested. Source: European Commission (2020). Processed by the authors

The Commission draws up the draft budget for the following year, based on these estimates, and forwards this draft budget to the Council of the EU and the European Parliament by 1 September. The Council of the EU forwards its position on the draft budget to the European Parliament not later than 1 October. Within 6 weeks the European Parliament must adopt its amendments to the position of the Council of the EU and the latter has 10 days to accept the Parliament’s amendments. If it does not, a Conciliation Committee is formed comprising equal numbers of representatives of the Council and members of the European Parliament. This committee must agree on a joint text within three weeks, otherwise the Commission must present a new draft budget and the procedure starts from the beginning. Otherwise, if agreement is reached in the Conciliation Committee, the Council of the EU and the European Parliament must approve or reject the text within two weeks. If the Council of the EU rejects the joint text, the European Parliament may still adopt it but only if a majority of its members vote and three fifths of them support it. If both institutions reject the joint text, the Commission must prepare a new draft budget and the procedure starts from the beginning. If the budget is not agreed by the end of the year, according to Article 315 of the TFEU the “provisional twelfths” system is applied. This means that the equivalent of no more than one twelfth of the previous year’s budget or of the Commission’s draft budget—whichever is the smaller—can be spent each month until the budget is legally adopted. In the case that new developments arise, the budget may need to be amended. The procedure for adopting amending budgets is the same as that for the annual budget.

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References 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. Communication COM(97) 2000 final - Agenda 2000: For a stronger and wider Union, Commission of the European Communities, Brussels, 15 July 1997. Communication COM(2017) 358 final - Reflection Paper on the Future of EU finances, European Commission, Brussels, 28 June 2017. European Commission, The 2021-2027 EU budget – What’s new?, 2020, Available: https:// commission.europa.eu/strategy-and-policy/eu-budget/long-term-eu-budget/2021-2027/whatsnew_en. Official Journal of the European Communities, Treaty of Brussels (Second Budget Treaty), 31.12.1977, No L 359, “Treaty amending certain financial provisions of the Treaties establishing the European Economic Communities and of the Treaty establishing a single Council and a single Commission of the European Communities”, Brussels, 22 July 1975. Official Journal of the European Communities, Treaty on European Union, 29.07.1992, No C 192, “Treaty on European Union”, Maastricht, 7 February 1992 Official Journal of the European Union, Treaty of Lisbon, 17.12.2007, No C 306. “Treaty of Lisbon amending the Treaty on European Union and the Treaty establishing the European Community”, Lisbon, 13 December 2007. Official Journal of the European Union, Treaty of Luxembourg (First Budget Treaty), 02.01.1971, No L 2, “Treaty amending certain budgetary provisions of the treaties establishing the European Communities and of the Treaty establishing a single Council and a single Commission of the European Communities”, Luxembourg, 22 April 1970. Official Journal of the European Communities No L 94, Decision 70/243/ECSC, EEC, Euratom of the Council of EC, on the Replacement of Financial Contributions from Member States by the Communities’ own Resources, Luxembourg, 21 April 1970. Official Journal of the European Communities No L 185, Decision 88/376/EEC, Euratom, of the Council of EC, on the system of the Communities’ own resources, Luxembourg, 24 June 1988. Official Journal of the European Communities No L 128, Decision 85/257/EEC, Euratom of the Council of EC, on the Communities’ system of own resources, Brussels, 7 May 1985. Official Journal of the European Communities No L 293, Decision 94/728/EC, Euratom of the Council of EU, on the system of the European Communities’ own resources, Luxembourg, 31 October 1994. Official Journal of the European Communities No L 253, Decision 2000/597/EC, Euratom, of the Council of EU, on the system of the European Communities’ own resources, Brussels, 29 September 2000. Official Journal of the European Union No L 163, Decision 2007/436/EC, Euratom, of the Council of EU, on the system of the European Communities’ own resources, Luxembourg, 7 June 2007. Official Journal of the European Union No L 168, Brussels, 26 Decision 2014/335/EU, Euratom, of the Council of EU, on the system of own resources of the European Union, May 2014. Official Journal of the European Union No L 112, Decision (EU) 2019/665, Commission Implementing Decision, amending Decision 2005/270/EC establishing the formats relating to the database system pursuant to European Parliament and Council Directive 94/62/EC on packaging and packaging waste, Brussels, 17 April 2019. Official Journal of the European Union No L 424, Decision (EU, Euratom) 2020/2053, of the Council of EU, on the system of own resources of the European Union and repealing Decision 2014/335/EU, Euratom, Brussels, 14 December 2020. Official Journal of the European Communities No L 365, Directive 94/62/EC, of the European Parliament and the Council of EU, on packaging and packaging waste, Brussels, 20 December 1994.

References

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Official Journal of the European Union No L 168, Regulation (EU, Euratom) 608/2014, of the Council of EU, laying down implementing measures for the system of own resources of the European Union, Brussels, 26 May 2014. Official Journal of the European Union No L 168, Regulation (EU, Euratom) 609/2014, of the Council of EU, on the methods and procedure for making available the traditional, VAT and GNI-based own resources and on the measures to meet cash requirements, Brussels, 26 May 2014.

6

The Common Agricultural Policy: Purpose, Evolution and Future Projections

6.1

Purpose and Creation of the Common Agricultural Policy

The unified agricultural policy of the EU Member States is expressed in practical terms as the Common Agricultural Policy (CAP), which is a set of regulations and mechanisms that control most aspects of the production, processing and trade of agricultural products within the EU. Through a set of laws and regulations relating to agricultural, livestock, forestry and fisheries production, as well as the selection, qualification and marketing of agricultural products and employment in the agricultural sector, it aims to ensure the sufficiency of agricultural products, price stability and support for rural incomes, while encouraging the production of high-quality products for an increasingly demanding market, and providing new methods of development, such as environmentally friendly energy sources and the use of renewable energy sources. The CAP is one of the EU’s main policies, currently accounting for almost 40% of the EU budget, and has a significant impact on the lives of all EU citizens. It is based on the principles of the integrated market, Community preference and financial solidarity that govern the EU (and former EEC) Member States, namely: (a) The integrated market: which means the free movement of agricultural products inside the territory of the Member States, within the framework of an integrated market using common instruments and mechanisms applicable to all Member States. (b) Community preference, which means that preference and pricing advantages are given to EU agricultural products in relation to imported products. (c) Financial (budgetary) solidarity, which means that all the costs arising from the implementation of the CAP are covered by the Community budget. In its course, the CAP has undergone several reforms and has evolved to meet the changing needs of civil society in the Member States, as well as the need to adapt to the conditions of international trade. However, CAP reforms have not been an easy task, given the different agricultural structures and the conflicting interests of the

# The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 P. Liargovas, C. Papageorgiou, The European Integration, Vol. 2, Springer Texts in Political Science and International Relations, https://doi.org/10.1007/978-3-031-47176-6_6

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Member States and the occasional enlargements with new Member States that created new realities in the agricultural sector of the EEC and the later EU.

6.1.1

The Different Agricultural Structures of the EU Member States

The EEC from its inception has generally had a deficit balance in foodstuffs, and the conditions of the world market did not allow a unilateral opening of its markets. It was therefore a priority to ensure its supply of agricultural products at stable prices and to organise its own agricultural production, taking advantage of existing complementary production. This meant that Northern Europe would have priority in supplying the Member States with cereals, dairy products and meat, while Southern Europe would have priority in supplying the Member States with fruit, vegetables, olives, cotton and tobacco. However, the rural structures in the Member States varied considerably due to their different economic and social situations, as well as their different geophysical and climatic characteristics. It was precisely this diversity in the agricultural sector, which increased with the successive enlargements of the EEC, and later the EU, that posed additional problems for the integration of agricultural markets. Moreover, the different importance of the agricultural sector in each national economy and the various traditions of the applied national agricultural policies were added to the existing different geophysical, structural and social conditions in the Member States of the EEC, which led to the application of different methods and policies in each Member State and set at the national level various privileges, which ensured national monopolies, price guarantees, agricultural income support, export subsidies, import restrictions, and customs and tariff protection of national agricultural products, etc. This complexity of national agricultural policies required their merging into a common agricultural policy, as an interventionist policy, the implementation of which would affect the agricultural economy of the Member States differently, but at the same time would lead to the homogenisation—as far as possible—of the agricultural structures among the Member States following the common path of European integration. In addition, many European rural areas, irrespective of Member States, such as regions in Southern Europe, faced significant problems and were at a disadvantage compared to other regions, due to limited competitiveness of local farms, low average income per capita, skills shortages among farmers, outdated agricultural technology and limited development of the service sector. The aim of a CAP would therefore be to solve the problems faced by these rural areas and to exploit their potential for the benefit of all Member States. Finally, concern for the rural environment and the quality of life in the European countryside required the application of specific rules. In this context, the CAP is called upon to promote a package of measures for pro-environmental rural development with the production of quality products, the use of soft and renewable energy

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sources, and the rational management of water resources intended for agricultural use.

6.1.2

The Foundations of a Common Agricultural Policy

The establishment of the EEC by the six founding Member States in 1957 had as its main objective the creation of a common market within the borders of the Member States. At that time the founding Member States were importers of agricultural products. The main priority of the Treaty of Rome of 1957 was therefore to lay down a concrete basis for the development of an agricultural policy. Thus, Article 39 of the Treaty establishing the EEC provided for specific objectives: (a) improving agricultural productivity, (b) ensuring farmers’ incomes, (c) stabilising markets, (d) guaranteeing stable supplies for consumers and (e) ensuring reasonable prices for consumers. However, it was clear that these objectives for a common agricultural policy were the product of a compromise between protectionism and the free market. Indeed, taking into account the agreements on rural development reached in Stresa, Italy, from 3 to 11 July 1958, it is clear that from the outset, the attempt to draw up a common agricultural policy took account of the differences in the interests of the founding members of the EEC, which were expressed in contradictory terms, providing for the following: (a) To make European agricultural production competitive, without, however, affecting its family character. (b) To make European prices of agricultural products higher than international ones, but without this fact leading to overproduction. (c) There should be protection against international competition, but without restricting imports. In order to achieve the above basic objectives, the establishment of the Common Market Organisation (CMO) was set as an immediate priority, in order to extend the customs union to agricultural products by establishing common prices to be determined by the Council of Agriculture Ministers of the EEC. The CMOs, which came to cover around 90% of EU agricultural production, helped to manage the production and marketing of products or groups of products (cereals, fruit and vegetables, pig meat, eggs, wine, etc.) in order to ensure a stable income for farmers and a steady supply for European consumers. The CMOs were the basic instruments of the common agricultural market, because they removed barriers to intra-Community trade in agricultural products and maintained common customs barriers to third countries. In 2007, as part of the CAP simplification process, a single common market organisation was established to replace the 21 existing CMOs. However, in addition to the abolition of tariffs on trade between Member States, the EEC initially pursued a system of intervention and protection, i.e. a policy of price support for agricultural products, which implied a transfer of resources from consumers to producers of agricultural products through high prices, relative to the international prices of these products. Thus, the first CAP measure adopted was the introduction of the intervention price/minimum price for agricultural products, which did not allow prices within the EEC to fall below a minimum level. This

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Fig. 6.1 Variations of the system of support for agricultural products. Source: Bourdaras (2006), Maraveyas (2003)

price was accompanied by import compensatory levies equal to the difference between the minimum import price and the lowest price offered by foreign producers at the EEC border. The minimum price was set for at least the main agricultural products at a level higher than the international price at which imports were available. There were, however, variations on the intervention price/minimum price system, which will be described below. The current system of aid, which also met the conditions of the founding Treaty of Rome, allowed farmers to produce larger quantities of products, thus increasing their income, keeping markets in sufficiency and at controlled levels of price fluctuation, affordable to consumers, while in case of shortages, there was the outlet of low-priced imports. The diagrams in Fig. 6.1 show the three variants of the system of aid for agricultural products in the EEC Member States after 1962, the year in which the CAP was effectively introduced. Diagram A of Fig. 6.1 shows schematically the system of aid in the form of an export subsidy or import duty, which was applied to a number of products, such as cereals, sugar beet, beef and cow’s milk. At low and fluctuating import prices of third country products, an import duty was imposed which raised the price of the imported product to prices similar to those at which the Community producer would sell his product. In the event of a surplus, the Community exporter would be rewarded with an export subsidy at a level that would enable it to purchase the products at the Community producer’s income levels and make them available for export at lower prices. The burden of the support derived from the import duty was in practice borne by the Community consumer, while the burden of the export subsidies was borne by the Community budget. Later, fruit and vegetables, wine, pork, poultry meat and eggs were added to this scheme, with lower levels of protection. Diagram B of Fig. 6.1 shows a schematic version of the system, originally applied in Italy for olive oil in the early 1970s, with a subsidy received by the Community

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Fig. 6.2 Pillars I and II of the CAP, also known as the “amber box” and “green box” respectively. Source: Bourdaras (2006), Maraveyas (2003)

producer on his production in order to increase his income to the desired level. This difference was borne by the Community budget, while the products covered by this subsidy system were freely imported. This scheme was later applied to certain fruit and vegetables and tobacco, and with Greece’s accession to the EEC, it was extended to cotton, raisins, dried figs, and sheep and goat meat. Diagram C of Fig. 6.1 shows schematically a mixed system, which was implemented after modifications of the individual CAP measures for several products. It was applied to cereals, beef and cow’s milk. The Community producer’s final revenue was derived from the sum of the import levy (charged to the Community consumer) or the export subsidy (charged to the Community budget) and the production aid (charged to the Community budget). It should be noted that all of these financial support payments for agricultural production, which were later called the “amber box”, were measures under Pillar I of the CAP, as shown in the diagram of Fig. 6.2, while measures were gradually introduced which were not aimed at providing financial support for agricultural production, but were structural measures concerning the farmer himself, the farm, the protection of the rural environment and natural resources, the extensification of production, etc. These measures, which were later called “green box” measures, constituted Pillar II of the CAP, as shown in the diagram of Fig. 6.2.

6.2

The Launch and Reforms of the CAP

At the conference of the Ministers of Agriculture of the EEC Member States, and experts and representatives of the agricultural trade unions in Stresa, Italy, from 3 to 11 July 1958, the guidelines of the future agricultural policy were laid down, i.e. market unity, Community preference and financial solidarity. On this basis, the

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Commissioner for Agriculture Sicco Mansholt submitted on behalf of the Commission a series of proposals to the Council of Ministers in June 1960 on the free movement of agricultural products, the guarantee of Community preference, financial solidarity, the creation of a European Agriculture Guidance and Guarantee Fund (EAGGF, Fonds Européen D’Orientation et de Garantie Agricole, FEOGA) and the gradual introduction of uniform prices for agricultural products.

6.2.1

The Launch of the CAP (the Mansholt Plan)

On 14 January 1962, after long negotiations, the Council of Ministers approved the organisation of six specific categories of agricultural product markets (cereals, pig meat, eggs, poultry meat, fruit and vegetables, and wine), as well as the creation of a timetable for the organisation of other categories (dairy products, beef, sugar, etc.). The first CMOs were thus created in July 1964. In practice, the principle of free movement was already being applied to the products of the Member States with the establishment of the EEC common market, which also covered agricultural products. Ensuring Community preference to satisfy the internal demand of the EEC common market would protect the producers of its Member States against cheaper imports from third countries by imposing tariffs, even though this preference was contrary to the logic of the General Agreement on Tariffs and Trade (GATT). The revenue from the tariffs would be used to finance exports, reducing the prices of Community agricultural products relative to those on the world market. To implement financial solidarity, the Member States would be financed by the Community, ensuring guaranteed prices for farmers. The Community body responsible for managing the CAP budget would be the EAGGF, established by Regulation (EEC) 25/1962 of the Council of Ministers of 4 April 1962, amended by Regulations (EEC) 728/70 and 729/70 of the Council of EC of 21 April 1970, whose expenditure would account for almost 60% of the Community budget. This fund was divided into two sections by Regulation 17/64/ EEC of the Council of Ministers of 5 February 1964: the guidance section, which relates to matters of improving the structure of agriculture, and the guarantee section, which relates to matters of the common organisation of the markets and ensuring satisfactory prices for agricultural products. Furthermore, by May 1966 an agreement was reached on the Commission’s proposals for the financing of the CAP and in July of the same year the Council of Ministers approved the CMOs for almost all agricultural products. On 21 December 1968, Commissioner for Agriculture Mansholt submitted through the Commission to the Council of EC a draft proposal for the formulation of the CAP entitled “Memorandum on the Reform of Agriculture in the European Economic Community” (also known as the “Mansholt Plan” or “Gaichel Group Report” after the name of the village of Gaichel in Luxembourg, which was the meeting place of the members of the group) (COM(68) 1000, Parts A and B), with obviously a structural character. The proposed structural changes were: (a) To increase the size of the farm, given that 66% of farms were smaller than 10 hectares,

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and less than half of the farms accounted for 80% of the workforce; (b) To reduce the total amount of land under cultivation, with the land that would be withdrawn being used for reforestation or the construction of service areas. (c) To reduce the number of people employed in the agricultural sector, with financial incentives for leaving. (d) To train 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, only three Directives in 1972 (72/159/EEC, 72/160/EEC and 72/161/EEC of the Council of EC of 17 April 1972) on the modernisation of agricultural holdings produced meagre results, on the early retirement and retirement of farmers over 55 years of age and on the training of farmers, and a Directive 75/268/EEC of the Council of EC of 28 April 1975 on compensation for farmers living in mountainous and problematic areas.

6.2.2

The 1992 Reform (the MacSharry Reform)

During the 1960s and 1970s, when the aid system described above was applied, no serious problems arose, since the EEC had not developed its agricultural production to the point of having unallocated surpluses. During the 1980s the agricultural production was increasing at a rate of 2–3% per annum, while the increasing rate of internal demand was not more than 0.5–1% per annum. As a result of this development, expenditure to support the prices of increasingly surplus products, both through market intervention and export subsidies, increased. Guaranteed prices led to overproduction, and the accumulation of stocks financed by the Community budget worked to the benefit of 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. The enlargement of the EC with Greece, Portugal and Spain and the consequent increase in the agricultural subsidies required contributed to this. On 23 July 1983 the Commission presented a report to the Council of EC with title Common agricultural policy—Commission report and proposals (COM (83) 500), while with the Commission’s Green Paper proposing a radical reform of the CAP with title Perspectives for the Common Agricultural Policy (COM (85) 333 final) of 15 July 1985 the need to protect the environment was recognised and reference was made to a multi-sectoral approach to rural development. The European Council in Brussels from 11 to 13 February 1988, following the proposals of the “Delors I package”, determined that “the annual rate of increase of EAGGF— Guarantee expenditure... shall not exceed 74% of the annual growth rate the Community GNP”. However, certain measures to limit surplus production had already been taken since 1984, when the system of production quotas, which applied

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to sugar, was extended to milk. The system of maximum guaranteed production, which had been applied to turnips and sunflower in 1987, was extended from 1988 to cereals, cotton, olive oil, rice, etc. Furthermore, fallowing was encouraged through the payment of compensation, the switch to other non-surplus crops through the payment of transitional aids, as well as the early retirement of farmers over 55 years of age. Since 1988, in order to curb the increase in CAP expenditure, its appropriations have been subject to strict budgetary discipline through the introduction of a multiannual agricultural guideline by Decision 88/377/EEC of the Council of EC of 24 June 1988, which acted as a stabilising mechanism with limits on maximum guaranteed quantities, above which the price was reduced accordingly. The Decision was supplemented by the interinstitutional agreement of 22 June 1988 under the “Delors I package”. However, in 1991 stocks of agricultural products continued to increase. Thus, from 1 February 1991, the Irish Agriculture Commissioner Ray MacSharry, proposed with a communication to the Council of EC, entitled The development and future of the Cap, (COM(91) 100 final), followed by a second one on 22 July 1991 to the Council of EC and the European Parliament, with the same title (COM(91) 258 final/3), drastic measures to further reduce agricultural production, but was initially met with strong opposition from farmers in the Member States. Eventually, the Commission’s proposals were 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”. Council Regulations (EEC) 2078/92, 2079/92 and 2080/92 of 30 June 1992 were the first to be adopted. The reform in general provided for: (a) Reduction of production for surplus agricultural products by reducing their guaranteed prices, such as cereals by 29% and beef by 15%, over a three-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. (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 budgetary framework was reshaped in the context of the “Delors II package”. The 1988 Interinstitutional Agreement was replaced by the new Interinstitutional Agreement on budgetary discipline of 29 October 1993 for the period 1994–1999 and by Council of EU Decision 94/729/EC of 31 October 1994, which replaced the earlier Decision 88/377/EEC, which confirmed the principle of the validity of budgetary discipline for all common policies of the EC (see Table 6.1). The reform came into force gradually from 1993, and was generally successful, since it reduced the stocks of certain surplus agricultural products such as butter and milk, while the weight of Pillar II increased from 5% of agricultural expenditure in the 1980s to 10% and finally to 20%. The structural measures of the “Delors I and

6.2 The Launch and Reforms of the CAP Table 6.1 Amounts in billion € (current prices), allocated from EAGGF for Pillar I of the CAP, for the period 1994–1999, by Member State

Member state Austria Belgium Britain France Germany Denmark Greece Ireland Total

205

Amount billion € 3.84 6.76 22.00 53.43 33.66 7.67 15.83 9.94

Member state Spain Italy Luxembourg Netherlands Portugal Sweden Finland Commission 225.99

Amount billion € 28.14 24.95 0.11 9.81 4.01 2.95 2.41 0.47

Source: European Commission—Agriculture and rural development (elaborated by the authors)

Delors II packages” also contributed to this. However, the administrative system required to implement the reform was complex and did not solve all the problems of the CAP. It should be noted that the 1992 “MacSharry reform” also enabled the successful conclusion of the Uruguay Round negotiations in 1994.

6.2.3

Relations with Trading Partners and the GATT Negotiations

In the period 1964–1968, within the framework of the GATT, there were the first pressures from the EEC’s trading partners, demanding the removal of European protectionism towards the farmers and producers of the Member States, without success. However, one of the factors that prompted 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 begun in 1986 with the participation of 123 countries. Issues relating to trade in the agricultural sector were of particular interest. In particular, with regard to agricultural subsidies, the negotiations were directly linked to the decisions to be taken by the EEC on the reform of the CAP, given that the USA wanted the Community to abolish them before the year 2000. The Uruguay Round agreement, reached in December 1993 and signed in April 1994 by 111 countries, strengthened the existing rules of international trade, notably by reforming the provisions on safeguards, subsidies and anti-dumping. The Uruguay Round Agreement was incorporated into the law of the EEC Member States. The main provisions of the agreement were a 36% reduction in external protection, a 20% reduction in internal price support, a minimum of 5% third country access to the internal market, a 36% reduction in export subsidies and a 21% reduction in the volume of subsidised exports. However, it became possible that the granting of income support per hectare and per farmed animal (see above) would not be considered by the EEC’s trading partners as a distortion of international trade competitiveness until the year 2000. In practice, as shown in Fig. 6.3, from 1995 to 2000, this part of the aid, which was

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Fig. 6.3 The results of the Uruguay Round and the emergence of the “blue box” as part of Pillar II. Source: Bourdaras (2006), Maraveyas (2003)

essentially part of Pillar I, was transferred to a new “blue box”, which was considered part of the “green box”, i.e. Pillar II of the structural measures, as a virtual reduction in aid. It was also agreed to launch a new round of GATT negotiations from 1999, shortly before the end of the transitional period of the “blue box”.

6.2.4

Agenda 2000 (Fischler Reform I)

According to the Commission’s Agenda 2000: For a stronger and wider Union, (COM(97) 2000 final) presented on 16 July 1997, the 1992 CAP reform was inadequate and support for farmers favoured the more prosperous regions. Problems were caused by 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, for the granting of income support per hectare and per farmed animal (see Sect. 6.2.3) not to be regarded by the EU’s trading partners as a distortion of international trade competitiveness. However, the new multilateral negotiations under the WTO, which replaced the GATT from 1 January 1995, due to start in Seattle in 1999, foreshadowed new changes to the aid regime. In the wake of the Cork Declaration of Ireland’s “A Living Countryside”, the European Conference on Rural Development, 7–9 November 1996, which recognised that the CAP must adapt to new challenges in terms of demand, consumer preferences, international trade developments and the next enlargement of the EU, concrete proposals were presented by the Commission, based on the triptych “Growth—Competitiveness—Rural Reconstruction”, drawn up by the Austrian

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Commissioner for Agriculture, Franz Fischler, on 18 March 1998. The aim was to reduce guaranteed prices, the reduction being only partially 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 aid policy should be formulated as Pillar II of the CAP for rural development, 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 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. At the Berlin European Council of 24 and 25 March 1999, within the framework of the Action Plan 2000, it was decided to reform the CAP for the period 2000–2006 taking into account that: “The content of this reform will ensure that agriculture is multifunctional, sustainable, competitive and spread throughout Europe, including regions with specific problems, that it is capable for maintaining the countryside, conserving nature and making a key contribution to the vitality of rural life, and that it responds to consumer concerns and demands as regards food quality and safety, environmental protection and the safeguarding of animal welfare”. To this end, the Council of EU adopted Regulations (EC) 1257/1999, 1258/1999 and 1259/1999 of 17 May 1999. Specifically, 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 cultivated and per farmed animal was increased to some extent, no longer counted under Pillar I of the CAP, but under Pillar II, that of rural development, while fiscal discipline measures were 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 competitiveness. With the Agenda, the 2000 agricultural guideline was included in the Financial Perspective 2000–2006, in the Interinstitutional Agreement on budgetary discipline of 6 May 1999. The financing of the CAP was laid down by the new Council of EU Regulation (EC) 1258/1999 of 26 June 1999. Table 6.2 shows the amounts allocated from the EAGGF Fund for Pillar I for each Member State.

6.2.5

The 2003 Mid-Term Review (Fischler Reform II)

However, 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.

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Table 6.2 Amounts in billion € (current prices), allocated from EAGGF for Pillar I of the CAP, for the period 2000 to 2006, by Member State

Member state Austria Belgium Britain France Germany Denmark Greece Estonia Ireland Spain Italy Cyprus Latvia Total

Amount billion € 7.94 6.90 28.54 67.80 43.23 8.46 19.21 0.21 12.29 43.44 37.41 0.13 0.40

Member state Lithuania Luxembourg Malta Netherlands Hungary Poland Portugal Slovakia Slovenia Sweden Czechia Finland Commission 313.78

Amount billion € 0.79 0.26 0.03 8.77 1.72 4.75 5.80 0.66 0.35 5.99 1.15 5.84 1.71

Source: European Commission—Agriculture and rural development (elaborated by the authors)

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 communication to the Council and the European Parliament on 10 July 2002, with title MidTerm Review of the Common Agricultural Policy (COM(2002 394 final), 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 as a third, environmental dimension to the Lisbon Strategy (Conclusions of European Council of 23-24 (2000)), establishing a new approach to policy-making in addition to the economic and social dimensions. These key objectives were, in general terms: (a) the greater connection of European agriculture with international markets, (b) the preparation for the enlargement of the EU with new Member States, which imposed the need for a revision before its implementation, (c) the greater response to the protection requirements of environment and quality of agricultural products, and (d) the compatibility of the CAP with the requests of third countries for the reduction and gradual abolition of all forms of direct aid and subsidies, which caused distortions in the market, in view of the negotiations between the 145 Member States of the WTO in the Doha Round, which had started in Qatar on 14 November 2001. The Commission proposed specific technical measures to achieve the objectives that defined the revised framework of the new CAP, such as greater liberalisation of agricultural product markets, decoupling of aid from the type and size of production, gradual reduction of direct aid of Pillar I of the CAP, that of guarantees, which caused market distortions, and transferring funding to Pillar II of the CAP, that of rural development, animal health and welfare measures, and compliance with

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regulations and correct agricultural practices to protect the environment and diversity of production, redistribution of aid between regions, etc. The proposals were the subject of intense debate in the Council of Agriculture Ministers of EU, starting on 15 July 2002, with Member States such as Britain, Germany, Denmark, the Netherlands and Sweden, to seek aid reductions as a way to reduce budget expenditure, and thereby reduce their contribution to it, as well as Member States such as Austria, France, Ireland, Spain and Luxembourg, to seek to maintain the level of aid, given that they benefited from it and considered that a revision of the CAP would be incompatible with the agreement of the Berlin European Council on March 24 and 25, 1999, which was valid until 2006. 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 (European Commission - Agriculture and rural development (2021)), 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 the CAP’s Pillar I 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 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 Pillar I 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 the initial refusal of France 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

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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 Luxembourg agreement of June 2003 brought about a gradual and practical radical reform of the CAP, with the introduction of new aid systems and the creation of new payment mechanisms. Furthermore, the 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 of EU approved on 20 November 2008 the carrying out of a “health check” of the CAP, as a stage in the evaluation of this long reform process, which may require an adjustment of the mechanisms introduced since 2003. The reform of the CAP was reflected in Council of EU Regulations (EC) 1782/ 2003 and 1783/2003 of 29 September 2003, supplemented by Commission Regulation (EC) 2237/2003 of 23 December 2003, Commission Regulations (EC) 795/ 2004 and (EC) 796/2004 of 21 April 2004, Council of EU Regulation (EC) 864/2004 of 29 April 2004, Council of EU Regulation (EC) 319/2006 of 20 February 2006, Commission Regulation (EC) 411/2007 of 17 April 2007, and Council of EU Regulation (EC) 1182/2007 of 26 September 2007. The main points of the agreement were: (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 three-year period 2000–2002, as a historical reference period, and during the four-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, as shown in Fig. 6.4. (b) The Single 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

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Fig. 6.4 The Single Decoupled Payment as part of Pillar I (“green box”) after the 2003/2004 mid-term review. Source: Bourdaras (2006), Maraveyas (2003)

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) The 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. Seventy-five per cent of the cuts are returned to the Community budget and 25% remain with the Member State that made the cut. (d) The 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 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

212

(f)

(g)

(h)

(i)

(j)

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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. 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, the European institutions would be able to make horizontal reductions in direct aids granted. The upgrading of the existing Integrated Administration and Control System (IACS), which will include an electronic database, a system for the geographical identification of agricultural land, a system for calculating and recording entitlements, a system for recording annual payments, a system for identifying and recording farmed animals, etc. The Farm Advisory System, which will operate in a supportive manner by providing advice and information to adapt to the rules of the Cross Compliance and to implement good farm management methods and practices. 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. 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, such as: 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, 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.

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Table 6.3 Funding of the CAP for the period 2007–2013, in 2004 prices Type of expenditure EAGF (Market and direct payments) EAFRD (Rural development) Total

Amounts (€ billion) 312.62 96.44 409.07

Percentage % 76.42% 23.58% 100.0%

Source: European Commission—Agriculture and rural development (elaborated by the authors)

(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 maximum area of 6,170,000 hectares. Rice: specific aid of €56.1 per hectare for a maximum area of 203,000 hectares. Cotton: specific aid corresponding to 35% of the old uncommitted aid, €59.4 per hectare for a maximum area of 3,000,000 hectares, and €34.28 per hectare for a maximum area of 700,000 hectares. Nuts in shell (almonds, walnuts, hazelnuts, pistachios, carobs): specific aid of €12.075 per hectare for a maximum area of 411,000 hectares, 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 their 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, by a new Council of EU Regulation (EC) 1290/2005 of 21 June 2005, applicable from 1 January 2007, the guidance and guarantee sections of the pre-existing EAGGF were replaced by two separate funds for financing the two pillars of the CAP, the European Agricultural Guarantee Fund (EAGF) for Pillar I and the European Agricultural Fund for Rural Development (EAFRD) for Pillar II, which will be controlled by the Commission. Council of EU Regulation (EC) 1290/ 2005 was accompanied by Regulation (EC) 1698/2005 of the Council of EU of 20 September 2005 on support for rural development by the EAFRD, due to the specific financial and programming features of Pillar II of the CAP. The Multiannual Financial Framework for the period 2007–2013 was adopted by the Interinstitutional Agreement on budgetary discipline of 14 May 2006. The revision of the financing of the CAP was also raised in the context of the preliminary discussions on the financial perspectives for the period 2007–2013. Later, the Regulation of the Council of EU (EC) No 1234/2007 of 22 October 2007 consolidated the 21 CMOs, which were governed by their own basic regulations, into one CMO. The final amounts decided for the financing of the Common Fisheries Policy (CFP) for the period 2007–2013 are summarised in Table 6.3, as a result of a compromise. Furthermore, Table 6.4 provides the amounts allocated from the EAGF and EAFRD by EU Member State for the period 2007–2013.

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Table 6.4 Amounts in € billion (current prices) paid by the EAGF and EAFRD in the period 2007–2013, by Member State. The amounts allocated are not exclusively from the programme for the current period 2007–2013 (for which payments continued after 2013) Amount from EAGF Member state billion € Austria 5.24 Belgium 5.19 Bulgaria 1.98 Britain 24.42 France 62.65 Germany 39.78 Denmark 7.09 Greece 17.66 Estonia 0.46 Ireland 9.36 Spain 41.88 Italy 34.63 Cyprus 0.28 Latvia 0.75 Total from EAGF Total from EAFRD

Amount from EAFRD billion € 3.58 0.44 1.47 3.64 6.11 7.41 0.40 2.24 0.63 2.37 5.31 5.83 0.12 0.94

Member state Lithuania Luxembourg Malta Netherlands Hungary Poland Portugal Romania Slovakia Slovenia Sweden Czechia Finland Commission 311.30 71.81

Amount from EAGF billion € 1.81 0.25 0.03 7.15 6.47 15.29 5.29 4.78 1.90 0.72 5.19 4.24 3.98 2.82

Amount from EAFRD billion € 1.41 0.09 0.05 0.44 2.73 9.86 3.14 5.08 1.72 0.75 1.63 2.43 1.99

Source: European Commission—Agriculture and rural development (elaborated by the authors)

6.2.6

The 2008 “Health Check” (Boel Reform)

Proposals for simplifying the CAP were adopted by the Commission on 19 October 2005, with the Communication entitled Simplification and Better Regulation for the Common Agricultural Policy (COM(2005) 509), which proclaimed itself to be “part of the CAP’s contribution to realising the EU’s Lisbon Strategy” (Conclusions of European Council of 23-24 (2000)). Amongst the actions proposed was the introduction of a Single Common Market Organisation (CMO) Regulation to replace the 21 currently in place, backed by the Council of Ministers of Agriculture of the EU with Regulation EC 1234/2007 on 22 October 2007, entitled Establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation). On 20 November 2007, the Commission, in a communication to the Council of EU and the European Parliament entitled Preparing for the ‘health check’ of the CAP reform (COM(2007) 722 final), on the initiative of Mariann Fischer Boel, Commissioner for Agriculture and Rural Development, set out the issues on which this check should focus. The CAP “health check” was in practice the assessment in order to evaluate and possibly adapt and further modernise the mechanisms introduced in 2003, to make the direct aid system simpler and more effective and to make market support instruments relevant, given that there are now 27 Member States in the EU after the last two enlargements, as well as new challenges such as climate change, the increased use of biofuels and water management. The Council of

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Agriculture Ministers of EU approved on 20 November 2008 the carrying out of a “health check” of the CAP. Despite its limited scope, and following suggestions from the Commission, the “health check” produced findings that led to decisions by the Council of Agriculture Ministers, which were codified mainly by Council of EU Regulations (EC) 72/2009, 73/2009 and 74/2009 of 19 January 2009, as well as other regulations adopted up to December 2009. The changes to the CAP decided in the context of this reform were: (a) Further decoupling of aids, with immediate decoupling of aid for dried fodder, potato starch, flax and hemp; decoupling from the beginning of 2010 of aid for arable crops, durum wheat, olive oil and hops; 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) Possibility for Member States to reallocate the value of Individual Payment Entitlements at country or geographical region level within three years on the basis of objective and non-discriminatory criteria. (c) Simplification of Cross 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) 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, and finally, for the mutual aid fund for animal diseases and plant and environmental accidents. (f) 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 2009/2010 and 2013/2014. 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.

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(g) 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) Abolition of fallow in a percentage of 10% of arable crops in order to enable the maximum possible utilisation of the production potential.

6.2.7

The 2013 Reform (Cioloş Reform)

After the completion of the CAP “health check”, a new period was started, including the implementation of the Europe 2020 Strategy (COM(2010) 2020) 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 formulation of a new CAP to apply from 2014 onwards was a new necessity. In this context, the Commission, in its communication entitled The CAP towards 2020: meeting the food, natural resources and territorial challenges of the future (COM(2010) 672 final) of 18 November 2010, opened the debate on a reform of the CAP. This communication was discussed by the Council of Ministers of Agriculture on 29 November 2010. On 12 October 2011, on the initiative of Commissioner for Agriculture and Rural Development Dacian Cioloş, a package of seven Regulations’ proposals was presented: (a) Establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy (COM(2011) 625; (b) Establishing a common organisation of the markets in agricultural products (Single CMO Regulation) (COM(2011) 626; (c) On support for rural development by the European Agricultural Fund for Rural Development (EAFRD) (COM(2011) 627; (d) On the financing, management and monitoring of the common agricultural policy (COM(2011) 628; (e) Determining measures on fixing certain aids and refunds related to the common organisation of the markets in agricultural products (COM(2011) 629); (f) Amending Council Regulation (EC) No 73/2009 as regards the application of direct payments to farmers in respect of the year 2013 (COM (2011) 630)—adopted later as Regulation (EU) 671/2012; (g) Amending Council Regulation (EC) No 1234/2007 as regards the regime of the single payment scheme and support to vine-growers (COM(2011) 631)—adopted later as Regulation (EU) 1028/2012. With these proposals were set out the three strategic objectives of the new CAP for the period after 2013: (a) sustainable food production and longterm 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 Pillar I payments to active farmers and funding for competitiveness, innovation, environmental protection, sustainable development and a focus on climate change under Pillar II, and should also be aligned with the Europe 2020 Strategy (COM(2010) 2020).

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On 16 December 2013, the Council of EU accepted the proposals for the reform of the CAP, following a first reading agreement with the European Parliament. This agreement sets the new rules for the CAP for a period of 7 years, through Regulations (EU) 1305/2013, 1306/2013, 1307/2013, 1308/2013 and 1310/2013 of the European Parliament and the Council of EU of 17 December 2013 and Regulation (EU) 1370/2013 of the Council of EU of 16 December 2013. 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, i.e. 38% of the total EU budget. Pillar I of the CAP will spend €312.73 billion, i.e. 76.6% of the budget, and Pillar II will spend €95.58 billion, i.e. 23.4% of the budget. The main points of revision include direct aid measures, the Regulation for the single Common Market Organisation (CMO), rural development measures, and the Horizontal Regulation on the financing, management and monitoring of the CAP. The key points of the reform include: I. Direct support measures for Pillar I: (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 amount 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 amount to grant small farmers an additional payment for the first hectares for which they have activated payment entitlements, up to a maximum of 30 hectares 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 applied at national or regional level for Member States to at least partially rebalance 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 reaches 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 aids: with a limit for Member States of 8% coupled aids and an additional 2% for protein crops. Member States which used more than 5%

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coupled aids 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 aids 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 agricultural from claiming direct aids, notably by providing for a mandatory “negative list” for persons who are a priori excluded from direct aids. (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. The percentage 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. II. Single Common Market Organisation: (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 30 September 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. III. Pillar II Rural Development: (a) A Common Strategic Framework: The European Agricultural Fund for Rural Development (EAFRD) will be integrated with the European Investment Funds, for greater consistency and 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 to 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

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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 rate takes into account the different circumstances in the regions, as well as two types of transition in cases 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 Liaisons Entre Actions de Développement de l’Economie Rurale—Links between Actions for the Development of the Rural Economy (LEADER) programme. At least 30% of the EAFRD should be available for environment- and climate change-related 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 (EIP-AGRI), launched in 2012 to contribute to the Strategy “Europe 2020”, resource efficiency and environmentally friendly agriculture and forestry will be promoted, while research and technology transfer to farmers will be supported. IV. Horizontal Regulation (combination of CAP rules) including: (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 for Member States to make farmers aware of their obligations under cross compliance and greening. (c) The system of cross compliance, created by the 2003 reform 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 two 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 Regulation of the single CMO.

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The Multiannual Financial Framework for the period 2014–2020 was adopted by the Interinstitutional Agreement on Budgetary Discipline of 2 December 2013 and Regulation (EU, Euratom) 1311/2013 of the Council of EU of 2 December 2013 on the new Multiannual Financial Framework. The final amounts decided for the CFP for the period 2014–2020 are shown in Table 6.5. Later, by Regulation (EU) 1370/ 2013 of the Council of EU of 16 December 2016, measures were adopted to determine certain aids and refunds linked to the CAP for agricultural products. Furthermore, Table 6.6 provides the amounts allocated from the EAGF and EAFRD by EU Member State for the period 2014–2020.

Table 6.5 Funding of the CAP for the period 2014–2020, in 2013 prices (last adjustment: September 2020) Checkout EAGF (Market and direct payments) EAFRD (Rural development) Total

Amounts (€ billion) 307.99 100.32 408.31

Percentage % 75.43% 24.57% 100.00%

Source: European Commission—Agriculture and rural development (elaborated by the authors)

Table 6.6 Amounts in € billion (current prices) paid by the EAGF and EAFRD in 2014–2020, by Member State. The amounts allocated are not exclusively from the programme for the current period 2014–2020 (for which payments will continue beyond 2020), but also include amounts from the previous period 2007–2013 Amount from EAGF Member state billion € Austria 4.99 Belgium 4.15 Bulgaria 5.13 Britain 22.01 France 54.78 Germany 35.19 Denmark 6.10 Greece 14.92 Estonia 0.84 Ireland 8.48 Spain 38.91 Italy 30.66 Croatia 1.38 Cyprus 0.40 Latvia 1.40 Total from EAGF Total from EAFRD

Amount from EAFRD billion € 3.41 0.43 2.16 4.91 9.98 7.52 0.66 3.75 0.73 2.02 7.15 8.54 1.26 0.13 1.09

Member state Lithuania Luxembourg Malta Netherlands Hungary Poland Portugal Romania Slovakia Slovenia Sweden Czechia Finland Commission

Amount from EAGF billion € 3.05 0.23 0.04 5.60 9.14 23.88 5.26 11.40 3.00 1.00 4.84 6.05 3.69 0.73

Amount from EAFRD billion € 1.41 0.08 0.09 0.57 3.08 8.23 3.84 7.79 1.28 0.74 1.45 2.28 2.29

307.23 86.87

Source: European Commission—Agriculture and rural development (elaborated by the authors), with estimates for 2020

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6.2.8

221

The New CAP for the Period 2021–2027

In the Cork Declaration 2.0, “Improving life in rural areas”, of the European Conference on Rural Development, held in Cork, Ireland, on 5 and 6 September 2016, the participants, expressing concern about the abandonment of the countryside and the mass exodus of young people, and the certainty that the agriculture and forestry sectors remain of great importance for the EU economy, aware of the role that agriculture and forestry play in shaping landscapes, bearing in mind the need to place a strong emphasis on the territorial dimension in the Common Agricultural Policy, operating in complementarity with other EU policies, and considering it necessary to strengthen the integration of local initiatives and rural capacity building, committing itself to ensuring the participation of rural development actors and stakeholders, and the principle of subsidiarity, taking into account the opinion of the European Committee of the Regions on innovation and modernisation of the rural economy, and the opinion of the European Economic and Social Committee on rural development programmes, believing that a common agricultural and rural development policy is a key element in achieving the priorities of the European Union, declared that an innovative, integrated and inclusive EU rural and agricultural policy should be governed by the following ten policy directions: (i) Promoting rural prosperity, (ii) Strengthening rural value chains, (iii) Investing in rural viability and vitality, (iv) Preserving the rural environment, (v) Managing natural resources, (vi) Encouraging climate action, (vii) Boosting knowledge and innovation, (viii) Enhancing rural governance, (ix) Advancing policy delivery and simplification, and (x) Improving performance and accountability. These guidelines have reopened the debate on the post-2020 rural development policy. On 29 November 2017, the Commission adopted a new Communication on The future of food and farming (COM(2017) 713 final) based on the recommendations made in the Cork Declaration 2.0 on rural development. In addition, on the occasion of the mid-term review of the Multiannual Financial Framework 2014–2020, the Commission adopted a proposal for a Regulation of the European Parliament and of the Council On the financial rules applicable to the general budget of the Union and amending Regulation (EC) No 2012/2002, Regulations (EU) No 1296/2013, (EU) 1301/2013, (EU) No 1303/2013, EU No 1304/2013, (EU) No 1305/2013, (EU) No 1306/2013, (EU) No 1307/2013, (EU) No 1308/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and (EU) No 652/2014 of the European Parliament and of the Council and Decision No 541/2014/EU of the European Parliament and of the Council (COM(2016) 605 final) (Omnibus legislative proposal) of 14 September 2016, which affected numerous European policies, including the CAP, with the aim of making technical adjustments to the existing basic acts and simplifying the existing instruments. An agreement was reached between the European Parliament and the Council of EU in October 2017, and the relevant Regulation (EU) 2017/2393 was published on 13 December 2017. The agreed improvements concern the scope

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of producers’ organisations, the support for agricultural insurance and income stabilisation instruments, the rules for eco-guarantee payments, payments to young farmers and the definition of “active farmer”. On the basis of the new proposed MFF for the period 2021–2027, on 1 June 2018, the Commission presented three legislative proposals for the CAP for the period 2021–2027: i) Establishing rules on support for strategic plans to be drawn up by Member States under the Common agricultural policy (CAP Strategic Plans) and financed by the European Agricultural Guarantee Fund (EAGF) and by the European Agricultural Fund for Rural Development (EAFRD) and repealing Regulation (EU) No 1305/2013 of the European Parliament and of the Council and Regulation (EU) No 1307/2013 of the European Parliament and of the Council (COM(2018) 392 final), ii) On the financing, management and monitoring of the common agricultural policy and repealing Regulation (EU) No 1306/2013 (COM (2018) 393 final) and iii) Amending Regulations (EU) No 1308/2013 establishing a common organisation of the markets in agricultural products, (EU) No 1151/2012 on quality schemes for agricultural products and foodstuffs, (EU) No 251/2014 on the definition, description, presentation, labelling and the protection of geographical indications of aromatised wine products, (EU) No 228/2013 laying down specific measures for agriculture in the outermost regions of the Union and (EU) No 229/2013 laying down specific measures for agriculture in favour of the smaller Aegean islands (COM(2018) 394 final), proposing to structure it around nine key objectives. The objectives are based on the EU’s broader social, environmental and economic objectives (see Fig. 6.5) and will form the basis for the preparation of Member States’ individual CAP Strategic Plans. 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), in particular the Farm-to-Fork Strategy and the Biodiversity Strategy. 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: (a) Ensuring a fair income for farmers. Key objective: To support sustainable farm incomes and resilience across the Union to improve food security. (b) Increasing 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.

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Fig. 6.5 The 9 objectives—priorities of the CAP 2021–2027. Source: European Commission (2018)

(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: To 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

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Table 6.7 Funding of the CAP for the period 2021–2027, in 2018 prices Checkout EAGF (Market and direct payments) EAFRD (Rural development) Total

Suggestion of Commission 2018 (billion €) 291.1

Percentage % 75.30%

95.5 386.6

24.70% 100.00%

Source: European Commission—Agriculture and rural development (elaborated by the authors)

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 NextGenerationEU instrument, with a total of €386.6 billion, of which €291.1 billion will come from the EAGF and €95.5 billion from the EAFRD. The NextGenerationEU 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 (Table 6.7). 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 NextGenerationEU. The proposed Regulation on the EU MFF for the period 2021–2027 and the interinstitutional agreement they reached were approved by the European Parliament and the Council of EU. The Council of EU issued the relevant Regulation (EU, Euratom) 2020/2093 of 17 December 2020, laying down the multi-annual financial framework for the years 2021 to 2027. Following the allocation of the CAP funding for the period 2021–2027 from the long-term EU budget, a Transitional Regulation (EU) 2020/2220 of the European Parliament and the Council of Ministers of 23 December 2020 was agreed for the years 2021 and 2022. The Transitional Regulation extends most of the CAP rules that were in force in 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 NextGenerationEU envelope into the EAFRD, allowing rural economies in the 2021–2022 biennium to recover from the impact of the COVID-19 pandemic, while ensuring a green and digital recovery (see also Sect. 11.2.10). Also, during the two-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 (see Sect. 11.2.8).

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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 the existing, 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.

6.2.9

The LEADER Initiative

While Pillar I relates to direct payments, which account for about 90% of all expenditure under the pillar, as well as market measures, Pillar II of the Rural Development Policy (RDP) generally revolves around three axes and one initiative (which can be seen as a fourth axis): (a) Improving competitiveness through support for restructuring, modernisation, innovation and quality production. (b) Improving the environment through support for better management of natural resources and tackling climate change. (c) Improving the quality of life in rural areas by achieving balanced territorial development of rural economies and communities, including the creation and maintenance of jobs. (d) Developing local initiatives for all previous activities through the LEADER initiative, which absorbs at least 5% of EAFRD funding (Fig. 6.6). The LEADER initiative (Liaisons Entre Actions de Développement de l’Economie Rurale—Links between Actions for the Development of the Rural Economy), which was implemented as LEADER I during the period 1990–1994, was an innovative initiative for rural multi-sectoral development, constituting a “bottom-up” approach to the development of rural areas, which provided an opportunity for local communities to choose their own way and process of development by designing and implementing integrated local development programmes by Local Action Groups (LAGs). The LEADER II initiative, which was the successor to the previous one for the second programming period 1994–1999, aimed at further mobilising the local Fig. 6.6 The logo of the LEADER initiative

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population to design “bottom-up” local development strategies, encouraging exemplary local rural development initiatives, providing support for innovative, exemplary and transferable actions, multiplying exchanges of experience and transfer of know-how, and providing support for transnational cooperation projects which are more effective in the field of rural development. The LEADER II initiative provided assistance to two categories of beneficiaries: (a) LAGs, involving public and private partners, with a jointly developed strategy and innovative measures for the development of a rural area of limited size with fewer than 100,000 inhabitants; and (b) other collective public or private rural bodies, provided that their planned action is thematic and aimed at the development of a local geographical unit. The LEADER+ initiative, during the third programming period 2000–2006, followed the same logic of the previous ones, introducing and strengthening the links of cooperation mainly between local actors and social groups in order to implement an integrated strategy. After the experience of three programming periods, the LEADER initiative had reached a level of maturity to be applied in rural areas in the fourth programming period 2007–2013, having been upgraded to a distinct axis (LEADER Axis) with three priorities. A similar initiative was implemented for the first time under Axis 4 of the European Fisheries Fund (EFF, see also Table 6.8 and Sect. 6.3.1). During the fifth programming period 2014–2020, the LEADER initiative maintains the basic element of the “bottom-up” approach to the design of multisectoral local strategies and, at the same time, the possibility of a multi-sectoral approach and the extension of its areas of application as Community-Led Local Development (CLLD) is given (2021). It is a particularly powerful tool to enable local communities. More specifically, the CLLD/LEADER initiative according to Regulation (EU) 1303/2013 of the European Parliament and of the Council of Ministers of 17 December 2013 has the potential for a multi-sectoral approach, with the participation of the EAFRD, as well as the ERDF, ESF and EMFF as “relevant EAFRD”, and (a) it is focused on specific sub-regional areas; (b) it is carried out at the initiative of LAGs composed of representatives of public and private local socio-economic interests; (c) it is implemented through integrated and multi-sectoral area-based local development strategies; and (d) it is designed based on local needs and local potential and includes innovative elements in the local context as well as networking and, where appropriate, cooperation.

Table 6.8 Elements of the LEADER initiative in the different programming periods Initiative LEADER LEADER II LEADER+ LEADER Axis

Number of LAGs 217 906 896 2,290

Total rural area (km2) 367,000 1,375,144 1,577,386 4,000,000

Source: European Commission—ENRD Home—LEADER /CLLD

Funding (million €) 442 1,775 2,105.10 6,033.36

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227

Based on the above, the vision for rural development is “Integrated growth and sustainable competitiveness of rural areas” with steps towards more efficient forms of economic, sustainable and inclusive growth, in line with the Europe 2020 Strategy (COM(2010) 2020).

6.2.10 A Brief Assessment of the CAP Table 6.9 shows the evolution of the CAP through the reforms for comparison. The shift of interest is as follows: from (a) improving agricultural productivity, securing farmers’ income, self-sufficiency and stabilising markets initially; (b) to financial solidarity and guarantee policy at the start of the CAP; (c) to increasing farm size and more competitive agricultural production with the 1968 Manshold Plan; (d) to limiting stocks, containing the costs of the CAP and appeasing actions against pressures from trading partners with the 1992 MacSharry Reform, (e) to the shift towards food quality, environmental protection and multi-sectoral development with the Agenda 2000 (Fischler I Reform) of 1999; (f) to the shift towards food quality, environmental protection, dealing with the forthcoming enlargement, linking European agriculture to international markets and engaging with the intended outcome of the WTO negotiations with the 2003 Mid-Term Review (Fischler II Reform), (g) to post-enlargement adjustment, market orientation of agricultural products, tackling climate change, use of biofuels and management of natural and water resources with the 2008 Health Check (Boel Reform); (h) to sustainable production, competitiveness, sustainable management of natural resources and balanced regional development with the 2013 Reform (Cioloş Reform); and (i) to ensuring fair income, increasing competitiveness, balancing power in the food chain, acting on climate change, protecting the environment, preserving biodiversity, encouraging generational renewal, stimulating rural areas and protecting food quality with the new reform being promoted. It is also worth making a brief reference to the relationship between the appropriations disbursed from the budget for direct payments and the market sector and the appropriations for the rural development sector or Pillar I and Pillar II. This ratio, which was originally 100% to 0%, after the Mansholt Plan was submitted in the mid-1970s, when the first rural development measures, initially based on negligible appropriations, were implemented, began to change, reaching a ratio of 95% to 5% in the 1980s. With the implementation of the Agenda 2000, the ratios became 90% to 10%, while in the next programming period 2007–2013, after the implementation of modulation, the ratios became 80% to 20%, ratios that were maintained in the next programming period. The histogram in Fig. 6.7 shows the CAP expenditure by category for the years 1980–2020. It is clear that the trend is for annual CAP expenditure to stabilise at below €60 billion per year after 2013. In conclusion, despite the existing agendas and conflicts of interest within the EU itself, and despite the profound changes that have taken place in economic, social and cultural life in the EU, it is hard to deny that agricultural production still plays an essential role, providing food security, maintaining a satisfactory standard of living

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Table 6.9 Key elements of the stages and reforms of the CAP Year 1957

Description Treaty of Rome

1958

Meeting in Stresa

1962

Launch of the CAP

1968

Agricultural Programme 1980 (Mansholt Plan)

1992

Reform 1992 (MacSharry Reform)

Key elements Predictions: • Improving agricultural productivity • Securing farmers’ income • Stabilisation of markets • Guarantee of stable supply to consumers • Ensuring reasonable prices for consumers Main Measures: • Intervention price/minimum price • Compensatory levies on imports It took into account the differences in the interests of the founding Member States, which were expressed in contradictory terms: • To make European agricultural production competitive, without compromising its family character • To make European agricultural prices higher than international prices, but without this leading to overproduction • Protection against international competition, but without restricting imports Predictions: • Financial solidarity Main Measures: • Member States would be financed by the Community, ensuring guaranteed prices • The Community body responsible for funding would be the EAGGF, which was set up in 1962 • In July 1966 the CMOs for almost all agricultural products were approved Predictions: • Increase in the size of the agricultural holding • More competitive agricultural production Main Measures: • Reduction of total arable land • Reduction of employment in the agricultural sector • Financial incentives to leave • Training of employees in the agricultural sector Predictions: • Restriction of stocks • CAP cost reduction • Resisting pressure from trading partners Main Measures: • Reduction of production for surplus products by reducing their guaranteed prices • Granting of income support as “coupled aid” paid per hectare cultivated and per farmed animal • Fallowing for arable crops • Introduction of fiscal discipline measures • Accompanying measures to encourage retirement, afforestation of arable land, environmental protection, (continued)

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Table 6.9 (continued) Year

Description

1999

Agenda 2000 (Fischler Reform I)

2003/ 2004

2003 mid-term review (Fischler Reform II)

Key elements improvement of agricultural product quality and food safety Predictions: • Quality of food produced • Environmental protection • Multi-sectoral development and competitiveness Main Measures: • Reduction of Pillar I (direct payments) guaranteed prices for some agricultural products, while maintaining the quota system for others • Increase to some extent in income support to farmers per hectare cultivated and per farmed animal, now counted under Pillar II (rural development) • Fiscal discipline measures • For Pillar II, attention to the integrated approach to the rural economy through multi-sectoral development, attention to the environmental dimension and the quality characteristics of the food produced and improving competitiveness Predictions: • Quality of food produced • Environmental protection • Upcoming enlargement • Linking European agriculture to international markets • Negotiations with the WTO Main Measures: • Principle of Decoupling. Most direct payments under Pillar I are replaced by Single and Decoupled Payment for each holding, as a fixed income for the producer, irrespective of the type and quantity of production. Farms will thus be market-oriented • The Single Payment and Decoupled Payment shall be paid in accordance with the Number of Individual Payment Entitlements of each beneficiary producer, i.e. the annual average of the number of hectares cultivated or used for animal feed during the historical reference period 2000–2002 • The value of an Individual Payment Entitlement shall be obtained by dividing the amount of the Single Decoupled Payment for each beneficiary by the number of his/her Individual Payment Entitlements • The Cross Compliance, which makes payments of all direct payments conditional on compliance with a series of criteria for the environment, public health, appropriate animal welfare, the suitability of food produced, the protection of farmland and surface and groundwater, etc. • Modulation, which provides for a gradual reduction of direct payments under Pillar I for farms with payments of more than €5000 and the transfer of these amounts to Pillar II (continued)

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Table 6.9 (continued) Year

2008

Description

‘Health Check’ 2008 (Boel Reform)

Key elements • The possible implementation of a Regional Decoupling Scheme under which Member States have the option, instead of calculating the value of allowances per eligible producer, to calculate it per region • The establishment of a Financial Discipline for Pillar I for the period 2007–2013 • 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 special cases, such as the entry of new farmers into the profession and to cover cases of force majeure • In addition, under a new Regulation and with effect from 1 January 2007, the guidance and guarantee sections of the pre-existing EAGGF were replaced by two separate funds to finance the two pillars of the CAP, the EAGF for Pillar I and the EAFRD for Pillar II • Later, by the Regulation of the Council of Ministers of 22 October 2007, the 21 CMOs, which were governed by their own basic regulations, were consolidated into one CMO Predictions: • Evaluation after enlargement • Market orientation of agricultural products • Tackling climate change • Use of biofuels • Management of natural and water resources Main Measures: • Further decoupling of aid. Decoupled payments will be integrated into the single payment scheme, with the exception of the suckler cow and sheep and goat premiums for which Member States may maintain the current levels of coupled support • The possibility for Member States to redistribute the value of Individual Entitlements at country or regional level within three years • Simplification of the Cross Compliance by removing standards not linked to farmer responsibility, and adding new ones to ensure good agricultural and environmental status • Compulsory modulation, which provides for a reduction of all direct payments for farms with payments of more than €5000, is gradually increased by 5% by 2012, in addition to the 5% already applied. The appropriations resulting from the application of the additional compulsory modulation, transferred to Pillar II, are mainly intended to address environmental issues • 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 (continued)

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Table 6.9 (continued) Year

2013

Description

Reform 2013 (Cioloş Reform)

Key elements reserved for sectoral programmes, including programmes for the protection and improvement of the environment, for aid in economically disadvantaged areas, for the promotion of risk management measures, and finally for the mutual fund for animal and plant diseases and for environmental accidents • The phasing out of milk quotas and their definitive abolition in April 2015 • The abolition of fallowing of 10% of arable crops in order to allow maximum utilisation of the productive potential Predictions: • Sustainable product production and competitiveness • Sustainable management of natural resources • Balanced regional development Main Measures: I. Direct support measures for Pillar I: • Reduction of the amount of income support for large crops: with the application of a mandatory 5% reduction for amounts above 150,000 € • 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 • External convergence: to ensure a fairer distribution of direct income support across the EU • Internal convergence: at national or regional level in order for Member States to partially restore the balance of the average level of direct payments • Coupled payments: with a limit for Member States of 8% coupled payments and an additional 2% for protein crops • Fiscal Discipline: under which farmers receiving less than €2000 in direct payments will be exempted from the linear cut in direct payments • The concept of active farmer: whereby stricter rules are introduced to prevent persons whose main activity is not agricultural from claiming direct payments • “Greening”: 30% of direct payments are subject to the assessment of farming practices that are beneficial to the environment and climate • Preservation of permanent pasture: Member States must ensure that a minimum proportion of the total agricultural area is maintained in permanent pasture • Ecological Focus Areas (EFAs): the minimum area where there will be no requirement to maintain an EFA is 15 hectares of arable land. The percentage will start from 5% in 2015 and will increase to 7% in 2017 II. Single Common Market Organisation: • Vine planting: the new planting authorisation system (continued)

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Table 6.9 (continued) Year

Description

Key elements starts in 2016 and will last until 2030, with a 1% annual increase • Sugar beet: End of quotas on 30 September 2017 • Milk: End of quotas on 31 March 2015 III. Pillar II Rural Development: • Common Strategic Framework: The European Agricultural Fund for Rural Development (EAFRD) will be integrated with the European Investment Funds for greater consistency, efficiency and effectiveness • Rural Environment, Organic Agriculture, Natura and the Water Framework Directive: Environment- and climate-related measures have been strengthened to increase their effectiveness • Areas with natural constraints: A new designation of areas with natural constraints, formerly designated as less-favoured areas, is introduced, based on eight biophysical criteria • Funding: For the sake of simplification, a Single Co-financing Rate is provided for all measures, taking into account the different conditions in the regions and two types of transition in cases where GDP per capita for the period 2007–2013 was below 75% of the EU average. Minimum expenditure conditions are foreseen for the environment and the LEADER initiative • Innovation: It is a horizontal objective and will be supported through rural development measures IV. Horizontal Regulation (combination of CAP rules): • The financing, management and control systems, including the Paying Agencies and the IACS • The agricultural advisory system, which consists of a range of advisory services • The Cross Compliance system, created by the 2003 CAP reform, which links support for farmers to compliance with criteria related to the environment, animal welfare and the use of plant protection products • The system for the recovery of unduly paid aid and penalties imposed on aid beneficiaries who do not comply with eligibility conditions or other obligations • The publication of the names of the beneficiaries of the CAP funds in order to discourage beneficiaries from irregular behaviour • A crisis reserve to support the agricultural sector in cases of severe crises affecting agricultural production

in rural areas, and contributing to the sustainable conservation of natural resources, environmental protection and action on climate change. There is no doubt that the contribution of the CAP has been significant despite its problems and weaknesses.

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Fig. 6.7 CAP expenditure for the period 1980–2020. Estimated values for the year 2020. Source: European Commission—Agriculture and rural development (elaborated by the authors)

6.2.11 Figures for the EU Agricultural Sector In the following histograms of Figs. 6.8, 6.9, 6.10, 6.11, 6.12, 6.13, 6.14 and 6.15, statistics of the EU agricultural sector are provided. From these it is evident that there has been stability over the last decade in the number of hectares of agricultural land in use, which is about 180 million hectares. Apart from a slight reduction in the number of hectares used for tomatoes, the area under cucumbers, carrots and onions remains stable.

178,039

176,867

178,099

178,393

178,996

178,763

178,822

179,145

180,054

200,000 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0

178,803

Used agricultural land in EU Member States in thousands of hectares (2010 - 2019)

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Fig. 6.8 Used agricultural land in EU Member States in thousands of hectares (2010–2019). Source: Eurostat (2020) ( elaborated by the authors)

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6 The Common Agricultural Policy: Purpose, Evolution and Future Projections

Areas under vegetable crops in EU Member States in thousands of hectares (2010 - 2019)

185

119

120

33

34

2012 2013 2014 2015 2016 2017 Tomatoes Cucumbers Carrots Onions

2018

2019

113

110

117

2011

116

119

182 235

181 240

180 241

173 247

173 254

248

34

158

162 231

120 36

2010

150

113

124 37

165

200

172 229

254

250

276

300

32

32

34

35

50

37

100

0

Fig. 6.9 Areas under vegetable crops in EU Member States in thousands of hectares (2010–2019). Source: Eurostat (2020) (elaborated by the authors)

Areas under cereals and maize in EU Member States in thousands of hectares (2010 - 2019) 56,873

55,437

55,620

57,201

57,640

58,185

57,991

58,078

56,582

50,000

57,157

60,000

40,000

8,272

8,259

8,924

9,256

9,610

9,775

2011

9,838

2010

2015 2016 2017 Maize (excluding feed)

2018

2019

8,546

10,000

9,286

20,000

8,335

30,000

0 2012 2013 2014 Cereals (except feed)

Fig. 6.10 Areas under cereals and maize (not intended for animal feed) in EU Member States in thousands of hectares (2010–2019). Source. Eurostat (2020) (elaborated by the authors)

Areas for the cultivation of cereals and maize not intended for animal feed are also stable. Relative stability also appears in the areas used for potato and sugar beet production, after a relative decline in the middle of the decade. With the exception of the reduction in the area covered by orange trees, the area of fruit trees with pears, apples and cherries is stable. There are increases in the quantities of grapes (wine and table grapes) and olives (oil and table olives). However, these variations are influenced by many factors, in particular the weather conditions. The quantities of pork and poultry meat produced show a slight increase, while the production of beef and sheep and goat meat is relatively stable.

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235

Areas under root crops in EU Member States in thousands of hectares (2010 - 2019) 1,751 1,641

2013 2014 Potatoes

1,703 1,736

2012

1,746 1,756

1,741 1,578

2011

1,690 1,498

1,798 1,654

2010

2015 2016 Sugar beet

2017

2018

2019

1,656 1,420

1,663 1,632

1,922 1,644

1,500

1,878 1,614

2,000

1,000 500 0

Fig. 6.11 Areas under root crops in EU Member States in thousands of hectares (2010–2019). Source: Eurostat (2020) (elaborated by the authors)

Area under fruit trees in EU Member States in thousands of hectares (2010 - 2019)

177 113

272

176

116

272

274

507

523

522 174 116

2012 2013 2014 2015 Apples Pears Cherries

117 173

118 174

279

286

287

124 170

2011

117 170

128 172

2010

120 171

126 173

300 200

524

539

525 293

293

308

400

536

374 542

534

500

553

600

2017

2018

2019

100 0 2016 Oranges

Fig. 6.12 Area under fruit trees in EU Member States in thousands of hectares (2010–2019). Source: Eurostat (2020) (elaborated by the authors)

Finally, milk, butter and cheese production showed a slight upward trend during the period.

6.3

The Common Fisheries Policy (CFP)

In 1970 the Council of EC adopted legislation establishing a CMO for fishery products and established an early Community structural policy for fisheries, which was initially integrated into the CAP. However, the CFP gradually developed a separate identity, in particular when the EEC Member States, from the 1970s onwards, established Exclusive Economic Zones (EEZs), with the result that the exclusive coastal fishing rights of Member States, originally limited to territorial

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6 The Common Agricultural Policy: Purpose, Evolution and Future Projections

EU Member States' production of grapes and olives in thousands of tonnes (2010 - 2019)

24,233 10,469

2017

27,637

2016

13,778

23,003 11,150

8,799

25,486

2012

10,000

10,891

2011

24,459

22,795

2010

9,453

24,760 13,435

15,000

24,463 12,632

20,000

26,434 14,476

25,000

25,175 11,673

30,000

5,000 0 2013

2014 Grapes

2015 Olives

2018

2019

Fig. 6.13 Production of grapes and olives by EU Member States in thousands of tonnes (2010–2019). Source: Eurostat (2020) (elaborated by the authors)

EU Member States' production of basic meat products in thousands of tonnes (2010 - 2019)

14,191 795

777

7,822

7,932

14,013 23,728

13,329 23,846 7,803 776

7,800 765

7,585 773

760

13,259 23,362

12,618 23,563

12,136 23,112

11,701 22,357 768

7,221

7,325

11,639 22,154 7,533

11,349 22,136 768

5,000

790

10,000

7,916

15,000

794

22,231

20,000

11,167 22,609 7,845

25,000

0 2010 2011 Pork meat

2012 2013 Beef and veal

2014 2015 2016 Goat and sheep meat

2017 2018 Poultry meat

2019

Fig. 6.14 EU Member States’ production of key meat products in thousands of tonnes (2010–2019). Source: Eurostat (2020) (elaborated by the authors)

waters as being within 12 nautical miles from the coast, were extended to include EEZs up to 200 nautical miles from the coast. Furthermore, the importance of fisheries was understood when the new Member States that joined gradually became owners of fishing fleets of considerable size. In particular, during the accession negotiations with Britain, Denmark, Ireland and Norway, the particular importance of fisheries was demonstrated. These developments resulted in the fisheries sector being treated separately, given the specific issues linked to fisheries, such as access to common natural resources, conservation of fish stocks, international relations in the fisheries sector and structural measures specific to fisheries.

6.3 The Common Fisheries Policy (CFP)

237

EU Member States' production of basic dairy products in thousands of tonnes (2010 - 2019) 172,277

170,712

168,869

168,115

159,026

156,694

156,014

120,000

154,469

140,000

164,837

160,000

173,935

180,000

100,000 80,000 2,531 10,526

2,433 10,330

2,409 10,250

2,389 10,084

2,288 9,871

2,236 9,565

2,115 9,322

2,166 9,237

20,000

2,106 9,019

40,000

2,074 8,970

60,000

0 2010

2011 2012 Milk production

2013 2014 2015 Production of butter

2016 2017 2018 Cheese production

2019

Fig. 6.15 EU Member States’ production of basic dairy products in thousands of tonnes (2010–2019). Source: Eurostat (2020) (elaborated by the authors)

6.3.1

Launch of the CFP. The Financial Instrument for Fisheries Guidance

It was only in 1983, after many years of negotiations, that the Council of EC adopted Regulation (EEC) 170/83 of 25 January 1983 on the conservation and management of fishery resources, which essentially established the CFP and provided for conservative management measures based on the concept of Total Allowable Catch (TAC) and quotas. The withdrawal of Greenland necessitated the adaptation of the CFP after 1983, while similar adjustments were required with the accession of Spain and Portugal in 1986 and the reunification of Germany in 1990. Later, Council of EC Regulation (EEC) 3760/92 of 20 December 1992 included provisions to regulate the fisheries policy until 2002 and attempted to solve the problem of the serious imbalance between fleet capacity and fishing opportunities. The solution proposed was a reduction in the Community fleet combined with structural measures to mitigate the social impact. The ultimate aim was to achieve a balance between available resources and fishing activities. The Regulation provided for access to natural resources through an efficient licensing system. The Edinburgh European Council of 11 and 12 December 1992 stated in its conclusions that “due attention must be paid to the needs of fisheries-dependent areas in the context of the relevant objectives”. Thus, Regulation (EEC) 2080/92 of the Council of EC of 20 July 1993 on support for the EU fisheries sector established the Financial Instrument for Fisheries Guidance (FIFG) to integrate fisheries structural policy into the Structural Funds with its own specific objective, Objective 5 (a) of aid for the restructuring and modernisation of fishing enterprises (see Sect. 6.2.4), and with its own financial instrument. The FIFG would support structural actions with the missions: (i) to contribute to achieving a sustainable balance between resources and their exploitation; (ii) to strengthen the competitiveness of

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6 The Common Agricultural Policy: Purpose, Evolution and Future Projections

structures and the development of economically viable enterprises in the sector; and (iii) to improve market supply and the value added to fisheries and aquaculture products. To this end, the FIFG would participate in the financing of actions in the following areas of activity: (a) Restructuring and renewal of the fishing fleet (b) Modernisation of the fishing fleet (c) Improving the conditions for processing/disposing of fishery/aquaculture products (d) Development of aquaculture and coastal zone management (e) Exploratory fishing (f) Facilities at fishing ports (g) Search for new markets (h) Specific measures In order to provide financial support to fisheries-dependent areas, the Community initiative PESCA was implemented during the period 1994–1999, together with accompanying measures such as early retirement and premiums for young fishermen. Regulation (EC) 1263/1999 of the Council of EU of 21 June 1999 established a new framework for the intervention of the FIFG and introduced the following changes: The structural actions of the FIFG were designed: (i) to contribute to achieving a sustainable balance between fishery resources and their exploitation; (ii) to strengthen the competitiveness of structures and the development of economically viable enterprises in the sector; (iii) to improve market supply and the value added to fishery and aquaculture products; and (iv) to contribute to revitalising areas dependent on fisheries and aquaculture. To ensure the success of the mission of the FIFG, it would provide support to the following areas of activity, taking appropriate structural measures: (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m)

Fleet renewal and modernisation of fishing vessels Adjustment of fishing effort Joint enterprises Small-scale coastal fishing Socio-economic measures Protection of marine resources in coastal waters Aquaculture Fishing ports facilities Processing and marketing of fishery and aquaculture products Measures to find and promote new market outlets Operations by members of the trade Temporary cessation of activities and other financial compensations Innovative actions and technical assistance

6.3 The Common Fisheries Policy (CFP)

6.3.2

239

The 2002 Reform. The European Fisheries Fund

Given that the measures introduced by Regulation (EEC) 3760/92 did not put an end to overfishing, and the depletion of fish stocks of many species continued at a faster rate, a new reform of the CFP was deemed necessary. The latter was implemented by three Regulations (EC) 2369/2002, 2370/2002 and 2371/2002 of the Council of EU of 20 December 2002, which entered into force on 1 January 2003. The primary objective of the 2002 reform was to ensure a sustainable future for the fishing industry, with stable incomes and jobs for those involved in the fishing industry, and to secure supplies for consumers, while maintaining the balance of marine ecosystems, which was extremely fragile. The reform introduced long-term management of the fisheries sector, with multi-annual management and recovery plans. Furthermore, those involved in the sector have been given greater opportunities to participate in decisions affecting them through the Regional Advisory Councils for the sector. The European Fisheries Control Agency (EFCA), originally called the Community Fisheries Control Agency under Council of EU Regulation (EC) 768/2005 of 26 April 2005, which was substantially amended by Commission Regulation (EU) 404/2011 of 8 April 2011, was established in Vigo, Spain, with the aim of ensuring effective and transparent monitoring of the implementation of the CFP (see Fig. 6.16). In 2007, the FIFG was replaced by the European Fisheries Fund (EFF), which placed greater emphasis on sustainability. The EFF was designed to be simpler to manage and implement compared to the FIFG, which it replaced. It was based on Council of EU Regulation (EC) 1198/2006 of 27 July 2006 establishing it and Commission Regulation (EC) 498/2007 of 26 March 2007 laying down detailed rules for the implementation of the previous Regulation. The EFF was geared towards objectives, with activities which are a continuation of FIFG practices: (i) support the common fisheries policy so as to ensure exploitation of living aquatic resources and support aquaculture in order to provide sustainability in economic, environmental and social terms; (ii) promote a sustainable balance between resources and the fishing capacity of the Community fishing fleet; (iii) promote sustainable development of inland fishing; (iv) strengthen the competitiveness of the operating structures and the development of economically viable enterprises in the fisheries sector; (v) foster the protection and the enhancement of the environment and natural resources where related to the fisheries sector; (vi) encourage sustainable development and the improvement of the quality of life in areas with activities in the fisheries sector; and (vii) promote equality between men and women in the development of the fisheries sector and fisheries areas. The priority axes of the EFF can be summarised as follows:

Fig. 6.16 The logo of the European Fisheries Control Agency

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6 The Common Agricultural Policy: Purpose, Evolution and Future Projections

(a) Axis 1: Measures for the adaptation of the Community fishing fleet. Where a Member State decides to reduce fishing opportunities, aid may be made available for vessels which permanently or temporarily suspend their activities. Aid may be granted for the mechanical improvement of vessels to make them more energy efficient without increasing their power, as well as for socio-economic measures, including early retirement, and for the retraining of fishermen. (b) Axis 2: Aquaculture, inland fishing, processing and marketing of fishery and aquaculture products. Support is available for diversification of activities through the introduction of new aquaculture species and species with good market potential, a shift towards environmentally friendly aquaculture, public and animal health measures, processing and marketing of fisheries and aquaculture products and lifelong learning. (c) Axis 3: Measures of common interest. This includes activities not normally supported by the private sector, whose overall importance goes beyond the commercial interests of individual companies, such as the protection and development of aquatic fauna and flora, ports, sanctuaries and landing sites, the development of new marketing and promotion campaigns, pilot projects, and other collective actions. (d) Axis 4: Sustainable development of fisheries areas. In this category, funding is based on local development strategies, with a “bottom-up” approach aimed at assisting local communities in reducing their economic dependence on fisheries. Coastal communities or those adjacent to natural or artificial lakes with significant levels of employment in the fisheries sector are eligible for Community support to strengthen their overall competitiveness, add value to their fisheries products, develop tourism infrastructure and services, protect the environment, and promote interregional and transnational cooperation. (e) Axis 5: Technical assistance. Covers items such as studies, reports and information activities as well as other actions relating to the implementation of operational programmes. Table 6.10 shows the distribution of EDF resources by EU Member State for the 2007–2013 programming period, in millions of € in current prices.

6.3.3

Reform of 2013. The European Maritime and Fisheries Fund

New problems that had not been identified in the past, such as fish discards, as well as the degradation of some stocks and the shortcomings of the 2002 reform, which did not meet short-term expectations, prompted the Commission to launch a public consultation on the CFP reform in 2009. After consultations, an agreement was finally reached between the Council of EU and the European Parliament, which resulted in the adoption of two Regulations, (EU) 1379/2013 and (EU) 1380/2013 of 11 December 2013, on the CMO for fisheries products and the new CFP respectively. This was followed by Regulation

6.3 The Common Fisheries Policy (CFP) Table 6.10 Breakdown of European Fisheries Fund (EFF) resources by Member State over the period 2007–2013 (in millions of €, at current prices)

Member state Austria Belgium Bulgaria Britain France Germany Denmark Greece Estonia Ireland Spain Italy Cyprus Latvia

241

Amount billion € 5.26 26.26 80.01 137.83 216.05 155.87 133.68 207.83 84.57 42.27 1131.89 424.34 19.72 125.02

Member State Lithuania Luxembourg Malta Netherlands Hungary Poland Portugal Romania Slovakia Slovenia Sweden Czechia Finland

Amount billion € 54.71 0.00 8.37 48.58 34.85 734.09 246.49 230.71 13.69 21.64 54.67 27.11 39.45

4.,304.95 Source: Commission Decision 2008/693/EC, of 13 August 2008

(EU) 508/2014 of the European Parliament and of the Council of EU of 15 May 2014 on the new European Maritime and Fisheries Fund (EMFF). The new CFP took into account the international commitments made at the World Summit on Sustainable Development in Johannesburg, South Africa, organised by the UN, from 26 August to 4 September 2002. The most important objectives of the new CFP can be summarised as follows: (a) To ensure that fishing and aquaculture activities are environmentally sustainable in the long term and are managed in a way that is consistent with the objectives of achieving economic, social and employment benefits, and of contributing to the availability of food supplies. (b) To achieve the objective of progressively restoring and maintaining populations of fish stocks above biomass levels capable of producing Maximum Sustainable Yield (MSY), the MSY exploitation rate shall be achieved by 2015 where possible and, on a progressive, incremental basis at the latest by 2020 for all stocks. (c) It would implement an ecosystem-based approach to fisheries management so as to ensure that negative impacts of fishing activities on the marine ecosystem are minimised, and shall endeavour to ensure that aquaculture and fisheries activities avoid the degradation of the marine environment. (d) It would phase out discards where appropriate and taking into account the best available scientific advice, avoiding and limiting, as far as possible, unwanted catches.

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(e) It would make the best possible use of unwanted catches, while avoiding the creation of a market for such catches below the minimum conservation reference size. (f) It would ensure the conditions for the creation of an economically viable and competitive fishing and processing industry and land-based activities related to fisheries. (g) It would provide measures to adjust the fishing capacity of fleets to levels of fishing potential, with a view to creating economically sustainable fleets without overexploiting marine biological resources. (h) It would promote the development of sustainable aquaculture activities to contribute to food security and employment security. (i) It would contribute to ensuring an adequate standard of living for those who depend on fishing activities, taking into account coastal fisheries and socioeconomic aspects. (j) It would contribute to the creation of an efficient and transparent internal market for fisheries and aquaculture products and to ensuring a level playing field for fisheries and aquaculture products marketed in the EU. In addition, the new EMFF would act as a financial instrument contributing to the implementation of the CFP and the CMO for fisheries and aquaculture products. The EMFF would contribute to the following objectives: (i) promoting competitive, environmentally sustainable, economically viable and socially responsible fisheries and aquaculture; (ii) fostering the implementation of the CFP; (iii) promoting a balanced and inclusive territorial development of fisheries and aquaculture areas; (iv) fostering the development and implementation of the Union’s IMP in a manner complementary to cohesion policy and to the CFP. In particular, the EMFF would have the following six key priorities: (a) Sustainable fisheries: financed at a rate of 26.9% of the total to achieve a balance between human fishing capacity and available natural resources, to make fishing more selective and to reduce unwanted catches. (b) Sustainable aquaculture: funded as a 21.0% of the total to make the industry more successful and competitive by focusing on quality, health and safety, and environmentally friendly production; and to provide consumers with reliable, high-quality and high-nutritional value products. (c) Implementation of the Common Fisheries Policy: Funded as a 19.1% of the total to improve data collection, scientific knowledge, control and enforcement of fisheries legislation. (d) Employment and territorial cohesion: it is funded at a rate of 9.0% of the total to help coastal and inland fishing and aquaculture communities to gain more value for their products and diversify their economies into other maritime sectors such as tourism or direct sales. (e) Marketing and processing: 17.6% of the total is funded to improve market organisation, market information knowledge and consumer information in the world’s largest seafood market.

6.3 The Common Fisheries Policy (CFP) Table 6.11 Breakdown of European Maritime and Fisheries Fund (EMFF) resources by Member State over the period 2014–2020 (in millions of €, at current prices)

Member state Austria Belgium Bulgaria Britain France Germany Denmark Greece Estonia Ireland Spain Italy Croatia Cyprus Total from EMFF

243

Amount billion € 6.97 41.75 88.07 243.14 587.98 219.60 208.36 388.78 100.97 147.60 1,161.62 537.26 252.64 39.72

Member state Latvia Lithuania Luxembourg Malta Netherlands Hungary Poland Portugal Romania Slovakia Slovenia Sweden Czechia Finland 5,749.33

Amount billion € 139.83 63.43 0.00 22.63 101.52 39.10 531.22 392.49 168.42 15.79 24.81 120.16 31.11 74.39

Source: Commission Executive Decision. 2014/372/EU, of 11 June 2014

(f) Implementation of Integrated Maritime Policy (IMP): funded as a 1.2% of the total to improve knowledge of the sea, better plan maritime activities, promote cooperation in maritime surveillance and manage sea basins according to their specific needs. The remaining 5.1% of the funding is for technical assistance to Member States for the implementation of the above priorities. Table 6.11 shows the distribution of EMFF resources by EU Member State for the 2014–2020 programming period, in millions of € in current prices.

6.3.4

The CFP After 2020

In general, the new CFP for the period 2021–2027 foresees: (a) Providing Member States with more possibilities to choose where to target support for their strategic priorities, instead of being forced to choose from a list of eligible actions (b) Trying to align with other EU structural and investment funds through a “common provisions” regulation (c) Closer cooperation with other EU policies, in areas such as combating climate change and implementing the European plastics practice in a circular economy

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6 The Common Agricultural Policy: Purpose, Evolution and Future Projections

(d) Greater and broader support for small-scale coastal fishermen and coastal communities, with support for local partnerships extended to cover all sectors of the blue economy (e) Providing support for safe, secure and clean oceans under sustainable management, with resources for maritime surveillance and cooperation between coastguards After 2020, the EMFF will focus on four priorities: (i) promoting sustainable fisheries and the conservation of marine biological resources; (ii) contributing to the food security of the European Union through the sustainability and competitiveness of aquaculture and markets; (iii) developing a sustainable blue economy and promoting the well-being of coastal communities; and (iv) strengthening international ocean governance and ensuring protected, safe, clean and sustainably managed seas and oceans. The proposed by the Commission EMFF budget to support fisheries and maritime policies amount is € 6.14 billion in current prices for the years 2021–2027.

6.3.5

EU Fisheries Sector Figures

The following histograms in Figs. 6.17, 6.18 and 6.19provide statistics for the EU fisheries sector over the last 12 years. They show the continuous decrease in the capacity of the fishing fleet of EU Member States, which is attributed to the CFP measures, in particular the aid granted to vessels that permanently or temporarily suspend their activities, as well as the socio-economic measures for the early retirement of fishermen.

Total capacity of the EU Member States' fishing fleet in GT (2008 - 2019)

1,632

1,661

1,649

1,588

1,584

1,568

1,546

1,532

2009

1,688

2008

1,400

1,749

1,818

1,600

1,872

2,000 1,800

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

1,200 1,000 800 600 400 200 0

Fig. 6.17 Evolution of the capacity of the EU fishing fleet over the period 2008–2019. Source: Eurostat (2020), elaborated by the authors

6.3 The Common Fisheries Policy (CFP)

245

Total catches of EU Member States in thousands of tonnes (2008 - 2019)

2017

2018

4,859

2016

5,224

5,011

2015

5,320

5,146

2011

4,829

2010

4,356

2009

4,762

2008

4,947

4,749

4,000

4,861

5,000

5,383

6,000

3,000 2,000 1,000 0 2012

2013

2014

2019

Fig. 6.18 Evolution of the annual total catches of EU Member States over the period 2008–2019. Source: Eurostat (2020), elaborated by the authors

EU Member States' aquaculture products in thousands of tonnes (2008 - 2019)

2015

2016

1,331

2014

1,318

2013

1,366

1,186

2012

1,287

1,219

2011

1,268

1,242

2010

1,250

1,256

1,000

1,302

1,200

1,255

1,400

2018

2019

800 600 400

200 0 2008

2009

2017

Fig. 6.19 Evolution of annual aquaculture products of EU Member States over the period 2008–2019. Source: Eurostat (2020), elaborated by the authors

Despite the fluctuations in catch quantities, the values do not show large deviations from a mean value over the reference period, showing relative stability over time. This view is similar for the quantities of aquaculture products produced, where there are also fluctuations without major deviations from an average value.

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6 The Common Agricultural Policy: Purpose, Evolution and Future Projections

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Official Journal of the European Union No L 180, Decision. 2014/372/EU of the European Commission, setting out the annual breakdown by Member State of the global resources of the European Maritime and Fisheries Fund available in the framework of shared management for the period 2014-2020, Brussels, 11 June 2014. Regulation (EEC) 25/1962 of the Council of Ministers on the financing of the common agricultural policy, Brussels, 4 April 1962. Regulation 17/64/EEC of the Council of Ministers on the conditions for granting aid from the European Agricultural Guidance and Guarantee Fund, Brussels, 5 February 1964 Regulation (EEC) 728/70 of the Council of EC on additional provisions for the financing of the common agricultural policy, Luxembourg, 21 April 1970. Regulation (EEC) 729/70 of the Council of EC on the financing of the common agricultural policy, Luxembourg, 21 April 1970. Regulation (EEC) 170/83 of the Council of EC establishing a Community system for the conservation and management of fishery resources, Brussels, 25 January 1983. Regulation (EEC) 2078/92 of the Council of EC on agricultural production methods compatible with the requirements of the protection of the environment and the maintenance of the countryside, Luxembourg, 30 June 1992. Regulation (EEC) 2079/92 of the Council of EC instituting a Community aid scheme for early retirement from farming, Luxembourg, 30 June 1992. Regulation (EEC) 2080/92 of the Council of EC instituting a Community aid scheme for forestry measures in agriculture, Luxembourg, 30 June 1992. Regulation (EEC) 3760/92 Council of EC establishing a Community system for fisheries and aquaculture, Brussels, 20 December 1992. Regulation (EC) 1257/1999 of the Council of EU on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF) and amending and repealing certain Regulations, Brussels, 17 May 1999. Regulation (EC) 1258/1999 of the Council of EU on the financing of the common agricultural policy, Brussels, 17 May 1999. Regulation (EC) 1259/1999 of the Council of EU establishing common rules for direct support schemes under the common agricultural policy, Brussels, 17 May 1999. Regulation (EC) 1263/1999 of the Council of EU on the Financial Instrument for Fisheries Guidance, Luxembourg, 21 June 1999. Regulation (EC) 2369/2002 of the Council of EU amending Regulation (EC) No 2792/1999 laying down the detailed rules and arrangements regarding Community structural assistance in the fisheries sector, Brussels, 20 December 2002. Regulation (EC) 2370/2002 of the Council of EU establishing an emergency Community measure for scrapping fishing vessels, Brussels, 20 December 2002. Regulation (EC) 2371/2002 of the Council of EU on the conservation and sustainable exploitation of fisheries resources under the Common Fisheries Policy, Brussels, 20 December 2002. Regulation (EC) 1782/2003 of the Council of EU establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers and amending Regulations (EEC) No 2019/93, (EC) No 1452/2001, (EC) No 1453/ 2001, (EC) No 1454/2001, (EC) 1868/94, (EC) No 1251/1999, (EC) No 1254/1999, (EC) No 1673/2000, (EEC) No 2358/71 and (EC) No 2529/2001, Brussels, 29 September 2003. Regulation (EC) 1783/2003 of the Council of EU amending Regulation (EC) No 1257/1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF), Brussels, 29 September 2003. Regulation (EC) 2237/2003 of the Commission of European Communities laying down detailed rules for the application of certain support schemes provided for in Title IV of Council Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers, Brussels, 23 December 2003.

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Regulation (EC) 795/2004 of the Commission of European Communities laying down detailed rules for the implementation of the single payment scheme provided for in Council Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers, Brussels, 21 April 2004. Regulation (EC) 796/2004 of the Commission of European Communities laying down detailed rules for the implementation of cross-compliance, modulation and the integrated administration and control system provided for in of Council Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers, Brussels, 21 April 2004. Regulation (EC) 864/2004 of the Council of EU amending Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers, and adapting it by reason of the accession of the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia to the European Union, Luxembourg, 29 April 2004. Regulation (EC) 768/2005 of the Council of EU establishing a Community Fisheries Control Agency and amending Regulation (EEC) No 2847/93 establishing a control system applicable to the common fisheries policy, Luxembourg, 26 April 2005. Regulation (EC) 1290/2005 of the Council of EU on the financing of the common agricultural policy, Luxembourg, 21 June 2005. Regulation (EC) 1698/2005 of the Council of EU on support for rural development by the European Agricultural Fund for Rural Development (EAFRD), Brussels, 20 September 2005. Regulation (EC) 319/2006 of the Council of EU amending Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers, Brussels, 20 February 2006. Regulation (EC) 1198/2006 of the Council of EU on the European Fisheries Fund, Brussels, 27 July 2006. Regulation (EC) 411/2007 of the Commission of European Communities amending Regulation (EC) No 795/2004 laying down detailed rules for the implementation of the single payment scheme provided for in Council Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers, Brussels, 17 April 2007. Regulation (EC) 498/2007 of the Commission of European Communities laying down detailed rules for the implementation of Council Regulation (EC) No 1198/2006 on the European Fisheries Fund, Brussels, 26 March 2007. Regulation (EC) 1182/2007 of the Council of EU laying down specific rules as regards the fruit and vegetable sector, amending Directives 2001/112/EC and 2001/113/EC and Regulations (EEC) No 827/68, (EC) No 2200/96, (EC) No 2201/96, (EC) No 2826/ 2000, (EC) No 1782/2003 and (EC) No 318/2006 and repealing Regulation (EC) No 2202/96, Brussels, 26 September 2007. Regulation (EC) 1234/2007 of the Council of EU establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation), Brussels, 22 October 2007. Regulation (EC) 72/2009 of the Council of EU on modifications to the Common Agricultural Policy by amending Regulations (EC) No 247/2006, (EC) No 320/2006, (EC) No 1405/2006, (EC) No 1234/2007, (EC) No 3/2008 and (EC) No 479/2008 and repealing Regulations (EEC) No 1883/ 78, (EEC) No 1254/89, (EEC) No 2247/89, (EEC) No 2055/93, (EC) No 1868/94, (EC) No 2596/97, (EC) No 1182/2005 and (EC) No 315/2007, Brussels, 19 January 2009. Regulation (EC) 73/2009 of the Council of EU establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers, amending Regulations (EC) No 1290/2005, (EC) No 247/2006, (EC) No 378/2007 and repealing Regulation (EC) No 1782/2003, Brussels, 19 January 2009.

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Regulation (EC) 74/2009 of the Council of EU amending Regulation (EC) No 1698/2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD), Brussels, 19 January 2009. Regulation (EU) 404/2011 of the European Commission laying down detailed rules for the implementation of Council Regulation (EC) No 1224/2009 establishing a Community control system for ensuring compliance with the rules of the Common Fisheries Policy, Brussels, 8 April 2011. Regulation (EU) 1303/2013 of the European Parliament and the Council of EU laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006, 17 December 2013. Regulation (EU) 1305/2013 of the European Parliament and the Council of EU on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) and repealing Council Regulation (EC) No 1698/2005, 17 December 2013 Regulation (EU) 1306/2013 of the European Parliament and the Council of EU on the financing, management and monitoring of the common agricultural policy and repealing Council Regulations (EEC) No 352/78, (EC) No 165/94, (EC) No 2799/98, (EC) No 814/2000, (EC) No 1290/2005 and (EC) No 485/2008, 17 December 2013. Regulation (EU) 1307/2013 of the European Parliament and the Council of EU establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy and repealing Council Regulation (EC) No 637/2008 and Council Regulation (EC) No 73/2009, 17 December 2013. Regulation (EU) 1308/2013 of the European Parliament and the Council of EU establishing a common organisation of the markets in agricultural products and repealing Council Regulations (EEC) No 922/72, (EEC) No 234/79, (EC) No 1037/2001 and (EC) No 1234/2007, 17 December 2013. Regulation (EU) 1310/2013 of the European Parliament and the Council of EU laying down certain transitional provisions on support for rural development by the European Agricultural Fund for Rural Development (EAFRD), amending Regulation (EU) No 1305/2013 of the European Parliament and of the Council as regards resources and their distribution in respect of the year 2014 and amending Council Regulation (EC) No 73/2009 and Regulations (EU) No 1307/2013, (EU) No 1306/2013 and (EU) No 1308/2013of the European Parliament and of the Council as regards their application in the year 2014, 17 December 2013. Regulation (EU) 1379/2013 of the European Parliament and the Council of EU on the common organisation of the markets in fishery and aquaculture products, amending Council Regulations (EC) No 1184/2006 and (EC) No 1224/2009 and repealing Council Regulation (EC) No 104/2000, Strasbourg, 11 December 2013. Regulation (EU) 1380/2013 of the European Parliament and the Council of EU on the Common Fisheries Policy, amending Council Regulations (EC) No 1954/2003 and (EC) No 1224/2009 and repealing Council Regulations (EC) No 2371/2002 and (EC) No 639/2004 and Council Decision 2004/585/EC, Strasbourg, 11 December 2013 Regulation (EU) 1370/2013 of the Council of EU determining measures on fixing certain aids and refunds related to the common organisation of the markets in agricultural products, Brussels, 16 December 2016. Regulation (EU) 508/2014 of the European Parliament and the Council of EU on the European Maritime and Fisheries Fund and repealing Council Regulations (EC) No 2328/2003, (EC) No 861/2006, (EC) No 1198/2006 and (EC) No 791/2007 and Regulation (EU) No 1255/2011 of the European Parliament and of the Council, Brussels, 15 May 2014. Regulation (EU, Euratom) 2020/2093 of the Council of EU laying down the multiannual financial framework for the years 2021 to 2027, Brussels, 17 December 2020.

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Regulation (EU) 2020/2220 of the European Parliament and the Council of Ministers (Transitional) laying down certain transitional provisions for support from the European Agricultural Fund for Rural Development (EAFRD) and from the European Agricultural Guarantee Fund (EAGF) in the years 2021 and 2022 and amending Regulations (EU) No 1305/2013, (EU) No 1306/2013 and (EU) No 1307/2013 as regards resources and application in the years 2021 and 2022 and Regulation (EU) No 1308/2013 as regards resources and the distribution of such support in respect of the years 2021 and 2022, Brussels, 23 December 2020. Treaty of Rome (EEC), “Traité instituant la Communauté Économique Européenne et documents annexes”, Rome, 25 March 1957.

7

Regional Policy: Disparities, Development and Future Direction

7.1

The Exercise of Regional Policy in the EU

The development of regional policy in the EC and later the EU for the Member States requires the definition of specific objectives which will be adapted to the needs of each Member State and their regions individually. It has not been sought in the past, nor is it currently envisaged, to bring regional policy in its overall dimension under centralised control, and therefore the roles of the institutions and the current EU remain complementary within the framework of the subsidiarity principle, and work alongside the role of the state institutions at the various levels of government within the boundaries of each Member State. However, the common regional policy coordinates national regional policies, defining their general guidelines by setting out certain principles for respecting the rules of competition between Member States. It also coordinates the EU’s operations and financial instruments, giving them the necessary regional dimension.

7.1.1

The Existence of Regional Disparities in the EC and the EU

Some of the main problems that the above policy has to address are the unequal distribution of productive resources, the lack of sufficient capital, the underemployed workforce, the lack of entrepreneurial initiatives and the weakening of the region’s population, which is concentrated in certain centres offering opportunities for economic and social activity. It has also become clear that the movement of goods, services, capital and people, through the rules of the free market, is not in itself capable of counteracting the natural tendency towards regional inequality, but is a vehicle for transferring positive growth factors to certain regions, taking them away from others. At the level of the EC and later the EU, a form of regional inequality has historically developed, which has at times been described as “North-South” or # The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 P. Liargovas, C. Papageorgiou, The European Integration, Vol. 2, Springer Texts in Political Science and International Relations, https://doi.org/10.1007/978-3-031-47176-6_7

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Regional Policy: Disparities, Development and Future Direction

even “centre-periphery” inequality and which persists despite the measures taken so far. Furthermore, the recent enlargement with the countries of Central and Eastern Europe has brought to the fore a new form of regional inequality, due to political and economic differences and attitudes between the old Member States and those from countries of the former USSR sphere of influence. In the recent period there seem to have been two countervailing dynamics at the spatial level of the EU. On the one hand, inequalities are increasing within Member States, and on the other hand, they are decreasing between Member States. This is largely due to the fact that the convergence of the cohesion countries has been achieved mainly by further strengthening metropolitan centres and other regions that had a dynamic.

7.1.2

Arguments for the Establishment of European Regional Policy

The main arguments for the establishment of European regional policy can be summarised as follows: (a) The “vested interest” argument, according to which the inhabitants of a region have a vested interest in ensuring that the regional problems faced by other Member States are reduced, which ultimately benefits everyone (b) The “financial targeting” argument, according to which it is necessary to transfer resources from the richer regions to the poorer ones in order to strengthen economic and social cohesion (c) The “effects of integration” argument, according to which the establishment of a European Cohesion Policy is necessary and justified to counter the adverse effects of the ongoing integration process (d) The “coordination” argument, according to which the coordinating role of the European institutions allows for effective intervention to help problem regions in specific cases (e) The “effects of other EU policies” argument, according to which an effort is needed to mitigate the regional effects of other policies that have a regional dimension (Common Agricultural Policy, Trade Policy, Competition Policy) and create specific problems with negative consequences for the regions (f) The “further integration” argument, according to which achieving a fair distribution of the benefits of integration from European Cohesion Policy may lead Member States to want to take further steps to achieve full integration

7.2

Regional Policy Programmes in the EU

Although the founding Treaty of Rome of 1957 referred to the need to reduce disparities between the regions of the EEC in order to achieve the “harmonious development” of the Community, it did not provide the Community institutions with the appropriate means to achieve these objectives. This may have been due to the

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working assumption that regional disparities would be reduced through the dynamic functioning of the free market economy, following the establishment of the common market.

7.2.1

The Regional Policy of the EC up to 1986

However, while there was no formal institutionalised regional policy at Community level, as mentioned above, until 1975, there were specific economic operators who had developed functions with a regional Community dimension. These are: (a) the European Social Fund (ESF), established by the Treaty of Rome with the aim of improving labour market mobility, mainly by providing resources for the training of workers affected by industrial restructuring; (b) the European Investment Bank (EIB), which was set up together with the ECSC and provided loans at preferential rates of interest to operators aiming at the economic development of less favoured regions; and (c) the European Agricultural Guidance and Guarantee Fund (EAGGF, Fonts Européen D’Orientation et de Garantie Agricole, FEOGA), which was set up in 1962 to serve the Common Agricultural Policy (CAP) and provided financing for investment in less favoured rural areas. But according to the opinion of some scholars, the financial resources channelled through the senior financial instruments were limited and lacked a clear strategy for promoting regional development. However, their existence suggests an awareness of the problem of regional disparities within the EEC, and a willingness to make efforts to alleviate them. However, the persistence of regional disparities at a high level, especially after the accession of Britain, Denmark and Ireland in 1973, and the effects of the first oil crisis, characterised by dramatic increases in oil prices, a decline in investment and industrial decline, disrupted the cohesion of the EC, and eventually led the partners to accept the idea of setting up a special fund for the financial support of the poorer regions. In particular, despite initial opposition from France, at the Paris summit in December 1974, following a proposal from Britain and Ireland, it was decided to set up a European Regional Development Fund (ERDF), from 1 January 1975, to help the regions having problems. The ERDF was created by Regulation (EEC) 724/75 of the Council of EC of 18 March 1975 and financed mainly infrastructure projects as well as productive investment projects, with the Member States that benefited from it being Britain, Ireland and Italy. The Fund’s activities were focused on co-financing projects (50% of the budget of each project) selected by the Member States within the framework of their quota. The Regulation was amended by a series of new Regulations: (EEC) 214/79 of 6 February 1979, (EEC) 3325/80 of 16 December 1980 and (EEC) 1787/ 84 of 19 June 1984. Table 7.1 shows the evolution of the amounts allocated from the ERDF, in amounts and as a percentage of the Community budget for financing regional development projects in the EEC Member States for the period 1975 to 1986. The table shows a significant increase in both the amounts allocated and the percentages of the Community budget over the twelve years of the period in question.

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Table 7.1 Evolution of amounts allocated from the ERDF, in amounts and as a percentage of the community budget for financing regional development projects in the EEC Member States, for the period 1975 to 1986 Year 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986

Amount in millions of ECU 257.6 394.3 378.5 581.0 945.0 1,165.0 1,540.0 1,759.5 2,010.0 2,140.0 2,289.0 3,176.5

Percentage (%) of the Community budget 4.8 5.6 4.9 4.6 6.1 6.7 7.3 7.6 7.6 7.3 7.5 9.1

Source: Petrakos and Psycharis (2004)

7.2.2

The Integrated Mediterranean Programmes (1986–1989/1993)

The most important change in regional disparities in the EC, which emerged from the accession of new Member States in the 1980s, was the fact that Greece, Spain and Portugal based their economies mainly on primary sector activities, i.e. agriculture, livestock and fisheries, and tourism, in contrast to the other EC Member States, with the exception of Ireland, which were based on secondary sector activities and some 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 of the EC Member States having problems. Thus, the first official position of the Greek government of Andreas Papandreou, expressed a week after the elections of 18 October 1981, “in order to bridge interregional 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 within 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 consequence that Greece threatened to exercise its right of veto on the accession of the like-producing countries Spain and Portugal to the EC at the Dublin European Council of 3 and 4 December 1984.

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Fig. 7.1 Areas benefiting from the Integrated Mediterranean Programmes: Greece, Italy and Southern France. Source: Authors work

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. Measures to achieve the objectives of the IMPs fall into five categories: (a) measures for agriculture, (b) measures for fisheries, (c) measures for industry and crafts, (d) measures for services and (e) measures for the development of human resources. The IMPs were approved by Council of EC Regulation (EEC) 2088/85 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 cost of the projects to be included in the IMPs. The geographical scope of the IMPs included Greece and certain regions of southern France and Italy, with development measures for agriculture, fisheries, industry and crafts, services and human resources development. A relevant map is provided in Fig. 7.1. The projects did not progress satisfactorily due to insufficient preparation and lack of experience, with the result that it was agreed that the unused Community aid would

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be carried over to the next first Community Support Framework for the years 1989 to 1993. Nevertheless, the IMPs are seen as an important example of European regional policy, at least at an early stage.

7.2.3

The Community Support Frameworks After 1988: The First CSF (1989–1993)

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 1986, 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. Regulation (EEC) 2052/88 on coordination was adopted by the Council of EC on 24 June 1988, while the other four Regulations (EEC) 4253/88, (EEC) 4254/88, (EEC) 4255/88 and (EEC) 4256/88 were adopted by the Council of EC on 19 December 1988. They 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) (see Fig. 7.2), as well as certain principles and objectives for the Cohesion Policy that applied to the population, regions and Member States of the EC as a whole. 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 single entity, are: I. Concentration and orientation of structural policy on five specific objectives, based on the SEA: 1. The development and structural adjustment of the least developed regions, with a GDP per capita of less than 75% of the average of the Member States, financed by the ERDF, the ESF and the EAGGF. 2. The restructuring of areas affected by the decline of the industry, with funding from the ERDF and the ESF. 3. The fight against long-term unemployment, with funding from the ESF.

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Fig. 7.2 Classification of the regions of the European territory (NUTS). Source: Eurostat

4. The promotion of the vocational rehabilitation of young people, funded by the ESF. 5. Rural restructuring and development with two sub-objectives, (a) to support 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. Funding was to be implemented mainly through multiannual action bundles in Community regions, known as Community Support Frameworks (CSFs), which would be partly financed by national resources of the Member States concerned by the implementation of the package of actions. II. 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.

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Fig. 7.3 Dispersion of targets for the first CSF 1989–1993. Source: European Commission, Regional Policy-Inforegio (2011). # EuroGeographics

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III. 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. IV. Better management of the Funds, establishing: (a) the doubling of resources; (b) multi-annual 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; and (g) systematic ex ante and ex post evaluation of Community structural action at macroeconomic and microeconomic level. Eighty-five per cent of the Funds’ resources will be allocated to the five priority objectives and 15% will be allocated at the Commission’s initiative. V. 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. The dispersion of the Targets is shown in the relevant map provided in Fig. 7.3. Table 7.2 shows the amounts allocated from each Objective of the CSF I, with a total funding of ECU 68.2 billion and the percentages of each Objective in the total, for the period 1989 to 1993, while Table 7.3 shows the amounts to be allocated for the main beneficiaries of the CSF I for the period 1989 to 1993.

7.2.4

Review of the Regulatory Framework: The 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. The Edinburgh European Council of 11 and 12 December 1992 accepted the new package of proposals from the Commission and its President Delors entitled From the Single Act to Maastricht and beyond: the means to achieve our ambitions, 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

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Table 7.2 Amounts allocated in billion ECU (1988 prices) and percentages of the total for the first CSF 1989 to 1993 Objective Objective 1 Objective 2 Objectives 3 & 4 Objective 5 16 other Community initiativesa Total

Amount in billion ECU 43.8 6.1 6.7 6.3 5.3 68.2

Percentage of total 64.0% 9.0% 10.0% 9.2% 7.8% 100.0%

Source: European Commission—Inforegio (elaborated by the authors) They are Interreg, Euroform, Now, Horizon, Leader, Resider, Rechar, Retex, Renaval, Konver, Regis, Envireg, Regen, Prisma, Telematique and Stride a

Table 7.3 Financial allocations by Member State in billion ECU (1988 prices) from the first CSF 1989–1993 Member state Belgium Britain France Germany

Amount in billion € 0.8 5.2 6.4 6.5

Member state Denmark Greece Ireland Spain

Amount in billion € 0.4 8.2 4.8 14.2

Member state Italy Luxembourg Netherlands Portugal

Amount in billion € 11.4 0.1 0.8 9.2

Source: European Commission—Inforegio (elaborated by the authors)

and environmental projects. It also doubled structural expenditure for the four least developed Member States, namely Greece, Ireland, Spain and Portugal, for the seven-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 by six Regulations (EEC) 2080/93, (EEC) 2081/93, (EEC) 2082/93, (EEC) 2083/93, (EEC) 2084/93 and (EEC) 2085/93 of the Council of EC 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 (EC) 1164/94 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-mentioned Regulations (EEC) 2080/93, set up as a fund to finance it. It should be noted that the forthcoming

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Fig. 7.4 Dispersion of targets for the second CSF 1994–1999. European Commission, Regional Policy-Inforegio (2011). # EuroGeographics

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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 five 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 include: 1. The development and structural adjustment of the least developed regions, with a GDP per capita 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 the decline of the industry, with funding from the ERDF and the ESF. 3. Fighting long-term unemployment, the vocational rehabilitation of young people and the promotion of equal opportunities for men and women, funded by the ESF. 4. The professional adaptation of workers to industrial changes, financed by the ESF. 5. Rural restructuring and development, with two sub-objectives, (a) support for the adaptation of rural areas and modernisation of fisheries, financed by the ERDF, EAGGF and FIFG, and (b) development of sensitive rural areas, financed by the ERDF, ESF and EAGGF. The dispersion of the targets is shown on a map provided in Fig. 7.4. Furthermore, Table 7.4 shows the amounts allocated from each objective of the second CSF, with a total funding of ECU 160.8 billion, of which ECU 14.45 billion from the CF, and the percentages of each objective out of the total, for the period 1994 to 1999. Table 7.5 shows the amounts to be allocated to the main beneficiaries under the second CSF for the period 1994 to 1999. Table 7.6 shows the estimates of the allocation of CF money as a percentage and as an amount in 1994 prices for the period 1994 to 1999 for the four Member States with a per capita income below 90% of the EU average.

7.2.5

New Review of the Regulatory Framework: The Third CSF (2000–2006)

With the Agenda 2000. For 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.

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Table 7.4 Amounts allocated in billion ECU (1994 prices) and percentages of the total for the second CSF 1994–1999 Objective Objective 1a Objective 2 Objectives 3 & 4 Objective 5 Newly acceded Member States (Objective 6)b 13 other Community initiativesc Total

Amount in billion ECU 108.5 9.4 15.2 13.0 0.7 14.0 160.8

Percentage of total 67.5% 5.9% 9.5% 8.1% 0.4% 8.7% 100.0%

Source: European Commission—Inforegio (elaborated by the authors) The CF also participates with 14.45 billion ECU for countries under its responsibility b Finland and Sweden c These are Interreg II, Leader II, Resider II, Rechar II, Retex, Konver, Regis II, Empleo, Adapt, Peace, Urban, Pesca, PYME a

Table 7.5 Financial allocations by Member State in billion ECU (1994 prices) from the second CSF 1994–1999 Member state Austria Belgium Britain France Germany

Amount in billion € 1.4 1.7 10.9 14.9 21.8

Member state Denmark Greece Ireland Spain Italy

Amount in billion € 0.7 17.7 6.7 42.4 21.7

Member state Luxembourg Netherlands Portugal Sweden Finland

Amount in billion € 0.1 2.1 18.2 1.1 1.4

Source: European Commission—Inforegio (elaborated by the authors) Table 7.6 Estimates of CF money allocation as a percentage and as an amount in 1994 prices (included in the previous table) over the period 1994–1999. Source European Commission— Inforegio (elaborated by the authors)

Member state Spain Portugal Greece Ireland Total

Percentage (%) 55 18 18 9 100

Amount in billion ECU 7.95 2.60 2.60 1.30 14.45

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 to 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

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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 Regulation (EC) 1260/1999 of 21 June 1999 of the Council of EU laying down general provisions on the Structural Funds, which replaced the previous Coordination Regulation and parts of the implementing Regulations. A number of new Regulations (EC) 1260/1999, (EC) 1261/1999, (EC) 1262/1999, (EC) 1263/1999, (EC) 1264/1999 and (EC) 1265/1999 of 21 June 1999, on the Structural Funds and the CF, were also adopted. The three objectives foreseen for this period are: 1. The objective of growth and structural adjustment of regions whose growth is lagging behind with a GDP per capita of less than 75% of the 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 that 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 different 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. These are Regulations (EC) 1159/2000 of 30 May 2000, (EC) 1685/2000 of 28 July 2000, (EC) 438/2001 of 2 March 2001, (EC) 448/2001 of 2 March 2001, (EC) 1386/2002 of 29 July 2002, (EC) 16/2003 of 6 January 2003 and (EC) 621/2004 of 1 April 2004. The responsibilities of national managing and paying authorities have been clarified and the management of programmes has been simplified and accelerated through financial discipline and the “n + 2” rule. According to this rule, if no proof of payment is provided within two years, the budget is lost. The dispersion of the targets across EU regions is shown in a map provided in Fig. 7.5. Furthermore, Table 7.7 shows the amounts allocated from each objective of the CSF, with a total funding amount of 232.7 billion €, of which 25.4 billion ECU from the CF, and the percentages of each objective out of the total, for the period 2000–2006. Table 7.8 shows the amounts to be allocated to the main beneficiaries of the third CSF for the period 2000 to 2006.

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Fig. 7.5 Dispersion of targets for the third CSF 2000–2006. European Commission, Regional Policy-Inforegio (2011). # EuroGeographics

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Table 7.7 Amounts allocated in € billion (1999 prices) and percentages of total for the third CSF 2000–2006 Objective Objective 1a Objective 2 Objective 3 4 other Community initiativesb Total

Amount in billion € 174.6 22.5 24.1 11.5 232.7

Percentage of total 75.0% 9.7% 10.4% 4.9% 100.0%

Source: European Commission—Inforegio (elaborated by the authors) The CF also participates with €25.4 billion for countries under its responsibility b These are: Interreg III, Urban II, Equal and Leader+ a

Table 7.8 Main beneficiary Member States and amounts allocated from the third CSF 2000–2006

Member state Spain Germany Italy Greece Portugal Britain France New entrants in 2004

Amount in billion € 56.3 29.8 29.6 24.9 22.8 16.6 15.7 21.7

Source: European Commission—Inforegio (elaborated by the authors)

7.2.6

The National Strategic Reference Frameworks: The 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 Ministers 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 Regulations (EC) 1080/2006, (EC) 1081/2006 and (EC) 1082/2006 of 5 July 2006

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and (EC) 1083/2006 and (EC) 1084/2006 of 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 ESF 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 objectives established for the period 2007–2013 were: 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. This objective will be financed by the ERDF and the 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 for 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 Commission Regulation (EC) 1828/2006 of 8 December 2006 implementing the General Provisions Regulation, which replaced the five existing regulations with provisions on information, promotion, management, control systems, irregularities, financial corrections and eligibility. The dispersion of the targets across EU regions is shown in a map provided in Fig. 7.6. Furthermore, Table 7.9 shows the amounts allocated from each objective of the NSRF 2007–2013, with a total funding amount of € 346.4 billion, of which €

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Fig. 7.6 Dispersion of targets for the NSRF 2007–2013. European Commission, Regional PolicyInforegio (2011). # EuroGeographics

7.2 Regional Policy Programmes in the EU Table 7.9 Amounts allocated in € billion (2004 prices) and percentages of the total for the NSRF 2007–2013

Objective Objective 1a Objective 2 Objective 3 Total

271 Amount in billion € 282.8 54.9 8.7 346.4

Percentage of total 81.6% 15.9% 2.5% 100.0%

Source: European Commission—Inforegio (elaborated by the authors) a The CF also participates with €69.6 billion for countries under its responsibility. The Community Initiatives Jeremie, Jessica, Jaspers and Jasmine are in operation Table 7.10 Financial allocations by Member State in € billion (2004 prices) from the NSRF 2007–2013. Source: European Commission—Inforegio (elaborated by the authors) Member state Austria Belgium Bulgaria Britain France Germany Denmark Greece Estonia

Amount in billion € 1.5 2.3 6.9 10.6 14.3 26.3 0.6 20.4 3.5

Member state Ireland Spain Italy Cyprus Latvia Lithuania Luxembourg Malta Netherlands

Amount in billion € 0.9 35.2 28.8 0.6 4.6 6.9 0.1 0.9 1.9

Member state Hungary Poland Portugal Romania Slovakia Slovenia Sweden Czechia Finland

Amount in billion € 25.3 67.3 21.5 19.7 11.6 4.2 1.9 26.7 1.7

69.6 billion from the CF, as well as the percentages of each objective out of the total, for the period 2007–2013. Table 7.10 shows the amounts to be allocated for the main beneficiaries from the NSRF 2007–2013.

7.2.7

Review of Regional Policy: The 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 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 are fully aligned with those of the “Europe 2020” Strategy for 2020, which are:

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1. Employment: employment of at least 75% of the active population aged 20–64. 2. Research & 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% and (b) completing at least 40% of tertiary education for the 30–34 age group. 5. Combating poverty and social exclusion: Reducing 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 ESF 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, Regulation (EU) 1303/2013 of the European Parliament and of the Council of EU of 17 December 2013 laying down the common provisions for the ERDF, the ESF, the CF, the EAFRD and the European Maritime and Fisheries Fund (EMFF) and the general provisions for the ERDF, the ESF, 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 workers’ mobility. (ix) Promoting social inclusion and the fight against poverty and social exclusion. (x) Investing in education, training and vocational training for skills acquisition and lifelong learning. (xi) Strengthening the institutional capacity of public authorities and stakeholders and effective public administration. 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, the last four Thematic Objectives cover the third characteristic of inclusive growth of the Europe 2020 Strategy.

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The priorities of the funds for the above 11 objectives are: (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). Relevant to the above-mentioned ERDF, ESF and CF funds, as well as the EGTC and the European Territorial Cooperation objective, are Regulations (EU) 1297/ 2013 and (EU) 1298/2013 of the European Parliament and the Council of EU of 11 December 2013, as well as Regulations (EU) 1299/2013, (EU) 1300/2013, (EU) 1301/2013, (EU) 1302/2013 and (EU) 1304/2013 of the European Parliament and the Council of EU of 17 December 2013. Likewise, Regulation (EU) 508/2014 of the European Parliament and of the Council of EU of 15 May 2014 on the EMFF. To maximise the contribution of the ESIF, 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 ESIF contributes to the achievement of the EU’s strategy for smart, sustainable and inclusive growth, the arrangements for promoting the integrated use of the ESIF, and the arrangements for coordinating the ESIF with other relevant EU 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 Agreement, 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 ESIF. The Partnership Agreement 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 ESIF; and (c) arrangements for the partnership principle and an integrated approach to territorial development. The implementation of the ESIF will be carried out through programmes covering the programming period in accordance with the Partnership Agreement. 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 ESIF. 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 ESIF. 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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Fig. 7.7 Categorisation of regions for the NSRF 2014–2020. European Commission, Regional Policy-Inforegio (2015). # EuroGeographics

The categorisation of EU regions is shown on a map provided in Fig. 7.7. Furthermore, Table 7.11 shows the amounts allocated to each of the 2014–2020 NSRF destinations, with a total funding amount of €351.8 billion, as well as the percentages of each destination out of the total, for the period 2014–2020. Table 7.12 shows the amounts to be allocated for the main beneficiaries from the 2014–2020 NSRF.

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Table 7.11 Amounts allocated in € billion (2012 prices) and percentages of the total for the period 2014–2020 Destination Less developed regions, with a GDP per capita of less than 75% of the EU average GDP Transition regions, with a GDP per capita between 75% and 90% of the EU average GDP per capita More developed regions, with a GDP per capita above 90% of the EU average GDP Youth Employment Initiative (additional) Urban innovative actions Remote and sparsely populated areas Technical assistance Member States of the Cohesion Fund Territorial cooperation Total

Amount in billion € 182.2

Percentage of total 51.8%

35.4

10.1%

54.3

15.4%

3.2 0.4 1.6 1.2 63.3 10.2 351.8

0.9% 0.1% 0.5% 0.3% 18.0% 2.9% 100.0%

Source: European Commission—Inforegio (elaborated by the authors) Table 7.12 Financial allocations by Member State in € billion (2012 prices) from the NSRF 2014–2020 Member state Austria Belgium Bulgaria Britain France Germany Denmark Greece Estonia Ireland

Amount in billion € 1.2 2.3 7.6 11.8 15.9 19.2 0.6 15.5 3.6 1.2

Member state Spain Italy Croatia Cyprus Latvia Lithuania Luxembourg Malta Netherlands

Amount in billion € 28.6 32.8 8.6 0.7 4.5 6.8 0.1 0.7 1.4

Member state Hungary Poland Portugal Romania Slovakia Slovenia Sweden Czechia Finland

Amount in billion € 21.9 77.6 21.5 23.0 14.0 3.1 2.1 22.0 1.5

Source: European Commission—Inforegio (elaborated by the authors)

7.2.8

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, renewable energy and combating climate change

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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, the ESF+, the EMFF, the Asylum and Migration Fund (AMF), the Internal Security Fund (ISF) and the Border Management and Visa Instrument (BMVI). As shown in Table 7.13, the ERDF contributes €200.6 billion, the CF €41.3 billion 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. The Commission’s proposal for the financing of the EMFF, the AMF, the BMVI and the ISF will be set out in the specific Regulation for each Fund. Also, Table 7.14 shows the financial allocations by Member State from the NSRF 2021–2027. Table 7.13 Allocations for ERDF, CF and ESF+ in € billion (2018 prices) over the period 2021–2027 Cohesion policy as a whole European Regional Development Fund (ERDF) – Investing in jobs and growth – European territorial cooperation – Outermost regions and sparsely populated areas Cohesion Fund (CF) – of which contribution to the Connecting Europe Facility Transport European Social Fund+a

330.624 200.629 190.752 8.430 1.447 41.349 10.000 88.646

Source: European Commission—Inforegio (elaborated by the authors) Note: The Commission’s proposal for the financing of the EMFF, AMF, BMVI and ISF will be included in the specific regulation for each Fund a Not including €1.042 billion for health, employment and social innovation Table 7.14 Financial allocations by Member State in € billion (2018 prices) from the NSRF 2021–2027 Member state Austria Belgium Bulgaria France Germany Denmark Greece Estonia

Amount in billion € 1.3 2.4 8.9 16.0 15.7 0.6 19.2 2.9

Member state Spain Italy Croatia Cyprus Latvia Lithuania Luxembourg Malta

Amount in billion € 34.0 38.6 8.8 0.9 4.3 5.6 0.1 0.6

Ireland

1.1

Netherlands

1.4

Member state Hungary Poland Portugal Romania Slovakia Slovenia Sweden Czech Republic Finland

Source: European Commission—Inforegio (elaborated by the authors)

Amount in billion € 17.9 64.4 21.2 27.2 11.8 3.1 2.1 17.8 1.6

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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, as shown in the map in Fig. 7.8. 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. Interregional 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 Cross-border 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 two months all available data on implementation, at which point the open data platform on cohesion will be automatically updated.

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Fig. 7.8 Categorisation of regions for the NSRF 2021–2027. European Commission, Regional Policy-Inforegio (2021). # EuroGeographics

Following the positive stance of the European Council of 10 and 11 December 2020, the Regulation on the EU MFF and NextGenerationEU for the period 2021–2027 and the interinstitutional agreement were adopted by the European Parliament on 17 December 2020, and the Council of EU adopted Regulation

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279

(EU, Euratom) 2020/2093 of 17 December 2020. Most EU sectoral funding programmes are expected to be adopted in early 2021 with retroactive effect from the beginning of 2021.

7.2.9

Assessment of the Evolution of European Regional Policy

After the accession of Greece in 1981 and Portugal and Spain in 1986, regional disparities between the then 12 EC Member States widened significantly. Before accession, one in eight Europeans had an annual income 30% lower than the Community average. This ratio rose to one in five after the 1986 accessions. Furthermore, according to a European Commission publication, the achievements of European Regional Policy during its distinct periods of implementation can be summarised as follows. Over the period 1989–1993, Objective 1 regions reduced the gap in GDP per capita compared to the EU average by 3 percentage points. Six hundred thousand jobs were created through the Structural Funds in Greece, Ireland, Portugal and Spain, and GDP per capita in these countries increased from 68.3% to 74.5% of the Community average. In addition, 917,000 people were trained through the ESF and 470,000 small and medium-sized enterprises received assistance in Objective 2 regions. The impact of Structural Fund interventions between 1994 and 1999 on GDP in real terms is estimated to have increased by 4.7% in Portugal, 3.9% in the regions of former East Germany, 2.8% in Ireland, 2.2% in Greece, 1.4% in Spain and 1.3% in Northern Ireland. In the Objective 1 regions 700,000 new jobs were created, adding almost 4% to employment in Portugal, 2.5% in Greece and between 1 and 2% in the regions of former East Germany, the Italian south and Spain. Around 800,000 small and medium-sized enterprises, including 500,000 in Objective 1 regions, received direct investment aid. A total of 4104 km of motorways and some 31,844 km of other roads were built or upgraded. Investment in rail infrastructure has led to a reduction in journey times on key routes such as Athens—Thessaloniki, Lisbon— Faro, Lisbon—Vila Formoso, Larne—Dublin and Belfast—Derry. In Objective 2 regions, it is estimated that 567,000 additional jobs were created, unemployment rates fell from 11.3% to 8.7% and a total of ECU 3.2 billion of ERDF funds were invested in the development of 115.1 million square metres of new space and buildings. Between 2000 and 2006, it is estimated that Objective 1 spending created around 570,000 new jobs, of which around 160,000 were in the new Member States. In Spain, the Structural Funds invested around €4 billion in research, technological development, innovation and information technologies in over 13,000 research projects involving almost 100,000 researchers and co-financing most of the country’s 64 technology parks. In Greece, continued investment in the Athens metro has reduced traffic congestion and pollution. Eight new stations, including four transit stations, were financed along with 17 trains. By mid-2005, 17,200 passengers were using them during peak hours compared to the 15,500 originally

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planned. In Spain, road investments are estimated to have saved 1.2 million hours of travel time per year. For Objective 2 regions, surveys at enterprise level show that 730,000 new jobs had been created by the end of the 2000–2006 period. In Catalonia, the Objective 2 programme involved over 6000 (around 21%) of the region’s researchers and accounted for €1.4 billion (37%) of private sector investment in the information society. In Britain over 250,000 small and medium-sized enterprises received support in Objective 1 and 2 regions, while 16,000 received direct financial support. Between 2007 and 2013, thanks to EU regional policy, 9.4 million people gained new jobs and 8.7 million citizens obtained qualifications. All Member States and regions have developed smart specialisation strategies to better focus efforts on research and innovation. Support has led to the creation of around 95,000 research and innovation projects and 42,000 new research posts. Around 400,000 SMEs have received support under Cohesion Policy resulting in the creation of more than one million new jobs. Much of the EU’s spending on climate change and environmental protection is channelled through Cohesion Policy. For example, around 6 million people have gained access to better water supply and 7 million people will have access to improved wastewater treatment systems. Member States built or renovated 2600 km of railways and 2400 km of roads belonging to the Trans-European Network, in addition to secondary networks connecting remote areas with the rest of Europe. Programmes in Italy, France, Czechia, Malta, England and Wales include conditions for the development of specific carbon rating systems. It should be noted that the programme objectives of this period were intended to achieve better numerical results. However, the global economic crisis has had a negative impact, making it impossible to achieve the initial ambitious targets. The last period 2014–2020 is inextricably linked to the Europe 2020 Strategy, and set as priorities the objectives of the strategy. A first assessment of its results can be taken from the Seventh Report on Economic, Social and Territorial Cohesion (2017), published by the European Commission, showing briefly that: (a) Regional disparities are again decreasing. (b) Employment has recovered, but unemployment remains above pre-crisis levels. (c) Investment in innovation, skills and infrastructure is insufficient. (d) More investment in energy efficiency, renewable energy and low-carbon transport is needed to reduce greenhouse gas emissions. (e) Despite the removal of many institutional and regulatory barriers, borders remain an obstacle to cross-border cooperation. (f) Improving the quality of governance and implementing structural reforms is expected to boost growth. (g) The key role of Cohesion Policy in public investment has reduced the impact of the crisis. The histogram in Fig. 7.9 shows the composition of Cohesion Policy investments in the least developed regions by programme according to the Sixth Report on Economic, Social and Territorial Cohesion (2014). There is a clear shift of interest from infrastructure to research and innovation together with the related business support. The graph in Fig. 7.10 shows the coefficient of variation of GDP per capita, employment rate (20–64) and unemployment rate, in the NUTS 2 regions of the

7.2 Regional Policy Programmes in the EU

281

Composition of Cohesion Policy investments in the least developed regions by programme 100 Technical Assistance 80 Environment 60

40

Employment, Education, Social inclusion

20

Infrastructure (transportation, energy, telecommunication) Business Support, R&D, Innovation

0 1989-1993

1994-1999

2000-2006

2007-2013

Fig. 7.9 Composition of Cohesion Policy investments in the least developed regions by programme. Source: Sixth Report on Economic, Social and Territorial Cohesion (2014) (processed by the authors)

Fig. 7.10 The coefficient of variation of GDP per capita, employment rate (20–64) and unemployment rate, in the NUTS 2 regions of EE-28, 2000–2016. Source: Seventh Report on Economic, Social and Territorial Cohesion (2017) (processed by the authors)

EE-28, over the period 2000–2016, as provided by the Seventh Report on Economic, Social and Territorial Cohesion (2017). Also, the histogram in Fig. 7.11 shows the evolution of Cohesion Policy expenditure from 1989 to 2013, i.e. from the first CSF, in current prices and as a percentage

7

Fig. 7.11 Evolution of actual Cohesion Policy payments, from 1989 to 2018, by EU Cohesion Policy Periodic Programme. Source: European Commission Inforegio (processed by the authors).

282 Regional Policy: Disparities, Development and Future Direction

References

283

of EU GDP, and estimates are provided for the period 2014–2020. Estimates of the corresponding amounts and percentages for the period 1980–1989, with ERDF and FIFG funding, are also presented (see also Table 7.1).

References 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. Communication COM(97) 2000 final - Agenda 2000: For a stronger and wider Union, Commission of the European Communities, Brussels, 15 July 1997. Communication COM(2010) 2020 – ‘Europe 2020 - A strategy for smart, sustainable and inclusive growth, European Commission, Brussels, 3 March 2010. Conclusions of European Council of 23-24 March 2000, European Council, Lisbon, 23-24 June 2000. European Commission, Investment for jobs and growth - Promoting development and good governance in EU regions and cities - Sixth report on economic, social and territorial cohesion, Publications Office of the European Union, Luxembourg, 2014. European Commission, My Region, My Europe, Our Future - Seventh Report on Economic, Social and Territorial Cohesion, Publications Office of the European Union, Luxembourg, 2014. European Commission – Inforegio – Regional Policy, 2021 https://ec.europa.eu/regional_policy/ home_en Official Journal of the European Communities 29.07.1992, No C 192,Treaty on European Union, “Treaty on European Union”, Maastricht, 7 February 1992. Petrakos, G., Psycharis, G., Regional Development in Greece, (in Greek Language), Kritiki, Athens, 2004. Regulation (EEC) 2052/88 of the Council of EC on the tasks of the Structural Funds and their effectiveness and on coordination of their activities between themselves and with the operations of the European Investment Bank and the other existing financial instruments, Luxembourg, 24 June 1988. Regulation (EEC) 4253/88 of the Council of EC laying down provisions for implementing Regulation (EEC) No 2052/ 88 as regards coordination of the activities of the different Structural Funds between themselves and with the operations of the European Investment Bank and the other existing financial instruments, Brussels, 19 December 1988. Regulation (EEC) 4254/88 of the Council of EC laying down provisions for implementing Regulation (EEC) No 2052/ 88 as regards the European Regional Development Fund, Brussels, 19 December 1988. Regulation (EEC) 4255/88 of the Council of EC laying down provisions for implementing Regulation (EEC) No 2052/ 88 as regards the European Social Fund, Brussels, 19 December 1988. Regulation (EEC) 4256/88 of the Council of EC laying down provisions for implementing Regulation (EEC) No 2052/88 as regards the EAGGF Guidance Section, Brussels, 19 December 1988. Regulation (EEC) 2080/93 of the Council of EC laying down provisions for implementing Regulation (EEC) No 2052/88 as regards the financial instrument of fisheries guidance, Brussels, 20 July 1993. Regulation (EEC) 2081/93 of the Council of EC amending Regulation (EEC) No 2052/88 on the tasks of the Structural Funds and their effectiveness and on coordination of their activities between themselves and with the operations of the European Investment Bank and the other existing financial instruments, Brussels, 20 July 1993.

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Regulation (EEC) 2082/93 of the Council of EC amending Regulation (EEC) No 4253/88 laying down provisions for implementing Regulation (EEC) No 2052/88 as regards coordination of the activities of the different Structural Funds between themselves and with the operations of the European Investment Bank and the other existing financial instruments, Brussels, 20 July 1993. Regulation (EEC) 2083/93 of the Council of EC amending Regulation (EEC) No 4254/88 laying down provisions for implementing Regulation (EEC) No 2052/898 as regards the, European Regional Development Fund, Brussels, 20 July 1993. Regulation (EEC) 2084/93 of the Council of EC amending Regulation (EEC) No 4255/88 laying down provisions for implementing Regulation (EEC) (No 2052/88 as regards the European Social Fund, Brussels, 20 July 1993. Regulation (EEC) 2085/93 of the Council of EC amending Regulation (EEC) No 4256/88 laying down provisions for implementing Regulation (EEC) No 2052/88 as regards the European Agricultural Guidance and Guarantee Fund (EAGGF) Guidance Section, Brussels, 20 July 1993. Regulation (EC) 1164/94 of the Council of EU establishing a Cohesion Fund, Brussels, 16 May 1994. Regulation (EC) 1260/1999 of the Council of EU laying down general provisions on the Structural Funds, Luxembourg, 21 June 1999. Regulation (EC) 1261/1999 of the Council of EU on the European Regional Development Fund, Luxembourg, 21 June 1999. Regulation (EC) 1262/1999 of the Council of EU on the European Social Fund, Luxembourg, 21 June 1999. Regulation (EC) 1263/1999 of the Council of EU on the Financial Instrument for Fisheries Guidance, Luxembourg, 21 June 1999. Regulation (EC) 1264/1999 of the Council of EU amending Regulation (EC) No 1164/94 establishing a Cohesion Fund, Luxembourg, 21 June 1999. Regulation (EC) 1265/1999 of the Council of EU amending Annex II to Regulation (EC) No 1164/ 94 establishing a Cohesion Fund, Luxembourg, 21 June 1999. Regulation (EC) 1159/2000 of the Commission of the European Communities on information and publicity measures to be carried out by the Member States concerning assistance from the Structural Funds, Brussels, 30 May 2000. Regulation (EC) 1685/2000 of the Commission of the European Communities laying down detailed rules for the implementation of Council Regulation (EC) No 1260/1999 as regards eligibility of expenditure of operations co-financed by the Structural Funds, Brussels, 28 July 2000. Regulation (EC) 438/2001 of the Commission of the European Communities laying down detailed rules for the implementation of Council Regulation (EC) No 1260/1999 as regards the management and control systems for assistance granted under the Structural Funds, Brussels, 2 March 2001. Regulation (EC) 448/2001 of the Commission of the European Communities laying down detailed rules for the implementation of Council Regulation (EC) No 1260/1999 as regards the procedure for making financial corrections to assistance granted under the Structural Funds, Brussels, 2 March 2001. Regulation (EC) 1386/2002 of the Commission of the European Communities laying down detailed rules for the implementation of Council Regulation (EC) No 1164/94 as regards the management and control systems for assistance granted from the Cohesion Fund and the procedure for making financial corrections, Brussels, 29 July 2002. Regulation (EC) 16/2003 of the Commission of the European Communities laying down special detailed rules for implementing Council Regulation (EC) No 1164/94 as regards eligibility of expenditure in the context of measures part-financed by the Cohesion Fund, Brussels, 6 January 2003. Regulation (EC) 621/2004 of the Commission of the European Communities laying down rules for implementing Council Regulation (EC) No 1164/94 as regards information and publicity measures concerning the activities of the Cohesion Fund, Brussels, 1 April 2004.

References

285

Regulation (EC) 1080/2006 of the European Parliament and the Council of EU on the European Regional Development Fund and repealing Regulation (EC) No 1783/1999, Strasbourg, 5 July 2006. Regulation (EC) 1081/2006 of the European Parliament and the Council of EU on the European Social Fund and repealing Regulation (EC) No 1784/1999, Strasbourg, 5 July 2006. Regulation (EC) 1082/2006 of the European Parliament and the Council of EU on a European grouping of territorial cooperation (EGTC), Strasbourg, 5 July 2006. Regulation (EC) 1083/2006 of the Council of EU laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999, Brussels, 11 July 2006. Regulation (EC) 1084/2006 of the Council of EU establishing a Cohesion Fund and repealing Regulation (EC) No 1164/94, Brussels, 11 July 2006. Regulation (EC) 1828/2006 of the Commission of the European Communities setting out rules for the implementation of Council Regulation (EC) No 1083/2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and of Regulation (EC) No 1080/2006 of the European Parliament and of the Council on the European Regional Development Fund, Brussels, 8 December 2006. Regulation (EU) 1297/2013 of the European Parliament and the Council of EU amending Council Regulation (EC) No 1083/2006 as regards certain provisions relating to financial management for certain Member States experiencing or threatened with serious difficulties with respect to their financial stability, to the decommitment rules for certain Member States, and to the rules on payments of the final balance, Strasbourg, 11 December 2013. Regulation (EU) 1298/2013 of the European Parliament and the Council of EU amending Council Regulation (EC) No 1083/2006 as regards the financial allocation for certain Member States from the European Social Fund, Strasbourg, 11 December 2013. Regulation (EU) 1299/2013 of the European Parliament and the Council of EU on specific provisions for the support from the European Regional Development Fund to the European territorial cooperation goal, Brussels, 17 December 2013. Regulation (EU) 1300/2013 of the European Parliament and the Council of EU on the Cohesion Fund and repealing Council Regulation (EC) No 1084/2006, Brussels, 17 December 2013. Regulation (EU) 1301/2013 of the European Parliament and the Council of EU on the European Regional Development Fund and on specific provisions concerning the Investment for growth and jobs goal and repealing Regulation (EC) No 1080/2006, Brussels, 17 December 2013. Regulation (EU) 1302/2013 of the European Parliament and the Council of EU amending Regulation (EC) No 1082/2006 on a European grouping of territorial cooperation (EGTC) as regards the clarification, simplification and improvement of the establishment and functioning of such groupings, Brussels, 17 December 2013. Regulation (EU) 1303/2013 of the European Parliament and the Council of EU laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006, Brussels, 17 December 2013. Regulation (EU) 1304/2013 of the European Parliament and the Council of EU on the European Social Fund and repealing Council Regulation (EC) No 1081/2006, Brussels, 17 December 2013. Regulation (EU) 508/2014 of the European Parliament and the Council of EU on the European Maritime and Fisheries Fund and repealing Council Regulations (EC) No 2328/2003, (EC) No 861/2006, (EC) No 1198/2006 and (EC) No 791/2007 and Regulation (EU) No 1255/2011 of the European Parliament and of the Council, Brussels, 15 May 2014.

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Regulation (EU, Euratom) 2020/2093 of the Council of EU laying down the multiannual financial framework for the years 2021 to 2027, Brussels, 17 December 2020. “Single European Act”, Luxembourg, 17 February 1986 and The Hague, 28 February 1986 Treaty of Rome (EEC), “Traité instituant la Communauté Économique Européenne et documents annexes”, Rome, 25 March 1957.

8

Economic and Monetary Policy: Origin, Evolution and Current Challenges

8.1

The Necessity and Origins of an Economic Policy

The Treaty of Rome establishing the EEC, which was signed on 25 March 1957 and entered into force on 1 January 1958, established a single economic area and 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 the Member States. The common market would be based on the well-known “four freedoms”, namely the free movement of goods, services, capital and people, and would be based on the principle of free competition. 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. To this end, the creation of a customs union was envisaged, 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 and a common transport policy.

8.1.1

The Beginnings of a Single Economic Policy

The customs union was the first step towards the creation of a single economy in the European Union. The creation of the customs union proceeded much faster than the Treaty of Rome establishing the EEC had foreseen, despite the difficulties encountered by some Member States. The first phase of trade liberalisation, in January 1959, was followed by an accelerated pace of reduction of tariffs and quantitative restrictions between Member States, following Commission proposals from May 1960, which were accepted by the Council of Ministers. These measures were # The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 P. Liargovas, C. Papageorgiou, The European Integration, Vol. 2, Springer Texts in Political Science and International Relations, https://doi.org/10.1007/978-3-031-47176-6_8

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accompanied by the introduction of a CET, which the Council of Ministers decided to reduce by 20% in 1960. The consequence of all this was the completion of the customs union on 1 July 1968, 18 months before the date laid down in the Treaty of Rome. The creation of a customs union ensured a level playing field for those importing from the rest of the world, with the result that the duties paid on imports were the same at any port, airport or road and rail entry point. The advantages of the customs union were evident from the early stages. A few years after the establishment of the EEC, trade between Member States had multiplied, while their trade with the rest of the world had also increased significantly. These were the beginnings of an economic integration, initiated by the six EEC Member States. And although the 1960s was a period of relative inertia for the EEC as well, mainly due to the attitude of Charles de Gaulle’s and the French government’s friction with the Committees, events which did not favour decisive steps, the EEC completed the customs union of the “Six” and followed a more successful course thereafter. However, the economic and political circumstances of the 1970s contributed to the realisation that additional economic convergence and cooperation were needed to meet the new challenges. 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. But 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 dollar exchange market caused a devaluation of the dollar and an international currency crisis, which began in the spring of 1971. The climax of the currency crisis came with the beginning of the collapse of the Bretton Woods system, when the convertibility of the US dollar into gold, the only currency directly convertible into gold since 1944 under this system, was first interrupted on 15 August 1971. 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.

8.1.2

Plans for Economic and Monetary Union: The Werner Report

In the Memorandum of the Commission of 24 October 1962, also known as the “Marjolin Memorandum” or Action Plan, the idea of a common currency for the member states of the EEC appeared for the first time. In this memorandum, the Commission called for a transition by the end of the 1960s to an economic union

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with irrevocably fixed exchange rates for the currency of the EEC Member States (Singleton, 2011). However, the existence and international operation of the Bretton Woods system ensured the stability of exchange rates, and it was therefore considered that the purpose of the Memorandum could be achieved without new institutional arrangements, with the exception of the establishment of a Committee of Governors of the Central Banks (CoG of Central Banks) of the EEC Member States. The CoG of Central Banks was established by Decision 64/300/EEC of the Council of Ministers of 8 May 1964, supplementing the work of the Monetary Committee, which had already been set up under Article 105(2) of the Treaty of Rome. Its main task was the monetary cooperation and the limitation of exchange rate fluctuations, gradually establishing the framework for monetary cooperation between the central banks of the Member States. The differences in the economic and monetary policies of the EEC member states and the currency crises of the late 1960s, 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, as well as the decline in the credibility of the US dollar as a consequence of the increased US debt, brought to the fore the need to draw up a plan for the gradual creation of an economic and monetary union. On 12 February 1969, the Vice-President of the Commission and later Prime Minister of France, Raymond Barre, 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 (EMU). 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 CoG of Central Banks 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 CoG of Central Banks 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

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(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 decision-making centre accountable to the European Parliament, and the second as a central bank body responsible for monetary matters. 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 of its currency in the context of an excessively lax economic policy, especially in view of a forthcoming period of high inflation.

8.1.3

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

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Fig. 8.1 Schematic representation of a coin snake. Source: Author’s work

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 which 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% (see Fig. 8.1, up to March 1973). The snake currency system entered into force on 24 April 1972 and operated essentially outside the formal structures of the EEC. As of 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, as well as those of Norway and Sweden, which were states associated with the EEC, were also included in the system. However, Britain abandoned the stability of the monetary system shortly 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 to 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

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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” (see Fig. 8.1, after March 1973). Furthermore, the Council of EC reacted negatively in April 1973 to the Commission’s proposal to launch the second stage of EMU. However, it did approve, by Regulation (EEC) 907/1973 of 3 April 1973, with effect from 6 April 1973, the establishment of the EMCF to monitor the stability of exchange rates. The same Regulation established the European Unit of Account (EUA), which was to 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 rejoined 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.

8.1.4

The European Monetary System

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, 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 and German Chancellor Helmut Schmidt at the Copenhagen European Council on 7 and 8 April 1978, who, at the Bremen European Council on 6 and 7 July 1978, promoted the idea of a European Monetary System (EMS). The Brussels European Council of 5 and 6 December 1978 defined the basic features of the EMS. With the Regulation (EEC) 3181/1978 of the Council of EC of 18 December 1978, effective from 1 January 1979, EMS started operating from 13 March 1979, essentially outside the institutionalised structures of the EEC, as did the monetary snake. Furthermore, the European Currency Unit (ECU) was adopted by Regulation (EEC) 3180/1978 of the Council of Ministers on 18 December 1978. In addition to the EMS, the Exchange Rate Mechanism (ERM), as well as the monetary solidarity and financial support mechanisms, have been in operation since 13 March 1979. From 1 January 1979, the operations of the EMCF were to be denominated in ECU, replacing the EUA as the bundle (“basket”) of the currencies of the EEC Member States. The ECU would be defined by the sum of the following amounts of the currencies of the Member States: 0.828 German Mark, 0.0885 British Pound, 1.15 French Franc, 109 Italian Lire, 0.286 Dutch Guilder, 3.66 Belgian Franc, 0.14 Luxembourg Franc, 0.217 Danish Krone and 0.00759 Irish Pound.

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The ECU was not established as a currency in its own right but as a weighted average of the currencies of the EEC member states, based mainly on their contribution to the Community GDP, and was used for drawing up the Community budget, and as a unit of payment and calculation for the exchange rate and intervention mechanisms, as well as for the operations of the credit mechanisms. Table 8.1 shows the participation of the currencies of the Member States of the EC and later of the EU in the determination of the ECU from 1979 to 1998. Indicative of the difference in the percentage participation of the Member States’ currencies during this period is the participation of the German mark with a share of more than 30%, followed by the French franc with a share of slightly less than 20%, and the currencies of the other Member States with lower participation rates 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% Table 8.1 Participation of the currencies of the UK and EU Member States in the determination of the ECU, from 1979 to 1998 Currency Belgian Franc (BEF) British Pound (GBP) French Franc (FRF) German Mark (DEM) Danish Krone (DKK) Greek Drachma (GRD) Irish Pound (IEP) Spanish Peseta (ESP) Italian Lira (ITL) Luxembourg Franc (LUF) Dutch Guilder (NLG) Portuguese Escudo (PTE)

13.03.1979–16.09.1984 9.64%

17.09.1984–21.09.1989 8.57%

21.09.1989–31.12.1998 8.18%

13.34%

14.98%

12.45%

19.83%

19.06%

20.32%

32.98%

32.08%

31.96%

3.06%

2.69%

2.65%

–

1.31%

0.44%

1.15%

1.20%

1.09%

–

–

4.14%

9.49%

9.98%

7.84%

–

–

0.32%

10.51%

10.13%

9.98%

–

–

0.70%

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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 worked steadily and efficiently, with some necessary adjustments, and the participating countries experienced greater convergence in their economic performance and low inflation rates. However, due to speculative pressures on the exchange market, after 1992 (see Sect. 8.2.3), the ERM decided in August 1993 to widen the margins of exchange rate fluctuation to ±15%. In 1998, the exchange rates of the currencies participating in the mechanism were set for the last time before the introduction of the euro (€) as the single currency of the euro area. The fluctuation of the exchange rates against the US dollar for the German Mark, the Dutch Fiat and the British Pound for all stages, from the entry into force of the Bretton Woods System to the start of third stage of EMU, is shown in the diagram in Fig. 8.2. 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.

Fig. 8.2 The exchange rate fluctuations against the US dollar for the German Mark, the Dutch Guilder and the British Pound, from the start of the Bretton Woods System to the start of Stage 3 of EMU. Source: Schnabl (2003). Diagram adapted by the Authors

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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.

8.1.5

The Single European Act and the Single Internal Market

The intentions to activate the integration process were again put forward at the Fontainebleau European Council on 25 and 26 June 1984, on the initiative of French President François Mitterrand and with the assistance of German Chancellor Helmut Kohl. At Fontainebleau, it was decided to set up an ad hoc committee to make proposals for improving European cooperation at Community and political level. This committee, headed by the senator and former Irish Foreign Minister James Dooge, was set up in September 1984 and submitted its final report to the Brussels European Council of 29 and 30 March 1985. In this report, it recommended, among other things, the transformation of the EC into a European Union, the development of a single economic area and the strengthening of the EMU. Furthermore, the Brussels European Council of March 1985, although it did not examine the Dooge report in depth, decided to instruct 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, as President of the Commission, submitted to the Council of Ministers a draft agreement on the completion of the single internal market. The draft, which took the form of a White Paper, the work of the British Francis Arthur Cockfield, Vice-President of the Commission, was presented by the Commission to the Milan European Council of 29 and 30 June 1985. It provided for the free movement of goods, services, capital and people, 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. The Milan European Council of 28 and 29 June 1985 approved both the Dooge Report on the development of a single economic area and the strengthening of the EMS 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. 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 at the same time a new treaty of political cooperation, as a “Single Act”.

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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 and the further development of EMU. The Council of Foreign Ministers, meeting in Luxembourg on 16 and 17 December 1985, undertook to transform the political agreement into a treaty text, entitled the Single European Act (SEA) as a single document. Thus, on 17 February 1986, the Single European Act (SEA) was signed in Luxembourg. 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, services, capital and people 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. However, the creation of a European market area without internal frontiers required the promotion of EMU and the establishment of common policies, which should also be reinforced by the implementation of directives to be adopted 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 people and goods, the adoption, abolition or equivalence of technical standards, the harmonisation of public procurement and tendering procedures, the harmonisation of the rules on the award of public contracts and the harmonisation of the rules on the use of public procurement.

8.1.6

Progress of the Single Internal Market

Given that he SEA was to complete the gradual transformation of the common market into a single internal market by 31 December 1992, important steps have been taken to achieve it. Customs formalities for goods were reduced from 1 January 1988 and abolished from 1 January 1993. Trade has been facilitated by the introduction of approximation measures for the mutual recognition of product manufacturing rules between Member States, and harmonisation measures for the adoption of criteria and specifications for the manufacture of products which are mandatory for all Member States in order to meet the essential requirements for the safety and health of consumers. The freedom of movement and residence of people, 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.

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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. It was 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. 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 Council Directive 88/361/EEC of 24 June 1988, established the full free movement of capital 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.

8.2

The Implementation of Economic and Monetary Union

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 prospect 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 EMU, which forced them to raise interest rates and pursue restrictive fiscal policies. 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

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proposed by the Commission and called for the setting up of a committee 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 Ministers and the Commission’s Vice-President Frans Andriessen. 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 risks associated with 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 EMS’s ERM. At this stage, negotiations would have to be conducted to ratify the necessary 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 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 and 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

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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 determination 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 ERM in June 1989, followed by Britain when its Prime Minister Margaret Thatcher, threatened with the resignations of her Foreign Secretary Geoffrey Howe and Finance Minister Nigel Lawson, was forced to accept her country’s conditional accession to the ERM from October 1990, and Portugal’s 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 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 the day after, 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 EMS, 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 borrowing rates for France, 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 “Twelve” 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

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at high-interest rates in order to maintain their exchange rates. Thus, the EMS managed to remain 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, 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.

8.2.3

Promoting EMU Through the Treaty on European Union

In the light of the decisions of the Strasbourg European Council of December 1989 to prepare for an Intergovernmental Conference on EMU, 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 as 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. Negotiations have been particularly difficult, and the proposals of the Member States and the EP institutions often lacked common ground. In addition, some Member States, in particular Britain, continued to argue for the non-transfer of their sovereign rights to the Community institutions, as well as for the preservation of their currency within the EMU framework. The negotiations were conducted mainly by the Ministers of Economy and Finance of the Member States, as well as by the directors of these ministries, under the chairmanship of Luxembourg’s Finance Minister Jean-Claude Juncker in the first half of 1991, and under the chairmanship of the Dutch Finance Minister Wim Kok in the second half of the same year, without much coordination with the parallel Intergovernmental Conference on Political Union.

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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. France, despite the initial position of its Finance Minister Pierre Beregovoy on the strengthening of the Council of Economic and Finance Ministers 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 Ministers), 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 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. However, disagreements remained, both on the start and duration of the two final stages of EMU, and on the criteria and conditions for a member state to join EMU. Furthermore, Britain expressed strong reservations about the success of the project, while both it and Denmark wished not to participate in the third stage of EMU for the time being. 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). 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. 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, 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

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Table 8.2 Convergence criteria for euro area membership, based on the TEU What is measured Price stability

Acceptable government deficit Acceptable government debt Duration of convergence Exchange rate stability

How it is measured Inflation based on harmonised index of consumer prices Deficit as a percentage of GDP

Convergence criteria No more than 1.5 percentage points above the average of the three best-performing Member States Reference value: not more than 3%

Debt as a percentage of GDP

Reference value: not more than 60%

Long-term interest rate

No more than 2% above the average of the three best-performing Member States Participation in the ERM for 2 years without serious tensions

Deviation from central rate

Source: Article 140 (1) of the Treaty on the Functioning of the European Union (2012)

would be taken by qualified majority. With regard to Britain and Denmark, which did not currently wish to join the third stage of EMU, two separate 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 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 (see Table 8.2). 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. It should be noted that Regulation (EC) No 3605/93 of the Council of EU of 22 November 1993 clarified definitions and details concerning the application of the Protocol on the excessive deficit procedure annexed to the Treaty establishing the European Community.

8.2.4

The Functioning of the Single Internal Market After the TEU

The functioning of the internal market is governed by TFEU Articles 26 on the internal market, 28–37 on the movement of goods, 45–55 on the movement and residence of persons, 56–62 on services and 63–66 on the movement of capital. The freedom of movement and establishment of persons, which had already been adopted for employees and entrepreneurs, was extended to other persons such as

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

8.2.5

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

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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 of the EU to determine the sanctions to be imposed on euro area Member States which breached this limit. The Amsterdam European Council of 16 and 17 June 1997 reached 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. The provisions of the SGP were laid down shortly afterwards by two Regulations (EC) 1466/97 and 1467/97 of the Council of Ministers of 7 July 1997, while ERM II was established 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 an exchange rate mechanism in third stage 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

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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 Sect. 8.3.1). As for the form of the new currency, following a competition for the designs of the banknotes, launched by the ENI in February 1996, the winning design was that of Robert Kalina of the National Bank of Austria, which was presented to the Dublin European Council on 13 and 14 December 1996 by ENI President Alexandre Lamfalussy. This was followed by the public selection of the common European side of the coins. The design by Luc Luycx 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. At an extraordinary meeting of the Council of EU on 3 May 1998, it was decided 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 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 third stage 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. The EMI was replaced by the ECB, which was established together with the ESCB on 1 June 1998, with its headquarters in Frankfurt, on the basis of Council of EU Regulations (EC) 1103/97 of 17 June 1997 and 974/98 of 11 May 1998, while 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 Regulation (EC) No. 2866/98 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

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from the Commission, having established that the convergence criteria had been fulfilled, and Greece became the twelfth 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. Figure 8.3 shows a schematic diagram of the entry and exit of Member States to and from the ERM and ERM II. Table 8.3 shows the irrevocable exchange rates of the euro area Member States, while the diagram in Fig. 8.4 shows the value of national banknotes withdrawn and new euro banknotes in circulation up to 2005. It should be noted that both the Treaty of Amsterdam and the Treaty of Nice did not bring about any changes in the planned course of EMU. However, the Lisbon European Council of 22–24 March 2000 set a number of objectives as the Lisbon Strategy, aimed at developing an information society for all, liberalising telecommunications markets

Fig. 8.3 Entry and exit of Member States to and from the ERM and ERM II. Source: ECB (processed by the Authors)

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Table 8.3 Euro area Member State currency exchange rates with the euro, their dates of identification and their dates of entry into the euro area Currency Austrian Shilling (ATS) Belgian Franc (BEF) French Franc (FRF) German Mark (DEM) Irish Pound (IEP) Spanish Peseta (ESP) Italian Lira (ITL) Luxembourg Franc (LUF) Dutch Guilder (NLG) Portuguese Escudo (PTE) Finnish Markka (FIM) Greek Drachma (GRD) Slovenian Tolar (SIT) Cyprus Pound (CYP) Maltese Lira (MTL) Slovak Koruna (SKK) Estonian Kroon (EEK) Latvian Lats (LVL) Lithuanian Litas (LTL)

Parity 13.7603 40.3399 6.55957 1.95583 0.787564 166.386 1936.27 40.3399 2.20371 200.482 5.94573 340.75 239.64 0.585274 0.4293 30.126 15.6466 0.702804 3.4528

Date of determination 31.12.1998 31.12.1998 31.12.1998 31.12.1998 31.12.1998 31.12.1998 31.12.1998 31.12.1998 31.12.1998 31.12.1998 31.12.1998 19.06.2000 11.07.2006 10.07.2007 10.07.2007 08.07.2008 13.07.2010 07.07.2013 23.07.2014

Date of enter 01.01.1999 01.01.1999 01.01.1999 01.01.1999 01.01.1999 01.01.1999 01.01.1999 01.01.1999 01.01.1999 01.01.1999 01.01.1999 01.01.2001 01.01.2007 01.01.2008 01.01.2008 01.01.2009 01.01.2011 01.01.2014 01.01.2015

Source: ECB

Fig. 8.4 Total value of banknotes in circulation from 2000 to June 2005 (€ billion). Source: ECB

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and developing e-commerce. Among the objectives of the Lisbon Strategy were the improvement of financial markets and the coordination of macroeconomic policies, which required the implementation of an action plan by 2005, while with regard to economic policies, the priority remained macroeconomic stability, as defined by the SGP, while taking into account the objectives of growth and employment.

8.3

The EMU After the Euro: The Economic Crisis

On 1 January 2002, the 11 Member States that entered the third stage of EMU in 1999, i.e. Austria, Belgium, France, Germany, Ireland, Spain, Italy, Luxembourg, the Netherlands, Portugal and Finland, started to use the euro as the currency of the euro area, and additionally Greece, which in the meantime, the European Council of Santa Maria da Feira on 19 and 20 June 2000 approved its 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 euro area in the future. Furthermore, Sweden, which had joined the EU in 1995 and had chosen to consider joining later, remained outside the Eurozone. 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 euro area 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 euro area. Furthermore, in a referendum held in Denmark on 28 September 2000, 53.1% of voters rejected the country’s membership of the euro area. Finally, in a referendum held in Sweden on 14 September 2003, 56.1% of voters opposed their country’s participation in the euro area.

8.3.1

The Course of EMU and the Eurogroup: The Revision of the SGP

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 become full euro area Member States. The Council of Ecofin 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. Also on 8 July 2008, it

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approved the accession of Slovakia as from 1 January 2009, on 13 July 2010, it approved the accession of Estonia as from 1 January 2011, on 7 July 2013, it approved the accession of Latvia as from 1 January 2014 and on 23 July 2014, it approved the accession of Slovakia as from 1 January 2015. Also, Andorra signed an agreement with the EU on 30 June 2011 to use the euro from June 2013. Finally, Montenegro and Kosovo are de facto using the euro without a formal agreement with the EU. In order to coordinate the work of the Eurozone 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. The meetings were chaired by the Finance Minister of the EU Member State holding the Presidency of the Council of EU, unless that Minister did not represent a Eurozone Member State, in which case the Presidency was taken over by the next Minister of a Eurozone 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 Council of Ecofin 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, which entered into force on 1 December 2009, also providing for the election of its President for 2 years (2007). However, since 2008, non-regular meetings of the Heads of State and Government of the euro area 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 SGP, adopted by the Amsterdam European Council on 16 and 17 June 1997, 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, the required qualified majority in favour of the Commission’s proposal was not reached at the Council of EU on 25 November 2003. Later, under pressure from France and Germany, the Council of Ecofin 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 Eurozone Member States to below 3% of their GDP and 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

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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.

8.3.2

The “Europe 2020” Strategy

The “Europe 2020” Strategy, proposed in the Commission’s Communication COM (2010) 2020 final of 3 March 2010 and endorsed by the European Council on 26 March 2010, set out three priorities to promote growth: (a) smart, with effective investment in education, research and innovation; (b) sustainable, with a dynamic 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 headline targets were agreed for the whole EU: (a) employment, (b) research and 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 the 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 objective, 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%, i.e. by 20 million people who are or may be in a situation of poverty and social exclusion. The Commission has proposed seven flagship initiatives that will act as catalysts for progress on each key priority: (i) “Innovation Union” to improve framework conditions and access to finance for research and innovation so as to ensure that innovative ideas can be turned into products and services that create growth and jobs; (ii) “Youth on the Move” to enhance the performance of education systems and to facilitate the entry of young people to the labour market; (iii) “A digital agenda for Europe” to speed up the roll-out of high-speed internet and reap the benefits of a digital single market for households and firms; (iv) “Resource-efficient Europe” to help decouple economic growth from the use of resources, support the shift towards a low-carbon economy, increase the use of renewable energy sources, modernise our transport sector and promote energy efficiency; (v) “An industrial policy for the

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globalisation era” to improve the business environment, notably for SMEs, and to support the development of a strong and sustainable industrial base able to compete globally; (vi) “An agenda for new skills and jobs” to modernise labour markets and empower people by developing their of skills throughout the lifecycle with a view to increase labour participation and better match labour supply and demand, including through labour mobility and (vii) “European platform against poverty” to ensure social and territorial cohesion such that the benefits of growth and jobs are widely shared and people experiencing poverty and social exclusion are enabled to live in dignity and take an active part in society. Member States are committed to achieving the “Europe 2020” Strategy targets, which they have translated into national targets. Member States’ efforts to achieve the Europe 2020 targets are coordinated in the context of the European Semester (see Sect. 8.3.3).

8.3.3

The Introduction of the “European Semester”

The European Council of 17 June 2010 endorsed the idea of the “European Semester”, which focuses on the first 6 months of the year, hence the term “semester”. The “European Semester” is codified in a pack of six measures, known as the “Six Pack” (see Sect. 8.3.7) 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. Actually, 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 the 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, which kicks off the annual European Semester cycle, 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) which launches the annual Macroeconomic Imbalances Procedure (MIP) to detect, prevent and correct imbalances that hinder the proper functioning of Member States’ economies. Based on a number of indicators, the AMR 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.

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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 are also invited to take these orientations and the findings of the country report 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. During 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 (Fig. 8.5).

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Fig. 8.5 The European Semester schematic. Based on an outline of the Council of the EU (2023). Author’s work

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8.3.4

8 Economic and Monetary Policy: Origin, Evolution and Current Challenges

The Global Economic Crisis and Its Transfer to the EU

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 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 seized 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 to European countries whose banks held “toxic” bonds of troubled US banks, such as Iceland, Britain and 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 problems, mainly fiscal or growth problems, such as Ireland, Greece, Portugal, Spain and Cyprus.

8.3.5

The Reasons for 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 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.

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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. This situation has raised concerns about the way the institutional framework of EMU and the Eurozone is structured and operates in response to financial crises. In particular, the structure of the euro area as a monetary union, without a common fiscal policy, limited the EU’s ability to respond effectively. Thus, financial crisis revealed inadequacies in the EU’s economic governance: (a) inadequate supervision of the competitiveness and the financial institutions of Member States; (b) inadequate mechanisms to impose sanctions in time, 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.

8.3.6

The First Mechanisms for 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 to their banks between 2008 and 2011 (see Sect. 8.3.8). 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 International Monetary Fund (IMF) was actively involved in the loan programmes, and thus it was given a role in the internal affairs of the EU. The EFSM was one of the first temporary bodies established by the Council of EU Regulation (EU) 407/2010 of 11 May 2010 to address the financial crisis. In particular, the EFSM was an emergency financing programme for euro area Member States, based on funds of up to €60 billion 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 EFSM provided €22.5 billion to Ireland and €24.3 billion to Portugal. In July 2015, the EFSM used €7.16 billion of the remaining €13.2 billion to finance Greece’s bridge programme, prompting objections from some non-eurozone Member States. It should be noted that the

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EFSM had the highest credit rating (AAA by Fitch Ratings and Standard & Poor’s and Aaa by Moody’s). The EFSF was a temporary special-purpose instrument operating as a limited liability company (specific purpose instrument), 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. The loans were financed by the EFSF bond and other debt means on the capital markets, and were guaranteed by the shareholders, i.e. the euro area Member States. The EFSF provided €18.4 billion to Ireland, €26 billion to Portugal and €130.9 billion 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 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 from the EFSF and up to €250 billion from the IMF to create a financial safety net of up to €750 billion. As of 1 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+.

8.3.7

The Permanent European Stability Mechanism (ESM)

However, the EFSF and the EFSF were only intended as temporary measures until 2013, partly due to the lack of a legal basis for their existence in the EU treaties, and should therefore be replaced by a permanent stability mechanism with a legal basis. Indeed, the European Council of 28 and 29 October 2010 agreed that it was necessary for Member States to establish a permanent crisis response mechanism to ensure the financial stability of the euro area. However, the initial thought of the German Chancellor Angela Merkel, to establish the mechanism by amending the existing treaties was not considered the best solution due to the difficulty of ratifying them. Thus an amendment was preferred, with the agreement of the French President Nicolas Sarkozy, as an addition to Article 136 TFEU. This amendment would state that: “Member States whose currency is the euro may establish a stability mechanism which shall be activated if deemed necessary in order to safeguard the stability of the euro area as a whole. The provision of any required financial assistance under the mechanism shall be subject to strict conditions”. The amendment would allow euro area Member States to establish a stability mechanism to protect the single currency, within the framework of Community legislation. This view was shared by the European Council of 16 and 17 December 2010, paving the way for the establishment of a permanent stability mechanism with a legal basis. The amendment would be made using the simplified procedure provided for in Article 48 TEU, under which the European Council shall act unanimously to adopt a

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decision amending, in whole or in part, provisions of Part III of the TFEU after consulting the European Parliament, the Commission and the ECB when institutional matters of a monetary nature are involved. In March 2011, the European Parliament approved the amendment to the TFEU after receiving assurances that the Commission would play a “central role” in the functioning of the permanent stability mechanism, pending approval (ratification) by the then 27 EU Member States. Following the signing of the Treaty revising the TFEU, the Treaty establishing the European Stability Mechanism was signed on 2 February 2012 by the representatives of the euro area Member States, establishing the European Stability Mechanism (ESM), based in Luxembourg. The first treaty signed for this purpose on 11 July 2011 was considered insufficient. The Treaty establishing the European Stability Mechanism stipulated that the mechanism would be established if Member States representing 90% of its initial capital requirements ratified the founding treaty. This threshold was exceeded by Germany’s ratification on 27 September 2012, bringing the treaty into force on the same date for the 16 states that had ratified the agreement. However, the ESM started its work on 8 October 2012, after Estonia ratified the Treaty on 3 October 2012. The entry into force of the Treaty establishing the European Stability Mechanism was not conditional on the ratification of the Treaty revising the TFEU, since the Court of Justice of the EU ruled in November 2012 that the right of a Member State to conclude and ratify that Treaty was not conditional on the ratification of the TFEU amendment. The TFEU amendment entered into force on 1 May 2013, when Czechia became the last member state to ratify it. Later, Latvia’s adoption of the euro on 1 January 2014 allowed it to join the ESM on 21 February 2014, while the Treaty entered into force for the country on 13 March 2014. The same was the case for Lithuania, which adopted the euro on 1 January 2015, joined the ESM on 14 January 2015, while the Treaty entered into force for the country on 3 February 2015. Given that the ESM operates on an intergovernmental basis, on 22 June 2015, an updated EMU reform plan, entitled “Completing Europe’s 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. The lending capacity of the facility currently stands at €500 billion which is planned to increase to €700 billion. 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, until then Managing Director of the EFSF,

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Table 8.4 Participation rates of euro area Member States in the ESM

Eurozone Member State Germany France Italy Spain Netherlands Belgium Greece Austria Portugal Finland Ireland Slovakia Slovenia Lithuania Latvia Luxembourg Cyprus Estonia Malta

Participation rate 26.9616% 20.2471% 17.7917% 11.8227% 5.6781% 3.4534% 2.7975% 2.7644% 2.4921% 1.7852% 1.5814% 0.8184% 0.4247% 0.4063% 0.2746% 0.2487% 0.1949% 0.1847% 0.0726%

Source: ECB

and the Chairman of the Board of Directors is the President of the Eurogroup, i.e. for the period in question Jeroen Dijsselbloem. Decisions in the ESM are taken unanimously by the shareholders, euro area Member States, except in cases of emergency, where a decision may be taken by 85% of the majority of the shareholders. The shareholder participation of Euro area Member States, following the entry into the Euro area of Latvia in 2014 and Lithuania in 2015, is shown in Table 8.4. The first programme executed by the ESM was a €41.3 billion 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 for its financial needs and the recapitalisation of the country’s financial sector.

8.3.8

Other European Economic Governance Measures in Response to the Crisis

Among the measures taken to tackle the economic crisis were the “Six Pack” proposals presented by the Commission in September 2010 and forwarded to the European Councils on 24 and 25 March 2011 and 23 and 24 June 2011. This included six legislative measures. These were five Regulations (EU) 1173/2011, 1174/2011, 1175/2011, 1176/2011 and 1177/2011 of 16 November 2011. The first provides for sanctions in both the preventive and corrective arms of the SGP for euro

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area countries only. The second and fourth regulate issues of the macroeconomic imbalances procedure. The third deals with fiscal surveillance issues and in particular refers to the European Semester, the establishment of an economic dialogue between the EU institutions and the safeguarding of the independence of national statistical authorities. The fifth focuses on the excessive deficit procedure of the euro area Member States. As the sixth measure of the “Six Pack” is the Council of EU Directive 2011/85/EU of 8 November 2011 on requirements for budgetary frameworks of the Member States. In practice, the “Six Pack” includes measures to strengthen economic governance through broader and enhanced surveillance of fiscal and macroeconomic policies and to try to improve economic cooperation and mutual surveillance on economic policy issues, making the procedures of the SGP more operational and effective in both its preventive and repressive arms. The legislative proposals entered into force on 13 December 2011. Their main points include the introduction of the “European Semester” (see Sect. 8.3.3), the improvement of the sanctioning mechanism, the establishment of an Alert Mechanism for early warning and monitoring of economic imbalances, and the strengthening of the Commission’s role. Furthermore, the new “Euro Plus Pact” or Euro Plus Pact, adopted on the margins of the European Council of 24 and 25 March 2011, is a comprehensive package of measures to strengthen the European economy and is designed as a more stringent successor to the SGP, which has not been consistently implemented. The Euro Plus Pact was established with the aim of strengthening the economic pillar of the monetary union and better coordinating economic policies in EMU, focusing in particular on areas that fall within national competence and are critical to increase competitiveness, promote employment, further contribute to the sustainability of public finances and strengthen financial stability. Elements of these measures took the form of a treaty between the then 17 euro area Member States with the participation of 6 non-euro area Member States (Bulgaria, Romania, Latvia, Lithuania, Lithuania, Denmark and Poland), as the Treaty on Stability, Coordination and Governance in EMU (TSCG), also known as the Fiscal Compact, signed at the European Council on 2 March 2012. The treaty requires balanced or surplus national budgets and a commitment to incorporate this rule into national law within 1 year of the treaty’s entry into force. The Court of Justice of the EU will be able to review the transfer of the balanced budget rule into national law. The Court’s ruling will be binding, and may be accompanied by financial sanctions if the Member State fails to comply with it. 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. From May 2013, two new regulations of the so-called “Two Pack” also came into force: Regulation (EU) 473/2013 of 21 May 2013 on common provisions for monitoring and assessing draft budgetary programmes and ensuring the correction of excessive deficit of the Member States in the euro area and Regulation (EU) 472/ 2013 of 21 May 2013 on strengthening economic and budgetary surveillance of Member States in the euro area experiencing or threatened with serious difficulties

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with respect to their financial stability. The regulations strengthen the procedures for the surveillance of Member States experiencing 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, as well as 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 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 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 implement 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. The Balance of Payment (BoP) assistance 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 mediumterm financial assistance. Finally, under the Banking Union as the natural complement to EMU, in order to address the weaknesses revealed by the crisis, the banks of each 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.

8.3 The EMU After the Euro: The Economic Crisis

8.3.9

321

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, which was vulnerable due to its oversized banking sector and the negative impact of the Greek financial crisis on its economy. In Greece, it was initially agreed as a first programme to provide €110 billion on 2 May 2010 for the implementation of reforms to restore its economy, of which €80 billion would come from the special Greek Loan Facility (GLF) and the remaining €30 billion from the IMF. This amount was eventually reduced by €2.7 billion 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 was eventually disbursed between May 2010 and June 2013, i.e. €20.1 billion from the IMF and €52.9 billion from the GLF. Later, on 14 March 2012, a further €164.5 billion was agreed as a second programme, of which €144.7 billion would come from the EFSF and the remaining €19.8 billion from the IMF. Ultimately, of these amounts, €142.9 billion was disbursed between March 2012 and June 2015, €130.9 billion from the EFSF and €12.0 billion from the IMF. It was further agreed that, at the start of the second programme, in order to improve the sustainability of Greek debt, there should be a Private Sector Involvement (PSI) in the 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 in bonds eligible for the swap offer, some €197 billion, 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. Greece continued to face severe economic problems. With the assumption of the country’s government by the left-wing Syriza coalition, in cooperation with the right-wing ANEL party, after the parliamentary elections of 25 January 2015, the new government started long negotiations with the EU institutions and the IMF, which ended in 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 to complete the current programme and the second with a preliminary analysis of the sustainability of Greek debt. 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 continued discussions with the lenders, in a climate of strong opposition within SYRIZA, and submitted on 8 July and 23 July 2015 new requests

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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 third programme. The economic adjustment programme was to start on 19 August 2015 and was scheduled to be implemented by 20 August 2018. Financial support of up to €86 billion would come from the ESM. In Ireland, it was initially agreed to provide €67.5 billion and later a further €0.7 billion. From these amounts, between November 2010 and December 2013, €22.5 billion was provided by the IMF, €22.5 billion by the EFSM, €18.4 billion by the EFSF and the remaining €4.8 billion from EU member states (€3.8 billion from Britain, €0.4 billion from Denmark and €0.6 billion from Sweden), for the restoration and recovery of the economy after the collapse of its largest banks. An additional €17.5 billion was received by Ireland, from internal borrowing (from the National Treasury). Major reforms to stimulate the Irish economy were successfully completed and in January 2014, the country exited the macroeconomic assistance programme and started borrowing from international markets. In Portugal, it was agreed to provide €79.0 billion, of which €76.8 billion was provided from May 2011 to June 2014. Of this amount, €26.5 billion was provided by the IMF, €24.3 billion from the EMFF and €26.0 billion 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, it was agreed to provide €100 billion, from the EFSF and the ESM. However, between July 2012 and December 2013, only €41.3 billion 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, it was agreed to provide €10 billion loan 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 comes from the ESM and €1 billion from the IMF, is disbursed in instalments, alongside the implementation of reforms, until 2016. An additional amount of €2.5 billion was received by Cyprus, which came from Russia. Outside the Eurozone, the EU also provided financial assistance to non-Eurozone states through the IMF, the WB and the Balance of Payments support programme. It was provided: (a) To Hungary, from November 2008 to October 2010, an amount of €9.1 billion from the IMF, an amount of €1.0 billion from the WB and an amount of €5.5 billion through the Balance of Payments support programme. (b) To Latvia, before it adopted the euro as its national currency, from December 2008 to December 2011, an amount of €1.1 billion from the IMF; an amount of €0.4 billion from the WB, an amount of €0.1 billion from the EIB/EBRD and an amount of €2.9 billion through the Balance of Payments support programme. (c) In Romania, from May 2011 to September 2015, an amount of €12.6 billion from the IMF, an amount of €4.65 billion from the WB, an amount of €1.0

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billion from the EIB/EBRD and an amount of €5.0 billion through the Balance of Payments support programme.

8.4

Towards a Banking Union

The EU’s response to the initial banking crisis of 2008 and 2009 was based on large financial facilities to national banking institutions, without actually addressing the issue of bad loans in their portfolios. Problems and dysfunctions 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 a large number of interventions and high levels of state aid, the EU and in particular the euro area banking system remained weak and problematic.

8.4.1

The Need for a Banking Union

On 25 February 2009, the report of the EU Group of High Level Experts in 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 microand macro-prudential supervision consisting of EU and national supervisory authorities. Micro-prudential supervision at the 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 ESFS. The ESRB, EBA, ESMA and EIOPA were established by Regulations (EU) 1092/2010, 1093/2010, 1094/2010 and 1095/2010 of the European Parliament and of the Council of 24 November 2010 respectively. The Joint Committee of the ESAs shall carry out the tasks set out in Articles 54–57 of Regulations (EU) 1093/ 2010, 1094/2010 and 1095/2010. Furthermore, the ESRB was established by Article 2 of Regulations (EU) 1093/2010, 1094/2010 and 1095/2010, while Regulation (EU) 1096/2010 of the European Parliament and of the Council of 24 November 2010 refers to the delegation of specific tasks to the European Central Bank for the operation of the ESRB. The ESRB has been operational since 1 January 2011. However, according to the Commission’s assessment COM(2014) 509 final of 8 August 2014, the ESAs have focused on their regulatory role. This is partly explained by the need to prioritise, given the scarce resources, but also seems to be linked to some shortcomings in the governance structure of the ESAs. Creating a

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common supervisory mindset at the EU level and promoting convergent supervisory practices is necessarily a long-term objective. 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. The process involved 27 large banks, excluding the Greek banks, whose recapitalisation would form part of the country’s second funding programme, 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. In practice, however, more than €94 billion was made available, and most banks met their targets on time and in full. However, on the occasion of the ongoing negotiations for Private Sector Involvement (PSI) in a debt-for-bond swap of Greece since July 2011, 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 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.

8.4.2

The European Banking Union as a Complement to EMU

Given the weaknesses of the existing supervisory mechanism for banks in the EU, 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, 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 feedback loop between fiscal and banking problems. Greater risk-sharing of the risks arising from the banking system is therefore required, and EMU should be supported in the long term by closer financial integration in the form of a unified bank resolution supervision. The question of a banking union was raised by José Manuel Barroso, President of the Commission, during the informal European Council of 23 May 2012. The matter was discussed again at the European Council of 28 and 29 June 2012. Specifically, it was submitted and approved a report entitled Towards a Genuine Economic and

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Monetary Union, by the Presidents of the European Council, Herman Van Rompuy, of the Commission, José Manuel Barroso, of the Eurogroup, Jean-Claude Juncker, and of the ECB, Mario Draghi, known as the “Report of the Four Presidents” (2012). 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 13 and 14 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 establishment of new rules for recovery and resolution, as well as for deposit guarantees. The SSM will be responsible for the direct supervision of the largest banking institutions, while the state supervisory authorities will continue to be responsible for the supervision of the remaining banks, with the ECB having ultimate responsibility. The process would be completed with the establishment of a Single Resolution Mechanism (SRM), which would ensure the effective management of any future bank failures within the Banking Union, at the lowest possible cost. By Regulation (EU) 1024/2013 of the Council of Ministers of 15 October 2013 on entrusting the ECB with supervisory tasks, and Regulation (EU) 1022/2013 of the European Parliament and of the Council of Ministers of 22 October 2013, on entrusting the ECB with specific tasks, established the SSM as 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, Directive 2013/36/EU on Capital Requirements Directive (CRD) of 26 June 2013 (also known as CRD IV, preceded by Directives 2006/48/EC—CRD, 2009/111/EC—CRD II and 2010/76/EU—CRD III) and Regulation (EU) 575/2013 on Capital Requirements Regulation (CRR) of the European Parliament and of the Council of 26 June 2013 were adopted, legislative measures transposing into European legislation the prudential capital requirements for banks to be considered safe and able to deal with their operational losses, as agreed at international level through the Basel III Accord. The CRD and the CSR entered into force on 1 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 Ministers 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, 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. Regulation (EU) 806/2014 of the European Parliament and of the Council of EU of 15 July 2014, established the EMI as a second pillar of the Banking Union, as well

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as a Single Resolution Fund (SRF) to ensure the effective management of any future bank failures within the Banking Union, at minimum 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 SRB started its work as an independent EU body on 1 January 2015. It should be noted that Directive 2014/59/EU of the European Parliament and of the 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; (c) crisis management and resolution of banks: to ensure that, in most cases, mechanisms for crisis management are in place (see Fig. 8.6). The “Five Presidents’ Report” 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 “Five Presidents’ Report” proposed the creation, in the long term, of a European Deposit Guarantee Scheme as a third pillar of the Banking Union together with banking supervision, which is entrusted to the EMU as a first Pillar, and bank resolution, which is entrusted to the EMU as a second Pillar. On 24 November 2015, the Commission proposed the creation of the European Deposit Insurance System (EDIS) for bank deposits in the euro area. EDIS would act as the 3oς Pillar of the banking union (see Fig. 8.7). The proposal to create an EDIS is based on the system of national Deposit Guarantee Systems (DGSs) regulated by Directive 2014/49/EU of 16 April 2014. The scheme will be developed in different

Fig. 8.6 Package of measures to prevent crises and help banks in difficulty. Source: Authors work

8.4 Towards a Banking Union

327

Fig. 8.7 The structure of the Banking Union with the future addition of the third Pillar

stages and the contributions of the EDIS will increase progressively over time. Initially, it will be a reinsurance scheme for national FSCs, 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 DGSs. 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 DGSs and the EDIS will intervene. The EDIS would provide a uniform and stronger degree of insurance coverage in the euro area, reducing the vulnerability of national DGSs, 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.

8.4.3

Review of the Progress of EMU by the Relevant Institutions

By Commission Communication COM(2019) 279 final of 12 June 2019 to the European Parliament, the European Council, the Council of EU and the European Central Bank on: Deepening Europe’s Economic and Monetary Union: Taking stock four years after the Five Presidents’ Report—European Commission’s contribution to the Euro Summit on 21 June 2019, it makes a brief assessment of the work and notes that: “despite undeniable improvements, important gaps remain in the

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architecture of Economic and Monetary Union, which ultimately affect the international attractiveness of the euro and the EU’s ability to create jobs, economic growth, social justice and macroeconomic stability”. According to the Commission: (i) One of the first important steps in the aftermath of the financial and debt crisis was to equip the Eurozone with crisis management mechanisms to support governments that no longer have access to markets with sustainable interest rates. The ESM can now provide financial assistance to euro area Member States facing or threatened with severe financing problems, with a total intervention capacity of €500 billion. (ii) Key elements of the Banking Union have been put in place to strengthen the financial sector, weaken the link between banks and their home countries, limit public bailouts of banks and overcome the disruptions caused by regulatory and supervisory fragmentation based on national borders. The SSM supervises the most important banks in the Banking Union. In the event that a major bank fails and resolution is in the public interest, the resolution is carried out centrally by the SRM according to a coherent set of rules. (iii) Progress on the Capital Markets Union contributes to the resilience of the financial system and to reducing risks through shared risk-taking by the private sector. The EU has made substantial progress in recent years in improving the insolvency framework, and the European Parliament and the Council of Ministers recently reached political agreement on a proposal for a directive that would provide entrepreneurs with a fresh start in the event of business failure and improve the efficiency of restructuring and insolvency procedures. (iv) The EU’s macroeconomic and budgetary surveillance of Member States has been significantly strengthened by the introduction of the macroeconomic imbalances procedure, the improvement of national budgetary frameworks and the reform of the SGP, the set of rules designed to ensure that Member States implement sound fiscal policies. All the new elements have been integrated into the European Semester, the EU’s economic policy coordination process. Member States are now required to submit their draft budgetary programmes for assessment at the EU level before they are adopted at the national level, and policy coordination goes beyond individual Member States as it takes into account issues affecting the euro area as a whole. Furthermore, the Commission invites the European Parliament, the European Council, the Council of Ministers, the European Central Bank and all stakeholders to: (a) Remain firmly on track towards the completion of EMU; (b) Reach agreement on the main features of the financial instrument for convergence and competitiveness and agree on the size of this instrument within the Multiannual Financial Framework; (c) finalise the changes to the Treaty on the reform of the ESM with a view to its swift ratification by the euro area Member States; (d) make renewed efforts to complete the Banking Union, with political negotiations on the European Deposit Insurance Scheme and (e) accelerate progress

References

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towards a Capital Markets Union and intensify work on strengthening the international role of the euro. At the Eurozone Summit of 11 December 2020, it was stressed that “the progress made in the Economic and Monetary Union and the Banking Union over the last decade has contributed to financial stability and allowed the financing of the economy to be maintained throughout the COVID-19 crisis”. The agreement reached in the Eurogroup, in an enlarged format, on the reform of the ESM, in line with the mandate of the June 2018 Eurozone Summit, was welcomed. The reform provides, inter alia, for a common fiscal buffer mechanism for the ESM in the form of a credit line from the ESM, to be put in place by early 2022, 2 years earlier than originally envisaged. The Eurozone Summit called on the Eurogroup to “establish a gradual and timebound work programme on all outstanding elements needed to complete the banking union”. Finally, rapid progress was called for on the Commission’s new Capital Markets Union Action Plan and the EU’s leading role in green finance was highlighted.

References Agreement of 1 September 1998 between the European Central Bank and the national central banks of the Member States outside the euro area laying down the operating procedures for an exchange rate mechanism in stage three of Economic and Monetary Union, Official Journal of the European Communities No C 345, European Central Bank, 14 September 2000. Council of the EU, “Policies, The European Semester explained -How the European Semester works”, 2023, https://www.consilium.europa.eu/en/policies/european-semester/how-europeansemester-works/ Communication COM(2010) 2020 – ‘Europe 2020 - A strategy for smart, sustainable and inclusive growth, European Commission, Brussels, 3 March 2010. Communication COM(2014) 509 final - On the operation of the European Supervisory Authorities (ESAs) and the European System of Financial Supervision (ESFS), European Commission, Brussels, 8 August 2014. Communication COM(2019) 279 final - Deepening Europe’s Economic and Monetary Union: Taking stock four years after the Five Presidents’ Report European Commission’s contribution to the Euro Summit on 21 June 2019, European Commission, Brussels, 12 June 2019. Decision 64/300/EEC of the Council of Ministers, on co-operation between the Central Banks of the Member States of the European Economic Community, Official Journal of the European Communities No 1206/44, Brussels, 8 May 1964. Directive 88/361/EEC of Council of EC, for the implementation of Article 67 of the Treaty, Luxembourg, 24 June 1988. Directive 2011/85/EU of the Council of EU, on requirements for budgetary frameworks of the Member States, Brussels, 8 November 2011. Directive 2013/36/EU of the European Parliament and the Council of EU, on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC, Brussels, 26 June 2013. Directive 2014/59/EU of the European Parliament and the Council of EU, establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/

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2010 and (EU) No 648/2012, of the European Parliament and of the Council, Brussels, 15 May 2014. Official Journal of the European Communities 29.07.1992, No C 192,Treaty on European Union, “Treaty on European Union”, Maastricht, 7 February 1992. 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. Official Journal of the European Union, 26.10.2012, No C 326,Treaty on the Functioning of the European Union (Consolidated version), “Treaty on the Functioning of the European Union”, Brussels, 26 October 2012. Regulation (EEC) 907/1973 of the Council of EC establishing a European Monetary Cooperation Fund, Luxembourg, 3 April 1973. Regulation (EEC) 3180/1978 of the Council of EC changing the value of the unit of account used by the European Monetary Cooperation Fund, Brussels, 18 December 1978. Regulation (EEC) 3181/1978 of the Council of EC relating to the European monetary system, Brussels, 18 December 1978. Regulation (EC) No 3605/93 of the Council of EU on the application of the Protocol on the excessive deficit procedure annexed to the Treaty establishing the European Community, Brussels, 22 November 1993. Regulation (EC) 1466/97 of the Council of EU on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies, Brussels, 7 July 1997. Regulation (EC) 1467/97 of the Council of EU on speeding up and clarifying the implementation of the excessive deficit procedure, Brussels, 7 July 1997. Regulation (EC) 332/2002 of the Council of EU establishing a facility providing medium-term financial assistance for Member States’ balances of payments, Brussels, 18 February 2002. Regulation (EU) 407/2010 of Council of EU establishing a European financial stabilisation mechanism, Brussels, 11 May 2010. 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.

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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. 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) 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. Regulation (EU) 806/2014 of the European Parliament and the Council of EU establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No 1093/2010, Strasbourg, 15 July 2014. 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 of the Ad Hoc Committee for Institutional Affairs to the European Council (Brussels, 29-30 March 1985). Brussels, 29-30 March 1985 (Dooge Report). Schnabl, G., “De jure versus de facto: Exchange rate stabilization in Central and Eastern Europe,” Tübinger Diskussionsbeiträge 269, University of Tübingen, School of Business and Economics, 2003 “Single European Act”, Luxembourg, 17 February 1986 and The Hague, 28 February 1986. Singleton, J., Central Banking in the Twentieth Century, Cambridge University Press, Cambridge, 2011. 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. Treaty of Rome (EEC), “Traité instituant la Communauté Économique Européenne et documents annexes”, Rome, 25 March 1957. Treaty on Stability, Coordination and Governance in the Economic and Monetary Union - not published in the Official Journal, Brussels, 2 March 2012.

9

Foreign and Defence Policy: Historical Developments and Contemporary Challenges

9.1

The First Attempts at European Political Cooperation

Although the purpose of the establishment of the EC was not to create a superstate with geopolitical and military power, the idea of the need for a unified expression and organised reaction on international issues was present from the first steps of European integration. And while the establishment of the ECSC, and later the EEC and the EAEC, was aimed at the peaceful settlement of problems that had plagued the continent in the past, as well as the coexistence and cooperation of the Member States and their peoples for common economic benefit, gradually, the increase in trade and interdependencies with other non-EU states have increased the need for a common language among the Member States for their discussions with international organisations, bodies, states and groups of states outside the borders of the unifying Europe. Although the European continent is enjoying a long period of peace in its recent history—largely the result of a successful integration process—the collapse of the coalition of Central Eastern European states, the continuous enlargements and the consequent assumption of new obligations, new international economic, technological, political, cultural and environmental challenges, as well as new threats to security and peace, all accentuate the need to improve the EU’s external relations. Cooperation with third countries and organisations, organised and coordinated, is therefore needed to promote its legitimate economic and commercial interests at international level and to maintain peace and security both within and outside the continent. However, the EU has not made as much progress on a common foreign and security policy as it has on the creation of a single internal market and a common currency. In order to be able to respond to these demands, it is essential that all Member States understand the role that the EU must play on the international stage, so that it can act as a single force for stability, cooperation, understanding and peace.

# The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 P. Liargovas, C. Papageorgiou, The European Integration, Vol. 2, Springer Texts in Political Science and International Relations, https://doi.org/10.1007/978-3-031-47176-6_9

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9.1.1

9 Foreign and Defence Policy: Historical Developments and. . .

The Attempt to Establish a European Defence Community

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 integration of the six ECSC Member States. The plan to establish the EDC was proposed by 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. 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, Luxembourg and Germany and with the participation of the USA, 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, 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 30 August 1954, rejected without debate the Treaty establishing the EDC. This 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.

9.1 The First Attempts at European Political Cooperation

9.1.2

335

The Failure to Establish a European Political Community

Meanwhile, it was entrusted by the foreign ministers of the “Six” Member States to the members of the ECSC Common Assembly, under the chairmanship of the former Belgian foreign minister, Paul-Henri Spaak, on 10 September 1952, to set up an ad hoc assembly, assisted by co-selected members, to draw up a draft treaty establishing a European Political Community (EPC), within 6 months. On 9 March 1953, the ad hoc assembly submitted the draft treaty to the foreign ministers of the “Six” partners. The project, which was structured along the federal logic provided for in Article 38 of the EDC, 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 a EPC, the federal structure of whose institutions was a source of suspicion, especially on the part of France.

9.1.3

The “Re-Founding” of the Western European Union

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 USA), held in London, from 28 September to 3 October 1954 and reactivating the inactive Brussels Treaty of 17 March 1948 between Britain, France and the Benelux, establishing the Western Union (Fig. 9.1). 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 Fig. 9.1 The emblem of the Western European Union

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9 Foreign and Defence Policy: Historical Developments and. . .

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 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.

9.1.4

Charles de Gaulle’s Positions and the Two Fouchet Plans

The assumption of the French 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, Prime Minister of France since 1959 during his presidency, considered, contrary to the functional theory of integration, 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. 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. 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 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 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 the field of foreign and security policy, which would result in the establishment of Political Europe.

9.1 The First Attempts at European Political Cooperation

337

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 weakening of the relations with the USA did not satisfy the “Atlanticists”, particularly in the Benelux countries. Despite the initial concessions which 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.

9.1.5

Request for European Political Cooperation and the Davignon Report

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 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. 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 European Political 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 six-monthly meetings

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9 Foreign and Defence Policy: Historical Developments and. . .

(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 states. 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 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.

9.1.6

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 which 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.

9.1 The First Attempts at European Political Cooperation

9.1.7

339

The European Council and the EPC: Tindemans Report

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 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 (Fig. 9.2). 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, 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. 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. Among other things, 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

Fig. 9.2 The establishment of the European Council as the coordinator of the EPC, at the summit of 9 and 10 December 1974 in Paris. Photo by European Union, 2012. https://www.consilium. europa.eu/media/31035/qc3111406enc.pdf

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9 Foreign and Defence Policy: Historical Developments and. . .

the implementation of a common defence policy with enhanced cooperation in the field of armaments. 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 policy matters was reiterated and a request was made to the Council of Foreign Ministers of EC and the 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.

9.1.8

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, 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 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. During the 1980s, the EC Member States, in the context of the non-institutionalised EPA, adopted some common positions, sometimes accompanied by economic sanctions or incentives. Such cases included sanctions for the Soviet invasion of Afghanistan in 1979, the Argentine invasion of the Falkland Islands in 1982, and interference in Israeli-Palestinian talks in the Middle East during the 1980s, the Iran-Iraq war that began 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.

9.1 The First Attempts at European Political Cooperation

9.1.9

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The Genscher-Colombo Project and the Promotion of the EPA

The European states until the end of the 1970s remained locked into the logic of bipolarity and dependence on the Superpowers. Gradually, however, the governments of the Member States of the EC decided that, instead of being locked into national strategies and narrow state interests, it would be preferable to take significant steps in the field of common foreign and security policy, including the necessary amendments and extensions to the Treaty of Rome of 1957. Moreover, the British Foreign Secretary Peter Carrington appealed in November 1980 to his partners for the development of a European political 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. In the same context, the German Foreign Minister Hans-Dietrich Genscher, 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, 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. The Genscher-Colombo initiative paved the way for the signing of the Stuttgart Solemn 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 Solemn Declaration on European Union, the Member States recognised the prominent political role of an institutionalised European Council in 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. 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.

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9.1.10 The Mitterand-Kohl Initiative and the Dooge Committee Report The European Parliament on 14 February 1984, with the adoption of the Draft Treaty establishing the European Union, drafted by a committee under Altiero Spinelli, continued the efforts of political integration. The draft Treaty, with a clear federal perspective, in addition to linking the EC with its institutions within the framework of a European Union, also linked the common policies of this Union with the EPC, giving the Union new powers in the fields of foreign and security policy. However, the intentions to activate the integration process were again raised at the Fontainebleau European Council on 25 and 26 June 1984, on the initiative of French President François Mitterrand and with the support of German Chancellor Helmut Kohl. 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, 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 promotion of a European external identity etc. With regard to the EPC, the Committee stressed the need to create a permanent secretariat, and to have a common representation of the “Ten” in international organisations. The Milan European Council of 28 and 29 June 1985, approved the “Dooge Report”, while the Italian Presidency, with the support of French President Mitterand and German Chancellor Kohl, managed to overcome the difficulties that had arisen and to promote the proposal of the Dooge Committee to convene an Intergovernmental Conference, which would have as its object, among other things, the implementation of a common foreign and security policies. The Intergovernmental Conference also examined a French Draft European Act, which proposed an amendment to the Treaty establishing the EEC and at the same time a new treaty of political cooperation, as a “Single Act”, while the Luxembourg European Council of 2 and 3 December 1985 managed to overcome the obstacles raised by the Member States, finally issuing an important joint declaration, as a political agreement that was obviously the product of compromise. It also provided for the promotion of the Single European Act, which eventually became a treaty text containing both the amendments to the Treaties of Rome and the measures required for cooperation between the Member States in the field of the EPC.

9.1.11 The Single European Act and the Institutionalisation of the EPC The Single European Act (SEA), signed on 17 February 1986, 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

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Community institution, which would require a necessary coordination as well as consultations on foreign policy and security issues 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 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.

9.2

New Efforts After the SEA for a Common Foreign Policy

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 committee, chaired by the former Italian MEP Pietro Adonnino. The task of this committee would be 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 residence of people.

9.2.1

A Europe with a Common Face and Official Symbols

The Adonnino Committee 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 people, 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

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Fig. 9.3 François Mitterrand presenting the European passport at the European Council in Fontainebleau on 26 June 1984. Photo by European Commission Audiovisual Library

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. The European Council encouraged the Adonnino Committee 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 Beethoven’s Ninth Symphony, which had already been adopted on 12 January 1972 as the anthem of Europe by the Committee of Ministers of the Council of Europe, was adopted also as the anthem of the EC (Fig. 9.3). Moreover, 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” adopted 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 on 1 January

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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.

9.2.2

Plans for Political Union: Joint Messages of Mitterand and Kohl

In the early 1990s, following the historic changes in Europe, with the collapse of socialism, 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 “Twelve” Member States. This position was further strengthened by the planned reunification of Germany. At the same time, the European Parliament, on 14 March 1990, submitted a resolution in which it stressed, among other things, the need to transform the European Communities into a European Union of federal type, extending beyond the single market and monetary union, as well as to accelerate 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, among other things, 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 discussions. 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, Prime Minister of Ireland, in preparation for its meeting in Dublin, requesting that the procedures for the Political Union of Europe be speeded up and that an Intergovernmental Conference be convened for this purpose, alongside the one for EMU. In their message, they said that they considered that the time was right for the transformation of the EC into a European Union. Among the four main objectives of the European Union, Mitterand and Kohl proposed the definition and creation of a common foreign and security policy. There were reactions and objections to the Belgian proposals and to the joint message of the President of France François Mitterrand and the Chancellor of Germany Helmut Kohl, which became evident at the Dublin European Council on 28 April 1990, while at the second Dublin European Council on 25 and 26 June 1990, it was decided to start the procedures for the convening of an Intergovernmental Conference on Political Union, in parallel with the one decided on EMU. Finally, on 6 December 1990, French President François Mitterrand and German Chancellor Helmut Kohl, in a second joint message, proposed extending the powers of the Community, but also insisted on strengthening the position of the European Council, given its contribution to the synthesis of views and the consolidation of

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integration, as well as its role in the common foreign and security policy, which ultimately leads to a common defence, through an organic relationship with the WEU. 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.

9.2.3

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 and in the second half of 1991 under the presidency of the Dutch Foreign Minister Hans van den Broek. Given the political changes in Eastern Europe, the break-up of Yugoslavia, 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 competences in a Community context, considering that such an action would limit its sovereign rights. Similar positions were held by Denmark and Portugal. 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 Ministers) would be the only institution with powers in all areas of activity. 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 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.

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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 USA, 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 Franco-German proposals in turn.

9.2.4

The Treaty on European Union and the CFSP Pillar

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), known as the Treaty of Maastricht. The form of the EU launched by the Treaty of Maastricht followed the model of the three functional pillars that included: (a) The European Community (EC), which would include all the known European Community structures and would operate according to the known Community methods; (b) The Common Foreign and Security Policy (CFSP), which would be a typical example of pluralistic intergovernmental cooperation, through a doctrine of a “shared sovereignty”, but without the erosion of the sovereign rights of the Member States, and would rely very much on unanimity and c) Cooperation in the areas of Justice and Home Affairs (JHA), with competences also in the areas of immigration, political asylum and EU border crossing, and operating through intergovernmental cooperation. The CFSP was essentially an institutionalised evolution of the EPA, which had already been launched with the SEA in 1986. It is a separate pillar of the TEU operating through intergovernmental cooperation. The objectives of the CFSP in accordance with Title V of the Treaty are as follows: (a) Safeguarding the common values and fundamental interests of the Union. (b) Strengthening the security of the Union. (c) Maintaining peace and strengthening international security. (d) Promotion of international cooperation. (e) Strengthening democracy and the rule of law, including human rights. 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 that: “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

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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 the 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 EU. Furthermore, on the basis of guidelines laid down by the European Council, the Council of EU may decide unanimously on “joint action”. The required implementing measures may be adopted by qualified majority, provided that the unanimous decision on joint action by the Council of EU has been taken beforehand. However, for decisions requiring unanimity, Member States are encouraged, as far as possible, not to prevent a 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 six-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 defence component, 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.

9.2.5

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

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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 (see Sect. 9.2.7). This was despite 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 USA 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 USA, but the USA seemed to want to maintain its leadership position, while many EU Member States seemed to be reluctant to have such a relationship with the USA.

9.2.6

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 Council of the WEU 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

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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, as noted above (see Sect. 9.2.3), 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, their desire to upgrade the WEU in terms of acquiring military defence capabilities for better 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: (a) humanitarian missions or missions for the removal of nationals of Member States; (b) conflict prevention and peacekeeping missions; (c) combat unit missions for crisis management, such as peacekeeping operations; (d) joint disarmament actions; (e) missions to provide advice and assistance on military matters and (f) stabilisation operations at the end of a conflict. 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. Hungary, Poland and Czechia, as NATO Member States only from 1999, also became associated states with the WEU in 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 Ministers and Secretariat of the WEU were moved from Paris to Brussels to allow for better communication with both NATO

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Fig. 9.4 The badges of (a) Eurocorps, (b) Eurofor, (c) Euromarfor and (d) European Air Group

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, 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 (Fig. 9.4). 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.

9.2.7

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.

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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 initially supported the unity of Yugoslavia, and later, in July 1991, in statements by its Secretary of State James Baker, 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 Treaty on European Union, 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.

9.3

The Common Foreign Policy After the TEU

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. The required institutional changes also focused on making the CFSP, the second pillar of the EU, more effective, at the request of France and Germany. A report by the Reflection Group, which also identified the need to improve the EU’s capacity to conduct a common foreign policy, was submitted to the Madrid European Council on 5 December 1995, where it was decided to convene an Intergovernmental Conference to review the TEU.

9.3.1

The Treaty of Amsterdam and Its Implications for the CFSP

The negotiations regarding a new treaty were not easy due to a difference of opinion between the governments of the Member States. The British Prime Minister, John Major, rejected further strengthening of the TEU in the EU on the grounds that it would negatively affect relations between EU and the USA. However, the new President of France, Jacques Chirac, by May 1995, managed to come closer to the German proposals and a series of joint proposals were presented, following cooperation with Member States wishing to improve the functioning of the CFSP and strengthen the role of the WEU in the EU. Agreement was reached at the Amsterdam European Council on 16 and 17 June 1997 and the Treaty of Amsterdam was signed by the Ministers of Foreign Affairs of the Member States on 2 October 1997. 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

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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 would take place shortly afterwards, in 1999, in an attempt to establish a meaningful European Defence and Security Policy. 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.

9.3.2

Establishment of a European Security and Defence Policy

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 USA 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 the reactivated WEU since 1984. 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,

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challenging NATO’s dominant position in this area. These positions were also reflected in the joint Declaration on European Defence (“Saint-Malo Declaration”) 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. The EU’s inability to intervene decisively in the Kosovo incidents forced the subsequent Cologne European Council of 3 and 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, 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 Council of General Affairs of EU, 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 available to the ESDP. The first joint meeting of Foreign and Defence Ministers in a Council of General Affairs of the EU 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 and 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

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

9.3.3

The Treaty of Nice and Its Implications for the CFSP

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. The preparatory work for the Intergovernmental Conference began in October 1999 with the publication of the report on the institutional changes required for the upcoming enlargement, which had been prepared at the request of Commission President Romano Prodi by a group of experts chaired by Jean-Luc Dehaene. The 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. The Treaty of Nice was signed on 26 February 2001. However, the ratification process got off to a bad start in Ireland, as in a referendum on 8 June 2001, the citizens of Ireland rejected the Treaty by 53.9%. 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 matters concerning the CFSP, helped to turn the tide. Thus, in the second referendum held on 19 October 2002, the Treaty of Nice was ratified with 62.9% of the votes cast. In the area of the CFSP, Britain managed to retain the right of veto on issues considered vital and to maintain its intergovernmental character. The scope of enhanced cooperation was broadened to include the CFSP of the second pillar of the EU, but with the restrictions requested by Britain, Ireland and Sweden, namely that it should apply to joint actions agreed unanimously by the Council of EU, but not to matters requiring military or defence activities. 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, 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 Union Military Committee (EUMC) and the European Union Military Staff (EUMS). 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

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356 Fig. 9.5 Badges of (a) Military Committee and (b) Military Staff

concern matters relating to military operations and defence, but only the implementation of joint action or the promotion of a common position (Fig. 9.5). 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 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. It should be noted that the Nice European Council, from 7 to 11 December 2000, adopted the French Presidency’s report on ESDP, 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 level of the EU, thus breaking the sovereignty of the Member States. However, the provision for guaranteed EU access to NATO’s planning capabilities ran up against the veto of Turkey, as a NATO member state, which set as a condition for its removal, the upgrading of its participation in the ESDP formulation and decision-making mechanism.

9.3.4

The Draft Constitution for Europe and Provisions for CFSP

The ad hoc Convention on the Future of Europe, which began its work on 28 February 2002 in Brussels, chaired by former French President Valéry Giscard d’Estaing, produced a text in the form of a comprehensive draft constitutional treaty. The subsequent Intergovernmental Conference on the drafting of a Treaty establishing a Constitution for Europe (TCE) began its work on 4 October 2003 in Rome and resulted in the drafting of the requested text, which was adopted by the Brussels European Council on 17 and 18 June 2004. The TCE was signed on 29 October 2004 by the “Twenty-Five” in Rome and, in the context of the CFSP, generally provided for the creation of an EU Foreign Minister, which merges the posts of High Representative for the CFSP and

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Commissioner for External Relations, as well as the establishment of the Common Security and Defence Policy (CSDP), the predecessor to the ESDP, as an integral part of the CFSP. It also provides for 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. It should be noted that the TCE 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 henceforth communitarised. However, following the rejection of the TCE by the French and Dutch referendums and the “period of reflection”, the Brussels European Council of 21 and 22 June 2007 agreed to abandon the TCE and to convene a new Intergovernmental Conference to negotiate a new reform treaty containing the amendments to the existing treaties.

9.3.5

Progress of the ESDP in the Context of the CFSP: Relations with NATO

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 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 ERRF by 2003, agreed at the Helsinki European Council in December 1999.

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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 exclusion of the six non-EU European NATO Member States (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 informal 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 ECAP. 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 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. 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 USA 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 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

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Fig. 9.6 The logo of the European Defence Agency

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 (Fig. 9.6). 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 include also joint disarmament operations, support to third countries in the fight against terrorism and the upgrading of the security sector. By 2010, new military capabilities would be developed, such as the 15 Battle Groups as rapidly expanding units of 1500 soldiers, which would prepare the ground for the ERRF, the European Gendarmerie Force of 800–900 persons, the Marine Force, the 5 Operational Headquarters in Britain, France, Germany, Greece, Italy etc. 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 & Technology (EDRT), the European Armaments Cooperation (EAC) and the European Defence Technological and Industrial Base (EDTIB). It should be noted that in 2004, an attempt was made to further codify the ESDP through the TCE, 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.

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9 Foreign and Defence Policy: Historical Developments and. . .

The Treaty of Lisbon and the EU’s External Representation

The Intergovernmental Conference for the preparation of a “Reform Treaty” started its work on 23 July 2007 in Lisbon. The new Reform Treaty would be based on most of the changes proposed by the TCE, such as, in the case of the CFSP, the introduction of the post of President of the European Council, the creation of the post of High Representative of the Union for Foreign Affairs and Security Policy etc. 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. The Treaty of Lisbon was signed on 13 December 2007 and entered into force on 1 December 2009. Meanwhile, on 19 November 2009, the extraordinary European Council in Brussels elected Herman Van Rompuy, Prime Minister of Belgium, as the first Permanent President and the British Trade Commissioner, Catherine Ashton, as EU High Representative for Foreign Affairs and Security Policy. The Treaty of Lisbon would give the EU 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 stable interlocutors with third parties, responding to the longstanding demand—particularly 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 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 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 Treaty of Lisbon renames the ESDP as the Common Security and Defence Policy (CSDP). And while the Treaty contains essentially the same provisions as the TCE 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 in NATO. Furthermore, the Treaty of Lisbon further extends and clarifies the competences of the European Defence Agency (EDA), 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

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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 (PeSCo), which is the subject of a protocol annexed to the Treaty of Lisbon (2017). 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 EDA. PeSCo 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 missions, 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. 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.

9.3.7

After the Treaty of Lisbon: The EU’s Overall 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

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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. 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 process of strategic reflection with a view to preparing an EU global strategy on foreign and security policy in close cooperation with Member States, to be submitted 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 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 EUGS aimed to change the philosophy of the 2003 European Security Strategy (see Sect. 9.3.5), 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) the 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. 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. 9.3.8). 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 EUGS operational, the High Representative for Foreign Affairs and Security Policy presented to the Council of Foreign Affairs 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

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focus on expenditure, improved EU rapid response capabilities (including through the use of EU combat units), and a new 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 Council of Foreign Affairs 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 EUGS, (ii) the EDAP and (iii) the implementation of the joint package of proposals following the EU-NATO Joint Declaration of 8 July 2016. The Council of Foreign Affairs 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 PSC, which would include the ambassadors of the EU Member States, based in Brussels. The MPCC would work closely with its existing civilian counterpart, the Civilian Planning and Conduct Capability (CPCC). The MPCC was finally created by a decision of the Council of Foreign Affairs of EU on 8 June 2017. At the European Council of 22 June 2017, it was agreed that 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 Council of Foreign Affairs of EU meeting of 13 November 2017, 23 Member States signed a notification, taking the first step towards the establishment of PeSCo, and on 8 December of the same year, the Council of Foreign Affairs of EU adopted a decision establishing PeSCo with the participation of 25 Member States. Britain, Denmark and Malta remain outside the cooperation. On 12 December 2017, the Council of Foreign Affairs of EU 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 for the period 2019–2020. The regulation is an integral part of the EDF. On 6 March 2018, the Council of Foreign Affairs of EU adopted a roadmap with guidance and instructions for the implementation of PeSCo. Subsequently, on 28 May of the same year, the Council of Foreign Affairs 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 PeSCo, the rapid implementation of the EDIDP and further progress on the EDF.

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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 Declaration outlines the common vision of the EU and NATO and highlights the need for closer cooperation in new areas (see Sect. 9.3.8). Finally, by a joint Regulation of the European Parliament and the Council of Foreign Affairs of EU, the 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 CCC. In the context of the evaluation of the EUGS, based on the third annual progress report of the High Representative for Foreign Affairs and Security Policy entitled The European Union’s Global Strategy Three Years On, Looking Forward, the Council of Foreign Affairs of EU 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 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 EDF, which would strengthen the EU’s defence industry and technology, were needed. Finally, on 5 November 2020, the Council of Foreign Affairs of EU 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.

9.3.8

EU-NATO Cooperation After the Treaty of Lisbon

In the EU-NATO Joint Declaration 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 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 (see Fig. 9.7). On 6 December 2016, the Foreign Affairs Council of EU adopted conclusions adopting a plan to follow up

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Fig. 9.7 Areas of EU-NATO cooperation according to the Joint Declaration of 6 December 2016. Source: European Council

the decisions taken in Warsaw on EU-NATO cooperation, consisting of 42 proposals for concrete actions. On 5 December 2017, the Council of Foreign Affairs 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 Declaration in Brussels ahead of the NATO Summit on 11 and 12 July 2018. This declaration 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.

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Diplomatic Representations and ESDP/CRPD Missions

After the establishment of the ECSC, third-country missions to the Community began to be accredited, and in 1955 the ECSC sent its first diplomatic mission to London. The first US diplomatic mission to the ECSC was sent by the USA Secretary of State Dean Acheson, confirming the full diplomatic recognition of the ECSC. The number of third-country representatives began to increase in the 1960s, particularly after the merger of the executive bodies of the three European Communities.

9.4.1

The EEAS and Diplomatic Delegations

With the establishment of the EEAS, as foreseen by the Treaty of Lisbon, as of 1 January 2010 all former European Commission Delegations were renamed EU Delegations and are gradually being upgraded to embassy-style missions. These upgraded delegations have taken over the role previously played by the embassies of the Member States holding the rotating Presidency of the Council of the European Union, representing the EU as a whole. The first upgraded diplomatic delegation was the EU delegation to the USA. In general, the EU’s external relations are managed by the EEAS, which reports to the High Representative for Foreign Affairs and Security Policy. EU Delegations represent the EU as a whole but operate separately from the missions of its Member States. However, in some cases they may share resources and facilities, and in some cases they take on the role of coordinating Member State embassies on issues of concern to the EU as a whole. The map in Fig. 9.8 shows diplomatic missions and delegations around the world.

Fig. 9.8 European Union diplomatic representations and missions in the world. Processed by the Authors

9.4 Diplomatic Representations and ESDP/CRPD Missions

367

The EEAS has identified five geographical areas for the management of the EU’s external relations: (i) Asia and the Pacific, (ii) Europe and Central Asia, (iii) Africa, (iv) Greater Middle East and (v) Americas. Its themes cover various issues such as security, human rights, migration, development and democracy building. At the same time, the service plays an important role in crisis response through its now upgraded diplomatic delegations and acts as an advisor to the High Representative on foreign and defence policy issues.

9.4.2

The Operations and Missions of the ESDP/CRDP to Date

Since 2003, several military, police, special civilian and mixed operations have taken place. However, at service level, since 2008 the main operations of EU forces have been conducted in African regions. In addition, Eurocorps, which started its activity in 1992, 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). Since 1 July 2006 and from time to time Eurocorps has been the ground component of the NRF. Furthermore, from January 2012 to January 2013, 50% of their personnel were deployed to command structures in Kabul, Afghanistan, within the framework of the ISAF. Table 9.1 shows the total number of ESDP/CSDP missions from 2003 to date, while the map in Fig. 9.9 shows ongoing EU missions. As regards the financing of the common costs of EU operations having military implications in the field of defence, on 23 February 2004 the Council of Ministers adopted Decision 2004/197/CFSP, which established the management mechanism known as “ATHENA”. This Decision was subsequently amended on several occasions. The last amendment was Decision 2015/528/CFSP of the Council of Ministers of 27 March 2015. The financial rules of ATHENA shall be laid down by the Special Committee. Specific rules for the different areas of eligible expenditure as well as for recruitment and procurement under ATHENA apply and were adopted on 11 February 2020. The rules on Member States’ contributions to the Athena mechanism are set out in Article 41(1)(a). 2 TEU. Member States contribute an annual share based on their gross national income.

9 Foreign and Defence Policy: Historical Developments and. . .

368

Table 9.1 Missions under the ESDP/CRPD since 2003 Launch 31.03.2003

End 15.12.2003

Full name European Union Military Operation in the Former Yugoslav Republic of Macedonia European Union Military Operation in the Democratic Republic of the Congo (2003) European Union Military Operation in Bosnia and Herzegovina

12.06.2003

01.09.2003

02.12.2004

–

30.07.2006

30.11.2006

28.01.2008

15.03.2009

08.12.2008

–

European Union Naval Force Somalia

10.04.2010

–

European Union Training Mission in Somalia

18.02.2013

–

European Union Training Mission in Mali

10.02.2014

23.03.2015

European Union Military Operation in the Central African Republic

22.06.2015

–

European Union Naval Force Mediterranean

16.07.2016

–

European Union Training Mission in the Central African Republic

European Union Military Operation in the Democratic Republic of the Congo (2006) European Union Military Operation in Chad and the Central African Republic

Abbreviated name EUFOR Concordia Military operation in FYROM EUFOR Artemis Military operation in Congo DR

State FYROM

EUFOR Althea BiH Military operation in Bosnia and Herzegovina EUFOR RD Congo Military operation in Congo DR EUFOR Tchad/ RCA Military operation in Chad EUNAVFOR Somalia Naval operation Atalanta in Somalia EUTM Somalia Military operation for the training of military forces EUTM Mali Military operation in Mali to train the Armed Forces EUFOR RCA Military operation in the Central African Republic EUNAVFOR Med Naval operations first SOPHIA and later IRINI in the Mediterranean EUTM RCA Military operation in the Central African Republic

Bosnia and Herzegovina

Congo

Congo

Chad

Somalia

Somalia

Mali

Central African Republic Mediterranean

Central African Republic (continued)

9.4 Diplomatic Representations and ESDP/CRPD Missions

369

Table 9.1 (continued) Launch 01.01.2003

End 30.06.2012

Full name European Union Police Mission in Bosnia and Herzegovina

15.12.2003

14.12.2005

16.07.2004

14.07.2005

European Union Police Mission in the former Yugoslav Republic of Macedonia European Union Rule of Law Mission to Georgia

12.04.2005

30.06.2007

European Union Police Mission in Kinshasa

08.06.2005

30.06.2016

01.07.2005

31.12.2013

European Union Security Sector Reform Mission in the Democratic Republic of the Congo European Union Integrated Rule of Law Mission in Iraq

18.07.2005

31.12.2007

European Union Support to African Union Mission in Sudan

15.09.2005

15.12.2006

25.11.2005

–

European Union Monitoring Mission in Aceh European Union Border Assistance Mission to Rafah

01.12.2005

–

European Union Border Assistance Mission to Moldova and Ukraine

15.12.2005

14.06.2006

European Union Police Advisory Team in the former Yugoslav Republic of Macedonia

01.01.2006

–

Abbreviated name EUPM BiH Police operation in Bosnia and Herzegovina EUPOL FYROM Police operation Proximal in FYROM EUJUST Georgia Legal business in Georgia EUPOL Kinshasa Police operation in Kinshasa EUSEC RD Congo Security operation in Congo RD EUJUST LEX Iraq Legal business in Iraq AMIS EU Supporting Action Mission support operation African Union AMM Observer mission to Indonesia EUBAM Rafah Border assistance mission to Rafah in the Palestinian Territories EUBAM Moldova and Ukraine Border Management of Moldova— Ukraine and Transnistria EUPAT Advisory Group mission to FYROM EUPOL COPPS Police mission to

State Bosnia and Herzegovina

FYROM

Georgia

Kinshasa

Congo

Iraq

Sudan

Indonesia

RafahPalestine region

Moldova Ukraine

FYROM

Palestine region (continued)

9 Foreign and Defence Policy: Historical Developments and. . .

370 Table 9.1 (continued) Launch

End

Full name European Union Police Mission for the Palestinian Territories European Union Police Mission in Afghanistan

15.06.2007

31.05.2013

01.07.2007

30.09.2014

European Union Police Mission in the Democratic Republic of the Congo

12.02.2008

30.12.2010

European Union Mission in Support of Security Sector Reform in GuineaBissau

01.10.2008

–

09.12.2008

–

European Union Monitoring Mission in Georgia European Union Rule of Law Mission in Kosovo

16.07. 2012

–

European Union Capacity Building Mission in Niger

16.07.2012

–

European Union Regional Maritime Capacity Building for the Horn of Africa and the Western Indian Ocean

18.06.2012

17.01.2014

European Union Aviation Security Mission in South Sudan

22.05. 2013

–

15.04. 2014

–

European Union Integrated Border Assistance Mission in Libya European Union Capacity Building Mission in Mail

Abbreviated name

State

the Palestinian Territories EUPOL Afghanistan Police operation in Afghanistan EUPOL RD Congo Police operation in Congo DR EUSSR GuineaBissau Mission to support security sector reform in GuineaBissau EUMM Georgia Monitoring mission to Georgia EULEX Kosovo Support to the Kosovo authorities in the field of the rule of law EUCAP Sahel Niger Strengthening the capacity of the Niger security forces EUCAP Somalia Developing naval military law enforcement capabilities in Somalia EUAVSEC South Sudan Flight safety mission to South Sudan EUBAM Libya Border assistance mission EUCAP Sahel Mali Support to the

Afghanistan

Congo

GuineaBissau

Georgia

Kosovo

Niger

Horn of Africa and West Indian Ocean

South Sudan

Libya

Mali

(continued)

9.4 Diplomatic Representations and ESDP/CRPD Missions

371

Table 9.1 (continued) Launch

End

Full name

01.12.2014

–

European Union Advisory Mission Ukraine

16.03.2015

15.07.2016

European Union Military Advisory Mission in the Central African Republic

22.11.2017

–

European Union Advisory Mission Iraq

09.12.2019

–

European Union Advisory Mission in the Central African Republic

Abbreviated name internal security forces in Mali EUAM Ukraine Reform of the security policy sector EUMAM RCA Advisory mission to the Central African Republic EUAM Iraq Advisory mission to Iraq EUAM RCA Advisory mission to the Central African Republic

State

Ukraine

CentreAfrican Republic Iraq

Central African Republic

Source: European External Action Service

Fig. 9.9 Existing CSDP missions today. Source: European External Action Service

372

9 Foreign and Defence Policy: Historical Developments and. . .

References Council Conclusions on the Implementation of the Joint Declaration by the President of the European Council, the President of the European Commission and the Secretary General of the North Atlantic Treaty Organization, Brussels, 6 December 2016 https://data.consilium. europa.eu/doc/document/ST-15283-2016-INIT/en/pdf. Council Conclusions on the Implementation of the Joint Declaration by the President of the European Council, the President of the European Commission and the Secretary General of the North Atlantic Treaty Organization, Brussels, 5 December 2017 https://www.consilium. europa.eu/media/31947/st14802en17.pdf. EU Global Strategy, Shared Vision, Common Action: A Stronger Europe A Global Strategy for the European Union’s Foreign And Security Policy, 2016. EU Global Strategy, The European Union’s Global Strategy Three Years On, Looking Forward, 2019. Joint Action Plan Implementing the Civilian CSDP Compact, European Commission, Brussels, 30 April 2019 https://data.consilium.europa.eu/doc/document/ST-8962-2019-INIT/en/pdf. Joint Declaration on EU-NATO Cooperation, Council of the European Union, Press Release, 10 July 2018, https://www.consilium.europa.eu/en/press/press-releases/2018/07/10/eu-natojoint-declaration/. Joint Declaration on EU-NATO Cooperation, Council of the European Union, Press Release, 8 July 2016, https://www.consilium.europa.eu/en/policies/defence-security/eu-nato-cooperation/. Decision 2004/197/CFSP the Council of Ministers, establishing a mechanism to administer the financing of the common costs of European Union operations having military or defence implications, No L 63, Brussels, 23 February 2004. Decision 2015/528/CFSP of the Council of Ministers of Brussels, establishing a mechanism to administer the financing of the common costs of European Union operations having military or defence implications (Athena) and repealing Decision 2011/871/CFSP, No L 84, Brussels, 27 March 2015. Decision (EU) 2017/971 of the Council of Foreign Affairs of EU, determining the planning and conduct arrangements for EU non-executive military CSDP missions and amending Decisions 2010/96/CFSP on a European Union military mission to contribute to the training of Somali security forces, 2013/34/CFSP on a European Union military mission to contribute to the training of the Malian armed forces (EUTM Mali) and (CFSP) 2016/610 on a European Union CSDP military training mission in the Central African Republic (EUTM RCA), No L 146, Luxembourg, 8 June 2017. Decision (CFSP) 2017/23158 of the Council of Foreign Affairs of EU, establishing permanent structured cooperation (PESCO) and determining the list of participating Member States, No L 331, Brussels, 11 December 2017. Official Journal of the European Communities 29.07.1992, No C 192,Treaty on European Union, “Treaty on European Union”, Maastricht, 7 February 1992. 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. 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 Union 16.12.2002, C 310. Treaty establishing a Constitution for Europe, “Treaty establishing a Constitution for Europe”, Rome, 29 October 2004. 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.

References

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Regulation (EU) 2018/1092 of the European Parliament and of The Council of EU establishing the European Defence Industrial Development Programme aiming at supporting the competitiveness and innovation capacity of the Union’s defence industry, Brussels, 18 July 2018. 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) Bulletin of the European Communities “Single European Act”, Luxembourg, 17 February 1986. 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.

Social Policy: Evolution, Impact and Current Challenges

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Social Thinking at the Start

It is a fact that the objectives of the common regional policy very largely include the objectives of the common social policy, given that the former aims to improve the least favoured regions of the EU, indirectly fulfilling the objectives of the latter, which is to improve the social and economic life of its least favoured citizens. Consequently, many of the measures taken are complementary and their financial instruments are well coordinated to fulfil their objectives. Although the Treaties of Paris and Rome establishing the ECSC, the EEC and the EAEC stated the intention of joint action for social welfare, setting as their main objective the improvement of the living and working conditions of their peoples, this cooperation was limited. And although the achievements of integration, including in the economic field, have been impressive, they have not in themselves been able to eliminate the economic and social inequalities of European citizens.

10.1.1 The Necessity of Social Policy In a peculiar union of states, events such as limited population growth, increasing life expectancy and shortening of the length of active working life, increasing time and improving the type of education and qualification, the entry of women into economic life and the extensive use of technology, were some of the important features of a new form of social life. If account is also taken of the major structural changes in the occupational sectors, with sectoral shifts in a relatively short space of a few decades from the primary to the secondary and tertiary sectors, the problems of employment, social security and vocational training for certain categories of workers, especially young people entering working life, women and older people approaching retirement age, become easier to understand and comprehend.

# The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 P. Liargovas, C. Papageorgiou, The European Integration, Vol. 2, Springer Texts in Political Science and International Relations, https://doi.org/10.1007/978-3-031-47176-6_10

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It is therefore understandable why the Member States as a whole have made it a priority to solve social problems which, due to similar economies, have many important similarities. Finding common solutions therefore becomes imperative, particularly in a Union where the single internal market, which allows for the free movement of workers, has created the conditions and trends for relative convergence of wages, social benefits and social security. Furthermore, problems of structural unemployment, income and wealth inequalities, as well as differences and asymmetries in economic and social values, cause disruptions in social life and negative attitudes. Given that these differences and asymmetries are often also due to the way in which integration processes are perceived by the Member States and citizens, the EU has an obligation to find solutions and implement a common social policy that will make it possible to harmonise common rules with existing social requirements, avoid the exclusion of specific social groups and provide appropriate social protection where necessary.

10.1.2 The Origins of Social Policy Social policy was one of the objectives of the EEC, given that the Treaty of Rome establishing the EEC in 1957 included social provisions (EAEC 1957). In particular, Articles 117–122 stated that there should be closer cooperation between Member States in the social field, while Article 119 required Member States to apply the principle of equal pay for equal work between men and women workers. However, this cooperation was limited, while the Member States retained full autonomy in the conduct of their social policy since the Treaty of Rome establishing the EEC did not require the adoption of specific measures, as it stressed that this would gradually evolve with the operation of the common market and the improvement in social conditions brought about by economic integration. In this context, and until 1972, actions for a common social policy were limited and essentially linked to the functioning of the common market. Apart from the establishment of the European Social Fund (ESF), from 1957, the measures adopted were limited to improving the mobility of workers while coordinating the social security systems of the Member States. However, the 1973 oil crisis and concerns about structural imbalances and unemployment led to a more targeted social policy at Community level. Thus, at the Summit of 9 and 10 December 1974, the first Social Action Programme, which had been submitted by the Commission since 24 October 1973 (COM(73) 1600) and had already been approved by the Council of Ministers since 21 January 1974, was adopted. Specifically. The Social Action Programme provided for: (a) the establishment of the necessary consultations between the Member States on their employment policies, in view of the need to achieve a policy of full and better employment in the Community as a whole and in the regions; (b) the promotion of better cooperation between national employment services; (c) the implementation of a common vocational training policy with a view to the progressive attainment of the required training standards, in particular through the creation of a European

10.1

Social Thinking at the Start

377

Vocational Training Centre; (d) to undertake action to achieve equality between men and women in terms of access to employment, vocational training and advancement and in terms of working conditions, including pay, (e) to ensure that the family responsibilities of all concerned can be reconciled with their employment aspirations, (f) to establish a programme action for migrant workers and their family members. However, the oil crises, high inflation and the economic contraction of the late 1970s and early 1980s caused major problems in the ten member states of the EEC, with a significant increase in unemployment reaching 13,000,000 in 1983, of which 40% were young people under 25 years of age. The consequence of these developments has been an intensification of efforts to pursue a more substantial social policy on the part of the EEC, which is seeking ways of highlighting and strengthening its social dimension and is gradually moving towards the formulation of a European social policy. Thus, since 1974 an effort has been made to establish a social action programme, with the adoption of directives on the vocational rehabilitation of young people, the protection of workers against collective redundancies etc., while regulations on equal opportunities between the sexes, the protection of disadvantaged persons, health and safety at work and social security in the Member States have been promoted.

10.1.3 The Single European Act and the European Social Charter Efforts to complete the internal market led to the signing of the Single European Act (SEA) in 1986, which came into force in 1987. The SEA was to put in place a social policy based on economic and social cohesion to offset the effects of the implementation of the internal market on the less developed Member States and to reduce the disparities in the level of development between the regions of the European Communities. At the same time, the SEA provided the Member States with 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, particularly in the area of collective bargaining, was encouraged. It should be noted that the decision of the “Twelve” Member States to promote directives on social policy to be adopted by the Council of Ministers by qualified majority rather than unanimity, following a proposal from the Commission and consultation of the EESC, was indicative of the partners’ intention to promote a common social policy. As a consequence, the first social policy arrangements were based on the Community Charter of the Fundamental Social Rights of Workers, adopted by the Member States at the Strasbourg European Council on 9 December 1989, with the exception of Britain. The Charter is a coherent set of social security objectives. Although general in character and terminology, the Charter includes “moral

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obligations” designed to ensure respect for certain social rights. These rights relate to: (a) employment and fair pay; (b) the improvement of living and working conditions; (c) social welfare; (d) freedom of association and collective bargaining; (e) vocational training; (f) equal treatment for men and women; (g) consultation and participation of workers; (h) protection of health and safety at work and (i) protection of children, adolescents, the elderly and disadvantaged persons. The above are only indicative elements of the Charter. With regard to social services, the Charter, by referring to their type, purpose, organisation, funding, staffing and operation, encouraged efforts to continuously improve services, with special attention to vulnerable populations, voluntary participation in the establishment and maintenance of social services and the promotion of public, private and non-profit sector cooperation. The Charter was not legally binding and therefore did not impose any obligations on Member States. However, it did reveal the general European objectives and positioning and set out the common basis for a common understanding of the future, especially of work, and included an explicit request to the Council to take initiatives to transpose its content into EEC Directives, Decisions and Legislative Acts. Thus, Council Directive 91/533/EEC of the Council of Ministers on the employer’s obligation to inform employees of the terms and conditions of their employment contract/relationship and Council Recommendations 92/442/EEC and 92/441/EEC on the convergence of social protection objectives and policies and on the formulation of common criteria concerning the adequacy of resources and benefits under the common social protection systems were adopted. However, the measures proposed by the Charter have encountered serious difficulties. Most of them had to be adopted unanimously by the Council of EC, with the result that their adoption was not completed or was delayed.

10.1.4 The Treaty on European Union and the Social Protocol The Treaty on European Union (TEU) of 1992, which entered into force in 1993, provided for certain measures to give a social dimension to the functioning of the single internal market, as an Agreement on Social Policy in the form of an annexed Social Protocol. The aim was to improve living and working conditions and combat exclusion, while promoting social dialogue and developing the human resources that would enable these objectives to be achieved. Britain agreed not to prevent the Social Protocol from being incorporated into the TEU provided that it included a specific protocol exempting it from the Social Protocol. The Agreement on Social Policy, however, not only defined the objectives of social policy in the direction set out in the 1989 Charter but also gave a new dimension to the European social policy debate. The TEU better clarified the tasks of the ESF and introduced a completely new chapter on education and vocational training. Also in 1993, the Commission launched a wide-ranging consultation on the future of European social policy. The purpose of this action was based on the White Paper on Growth, Competitiveness

10.1

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and Employment of 1993 (COM(93) 700 final) and put the issue of employment at the heart of economic policy. The Commission proposed not only the adoption of structural policies to boost the competitiveness of European enterprises, but also the development and implementation of active employment policies, such as: (a) training young people in new technologies; (b) lifelong education and re-training of adults; (c) creating a more favourable framework for small and medium-sized enterprises and (d) creating jobs in the context of actions in the fields of culture, the elderly and the environment. In further efforts to implement the White Paper on Growth, Competitiveness and Employment, the Commission adopted the Confidence Pact for Employment, endorsed by the Florence European Council on 21 and 22 June 1996 (COM (96) 485 final), and the Green Paper on Partnership for a New Organisation of Work, adopted in 1997 (COM(97) 128 final) (1997). With this paper, the Commission wanted to launch a debate among all stakeholders at the European level on new forms of work organisation and improving the employment situation.

10.1.5 The Treaty of Amsterdam and the European Employment Strategy The Treaty of Amsterdam signed in 1997, which entered into force in 1999, was an important step in the evolution of EU social policy, as Britain accepted the incorporation of the renewed Agreement on Social Policy as a Social Protocol. The Social Protocol, which was adopted by all Member States except Britain when the TEU was being drawn up, was incorporated into the Treaty following its acceptance by Tony Blair’s new Labour government in Britain. The Treaty included a chapter on employment, providing a comparison of the current situation in the Member States, and another on the introduction of incentives for employment. However, the Treaty was limited to the formulation of 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 in favour of employment and the coordination of the respective national policies. However, two directives have also been adopted: (a) Directive 2000/43/EC on equal treatment between persons irrespective of racial or ethnic origin and (b) Directive 2000/78/EC establishing a general framework for equal treatment in employment and occupation. Furthermore, the co-decision legislative procedure replaced the cooperation legislative procedure and was extended to provisions relating to the ESF, the free movement of workers and social security for mobile Community workers. 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)—also called the “Luxembourg process” for employment—was agreed and the pillars of a proactive

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and preventive employment policy were drawn up. The coordination of national employment policies was intended to commit Member States to a common set of goals and objectives expressed around the four pillars of the EES: I. Employability and ability to work. Training, re-training and good career guidance are the means by which governments can ensure that jobseekers have the skills and qualifications required by the labour market. Thus, all young people should be offered training, education, employment or work experience before they reach 6 months of unemployment, while unemployed adults should be offered a fresh start, in particular through further training and vocational guidance before they reach 12 months of unemployment. In addition, the school drop-out rate should be reduced. II. Entrepreneurship. The EU’s intention is to make it easier to set up a new business and self-employment by identifying existing barriers to the creation of small and medium-sized enterprises, reducing the tax and labour contribution burden and finding ways to create more jobs in the social (voluntary) sector. III. Adaptability. Businesses and workers face new technologies and changing market conditions. The necessary adaptation should be facilitated by developing strategies for modern and flexible work organisation, by examining the need for new types of employment contracts and by introducing, where possible, incentives for individual and in-house further training. IV. Equality of opportunity. EU Member States attach particular importance to ensuring equal opportunities for women and men and to improving the integration of people with disabilities into the labour market. They have therefore decided to take measures to ensure that more women can gain access to previously male-dominated occupations, to improve the availability of childcare facilities and care services for the elderly so that women, in particular can work without hindrance, to gradually remove barriers that make it difficult for women and men to return to work after a break (e.g. to bring up children), and finally, to give women and men a better chance of finding work after a break. The pillars of the EES would be implemented simultaneously at national and European levels. In this context, Member States coordinate their labour market policies on an annual cycle. Initially, and on a proposal from the Commission, the Council of Ministers adopts on an annual basis a set of priority areas for action, along the lines of the four key axes of the EES. Each Member State prepares annually a National Action Plan (NAP) for Employment, which is a key tool for coordinating national objectives with the employment objectives and guidelines formulated through the EES. This process should involve a wide range of partners: trade unions, employers, local and regional authorities. The Commission and the Council of EU jointly examine each NAP for Employment and draw up a joint employment report, which is submitted to the European Council at the end of the year. The conclusions of these employment reports may lead to changes in the guidelines and recommendations for the employment policies of specific Member States.

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The evaluation of the experience of the implementation of the NAPs for Employment reveals that the commitment made by national governments to integrate the gender dimension into employment policies has significantly increased female employment and improved the prospects for gender equality. Also, despite the noted worrying slowdown in the rate of labour productivity growth, recent performance in labour quality has been encouraging.

10.1.6 The Lisbon Strategy for a Europe with a Social Face Shortly afterwards, on 23 and 24 March 2000, the Lisbon European Council in Lisbon adopted the Lisbon Strategy, with the aim of making the EU more dynamic and competitive by 2010, with references to encouraging research, innovation and entrepreneurship, and with the important objective of ensuring cohesion within the Member States by boosting employment, creating more and better jobs and eliminating social exclusion. The implementation of this strategy would be possible by improving existing procedures, introducing a new Open Method of Coordination (OMC) at all levels, combined with a stronger steering and coordination role for the European Council to ensure more effective strategic direction and effective monitoring of progress. A European Council meeting each spring would set out the relevant mandates and ensure that their implementation is monitored. This strategy, which was developed in the context of several European Councils held since 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. This pillar emphasises the need for continuous adaptation to developments in the information society and efforts to build consensus in the field of research and development. (b) A social pillar to modernise the social model through investment in human resources and the fight against social exclusion. Member States are invited to invest in the areas of education and training and to pursue active employment policies in order to facilitate the transition to the knowledge economy. (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 decoupled from the use of natural resources. As the relevant policies are almost exclusively the responsibility of the Member States, the OMC was implemented, which involved the drawing up of national action plans and their subsequent coordination. Thus, the Lisbon Strategy provides for the adaptation and strengthening of existing coordination procedures: (i) the “Luxembourg process” for employment (see Sect. 10.1.5), (ii) the “Cardiff process” (stemming from the conclusions of the Cardiff European Council of 15 and 16 June 1998) on the functioning of markets and (iii) the Cologne process (stemming from the conclusions of the Cologne European Council of 3 and 4 June 1999) on the macroeconomic dialogue. The Lisbon Strategy contains ten main guidelines:

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I. The creation of a European knowledge area, in which citizens and businesses should have cheap access to a global network of information and services, subject to appropriate legislation on electronic services and telecommunications, the reduction of Internet access costs, the introduction of the Internet in schools and teacher training, and the possibility of electronic access to public services. II. The development of a European Research and Innovation Area, with the necessary conditions to encourage research activities through tax and other economic policies, the networking of research organisations and the enhancement of the mobility of researchers and academics, as well as the protection of intellectual property. III. Creating an environment friendly to new and innovative enterprises, by promoting a regulatory framework to encourage investment, innovation and entrepreneurship, as well as efforts to reduce operating costs and remove barriers to the entry of enterprises, especially SMEs, into markets, and networking with research and technology institutions. IV. Economic reforms for the completion and efficiency of the internal market, including the removal of barriers in the services sector, the simplification of the institutional framework, the modernisation of public procurement systems and the emphasis on horizontal policies, employment, regional development, research, training and environmental protection. V. The creation of efficient and integrated financial markets, which are transparent and facilitate access to the necessary capital for businesses, especially SMEs, allowing all categories of investors to participate in the capital market and the use of new financial instruments. VI. The implementation of sound macroeconomic policies aimed at reducing the tax burden on labour, especially for unskilled and low-paid workers, and encouraging investment, research, development, innovation and technology. An action plan is required to be implemented by 2005, while as regards economic policies, the priority remains macroeconomic stability, as defined by the SGP, while taking into account the objectives of growth and employment. VII. Emphasis on education and training to respond to the new conditions of the knowledge society, with particular attention to young people, the unemployed and citizens whose professional skills are being devalued by the introduction of new technologies and with the preconditions of increasing investment in “human capital”, reducing the percentage of citizens aged 18–24 years who have not entered higher education, giving all schools access to the Internet and developing training centres into multi-faceted knowledge centres, encouraging the development of training centres and encouraging the development of a new knowledge society. VIII. Creation of more and better jobs, with the aim of increasing the employment rate from 61% in 2000 to 70% in 2010 and, in particular, increasing the female employment rate from 51% in 2000 to at least 60% in 2010, with the necessary emphasis on lifelong learning and upgrading of skills, flexibility in forms of

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work, increasing employment in the service sector and ensuring equal opportunities. IX. Modernisation of social policy and protection systems, which should ensure adequate remuneration for work, their sustainability in the light of the ageing population of the Member States, gender equality, the quality of health services and the elimination of social exclusion. X. Strengthening social cohesion and eradicating social exclusion by combating poverty and unemployment, upgrading skills and ensuring broad access to knowledge and labour market opportunities, which requires cooperation between Member States and the adoption of policies targeted at specific social groups, such as minorities, children, the elderly and people with disabilities. 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 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 retained the objective that Member States should allocate 3% of their GDP to research and development by 2010. Subsequently, the Brussels European Council of 22 and 23 March 2005 proposed a new start for the Lisbon Strategy for the three-year period 2005–2008, focusing on the actions to be taken rather than on the numerical targets to be achieved. The deadline of 2010 and the targets linked to the various employment rates are no longer priorities.

10.1.7 The Treaty of Nice and the European Social Agenda On 12 December 2000, shortly before the signing of the Treaty of Nice, French President Jacques Chirac was strongly criticised by the representatives of the political parties in the European Parliament during the presentation of the new treaty, and the dissatisfaction of Commission President Romano Prodi was also evident. The reasons for the dissatisfaction were due to the non-inclusion of the Charter of Fundamental Rights of the European Union as an integral part of the 2001 Treaty of Nice, which entered into force in 2003 (2001). The Charter included for the first time in a single text all the civil, political, economic and social rights of European citizens and all persons living in the EU. The draft Charter was finalised on 26 September 2000 and presented to the European Council in Biarritz on 13 and

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14 October 2000, with a view to its final approval or rejection by the Nice European Council of 7–11 December 2000. However, the Nice European Council contented itself with its 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. However, the Nice European Council of 7–11 December 2000 adopted the Commission’s proposal of 28 June 2000 for a Social Policy Agenda, called the European Social Agenda (ESA) (COM(2000) 379 final), for the time period 2000–2005, which promoted the safeguarding of the European Social Model, with: (a) More and better jobs; (b) Anticipating and exploiting changes in the working environment, while developing a new balance between flexibility and security. (c) Combating social exclusion and discrimination. (d) Modernising social protection. (e) Promoting equality between men and women. (f) Strengthening the social dimension of enlargement and the EU’s external relations. Later, on 9 February 2005, the Commission launched a new Social Policy Agenda (2006–2010) (COM(2005) 33 final). As stated in the Commission document, the Social Policy Agenda (2006–2010) takes into account: I. An intergenerational approach. The changes brought about by demographic change, in particular the ageing of the European population, the need to adapt social protection and pension systems, the need to ensure better integration of young people and the need to tackle the problem of migration represent the main issues at stake. To this end, an analysis of the challenges and a series of actions are proposed to analyse demographic changes in populations. II. A partnership for change: Given that partnership between public authorities, social partners and civil society has been key to the success of European policies, it is proposed to organise an annual meeting of all stakeholders in the form of a forum. The purpose of this meeting would be to periodically evaluate the implementation of the agenda. III. The integration of the external dimension: The integration of the European Social Model in external dialogues and actions at bilateral, regional and multilateral levels is foreseen. The two priority axes relating to the strategic pillars of the new Agenda are employment, under the prosperity objective, and equal opportunities and inclusion, under the solidarity objective. Prerequisites for the implementation of the Social Policy Agenda (2006–2010) are the study and understanding of demographic change, the establishment of institutions where public authorities, social partners and civil society regularly evaluate the implementation of the Agenda and the integration of the European Social Model in the EU’s contacts, negotiations and actions at bilateral, regional and global levels. In addition, the Progress programme was established for the period 2007–2013 to support the implementation of the EU’s objectives in the social field, in particular in the areas of employment, social affairs and equal opportunities, as set out in the Social Agenda. The programme would also contribute to the achievement of the

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objectives of the Lisbon Strategy for growth and jobs. The programme, operated jointly with the ESF, replaces the previous programmes which expired in 2006 and covered anti-discrimination, gender equality, employment measures and the fight against social exclusion. The total budget of the programme is €743.25 million. Finally, the European Globalisation Adjustment Fund (EGF) was established on 20 December 2006 (Regulation (EC) No 1927/2006) and was set up in 2007 to provide support to workers who lose their jobs either because of major structural changes in world trade due to globalisation or because of the global economic and financial crisis. The total annual budget of the EGF is EUR 150 million for the period 2014–2020. This fund can finance up to 60% of the cost of projects to help workers made redundant to find a new job or start their own business.

10.1.8 The Treaty of Lisbon: The Charter of Fundamental Rights The Treaty of Lisbon of 2007, which entered into force in December 2009, paved the way for further progress to be made in consolidating the social dimension of European integration, given that it incorporated the Charter of Fundamental Rights of the European Union as an integral part of it, following the failure to incorporate it in the Treaty of Nice. The drafting of the Charter was entrusted by the Tampere European Council on 15 and 16 October 1999 to a special assembly which, despite the difficulties, completed the draft and presented it 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 (2000). It was based on the Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950 and the Helsinki Final Act, signed in the framework of the OSCE on 1 August 1975. The issues it deals with are grouped under six main headings: dignity, freedom, equality, solidarity, civil rights and justice. The chapter on Dignity refers to the right to life and not to be condemned to death, to physical and mental integrity, as well as 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 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 inclusion of people with disabilities. The chapter on Solidarity refers to the right of workers to information and consultation in the context of their workplace, the right to negotiation and collective

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activities, the right to access job search services, protection in the event of unjustified dismissal, appropriate working conditions, the prohibition of child labour and the protection of young people at work, the protection of family life and the coexistence of family and work-life through measures such as maternity and parental leave, health care, environmental protection and consumer protection, while recognising the right to access social benefits and social assistance services and housing assistance, but not the right to social security, employment and housing. 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 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 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 Ministers and the Commission, the right to vote in elections to the European Parliament, the Council of Ministers and the Council of the European Union. In the chapter on Justice, a general reference is made to the right to apply to the courts 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.

10.1.9 After the Treaty of Lisbon: 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 headline targets have been agreed for the whole EU. Among these objectives, employment, education and the fight against poverty and social exclusion are of particular importance for EU social policy. For the employment target, it is planned to increase employment in the 20–64 age group from 69% to at least 75%. The education objective aims to reduce early school leaving rates from 15% to below 10% and 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%, i.e. by 20 million people who are in or at risk of poverty and social exclusion. The central argument developed is that the Europe 2020 Strategy appears more social than the Lisbon Strategy of 2000, since it puts employment, education and especially the fight against poverty and social exclusion, among others, back at the heart of European policy and establishes for the first time quantitative targets and guidelines for the implementation of these objectives.

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Seven flagship initiatives are foreseen to act as catalysts for progress on each key priority. These include the following three, of particular interest to the common social policy: I. “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 the EU programmes on mobility, universities and researchers and link them with national programmes and resources; (b) accelerate the higher education modernisation programme; (c) explore ways to promote entrepreneurship through mobility programmes for young professionals; (d) promote the recognition of non-formal and informal learning and (e) launch a youth employment framework that will outline policies aimed at reducing youth unemployment. II. “Agenda for new skills and jobs” to modernise labour markets and ensure the sustainability of European social models, to acquire new skills for citizens to adapt to new conditions and possible career changes, to 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; (b) adapt the legislative framework, in line with the principles for “smart” regulation; (c) facilitate and promote labour mobility within the EU and better match labour supply to demand; (d) strengthen the capacity of social partners and make full use of the problem-solving potential of social dialogue at all levels; (e) give a strong impetus to the strategic cooperation framework for education and training involving all stakeholders and (f) develop a common language and an operational tool for education/training and work: a European framework for skills, qualifications and occupations. III. “European Platform against Poverty” to ensure economic, social and territorial cohesion, so as to recognise the fundamental rights of people living in poverty and social exclusion, 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 (OMC) on social exclusion and social protection into a platform for cooperation and 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 to integrate 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 health care systems. Progress on these initiatives is monitored in the annual cycle of EU economic governance, through the European Semester. However, the analysis of the Commission’s Communication of 5 March 2014 to the European Parliament, the European Council, the EESC and the CoR (COM(2014) 130 final) shows that

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experience with the objectives and flagship initiatives of the Europe 2020 Strategy is not homogeneous. In terms of social policy, the EU is expected to achieve or come close to its objectives for education, but not for employment and poverty reduction. However, the transfer of these targets to the national level has helped to highlight several worrying trends—widening gaps between the best performing Member States and the worst performing Member States and widening gaps between EU regions and the regions of the Member States themselves. On 11 March 2014, the Fund for European Aid to the most Deprived (FEAD) was established (Regulation (EU) 223/2014), to support the actions of EU Member States to provide material assistance to the most deprived. This consists of the distribution of food, clothing and other necessary personal items, and must be accompanied by social inclusion measures such as guidance and support to enable these people to lift themselves out of poverty. In real terms, more than €3.8 billion is allocated to the FEAD for the period 2014–2020, with Member States contributing at least 15% of the funding of their national programme.

10.1.10 The European Pillar of Social Rights In order to build a fairer and more social Europe, the European Parliament, the EU Council of Ministers 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 (COM(2017) 250 final). 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 EU Member States, and the Commission has launched specific initiatives at the European level. Furthermore, the 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 (see Fig. 10.1): 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 to employment.

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Fig. 10.1 Schematic illustration of the European Pillar of Social Rights. Source: European Commission (2017)

Chapter II: Fair working conditions, including (v) secure and adaptable employment, (vi) fair and decent pay, (vii) information about employment conditions and protection in case of dismissal, (viii) social dialogue and involvement of workers, (ix) work-life balance (leave—benefits) and (x) a healthy, safe and well-adapted working environment and protection of personal data. Chapter III: Social protection and integration, including (xi) child care and support to children, (xii) social protection, (xiii) unemployment benefits, (xiv) minimum (guaranteed) income, (xv) old-age income and pensions, (xvi) health care, (xvii) inclusion of people with disabilities, (xviii) long-term care, (xix) housing and assistance for homeless and (xx) access to essential services.

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10.1.11 The EU’s Social Contribution to Tackling COVID-19 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 (Figs. 10.2 and 10.3). The EU response is summarised by the Council of EU, the Commission, the European Parliament and

Fig. 10.2 Rolling average of 7 days of new coronavirus cases in the EU from 1 March to 5 December 2020. Source: European Council (2020) (processed by the Authors)

Fig. 10.3 Symbolic illustration of the ten EU interventions to respond to pandemic COVID-19. Source: European Council (2020)

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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 (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 “Next Generation EU” recovery instrument and will support public investment and reforms in Member States, helping them to address the socioeconomic 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 ReactEU (€47.5 billion), Horizon Europe (€5 billion), InvestEU (€5.6 billion), Rural Development (€7.5 billion), the Just Transition Fund (JTF) (€10 billion) and RescEU (€1.9 billion) are added together, the amounts available through the Next Generation EU will be almost €750 billion. In addition, the European Council of 21 July 2020 approved the MFF 2021–2027, adopted by the European Parliament on 16 December 2020, through which a total of €1074.3 billion 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 to support the recovery from pandemic COVID-19 and the EU’s long-term priorities in various policy areas, including health. Finally, the EU has made available a €540 billion support package for workers, businesses and Member States, while the ECB is providing an additional €1350 billion under its bond purchase programme to help Member State governments during the crisis. 2. 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 hours 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. 3. 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.

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4. 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 Organisation in the global effort to achieve universal access to vaccination. 5. 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, of which €3.1 billion would be used as follows: €2.7 billion for the Emergency Support Instrument (ESI) and €415 million 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. The amount of €1.09 billion will be used for the ESI as an advance for the pre-ordering of vaccine doses, while €5.1 billion will be allocated to the Corona Response Investment Initiative (CRII and CRII+). 6. 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 (potentially up to €100 billion) 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, Bulgaria: €511 million, Greece: €2.7 billion, Spain: €21.3 billion, Italy: €27.4 billion, Croatia: €1 billion, Cyprus: €479 million, Latvia: €193 million, Lithuania: €602 million. Malta: € 244 million, Poland: € 11.2 billion, Hungary: € 504 million, Portugal: € 5.9 billion, Romania: € 4.1 billion, Slovakia: € 631 million, Slovenia: € 1.1 billion, Czechia: € 2 billion. Subsequently, Ireland also requested support of €2.5 billion from the SURE programme, subject to agreement by the Council of EU. The total financial support will amount to €90.3 billion. The first €39.5 billion were disbursed by 1 December 2020. 7. Financial assistance to EU Member States. The EU has supported Member States financially in dealing with the crisis through the Corona Response Investment Initiative, providing Member States with around €37 billion 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

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state aid rules so that governments can provide liquidity to the economy to benefit businesses and keep jobs. 8. Strengthening European solidarity. The EU in a 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 (EUSF) to cover emergency health needs. The scope of the Fund has recently been widened, with up to €800 million being made available in 2020 to Member States to fight the coronavirus pandemic. 9. 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. 10. 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 humanitarian needs. The total effort through the “Team Europe” Initiatives (TEIs) package amounts to €38.5 billion, and the EU has also activated an airlift of humanitarian aid where needed.

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Statistics for the Evaluation of Social Policy

A worrying phenomenon that causes serious problems in the implementation of the common Social Policy is the demographic problem that has worsened the ratio of insured to pensioners. Social security has always been based on the link between previous generations and future generations, with the Pay As You Go (PAYG) redistributive system, in which the active working population pays contributions to cover the benefits and pensions of the inactive working population. The sustainability of such a system therefore depends to a significant extent on the existence of sufficient contributions from the active working population, making the system directly dependent on the current ratio of workers to pensioners, highlighting the seriousness of the demographic problem in the EU in the coming years.

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10.2.1 The Demographic Problem and Social Security Costs in the EU According to Eurostat’s projections, the graphs in Figs. 10.4 and 10.5 show the fertility rates and life expectancies of men and women in the EU-27 by 2100. These show a relatively small increase in fertility rates, from 1.51 in 2019 to 1.71 in 2100, while the increase in life expectancy at birth for both sexes by 2100 is significant, for men from 77.6 years in 2019 to 88.9 years in 2100 and for women from 83.4 years in 2019 to 92.8 years in 2100. Furthermore, the graph in Fig. 10.6 shows the evolution over time of the average age of the population in the EU-27 Member States up to 2100, where it is evident that the average age of 43.7 years in 2019 reaches 48.8 years in 2100, making evident the ageing of the population of the EU Member States that is occurring over the coming decades. Average Fertility Indicators in the EU-27 1.75 1.70

1.65 1.60 1.55 1.50 1.45 1.40 2019 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080 2085 2090 2095 2100

Fig. 10.4 Fertility rates in the EU-27 up to 2100. Source: Eurostat (2020) (processed by the Authors)

Average life expectancy for men and women in the EU-27 at birth 94 92 90 88 86 84 82 80 78 76 74 2019 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080 2085 2090 2095 2100 Average life expectancy for men

Average life expectancy for women

Fig. 10.5 Life expectancy of men and women in the EU-27 up to 2100. Source: Eurostat (2020) (processed by the Authors)

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Average age of population in ΕU-27 50 49 48 47 46 45 44 43 42 2019 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080 2085 2090 2095 2100

Fig. 10.6 Average age of population in the EU-27. Source Eurostat (2020) (processed by the Authors)

Proportions of population groups in the ΕU-27 100 90 20.30 20.60 22.30 24.20 26.10 27.60 28.70 29.50 30.00 30.30 30.30 30.30 30.60 30.80 31.00 31.20 31.20 31.30 80 70 60 50 40

64.6 64.3 63.2 61.8 60.3 58.9 57.7 56.8 56.2 56.1 56.1 56.1 55.7 55.3

55

54.9 54.9 54.8

30 20 10

15.2 15.1 14.6

14

13.6 13.6 13.6 13.7 13.7 13.6 13.6 13.6 13.8 13.9 13.9 13.9 13.9 13.9

0 2019 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080 2085 2090 2095 2100 Age group 0 - 14 years

Age group 15 - 64 years

Age group 65 years and over

Fig. 10.7 Population age ratios in the EU-27 by 2100. Source: Eurostat (2020) (processed by the Authors)

As a consequence of this development, and as shown in the histogram in Fig. 10.7, the proportion of young people aged 0–14 years is projected to decrease by percentages from 15.2% in 2019 to 13.9% in 2100, while the category of people aged 25–64 years will decrease significantly, from 64.6% in 2019 to 54.8% in 2100. In contrast, the 65 and older age group will experience an increase from 20.3% in 2019 to 31.3% in 2100. In addition, Fig. 10.8 provides the proportions of people aged 65 years and older relative to active working people aged 15–64 from 2019 to 2100. The histogram shows the ever-increasing dependency ratio, which increased from 31.4% in 2019 to 57.2% in 2100. These projections do not favour the pension systems of the Member States and are a serious issue to which particular attention should be paid in the coming years.

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Ratio of population aged 65+ years to active population aged 15-64 years in the EU-27 60 50

40 30 20 10 0

2019 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080 2085 2090 2095 2100

Fig. 10.8 Dependency ratios of people aged 65 years and over compared to active working people, aged 15–64 years. Source: Eurostat (2020) (processed by the Authors)

10.2.2 Unemployment, Education Level and Poverty Risk An important indicator of social well-being is unemployment rates. The histogram in Fig. 10.9 shows the average unemployment rate as a percentage of the active population in the EU-28 from 2002 to 2019. The histogram shows the increase in the unemployment rate immediately after the global financial crisis, which peaked in 2013. Some 10 years after the onset of the financial crisis, unemployment rates in the EU have fallen, with concerted efforts by Member States reaching on average lower rates than before the financial crisis. However, the COVID-19 pandemic of 2020 has created new realities and demands for new coordinated efforts to address the social and economic problems it creates. Unemployment as a percentage of the active population in the EU-27 12 10 8 6

10.5 9.0

9.2

9.3

9.0

9.0 8.2 7.2

7.0

9.6

9.7

10.9 10.2 9.4 8.5 7.6 6.8

6.3

4 2 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Fig. 10.9 Unemployment as a percentage of the active population in the EU-28 Member States, from 2000 to 2019. Source: Eurostat (2020) (processed by the Authors)

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Percentage of those who attended only compulsory education in the EU-27 40 35

30 25

37.0 35.9 34.9 34.1 33.5 32.9 32.2 31.5 30.8 29.7 28.8 27.9 27.5 26.9 26.5 26.0 25.5 24.9

20 15 10 5 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Fig. 10.10 Percentages of those who attended compulsory education in the EU-28, from 2002 to 2019. Source: Eurostat (2020) (processed by the Authors)

Percentages of those who attended up to Secondary Education in the EU-27 50 45 40

45.6 46.0 46.0 46.3 46.4 46.6 46.6 46.5 46.5 46.6 46.6 46.7 46.5 46.4 46.2 46.1 45.8 45.6

35 30 25 20 15 10 5 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Fig. 10.11 Percentages of those who attended secondary education in the EU-28, from 2002 to 2019. Source: Eurostat (2020) (processed by the Authors)

In terms of education, in the following histograms of Figs. 10.10, 10.11, and 10.12, the percentages of those who attended only Compulsory Education, those who attended up to Secondary Education and those who attended Tertiary Education respectively, from 2002 to 2019, are provided for the EU-28 Member States. The histograms show a decrease in the percentage of those who attended only Compulsory Education and a corresponding increase in those who attended Higher Education, while the percentages of those who attended Secondary Education remain stable. A first assessment of this development is the achievement of the key objective of improving the educational attainment of European citizens. Finally, of particular importance are the data on the average percentage of EU citizens of the 28 Member States who are at risk of poverty or social exclusion,

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Percentages of those who attended and Higher Education in the EU-27

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17.4 18.1

29.5 27.9 28.7 26.7 27.3 26.0 24.6 25.4 22.8 23.7 22.0 20.5 21.2 19.1 19.6 20.0

10 5 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Fig. 10.12 Percentages of those who attended tertiary education in the EU-28, from 2002 to 2019. Source: Eurostat (2020) (processed by the Authors)

Percentage of population at risk of poverty or social exclusion in the ΕU-27

25 23.7

23.3

23.8

24.3

24.8

24.6

24.4

23.8

23.5

20

22.4

21.8

21.4

2017

2018

2019

15 10 5 0 2008

2009

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2011

2012

2013

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2015

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Fig. 10.13 Percentage of population at risk of poverty or social exclusion in the EU-28. Source: Eurostat (2020) (processed by the Authors)

provided in the histogram in Fig. 10.13 for the years 2008–2019, where it is clear that after the peak in 2012, as a result of the economic crisis, the rate is gradually decreasing. However, more effort is needed to make relevant initiatives to reduce the risk of poverty or social exclusion more effective. In addition, the histogram in Fig. 10.14 shows the years of healthy living for birth years 2007–2018, which show a relatively small increase.

10.2

Statistics for the Evaluation of Social Policy

399

Years of healthy living at birth in the EU-27 65 60 55 50 45 40 35 30 25 20 15 10 5 0

62.1

61.6

61.5

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61.8

61.7

61.4

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63.6

2007

2008

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Fig. 10.14 Years of healthy living at birth in the EU-28. Source: Eurostat (2020) (processed by the Authors)

10.2.3 Evidence from the Implementation of the Europe 2020 Strategy The Europe 2020 Strategy of 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 strategy, five key objectives have been agreed for the whole EU. For Social Policy, and in particular, for the employment headline target, the employment rate for the 20–64 age group should increase from 69% to at least 75%. For the education headline target it is foreseen: (a) to reduce early school leaving rates from 15% to below 10% and (b) 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%, i.e. by 20 million people who are in or at risk of poverty and social exclusion. From the graphs of Figs. 10.15, 10.16, 10.17 and 10.18 it is clear that in the field of education, the target of completing higher education for the 30–34 age group of at least 40% has already been achieved, while the target of reducing the rate of early school leaving to below 10% seems to be achieved. For the target of increasing the employment rate for the 20–64 age group to at least 75%, it appears that the global economic crisis has had a negative impact, with the employment rate declining until 2013 and then rising thereafter, which may lead to the target being approached if not reached. Finally, the results of the efforts to achieve the objective of combating poverty and social exclusion, with a projected reduction of at least 20%, i.e. 20 million people in or at risk of poverty and social exclusion, are not encouraging,

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Evolution of the employment rate of persons aged 20-64 76

75 74 73 72 71 70 69 68 67 2008

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Fig. 10.15 Evolution of the employment rate of persons aged 20–64 years. Target: 75%. Source: Eurostat (2020) (processed by the Authors)

Trend in the share of 18-12 year old dropping out of education 15 14 13 12 11 10 9 2008

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Fig. 10.16 Evolution of the percentage of 18–12 year olds dropping out of education. Target: 10%. Source: Eurostat (2020) (processed by the Authors)

since, mainly due to the global economic crisis, the rate reached a peak for the period 2008–2019 in 2013 and then started to decline, but there are no signs of reaching the target.

10.2.4 General Assessment of Social Policy in the EU The European Social Model, as an acquis of the EU through the Common Social Policy, was established in order to create in the Member States the appropriate conditions to form a new relationship between the free market and society. This relationship would contribute to the smooth functioning of the single internal market

10.2

Statistics for the Evaluation of Social Policy

401

Evolution of the share of people aged 30-34 who have completed tertiary education 44 42 40 38 36 34 32 30 2008

2009

2010

2011

2012

2013

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Fig. 10.17 Evolution of the share of 30–34 year olds who have completed tertiary education. Target: 40%. Source: Eurostat (2020) (processed by the Authors)

Evolution of the number of people at risk of poverty or social exclusion in millions 125 120

115 110 105 100 95 90 2008

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Fig. 10.18 Evolution of the percentage of people at risk of poverty or social exclusion in millions. Target: 96.2 million. Source: Eurostat (2020) (processed by the Authors)

and at the same time ensure respect for fundamental social rights. However, there is disagreement about the importance and role of European social policy and the issue is approached both positively and negatively. The positive approach considers that the establishment of the single internal market, the freedoms it brought and the resulting economic, technological and other changes required a necessary coordination of national social policies, making it easier for the EU to take decisive steps to regulate social policy issues for the benefit of all European citizens. The result of this EU Common Social Policy is the social content of the Treaties, based on common values such as solidarity, equal opportunities, working conditions, safety and health, universal access to education and healthcare, combating exclusion and discrimination and the creation of a participatory civil society.

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The negative approach considers that the single internal market has contributed to a significant social degradation, since free market rules have led to the death of the welfare state, the restriction of workers’ privileges and rights, the equalisation of social benefits to the lowest prices and the reluctance to fight unemployment. Efforts to pursue a rudimentary European social policy aimed at appeasing citizens, and developed solely because of its functional link to the single market. However, it should not be overlooked that the steps that have been taken with the implementation of a Common Social Policy are visible. The series of Directives and Recommendations issued by the EU to Member States are indicative of an effort to formulate a common policy to address social problems, thus reinforcing the European Social Model. However, Member States remain responsible for the design and operation of their social systems and it is their responsibility to contribute to the development and strengthening of the Common Social Policy.

References Communication COM(73) 1600 - Social action programme, Commission of European Communities, Brussels, 24 October 1973. Communication COM(93) 700 final - Growth, competitiveness, employment The challenges and ways forward into the 21st century - White Paper, Commission of European Communities, Luxembourg, 5 December 1993. Communication COM(96) 485 final - Employment in EUROPE 1996, Commission of European Communities, Brussels, 09 October 1996. Communication COM(97) 128 final - Partnership for a New Organisation of Work - Green Paper, Commission of European Communities, Brussels, 16 April 1997. Communication COM(2000) 379 final - Social Policy Agenda, European Commission, Brussels, 28 June 2000. Communication COM(2005) 33 final - on the Social Agenda, European Commission, Brussels, 9 February 2005. Communication COM(2014) 130 final - Taking stock of the Europe 2020 strategy for smart, sustainable and inclusive growth, Brussels, European Commission, Brussels, 5 March 2014. Communication COM(2017) 250 final - Establishing a European Pillar of Social Rights, European Commission, Brussels, 26 April 2017. Conclusions of European Council of 23-24 March 2000, European Council, Lisbon, 23-24 June 2000. Directive 91/533/EEC of the Council of EC on an employer’s obligation to inform employees of the conditions applicable to the contract or employment relationship, Luxembourg, 14 October 1991. Directive 2000/43/EC of the Council of EU implementing the principle of equal treatment between persons irrespective of racial or ethnic origin, Luxembourg, 29 June 2000 Directive 2000/78/EC of the Council of EU establishing a general framework for equal treatment in employment and occupation, Brussels, 27 November 2000. European Council, Home, Policies, The EU’s response to the COVID-19 pandemic, 2020, https:// www.consilium.europa.eu/en/policies/coronavirus/ European Pillar of Social Rights, European Parliament, Council of the EU, European Commission, EU Publications, Brussels, 2017. Eurostat, Database, 2020, https://ec.europa.eu/eurostat/web/main/data/database Official Journal of the European Communities Charter of Fundamental Rights of the European Union, 18.12.2000, No C 364., Brussels, 18 December 2000.

References

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Official Journal of the European Communities, Treaty of Nice, 10.03.2001, No C 80., Nice, 26 February 2001. Official Journal of the European Union, Treaty of Lisbon, 17.12.2007, No C 306, Lisbon, 13 December 2007. Official Journal of the European Communities, Treaty on European Union, 29.07.1992, No C 192, Maastricht, 7 February 1992. Official Journal of the European Communities, Treaty of Amsterdam, 10.11.1997, No C 340, the Treaties establishing the European Communities and certain related acts”, Amsterdam, 2 October 1997. Recommendation 92/441/EEC of the Council of EC on common criteria concerning sufficient resources and social assistance in social protection systems, Brussels, 24 July 1992. Recommendation 92/442/EEC of the Council of EC on the convergence of social protection objectives and policies, Brussels, 27 July 1992. Regulation (EU) 223/2014 of the European Parliament and the Council of EU, on the Fund for European Aid to the Most Deprived, Strasbourg, 11 March 2014. Regulation (EC) 1927/2006 of the European Parliament and the Council of EU, on establishing the European Globalisation Adjustment Fund, Brussels, 20 December 2006. “Single European Act”, Luxembourg, 17 February 1986 and The Hague, 28 February. 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.

Environmental Policy: Progress, Challenges and Future Directions

11.1

11

Environmental Protection as a Priority

The regional and transnational nature of environmental problems and the need for a transnational approach to their resolution were initially highlighted in academia, but also by environmental organisations and international environmental organisations. Gradually, and with the use of the mass media and the mobilisation of sensitised social groups, this need has been understood by the general public. However, the reaction of the EC was initially very lukewarm. The main reasons for this reaction were the absence of a legal basis in the Treaty of Rome for the pursuit of a meaningful Environmental Policy. Furthermore, the prevailing economic perceptions of cost inflation in the case of the implementation of environmental measures at Community level were an obstacle to the development of a Community Environmental Policy.

11.1.1 The Need for an Environmental Policy The special interest and importance attached to environmental problems and the emerging need for transnational cooperation to solve them continued to grow at all social levels within the EC, while internationally an ecological perception began to grow, expressed mainly by international organisations for the protection of the environment. With the launch of a common Environmental Policy, the concepts of responsibility, prevention, sustainability and precaution have given a particular impetus to the way environmental problems are addressed, and have been used as tools, both in the EC and EU treaties themselves and in the action programmes. The first period of European Environmental Policy is the period from the establishment of the EEC by the Treaty of Rome in 1957 to the UN Conference on Environment and Development in Stockholm on 5 June 1972—now Environment # The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 P. Liargovas, C. Papageorgiou, The European Integration, Vol. 2, Springer Texts in Political Science and International Relations, https://doi.org/10.1007/978-3-031-47176-6_11

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Day—which was attended by delegations from 113 developed and developing countries. The Treaty of Rome made no reference to environmental protection and therefore there was no legal basis for the establishment and implementation of a Community Environmental Policy (EAEC 1957). The overriding concern at that time was to remove the technical barriers to the free movement of products required by the common market, which would contribute to economic growth and thus to the well-being of the citizens of the Community.

11.1.2 The First Steps to the Stockholm Conference Under pressure from public opinion and emerging environmental organisations, Member States began to formulate their own separate environmental policies. Furthermore, the Communities began to adopt directives with an environmental content, but these were mainly aimed at eliminating certain technical barriers and improving the functioning of the common market. For example, the ECAE Directives of 20 February 1959 (OJ L 11, 20.2.1959, p. 221) laying down the basic standards for the protection of the health of workers and the general public against the dangers arising from ionising radiation were adopted. Furthermore, Directive 67/548/EEC was adopted in 1967 in the field of the environment, concerning the classification, packaging and labelling of dangerous substances. Under this Directive, Member States are required to take all appropriate measures to ensure that dangerous substances may not be placed on the market unless their packaging is labelled with the name of the substance, the origin of the substance, the symbols and indications of the risks involved in using the substance and a reminder of the particularly dangerous situations arising from these risks. The United Nations Declaration on Environment and Development, drafted at the Stockholm Conference on 5–16 June 1972, adopted a new understanding that the hitherto achieved and guaranteed rights of people must necessarily be accompanied by the guarantee of their ability to live in a healthy and harmonious environment.

11.2

The Environment Action Programmes

Although the United Nations Declaration on Environment and Development is a soft law document, it was the trigger for the development of environmental policy internationally, since it activated certain fundamental principles of environmental law and contributed to the awakening of the international community to environmental problems and the taking of initiatives to solve them. Furthermore, the comprehensive report by Donella Meadows, et al. entitled The Limits to Growth, presented in 1972 at the Club of Rome, brought to the fore the fundamental question of the possibility of continued economic growth in a world in which natural resources are limited.

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The Environment Action Programmes

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11.2.1 The First Action Programme for the Environment 1973–1976 One year after the UN Conference on Environment and Development, in Stockholm, on 22 November 1973, the Council of Ministers of the EC (OJ C 112, 20.12.1973) adopted the First Environmental Action Programme for the period 1973–1976, as a result of the decision of the Paris Summit of 19 and 20 October 1972, where it was declared that: “economic expansion is not an end in itself: its first aim should be to enable disparities in living conditions to be reduced. It must take place with the participation of all the social partners. It should result in an improvement in the quality of life as well as in standards of living. As befits the genius of Europe, particular attention will be given to intangible values and to protecting the environment so that progress may really be put at the service of mankind”. Its main objectives were broadly the same as those formulated at the Stockholm Conference, namely, (a) prevent, reduce and as far as possible eliminate pollution and nuisances; (b) maintain a satisfactory ecological balance and ensure the protection of the biosphere; (c) ensure the sound management of and avoid any exploitation of resources or of nature which cause significant damage to the ecological balance; (d) guide development in accordance with quality requirements, especially by improving working conditions and the settings of life; (e) ensure that more account is taken of environmental aspects in town planning and land use and (f) seek common solutions to environmental problems with States outside the Community, particularly in international organisations. The programme encouraged Member States to take measures against pollution and for the protection of the environment in general and to participate in international environmental protection organisations. It also proposed specific pollution control measures by identifying risks, setting pollutant limits and measures to be taken for specific cases of industrial and energy products, marine pollution from shipping, industrial waste, radioactive waste etc. It also made reference to the economic costs of the measures taken, since protecting the environment from pollution and improving the environment in order to improve the quality of life of decision-making mechanisms and production structures inevitably entails various types of costs. Then, it is important for the authorities to make accurate estimates of the size of these costs in order to have a clear picture of the likely economic, financial and social impact of the proposed decisions and to adjust the procedures for implementing these decisions accordingly. A key principle of the programme was therefore that prevention is better than cure and that environmental impacts should be taken into account as early as possible in the planning process. It was also recognised that environmental protection is not only the responsibility of the authorities, but also the obligation of every citizen, and therefore “the polluter (must) pay”. In the context of environmental responsibility, the Community’s environmental policy should take into account the interests of developing countries in order to prevent negative economic or other consequences of environmental policy in these countries. The issue of “subsidiarity” was also raised, i.e. the choice of the most appropriate level—Community, transnational, state,

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Fig. 11.1 The logo of the European Foundation for the Improvement of Living and Working Conditions

national, regional or local—at which environmental action should be taken in order to be most effective for all. Finally, the programme provided for the creation of the European Foundation for the Improvement of Living and Working Conditions (Eurofound). This foundation, created by Council of EC Regulation (EEC) 1365/75 of 26 May 1975, is located in Ireland and provides research-based data and knowledge for the formulation of social and labour policies. It is addressed to the EU institutions, EU-level employers, EU-level trade unions, national governments, employers’ and trade union organisations, parliaments, as well as research institutes and universities. Its ultimate aim is to contribute to the design of better living and working conditions in Europe (Fig. 11.1).

11.2.2 The Second Action Programme for the Environment 1977–1981 The Second Environmental Action Programme was adopted on 17 May 1977 by the EC Council of Ministers (OJ C 139, 13.06.1977) for the period 1977–1981. This was practically a continuation of the previous one and reiterated the same objectives and principles, namely, (a) prevent, reduce and as far as possible eliminate pollution and nuisances; (b) maintain a satisfactory ecological balance and ensure the protection of the biosphere; (c) ensure sound management of resources and of the natural environment, and avoid any exploitation of them which causes significant damage to the ecological balance; (d) guide development in accordance with quality requirements, especially by improving working and living conditions; (e) ensure that more account is taken of environmental aspects in structural planning and regional development and (f) seek common solutions to environment problems with States outside the Community, particularly in international organisations. However, this programme also referred to the need to protect against pollution and noise, and in addition to the need to protect flora, fauna and natural resources, to reduce unnecessary water consumption, to treat waste water and to take measures to deal with air pollution, pollution from energy production and pollution from industrial production. The result of this programme, like the previous one, was a series of legal provisions mostly concerning the fight against pollution and the repair of damage at source. A number of regulations addressed environmental issues relating to

11.2

The Environment Action Programmes

409

chemicals and industrial accidents, the natural environment, air, water, waste and noise. In addition, a series of two types of directives set limits on the emission of pollutants into the environment and quality criteria for the recipients of pollution. The choice of the prescribed emission limit values or quality criteria for the recipients of pollution was not an easy process, but was the subject of controversy, while the debate on the imposition of measures provided for by environmental legislation on economic grounds continued. However, the Council of EC Directive (79/409/EEC) for Wild Birds of 2 April 1979, should be seen as a positive step, which is essentially a directive with a purely ecological content, obliging the Member States to take the necessary measures in order to maintain or adapt the population of all (listed) bird species to a level which corresponds in particular to ecological, scientific and educational requirements, while taking account of economic and recreational requirements. In so doing, the Directive, following the approach of the Ramsar Convention signed on 2 February 1971 in the city of the same name in Iran, provided for the protection of wild bird habitats and not only for the protection of populations of important or endangered species found there.

11.2.3 The Third Action Programme for the Environment 1982–1986 The Third Environmental Action Programme, adopted on 7 February 1983 by the EC Council of Ministers (OJ C 46, 17.02.1983), for the period 1982–1986, adopted the principles of the previous two, but emphasised the global dimension. In particular, this programme set itself the following objectives: (a) to help in creating new jobs by the promotion and stimulation of the development of key industries with regard to products, equipment and processes that are either less polluting or use fewer non-renewable resources; (b) to reduce any form of pollution or nuisance, or of interference with spatial features, the environment or resources which create waste or unacceptable cost for the Community; (c) to economise certain raw materials that are non-renewable, or of which supplies can be obtained only with difficulty, and to encourage the recycling of waste and the search for less polluting alternatives; (d) to prevent or reduce the possible negative effects of using energy resources other than oil, such as coal or nuclear power, and to promote energy saving and the use of less polluting energy resources and (e) to reinforce the implementation of the Information Agreement of 5 March 1973 (OJ C 9, 15.03.1973 and OJ C 86, 20.03.1973), to avoid individual national measures affecting the proper functioning of the internal market or making the adoption of appropriate Community measures more difficult. The programme placed particular emphasis on prevention, stressing that is to have full effect: (a) the requisite knowledge and information must be improved and made readily available to decision makers and all interested parties, including the public; (b) it is necessary to formulate and introduce procedures for judgment which will ensure that the appropriate facts are considered early in the decision-making processes relating to any activity likely to affect the environment significantly. Such procedures should be carried out in an ecological, context, which will need to be

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gradually defined and will indicate the limits not to be exceeded to avoid jeopardising the regenerative capacity of the ecosystem and the availability of natural resources; (c) an effort must be made to achieve optimum distribution of resources; (d) to monitor the implementation of adopted measures, to ensure their correct application and their adaptation if circumstances or new knowledge should so require; (e) to strengthen the cohesion of Community and Member State environmental policies and (f) training and public awareness with regard to the environment should be improved and intensified. The programme stressed, in particular, the need to prevent and reduce pollution and nuisances in specific areas, in particular, freshwater, marine waters, air, chemical pollution and acoustic nuisances and re-emphasised the need to preserve flora and fauna, rational management of water resources, waste management and the use of clean technologies. It is worth mentioning that the accident in Seveso, Italy, in 1976, at a Sandoz pesticide plant, which resulted in the release of toxic dioxin, was the case for the adoption in 1982 of a Directive (82/501/EEC) known as “Seveso I”, on the risk of accidents in industrial activities of a specific type. Later, in 1996, the EU adopted Directive 96/82/EEC, known as “Seveso II”, on the prevention of major accidents involving dangerous substances and the limitation of their consequences. Furthermore, in 2012, Directive 2012/18/EU, known as “Seveso III”, was adopted with an obligation to be implemented by Member States by June 2015. The first Directive (85/337/EEC) on the assessment of the effects of public and private projects on the environment was adopted during this period. The Directive provided for public participation in a public consultation on the environmental impact assessment of the project. Specifically, the direct or indirect effects on (a) humans, fauna and flora; (b) soil, water, air, climate and landscape; (c) material assets and cultural heritage; (d) the interaction between the factors listed and (e) the first, second and third cases together are studied. Since the mid-1980s, the EC’s scope of action for the environment was broadened with the creation of the financial instrument Community Action for the Environment (Action Communautaire pour l’Environnement, ACE), through two Regulations: (i) Council Regulation (EEC) 1872/84 of 28 June 1984, which entered into force between July 1984 and June 1987 and launched financial support to projects (ACE I) in three areas: (a) development of new clean technologies; (b) development of new techniques for measuring and monitoring the natural environment and (c) assistance for the protection of habitats and endangered species of particular importance as defined in Directive 79/409/EEC. (ii) Council Regulation (EEC) 2242/87 of 23 July 1987, which replaced the previous one and entered into force until July 1991 and extended its scope (ACE II) to include the financing of projects in the fields of waste, rehabilitation of contaminated sites and remedial action on land affected by fire, erosion and desertification. In total, the ACE programme financed 53 nature protection projects and 55 clean technology projects. The total cost of these projects over the period 1984–1991 was ECU 98 million, with the EC providing ECU 41 million, i.e. 44.5% of the total cost.

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The Environment Action Programmes

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In addition, an allocation of ECU 6.5, entitled Community Operations Concerning the Environment, was included in the annual budget by the European Parliament, from 1982 onwards, for urgent environmental actions.

11.2.4 The Fourth Action Programme for the Environment 1987–1992 The concept of sustainability was first introduced in the World Commission on the Environment and Development’s report entitled Our Common Future in October 1987, also known as the “Brundtland Report” (after the chairperson of the World Commission on Environment and Development, Norwegian politician Gro Harlem Brundtland). According to the report, “Humanity has the ability to make development sustainable to ensure that it meets the needs of the present without compromising the ability of future generations to meet their own needs”. The introduction of this term and the understanding of its meaning had important implications for the development of environmental policy in the future, as it recognised that there were environmental limits to economic growth in industrialised and developing societies. At the same time, a new period of Environmental Policy began in the EC, with the signing of the Single European Act (SEA) of 1986 and the addition of the new Title “Environment” to the text of the Treaty, thus making Community Environmental Policy legitimate and freeing it to a greater extent from the competitive constraints of the common market. According to the EEA, Community action should aim to preserve, protect and improve the environment, contribute to the protection of human health and ensure prudent and rational utilisation of natural resources. The Fourth Environmental Action Programme for the period 1987–1992, adopted on 19 October 1987 by the EC Council of Ministers (OJ C 328, 07.12.1987), is a continuation of the previous three, but its main objective was to “harmonise the internal market with the objectives of environmental protection”. It is considered that environmental protection and competition are not necessarily conflicting concepts, but that, on the contrary, the promotion of environmental protection can be a precondition for improving competitiveness. The introduction of the concept of “sustainable development” has been a tool for improving the quality of the environment and quality of life and increasing competitiveness. Sustainable development has gradually become a normative reference for environmental policy in the EU since the early 1990s. In the preamble of the programme, the most important priority areas were again underlined, namely, (a) prevention of all forms of pollution, (b) improvement of natural resource management methods, (c) participation in international activities and (d) development of appropriate means of pollution control and mitigation. The Action Programme noted the obligation to integrate the environmental dimension into other Community policies, highlighting four areas of activity: (a) effective implementation of existing Community legislation; (b) regulation of all environmental impacts of “substances” and “sources” of pollution; (c) public access to environmental events and decisions and wide dissemination of relevant

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Fig. 11.2 The logo of the Natura 2000 network

information and (d) creation of new jobs. This is an initial commitment to the strategic reorientation of environmental policies in the EC. A key feature of the programme was the inclusion of economic costs when taking measures to protect the environment. In order to reduce the economic losses from taking such measures, it was proposed to introduce economic facilities such as tax reductions and subsidies. Later, two programmes were established, which supported environmental projects in two specific marine areas: (i) the Mediterranean Special Programme of Action (MEDSPA), by Council Regulation (EEC) 563/91 of 4 March 1991 and (ii) the North Sea Special Programme of Action (NORSPA), by Council Regulation (EEC) 3908/91 of 19 December 1991. MEDSPA supported 198 projects at a cost of 38 million ECU, relating to the protection of water resources, prevention of water pollution, waste disposal and conservation of habitats and endangered species. NORSPA supported 38 projects costing ECU 16 million, concerning the conservation of marine life and integrated habitat management, with a particular emphasis on international cooperation and coordination. In addition, Council Regulation (EEC) 3907/91 of 19 December 1991 established the Actions for Nature (ACNAT) programme. The ACNAT programme was designed to support habitats and funded projects of around 36 million ECU. However, ACNAT was quickly replaced by the new LIFE I programme, with a first phase budget of ECU 400 million (see below). In May 1992, the Natura 2000 network was established to protect nature, based on the Wild Birds Directive 79/409/EEC of 2 April 1979 (see Sect. 11.2.2), which required the creation of Special Protection Areas (SPAs) for avifauna, and was complemented by Directive 92/43/EEC on habitats of 21 May 1992, which required the creation of Special Areas of Conservation (SACs) for other species and the environment. Together these zones create the Natura 2000 network sites. Natura 2000 is a pan-European network for the protection of species and their habitats and is an ambitious and successful programme of EU Environmental Policy for the protection of nature (Fig. 11.2). Council Regulation (EEC) 1973/92 of 21 May 1992 established the Financial Instrument for the Environment (L’Instrument Financier pour l’Environnement, LIFE) to contribute to the implementation and development of the Community’s environmental policy and legislation, and in particular to contribute to an efficient,

11.2

The Environment Action Programmes

413

Fig. 11.3 The logo of the LIFE programme

climate-friendly, low-carbon economy, to the protection and improvement of the environment, preserving and enhancing biodiversity, ecosystems and in particular the network It also aims to implement and integrate environmental and climate objectives into Member States’ policies and practices and to improve environmental and climate governance at all levels. To date there have been five phases of the programme: (i) LIFE I started in 1992 and covered the period 1992–1995; (ii) LIFE II covered the period 1996–1999 with Regulation (EC) 1404/96 of 15 July 1996; (iii) LIFE III covered the period 2000–2006 by Regulation (EC) 1655/2000 of 17 July 2000 and (EC) 1682/2004 of 15 September 2004 (EC); (iv) LIFE+ covered the period 2007–2013 by Regulation (EC) 614/2007 of 23 May 2007 and (v) LIFE 2014–2020 covered the period 2014–2020 by Regulation (EU) 1293/2013 of 11 December 2013. During this period, LIFE co-financed around 4600 projects across the EU, with a total contribution of around €6.5 billion to environmental and climate protection, of which, €3.4 billion covered the last period. For the next phase of the programme (2021–2027), the Commission proposes to increase the budget to €5.45 billion (Fig. 11.3). Regulation (EEC) 880/92 introduced the Ecolabel on 23 March 1992, which is awarded to the best-performing products and services based on environmental criteria throughout their life cycle. The Ecolabel is awarded by the EU Eco-labelling Board and supported by the Commission and all EU and EEA Member States. Each Member State has designated its own competent body, which is responsible for receiving applications, examining and evaluating them and finally awarding the label, informing the Commission and the other Member States (Fig. 11.4). Furthermore, since October 1993 the European Environment Agency (EEA), based in Copenhagen, established by Regulation (EEC) 1210/90 of 7 May 1990, has been operating. As an EU agency, the EEA provides independent information on the environment, thus assisting stakeholders in the development, adoption, implementation and evaluation of environmental policy, as well as in informing the public. The Agency is currently governed by a Management Board consisting of 33 representatives of the Member States (28 EU Member States, 4 EFTA States and 1 representative of Turkey), one representative of the Commission and two scientists appointed by the European Parliament, assisted by a Committee of Scientists (Fig. 11.5).

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Fig. 11.4 The ecolabel

Fig. 11.5 The logo of the European Environment Agency

In addition, the Eco Management and Audit Scheme (EMAS) was introduced by Regulation (EEC) 1836/93 of 29 June 1993, as a tool for fulfilling the objective of sustainable development, which is a voluntary system for companies and other bodies committed to managing and improving their environmental performance. Initially, its activity was limited to companies in the industrial sector. Later, in 2001, the revised Regulation (EC) 761/2001 of 19 March 2001 was adopted, extending the scope of the scheme, as EMAS II, to all sectors of economic activity, incorporating the international environmental management system EN ISO 14001. Finally, in 2009, the scheme was revised again, as EMAS III, with a new Regulation (EC) 1221/2009 of 25 November 2009 (Fig. 11.6). At the global level, from 3 to 14 June 1992, the United Nations International Conference on the Environment was held in Rio de Janeiro, Brazil, under the auspices of the United Nations. Among the issues addressed at the Conference were sustainable development (1992), the improvement of living conditions for the inhabitants of the planet, the rational management of natural resources, air,

11.2

The Environment Action Programmes

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Fig. 11.6 The logo of the Eco-Management and Audit Scheme

water and soil pollution, toxic and radioactive waste, climate change etc. In particular, it was recognised that the concentration of greenhouse gases in the atmosphere must be stabilised at a level that does not affect the climate. One of the most important documents of the Conference was the “Agenda 21” which consisted of a non-binding action plan for the twenty-first century. The Precautionary Principle was also recognised and incorporated in “Principle 15” of the Rio Declaration on Environment and Development, which is described as follows: “In order to protect the environment, the precautionary approach should be widely applied by States, according to their capacities. Where there is a threat of serious or irreversible damage, the lack of full scientific certainty cannot be used as a reason for postponing cost-effective measures to prevent environmental degradation.

11.2.5 The Fifth Action Programme for the Environment 1993–2000 The Maastricht Treaty on European Union (TEU) of 1991 included the “precautionary principle” in Article 130 P § 2 on the environment, stating that EU environmental policy shall be based on the principles of precaution and preventive action, priority restoration of environmental damage at source, and the polluter pays principle (Official Journal of the European Communities 1992). Article 2 of the principles also states that the Community’s mission is to promote the harmonious and balanced development of economic activities throughout the Community, a stable and lasting [sustainable], non-inflationary and environmentally sound development. With this background, and in line with the wish expressed at the Dublin European Council of 25 and 26 June 1990 for a new action programme aimed at sustainable development, the Fifth Action Programme for the Environment and Sustainable Development for the period 1993–2000 was drawn up, adopted on 1 February 1993 by the Council of EU (OJ C 138, 17.05.1993). The programme, which is a

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continuation of previous ones, was developed in response to the fact that, despite the adoption of a number of policies and measures to solve environmental problems, the quality of the environment continued to deteriorate. It also introduced the new element that the principle of “sustainability” would now constitute the strategy for environmental policy. The Action Programme advocated two main principles: (a) The integration of environmental requirements into all other policies, especially those policies that cause environmental degradation; (b) The development of “shared responsibility”, based on a consensus among stakeholders (governments, industry and the general public) around the measures to be taken. The main areas of action covered by this programme, considering sustainable development that enables the needs of present generations to be met without compromising the ability of future generations to meet their own needs are: (a) Maintaining quality of life; (b) Maintaining continuous access to natural resources and (c) Avoiding irreversible damage to the environment. The policies chosen to integrate the environmental requirements set out in the Action Programme were in the fields of energy, transport, tourism, agriculture and industry. In 1993, on the initiative of the then Commission President Jacques Delors, the White Paper on Growth, Competitiveness and Employment was published. The White Paper, adopted by the Brussels European Council on 10 and 11 December 1993, stated that the current development model is based on the optimal use of the two main economic factors, namely labour and natural resources, resulting in increased unemployment and destruction of the natural environment. It would be advisable to reverse these trends, increase employment and reduce the use of natural resources. The means of achieving this objective would be a “green” tax reform that would help shift the tax burden from labour to energy and natural resource consumption. Subsequently, the 1997 Treaty of Amsterdam enshrined the principle of sustainable development as one of the EU’s primary objectives and environmental protection as one of its absolute priorities, while the 2001 Treaty of Nice did not make any major changes. The Lisbon Strategy of 2000 stressed the importance of the effective functioning of the single internal market, subject to conditions, including environmental protection, and underlined the need for sustainable economic growth. During this period the Commission, with a view to more effective management of coastal zones, presented the proposal COM(95) 511 final of 31 October 1995 for the implementation of a Demonstration Programme on Integrated Coastal Zone Management, with the aim of acquiring the necessary experience in this field to describe the existing situation and existing environmental problems, to create a model for cooperation and coordination and to disseminate the necessary know-how. The Demonstration Programme was implemented through 35 demonstration projects and 6 thematic analyses for a successful coastal zone management. The Demonstration Programme was completed at the beginning of 1999. On 25 September 2000, the European Commission in its Communication COM (2000) 547 to the Council and the European Parliament proposed an Integrated Coastal Zone Management (ICZM) for the integrated management of the EU’s

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coastal zones, based on the conclusions and results of the EU Demonstration Programme. The principles of Integrated Coastal Zone Management can be summarised as follows: (a): a broad “global” perspective (thematic and geographical); (b) a long-term perspective; (c) adaptive management in a step-by-step process; (d) the promotion of local specificity; (e) operation in relation to natural processes; (f) participatory planning; (g) support and involvement of all relevant administrative bodies and (h) the use of a combination of instruments. Furthermore, the Green Paper on Integrated Product Policy (IPP) (COM(2001) 68) was published on 7 February 2001. The Green Paper proposed a strategy for refocusing on product-oriented environmental policies in order to promote the development of the eco-products market. Among other things, the Green Paper refers to the ecodesign of products which should be produced and information on their environmental impact should be published throughout their life cycle. 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. The Kyoto Protocol provides for a 5.2% reduction in emissions of six greenhouse gases between 2008 and 2012, compared to 1990 levels, and was approved by the Council of EU Decision 2002/358/EC of 25 April 2002, which quantified the commitments of the 15 EU Member States to limit or reduce greenhouse gas emissions (Effort Sharing Decision—ESD).

11.2.6 The Sixth Action Programme for the Environment 2002–2012 In the wake of the conclusions of the Gothenburg European Council of 15 and 16 June 2001, which stressed the importance of sustainability in the pursuit of EU Environmental Policy through the Sustainable Development Strategy (which was also a Commission proposal in view of the Gothenburg European Council), the Sixth Environment Action Programme, Our Future, Our Choice, for the period 2002–2012, proposed by the Commission on 21 January 2001 (COM(2001) 31 final) and adopted on 22 July 2002 by the Council of EU (1600/2002/EC, 10.09.2002). Although it is a continuation of previous programmes, it is characterised by a strong preference for the use of economic instruments and voluntary agreements and by the rationalisation, reduction and reduction of the complexity of legislation. The programme identified specific priority areas: (a) tackling climate change; (b) nature and biodiversity—protecting a unique resource (c) environment and health and (d) ensuring the sustainable management of natural resources and wastes. For each sector, objectives and measures were identified to facilitate the adoption of environmental policies and to complement existing legislation so that it covers all sectors. To achieve improvements in these areas and meet environmental objectives, the new programme sets out the following five strategic approaches: (a) Improving the

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Implementation of Existing legislation. (b) Integrating environmental concerns into other policies. (c) Encouraging the Market to Work for the Environment. (d) Empowering Citizens and Changing Behaviour. (e) Greening Land Use Planning and Management Decisions. Given that the EU has been a supporter of the Kyoto Protocol, the following Directive 2003/87/EC of the European Parliament and the Council of EU of 13 October 2003 was adopted, establishing a scheme for greenhouse gas emission allowance trading within the Community (Emissions Trading System—ETS) established the greenhouse gas emission allowance trading scheme provided for by the Kyoto Protocol. The Directive was amended by Directive 2004/101/EC of the European Parliament and the Council of EU of 27 October 2004. According to these, the first period of the European emissions trading scheme would be the 3-year period 2005–2007, with subsequent trading periods identical to the 5-year periods provided for by the Kyoto Protocol, with the next period being 2008–2012. The European Council of 8 and 9 March 2007 in its conclusions stressed that the Community is committed to making Europe a highly energy-efficient and low greenhouse gas emitting economy and decided that, pending a new global agreement for the post-2012 period under the Kyoto Protocol, and without prejudice to its position in international negotiations, the Community makes a strong independent commitment to achieve at least a 20% reduction of greenhouse gas emissions by 2020 compared to 1990. Thus, Decision 406/2009/EC of the European Parliament and of the Council of EU of 23 April 2009 redefined the quantification of Member States’ commitments to limit or reduce greenhouse gas emissions (the new Effort Sharing Decision (ESD)). The 2007 Treaty of Lisbon confirms the EU’s determination to achieve a high level of protection and improvement of the quality of the environment and takes into account the diversity of situations in different regions of the EU. It is also based on the principles of precaution and preventive action, priority restoration of environmental damage at source and the polluter pays principle. It also refers to climate change and the need to promote measures to reduce emissions, and links environmental protection with energy policy and the adoption of appropriate measures to protect natural resources. The “Europe 2020” Strategy of 2010 also had a strong environmental focus, setting 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 an emphasis on job creation and poverty reduction. To assess progress in implementing the “Europe 2020” Strategy, five overarching objectives were agreed for the whole EU, including climate change and energy sustainability (COM(2010) 2020). This EU-level target is then translated—like the others—into a national target for each Member State, reflecting the different situations and circumstances in each Member State. 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%. Among the proposed flagship initiatives was the “Resource Efficient Europe”

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initiative to decouple economic growth from resource and energy use, support the transition to a low-carbon economy using renewable energy sources, reduce carbon emissions, enhance competitiveness and increase energy security. Furthermore, the initiative “An industrial policy for the globalisation era” aims at a modern industrial policy that promotes competitiveness by helping to seize the opportunities offered by globalisation and the green economy.

11.2.7 The Seventh Action Programme for the Environment 2013–2020 The Seventh Environment Action Programme for Prosperity at the Planet’s Limits, for the period 2013–2020, was adopted on 20 November 2013 by Decision 1386/ 2013/EU, of the Council of EU, on 28 December 2013. Through this programme, the EU intends to make greater efforts to protect our natural capital, stimulate resourceefficient and low-carbon growth and innovation and protect the health and wellbeing of people at the planet’s natural limits. The programme sets nine priority objectives and sets out what the EU needs to do to achieve them by 2020. Of these, the first three are considered priority objectives: a) to protect, conserve and enhance the Union’s natural capital; (b) to turn the Union into a resource-efficient, green and competitive low-carbon economy; (c) to safeguard the Union’s citizens from environment-related pressures and risks to health and well-being; (d) to maximise the benefits of Union environment legislation by improving implementation; (e) to improve the knowledge and evidence base for Union environment policy; (f) to secure investment for environment and climate policy and address environmental externalities; (g) to improve environmental integration and policy coherence; (h) to enhance the sustainability of the Union’s cities and (i) to increase the Union’s effectiveness in addressing international environmental and climate-related challenges. These nine objectives include 36 sub-objectives and 60 specific actions to be implemented by the EU and its Member States, as well as by businesses, employers’ and workers’ groups and individuals. The Commission’s assessment of the Seventh Environment Action Programme 2013–2020 on 15 May 2019 concludes that it is: (i) Effective in that it has made some progress towards achieving its objectives; (ii) Efficient in that it has helped to create synergies aimed at reducing costs and improving efficiency; (iii) Relevance, given that it covers the 2050 vision to a satisfactory extent, although some adjustments are needed; (iv) Coherence, given that it is generally consistent with European and global environmental and climate policy making and (v) Added value, given that it has improved the effectiveness and efficiency of environmental policy. In addition, this period, in its conclusions of 23 and 24 October 2014, the European Council adopted a 2030 energy and climate framework for the EU, based on four key objectives at Union level: (a) a reduction of at least 40% of economy-wide greenhouse gas emissions; (b) an indicative target for improving energy efficiency of at least 27%, to be reviewed by 2020, with a view to increasing the level to 30%; (c) a share of energy from renewable sources consumed in the EU

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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. The Council (Environment) of EU on 18 September 2015 adopted conclusions on 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 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 Climate Change Conference in Paris took place, with delegations from around 150 countries involved in 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 Paris Agreement would be open for signature in New York from 22 April 2016 for 1 year. The agreement, which covers the period from 2020 onwards, would enter into force once it has been ratified by 55 countries responsible for at least 55% of global emissions. Following the Council of EU’s urging of 4 March 2016 on the importance of swift ratification of the Paris Agreement, the European Council of 17 and 18 March 2016 stressed that EU Member States should ratify the agreement in time to become parties to it upon its entry into force. The Agreement was signed by the President of the Council of EU, and the Vice-President of the Commission on behalf of the EU at an official ceremony in New York on 21 April 2016. 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, Regulation (EU) 2018/842 of the European Parliament and of the Council, binding annual greenhouse gas emission reductions (Effort Sharing Regulation— ESR) was adopted on 30 May 2018. Finally, Regulation (EU) 2018/1999 of the European Parliament and the Council of EU on the governance of the Energy Union and Climate Action was adopted on 11 December 2018.

11.2.8 Towards an Eighth Action Programme for the Environment 2021–2030 The Council of EU adopted on 4 October 2019, conclusions providing political guidance for EU environment and climate policy for the period 2021–2030, calling on the Commission to present, at the latest by early 2020, an ambitious and focused proposal for the Eighth Environment Action Programme—Let’s reverse the trends together. These conclusions are mainly based on the EU Strategic Agenda 2019–2024, endorsed by the European Council of 20 and 21 June 2019, which

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Fig. 11.7 Draft of the European Green Deal. Source: COM (2019) 640

focuses on four key priorities, (a) protecting citizens and freedoms; (b) developing a strong and vibrant economic base; (c) building a climate-neutral, green, fair and social Europe and (d) promoting European interests and values on the global stage. Thus, the Strategic Agenda 2019–2024 promotes the urgent need to build a climateneutral, green, fair and social Europe. On 11 December 2019, the Commission presented a European Green Deal for the EU and its citizens as a response to climate change and environmental challenges (COM(2019) 640 final; European Council 2019). The European Green Deal aims “to transform the EU into a just and prosperous society with a modern, competitive and resource-efficient economy, where 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 wellbeing of citizens from risks and impacts related to the environment. At the same time, this transition must be fair and inclusive”. The European Green Deal is shown schematically in Fig. 11.7. A series of Commission’s Communication were issued during this period: (a) COM(2018) 773 final of 28 November 2018, entitled: A Clean Planet for All—A European, strategic, long-term vision for a prosperous, modern, competitive and climate-neutral economy, (b) COM(2020) 80 final of 4 March 2020, a proposal for a Regulation entitled: Establishing a framework to achieve climate neutrality and amending Regulation (EU) 2018/1999 (European Climate Law), which included a commitment to a climate-neutral economy by 2050, (c) COM(2020) 98 final of 11 March 2020 adopting A new action plan for the circular economy—Towards a cleaner and more competitive Europe, (d) COM(2020) 380 final of 20 May 2020 on

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strategy EU Biodiversity Strategy 2030—Bringing nature back into our lives, and (d) COM(2020) 381 final of 20 May 2020 on strategy From farm to fork—A strategy for a fair, healthy and environmentally friendly food system. On 14 October 2020, the Commission presented its proposal for the Eighth Environment Action Programme COM(2020) 652 final, which includes the following six priority thematic objectives: (a) progressively reducing greenhouse gas emissions to achieve the greenhouse gas emission reduction target by 2030 and achieving climate neutrality by 2050; (b) making continued progress in enhancing adaptive capacity, strengthening resilience and reducing vulnerability to climate change; (c) moving towards a regenerative model of climate change and (d) developing a climate-resilient economy. The Commission’s proposals were presented to the Council of Ministers on 23 October 2020, where it was stressed that the new programme builds on the environmental and climate objectives of the EU Green Deal and provides an appropriate framework for achieving these objectives. The concept of a regenerative economy, which gives the planet more than it needs, was explained. 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 the proposal for a European climate law and to adopt this law quickly. In particular, the European Council considers that the new target will: (a) boost sustainable economic growth; (b) create jobs; (c) bring health and environmental benefits to EU citizens and (d) contribute to the long-term global competitiveness of the EU economy by promoting green innovation.

11.3

Brief Assessment of the Environmental Policy

The “Europe 2020” Strategy of 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 strategy, some key EU-wide targets have been agreed. In particular, for the overarching objective of climate change and energy sustainability, it is foreseen to: (a) reduce greenhouse gas emissions by 20% (or 30% if conditions allow) compared to 1990, (b) ensure 20% of energy from renewable sources and (c) increase energy efficiency by 20%. The EU monitors the annual performance of Member States and their efforts to reach the targets set at Member State and EU level.

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Brief Assessment of the Environmental Policy

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11.3.1 Evidence from the Implementation of the “Europe 2020” Strategy The graphs in Figs. 11.8, 11.9 and 11.10 show the efforts of Member States to meet their targets, through which the EU average target is achieved. Over a 10-year time horizon, improvements are evident from an environmental perspective, but it is not certain that the common targets will be met by the end of 2020. However, the achievements so far in the efforts made by the EU and its Member States to mitigate the problems of climate change cannot be overlooked. Greenhouse gas emissions according to ESD 100 95 90 85 80 75 2008

2009

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2011

2012

2013

2014

2015

2016

2017

2018

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Fig. 11.8 Greenhouse gas emissions under the Effort Sharing Decision (ESD). Base year: 1990 = 100). Target: 80%. Source: Eurostat (2020) (processed by the Authors)

Ensuring energy from renewable sources 22 20 18 16 14 12 10 2008

2009

2010

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2016

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Fig. 11.9 Percentage of renewable energy in final energy consumption. Target: 20%. Source: Eurostat (2020)

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Reduction of primary energy consumption (Mtoe) 1,750 1,700 1,650 1,600

1,550 1,500 1,450 1,400 2008

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Fig. 11.10 Increase in energy efficiency due to a reduction in primary energy consumption (Mtoe, Million tonnes of oil equivalent). Target: 1483 Mtoe. Source: Eurostat (2020), (COM(2010) 2020) (processed by the Authors)

11.3.2 A Brief Assessment Undoubtedly, the environmental reality and the awakening of public opinion have influenced the formulation of Environmental Policy in the EU and brought it to a high level on a global scale, given that it has some of the highest international standards, not only for limiting degradation of the environment but also for improving the quality of the environment, which are the product of experience gained over a period of about half a century. The EU’s Environmental Policy has moved from pollution prevention, responsibility sharing and precaution to sustainability, including the prevention of climate change resulting from the emission of greenhouse gases. It also protects natural habitats, the atmosphere, the waters of springs, lakes, rivers and seas, ensures the correct disposal of waste, improves knowledge of toxic chemicals and helps businesses to develop environmentally friendly production methods. The EU is shaping and implementing climate policies and strategies, playing a leading role in international negotiations and is committed to ensuring the successful implementation of what is agreed at international level. In this context, EU Member States have agreed to reach a number of targets in the coming years, and the EU seeks to ensure that climate concerns are taken into account in other policy areas such as transport and energy, while also promoting low-carbon technologies and appropriate adaptation measures. Today, the EU’s Environment Policy contributes to economic growth with sustainable and people-friendly rules, protecting Europe’s natural resources and ensuring the health and well-being of EU citizens. At the same time, it contributes through education to the development of environmental awareness and responsibility.

References

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References Communication COM(95) 511 final - On the integrated management of coastal zones, Commission of European Communities, Brussels, 31 October 1995 Communication COM(2000) 547 - On integrated coastal zone management: A Strategy for Europe, Commission of European Communities, Brussels, 27 September 2000 Communication COM(2001) 31 final - On the sixth environment action programme of the European Community ‘Environment 2010: Our future, Our choice’ - The Sixth Environment Action Programme - Proposal for a Decision of the European Parliament and of the Council Laying down the Community Environment Action Programme 2001-2010, Commission of European Communities, Brussels, 24 January 2001 Communication COM(2001) 68 final - Green Paper on Integrated Product Policy, Commission of the European Communities, Brussels, 7 February 2001 Communication COM(2010) 2020 – ‘Europe 2020 - A strategy for smart, sustainable and inclusive growth, European Commission, Brussels, 3 March 2010 Communication COM(2019) 640 final – The European Green Deal, European Commission, Brussels, 11 December 2019 Communication COM(2018) 773 final - A Clean Planet for all A European strategic long-term vision for a prosperous, modern, competitive and climate neutral economy, European Commission, Brussels, 28 November 2018 Communication COM(2020) 80 final - establishing the framework for achieving climate neutrality and amending Regulation (EU) 2018/1999 (European Climate Law), European Commission, Brussels, 4 March 2020 Communication COM(2020) 98 final - A new Circular Economy Action Plan For a cleaner and more competitive Europe, European Commission, Brussels, 11 March 2020 Communication COM(2020) 80 final EU - Biodiversity Strategy for 2030 Bringing nature back into our lives, European Commission, Brussels, 20 March 2020 Communication COM(2020) 381 final - A Farm to Fork Strategy for a fair, healthy and environmentally-friendly food system, European Commission, Brussels, 20 May 2020 Communication COM(2020) 652 final - On a General Union Environment Action Programme to 2030, European Commission, Brussels, 14 October 2020 “Convention on Wetlands of International Importance Especially as Waterfowl Habitat”, Final Text adopted by the International Conference on the Wetlands and Waterfowl at Ramsar, Iran, 2 February 1971 Decision 2002/358/EC of the Council of EU, concerning the approval, on behalf of the European Community, of the Kyoto Protocol to the United Nations Framework Convention on Climate Change and the joint fulfilment of commitments thereunder, Luxembourg, 25 April 2002 Decision 1600/2002/EC of the European Parliament and the Council of EU, laying down the Sixth Community Environment Action Programme, Brussels, 22 July 2002 Decision 406/2009/EC of the European Parliament and the Council of EU, on the effort of Member States to reduce their greenhouse gas emissions to meet the Community’s greenhouse gas emission reduction commitments up to 2020, Strasbourg, 23 April 2009 Decision 1386/2013/EU of the European Parliament and the Council of EU, on a General Union Environment Action Programme to 2020 ‘Living well, within the limits of our planet, Strasbourg, 28 December 2013 Decision (EU) 2016/1841 of the Council of EU, on the conclusion, on behalf of the European Union, of the Paris Agreement adopted under the United Nations Framework Convention on Climate Change, Brussels, 5 October 2016 Directives of 20 February 1959 (OJ L 11, 20.2.1959, p. 221) of the Council of ECAE, laying down the basic standards for the protection of the health of workers and the general public against the dangers arising from ionising radiations, Brussels, 20 February 1959

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Directive 67/548/EEC of the Council of EC on the approximation of laws, regulations and administrative provisions relating to the classification, packaging and labelling of dangerous substances, Brussels, 27 June 1967 Directive (79/409/EEC) of the Council of EC on the conservation of wild birds, Luxembourg, 2 April 1979 Directive (82/501/EEC) of the Council of EC on the major-accident hazards of certain industrial activities (known as Seveso I), Luxembourg, 24 June 1982 Directive (85/337/EEC) of the Council of EU on the assessment of the effects of certain public and private projects on the environment, Luxembourg, 27 June 1985 Directive 92/43/EEC of the Council of EC on the conservation of natural habitats and of wild fauna and flora, Brussels, 21 May 1992 Directive 96/82/EEC of the Council of EU on the control of major-accident hazards involving dangerous substances (known as Seveso II), Brussels, 9 December 1996 Directive 2003/87/EC of the European Parliament and the Council of EU establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC, Luxembourg, 13 October 2003 Directive 2004/101/EC of the European Parliament and the Council of EU amending Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community, in respect of the Kyoto Protocol’s project mechanisms, Strasbourg, 27 October 2004 Directive 2012/18/EU of the European Parliament and the Council of EU on the control of majoraccident hazards involving dangerous substances, amending and subsequently repealing Council Directive 96/82/EC (known as Seveso III), Strasbourg, 4 July 2012 European Council, A New Strategic Agenda 2019 – 2024, Brussels, 20 and 21 June 2019. Eurostat, Database, 2020, https://ec.europa.eu/eurostat/web/main/data/database Meadows, D., Meadows, D., Renders, J., Behrens, W., The Limits to Growth, presented in 1972 at the Club of Rome, Universe Books, New York, 1972 Official Journal of the European Communities No C 112, 20.12.1973, 1st Environmental Action Programme for the period 1973 – 1976 (Declaration of the Council of the European Communities and of the representatives of the Governments of the Member States meeting in the Council of 22 November 1973 on the programme of action of the European Communities on the environment), Council of Ministers of EC, 22 November 1973. Official Journal of the European Communities No C 139, 2nd Environmental Action Programme for the period 1977-1982 (Resolution of the Council of the European Communities and of the Representatives of the Governments of the Member States meeting within the Council of 17 May 1977 on the continuation and implementation of a European Community policy and action programme on the environment), 13.06.1977, Council of EC, 17 May 1977. Official Journal of the European Communities No C 46, 3rd Environmental Action Programme for the period 1982-1986 (Resolution of the Council of the European Communities and of the representatives of the Governments of the Member States, meeting within the Council, of 7 February 1983 on the continuation and implementation of a European Community policy and action programme on the environment (1982 to 1986)), 17.02.1983, Council of EC, 7 February 1983. Official Journal of the European Communities No C 328, 4th Environmental Action Programme for the period 1987 – 1992 (Resolution of the Council of the European Communities and of the representatives of the Governments of the Member States, meeting within the Council of 19 October 1987 on the continuation and implementation of a European Community policy and action programme on the environment (1987-1992)), 07.12.1987, Council of EC, 19 October 1987. Official Journal of the European Communities No C 138, 5th Environmental Action Programme for the period 1993 – 2001 (Resolution of the Council and the Representatives of the Governments of the Member States, meeting within the Council of 1 February 1993 on a Community

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programme of policy and action in relation to the environment and sustainable development), 17.05.1993, Council of EC, 1 February 1993. Official Journal of the European Communities 29.07.1992, No C 192, Treaty on European Union, “Treaty on European Union”, Maastricht, 7 February 1992. 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. 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 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. Official Journal of the European Communities No C 9, Information Agreement (Agreement of the Representatives of the Governments of the Member States meeting in Council of 5 March 1973 on information for the Commission and for the Member States with a view to possible harmonization throughout the Communities of urgent measures concerning the protection of the environment), 15.03.1973, Council of EC, 5 March 1973. Regulation (EEC) 1365/75 of the Council of EC, on the creation of a European Foundation for the improvement of living and working conditions, Luxembourg, 26 May 1975. Regulation (EEC) 1872/84 of the Council of EC, on action by the Community relating to the environment, Luxembourg, 28 June 1984. Regulation (EEC) 2242/87 of the Council of EC, on action by the Community relating to the environment, Brussels, 23 July 1987. Regulation (EEC) 1210/90 of the Council of EC, on the establishment of the European Environment Agency and the European environment information and observation network, Brussels, 7 May 1990. Regulation (EEC) 563/91 of the Council of EC, on action by the Community for the protection of the environment in the Mediterranean region (Medspa), Brussels, 4 March 1991. Regulation (EEC) 3907/91 of the Council of EC, on action by the Community relating to nature conservation (ACNAT), Brussels, 19 December 1991. Regulation (EEC) 3908/91 of the Council of EC, on Community action to protect the environment in the coastal areas and coastal waters of the Irish Sea, North Sea, English Channel, Baltic Sea and North-East Atlantic Ocean (Norspa), Brussels, 19 December 1991. Regulation (EEC) 1973/92 of the Council of EC, establishing a financial instrument for the environment (LIFE), Brussels, 21 May 1992. Regulation (EEC) 880/92 of the Council of EC, on a Community eco-label award scheme, Brussels, 23 March 1992. Regulation (EEC) 1836/93 of the Council of EC, allowing voluntary participation by companies in the industrial sector in a Community eco-management and audit scheme, Luxembourg, 29 June 1993. Regulation (EC) 1404/96 of the Council of EU, amending Regulation (EEC) No 1973/92 establishing a financial instrument for the environment (Life), Brussels, 15 July 1996. Regulation (EC) 1655/2000 of the European Parliament and the Council of EU, concerning the Financial Instrument for the Environment (LIFE), Brussels, 17 July 2000. Regulation (EC) 761/2001 of the European Parliament and the Council of EU, allowing voluntary participation by organisations in a Community eco-management and audit scheme (EMAS), Brussels, 19 March 2001. Regulation (EC) 1682/2004 of the European Parliament and the Council of EU, amending Regulation (EC) No 1655/2000 concerning the Financial Instrument for the Environment (LIFE), Strasbourg, 15 September 2004. Regulation (EC) 614/2007 of the European Parliament and the Council of EU, concerning the Financial Instrument for the Environment (LIFE+), Brussels, 23 May 2007.

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Regulation (EC) 1221/2009 of the European Parliament and the Council of EU, on the voluntary participation by organisations in a Community eco-management and audit scheme (EMAS), repealing Regulation (EC) No 761/2001 and Commission Decisions 2001/681/EC and 2006/ 193/EC, Strasbourg, 25 November 2009. Regulation (EU) 1293/2013 of the European Parliament and the Council of EU, on the establishment of a Programme for the Environment and Climate Action (LIFE) and repealing Regulation (EC) No 614/2007, Strasbourg, 11 December 2013. Regulation (EU) 2018/1999 of the European Parliament and the Council of EU, on the Governance of the Energy Union and Climate Action, amending Regulations (EC) No 663/2009 and (EC) No 715/2009 of the European Parliament and of the Council, Directives 94/22/EC, 98/70/EC, 2009/31/EC, 2009/73/EC, 2010/31/EU, 2012/27/EU and 2013/30/EU of the European Parliament and of the Council, Council Directives 2009/119/EC and (EU) 2015/652 and repealing Regulation (EU) No 525/2013 of the European Parliament and of the Council, Strasbourg, 11 December 2018. Report of the World Commission on the Environment and Development: Our Common Future, the United Nations through the Oxford University Press, October 1987, (Brundtland Report). “Single European Act”, Luxembourg, 17 February 1986 and The Hague, 28 February 1986. 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. United Nations Conference on Environment and Development “Agenda 21”, Volume I: Resolutions Adopted by the Conference, Rio de Janeiro, Brazil, 3-14 June 1992 United Nations Conference on the Human Environment, Declaration, Stockholm, 5-16 June 1972. United Nations, Kyoto Protocol to the United Nations Framework Convention on Climate Change, in United Nations Framework Convention on Climate Change, 1998, Kyoto, 11 December 1997. United Nations, The Paris Agreement, Framework Convention on Climate Change, United Nations 2015, Paris, 12 December 2015.

Migration Policy: Historical Progress, Current Status and Future Directions

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The Launch and Evolution of Migration and Asylum Policy

The founding members of the EEC, when they signed the Treaty of Rome on 25 March 1957, had already ratified the Geneva Convention of 28 July 1951 on refugees, which entered into force on 22 April 1954. The absence of any reference to immigration, asylum and refugee issues in the Treaty of Rome is due to the fact that it was a treaty with an essentially economic object. The first implicit reference to the rights of refugees to move within the EEC Member States is recognised in Regulation (EEC) 1612/68 of the Council of Ministers of 15 October 1968, which referred to the right of third-country nationals working in an EEC Member State to be accompanied by members of their family. The Regulation was supplemented by Council of Ministers Directive 68/360/EEC of 15 October 1968 concerning the formalities required for residence in an EEC Member State. However, the very object of the Treaty of Rome envisaged a single internal market, in which the free movement of goods, services, capital and people would be essential. Thus, the need to abolish internal borders, which was later achieved by the Schengen Agreement, created these conditions, but also raised the need for better and more organised control of the entry of third-country nationals from the external borders of the EC and later the EU, as well as their movement between Member States, given that the freedom of movement achieved within the EC and the EU did not cover third-country nationals residing in a Member State. The following analysis takes into account internal security and justice issues as they evolved during the drafting of the SEA, TEU, Amsterdam, Nice and Lisbon Treaties, given that their evolution and the accompanying legislative acts took into account migration and asylum issues.

# The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 P. Liargovas, C. Papageorgiou, The European Integration, Vol. 2, Springer Texts in Political Science and International Relations, https://doi.org/10.1007/978-3-031-47176-6_12

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Fig. 12.1 The signatures on the text of the Schengen Agreement of 19 June 1990. Photo by Zinneke, licensed: CC BY-SA 4.0 Deed I Attribution ShareAlike 4.0 International, https:// commons.wikimedia.org/wiki/File:Schengen_Agreement_%281985%29_signatures.jpg

12.1.1 The Schengen Agreement and Freedom of Movement Within the EU On 14 June 1985, the first Schengen Agreement was signed by Belgium, France, Germany, Luxembourg and the Netherlands, the five states, in the small town of Schengen in Luxembourg, for the progressive abolition of controls at their common borders, the establishment of free movement for all persons, nationals of the signatory states, and police and judicial cooperation between them. The treaty was signed on board the steamship Princess Marie-Astrid, which was anchored on the Moselle River, the tri-national border between France, Germany and Luxembourg (Fig. 12.1). 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,

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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 participated with the last three Scandinavian states in a similar Scandinavian association, the Nordic Passport Union (Scandinavian Passport Union), signed a specific agreement to participate in the Schengen Agreement with the other 13 EU Member States participating in the Treaty on 19 December 1996. With the entry into force of the Treaty of Amsterdam on 1 May 1999, the Schengen Agreement, which was incorporated into the EU framework, applied to all its member states, with the exception of Ireland and Britain. 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, Poland, Slovakia, Slovenia and Czechia also acceded to the Schengen acquis by signing their accession to the EU on 16 April 2003 and with effect from 21 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, Ireland is EU Member States that has 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 25 March 2001, Switzerland signed on 26 October 2004, with an effective date of 12 December 2008, and Liechtenstein signed on 28 February 2008, with an effective date of 19 December 2011 (Fig. 12.2). It is estimated that around 3.5 million people cross the EU’s internal borders every day as professionals, tourists, visitors, migrants etc. Citizens of an EU Member State can stay as visitors in another EU Member State for up to 3 months with a passport or identity card. They may also reside in another Member State as workers, while retaining the right to equal treatment with citizens of the host Member State. Entrepreneurs have the right of free establishment and students have the right to study anywhere in the EU.

12.1.2 The Dublin Convention on Asylum and Immigration The SEA clearly established the free movement of people as one of the four essential elements of the single market and explicitly assigned this area of competence to the Community.

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Fig. 12.2 EU and non-EU Member States that are part of the Schengen area, as well as EU Member States that are not part of the Schengen area or that will be fully part of it in the future. Source: Eur-Lex (2023). Authors work

The ad hoc group “Immigration” set up specifically for immigration and asylum issues on 20 October 1986, after the signature of the SEA, with the participation of the competent ministers of the EC Member States, was set up to elaborate common principles on immigration and asylum. The work of the group was complemented by six sub-groups on asylum, immigration, external borders, false documents, admissions and expulsions. Despite the impetus given by this group through the establishment of working groups, justice and home affairs issues were still mostly dealt with in the framework of intergovernmental cooperation. Two years later, the European Council in Rhodes, on 2 and 3 December 1988, set up the intergovernmental coordination group called “Free Movement of Persons”, with the task of proposing measures to combine the free movement of persons and security when internal border controls are abolished. These measures should promote cooperation in the fight against terrorism, international crime, drugs and trafficking of all kinds. In 1989, in the “Palma de Mallorca Document”, this group proposed a more coordinated approach to the various aspects of cooperation in the fields of justice and home affairs, given that the various existing working groups set up over the years had been working separately and preparing reports for the ministers

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meeting in different configurations. At the same time, it included measures on asylum and immigration issues. The document was adopted by the Madrid European Council on 26 and 27 June 1989. The Dublin Convention, signed on 15 June 1990, was the result of an effort to catalogue the asylum and immigration policies of the Member States and to gradually harmonise them. It determines the Member State responsible for examining an asylum application lodged by an applicant in one of the Member States of the Community. The Convention 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 reason for the delay in its entry into force is due to the long process of ratification by the Member States. The reason for signing the Dublin Convention was largely dictated by the increase in refugee flows, given the imminent opening of the internal borders of the Member States, due to the implementation of the Schengen Agreement. By designating the Member State responsible for examining the asylum application, the applicant will “be sure that his/her application will be examined by a Member State, thus avoiding a succession of referrals from one Member State to another”, as the Convention states, thus avoiding prolonged uncertainty. The application review process is based on the legislation of the responsible state. In addition, the supporting Centre for Information, Discussion and Exchange on Asylum (CIREA) is being created, which aims to collect, exchange and transmit information related to developments in the field of immigration and asylum in the Members States and in investigating the situation in the third countries from which the asylum seekers come. The Dublin Convention later incorporated resolutions on asylum adopted by the Ministers responsible for immigration of the EC Member States meeting in London on 30 November and 1 December 1992, which were ratified by the Edinburgh European Council of 11 December 1992. These are the resolutions on “manifestly unfounded applications for asylum”, on the “procedure for applying the concept of third country of reception” and on “countries where there is generally no serious risk of persecution”. Although these resolutions are not binding on Member States, they are indicative of the existing will to broaden cooperation between Member States in asylum matters.

12.1.3 The Third Pillar of the TEU for Cooperation in JHA Areas The TEU (Treaty of Maastricht), which entered into force on 1 November 1993, included for the first time immigration and asylum issues in the Union’s policies and placed them under the “third pillar”, in the Justice and Home Affairs (JHA) area (Title VI), while maintaining the intergovernmental nature of cooperation between Member States (Official Journal of the European Communities 1992).

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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. As these matters are all sensitive areas related to Member State sovereignty, intergovernmental cooperation applies to the areas of JHA. Furthermore, links are created between the pillar of cooperation in JHA and the first pillar of the European Community, given the involvement of their competences. 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 qualified majority by the Council of Ministers. 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 Ministers decides by unanimity on common positions and joint actions, while decisions on implementing measures may be taken by qualified majority. The most important acts adopted under the TEU are: Common Position 96/196/ JHA of 4 March 1996, adopted by the Council on the basis of Article K3 of the TEU on the harmonised application of the definition of “refugee” within the meaning of Article 1 of the Geneva Convention of 28 July 1951 relating to the Status of Refugees and Decision 96/198/JHA of 4 March 1996 on alert and urgency in sharing the burden of reception and temporary accommodation of displaced persons.

12.1.4 The TEU and the Establishment of EUROPOL In the context of an early cooperation in the fields of justice and home affairs between the EC Member States, the establishment of the TREVI group, 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

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Fig. 12.3 The EUROPOL logo

EU on 26 July 1995, under Article K3 of the TEU, but entered into force in July 1999. It was the first organisation established under the provisions of the TEU. EUROPOL’s powers were 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 Ministers may extend its jurisdiction to other offences (Fig. 12.3).

12.1.5 The Treaty of Amsterdam and the Changes in the JHA Sectors A decisive step forward towards the creation of a single area of freedom, security and justice was taken with the incorporation of the Schengen Agreement into the European acquis through the Treaty of Amsterdam, which entered into force on 1 May 1999 (Official Journal of the European Communities 1997). However, this integration also brought about a number of changes to the objects of the first and third pillars of the EU. Thus, the first pillar was transferred to the first pillar, with the competences of visa policy, asylum, immigration and judicial cooperation in civil matters, 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 Sect. 12.1.4) 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 has secured the right of initiative equivalent to that of the Member States, and the European Parliament would henceforth be consulted.

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12.1.6 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 territory of the EC 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 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 immigration issues should be the responsibility of the EC. The signing of the Schengen Agreement on 14 June 1985 (see Sect. 12.1.1) 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 arrangements for the abolition of controls at the EU’s internal borders, which entered into force on 26 March 1995, although it was scheduled to be implemented on 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. In addition, Denmark, which joined the Schengen area and accepted the intergovernmental

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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 Treaty of Amsterdam stipulates that the Schengen Agreement is an acquis to be accepted in its entirety by all EU candidate countries.

12.1.7 The AFSJ and the Tampere Programme (2000–2004) 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 Treaty on European Union, were first clarified. The political will to strengthen this single AFSJ was expressed by the Prime Minister of Spain, Jose Maria Aznar, 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. With a view to implementing a Common European Asylum System (CEAS), it drew up the Tampere Programme for the period 2000 to 2004, with the aim of developing a common European policy on asylum and immigration, stating that the EU’s objective is to develop “common asylum and immigration policies while taking into account the need for continuous control of external borders in order to put an end to illegal immigration”. The Tampere European Council also aimed to create a European area of justice by ensuring mutual recognition of civil and criminal laws and easier access to justice for European citizens. The most important legislative acts of this period were: Regulation (EC) 539/ 2001 of the Council of EU of 15 March 2001, listing the third countries whose nationals are subject to a visa requirement for crossing the external borders of the Member States and those whose nationals are exempt from that requirement. Directive 2001/40/EC of the Council of EU of 28 May 2001 on the mutual recognition of decisions on the expulsion of third-country nationals. Directive 2001/55/EC of Council of EU of 20 July 2001 on minimum standards for giving temporary

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protection in the event of a mass influx of displaced persons and on measures promoting a balance of efforts between Member States in receiving and bearing the consequences of receiving such persons. Directive 2002/90/EC of the Council of EU of 28 November 2002, defining the facilitation of unauthorised entry, transit and residence. Framework Decision 2002/946/JHA of the Council of EU of 28 November 2002 on the strengthening of the penal framework to prevent the facilitation of unauthorised entry, transit and residence. Directive 2003/9/EC of the Council of EU of 27 January 2003 on minimum standards for the reception of asylum seekers in Member States. Directive 2003/86/EC of the Council of EU of 22 September 2003 on the right to family reunification. Directive 2003/109/EC of the Council of EU of 25 November 2003 concerning the status of third-country nationals who are long-term residents. Directive 2004/81/EC of the Council of EU of 29 April 2004 on the residence permit issued to third-country nationals who are victims of trafficking in human beings or who have been the subject of an action to facilitate illegal immigration, who cooperate with the competent authorities. Directive 2004/83/EC of the Council of EU of 29 April 2004 on minimum standards for the qualification and status of third-country nationals or stateless persons as refugees or as persons who otherwise need international protection. Furthermore, the EU also sought to strengthen the EU in the fight against crime through EUROPOL and the creation of the European Union Agency for Criminal Justice Cooperation (EUROJUST) by Council of EU Decision 2002/187/JHA of 28 February 2002, a judicial organisation for the coordination of investigations into organised crime and the harmonisation of 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 (Fig. 12.4). The Treaty of Nice, which entered into force on 1 February 2003, resulted in limited reforms, more of a technical nature, in the implementation of the Community method in the first pillar (Official Journal of the European Communities 2001). 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 adopted by the Council of Ministers by qualified majority and concerned a number of important areas such as immigration and judicial cooperation in civil matters. Unanimity remained on family law, legal immigration and the integration of third-country nationals. In addition, Fig. 12.4 The EUROJUST logo

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Fig. 12.5 The FRONTEX logo

new areas of cooperation in the fight against organised crime were identified and EUROJUST was strengthened, with a mandate to help coordinate investigations and prosecutions between the competent authorities of the Member States. In addition, 5 years after the Tampere Programme (see Sect. 12.1.7), the Commission published Communication COM(2004) 401 final of 6 June 2004 on the state of play of the CEAS, which recorded the positive developments concerning the implementation of the measures foreseen by the Programme, as well as future orientations for the improvement of the CEAS. Furthermore, the 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), building on the experience of the External Border Practitioners Common Unit, which had been established 2 years earlier and had set up 7 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 external borders, as well as to provide the necessary technical assistance and expertise (Fig. 12.5).

12.1.8 The Dublin II Regulation Since 15 January 2003, the European Dactyloscopy (EuroDac) system has been in operation, under Council of EU Regulation (EC) 2725/2000 of 11 December 2000, 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. The database is 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, participate in the project. The Council of EU adopted Regulation (EC) 343/2003 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 thirdcountry national, known as the Dublin II Regulation, replacing the 1990 Dublin Convention (see. Sect. 12.1.2), for all EU Member States, with effect from 1 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 1 April

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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 prevent more than one asylum application from 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.

12.1.9 The AFSJ and the Hague Programme (2005–2009) 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 AFSJ, which, after reporting on the achievement of the objectives of the Tampere Programme, set out the policy in the field of JHA 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 complete the CEAS by 2010, to combat organised cross-border crime, to extend the mutual recognition of judicial decisions in civil and criminal matters by the Member States and to make fuller use of and upgrade EUROPOL and EUROJUST. Finally, the new European drugs policy was adopted, and the new European drugs policy was adopted, while the Council of EU Decision 2004/927/EC of 22 December 2004 on the inclusion of certain areas covered by Title IV of Part III of the Treaty establishing the European Community in the procedure laid down in Article 251 of that Treaty introduced the qualified majority/co-decision procedure for all JHA matters, except legal migration, as of 1 January 2005. A few months later, on 10 May 2005, the Commission presented an Action Plan COM(2005) 184 final on the implementation of the Hague Programme. The most important legislative acts of this period were: Directive 2005/71/EC of the Council of EU of 12 October 2005 on a specific procedure for admitting thirdcountry nationals for the purposes of scientific research. Directive 2008/115/EC of the European Parliament and of the Council of EU of 16 December 2008 on common standards and procedures in Member States for returning illegally staying thirdcountry nationals. Directive 2009/50/EC of the Council of EU of 25 May 2009 on the conditions of entry and residence of third-country nationals for the purpose of highly qualified employment. Directive 2009/52/EC of the European Parliament and

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of the Council of EU of 18 June 2009 on minimum standards on sanctions and measures against employers of illegally staying third-country nationals. Additionally, the Prüm Convention (sometimes called Schengen III Agreement) was adopted, which was signed on 27 May 2005 by Austria, Belgium, France, Germany, Luxembourg, the Netherlands and Spain in the town of Prüm in Germany. The Convention was adopted outside of the EU framework but it is open for accession to all Member States of the EU, Now, there are 14 Member States of the EU that ratified the Convention, since other 7 Member States signed the Convention (Bulgaria, Estonia, Finland, Hungary, Romania, Slovakia and Slovenia). The Convention was adopted so as to enable the signatories to exchange data regarding DNA, fingerprints and vehicle registration of concerned persons and to cooperate against terrorism.

12.1.10 The European Pact on Migration and Asylum The European Pact on Migration and Asylum, proposed as a draft by the Council of EU on 24 September 2008, was adopted by the European Council on 15 and 16 October 2008 in Brussels, having regard to the Commission Communication of 17 June 2008. With the Pact—which is a political declaration rather than a legally binding text—the European Council makes five fundamental commitments, which will continue to be translated into concrete measures, in particular in the programme that will succeed the Hague Programme in 2010: (a) Organising legal migration taking into account the priorities, needs and reception capacities of each Member State, and encouraging integration. There is a need to improve the arrangements for family migration. Member States should be invited to establish, through what they consider to be appropriate procedures and instruments, ambitious policies to encourage the harmonious integration in their host countries of migrants who have the prospect of settling in those countries on a long-term basis. Promote exchanges of information on the implementation of best practices in the field of reception and integration, as well as Community measures to support national integration policies. (b) Combating illegal immigration, and encouraging voluntary returns to the countries of origin or transit of migrants. There is a need for: legalisation decisions to be taken only on a case-by-case basis and not in a general way under national laws, for humanitarian or economic reasons. To conclude readmission agreements, at Community or bilateral level, with the countries for which it is deemed necessary, so that each Member State has the legal means to ensure the removal of illegal immigrants. Ensure that the risks of illegal immigration are prevented. Strengthen cooperation with countries of origin and transit. Give practical effect to the Community provisions under which an expulsion decision issued by a Member State is valid throughout the territory

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of the EU and, in this context, its entry into the Schengen Information System (SIS). (c) Strengthening the effectiveness of border controls. It is necessary: To generalise by January 1, 2012 at the latest, thanks to the Visa Information System (VIS), the granting of biometric visas. To immediately strengthen the cooperation between the consular authorities of the member states and to give FRONTEX, without prejudice to the role and responsibilities of the member states, the necessary means for the smooth execution of its mission in terms of the coordination of the control of the external borders of the EU. To develop modern technological means that will ensure the interoperability of systems and allow the exercise of effective integrated management of the external borders. To intensify cooperation with countries of origin or transit to strengthen external border controls and the fight against illegal immigration. (d) Establishment of Europe as an asylum area. A European support office should be set up to facilitate the exchange of information, analysis and experience between Member States and to develop practical cooperation between the competent administrations for the examination of asylum applications. To establish procedures in the event of a crisis in a Member State facing a mass influx of asylum seekers, so that officials from other Member States can be made available to it and effective solidarity can be provided through better use of existing Community programmes. Strengthen cooperation with the UNHCR to ensure better protection for persons applying for asylum outside the EU. Invite Member States to provide training on the rights and obligations regarding international protection to persons responsible for external border controls. (e) Creating a global partnership with third countries that fosters synergy between migration and development. Needed: Community-level or bilateral agreements with countries of origin and transit should be concluded, with appropriate provisions for legal migration possibilities. Encourage the Member States to provide, within the limits of their capacities, nationals of partner countries to the east and south of Europe with legal migration opportunities adapted to the labour market situation in the Member States, enabling them to receive training or acquire professional experience and to build up savings which they can use for the benefit of their countries. Launch cooperation policies with countries of origin and transit in order to prevent or combat illegal immigration. Promote co-development actions to enable migrants to participate in the development of their countries of origin.

12.1.11 The Treaty of Lisbon and the Changes to the JHA and the AFSJ With the Treaty of Lisbon, which entered into force on 1 December 2009, a particularly important change following the abolition of the third pillar, is the application of Community rules on criminal and police cooperation, i.e. the extension of the ordinary legislative procedure (former co-decision procedure) to almost

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the entire field of JHA, while the implementation of the AFSJ, which covers JHA matters, is strengthened (Official Journal of the European Union 2007). 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 provided for to date relating to infringements by Member States are abolished, while only the exceptions relating to proportionality of operational police 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, as well as for 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, in 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 foreseen to allow these states to withdraw from measures to which they are already bound.

12.1.12 The AFSJ and the Stockholm Programme (2010–2014) 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. 12.1.7) and Hague (see Sect. 12.1.9) Programmes, was adopted in Brussels by the European Council under the Swedish Presidency on 10 and 11 December 2009 (The Hague Programme 2005). In the light of the Treaty of Lisbon, which entered into force on 1 December 2009, bringing about significant changes to the AFSJ, the Stockholm Programme for the period 2010–2014 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 10 and 11 December 2009, sets the following six priorities: (a) Promotion of

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12 Migration Policy: Historical Progress, Current Status and Future Directions

citizenship and fundamental rights. Making European citizenship a tangible 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 a 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 Migration and Asylum (see Sect. 12.1.10) 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. The most important legislative acts of this period were: Directive 2011/36/EU of the European Parliament and of the Council of EU of 5 April 2011 on preventing and combating trafficking in human beings and protecting its victims. Directive 2014/36/ EU of the European Parliament and of the Council of EU of 26 February 2014 on the conditions of entry and residence of third-country nationals for the purpose of seasonal employment. Directive 2014/66/EU of the European Parliament and of the Council of EU, of 15 May 2014, on the conditions of entry and residence of thirdcountry nationals for the purpose of intra-corporate transfer. As a consequence of the Stockholm Programme (together with the provisions of the European Pact on Migration and Asylum, see Sect. 12.1.10) particular emphasis

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was 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 by Council of EU Decision 2001/427/JHA, of 28 May 2001, replaced by Decision 2009/902/JHA of the Council of EU of 30 November 2009, the European Police College (CEPOL), established by Decision 2000/820/JHA of the Council of EU of 22 December 2000, replaced by Decision 2005/681/JHA of the Council of EU of 22 December 2000, of 20 September 2005, the EU Situation Centre (EU SITCEN—renamed as EU Intelligent Analysis Centre, EU INTCEN as of March 2012), established in June 2002 (the “founding act” of SITCEN is considered to be Javier Solana’s document to the Council of EU of 15 November 2001 on “Intelligence Cooperation”), and the European Criminal Records Information System (ECRIS), which became operational in April 2012 and is governed by Framework Decision 2009/315/JHA of the Council of EU of 26 February 2009 and Framework Decision 2009/316/JHA of the Council of EU of 6 April 2009. Furthermore, the European Asylum Support Office (EASO) was developed as a tool for the development and implementation of the CEAS, which was established by Regulation (EU) 439/2010 of the European Parliament and of the Council of EU of 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 by Regulation (EU) 1052/ 2013 of the European Parliament and of the Council of EU of 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. 12.1.6) by Regulation (EC) 1987/2006 of the European Parliament and of the Council of EU of 20 December 2006 and Decision 2007/533/JHA of the Council of EU of 12 June 2007, which finally became operational as of 9 April 2013, has started to operate. Finally, the use of the VIS (Visa Information System), established by Decision 2004/512/EC of the Council of EU of 8 June 2004, was required and accessibility to its data started on 11 October 2011. Developments in Migration Policy and Asylum Policy are monitored by the European Migration Network (EMN), established by Council of EU Decision 2008/381/EC of 14 May 2008, as an EU network of experts on migration and asylum issues from all cooperating Member States to provide objective, comparable and policy-relevant information. As regards the dialogue with third countries, the Global Approach to Migration and Mobility (GAMM), announced by the Commission in COM (2011) 743 final on 18 November 2011, sets out a general framework for the EU’s relations with third countries on migration. This approach is based on four pillars: legal migration and mobility, irregular migration and trafficking in human beings and human trafficking, international protection and asylum policy and maximising the impact of migration and mobility on development. The fundamental rights of migrants are a cross-cutting issue in this approach.

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12 Migration Policy: Historical Progress, Current Status and Future Directions

12.1.13 The Dublin III Regulation 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. 12.1.8). 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 as Regulation 604/2013 of the European Parliament and of the Council of EU 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 normally the first Member State to ring and receive the asylum seeker refugee is responsible for examining the asylum application. In addition, the Regulation provides that detention is permissible 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 necessary to carry out the necessary administrative procedures for the transfer of the asylum seeker.

12.1.14 The AFSJ and the Newest Guidelines (2015–2019) The Stockholm Programme expired in December 2014. Since 11 March 2014, the Commission has issued a new Communication COM(2014) 154 final, containing its proposals for the CEAS, entitled “An open and secure Europe: from theory to practice”. The European Council of 26 and 27 June 2014, subsequently set out in its conclusions the “strategic guidelines on legislative and operational planning for the area of freedom, security and justice” for the period 2015–2020. This is no longer a programme like its predecessors Tampere, The Hague and Stockholm, but clearly guidelines focused on the objective of transposing, and implementing, existing legal instruments and measures taken. In line with the conclusions of the European Council of 26 and 27 June 2014, the full transposition and effective implementation of the CEAS is an absolute priority. These efforts should be accompanied by a strengthened role for the EASO, in particular, to promote the uniform application of the acquis. Addressing the root causes of irregular migration flows is an essential part of the EU’s migration policy and therefore emphasis should be placed on strengthening and expanding regional protection programmes, especially in the vicinity of regions of origin, on tackling irregular trafficking and human trafficking more decisively, on establishing an effective common return policy and imposing readmission obligations in agreements with third countries, and on fully implementing the actions highlighted by the

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The Launch and Evolution of Migration and Asylum Policy

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European Commission in its Communication on the fight against illegal immigration. More effective management of the EU’s external borders is required and, to this end, integrated management of the external borders should be modernised, while FRONTEX, as an instrument of European solidarity in the field of border management, should strengthen its operational assistance, in particular, to support Member States under strong pressure at their external borders, and the possibility of creating a European border guard system should be considered. In the fight against crime and terrorism, the EU should support national authorities by mobilising all means of judicial and police cooperation and strengthening the coordinating role of EUROPOL and EUROJUST, including by: improving cross-border information exchange, including on criminal records; further developing an integrated approach to cyber security and cybercrime; and preventing radicalisation and extremism and countering the phenomenon of foreign fighters The smooth functioning of a truly European area of justice, respecting the different legal systems and traditions of the Member States, is of vital importance for the EU. However, the adoption of new strategic guidelines, scheduled for the European Council of 26 March 2020, has been postponed due to the pandemic. Legislative developments related to asylum and immigration during this period can be summarised as follows: Directive (EU) 2016/801 of the European Parliament and of the Council of EU, of 11 May 2016, on the conditions of entry and residence of third-country nationals for the purposes of research, study, training, voluntary service, pupil exchange or educational programmes and the employment of unpaid domestic workers (au pair). Regulation (EU) 2016/1953 of the European Parliament and of the Council of EU of 26 October 2016 on the establishment of a European travel document for the return of illegally staying third-country nationals. Also on 13 May 2015, the Commission published Communication COM(2015) 240 final on the European Agenda for Migration. The Action Plan proposed immediate measures to address the crisis in the Mediterranean, as well as measures to be taken in the coming years to better manage migration in all respects (see Sect. 12.2.1). On the basis of this programme, the Commission adopted on 6 April 2016 Communication COM(2016) 197 final with guidelines on legal migration as well as asylum. Through four main pillars, it outlines the set of actions required for legal migration: (a) reviewing the Blue Card Directive; (b) attracting innovative entrepreneurs to the EU; (c) developing a more coherent and efficient model for managing legal migration at EU level by assessing the current framework and (d) strengthening cooperation with the main countries of origin in order to ensure legal pathways to the EU while improving the return of those who have not. On 23 September 2020, the Commission tabled Communication COM(2020) 609 final on a New Pact on Migration and Asylum, aiming at a more general reform of EU migration and asylum rules and the creation of a comprehensive common European framework for the management of migration and asylum, replacing the Dublin III Regulation. In general, the new pact provides for actions to: (a) sound and fair management of external borders, including identity, health and security checks; (b) fair and effective asylum rules, streamlining asylum and return procedures; (c) a new solidarity mechanism for search and rescue, pressure and crisis situations;

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12 Migration Policy: Historical Progress, Current Status and Future Directions

(d) better foresight, preparedness and crisis response; (e) effective return policy and coordinated approach to returns at EU level; (f) integrated governance at EU level for the better management and implementation of asylum and migration policies; (g) mutually beneficial partnerships with the main third countries of origin and transit; (h) developing sustainable legal pathways for people in need of protection and for attracting talent to the EU and (i) supporting effective integration policies. Outstanding issues and legislative proposals in the pipeline relate to: (a) the replacement of the Dublin system with a new asylum and migration management system which will improve the distribution of asylum applications between Member States through a new solidarity mechanism and ensure the rapid processing of applications, (b) the provision of temporary and emergency measures to deal with situations of crisis and force majeure in the field of migration and asylum, (c) the strengthening of the Eurodac Regulation, in order to improve the database that the EU adheres to the fingerprinting of asylum seekers, (d) the creation of an autonomous EU asylum agency, (e) the introduction of a new mandatory pre-entry screening process, which will include identification, health and safety checks, as well as fingerprinting and registration in the Eurodac database, (f) the replacement of the Asylum Procedures Directive with an amended regulation that will harmonise EU procedures, (g) the replacement of the Minimum Requirements Directive with a regulation that will harmonise the protection standards and rights of asylum seekers, (h) the reform of the Reception Conditions Directive to ensure that asylum seekers can benefit from harmonised and decent reception conditions and (i) the establishment of a permanent EU framework for resettlement.

12.2

Data on Migration Flows in Recent Years and Related Actions

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 refugees-migrants 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

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Data on Migration Flows in Recent Years and Related Actions

449

Refugees rescued and lives lost on the three Mediterranean refugee routes (2014 - 2020) 1,100,000 1,000,000 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0

4,054

1,046,336 5,143 3,283

3,139

2,299

373,643 228,741

2014

2015

2016

184,344

137,080

1,885 121,303

2,016 97,170

2017

2018

2019

2020

Rescued

Loss of lives

Fig. 12.6 Refugee rescues and loss of life on the three Mediterranean refugee routes (2014–2020). Source: Eurostat (2020) (processed by the Authors)

Western Mediterranean

41,861 35,678 19,681

2014

23,967 14,009 83,333

2013

57,034 23,485 56,561

7,243

2012

23,063 118,962 42,319

6,800 40,000 24,800

2011

181,376 182,277

6,400 15,900 37,200

2010

9,990

8,450 64,300 57,000

2009

153,946

5,000 4,500 57,000

2008

7,004

6,650 11,000 40,000

170,664 50,834

6,500 39,800 52,300

900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0

885,386

Number of rescued refugees-migrants per Mediterranean sea route (2008-2020)

2015

2016

2017

2018

2019

2020

Central Mediterranean

Eastern Mediterranean

Fig. 12.7 Number of rescued refugees-migrants by Mediterranean Sea route (2008–2020). Source: Eurostat (2020) (processed by the Authors)

and North Africa, passing through Tunisia and Libya. By this route, refugee arrivals in 2016 reached 181,376. 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 1.046 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. Detailed data on arrivals from each of the sea lanes, as well as data on loss of life, are provided in the diagrams in Figs. 12.6 and 12.7. In the histogram in Fig. 12.8, data on asylum applications lodged, examined, granted and rejected are provided.

12 Migration Policy: Historical Progress, Current Status and Future Directions

200,000

221,020 348325

675,515 569,345

217,430 364465

602,515 581,895

961,610 654,610

437,555 524055

433505

367,825 314,235 107,610 206625

400,000

278,280 288,505 91,010 197495

600,000

263,135 237,390 59,535 177,855

800,000

562,680 366,850 167,385 199465

1,000,000

307,650 289005

1,200,000

1,206,045 1,106,395 672,890

1,256,575

1,400,000

Asylum applications in EU-28 member state, processed, granted & refused (2011-2019)

596,655

450

0 2011 2012 2013 2014 Asylum seekers for the first time Positive decisions on asylum

2015

2016 2017 2018 2019 Applications for asylum examined Negative decisions on asylum

Fig. 12.8 Asylum applications submitted in an EU-28 Member State, examined, granted and rejected, by year (2011–2019). Source: Eurostat (2020) (processed by the Authors)

According to Commission data, 20.9 million third-country nationals were legally residing in EU countries in 2019, accounting for around 4.7% of the total EU population. The EU was also hosting around 2.6 million refugees at the end of 2019, representing 0.6% of the EU population.

12.2.1 Large Migratory Flows and How to Deal with Them in Practice Following the high number of refugee casualties in the Mediterranean in April 2015, the extraordinary European Council of 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) deterring irregular migration flows and (d) enhancing 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.

12.2

Data on Migration Flows in Recent Years and Related Actions

451

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. On 3 February 2016, EU Member States agreed on how to finance the €3 billion 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 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 of 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 enlargement of the role of FRONTEX from the European Agency for the Management of Operational Cooperation at the External Borders to the 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 from 1 February 2018, (b) the continuation of the POSEIDON mission in the Agau and the Evros River, which had been operating as Joint Operation POSEIDON Sea since 26 March 2011 and then as Operation POSEIDON Rapid Intervention since 28 December 2015; (c) the continuation of the INDALO mission in the maritime area of Spain towards North Africa, which had been operating as Joint Operation INDALO and was later renewed on 3 May 2017 (see also the report of the European Commission on the implementation of Operation POSEIDON Sea, which was renewed on 3 May 2017 (Fig. 12.9). On 29 June 2018, EU Member States agreed on a new €3 billion 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

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12 Migration Policy: Historical Progress, Current Status and Future Directions

Fig. 12.9 The three FRONTEX missions covering the three Mediterranean routes and the EURONAVFOR military mission between Italy and Libya. Source: Authors work

children, can continue without interruption when contracts under the first tranche expire.

12.2.2 New Measures on the Occasion of the Directed Entry of Immigrants in 2020 On 6 March 2020, in response to the directed 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 efforts to host migrants and refugees. Continuing this cooperation and commitment is in the interest of both the

References

453

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.

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Directive 2001/55/EC of Council of EU of 20 July 2001 on minimum standards for giving temporary protection in the event of a mass influx of displaced persons and on measures promoting a balance of efforts between Member States in receiving and bearing the consequences of receiving such persons. Directive 2002/90/EC of the Council of EU of 28 November 2002, defining the facilitation of unauthorised entry, transit and residence. Decision 2002/187/JHA of the Council of EU of 28 February 2002, for the creation of the European Union Agency for Criminal Justice Cooperation (EUROJUST). Directive 2003/9/EC of the Council of EU of 27 January 2003 on minimum standards for the reception of asylum seekers in Member States. Directive 2003/86/EC of the Council of EU of 22 September 2003 on the right to family reunification. Directive 2003/109/EC of the Council of EU of 25 November 2003 concerning the status of thirdcountry nationals who are long-term residents. Directive 2004/81/EC of the Council of EU of 29 April 2004 on the residence permit issued to thirdcountry nationals who are victims of trafficking in human beings or who have been the subject of an action to facilitate illegal immigration, who cooperate with the competent authorities. Directive 2004/83/EC of the Council of EU of 29 April 2004 on minimum standards for the qualification and status of third country nationals or stateless persons as refugees or as persons who otherwise need international protection. Directive 2005/71/EC of the Council of EU of 12 October 2005 on a specific procedure for admitting third-country nationals for the purposes of scientific research. Directive 2008/115/EC of the European Parliament and the Council of EU of 16 December 2008 on common standards and procedures in Member States for returning illegally staying thirdcountry nationals. Directive 2009/50/EC of the Council of EU of 25 May 2009 on the conditions of entry and residence of third-country nationals for the purpose of highly qualified employment. Directive 2009/52/EC of the European Parliament and the Council of EU of 18 June 2009 on minimum standards on sanctions and measures against employers of illegally staying thirdcountry nationals. Directive (EU) 2016/801 of the European Parliament and of the Council of EU, of 11 May 2016, on the conditions of entry and residence of third-country nationals for the purposes of research, study, training, voluntary service, pupil exchange or educational programmes and the employment of unpaid domestic workers. Eur-Lex, Schengen Agreement and Convention, 2023, https://eur-lex.europa.eu/EN/legal-content/ glossary/schengen-agreement-and-convention.html Eurostat, Database, 2020, https://ec.europa.eu/eurostat/web/main/data/database Framework Decision 2009/315/JHA of the Council of EU of 26 February 2009 for the operation of the European Criminal Records Information System (ECRIS), which became operational in April 2012. Framework Decision 2009/316/JHA of the Council of EU of 6 April 2009 for the government of the European Criminal Records Information System (ECRIS), which became operational in April 2012. Framework Decision 2002/946/JHA of the Council of EU of 28 November 2002 on the strengthening of the penal framework to prevent the facilitation of unauthorised entry, transit and residence. Joint Position 96/196/JHA of 4 March 1996 defined by the Council on the basis of Article K.3 of the Treaty on European Union on the harmonized application of the definition of the term ‘refugee’ in Article 1 of the Geneva Convention of 28 July 1951 relating to the status of refugees. Official Journal of the European Communities No C 254, 19.08.1997, Convention determining the State responsible for examining applications for asylum lodged in one of the Member States of the European Communities, Dublin, 15 June 1990.

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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. 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. Official Journal of the European Communities 29.07.1992, No C 192, Treaty on European Union, “Treaty on European Union”, Maastricht, 7 February 1992. 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. 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 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 (EEC) 1612/68 of the Council of Ministers of 15 October 1968 on freedom of movement for workers within the Community. Regulation (EC) 2725/2000 of the Council of EU of 11 December 2000 for the European Dactyloscopy (EuroDac) system operation. Regulation (EC) 539/2001 of the Council of EU of 15 March 2001, listing the third countries whose nationals are subject to a visa requirement for crossing the external borders of the Member States and those whose nationals are exempt from that requirement. 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 (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 604/2013 of the European Parliament and of the Council of EU on 26 June 2013 for the Dublin III Regulation. Regulation (EU) 1052/2013 of the European Parliament and the Council of EU of 22 October 2013, for the establishment of the European Border Surveillance System (EUROSUR), a multiobjective 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. Regulation (EU) 2016/1953 of the European Parliament and of the Council of EU of 26 October 2016 on the establishment of a European travel document for the return of illegally staying thirdcountry nationals. The Hague Programme: Strengthening Freedom, Security and Justice in the European Union, 03.03.2005, Council of EU, 3 March 2005. Treaty of Rome (EEC), “Traité instituant la Communauté Économique Européenne et documents annexes”, Rome, 25 March 1957.

Overview: The European Integration, Volume I & Volume II

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The European Integration: History, Institutions and Policies

Volumes I and II on European integration showed that the creation of the European Union was a gradual and complex process that began after World War II. From the records of Charlemagne to the ruins of World War II, Europe has a varied history of cooperation and conflict. The path to European integration represents human resilience and a complex mix of stories, institutions and politics that are closely linked to transforming a war-torn continent into a symbol of harmony and a shared collective future.

13.2

History: From Battles to Brotherhood

The concept of European solidarity was seen as an obstacle to the revival of nationalism during World War II. The origins of the European Union can be traced back to the intellectual environment of the 1920s and the founding of the European Coal and Steel Community (ECSC) in 1951. The ECSC established a free trade zone for important economic and military assets. The Treaty of Rome led to the creation of the European Economic Community (EEC) in 1957 to create a single market and promote economic cooperation. A number of international agreements and similar changes led to the creation of the European Union. In 1992, the Treaty of Maastricht established the European Union as a political organisation, established the European Parliament, and introduced a common currency, the euro. The treaty aims to promote political and economic union among European countries. The European Union has grown over time, adding several new members since its inception. The treaty promotes cooperation in the fields of immigration, asylum and judicial procedures. The European Union (EU) has changed over the course of time as a result of multiple factors. Initially, European integration theory concerned itself with the # The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 P. Liargovas, C. Papageorgiou, The European Integration, Vol. 2, Springer Texts in Political Science and International Relations, https://doi.org/10.1007/978-3-031-47176-6_13

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explanation of the process of building a supranational institution. Understanding of the European integration process has evolved over the course of time based on the empirical world and the theories that are used to understand it. The theory of Multilevel Governance (MLG) was created to understand the behaviour and development of the EU, during the second phase, a comparative policy approach was employed to understand the behaviour and development of the EU. Neo-functionalism ranks among the most prevalent theories in European integration. The theory centres on the increased integration that stems from the interaction of well-integrated and dependent regions, and is regarded as one of the most influential concepts in European politics. Neo-functionalism signifies the shift from the European Coal and Steel Community to the European Economic Community, established through the Treaty of Rome in 1957. The process of European integration encompasses economic, political, legal, social and cultural aspects. The EU was created in 1993 under the Treaty of Maastricht to consolidate the European Coal and Steel Community (ECSC), the European Atomic Energy Community (Euratom) and the European Economic Community (EEC). The 1967 merger agreement resulted in the amalgamation of the ECSC and Euratom institutions, creating the EEC. From the outset, the Parliament and courts of the European Community have been common to all member states. Although these communities initially had distinct identities, their integration gradually deepened through several agreements and treaties, such as the Single European Act of 1987. The history of European integration has several noteworthy events. One of the earliest measures was the creation of international organisations in the 1920s to facilitate cooperation between like-minded transnational parties. In addition, the visionaries and thinkers of this period also put forward the idea of European political integration. However, it was not until after World War II that the political climate in the European democracies became more conducive to unity. This has also become an important milestone in the history of European integration. When Winston Churchill explained the concept in more detail in a speech at the University of Zurich in 1946, he did not expect Britain to join the European Union. Widely regarded as the founder of the European Union, Jean Monnet played a crucial role in the formation of the European Community. His contribution is considered of great significance to the history of European integration. The creation of the European Union under the Treaty of Maastricht in 1992 was an important milestone, cementing the EU’s position as a driving force for European integration. The treaty empowers a group with responsibility for promoting policy coordination in various fields. It is worth noting that the main goal of the EU is to create an internal market, which is an important milestone in its development. The accession of 18 member states to the European Union and the institutions of the European Monetary Union, as well as the implementation of agreements such as the Schengen Agreement, have played an important role in the process of European integration.

13.4

13.3

Policies: Crafting a Shared Destiny

459

Institutions: The Pillars of Unity

Effective agencies and institutions within the government participate in and enforce EU regulations. These organisations are categorised by their leadership, their legislative, their judicial and their financial institutions. Other national institutions have a significant role in the EU system. These agencies collaborate closely and each has a different purpose of ensuring that member states follow EU rules. The Council of Europe is involved in the process of coming up with new treaties, securing the formal recognition of important documents, resolving disagreements in the lower levels of discussion, and directing foreign policy. Internally, it functions as the collective leader of the state. The European Parliament is considered an essential body that political parties and committees have a significant role in its activities. Policy proposals are evaluated and discussed by relevant committees before being passed on to the full Parliament. Legislative activity is conducted by specialised committees. Along with the Council of the European Union, the European Parliament is the budgetary entity responsible for implementing the EU budget and advising local and regional officials regarding matters of concern. The EU Court of Justice interprets treaties and applies them to the law. It delineates the fundamental principles of the EU’s powers and responsibilities, the relationship between EU law and national law, and the purpose of checking the legitimacy of EU law. Additionally, courts have jurisdiction over lawsuits related to competition that are initiated by individuals, companies or organisations. It also determines if member states or other entities have met their obligations under EU law. In addition, the European Court of Auditors (ECA) monitors the value of spending EU funds, whether legal or not, to promote transparency and accountability. It also acts as an independent advocate for the economic interests of EU citizens. Although the different agencies have different roles and responsibilities, they work together to ensure that EU policies are effectively implemented.

13.4

Policies: Crafting a Shared Destiny

The European Union (EU) has a wide range of policies. For example, the EU is committed to eastward enlargement, which includes initiatives and policies that promote stability and prosperity in the EU’s periphery. Moreover, the EU has a financial framework that spans 7 years which outlines its budgetary priorities for the upcoming years. Furthermore, the EU has a policy area called “Europe 2020 strategy” that aims to stimulate growth and employment in the region. Concerning institutional structures, the EU always strives to improve its governance and decision-making processes. The European Neighbourhood Policy is the EU’s approach to strengthening relationships with countries in the eastern and southern regions. Provide financial support to countries that demonstrate government and economic reforms as well as significant change. This procedure is based on action plans that are shared between the targeted countries and Brussels. Comprising of 10 policy areas, each represented by a member state at the ministerial level, the

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Council of the European Union oversees the governance of the EU. These policy areas cover environmental protection, energy conservation, agriculture, justice, education as well as conservation of habitats and species. EU law plays a crucial role in promoting habitat conservation and species protection, as well as in protecting air and water resources, and in managing waste. The Treaty of Lisbon has increased the EU’s aspiration to lead in environmental policies, as demonstrated by its leadership in the international community through support for significant international agreements. The EU has regulations concerning energy, such as augmenting funding for new technologies in energy, diversifying resource usage, enhancing internal market competition, crafting a novel framework for contracting with Russia, and improving relationships with Central Asian and North African nations. These regulations aim to encourage investment in enhancing the grid connection and facilitating efficient utilisation of existing energy sources while promoting alternative energy commercialisation. Apart from domestic regulations, the EU also engages in foreign policy, involves itself in trade negotiations, and reinforces agreements through legal measures. The establishment of a customs association, and the development of a common market are fundamental goals of the European Economic Community. Besides these goals, the EU also implements policies to manage social changes in areas beyond urban centres and allocates a budget to assist members in aligning with EU standards. In summary, the EU has mechanisms to support the development of less advanced regions. In addition to the policies mentioned above, the EU implements a range of others such as the Common Agricultural Policy, the Common Fisheries Policy, the Internal Market, the Energy and Transport Policy, and the Culture and Social Policy. Moreover, the EU endeavours to enhance economic, social and territorial cohesion in underdeveloped EU countries through different schemes and expenditures. The ultimate aim of the EU’s Common Security and Defence Policy (CSDP) is to undertake both military and civilian responsibilities, ranging from police training to security and defence. The CSDP is overseen by the European Commission and comprises EU foreign policy leaders. The process of policy development in the EU is slow and presents several challenges that require resolution to ensure successful implementation. The financial hardships of member states present one of the greatest obstacles, which require political actions to overcome. The Council plays a significant role in devising country-specific solutions to tackle these issues. Member states then implemented these suggestions as part of their individual country reform plans, which detailed the actions required to address economic issues. Another challenge is determining when and how to take part in the process of developing policies. The analysis of national governments’ economic policies and the identification of major challenges associated with economic policy fall under the significant role of the European Commission. Nonetheless, policymaking encounters various obstacles, including the COVID-19 pandemic, Brexit and the growing prominence of populist movements. The participation of three authorities, the Commission, the Parliament, and the Council of Ministers, is critical in the process of political decision-making

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Challenges Faced by the EU

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within the EU. Committees often develop policy proposals and legislation in response to concerns expressed by the Parliament and the Council. Therefore, committee officials are frequently invited to attend meetings of parliamentary committees or government councils to discuss their actions. In addition, the future of the labour market will significantly affect vital skills, which highlights the necessity of developing new strategies to address these issues. Furthermore, the process of policymaking can be hindered by political polarization and populism. Stakeholders are frequently unable to agree on policy goals and priorities. In conclusion, the complexity and interdependence of issues prominently influence the political decision-making process.

13.5

Challenges Faced by the EU

The European Union is presently facing a number of difficulties, causing negative financial and political consequences. The EU intervenes in only a limited number of areas, such as environmental policy and trade. It also lacks an agenda for reform that is driven by ideology. Furthermore, the EU has faced criticism for being excessively market-oriented. In cases where social intervention poses a threat to the market, the EU tends to change its approach. Critics argue that the EU prioritises corporate interests over social issues. Interestingly, European integration replaced corporatism at the institutional level, yet the EU is now criticised for promoting corporatism. The criticism has raised questions about the priorities of the EU and its ability to effectively address citizen’s needs. Although the EU has made significant progress in promoting peace, stability and economic growth, the criticism implies the need for further efforts to achieve accountability, transparency and citizen-centric solutions. The Euro crisis has also highlighted the weaknesses of the European Union and exposed political paradoxes that are critical for the future of European integration. The crisis has resulted in unprecedented cooperation and consultation among member states, yet high-level meetings have failed to engage the European Parliament or the Commission; institutions that hold more power under the Treaty of Lisbon. The response to the crisis has resulted in a reduction in public support for greater integration in the European community. This situation is concomitant with the belief that the bloc could become more technocratic, while still preserving its democratic nature. The European Union strives to maintain a balanced approach towards respecting national autonomy and promoting collaboration. In addition, the refugee crisis has impacted the EU’s political and social structures, leading member states to cooperate in the search for solutions. The economic crisis has caused high unemployment, especially among young people, resulting in the emergence of populist and nationalist movements. Moreover, there are challenges related to circumventing or modifying EU regulations and institutions have endeavoured to acquire more power. The Future of Europe Conference provides a platform for European participants to discuss the challenges and priorities of the EU. This is essential for addressing the challenges that the EU currently confronts.

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The difficulties associated with the EU can be overcome through multiple possible solutions. One solution is to model the knowledge economy’s emerging model to create more value-added products in the context of the global market. This would facilitate the introduction of new growth in southern and eastern European countries that are facing economic issues. Another potential solution is to congregate resources and collect power to achieve quick victories and bond with non-European partners, particularly in regards to their security, energy and inflation concerns. Beneficial agreements, such as those pertaining to access to the job market and cooperation in the fields of education, security, liberty and justice, can have a tangible effect on the security, well-being and common identity of European citizens. Additionally, modifying technical processes to combine internal market rules and political processes in order to achieve the standards of the legal system and to protect human rights can be applied to each partner’s situation and development. Immigration could address the EU’s troublesome elderly dependency ratio. However, the failure of effective policies to address the increasing number of refugees that are crossing the Mediterranean and the increase in far-right parties in Europe has challenged this solution. Potential solutions such as debt relief, inflation and economic growth have been dismissed by the European response. Nevertheless, the reduction of debt-to-GDP ratio through a return to economic growth can facilitate the exit of countries from debt situations. Likewise, inflation can lessen the true value of debt, and this can aid countries in resolving their debt problems. On the other hand, countries may recover from debt crises if most of their debt is forgiven. Ultimately, some member states may need to implement strategies that demand a more expansionary fiscal policy, like the fiscal compact that unites a singular fiscal policy with a single monetary policy. Monetary policy is not a means of economic attainment. In the end, the process of European integration shows the continent’s determination. It tells a story where nations, damaged by war and division, chose to come together, develop, and work towards a shared future. The EU remains a symbol of hope and collaboration in a changing world, possessing a diverse history, strong institutional basis and future-oriented strategies.

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