The European Union

1. Introduction
- One of the most successful international organizations of our time. Has contributed to the post-war prosperity in Europe, greatly assisted the economic efforts of its members (esp. Spain, Ireland, France, etc.), and perhaps, most importantly, has made the idea of another war in Western Europe virtually unthinkable. Between 1870 and 1945, France and Germany fought three devastating wars, France losing the first of these conflicts and having to be bailed out by the hated Anglo-Saxons in the latter two. Strong inducement to attempt some sort of collaboration. Also, there was a belief that this could aid in the post-war reconstruction of Europe, something certainly on the minds of the involved countries. Remember the Marshall Plan and the creation of Bretton Woods (will talk about the IMF/World Bank in the next section), general perception that countries had to form some sort of common bond in order to develop (not the only idea, others would later experiment with autarky) and that this would be the most effective way to guarantee the future peace of Europe. Here we see the mix of interest and idealism, desire for economic growth coupled with a belief that co-operation was necessary for the post-war peace. After all, if the Germans and French could get along, then one of the principal sources of European conflict could be removed.
- The United States has always taken a somewhat contradictory view on this matter, desire for European economic and military strengthening coupled with a skepticism that this could actually work. Of late, most of the interchange between the US and the EU has centered over trade disputes (bananas, meat, etc.), but in the early 1950s it would have taken a great deal of optimism to predict that the European Union could develop to the point where the United States might perceive it to be a rival. Speaks to the success of the organization.
- While ideas for a unified Europe had been around since the time of Charlemagne, the impetus for this particular body came from a couple of Frenchmen - Jean Monnet and Robert Schuman, credited as the intellectual founders of the EU. Vision of a United States of Europe, has not exactly come to be (though it may), never the less, the Union should still be regarded as a success. Of course, the optimist would maintain that the EU is simply experiencing the growing pains like those suffered by the US in the early years of their independence, and any efforts at integration will produce some uncertainty as to the locus of power, the central organization or the component parts. With respect to this theme, we shall be discussing the matter throughout the analysis of the EU.
- Two Trends that this exemplifies – toward regional organizations and economics as and impetus to organization.

2. The Development of the EU

- Descendent from the European Coal and Steel Commission, formed in 1951, by France Germany, Italy, Belgium, Luxembourg, and the Netherlands. Body established pooled control over coal and steel industries in member countries, intended to ease post-war economic recovery and also to make war in Europe less likely. Latter goal accomplished by the members renouncing national control over industries that would be absolutely essential to any future war-making effort. Concept developed by Robert Schuman (Schuman Plan), the French Foreign Minister. The idea represented “a leap into the unknown”, and the aim of creating supranational institutions would be an important legacy of the ECSC.
- Both the French and the Germans (the two dominant members of the ECSC, EEC, and EU) had their own individual motivations for pursuing European Unification. For the French, there was a strong desire to constrain Germany to prevent future conflict, there was an attendant desire to use the union as a lever to increase French power. Remember that at the end of WWII, the world was pretty much a bi-polar entity, and the French had limited desire to be anyone’s poodle, de Gaulle and successive French leaders saw a role for France as a Third pole, but this was not something that could be accomplished in isolation, it would have to be a European organization, which France expected to dominate.
- In his memoirs, Charles de Gaulle identified his intentions after assuming power following the end of the Second World War:
- I intended to assure French primacy in Western Europe by preventing the rise of a new Reich that might again threaten her safety; to cooperate with the east and the west and, if need be, contract the necessary alliances on one side or another without ever accepting any kind of dependency; to transform the French Union into a free association to avoid the as yet unspecified dangers of upheaval; to persuade the states along the Rhine, the Alps, and the Pyrenees to form a political, economic and strategic bloc; to establish this organization as one of the three world powers and, should it be necessary, as the arbiter between the Soviet and the Anglo-Saxon camps.

- Several developments have frustrated these plans, most notably the reluctance of the Germans and later the British to place faith in a defense organization (the WEU) that excluded the United States, the rise of Germany as an economic power, its eventual re-unification (1990) and its desire to once again behave like a “normal country”. Following the last German elections, Chancellor Schroeder stated that Germany “has every interest in considering itself as a great power in Europe”.
- This rise of Germany to the point where it assumes at least a co-leadership role in Europe has not completely fit with the French expectations and has created a certain amount of unease in Paris as to the future development of the EU (In a survey taken in March/April of this year, the French had the fourth lowest percentage of people with a sense of attachment to Europe). This is a theme to which we will return.
- From the German perspective the motivations for becoming involved in Europe were somewhat different, they were primarily anxious to avoid a recurrence of the militarism that produced the wars of the twentieth century. Germany was crippled by guilt over the actions of the Nazis, and could not assume any sort of a leadership role within Europe. It suited, their interests, as well as those of the French to allow the French to lead Europe on both of their behalves.
- Germans remain more committed to a federal Europe than their neighbors.
- While the French and German motives for participating in Europe were reasonably clear – economic benefits, a French desire to bind Europe into a supranational structure and use this as a springboard to accentuate their power and influence; for the Germans it was a chance to prove their changed nature and to become a respected international actor – the other parts of the original six had equally strong motives. For the Benelux countries, this was a chance to bind themselves to Germany and France, in the words of the Dutch Foreign Ministry, this was “the capability for Europe to profit by Germany’s strength without being threatened by it.” For the Italians, this was a chance to put aside their fascist past, to modernize their country, and to hopefully (more on this in a moment) to check the rise of the Italian Communist Party. Should also be noted that the leaders of these countries were all Christian Democrats (centre-right) and that the left wing forces in each country tended to oppose the EU as a tool of Capitalism. Should also be noted that five of the six national leaders were Catholic, which would add to the British reluctance to join – furthering suspicion of the continentals.
- What of the countries that did not join in 1951, but would later become involved. Spain and Portugal were under right wing dictatorships (Franco and Salazar), Greece was involved in a civil war, the Scandinavians were less than thrilled at the prospects of supranational government, the Eastern Europeans were bound to the Soviet Union, and the British (who were invited), displayed another in their frequent bouts of skepticism concerning Europe, reasons:
- Labour gov’t not overly anxious to become involved in any potential surrender of sovereignty, they were presently in the process of taking over the coal and steel industry themselves, and did not wish become involved in some continental cd scheme.
- Catholicism of continentals (mention how different the times were) and a general feeling that they represented a different culture. In surveys done over time, the Brits consistently tend not to think of themselves as European. Something that is still the case.
- Finally, even though India and Pakistan (E and W at the time) had left the empire four years earlier and the others were on the path to independence, they were in the process of attempting a transition from empire to commonwealth, still saw the links to the current and former possessions as being stronger than the links to Europe.
- Brits have always been the single most hesitant member of the EU, from its inception to the present. (mention the relevance for Canada when the Brits eventually did join, as well as the current debate over EMU and possible transatlantic linkages – Gingrich and the Brits in NAFTA. Anyway, their failure to join, and subsequent hesitance (mention how Cons did not join in ’57) has colored the relationship of the island to the continent.
- The ECSC was obviously not the last step in the evolution of the EU, only the first, this was followed by the EEC, which was developed through the Treaty of Rome (1957) in 1958. ECSC had greatly expanded the level of trust and co-operation between the six, and this set the stage for a much more ambitious venture. Think of the ECSC as being a trial run. Treaty of Rome created the European Economic Community, which began in 1958.
- Members of the EEC were expected to work toward free movement of goods, services and peoples among themselves. Alongside this notion was the first mention of the CAP, something we will be coming back to in a few moments and an essential part of the EU (not instituted for another 5 yrs). Anyway, this document bound the participants to work toward these goals, but did not explicitly settle how they could best be achieved – long process and most movement within an IO occurs incrementally. Also, worth noting that some rather significant cultural barriers had to be overcome, Italian and French protectionism for two. However, the CAP also reflected another cultural predilection, the French attachment to their soil. Paysantisme The idea of paysantisme refers to the emotional attachment between the French and their soil. In a 1977 speech Giscard d’Estaing referred to agriculture as petrole vert, “green oil”, emphasizing the status of agriculture as a state resource of enormous value. This seeming special relationship between the French and their land has persisted throughout France’s industrialization and has influenced its economic and political development. Recent urbanization of the French and their residual attachment to the soil. Anyway, this became the tradeoff to get the French parliament to agree to sign off on the concept of opening up the economies to the other members of the EEC, that talks also begin on the CAP, which came into effect between 1963 and 1968.
- While this went largely unstated during the negotiations over the EEC, there was another component that was lying under the surface of these discussions and that was the notion of political union. Certainly this was contained in the visions of Monnet and Schuman, but was less readily acceptable to the nations at large, at this time. However, the belief was that closer economic ties could foster the eventual shift to closer political ties as well.
- While the EEC was setting forth an ambitious program for a common economic market and movement toward political union, another organization was emerging as a potential rival to the EU. IN 1960, Britain, Norway, Sweden, Denmark, Switzerland, Portugal and Austria (Iceland would later join) set up the European Free Trade Organization as an alternative to the EU. This model sought to create a free trade area between the members, but did not contain any of the other ideals of supranational government. This saw economic gain as an end in itself and did not seek any larger goals. The members would be sovereign states that did not seek to expand to influence other elements of national jurisdiction. Mention the difficulty of carrying this through based on the experience of NAFTA. Anyway, EFTA represents a competing vision, and one that has historically been at the center of British visions for international co-operation. Also mention that the French have occasionally seen the matter this way as well.
- EFTA did not prove to be able to stand the test of time (French and German markets were simply too powerful - three of the five largest markets in Europe were in EEC, Britain and Spain were the exceptions) and the members gradually spun off to join the EU. Britain’s entry was the death knell. By 1997, all that was left in EFTA were Iceland, Norway, and Switzerland.
- While the Treaty of Rome did serve to expand trade among the members, the dismantling of tariffs was a key element in this process, by the end of the 1970s, the member nations desired more. Concerned about the volatile financial markets and the viability of the market given the differences in exchange rates (explain how differing exchange rates can greatly impact trade and the pros and cons of a weak currency). European Monetary System was introduced in the late 1970s – where the currencies were to be tied to a fixed mechanism, this set the stage for the EMU, which would occur twenty odd years later. Will come back to this point and discuss it in detail in a few moments.
- There was an attendant desire to expand the scope of the union. In 1985, Jacques Delors was named President of the EEC. Delors was very much an activist, both in expanding the scope of the economic reach of the EEC, and also as a visionary seeking to turn involve this in the realm of politics as well. As he later explained – “If this job was about making a single market I wouldn’t have come here in 1985. We’re not here just to make a single market – that doesn’t interest me – but to make a political union.” Such attitudes did not go well in London and also occasionally encountered opposition in Paris, but Delors would be a driving force in the evolution of the Union.
- One of his major initiatives was the Single European Act of 1985, which adopted the qualified majority system of voting and surrendered the concept of the national veto. Abandonment of final national control over policy, now regulation could be adopted by the Union over the objection of any one of the members. Other part of the legislation was the intended removal of non-tariff barriers (German beer standards for example or Italian pasta makers). Intended goal of this was to free up internal trade, and to replace national regulations with European wide regulations. Idea was that this would help enable European companies to be more globally competitive, yet this could occur within a cosseted business environment – still protected from American and Japanese competition, unless those companies chose to set up branches in an EU member state. Two elements go together, reduction in the veto power of members (still had some discretion in environmental and other matters) limited their ability to protect national firms and to enact barriers to trade within. Why were the European countries willing to surrender their sovereignty to such an extent? The answer was in the perceived loss of competitiveness by their industries in the global realm. Interesting in light of American perspectives at that time – worth noting that this is before the collapse of the Japanese economy. Example of markets driving the organization.
- The next step in the process was the signing of the Maastricht Treaty in December of 1991 (came into effect in 1993), which set the stage for monetary union, established a European central bank and expanded the reach of the organization, which was to renamed the European Union. While Maastrict (the treaty of European Union) represented a deepening of the EU, it did also place primary authority for common foreign and security and justice and home affairs under the jurisdiction of the Council of Ministers (state reps) as opposed to EU institutions. Represents a trend we will return to, the dispute between those within the body seeking a federal Europe and those who want to see a confederation.
- We will now be examining the EU from several areas, What it is, the membership, expansion, the future.

3. What is the EU

- Common market for agriculture (more on that in a moment), goods, and services. Has also involved currency, immigration, borders (with exceptions). Obviously, the mandate of the organization has expanded greatly over the years, from modest beginnings to a potentially federal Europe. Name has also changed twice, from the ECSC to the European Economic Community in 1957, to the European Union in 1993.
- Goal was the creation of a European common market for good and services, trading bloc.
- One of the most controversial aspects of the EU has been the CAP, which gets to the essence of the organization, its strengths and its weaknesses.
- European Union’s Common Agricultural Policy (CAP). The CAP was instituted, at the insistence of the French between 1962 and 1968 and sets heavy tariff barriers against agriculture from outside of the Union and offers subsidies to farmers within that body. Of which, the French farmers have been the primary beneficiaries. Possible to interpret the degree to which France pursued this objective to be indicative of their strong feelings toward agriculture. Of course, these subsidies and tariffs are paid for by the consumers and have also led to significant over-production by the farmers ( butter mountains of the EU).
- CAP accounts for roughly half of the EU’s annual budget.($45 billion last year)
- Not all members of the European Union have been thrilled with the CAP (not to mention countries outside the EU). Britain has been particularly overt in its criticisms of the expense and waste involved in the process. Over the past several years, efforts have been made to trim the amount of money offered in terms of farm subsidies and efforts made to move away from price supports (which encourage over-production) and toward direct support for the farmers - sort of like rural welfare.
Organs Within the EU
(i) The European Parliament – 626 members elected directly from the 15 member nations. Each nation has a different system of electing the EuroMPs, most use PR for this purpose. Representation is not exactly by population, but it is not equal either, big countries have a significant advantage, but not one that is equal to the discrepancies in population. Remember that the EU is composed of both very large (Germany) and very small countries (Luxembourg). Here is the rough breakdown of the Euro MPs by population:

Country No of MEPS Pop/MEP
Germany 99 820,000
UK 87 670,000
France 87 665,000
Italy 87 655,000
Spain 64 610,000
Netherlands 31 495,000
Greece 25 415,000
Belgium 25 405,000
Portugal 25 395,000
Sweden 22 390,000
Austria 21 370,000
Denmark 16 325,000
Finland 16 310,000
Ireland 15 240,000
Luxembourg 6 65,000
Total 626 585,000

Has only a consultative role on legislation, but must approve the budget, the President and various commissions. In 1999, it threatened to fire the commission for fraud and mismanagement, but they eventually resigned en masse. Various commissions rest beneath it.
(ii) European Council – Summit meetings of the heads of government of the member states who meet to provide guidelines for legislation. Meets biannually. Presidency of this body rotates among the member states. Voting is based on a qualified majority system (more on that and how it relates to the Council of Ministers in just a moment), though the big issues usually have to be settled by a unanimous vote. When a summit meeting is held, usually named after the capital of the host country (current holder of Pres, normally), and also has the Foreign Minister of host country and EU pres in attendance. Gets to the notion of the council as the reps of the states and as the impetus for legislation. Sort of like a governor’s meeting with teeth (Gina Smith).
(iii) Council of Ministers – Bodies of ministers ( 25 in total, trade, agriculture, etc.) from each of the 15 member states that meet regularly to discuss issues pertaining to their issue areas. This is the primary decision making body within the EU. This and the European council have become much more powerful over the past two years. This is the single most powerful decision making body (bodies) within the EU. Technically, there are many councils, who meet to discuss differing issue areas (General Affairs, Finance, and Agriculture are among the most popular, usually about once a month). Within this council, votes occur on a qualified majority basis, and not all countries have equal weight. The UK, Germany, France and Italy each have ten votes; Spain has eight; Belgium, the Netherlands, Greece and Portugal have five each; Sweden and Austria four; and Denmark, Ireland, Finland three each, and Luxembourg two. This is a total of 87, and to pass, legislation requires 62 votes. The replacement of the individual veto, to the critics, means a partial renunciation of sovereignty, but the need for such a healthy majority (at least two of the large countries have to play ball, and they cannot run roughshod over the smaller countries). Remember also that these are the reps of elected national governments, which does give some influence back to the states.
(iv) European Commission – Executive branch of the EU. Has 20 members (appointed by national governments) that serve five year terms. Two members each are taken from Germany, France, Britain, Spain, and Italy, rest appoint one. Each of the commissioners is responsible for a given issue area (competition. Foreign secretary. Etc.), meet on a weekly basis to discuss matters related to the goal of promoting European integration. Each controls the bureaucracy below him/her in the relevant issue area (mention the events of 1999) Supposed to represent the EU rather than their home states. Historically has played a key role in enforcing the laws passed, but has come under severe fire over the past year. Role is seen to be diminished by the scandals that have plagued the organization. Commission is headed by the President of the EU, who is appointed by the unanimous consent of the member states and serves a five year term. Yet, the President does not exactly serve as a PM, and the Commission is not exactly a cabinet. Both are appointed, separately, by national governments so the ability to control each other is rather limited. It was not really fair to tie the can to Santer over Cresson, but he stood in the line of fire.
- Worth noting that this is the only body in the EU that can propose legislation. Also, monitors the budget and oversees the application of EU law in the members, general mandate of expanding integration.
(v) European Court of Justice – Each state appoints one judge that sits for renewable terms of six years. Adjudicate cases by individuals, companies, and EU institutions on matter relating to the law of the community.. Court may rule state laws to be invalid due to conflicts with European law.
- Question of how deep the EU will go, in terms of challenging national sovereignty is an open one. Mention the ideas of the Germans, British and French. Also discuss the inequities in terms of rep by pop on all of the EU organs.

4. Membership

- Presently, there are 15 members of the European Union, with a further expansion to take place early in the next century. The Current members include:
1951 1973 1980s 1990s
Germany Denmark Greece (1981) Austria (1995)
France Britain Portugal (1986) Sweden (1995)
Belgium Ireland Spain (1986) Finland (1995)
Luxembourg
Italy
Netherlands
- 12 Applicants: First Wave – Estonia, Poland, Czech Republic, Hungary, Slovenia; Second Wave – Latvia, Lithuania, Cyprus, Slovakia, Malta, Bulgaria, Romania.
- Special Category – Turkey.
- List is potentially much larger with the various component parts of the former Yugoslavia and the former Soviet Union potentially seeking membership in the future. Organization is very successful, but the new applicants pose potential problems for the organization.
The Future
- By virtually any measure, the EU has been remarkably successful (though this does not prevent squabbles among the member countries), but there are still some recent developments that are worthy of our attention.
- Several new developments:
(i) Rise of Germany and the reversal of positions between Germany and France as to the natural leader for Europe. Not only will this development cause a certain amount of unease in Paris, but it also with respect to visions of the EU. Germans tend to view the federal side of this a little more ambitiously than the French.
(ii) Experience of Kosovo, which has led many to follow the old French belief that the EU must develop an organization for military action that does not depend on the desires of the United States. Mention the attitude of the US and the contradictory positions it often holds..
(iii) Introduction of the Euro, a common currency that first emerged for electronic and paper transactions on January 1, 1999. In 2002, notes and coins were issued to replace the national currencies of the 12 countries that have chosen to adopt the Euro. Will this create a common european interest, rather than national economic interests?
(iv) Weakening of the European Commission, which had been the primary political institution of the EU. Series of scandals that led to the resignation of the Commission in its entirety in March of 1999 under Jacques Santer greatly undermined confidence in the body. New EU president Romano Prodi seems determined to restore faith in this body, but much of the power has devolved to the European Council (Heads of Governments) and Council of Ministers (Gov’t Ministers).
(v) Expansion (see above).

- How viable is the EU as a model for integration?