The European Union

1. The European Union Osvaldo Croci

2. What Exactly Is the EU? ECSC, EEC or Common Market , EC, EU. Neither an international organization nor a federation. A different beast depending on who is looking, at what one looks, and from where one is looking. A single market, a common currency, a kind of common passport, but some peculiar political institutions, and a very peculiar budget Why should one be interested in studying it?

3. How to study it? Economic and Political integration Why do states come together and cooperate? Comparative politics How does it function (as opposed to why it is formed, its relation to the nation state and where it is going)? Example of regional governance Robert Cooper: The EU as a post-modern region Europeanization

4. How the course is organized Theories of economic and political integration History (from before Paris to after Lisbon) Institutions Policy-making and policies Where is it going and what does it all mean?

5. Degrees of Economic Integration Autarchy Free trade area Customs Union Common market Economic Union

6. Economic Integration (1) Theory of absolute (Adam Smith) and relative (David Ricardo) advantages Integration as a movement towards free trade? Why not global free trade? Customs Union Theory (Jacob Viner) Trade creation vs. trade diversion

7. Economic Integration (2) 1960s: Economists such as Johnson, Cooper and Massell turned the prevailing wisdom about why countries form customs union around. Integration as protectionism at a higher, regional level? If the objective of a customs union is to gain from increased trade why not pursue it at the global level (i.e. not to discriminate against any foreign supplier) and hence benefit from trade creation and not suffer the shortcomings of trade diversion? Since this does not happen and customs union are formed at a regional level, it follows that the preoccupation of those who form customs union might not be trade liberalization but protectionism. Customs union, in other words, could be seen as a special mechanism of protection. To understand this one needs to compare customs union to alternative instruments of protection as opposed to seeing it as an intermediate step towards global free trade.

8. Economic Integration (3) Customs union are a form of government intervention to achieve politically preferred objectives, which the market alone cannot achieve. Take the case for instance of a country that wants to develop a certain type of industry which the market has failed to give life to. It could introduce a huge tariff on competing imports and production subsidies. The local market, however, could be too small to sustain that particular industry. The goal could be achieved but might be expensive. A Customs Union is a way of enlarging the market so that the promotion of the local industry does not become too expensive.

9. Degrees of Political Integration Isolated nation states International organization Confederation Federation Unitary state

10. Political Integration (1) Federalism (Spinelli) - normative Functionalism (Mitrany) – hollowing out the state - normative - Neo-functionalism (Haas, Lindberg, Schmitter) Role of economic and political elites, and then of centrally established institutions (Commission, ECJ Concept of spill-over

11. Political Integration (2) Intergovernmentalism(Hoffmann; Moravcsik; Milward’s ‘rescue of the nation state’), Putnam’s two level game Governments are the key actors Other actors have some influence, especially in ‘low-politics’ sectors Action reflects preferences of national governments which in turn reflect the balance of domestic economic interests; Outcome of negotiations reflect relative bargaining power of states Decision-making delegation to supranational institutions reflect need to insure commitments of all parties and not federalism

12. Political integration (4) Robert Cooper Modern, pre-modern (failed or collapsed), post-modern states The EU as a ‘post-modern area of regional governance’

13. History: General Points Why integration? (deep historical roots, but concrete results only after 1945) Systemic level: WWII and Cold War State level: Democracies Individual level: Schumann, Adenauer, De Gasperi No linear, teleological, unfolding Continuous process but with phases of stagnation and acceleration 2014-03-07 13

14. History 1. Ideological-Political Resistance movement. Spinelli (Manifesto di Ventotene - Draft Declaration of the European Resistance in 1944 calling for a ‘federal Union among European people’) 1946 Churchill’s speech in Zurich – calls for a federation of European states sponsored by US and USSR and UK 1946 European Union of Federalists (Henry Brugmans) – rebuild Europe as a federation May 1948 the Hague conference It creates the Council of Europe - 47 members today (adopted European Convention of Human Rights in 1950, maintains Commission and Court of Human Rights) 2014-03-07 14

15. History 2. Economic: 1944-48 Benelux (Customs Union then Economic Union) and possible extension to I & F 1947 Marshall Plan (ERP) 1947 Committee for European Economic Cooperation (CEEC) then OEEC then OECD in 1960 1950 EPU 1951 ECSC 2014-03-07 15

16. ECSC Schuman Plan (9 May 1950) (1951, 1952) Role of Jean Monnet Dirigisme’, Functionalist idea, organize Franco-German relations in light of the rebirth of the German state, assure French access to coal - From IAR to ECSC ‘Role of Adenauer (solidify link to the West, international recognition) Role of De Gasperi (international recognition) Role of the US Position of Britain (island mentality; supra-nationalism, self-image, nationalism, economic interests, coal had just been nationalized) 2014-03-07 16

17. ECSC Institutions as conceived by Monnet and as they developed High authority Council of ministers (Dutch, Germans) Common assembly Court of justice Negotiations: subsidies for Belgium, maintenance of tariffs for Italy, break up of German cartels 2014-03-07 17

18. EDC Treaty of Dunkirk (F and UK: 1947) Treaty of Brussels: (B+F+B+NL+LUX) (1948) NATO (1949- US, Cnd, UK, F, B, NL, Lux, ISL, I, N, P) Problem of German rearmament – US pressures Pleven Plan launched in 1950, signed in May 1952, killed by the French National Assembly in August 1954) EDC and need for EPC (against the precepts of neo-functionalism) Failure of EDC and lesson 1955: WEU (admission of Italy and Germany, links to NATO and restrictions imposed on German army) 2014-03-07 18

19. Euratom and EEC Euratom’s idea advanced by Monnet’s Action Committee for the United States of Europe and supported by the French who do not like the idea of a common market Benelux and D: advance idea of a common market (Beyen Plan- Dutch FM) UK prefers FTA • Messina Conference (April 1955) - Spaak report • Negotiations: the French agree to the common market but concession on agriculture, access by goods from external colonies, Italians ask for regional policy • Treaty of Rome 2014-03-07 19

20. Evolution of the EEC DeGaulle 1961: Fouchet plan (how to avoid something by appearing to be in favor of it) 1963: opposition to UK entry and first veto 1965 crisis (empty chair) – funding of CAP and responsibility for approval of the budget to be given to EP – no majority vote in the Council of Ministers 1965: merger treaty (coming into effect 1967) 1967: Second veto of the UK application 2014-03-07 20

21. Eurosclerosis Limits to economic cooperation: 1971 collapse of IMS, 1973 Oil Crisis, Stagflation 1969 Hague Summit Resignation of De Gaulle (April 1969) Completion: own resources for the budget Widening: Let the UK in (1973) Re-negotiations after Labor (Wilson) replaced the Conservatives (Heath) and referendum in 1975) Ireland and Denmark and Norway (referendum says no) Deepening: economic and monetary union (Werner Report) and closer intergovernmental cooperation on foreign policy along the lines of the Fouchet plan (Davignon Report) Major success: CSCE in Helsinki 1974: European Council (3 meetings a year by Heads of states (F) and governments) 1979 Direct election to the EP 2014-03-07 21

22. Eurosclerosis 1978: Creation of the EMS and the ecu 1979 Greece accedes 1985 Spain and Portugal accede 1979-1985 British renegotiation of the budget 1980s- Moves behind the curtains to begin removing non-tariff barriers (European Round Table of Industrialists) 2014-03-07 22

23. 1987-1992: Single European Act Role of Jacques Delors 1985 Commission’s White Paper (Cockfield Report) Remove NT barriers, open up procurement, free capital movement by 1992 Institutional Reforms tied to such a project QMV within the Council of Ministers for single market measures Increase legislative powers of the EP What made the SEA possible? Governments? Pressure groups (European Round Table of Industrialist) afraid of Europe’s losing international competitiveness to the US and Japan? 2014-03-07 23

24. 1991: Maastricht Treaty Delors: continue on the path of the SEA 1988: Delors committee report on strengthening monetary cooperation ‘Acceleration of history’: events in Eastern Europe, prospect of German reunification The three pillars structure, EMU (three stages) and deepening of social policy Kohl: Reunification in exchange for EMU Subsidiarity Europe a la carte or flexible integration (UK opting out of EMU and social policy) Citizens involvement 1995: accession of A, SU, S, Preparation for further enlargement: different attitudes UK and Mediterranean countries 2014-03-07 24

25. The Treaty of Amsterdam 1997-99 Trying to prepare for enlargement: institutional and policy reforms Pillar 1: Tinkering with decision-making (limited extension of qmv and EP powers), emphasis on openness and transparency of EC procedures. Pillar 2: Joint actions and common positions to be taken by qmv except when a state is strongly opposed. So-called ‘constructive abstention’ (EU committed but not the member states). CFSP financing charged to the EC budget. Pillar 3: A number of items related to visas, asylum, immigration, free movement, were transferred from pillar 3 to pillar 1 (opts out for IRL, UK and DK). ‘Justice and Home Affairs’ now renamed ‘Police and Judicial Co-operation in Criminal Matters 2014-03-07 25

26. Between Amsterdam and Nice January 1999: EMU (euro) – 11 (Greece in Jan. 2001) 1999: Problems with the Commission – fraud on humanitarian funds –resignation in March by Santer and entire Commission Kosovo and St. Malo meeting (December 1998) (ESDP and rapid reaction force). 2014-03-07 26

27. The Treaty of Nice Treaty of Nice 2002 (February 2003) Reallocation of seats in EP and members capped at 732 (from 700). Redistribution of votes in the Council Extension of qmv but with many exceptions and definition of qmv (62% of population plus a majority of states). Composition of Commission (no more than one per state and later some without since no more than 26). Ireland rejects it in a referendum in June 2001 (54 to 46 but only 33 % turnout). Second positive vote in October 2001 2014-03-07 27

28. Enlargement and other issues Copenhagen criteria 2001: 10 states accepted for membership in 2004 25 states, 450 million people) Bulgaria, Romania (2007) Croatia and Turkey (begin negotiations 2005) Macedonia (application accepted) Divisions on CFSP over Iraq Problems with stability and growth pact (budget deficits below 3% of GDP) – Ireland and Portugal and then France and Germany 2014-03-07 28

29. The Constitutional Treaty Representatives of national governments and Parliaments including accession states, and EU representatives, chaired by Giscard D’Estaing Supposed to replace existing treaties and systematize some lingering issues Fails because of non ratification in France and the Netherlands Replaced by the ‘Reform Treaty’ (2007) 2014-03-07 29

30. Institutional Architecture The treaties ‘in lieu of’ a formal Constitution (symbolism?) EU’s three pillars: EC, CFSP,JHA EC Pillar The Commission Council of Ministers (Council of European Union) European Parliament European Court of Justice Others 2014-03-07 30

31. The Commission (1) A bureaucratic monster or a small organization? College of Commissioners (27) and staff of 25 000 of which about 10 000 are interpreters and translators 24 Directorate Generals (DGs) + special and internal services Commissioners’ cabinets: from national enclaves to multinational and increasing internal recruitment Commissioners Nominated by National Governments Appointed by the Council of Ministers and subject to approval by Parliament renewable 5 year term in line with EP President chosen first (by Council) Sworn to abandon all national allegiance 2014-03-07 31

32. The Commission (2) Functions Policy initiations (a Treaty-based justification of the initiative is always provided) Legislative proposals can be amended by the CoM acting unanimously Does the Commission determine the direction in which the EU moves? Autonomous or servant of national governments? More than an international secretariat but not quite a government Opposed to give EP legislative initiative (policy coherence). Maastricht treaty allows the EP to request (majority vote), legislative initiative from Commission 2014-03-07 32

33. The Commission (3) Acts as ‘guardian of the treaties’ Monitors policy implementation (as opposed to direct implementation as in competition policy, fisheries, humanitarian and transition aid) Prepares budget Mediator (role in European Council and IGC) External role (Negotiator in commercial and cooperation agreements) - Delegations 2014-03-07 33

34. The European Council European Council (intergovernmental at the top of the EU) – since 1974 officially summitry Provides strategic guidance to the EU Also institutional reform, CFSP, enlargement Breaking deadlocks June and December meetings plus occasional more focused meetings Communiqués or Presidency conclusions 2014-03-07 34

35. Council of the EU (1) Council of the European Union (formerly Council of Ministers): core of legislative process Takes decisions (Committees of member states’ government officials and CoRePer) Unanimity and QMV depending on issue Germany, France, Italy, United Kingdom 29 Spain, Poland 27 Romania 14 Netherlands 13 Belgium, Czech Republic, Greece, Hungary, Portugal 12 Austria, Bulgaria, Sweden 10 Denmark, Ireland, Lithuania, Slovakia, Finland 7 Cyprus, Estonia, Latvia, Luxembourg, Slovenia 4 Malta 3 TOTAL 345 2014-03-07 35

36. Council of the EU (2) Different embodiments(General Affairs Council, Ecofin, and sectoral councils e.g. agriculture, fisheries, culture, health etc.) CoRePer: Supranational element of the Council (?) Bonding, iterated game, diffuse reciprocity, thick trust, mutual responsiveness, consensus-reflex About 85% of all decisions Working groups (over 250, some permanent, some ad-hoc) Council General Secretariat (memory of the Council, broker, creative legal solutions) 2014-03-07 36

37. Council of the EU (3) Rotating presidency (six months): Troika system organizing meetings, setting agenda) visibility, leaving imprint Output: Regulation, directives, decisions and recommendations in pillar 1 Joint actions and common positions in Pillars 2 and 3 Unanimity and QMV (formal voting rare) 2014-03-07 37

38. Institutional Architecture: Parliament The European Parliament Low public profile From Common Assembly (78 members, supervisory and advisory role, part-time) to European Parliament (785 to be reduced to 750) members directly elected, with more power on budget and legislative process Directly elected since 1979 (5-year term) Supervisory function (Commission and a little over the Council) From consultative role to co-decision 2014-03-07 38

39. Institutional Architecture: Parliament Plenary sessions (once a month except August in Strasbourg) President (2.5-year term) Party groups (8) –CD and Socialists the largest Committees (meet in Brussels) Elections Low turnout (to less than 50%) Perceived as ‘second order national elections’ 2014-03-07 39

40. Institutional Architecture CoRePer (already mentioned) The Economic and Social Committee Employers workers and various interests appointed by national governments but sitting in a personal capacity – consulted on legislative proposals Committee of Regions and Local Authorities Created by TEU and consulted on issues that affect regional and local interests (Chosen by member states and appointed by CoM) Upper House in the making? 2014-03-07 40

41. The Court European Court of Justice and Court of First Instance (1988) 27 judges and 8 advocates general (six year term in two sections)) Preliminary rulings (only the ECJ) vs. direct actions (failure to take action, infringements and annulments) Court of First Instance (1989) Principle of Direct Effect (1963) Principle of Supremacy of EC law over national law (1964) 2014-03-07 41

42. Weiler (1) Weiler’s central argument is that the legal changes that have occurred in the Community can only be properly understood if seen against the evolution of the political process. There is no doubt that “the Community’s ‘operating system’ is no longer governed by general principles of public international law, but by a specified interstate government structure defined by a constitutional charter and constitutional principles” (p. 12). Yet, this “process of constitutionalization”, which makes the Community very like to a federal state, occurred at the same time as the Community’s political and decision-making process adopted an increasingly “confederal procedure controlled by member States acting jointly and severally” (p. 36). 2014-03-07 42

43. Weiler (2) According to Weiler, the two processes were linked. On the one side, a judicially driven process led Community norms and policy to penetrate national polities and make the “exit” option increasingly costly and unlikely for member states. On the other, member governments reacted to this process by reaffirming their “voice” that is by taking more control of the Community’s decision-making process the outcomes of which they had to abide by. This explanation resolves the apparent paradox that integration has not threatened, and perhaps even strengthened, member states. It also throws light on the alleged democratic deficit of the Community: Europeans have become empowered as legal consumers at the price of remaining largely disempowered as political citizens. 2014-03-07 43

44. Institutional Architecture Intergovernmental pillars Legislative initiative shared by Commission with member states and EP has only a right to be consulted. Outside ECJ 2014-03-07 44

45. Decision-Making Legislative Procedure: Increasing role of EP Consultation From Commission to Council which simply consults EP and can reject its advice –Amendments can be made only by unanimity in CoM (Agriculture, issues transferred from JHA) Co-Operation EP has a second chance in areas of QMV. If EP rejected the ‘common position’ of the CoM the latter could only proceed unanimously. If EP proposed amendments, Commission had to decide whether to accept them and if not CoM would decide but unanimously Co-Decision (same as above plus ‘Conciliation Committee’ = EP+CoM – 6 weeks). If CC fails, measures falls Assent: EP assent needed (originally only foragreements with non-member states but extended in the TEU) 2014-03-07 45

46. Implementation Responsibility of the Commission but implemented by member states Outputs: Decisions: addressed to specific legal actors or states Directives: incorporated into national legislation and then implemented by national administrations Regulations: implemented as they are by national administrations Record of member states The Commission acts as a watchdog and may bring member states to the ECJ – moral blame and then fines if states do not comply Court of Auditors (1975) auditing the accounts and the implementation of the budget – improve and report 2014-03-07 46