Chapter 2 A Brief History of European Integration

The Origins of European Integration • The idea of a united Europe dates back several centuries, but in the years following the Second World War it acquired a greater urgency. • The aim was to make another war in Europe materially impossible, and to co-operate in the post-war reconstruction process. • During the early years, most of the initiatives to carry forward the integration process came from France, usually backed by Germany and the Benelux countries.

Background to the Integration Process: the 1940’s • The first European organization to be created after the war was the UNECE (United Nations’ Economic Commission for Europe), which was set up as a regional organization of the UN in Genova in 1947 • Its initial aim was to carry out economic reconstruction and encourage co-operation among all the states of Europe: East, West and Central.

Background to the Integration Process: the 1940’s • The European integration process gained a new impetus in 1947 with the introduction of the Marshall Plan • Officially it is the European Recovery Program, Program ERP (1948 – 1951).

Background to the Integration Process: the 1940’s • US General George Marshall proposed a programme to aid Europe. It was initially suggested that the programme would be administrated through the UNECE, but this was opposed by the USSR, which feared an increase of Western influence on its satellites.

Background to the Integration Process: the 1940’s • The Marshall Plan involved US and Canadian aid to 16 European countries • The aid was to be conditional on the European countries dismantling barriers to trade among themselves, and co-operating in the creation of a European organization to administer the aid programme. • In 1948 this led to the creation of the OEEC.

Background to the Integration Process: the 1940’s

Background to the Integration Process: the 1940’s • The Organisation for European Economic Co-operation (OEEC); came into being on 16 April 1948 • It emerged from the Marshall Plan and the Conference of Sixteen (Conference for European Economic Co-operation), which sought to establish a permanent organisation to continue work on a joint recovery programme and in particular to supervise the distribution of aid.

Background to the Integration Process: the 1940’s • After the winding up of Marshall aid, in 1961 the OEEC (Organisation for European Economic Cooperation) was transformed and became OECD (Organization for Economic Co-operation and Development. ) • The Council of Europe (1949). 1949 • promoting co-operation between all countries of Europe in the areas of legal standards, human rights, democratic development, the rule of law and cultural co-operation • In both the OEEC and the Council of Europe debates about European integration took place and initiatives were presented.

The ECSC (European Coal and Steel Community) • The Schuman Plan was elaborated by Jean Monnet, and put forward by the French Foreign Minister, Robert Schuman. • The Schuman Plan aimed at making War in Europe not only ‘unthinkable, but materially impossible’ through the creation of a common market for iron, steel and coal in Europe.

The ECSC (European Coal and Steel Community) • According to the Schuman Plan, production of steel and coal should be ‘pooled’ (the famous ‘black pool’) and placed under a supranational High Authority. • The High Authority could levy taxes, influence investment and fix minimum prices and production quotas in times of ‘imminent’ and ‘manifest’ crisis.

The ECSC (European Coal and Steel Community) • The aim was to eliminate trade barriers and increase competition, but the aproach was essentially that of ‘regulated competition’.

The ECSC (European Coal and Steel Community) • France, Germany, Italy and the Benelux countries (who were to become the founder members of the EEC) signed the Treaty of Paris establishing the ECSC in 1951 • Great Britain opposed the transfer of sovereignty to a supranational organisation so remained out of the initiative.

Attempts at co-operation in defence • Given the aim of rendering the war in Europe impossible, and the fear of the perceived Soviet threat, it was to be expected that a common defence policy would be one of main aims of the European integration process.

Attempts at co-operation in defence • In 1948 France, Britain and Benelux signed the Treaty of Brussels that provided for a system of mutual assistance in the event of attack. • In 1949 these countries joined with the USA, Canada, Denmark, Italy, Norway, Portugal and Iceland to form the NATO (North Atlantic Treaty Organisation).

Attempts at co-operation in defence

Attempts at co-operation in defence • 1952 Treaty on a European Defence Community (EDC) signed by the six future founding members of the EC. • 1953 a draft proposal for the creation of a European Political Community. • In 1954 the French Parliament refused to ratify the Treaty on the EDC. • Creation of the Western European Union (WEU) in 1955.

Attempts at co-operation in defence • Western European Union (WEU) is a traditional inter-governmental organization whose founding members were the original European Communities (EC; 6) plus the UK. • Its aim was to provide a European framework in which Germany could be rearmed and enter NATO, and in which the last vestiges of Allied occupation of Germany could be removed. • The WEU remained relatively ineffective for almost 30 years before the question of an EU security initiative was revived.

Agriculture • For many years the Common Agricultural Policy was considered the cornerstone of the integration process. • In the immediate post-war period there were strong reasons for creating a common market for agricultural products: ◦ The initial deal is frequently regarded as an exchange of interests between France (who was seeking markets for her agricultural exports) and Germany (who was anxious to reduce tariffs in order to ensure outlets for her industrial exports).

Agriculture ◦ By the common agricultural market, Italy and The Netherlands could develop their typical forms of production. ◦ At the time agriculture was extremely important economically, socially and politically. ◦ The farm policies in the original EC (6) countries were very different and had to be harmonised; otherwise, differences in agricultural price levels and support measures would cause distortions in intra-EC trade.

Agriculture ◦ The introduction of a common market for agriculture would encourage competition and specialisation according to the principle of comparative advantage, thereby increasing the productivity of the sector. ◦ The harmonisation of agricultural prices was envisaged as the first step towards harmonisation of wage levels.

The proposed ‘green pool’ In 1950 the French presented the Charpentier Plan that entailed: • common agricultural prices, • the elimination of barriers on trade between the member states, • community preference, • a High Authority with supranational powers.

Towards the Treaties of Rome • In 1955 the Benelux countries presented a Memorandum calling for the creation of a common market, and specific action in the fields of energy and transport. • The Foreign Ministers of the Six at the Messina Conference considered the ideas of the Memorandum and agreed to set up the Spaak Committee (an intergovernmental committee under the Belgian foreign minister, Paul-Henri Spaak).

Towards the Treaties of Rome • The Foreign Ministers of the Six in Venice in 1956 accepted the results of the Spaak Committee. • Work began on the two Treaties establishing the European Economic Committee and Euratom. These were signed in Rome in March 1957, and entered into force from January 1958.

The Treaties of Rome • The Treaties of Rome (signed in 1957 and entered into force in 1958) provide the legal basis for establishment of the EEC and the Euratom. • The Treaties are among the most fundamental elements of the acquis communautaire. • The Treaty of Rome establishing the EEC consists of 248 Articles.

Article 2 of the Treaty of Rome (objectives of the EEC) • harmonious development; • continuous and balanced expansion; • increased stability; • ever more standards; rapid growth in living • closer links between the member states.

Article 3 lists the policies to be introduced: • the abolition of tariffs, and of quantitative and qualitative restrictions in intra-EC trade; • the creation of a common external commercial policy; • the elimination of obstacles to the free movement of people, capital, goods and services; • a common agricultural policy; • a common transport policy;

Article 3 lists the policies to be introduced: • the introduction of means to ensure fair competition; • the co-ordination of the economic policies of the member states to avoid balance of payments disequilibria; • the creation of a European Social Fund (ESF); • the creation of a European Investment Bank (EIB); • special trade and development arrangements for colonies and ex-colonies.

• Progress in implementing these measures has been very uneven. • The elimination of tariffs on intra-EC trade and the introduction of the common external tariff were largely completed by mid-1968. • However, the linguistic and cultural differences partially account for the relatively limited increases in the movement of people, and similarly for the slow progress in the recognition of qualifications and in obtaining social security benefits in other member states.

EFTA (European Free Trade Association) • Faced with the creation of the EEC, in 1960 the European countries that then preferred intergovernmental co-operation decided to create the EFTA. • The founder members of EFTA were UK, Norway, Sweden, Denmark, Austria, Switzerland Portugal. Subsequently Iceland (in 1970), Finland (in 1986) and Liechtenstein (in 1991) joined. • As its name suggests, EFTA involved the creation of a free trade association for industrial products. • Agricultural products were largely excluded from this arrangement.

The EEC in the 1960 s (trade and agriculture) • The elimination of tariffs on intra-EC trade and the introduction of the common external tariff were largely completed by mid-1968, eighteen months ahead of schedule. • The main instruments of the Common Agricultural Policy (CAP) were in operation from 1967. • CAP was then regarded by many as the greatest achievement in integration.

The EEC in the 1960 s (trade and agriculture) • The emergence of the EEC Six as a single actor and their successful economic performance encouraged the UK to apply for membership. • Britain applied for membership in 1961 and 1967, but on both occasions De Gaulle vetoed the application. • The opposition of De Gaulle to any transfer of French sovereignty to the Community also meant that agreement on financing of the EC budget had to wait until 1970.

The 1969 Hague Summit At the Hague Summit of 1969 a package was presented, which contained three main elements: • completion (the EEC budget), • deepening (the creation of an Economic and Monetary Union (EMU) by 1980 and the introduction of European Political Cooperation), and • enlargement (in 1973 Britain, Ireland Denmark became members).

The community in the 1970 s: the years of Eurosclerosis • After the successes of the first 12 years, the Community entered a long period of stagnation when little progress was made in integration. • Particularly after the 1973 oil crisis, the EC economy entered a phase of slower growth, higher unemployment, more rapid inflation and falling competiveness. • The process of trade liberalization wavered, and nontariff barriers were applied on trade both within the EC and with third countries in what became known as the ‘new protectionism’.

The community in the 1970 s: the years of Eurosclerosis • These are often called ‘the years of Eurosclerosis ’ or ‘Europessimism ’, but none the less a few successes must be noted: ◦ The 1973 enlargement, ◦ The creation of the European Regional Development Fund in 1975, ◦ The establishment of the European Monetary System, ◦ The introduction of the direct elections to the Parliament in 1979, ◦ The entry of Greece in 1981.

The relaunching of integration: the Internal Market Programme • The strategy chosen to revive the integration process was the completion of the internal market. • The objective was to eliminate barriers at the frontiers between member states and promote the freedom of movement of labour, capital, goods and services. • In 1985 France, Germany and the Benelux countries signed the Schengen Agreement, which aimed at the removal of checks on people on borders.

The relaunching of integration: the Internal Market Programme • Freedom of movement of goods and services entailed eliminating the remaining non-tariff barriers on trade between the member states, one of the most important of which was differences in standards. • A key element of the Community’s strategy in tackling differences in standards was to rely as far as possible on the principle of mutual recognition.

The relaunching of integration: the Internal Market Programme • The introduction of the Single or Internal Market Programme had the effect of launching a new phase in the integration process, spilling over into renewed efforts in institutional reform, reinforced EC social, regional and competition policies, and economic and monetary union. • The programme was initially presented as an exercise in deregulation and received wholehearted support from the EC member states and business community.

The Maastricht Treaty and Economic and Monetary Union (EMU) • In addition to creating the European Union, the Maastricht Treaty (signed in 1992 and entered into force in 1993) envisaged a strengthening of the Community. • This would consist of EMU, greater economic and social cohesion, some institutional reform, the creation of European citizenship and the extension of EU competence to new areas.

The Maastricht Treaty and Economic and Monetary Union (EMU) • The Treaty of Maastricht set out the three stages in the process of implementing EMU, fixing dates and describing the objectives to be reached in each stage. • In addition, it presented criteria to be satisfied before member states could participate in EMU and allowed for certain countries to opt out. • The objective of greater economic and social cohesion in the Treaty was translated into an increase in transfers through the Structural Funds to the poorer regions of the Community.

The Maastricht Treaty and Economic and Monetary Union (EMU) • The third stage of economic and monetary union began on 1 January 1999 with 11 countries as full participants. • Greece also subsequently joined. • Denmark and the UK chose to opt out. • Sweden decided not to participate and remained out on technical grounds. • Slovenia adopted the Euro in 2007, Malta and Cyprus joined in 2008, Estonia joined in 2011.

The Maastricht Treaty • The Treaty was also accompanied by a separate protocol known as ‘the Social Chapter ’, which aimed at improving living and working conditions. • The new areas of competence introduced by the Treaty of Maastricht refer to an increased role for the Community in education, culture, public health and the environment. • In addition, there were to be the development of trans-European networks in transport and energy.

The Maastricht Treaty POLICIES • The Treaty establishes Community policies in six new areas: • trans-European networks; • industrial policy; • consumer protection; • education and vocational training; • youth; • culture.

The Maastricht Treaty CITIZENSHIP • One of the major innovations established by the Treaty is the creation of European citizenship over and above national citizenship. • Every citizen who is a national of a Member State is also a citizen of the Union. This citizenship vests new rights in Europeans, viz. : • the right to circulate and reside freely in the Community; • the right to vote and to stand as a candidate for European and municipal elections in the State in which he or she resides; • the right to protection by the diplomatic or consular authorities of a Member State other than the citizen's Member State of origin on the territory of a third country in which the state of origin is not represented; • the right to petition the European Parliament and to submit a complaint to the Ombudsman.

The Maastricht Treaty

EU enlargement • The EFTA enlargement of 1995; Austria, Sweden, Finland • The May 2004 enlargement; The Czech Republic, Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia • The 2007 enlargement; Bulgaria and Romania • The 2013 enlargement; Crotia

Main developments in European Integration • At the Barcelona Summit of 1995 it was agreed to set up the Euromed Programme to increase aid and create a free trade area in the Mediterranean area by 2010. • In 2003 the European Neighbourhood Policy was established to provide closer co-operation with EU neighbours that have no prospect of EU accession. • In 1997 the Luxembourg Process, or European Employment Strategy was launched.

Main developments in European Integration • In March 2000 the Lisbon Strategy was introduced to create a knowledge-based economy in ten years. • The Treaties of Amsterdam and of Nice, and the proposed Constitutional Treaty, were intended to introduce the necessary institutional changes for an enlarged EU. • Following the rejection of the Constitutional Treaty in referenda in France and the Netherlands and reflection period, agreement on the Reform or Lisbon Treaty was finally reached in 2007. • The Treaty of Lisbon entered into force on 1 December 2009 with the ratification of all member states.

Main developments in European Integration (1) • The Eurosclerosis of the 1970 s and early 1980 s. • The Internal Market Programme. • The Maastricht Treaty. • The 1995 EFTA enlargement. • The 2004 and 2007 enlargements and the ongoing enlargement process.

Main developments in European Integration (2) • From the Mediterranean Policy to the European Neighbourhood Policy. • The Lisbon Strategy and the Luxembourg Process (or European Employment Strategy). • Attempts at reform of EU decision-making: o The Treaty of Amsterdam (1999); o The Nice Treaty (2003); o The Constitutional Treaty (rejected in referenda in France and the Netherlands in 2005); o The Lisbon Treaty (2009).