VIDEO
History: European Single Market
From the “Single European Act” to the “Treaty of Maastricht” (“Treaty on European Union – TEU”) into the creation of the internal market
The Commission stated that “if the programme [the SEA] succeeded, it would fundamentally alter the face of Europe”.41 This was especially true as the SEA contained a hidden agenda, that is, the creation of economic and monetary union, a necessary complement to the single market.
However, in order to achieve the objectives set out in the SEA, it was necessary to deal first with persisting internal conflicts. These were dealt with by the adoption of the Delors I Package, a Commission proposal in 1987 for a radical reform of the Community’s financial system for the period 1988-1993. The Delors I Package introduced budgetary discipline, ended the “British rebate” saga, 42 reformed the CAP and provided for the Commission to put forward new initiatives. The Commission under the presidency of Jacques Delors was committed to further integration with a view to introducing EMU. Its motto was “one market, one money.”
The Hanover Summit of June 1988 reappointed Jacques Delors as president of the Commission. It also affirmed his vision of the Community by declaring that “in adopting the Single European Act, the Member States of the Community confirmed the objective of progressive realisation of economic and monetary union.”43 The Hanover Summit, most importantly, set up a Committee, chaired by Jacques Delors, to examine the measures necessary for the establishment of EMU. The task of this Committee was to prepare concrete stages leading towards monetary union for the Madrid Summit in June 1989. Jacques Delors, in his annual speech on 17 January 1989 to the EP, assessed progress in the completion of a single market and set the agenda for the newly appointed Commission, which was to promote the devolution of more power to the EP by the Member States and the creation of EMU by successive stages. His vision of the Community was clear: it was a “frontier free economic and social area on the way to becoming a political union”, 44 although at this stage political union was not his priority. The Madrid Summit in June 1989 examined the Delors Report45 without taking particular notice of the changing situation in Europe.46
The dismantling of the barbed wire border betweenHungaryandAustriaon 2 May 1989 was the first tear in the “Iron Curtain” and started the sequence of events that led towards the next stage of integration in the 1990s.
The “German question” became the main preoccupation of Member States. The old political division between West and East was abolished; the Soviet Unionwas in a coma; the old order was shattered. Under the pressure of events and uncertainty the Federal Republic of Germany (FRG) accelerated the reunification process. Helmut Kohl, in his ten-point programme on German reunification submitted to the Bundestag (the German Parliament) on 28 November 1989, underlined that German unity was entirely a German matter. Nevertheless, in six of the points he underlined FRG commitment to the Community, the necessity to embed inter-German relations in an all-European process, and the necessity for further strengthening the Community, especially in the light of the historic changes occurring in Europe.47 The official policy of Germany on reunification echoed the famous call of Thomas Mann in 1953 “not a German Europe but for a European Germany”. The idea of the likely hegemony of Germanywithin the Community, once reunited, haunted all European leaders.48 Jacques Delors considered that German reunification was a matter the Germans had to deal with. In his annual speech on 17 January 1990 to the EP he presented his programme for the Commission’s forthcoming year and emphasized thatEast Germany was a special case. He noted that reunification of Germany, although being left to the German nation, nonetheless must be achieved “through free self-determination, peacefully and democratically, in accordance with the principles of the Helsinki Final Act, in the context of an East-West dialogue and with an eye to European integration”.49 Indeed, at that time the Brandenburg Gate in Berlin was opened and the first democratic elections in the former German Democratic Republic (GDR) were announced. It was clear that, at that stage, nothing could really stop the inevitable reunion of the German nation.
President Mitterrand of France began to put pressure on other Member States to create a political union to counterbalance the implications of German reunification by closely linking the largest Member State with the Community in political matters.50 The Extraordinary Summit held in Dublin on 28 April 1990 formally welcomed East German integration into the Community. In reply Helmut Kohl agreed to political union alongside EMU. The Dublin Summit asked foreign ministers to prepare proposals regarding co-operation between Member States in political matters for the Dublin Summit in June 1990. These were to constitute the basis of a second Intergovernmental Conference.51
The secondSummitinDublinon 25–26 June 1990 decided to convene two Intergovernmental Conferences on 14 December 1990, one on EMU and the other on political union. The two IGCs were intended to be parallel with ratification of both instruments taking place within the same time frame. In the course of negotiations two approaches emerged:
The first favored a “Three Pillars” structure, the so-calledTemple, consisting of a main agreement based on the EC Treaty and two separate arrangements outside the main framework covering co-operation on Common Foreign and Security Policy and Justice and Home Affairs matters.
The second proposal was more ambitious and suggested the “tree” model, a single “trunk” having several branches and treating integration in all three areas as a common foundation (the tree) with special arrangements in particular fields (the branches). The second project was strongly federalist and as such judged too controversial by the foreign ministers of the Member States to be submitted for consideration atMaastricht.
The deliberations of the IGCs were based on the first project with modifications introduced by a second proposal made by The Netherlands on 8 November 1989, which provided for unanimous voting within the CFSP while submitting the implementation of adopted measures to a qualified majority vote. The Intergovernmental Conferences began on 15 December 1990. The Maastricht Summit held on 9 and 10 December 1991 approved the text of the TEU. The final version was signed on 7 February 1992 atMaastricht. It was agreed that the process of ratification should be completed by the end of 1992. Its entry into force was to coincide with the completion of a single market. In practice, the process of ratification was fraught with difficulties.
The TEU was rejected by Danish voters in a national referendum held on 2 June 1992 (the Edinburgh Summit in December 1992 reassured the Danes and in the second referendum held on 18 May 1993, 56.8 per cent voted in favor of the TEU52), and was challenged before the German Constitutional Court53 and the English High Court in R v Secretary of Foreign and Commonwealth Affairs, ex parte Rees-Mogg.54
41. EC Bull. 6/85, point 18.
42. The terms of EC membership were not favorable to theUKas it gained almost nothing from the CAP. Additionally, the British VAT contribution to the EC budget was very high due to high consumption levels in theUK. From 1 January 1973 to 31 December 1986 theUK’s net contribution to the EC Budget was £7,772 million, which represented a net payment of £1.52 million per day of membership (I. Barnes and J. Preston, The European Community, 1988, London and New York: Longman, pp 5 et seq). The main issue was not that theUKcontribution was too high, as it was similar to otherMemberStates, but the imbalance between its contribution and its receipts from the EC Budget. This problem was acknowledged from the time ofUKaccession. However, when Margaret Thatcher became prime minister of theUK, which coincided with the end of the transitional period during which theUKdid not pay its full contribution to the EC budget, the renegotiation of theUKfinancial contribution (which anyway was marginal compared to theUKbudget as a whole) became the single preoccupation of the British Government. Thus, during the 1980s the main point on theUKagenda at each European Summit was to obsessively complain about the injustice of theUK’s financial contribution in an aggressive and perhaps not the best diplomatic manner. This negative attitude of theUKcontributed to the growing unpopularity of theUKwithin the Community and, at the same time, to the growing unpopularity of the Community with the British people. Finally, the European Summit meeting inFontainebleauin June 1984 formalized a rebate for theUKfrom the EC budget as part of a package of EC budget reforms.
43. EC Bull. 6/88, point 1.1.14.
44. EC Bull. Supp. 11/89, point 18.
45. J. Delors, Report on Economic and Monetary Union in the EC, 1989,Luxembourg: Office for Official Publications of the European Communities.
46. Only a very brief discussion on the changes in the Soviet bloc, EC Bull. 6/89, Presidency Conclusion, point 1.1.16.
47. E. Kirchner, “Genscher and What Lies Behind Genscherism”, (1990), 13 West European Politics, pp 159–77.
48. British Prime Minister Margaret Thatcher strongly opposed reunification of Germany and tried to convince Mitterrand that indeed, within the EC, Germany’s hegemony would assert itself and that France and the UK should act together, as in the past, to prevent or at least slow the process of reunification. Mitterrand agreed with her but considered that the reunification was inevitable, and instead of prevention, it was better to strengthen the EC through further political integration. (Thatcher wanted to widen the EC to include Central European countries and thus counterbalance the excessive influence of a reunitedGermany.) M. Thatcher, The Downing Street Years, 1993,New York: Harper Collins, pp 688–726.
49. EC Bull. Supp. 1/90, point 6.
50. A unitedGermanywith its 77 million people, that is, 25 per cent of the entire population of the Community at that time, would account for 27 per cent of its GDP.
51. R. Corbett, “The Intergovernmental Conference on PoliticalUnion”, (1992) 30 JCMS, p 274.
52. D. Howarth, “The Compromise onDenmarkand the Treaty on European Union: A Legal and Practical Analysis”, (1994) 31 CMLRev, pp 765–805; D. Curtin, “The Constitutional Structure of the Union: AEuropeof Bits and Pieces”, (1993) 30 CMLRev, p 17.
53. M. Herdegen, “Maastrichtand theGerman Constitutional Court: Constitutional Restraints for an ‘Ever CloserUnion’”, (1994) 31 CMLRev, pp 235–49.
54. [1994] 1 All ER 457, QBD.
