An Imperfect Union: Understanding European Integration

EUI

Amsterdam Treaty 1997 and Agenda 2000

In negotiations to draw up the Amsterdam Treaty the new mood of give and take meant that other member states were disposed to accommodate British positions on contentious issues. The Amsterdam Council was hailed as a triumph for Tony Blair and his government in that, without surrendering a tough negotiating stance, the Blair team showed a willingness to listen to the arguments, an ability to compromise when required and a reluctance to employ the British veto.

At the intergovernmental conference in Amsterdam:

  • • Agreement was reached on a range of internal security measures, including freedom of movement, immigration, political asylum and harmonisation of civil laws such as divorce.
  • • Britain gave up its solitary opt-out on the Social Chapter.
  • • Strong measures were introduced against discrimination on the grounds of gender, race, religion, sexual orientation or age.
  • • Policing remained with national governments but a supranational Europol was inaugurated.
  • • Britain and Ireland, as island members with a terrorist problem, were allowed to retain their external border control.
  • • Plans by France and Germany to make the Western European Union into the defence arm of the European Union were blocked by Britain, Finland, Sweden and Ireland, leaving NATO as the safeguard of European defence.
  • • New anti-unemployment measures were introduced across Europe. The European Investment Bank was to make £700 million available to underwrite pan-European job creation schemes and an employment chapter written into the revised Treaty for European Union.

Institutional reform was a contentious issue, with its implications for representation on key bodies and voting rights in an enlarged Union. The Amsterdam Council failed to agree on new constitutional structures, preferring to leave the issue to be resolved in a new IGC in 2000 and form the basis of a new Treaty of Nice. In fact, the overall outcome of the meeting was a rather bland treaty that left unresolved quite a few of the issues carried forward from Maastricht. To continue the examination of these unresolved issues, Jacques Santer went before the EP in July 1997 to outline the Commission’s strategy for strengthening and widening the Union in the early years of the twenty-first century. The document submitted by the Commission, known as Agenda 2000, was 1,300 pages long and made a detailed assessment of what needed to be done in the wake of the Maastricht and Amsterdam treaties. It stressed the need to concentrate on five broad aspects:

1. Enlargement of the union through the accession of new member states, initially there being five serious contenders

2. A more proactive role in foreign affairs

3. Further institutional and constitutional reform

4. Effective action to create employment and reduce unemployment

5. Further reform of the Common Agricultural Policy.

Treaty of Nice, June 2000

At Nice, the assembled heads of government were concerned to achieve the changes required for the next enlargement. It was agreed that the institutional and policy foundations of a Union of fifteen would be inadequate when the EU had perhaps another ten members. In the event, the major governments won the important arguments and confirmed their unassailable dominance. The summiteers seemed more concerned with national interests than the cause of integration. The Treaty:

  • • Capped the size of the Commission and the number of seats in Parliament; larger countries would each lose one commissioner to accommodate representatives of the new entrants
  • • (As a quid pro quo) gave those larger countries a favourable reweighting of votes in the Council of Ministers, ensuring that the interests of the main players in the Union would be preserved as majority voting became more common
  • • Continued the movement towards qualified majority voting (QMV), permitting it in some twenty-three policy areas
  • • Allowed for the establishment of a Rapid Reaction Force.

The Treaty was signed in 2001 and ratified following a second Irish referendum in October 2002 (after the voters in the first one had rejected the agreement).

Recent developments: the beginnings of the twenty-first century

In the twenty-first century, there have been four other significant developments within the European Union: the issue of the single currency; a further stage in the process of enlargement; the divisive issue of policy towards the Iraqi regime of Saddam Hussein; and the attempt to reach agreement over a constitution for Europe.

Eurozone

In 1995, EU heads of government had agreed that the proposed single currency should be called the euro, rather than the European Currency Unit (ECU) as previously planned. In May 1998, it was decided that all member states other than Greece could be deemed to have met the Maastricht convergence criteria, necessary for entry into a new eurozone. Three countries – Britain, Denmark and Sweden – decided against membership, so that when euroland was created in January 1999 there were eleven participants. The national currencies of members of the eurozone disappeared in January 2002, banknotes and coins of the single currency becoming the sole basis of all transactions. At that time, Greece was allowed to join with the other eleven countries, leaving three countries outside.

Of the twenty-first-century entrants, Slovenia qualified in 2006 and was admitted on 1 January 2007, bringing total eurozone membership to over 316m people and thirteen member states. Cyprus and Malta plan to join in January 2008, Slovakia in 2009. Other states of the Fifth Enlargement parts i and ii are gearing themselves to join within a few years. Monaco, San Marino and Vatican City also use the euro, although they are not officially euro members or members of the European Union.

Further enlargement

In 1995, the EU had become an organisation of fifteen members in what was the fourth enlargement to the original six-member Community. But by then its leaders were already having to grapple with the unexpected and unprecedented opportunity to extend European integration into the countries of Central and Eastern Europe that were formerly members of the Soviet Union. In the aftermath of the collapse of the Berlin Wall in 1989, several ‘new democracies’ had been created. At first they had association agreements with the EU, but at the Copenhagen meeting of the European Council in December 2002, it was agreed that ten more countries should accede to the Union in May 2004 (the Fifth Enlargement (Central and Eastern part i)). A prolonged process of preparation and negotiation culminated in the entry of the Baltic states of Estonia, Latvia and Lithuania, Hungary, Poland, Slovakia, Slovenia, the Czech Republic and the two Mediterranean islands of Malta and Cyprus. The process of enlargement was taken further in 2007, with the accession of Bulgaria and Romania at the same time.

The new member states are unlikely to favour any irksome interference from Brussels. They mostly believe in open markets, but are less enthusiastic about state intervention and undue central interference. Their entry is likely to bolster the EU’s liberal economic credentials and affirm support for the idea that the EU should be an association of nation states rather than evolve into a giant superstate of the type feared by many British Conservatives. The model they favour is not the traditional Franco-German integrationist project. Rather, shunning the idea of any monolithic entity, they are nearer to the pragmatic British and Scandinavians, in their preference for a looser, more varied and multi-speed European Union.

Policy over Iraq

The idea that the European Union should speak with one voice in world affairs is a long-standing one, almost as old as the postwar process towards greater unity itself. However, despite repeated attempts to galvanise the issue, the EU has made much less progress in forging a common foreign and security policy than it has in creating a single market and a single currency.

The difficulties of achieving any breakthrough were highlighted by the deep divisions among EU member states in early 2003 over whether or not the United Nations Security Council should authorise the American-led war on Iraq. In the event, the British government gave strong endorsement to the US position and thus reaffirmed its traditional transatlantic ties. It had the backing of Spain and some of the countries then awaiting entry into an enlarged Union, but found itself on the opposite side of the fence to France and Germany. As one of the permanent members, France would not support the war in the Security Council and had the backing of Russia for the stance it adopted. EU member governments once again found it difficult to reconcile the cause of Union solidarity with their own national preferences.

A constitution for the EU?

Meanwhile, a Convention on the Future of Europe chaired by former French president Giscard d’Estaing was engaged in devising a constitution for the enlarged European Union. Set up in late 2001, its task was not so much to revise the existing constitutional structure of the European Union, but more to clarify and modernise it. The most visible achievement of the Convention was the merging of all previous treaties (with the exception of the Euratom Treaty) into a single text which formed the basis of further negotiation in an intergovernmental conference which first met in October 2003. There were contentious issues to resolve, particularly over voting rights in the Council of Ministers.

The proposed Constitutional Treaty

At the Brussels European Council ( June 2004), agreement on the contents of a new Constitutional Treaty was finally reached. Its main aims were to replace the overlapping set of existing treaties that compose the Union’s current informal Constitution, to codify human rights throughout the EU and to streamline decision-making in what had just become a twenty-five-member organisation. It was hoped that this would provide a clearer structure and focus to the Union, providing it with a simpler and more accessible set of rules.

To its supporters, it was essentially a codifying-up exercise that clarified and elaborated existing practice. However, it contained new features that included:

  • • The replacement of the six-monthly rotating EU presidency with the new post of EU President which it was anticipated would provide a greater sense of coherence and continuity to Union affairs. The President would be elected for thirty months by the elected heads of government of member states.
  • • The creation of a new EU Minister for Foreign Affairs who would replace the European Commissioner for External Relations and the High Representative for CFSP and thereby give the Union a more distinctive international identity.
  • • Incorporation of the EU Charter of Fundamental Rights.
  • • Removal of the national veto in some areas such as asylum and immigration policy, though not on budgetary, tax, welfare, and defence and foreign policy.
  • • A fairer distribution of votes in the Council of Ministers, ensuring that a QMV would need the support of fifteen member states and a minimum of 65 per cent of the population.

The treaty was signed in Rome by representatives of the member states in October 2004 and was in the process of ratification by the members states when, in 2005, the French and Dutch voters rejected it in referendums. The failure to win popular support in these two original member countries of the ECSC/EEC led to other countries postponing or abandoning their ratification procedures.

The Constitution now had a highly uncertain future. Had it been ratified, it would have come into force on 1 November 2006.

An amending or mini treaty?

The Barroso Commission was forced to admit that the Constitution was effectively dead. Yet of the present twenty-seven states, eighteen ratified it, several of which were keen to see it resurrected in some form. When Germany took over the rotating EU Presidency in January 2007, the Merkel administration declared the period of reflection over. It urged progress on a new treaty to be in place before the 2009 elections, a position agreed by the member states in the Berlin Declaration which marked the fiftieth anniversary of the signing of the Treaty of Rome.

There were different priorities among those who gathered at the European summit in June to agree on the way forward. The Germans wanted to salvage as much as possible from the dead constitution, the French favoured a mini-treaty, Britain an amending treaty and the Czech, Dutch and Polish representatives a document that would give national parliaments the power to block EU legislation.

After hard bargaining, agreement on the text of an amending treaty was achieved in October 2007. The new ‘Reform Treaty’ is intended to keep most of the institutional innovations that were agreed upon in the European Constitution, such as a permanent EU president, foreign minister (renamed ‘High Representative of the Union for Foreign Affairs and Security Policy’), the same distribution of parliamentary seats, a reduced number of commissioners, a clause on withdrawal from the EU and a full legal personality (currently held only by the European Community) allowing it to sign international agreements. It was agreed to drop most of the state-like features such as the name ‘constitution’, as well as a reference to EU symbols (flag, anthem, motto) that had been subject to major controversy in some member states. Also, new names for various types of EU legislation, in particular the proposal to rename EU regulations and directives to be EU ‘laws’ were dropped.

The Reform Treaty became better known as the Lisbon Treaty after it was signed at a special ceremony in Lisbon in December 2007. If successfully ratified by all twenty-seven states, and became operative from January 2009.

A new President of the Commission

Also under discussion in Brussels (December 2003) was the question of a successor to Romano Prodi, widely seen as a lackluster president of the Commission. The preferred choice of France and Germany was Guy Verhofstadt, the Belgian federalist who had the additional disadvantage in British ministerial eyes of being anti-American in his rhetoric. British ministers had hopes that its outgoing Conservative commissioner might be chosen, but the French were equally unwilling to accept their candidate. Out of the stalemate emerged a compromise choice, the Portuguese prime minister, José Manuel Durão Barroso.

As a free marketer, moderniser and pro-American who backed the war in Iraq, Barroso was acceptable to the British government, which hoped that his appointment might prove helpful in its bid to influence the orientation of the future Union. He was confirmed as the new president at the special summit in Brussels at the end of June 2004.

Though consensus is the preferred route to nomination, a formal vote in the Council of Ministers still has to be taken. Barroso was chosen by a clear majority in the QMV. Should they have tried to block him, France or Germany would have risked an embarrassing defeat in the newly enlarged Europe.

The Union in 2007

With the admission of Bulgaria and Romania, the European Union has now become a community of twenty-seven states. All but four of the Western European countries are now members. In two of those – Iceland and Switzerland – some politicians continue to express interest in joining.

  • • Iceland’s close trading connections with the EU make membership at some point seem likely, though application is not on its current political agenda.
  • • In Switzerland, serious doubts remain among the voters, who rejected the Union in a referendum held in March 2001 by a margin of more than 3:1.
  • • Liechtenstein is unlikely to join unless Switzerland does. If it were to do so, it would become the smallest country in the Union.
  • • Norway has applied four times already, its people rejecting the opportunity to join on two occasions. As inhabitants of the richest countries in the world on a per capita basis, Norwegians are aware that they have much to lose and little to gain via membership. Having a small agrarian sector and few undeveloped areas, Norway would benefit little from income from the Union. It would be a substantial net contributor and would also lose full control over the fish, gas and oil resources in its territorial waters.

Three out of four Europeans now live within the European Union. Those who inhabit other countries that at present seem far from membership may still find themselves becoming members at some point in the future, for the EU has a powerful attraction for small states. In addition to the Russians, the peoples who are not members include the Albanians, Croats, Moldovans, Norwegians, Serbians and Swiss, all of whom constitute relatively small populations. An exception in terms of size is Turkey, whose possible membership raises questions of European identity, as well as other issues. If Russia and Turkey are viewed as constituting the eastern limits of the European continent, then at present twenty-seven of its thirty-eight countries now belong to the Union.

The European Union has tended to enlarge along regional lines, adding groups of nearby nations, the accession of Greece being the notable exception. Currently, it is very interested in the integration of the Balkan states. Of Eastern Europe Heather Grabbe2 of the Centre for European Reform has observed that ‘Belarus is too authoritarian, Moldova too poor, Ukraine too large, and Russia too scary for the EU to contemplate offering membership any time soon’.

The Union has become the world’s largest trading power, fifteen of its members now sharing a single currency. Merely to state that indicates just how far Europe has travelled since the early postwar years.

The six countries who took that first step of forming a coal and steel community have become twenty-seven in a process of enlargement that has gathered pace over the last decade and a half. In that time, there have been a series of what Henig3 refers to as ‘defining moments’, including the signing of the Treaty of Rome which launched the European Economic Community, agreement on and implementation of the Single European Act, the signing of the Maastricht Treaty which created the present Union, the creation of a single market and the adoption of the euro.

The Union itself has undergone different stages of development. At some times, it has seemed to be stuck in a groove of stagnation and introspection; at others (usually when the economic outlook has seemed more promising) there have been prospects for a further move forwards. In the periods of stagnation, little is heard of the long-term possibilities and the dreams of ever closer union.

In the formation and evolution of the Community into the Union, two forces have been at work: intergovernmentalism and integration. At different times over the last forty years, one set of ideas has gained the ascendancy, as different thinkers and statesmen have pressed their particular viewpoint. The dispute is still at the heart of the controversy within the Union about the way it has developed and the future direction it should take.

Glossary

Acquis communautaire – The rights and obligations deriving from the accumulated laws currently in force that must apply in every state if the EU is to function property as a legally regulated community. Laws include treaties, directives and regulations, as well as the case law of the Court of Justice.

Copenhagen Criteria – A set of criteria laid down at the Copenhagen Council (June 1993) against which the applications for membership of the Union of states from Central and Eastern Europe should be assessed.

Europe Agreements – Agreements via which the EU has undertaken to provide applicant countries with specific economic and political assistance, prior to full membership. Following the ending of the Cold War, eight of the Central and Eastern European states that have sought membership of the Union have concluded such agreements, the first being Hungary and Poland.

Fifth Enlargement – The latest enlargement is being viewed as the completion of the Fifth (Central and Eastern) Enlargement, rather than as a sixth one, so the Fifth Enlargement is referred to as having two stages: parts i and ii. Between March 1994 and January 1996, ten Central and Eastern European Countries (CEECs) applied to join, but Bulgaria and Romania were slower than the others to implement the necessary political and economic reforms, and so were deemed not ready for membership in part i (2004). In fact it is rather misleading to think of the 2004 entrants as all being CEECs, for Cyprus and Malta do not fit the description. This is why Nugent4 labels the 2007 enlargement as the 10+2 round.