European integration

European integration The attempt to promote economic and political union in Europe emerged initially from a desire after World War II to integrate European powers so closely as to make another war between them impossible. Another central motive emerged from the 1980s in the concern about the internationalization and globalization of trade and politics, in which the relatively small European states could only have an influential voice if they acted in coordination with each other.

The European Coal and Steel Community (ECSC) was established by the Treaty of Paris on 18 April 1951, to create a common market for coal and steel between the signatories, Belgium, the Federal Republic of Germany, France, Italy, Luxemburg, and the Netherlands. Through the common control of those industries which were deemed crucial for war production, German and French politicians such as Robert Schumann and Jean Monnet intended to prevent the unilateral rearmament of any of its member states, and especially to avoid renewed unilateral German rearmament.

Encouraged by the economic and political success of the ECSC, the six member states proceeded to sign the Treaty of Rome in 1957. This established the European Economic Community (EEC), which from 1967 was transformed into the European Community (EC).

The EEC excluded Europe's most powerful economy of the immediate postwar years, the United Kingdom. The UK was not involved in the negotiations leading up to the Treaty of Rome because it still conducted most of its trade with its Empire, and because the Eden government and its civil service failed to appreciate the will of the other European states to go ahead without it. Following the Treaty of Rome, the UK founded a looser economic association (EFTA), but decided to apply for membership during the 1960s, only to be turned down twice (1963, 1967) because of the veto of the French President, de Gaulle. After de Gaulle's resignation in France, the EC was expanded by the first wave of enlargement to include Denmark, the Republic of Ireland, and the UK as new members, with effect from 1 January 1973. Earlier, Norway had withdrawn its application after a referendum had shown that a majority of its population opposed entry. (This outcome was confirmed in a renewed referendum in 1994.) Under the government of Harold Wilson, a referendum was held in the UK on 5 June 1975, and produced a two-thirds majority in favour of continuing membership of the EC.

In 1974 the Paris Summit convened by Giscard d'Estaing made a number of changes that proved to be decisive. It instituted the European Council, and it transformed the European Parliament into a directly elected body with effect from 1979. The 1970s also saw dramatic progress in European legal integration through the rulings of the European Court of Justice. Finally, 1979 saw the creation of the ERM.

The 1980s were notable for four developments. (1) In 1984, Margaret Thatcher gave up her obstinate attitude in the European Council in return for a settlement on the size of a rebate on British overpayment into the European budget. This crisis, however, strengthened the resolve of other member states to increase the application of Qualified Majority Voting to make decision-making more effective. (2) A second wave of integration saw the accession of Greece in 1981, and Portugal and Spain in 1986. This created further impetus for institutional reform, changed the geopolitical outlook of the EC, and demonstrated in the long run the EC's ability to stabilize and promote the economic and political systems of poorer, more fragile member states. (3) The recovery following the oil price shocks of the 1970s demonstrated the relative inability of fiscal policies to overcome supply-side shocks. During the 1970s and 1980s, the German central bank had established itself as the EC's key central bank. Whatever the political preferences of other members, its decisions became increasingly determinate over the monetary policies of other member states, which greatly strengthened the will to coordinate monetary and commercial policies more formally. (4) This led to the Single European Act in 1986, and ultimately gave rise to demands for European Monetary Union (EMU). German resistance against this was removed by German unification in 1990, because it gave its political leadership under Kohl sufficient strength in domestic politics to realize this aim against internal institutional opposition.

The Maastricht Treaty was perhaps the most radical milestone in European integration. It created the European Union, and created a timetable for the introduction of a single currency, which was named the euro at the Madrid Summit in 1995. Followed by the Treaties of Amsterdam and Nice, the 1990s led to fundamental institutional reform, to a dramatic extension of areas of common EU concern, and it prepared the EU for the enlargement of up to twelve new member states in central, eastern, and southern Europe from 2004. In other words, from the Single European Act, European integration was less and less about the ‘negative’ removal of barriers, and more and more about ‘positive’, active harmonization. As this affected individual citizens much more, integration since 1986 has led to growing public scepticism, if not outright hostility, in many member states. During the 1990s, then, public opinion became a much more prominent factor in European integration, and at times even threatened its outcomes, as the negative outcome of the Irish referendum on Nice showed in 2001.

The first decade of the new millennium was characterized by three fundamental changes in the nature of the European Union. (1) In response to the War on Terrorism and changes in the nature of NATO, the necessity of transforming the Common Foreign and Security Policy into an effective policy instrument of the EU became apparent. (2) More important still was the conclusion of the accession negotiations with the ten applicant states due to be admitted in 2004. (3) Closely linked was institutional reform. A community which found it often difficult to find agreement among fifteen member states needed to find ways to ensure agreement among twenty five states was possible. A Constitutional Convention was set up which produced a Draft Treaty establishing a Constitution for Europe in 2003. The Draft Treaty proposed to simplify the decision-making process, by strengthening majoritarian decision-making (instead of unanimity). Poland especially objected to this, with France unwilling to grant it concessions. As a result, the Treaty, which also contained the Charter of Fundamental Rights, was not adopted at the subsequent Intergovernmental Conference (IGC).

Frustrated by the apparent difficulty of exerting influence in an enlarged community, France began to consider promoting a smaller, more integrated European ‘core’ inside or even outside the EU. Continued discussions in 2004 about the EU's constitution also impacted on negotiations about the size of the budget from 2007. States who disagreed on the Draft Treaty also opposed each other on this issue. Net donors such as France and Germany wanted to limit the budget to 1% of GNP in the EU. This was in turn opposed by the new member states such as Poland, which were net recipients of EU funds.

WEU; Lomé Convention; Coutounu Agreement

Table 8. Members of the European Union (by date of entry)

1957	Belgium
1957	France
1957	Germany
1957	Italy
1957	Luxemburg
1957	Netherlands
1973	Denmark
1973	Ireland
1973	United Kingdom
1981	Greece
1986	Portugal
1986	Spain
1995	Sweden
1995	Finland
1995	Austria
2004	Cyprus
2004	Czech Republic
2004	Estonia
2004	Hungary
2004	Latvia
2004	Lithuania
2004	Malta
2004	Poland
2004	Slovakia
2004	Slovenia